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Books bel^aai^g
8S 95
Moulton V. Kershaw, 59 Wis. 316, 18 N.
W. 172 99
Mis.sissippi & D. S. S, Go. v. Swift, 86 Me.
248, 29 Atl. 1063 101
III. Contracts under Seal.
(a) Delivery.
Martin v. Flaharty, 13 Mont 96, 32 Pac
287
100
Cb) Consideration.
AUer T. Aller, 40 N. J. Law, 446 110
(c) Revocation of Offer under Seal.
McMillan t. Ames, 33 ilinn. 257, 22 N.
W. 612 113
IV. Statute of Frauds.
(a) Instruments under Statutes.
Thompson v. Blanchard, 3 N. Y. 335 115
Cb) Executed Contracts.
Stone V. Dennison. 13 Pick. (Mass.) 1.
116
Ci) I5. 151
Goddard v. Biuney, 115 Mass. 450 153
Cooke V. Millard, 65 N. Y. 352 155
Pratt V. Miller. 109 Mo. 78. 18 S. W. 965. 163
Caalkins v. Hellman, 47 N. Y. 449 H>6
Garfield v. Paris, 96 U. S. 557 168
Edgerton v. Hodge, 41 Vt. 676 172
Hunter v. Wetsell, 84 N. Y. 549 174
(i) TTie Memorandnm in Writing.
Peabody v. Speyers, 56 N. Y. 230 176
Louisville Asphalt Varnish Co. v. Lorick,
29 S. C. 533, 8 S. B. 8 178
McGovern v. Hern, 153 Mass. 308, 26 N.
E. 861 183
Drake v. Seaman. 97 N. Y. 230 184
Justice V. Lang, 42 N. Y. 493 187
Wilkinson v. Heavenrich, 58 Mich. 574, 26
N. W. 139. 199
Clason T. Bailey, 14 Johns. 484 ,... 201
(j) EfPect of Noncompliance with.
Statute.
Townsend v. Hargraves, 118 Mass. 325. . 205
Wheeler r. Reynolds, 66 N. Y. 227 208
Nally V. Reading, 107 Mo. 350, 17 S. W.
978 212
Britain v. Rossiter, 11 Q. B. Div. 123. . . 213
Baker v. Lauterback. 68 Md. 64, 11 AtL
703 218
V. Consideration.
(a) Defined.
flamer v. Sidway, 124 N. Y. 538, 27 N.
Pag9
McKjnley t. Watkins, 13 IB. 140 243
Rue y. Meirs, 43 N. J. Eq. 377. 12 A.tL 369 249
(f) Natnral Affection.
Fink V. Cox, 18 Johns. (N. Y.) 145.
253
(g) Moral Obligation.
Mills v. Wyman, 3 Pick. (Mass.) 207 254
(b) Impossible Promises.
Stevens v. Coon, 1 Pin. (Wis.) 356 256
(i) Doing Wliat One is Bound to Do.
Stilk V. Myrick, 2 Comp. 317 257
Munroe v. Perkins, 9 Pick. (Mass.) 298. . . 258
Vanderbilt v. Schreyer, 91 N. Y. 392 260
Wheeler v. Wheeler, 11 Vt. 60 264
Jaffray v, Davis, 124 N. Y. 164, 26 N. B.
351 266
(j) Past Consideration.
Ehle V. Judson, 24 Wend. (N. Y.) 97 269
Pool V. Homer, 64 Md. 131, 20 Atl. 1036. . 271
Boothe V. Pitzpatrick, 36 Vt. 681 272
Earle t. OUver, 2 Exch. 71 274
VI. Capacity of Parties.
(a) Tbie Government.
U. S. T. TiQgey, 5 Pet 115
276
E. 256
220
(b) Necessity.
liann v. Hughes, 7 Term R. 350 224
(,c) Adequacy.
Haigh v. Brooks, 10 Adol. & E. .''.09 226
Judy V. Louderman, 48 Ohio St, 562, 29 N.
E. 181 227
SchneU v. NeU, 17 Ind. 29 2;30
(d) Mutual Promises.
Coleman v. Eyre. 45 N. Y. 38 232
Seward v. Mitchell, 1 Cold. (Tenn.) 87 233
Presbyterian Church v. Cooper, 112 N. Y.
517, 20 N. E. 352 234
Keep v. Goodrich, 12 Johns. (N. Y.) 397. . 236
L'Amoreux v. Gould, 7 N. Y. 349....... 238
Davie v. Lumberman's Min. Co., 93 Mich.
491, 53 N. W. 625 240
(e) Forbearance.
Cook V. Wright, 1 Best & S. 5.59 242
Rector, etc, St. Mark's Church v. Teed,
120 N. Y. 5.83,24 N. B. 1014 246
(b) Infants.
Whitney v. Dutch, 14 Mass. 457 278
Bordentown Tp. v. Wallace, 50 N. J. Law,
13, 11 Atl. 267 281
Rvder v. WombweU. L. R. 4 Exch. 32 282
M'cKanna v. Merry, 61 111. 177 286
Johnson v. Lines, 6 Watts & S. (Pa.) 80. . 287
Stafford v. Roof. 9 Cow. (N. Y.) 626 290
Goodnow V. Empire Lumber Co., 31 Minn.
468, 18 N. W. 283 292
Mansfield v. Gordon. 144 Mass. 168, 10 N.
E. 773 294
Tucker v. Moreland, 10 Pet. 58 295
Henry v. Root, 33 N. Y. 526 301
Lemmon v. Beeman, 45 Ohio St. 505, 15
N. E. 476 313
Rite V. Boyer, 108 Ind. 472, 9 N. E. 420. . 315
(c) Insane Persons and Idiots.
Allis V. Billings, 6 Mete. (Mass.) 415 319
Hovey v. Hobson, 53 Me. 451 322
Mutual Life Tns. Co. v. Hunt, 79 N. Y.
541 325
Seaver v. Phelps, 11 Pick. (Mass.) 304... 320
Sawyer v. Lufkin, 56 Me. 308 328
(d) Drunken Persons.
Barrett v. Buxton, 2 Aiken (Vt) 167 329
(e) Married Women.
Martin v. DweUy, 6 Wend. (N. Y.) 9 331
Gregory v. Pierce. 4 Mete. (Mass.) 478. . 335
Willard v. Eastham, 15 Gray (Mass.) 328. 336
Owen V. Cawley, 36 N. Y. 600 339
(f) Corporations,
Downing v. Mt Washington Road Co., 40
N. H. 230 342
TABLE OF CONTENTS.
Thomas v. Railroad Co., 101 U. S. 71 34."
Bradley v. Ballard. HO III. 413 350
Union Bank v. Jacobs, G Humph. (Tenn.)
515 352
VII. Reality of Consent.
(a) Mistake.
Foster v. Mackirinon. L. U. 4 C. P. 704. . 358
Cuudj' V. Liiidsav, 3 App. Gas. 459 3G0
Couturier v. ilastio, 5 H. L. Ca.s. 073... 363
Irwin V. Wilson, 45 Ohio St. 426, 15 N.
E. 209 366
Sherwood v. Walker, 60 Mich. 508, 33 N.
W. 919 370
Osbnrn v. Throckmorton, 90 Va. 311, 18 S.
E. 28o 374
(b) Fraud.
People's Bank of City of New York t.
Bogart, 81 N. 1. 101 376
Lomerson v. Johnston; 47 N. J. Eq. 312, 20
Atl. 075 379
Gordon v. Parmelee, 2 Allon (Mass.) 212. 380
Sheldon v. Davidson, 85 Wis. 138, 55 N.
W. 101 382
Stimson v. Helps, 9 Colo. 33. 10 Pac. 290. oS4
Cobb T. Hatfield, 40 N. Y. 533 380
Rowley v. Bipelow, 12 Pick. (Mass.) 307. . 388
Mallory v. Leach, 35 Vt. 150 390
(e) Duress.
Brown .-. Pierce, 7 Wall. 205 394
Spaids V. Barrett, 57 111. 289 396
Robinson v. Gould, 11 Cush. (Mass.) 55. . 398
Fairbanks v. Snow, 145 Mass. 153, 13 N.
E. 59c> 400
(d) Undue Influence.
Cowee V. Cornell, 75 N. Y. 91 402
McParland v. Larkin. 155 111. 84, 39 N.
E. 609 406
Wooley V. Drew, 49 Mich. 290, 13 N. W.
5M 410
Vm. Illegality of Object.
(a) Commission of Crime or Civil Wrong.
Atkins V. Johnson, 43 Vt. 78 412
Jewett Pnb. Co. v. Butler, 159 Mass. 517,
34 N. E. 1087 414
Cb) Violation of Statutes.
Griffith V. W^lls. 3 Denio (N. Y.) 226 416
(c) Same — Sunday Laws.
Lyon T. Strong, 6 Vt. 219 417
(d) Same — Usury.
Lloyd V. Scott. 4 Pet. 205 421
(e) Public Policy — Injury to Public
Service.
Bliss V. Ijawrence, 58 N. Y. 442 425
Providence Tool Co. v. Norris, 2 Wall. 45. 428
Trist V. Child. 21 Wall. 441 430
(f) Same — Obstruction of Justice.
Goodrich v. Tenney. 144 111. 422, 33 N. B.
44 434
Jones V. Rice, 18 Pick. (Mass.) 440 439
(g) Same — Champerty and Maintenance.
Pa-.-
Thompson v. Reynolds, 73 111. 11 440
Fowler v. Callan. 102 N. Y. 3!t."j, 7 N. E.
1(;9 442
Courtright v. Burnes, 13 Fed. 317 443
Oi) Same— Immoral Aereements.
Saxon V. Wood, 4 Ind. App. 242, 30 N. E.
797 444
(i) Same — Gaming and Wagers.
Collamer v. Day, 2 Vt. 144 447
(j) Same — Futures.
Beadles v. McElrath. 85 Ky. 230. 3 S. W.
152 448
(k) Same — Fraud and Breach of Trust.
Spinks V. Davis, 32 Miss. 152 452
(1) Same — Derogation of Marriage Re-
lation.
Lowe V. Peers, 4 Barrows, 2225 454
(m) Same — Restraint of Trade.
Herreshoff v. Boutineau, 17 R. I. 3, 19
Atl. 712 458
Diamond Match Co. v. Roeber, 106 N. Y.
473, 13 N. E. 419 401
Cartl V. Snyder (N. J. Ch.) 26 Atl. 977. .. 40.^.
Tode V. Gross, 127 N. Y. 480, 28 N. E. 469 407
(n) Same— Unlavrfnl Combinations —
Monopolies, etc.
Morris Run Coal Co. v. Barclay Coal Co.,
68 Pa. St 173 469
Central Shade-Roller Co. v. Cushman, 143
Mass. 353, 9 N. E. 629 473
Good V. Daland. 121 N. Y. 1. 24 N. E. 15. . 474
More V. Bennett, 140 111. 09, 29 N. E. 888 470
(o) Same — Idmiting Liability for Neg-
ligence.
Railroad Co. v. Lockwood, 17 Wall. 357. . 480
(p) Effect orf niegality.
Sullivan t. Hergan, 17 R. I. 109, 20 Atl.
232 490
Shaw V. Carpenter. 54 Vt 155 491
Roys v. Johnson. 7 Gray (Mass.) 162.... 490
Tracy t. Talmage, 14 N. Y. 162 497
Tvler V. Carlisle, 79 Me. 210. 9 Atl. 356. . 508
Frost V. Gage, 3 Allen (Mass.) 500 509
Woodworth v. Bennett 43 N. Y. 273 511
Sprins Co. v. Knowlton. 103 N. Y. 49 513
Ford \. Harrington, 10 N. Y. 2S5 517
White V. Franklin Bank, 22 Pick. (Mass.)
181 520
IX. Operation of Contract.
(a) Limits of Contractual Relation.
Boston Ice Co. v. Potter, 123 Mass. 28. .. 524
Exchange Bank of St. Louis v. Rice, 107
Mass. 37 526
Lawrence v. Fox. 20 N. Y. 208 529
(b) Assigrnment.
Rapplye ▼. Racine Seeder Co., 79 Iowa,
220. 44 N. W. 303 534
VI
TABLE OF CONTENT.^.
Page
Coolidcre v. Rugrcles. 15 Mass. 3S7 538
Walker v. Brooks. 125 Mass. 241 539
Arkansas Vallev Smeltins Co. v. Belden
Min. Co., 127 U. S. 379, S Sup. Ct. 130S. 542
Vanbuskirk t. Hartford Fire Ins. Co., 14
Conn. 141 545
Mott V. Clark, 9 Pa. St. 399 546
(c) Joint and Several Contracts.
Eller V. Lacv. 137 Ind. 436. 36 N. E. lOSS 549
Ansrus v. Robinson. 59 Vt 5S5, 8 Atl. 497. 551
X. Interpretation of Contract.
(a) Rales Relating to Evidence.
Smith V. Williams, 1 Murph. (N. C.) 426. 552
Cb) Same — Proof of Custom and Usage.
Cooper V. Kane, 19 Wend. (N. Y.) 3S6 555
(c) Roles of Constmction.
Grav V. Clark, 11 Vt. 583 556
(d) Same — Rules as to Time.
Beck & Pauli Lithographing Co. v. Colo-
rado MUIing & Elevator Co.. 3 C. C. A.
248, 52 Fed. 700 558
(e) Same — Penalties and Liquidated
Damages.
561
laqnith v. Hudson, 5 Mich. 123.
XI. Discharge of Contract.
(a) Waiver.
Uobbs v. ColTimbia Falls Brick Co., 157
Mass. 109, 31 N. E. 756 566
Cb) Substituted Agreement.
Cutter V. Cochrane, 116 Mass. 408 567
Buttertield y. Hartshorn, 7 N. H. 345 568
(c) Performance — Payment.
PaK»
Markle v. Hatfield, 2 Johns. (N. Y.) 455. . 571
Cheltenham Stone & Gravel Co. v. Gates
Iron Works, 124 111. 623, 16 N. E. 923. . 573
(d) Same — Tender.
Lamb v. Lathrop, 13 Wend. (N. Y.) 95. .. 57.^
(e) Conditions Subsequent.
Ray V. Thompson, 12 Gush. (Mass.) 281. . . 577
(f) Breacb — Renunciation.
Lake Shore & M. S. Ry. Co. v. Richards,
152 111. 59, 38 N. E. 773 578
(g) Same — Impossibility Caused by Party.
Newcomb v Brackett, 16 Mass. 161 592
(b) Same — Concurrent Conditions.
Morton v. Lamb, 7 Term R. 125 594
(i) Same — Conditions Precedent.
Dey V. Dox, 9 Wend. (N. Y.) 129 598
Grant v. .Tohnson, 5 N. Y. 247 601
Norrington v. Wright, 115 U. S. 188. 6
Sup. Ct. 12 604
Wooten V. Walters, 110 N. C. 251, 14 S. E.
734 610
Bast V. Byrne, 51 Wis. 531, 8 N. W. 494. . 613
(j) By Operation of 'La.w — Impossibility.
Superintendent & Trustees of Public
Schools of City of Trenton v. Bennett, 27
N. J. Law, 513 615
Yerrington v. Greene, 7 R. I. 589 618
(k) Same — Merger.
Van Vleit v. Jones, 20 N. J. Law, 340 620
(X) Same — Alteration of .Written Instru-
ment.
Wood T. Steele, 6 Wall. 80 622:
CASES REPORTED.
PaRe
Allpr V. Allor (40 N. J. Law. 44G) 110
AUis V. Billirijrs (C, Mi-to. 4ir.i 319
Angus T. Robinson (8 Atl. 497, 59 Vt. 585) 551
Arkansas V:illey Smt'ltinj; Co. v. Beldeu
Mill. Co. (8 Sup. Ct. laOS, 127 U. S. 379) 542
Atkins V. Johnson (43 Vt. 78) 412
Baker t. Lauterback (11 Atl. 703, 68 Md.
&4) 218
Baldwin v. Williams (3 Mctc. 365) 151
B.irrett v. Buxton (2 Aik. 167) 329
Bast V. Byrne (8 N. W. 494, 51 Wis. 531) . 613
Beadles v. Leet (3 S. W. 152. 85 Ky. 230) 448
Beadles v. McElrath (3 S. W. 152, 85 Ky.
230) 448
Beck & Pauli Lithographing Co. v. Colo-
rado Milling & Elevator Co. (3 C. C. A.
248, 52 Fed. 700) 558
Bellows V. Sowles (57 Vt. 104) 118
Blake v. Cole (22 Pick. 97) 149
Bliss V. Gardner ^58 N. Y. 442) 425
Bliss V. Lawrtmc6 (58 N. Y. 442) 425
Boothe v. Fitzpatrick (36 Vt. 681) 272
Bordentown Tp. v. Wallace (13 Atl. 267,
50 N. J. Law, 13) 281
Boston Ice Co. v. Potter (123 Mass. 28) . . 524
Boston & M. R. R. v. Bartlett (3 Cush.
224) 75
Bradley v Ballard (55 111. 413) 350
Britain v. Kossiter (11 Q. B. Div. 123) 213-
Brown v. Pierce (7 Wall. 205) 39-4
Butterfield v. Hartshorn (7 N. H. 345) 568
Carlill V. Carbolic Smoke Ball Co. ([1893]
1 Q. B. 256) 67
Carll V. Snyder (26 Atl. 977) 465
Caulkins v. Hellman (47 N. Y. 449) 166
Central Shade-Roller Co. v. Cushman (9
N. E. 629, 143 Mass. .353) 473
Cheltenham Stone & Gravel Co. v. Gates
Iron Works a6 N. E. 923, 124 111. 623). . 573
Clason v. Bailey (14 Johns. 484) 201
Clason V. Denton (14 Johns. 484) 201
Clason T. Merrit (14 Johns. 4$4) 201
Cobb V. Hatfield (46 N. Y. .5.33) 386
Coleman v. Eyre (45 N. Y. 38) 2;^2
Collamer v. Day (2 Vt. 144) 447
Cook V. Wrifrht (1 Be.st. «fc S. 5."9) 242
Cookp V. Millard (65 N. Y. 352) 155
Coolidge V. Ruggles (15 Mass. 387) 538
Cooper V. Kane (19 Wend. 386) 5.55
Courtrip:ht v. Burnes (13 Fed. 317) 443
Couturier v. Hastie (5 H. L. Gas. 673) 363
Cowee v. Cornell (75 N. Y. 91) 402
Crane v. Wheeler (50 N. W. 1033, 48
Minn. 207) 122
Cundv V. Lindsay (3 App. Cas. 4.59) 360
Cutter V. Cochrane (116 Mass. 408) 567
Davie t. Lumberman's Min. Co. (53 N. W.
625. 93 Mich. 491) 240
Day V. Caton (119 Mass. 513) 28
I )ey V. Dox (9 Wend. 129) 598
Diamond Match Co. v. Roeber (13 N. E.
419. 106 N. Y. 473) 461
Dickinson v. Dodds (2 Ch. Div. 463) ... 77
Downing v. Mt. Washington Road Co. (40
X. H. 230) 342
Dovle V. Dixon (97 Mass. 208) 1.50
Drake v. Seaman (97 N. Y. 230) 184
Dunlop V. Higgins (1 H. L. Cas. 381) 31
Earle v. Oliver (2 Exch. 71) 274
Edgerton v. Hodge (41 Vt. 676) 172
Page
Ehle T. Jud.son (24 Wend. 97) 269
Eliason v. Henshaw (4 Wheat. 225) 24
EUer V. Lacy (36 N. E. luss, 137 Ind. 436) 549
Exchange Bank of St. Louis v. Rice (107
Mass. 37) 526
Fairbanks v. Snow (13 N. E. 596, 145
Mass. 153) 400
Fink v. Cox (18 Johns. 145) 253
Fogg V. Portsmouth Athencum (44 N. H.
115) 26
F..rd V. Harrington (16 N. Y. 2S5) 517
Foster v. Mackinnon (L. R, 4 C. P. 704). . 358
Fnuier v. Cullan (7 N. E. 169, 102 N. Y.
395) 442
Frost v. Gage (3 AJlen, 560) 509
Gabell v. South Eastern Ry. Co. (2 C. P.
Div. 416) 18
Garfield v. Paris (96 U. S. 557) 168
Goddard v. Binney (115 Mass. 450) 153
Good V. Daland (24 N. E. 15, 121 N. Y. 1) 474
Goodnow V. Empire Lumber Co. (18 N. W.
283, 31 Minn. 468) 292
Goodrich v. Tenney (32 N. E. 44, 144 111.
422) 434
Gordon v. Parmelee, two cases (2 Allen,
212) 380
Grant v. Johnson (5 N. Y. 247) 601
Gray v. Clark (11 Vt 583) 556
Green v. Armstrong (1 Denio, 5.50) 145
Gregory v. Pierce (4 Mete 478) 335
Griffith v. Wells (3 Denio, 226) 416
Haigh T. Brooks (10 Adol. & E. 309) 226
Hauler v. Sidway (27 N. E. 256, 124 N. Y,
538) 220
Harris v. Scott (32 Atl. 770) 63
Haviland v. Sammis (25 AtL 394, 62
Conn. 44) 139
Heffron v. Brown (40 N. E. 583, 155 111.
322) 95
Henry v. Root (33 N. Y. 526) 301
Horreshofif v. Boutineau (19 Atl. 712, 17
R. I. 3) 458
Hertzog v. Hertzog (29 Pa. SL 465) ri
Hirth V. Graham (33 N. B. 90, 50 Ohio St.
57) 147
Hobbs V. Columbia Falls Brick Co. (31
N. E. 756. 157 Mass. 109) 560
Household Fire & Carriage Ace. Ins. Co.
V. Grant (4 Exch. Div. 216) 58
Hovey v. Hobson (53 Me. 451) 322
Hunter v. Wetsell (84 N. Y. 549) 174
Hyde v. Wrench (3 Beav. 334) 89
Ide V. Leiser (24 Pac. 695. 10 Mont. 5) 82
Irwin V. Wilson (15 N, E. 209, 45 Ohio
St. 426) 366
Jaffray v. Davis (26 N. E. 351. 124 N. Y.
164) 266
Jaquith v. Hudson (5 Mich. 123) 561
Jewett Pub. Co. v. Butler (34 N. E. 1087,
159 Mass. 517) 414
Johnson v. Lines (6 Watts & S. 80) 2S7
Jones V. Rice (IS Pick. 440) 439
Judy V. Louderman (29 N. E. 181, 48 Ohio
St. 562) 227
Justice V. Lang (42 N. Y. 493) 187
Keep V. Goodrich (12 Johns. 397).
236
nOPK.SEI..CAS.CONT.
(vii)
viii
CASES REPORTED.
Lake Shore & M. S. Ry. Co. v. Richards
(3S N. E. 773, 152 111. 59)
Lamb v. Lathrop (13 Wend. 95)
L'Amoreiix v. Gould (1 N. Y. 349)
Larson v. Jensen (19 N. W. 130, 53 Mich.
Lawrence* V! 'Fox (20* isV Y.' 268) '.'.'.'.'.'.'.'.
Lawson's Ex'r v. Lawson (16 Grat. 230). .
Lemraon v. Beeman (15 N. E. 47G, 45
Ohio St 505)
Lewis V. Brownins (130 Mass. 173)
Lloyd T. Scott (4 Pet. 205)
Lomerson v. Johnston (20 Atl. 675, 47 N.
J. Eq. 312)
Longworth v. Mitchell (26 Ohio St. 334) . .
Louisyille Asphalt Varnish Co. v. Lorick
(8 S. E. 8, 29 S. C. 533)
Lowe V. Peers (4 Burrows. 2225)
Lyon v. Strong (6 Vt. 219)
McGovern v. Hern (26 N. E. 861, 153
Mass. 308)
MoKanna v. Merry (61 111. 177)
McKinley v. Watkins (13 111. 140)
McMillan v. Ames (22 N. W. 612, 33
Minn. 257)
McParland v. Larkin (39 N. E. 609, 15o
lU. 84)
Mactier's Adra'rs v. Frith (6 Wend. 103)
Page
578
575
238
120
529
313
62
421
379
85
178
454
417
MaUory v. Gillett (21 N. Y. 412) .
Mallory t. Leach (35 Vt. 156)..,
183
286
248
113
406
38
124
390
Maiiory's Adm'r v. Mallory's Adm'r (17
S. W. 737. 92 Ky. 316) 138
Mansfield v. Gordon (10 N. E. 773, 144
Mass. 168) 294
Markle v. Hatfield (2 Johns. 455) 571
Martin v. Dwclly (6 Wend. 9i 331
Martin v. Flaharty (32 Pac. 287, 13 Mont.
96) 106
MiUs V. Wyman (3 Pick. 207) 254
Minnesota Linseed Oil Co. v. Collier White
Lead Co. (Fed. Cas. No. 9,635) 87
Mississippi & Dominion Steamship Co. v.
Swift (29 Atl. 1063, 86 Me. 248) 101
More V. Bennett (29 N. E. 888, 140 111. 69) 476
Morris Run Coal Co. v. Barclay Coal Co.
(68 Pa. St. 173) 469
Morton v. Lamb (7 Term R. 125) 594
Mott V. Clark (9 Pa. St. 399) 546
Moulton V. Kershaw (18 N. W. 172, 59
Wis. 316) 99
Mumford v. Whitney (15 Wend. .3,80) 140
Munroe v. Perkins (9 Pick. 208) 258
Mutual Life Ins. Co. v. Hunt (79 N. Y.
541) 325
Nally V. Reading (17 S. W. 978, 107 Mo.
350) 212
Newcomb v. Brackett (16 Ma.ss. 161).-... 592
Norrington v. Wright (6 Sup. Ct. 12, 115
U. S. 188) 604
O'Brien v. Young (95 N. Y. 428) 11
Osbum V. Throckmorton (18 S. E. 285,
90 Va. 311) 374
Owen V. Cawley (36 N. Y. 600) 339
Paine t. Cave (3 Term R. 148) 74
Parker v. South Eastern Ry. Co. (2 C. P.
Div. 416) 18
Peabody v. Speyers (56 N. Y. 230) 176
People's Bank of City of New York v. Bo-
gart (81 N. Y. 101) 376
Pool T. Homer (20 Atl. 1036, 64 Md. 131) 271
Pratt V. Miller (18 S. W. 945, 109 Mo. 78) 163
Presbyterian Church v. Cooper (20 N. E.
3.52, 112 N. Y. 517) 234
Providence Tool Co. v. Norris (2 Wall. 45) 428
Railroad Co. v. Lockwood (17 Wall. 357) 480
Rann v. Hughes (7 Term R. 3-50, note) ... 224
Rapplye v. Racine Seeder Co. (44 N. W.
363, 79 Iowa. 220 1 534
Ray T. Thompson (12 Cash. 281) 577
Paga
Rector, etc., of St. Mark's Church t. Teed
(24 N. E. 1014, 120 N. Y. 583) 246
Rice V. Boyer (9 N. E. 420, 108 Ind. 472) 315
Robinson v. Gould (11 Cush. 55) 393
Rowlev V. Bigelow (12 Pick. 307) 388
Roval Ins. Co. v. Beatty (12 AtL 607, 119
Pa. St. 6) 20
Roys T. Johnson (7 Gray, 162) 496
Rue V. Meirs (12 Atl. 369, 43 N. J. E.j.
377) 249
Ryder v. WombweU (L. R. 4 Exch. 32). .. 282
St. >Lark's Church v. Teed (24 N. E. 1014,
120 N. Y. 58:3) 246
Sawyer v. Lufkin (56 Me. 308) 328
Saxon V. Wood (30 N. E. 797, 4 Ind. App.
242) 444
Sceva V. True (53 N. H. 627) 8
Schnoll V. Nell (17 In 1. 29) 230
Seaver v. Phelps (11 I'ick. 304) 326
Seward v. Mitchell (1 L'old. 87) 233
Shaw V. Carpenter (54 Vt. 155) 491
Sheldon v. Davidson (r)5 N. W. 161. 85
Wis. 138) 382
Sherwood v. Walker (33 N. W. 919. 66
Mich. 568) 370
Smith V, Williams (1 Murph. 426) 552
Spaids V. Barrett (57 111. L'SO) 396
Spiuks V. Davis (32 Miss. 152) 4-52
Spring Co. v. Knowlton (103 U. S. 49) 513
Stafford v. Roof (9 Cow. 626) 290
Stamper v. Temple (6 Humph. 113) 93
State of Indiana v. Leavitt (14 N. Y. 162) 497
Stevens v. Coon (1 Pin. 356) _256
Stilk V. Myrick (2 Comp. 317) 257
Stimson v. Helps (10 Pac. 290, 9 Colo. 33) 384
Stone V. Dennison (13 Pick. 1) 116
Sullivan v. Hergan (20 Atl. 232. 17 R. I.
109) 490
Superintendent & Trustees of Public
Schools of City of Trenton v. Bennett
(27 N. J. Law. 513) 615
Thomas v. Greenwood (37 N. W. 195. 69
Mich. 215) 65
Thomas v. Railroad Co. (101 U. S. 71). .*. 345
Thompson v. Blanchard (3 N. Y. 335) 115
Thompson v. Reynolds (73 111. 11) 440
Thruston v. Thornton (1 Cush. 89) 14
Tode V. Gross (28 N. E. 469. 127 N. Y. 480) 467
Towusend v. Hargraves (118 Mass. 325) . . . 205
Tracy v. Talmage (14 N. Y. 162) 497
'Prist V. Child (21 AVall. 441) 430
Tucker v. Moreland (10 Pet. 58) 295
Tyler t. Carlisle (9 Atl. 356, 79 Me. 210) . . 508
Union Bank v. Jacobs (6 Humph. 515) 352
United States v. Tingey (5 Pet 115) 276
Vanbuskirk v. Hartford Fire Ins. Co. (14
Conn. 141) 545
Vanderbilt v. Schreyer (91 N. Y. 392) 260
Van Vleit v. Jones (20 N. J. Law. 340). .. 620
Wait V. Wait's Ex'r (28 Vt. 350) 123
Walker v. Brooks (125 Mass. 241) 539
Wallace v. Townsend (3 N. E. 601, 43 Ohio
St. 537) 90
Wheeler v. Reynolds (66 N. Y. 227) 208
Wheeler v. Wheeler (11 Vt 60) 264
White V. Corlies (46 N. Y. 467) 16
White V. Franklin Bank (22 Pick. 181)... 52T)
Whitney v. Dutch (14 Mass. 457) 278
Wilkinson v. Heavenrich (26 N. W. 139, 58
Mich. 574) 199
Willard v. Easthara (15 Gray, 328) 336
Wood v. Steele (0 Wall. 80) 622
Wood worth v. Bennett (43 N. Y. 273).,. 511
Wooley V, Drew (13 N. W, 594, 49 Mich.
2fX)) 410
Wooten V. Walters (14 S. E. 734. 110 N.
C. 251) 610
Yerrington v. Greene (7 R. L 589) 618
ILLUSTRATIVE CASES
ON THE
LAW OF CONTRACTS
HOPK.SEL.CAS.COST. (1)*
>3/
CONTRACT AND QUASI-CONTRACT DISTINGUISHED
3
LAWSON'S EX'Il V. LAWSON.
(16 Grat. 230)
Supreme Court of Api)f'als of Virginia.' April
10, 1801.
This was an action of assumpsit in the
circuit court of tlio county of Alexandria by
Thomas A. Brew is. executor of John Law-
son, deceased, ajjaiust Isabella Lawsou.
The declaration contained only the common
couut.s, and whilst it commenced in the name
of Thomas A. Brewis, executor of .Tohn Law-
son, it charged that the defendant was in-
debted to the plaintiff, and promised to pay
the plaintiff.
The defendant pleadetl "non assumpsit;"
and on the trial demurred to the evidence.
That evidence was that on the 3d day of
June, 1851, T. A. Brewis, the plaintiff, came
to the room where John Lawson, the plain-
tiff's testator, was sick in bed, and counted
out to him a sum of mo ley, upwards of six
hundred dollai-s, in notes, and asked Lawson
if he (Brewis) should carry the money back
to the store. That Lawson said, "No; he
would be better afttr a while, and would
then arrange it for the bank." Lawson then
handed the money to his wife, the defend-
ant, and told her to put it aside until he
felt better, and that he would arrange it for
the bank. That John Lawson died on the
18th of Juno, 1851, and that between that
date and the time when Brewis qualified as
executor of the estate of Lawson, Brewis
asked Mrs. Lawson for the money which he
handed to John Lawson. and Mrs. Lawson
refused to give it to him saying she mteud-
ed to keep it.
There was a verdict for $569.85, with in-
terest from the 19th of June, 1851, until
paid, subject to the demurrer to evidence;
and upon the demurrer the court below gave
a judgment for the defendant, whereupon
Brewis applied to this court for a superse-
deas, which was allowed.
Brent & Kinzer, for appellant F. J. Smith,
Lor appellee.
LEE, J. The money sought to be recov-
ered in this case was the property of the
plaintiff's testator in the form of bank notes,
and was handed to defendant (his wife) a
short time before his death, for safe-keeping
until he should be better, when as he said,
he would arrange it for the bank. It re-
mained in her possession during his life, and
at his death, which took place a few days
after, it was still his propertj'. She made
no claim to it as hers, during his life; nor,
so far as appears, did she dispose of any
part of it to her own use or that of her hus-
band. After his death the plaintiff, though
before he had qualified as executor under
the will of his testator, called on the defeud-
imt for the money, but she refused to sur-
render it, saying that she intended to keep it
1 Irrelevant parts of opiuion omittod.
Now as this money was part of the assets
of the estate of the testator, it Is clear that
the plaintiff is entitled to recover it in some
form of action, and in some character either
individual or representative.
But it is said that if the plaintiff be en-
tith'd to recover, he cannot do so in this
action, but should have declared on the
special case, or in trover anil conversion.
I do not think the plaintiff was bound to
declare speay over
to that other. This action has of late years
been greatly extended, becau.se founded on
principles of justice; and it now embraces
all cases in which the plaintiff has equity
and conscience on his side, and the defend-
ant is bound by ties of natural justice and
equity to refund the money. In such a
case, no express promise need be proved,
because from such relation between the par-
ties the law will imply a debt and give this
action founded on the equity of the plain-
tiff's case, as it were upon a contract quasi
ex contractu as the Roman law expresses it.
and upon this debt founds the requisite un-
dertaking to pay. Moses v. Macfarlan, 2
Burrows, 1005, 1008, 1012; per Buller, J..
Stratou v. RastaU, 2 Term R. 3G6, 370.
Here this money was part of the assets
of the plaintiffs testator, and it was the
duty of the defendant ex aequo et bono, to
pay it over to the plaintiff.
Nor do I think the plaintiff was bound to
declare in trover and conversion. The mon-
ey handed to the defendant by the taetator
was in bank notes, and if it be conceded
that upon the refusal of the defendant to
deliver the same to the plaintiff, trover
might be maintained as for a tort it by no
means follows thai as.sumpsit could not be
brought. There are many cases in which a
party aggrieved, who has a clear remedy by
action as for a tort, may waive the tort and
sue in assumpsit Thus an action against
a common carrier is for a tort and sup-
posetl crime, but assumpsit will lie for the
same cause. Per Lord Mansfield, Hambly
V. Trott, Cowp. 371, 375. So if a man takes
a horse from another, and brings him back
again, an action of trespass may be brought,
but the owner may bring assiuupsit for the
use and hire of the horse. Id. If a bank-
rupt, on the eve of his bankruptcy, fravid-
ulently deliver goods to one of his creditoi-s.
the assignees may recover the goods in tro-
ver, or waive the tort and bring assumpsit
Smith V. Hodson, 4 Term R. 211. If a stran-
ger takes my goods and delivers them to an-
other, a contract may be implied, and I
may bring an action of trover for them, or
of assumpsit to recover their value. Per
Lord Abinger. Bassell v. BeU, 10 Mees. &
■V\'. 350. In this case it was decided that
the assignees of bankrupt, who after the
CONTRACT AND QUASI-CONTRACT DISTINGUISHED.
bankruptcy had delivered goods to the de-
fendant to meet an accommodation bill
which they were about to give the bank-
rupt, might waive the tort and sue in as-
sumpsit. So a master whose apprentice has
left him and entered into the service of an-
other, who persuades him to remain with
him after he had found out who he was
and from what shop he had deserted, may
waive the tort and bring assimipsit against
the defendant for the work and labor of the
apprentice. Foster v. Stewart. 3 Maule &
S. 191. See, also, Curtis v. Bridges, Comb.
450: Eades v. Vandeput 5 East, 39; Lightly
T. Clowston, 1 Taunt 112. So if a man take
the goods of another and sell them, the own-
er may waive the trespass and sue him for
money had and received. Gilmore v. Wil-
bur, 12 Pick. 120; Foster v. Stewart, 3
Maule & S. 191. See, also, Jones v. Hoar,
5 Pick. 285. Other illustrations may be de-
rived from the cases, but I will not stop to
give them. I think that in no case could
the exercise of the right to elect between an
action in tort and assumpsit be more ap-
propriate than in this. The bank notes wert
received and treated by the testator as mon
ey, and as such were received and retained
by the defendant, and though trover might
lie to recover the notes, the law will imply
a promise to pay the amotmt to the plaintiff.
-6 3/
CONTRACT AND QUASI-CONTRACT DISTINGUISHED.
HEIITZOG T. HERTZOQ.
(29 Pa. St. 465.)
Supreme Court of Pennsylvania. 1857.
Error to court of cominon pleas, Fayette
county
This suit was brought by John Hertzes to
recover from the estate of his fatlior compen-
sation for services rendered the latter in his
lifetime, and for money lent. The pUiintilT
was twenty-one years of age about the year
1825, but continued to reside with his father,
who was a farmer, and to labour for him on
the farm except one year that he was ab-
sent in Virginia, until 1S42, when the plaintiff
married and took his wife to his father's,
where they continued for some time as he had
done before. His father then put him on an-
other farm which he owned, and some time
afterwards the father and his wife moved in-
to the same house with .John, and continued
to reside there until his death in 1849.
The testimony of Adam Stamm and Daniel
Roderick was relied on to prove a contract
or agreement on the part of George Hertzog
to pay for the services of plaintiff.
Adam Stamm affirmed: "John laboured for
his father. All worked together. The old
man got the proceeds. I know the money
from the grain went to pay for the farm.
The old man said so. John's sei-vices worth
.$12 per month; the wife's worth $1 per week,
beside attending to her own family. I heard
the old man say he would pay John for the
labour he bad done."
Daniel Roderick sworn: "John Hertzog re-
quested him to see his father about paying
liim for his work, which he had done and was
doing, and stated that he had frequently
spoken to the old man, his father, about it,
and he had still put him off. He agreed to
see him, and thinks it was in Jime, 1849.
Coming from Duncan's Furnace, he spoke to
the old man about paying John for his work.
He said he intended to make John safe. John
spoke to me in the spring of 1848. The old
awn died in August, 1849, I think."
The plaintiff also proved the services ren-
dered by himself and by his wife, and by the
declarations of the intestate that he had re-
ceived from the plaintiff ?5lX), money that be-
longed to the latter's wife, at the time of
purchasing a fann in 1847. The court, after
the defendant's points were presented, per-
mitted the plaintiff to add to his declaration
a count on a quantum meruit.
The defendant pleaded the statute of lim-
itation?, and presented the following points:
1. The court are respectfully requested to
charge the jury that where a son, after he
arrives at the age of twenty-one years, and
continues to live with and work for his father,
without any special contract, he cannot "re-
cover for wages or sei'vice rendered, from the
estate of his deceased parent, unless upon
clear and imequiVocal proof, leaving no doubt
that the relation between the parties was not
the ordinary one of parent and child, but
master and servant."
2. That according to the plaintiff's own
showing, the .$.">00 claimed by him belonged
to the wife of the plaintiff, and, since the act
of 1848, is her separate property, and cannot
be recovered in this suit, the same having
been instituted in \he name of the husljund
alone.
3. The plaintiff cannot recover in this ac-
tion on a quantum meruit, there being no
such count in plaintiff's narr.
The court below (Gilmore, P. J.) answered
these points as follows:
"1. We answer this in the affirmative. It
was so ruled in Candor's Appeal, 5 Watts &
S. 515. If the plaintiff was working for his
father, without a mutual understanding be-
tween them that he was to be paid for his
labour, he cannot recover wages.
"The jury must be satisfied from the evi-
dence that it was understood between him
and his father that he was to be compensat-
ed, not by the way of gift or legacy, but by
the payment of wages." Here the court re-
ferred to the evidence of Adam Stamm and
Daniel Roderick, and said, "From this evi-
dence, if you believe it, you may infer such
an agreement.
"2. If the jury are satisfied from the evi-
dence that the S-'OO was in the possession of
plaintiff's wife in 1847, and that the defend-
ant [decedent] then received it from her, this
would be considered the possession of tlie
same by the husband, and plaintiff could sue
without joining his wife.
"3. The court permit the declaration to be
amended so as to embrace this point."
The jury foimd a verdict for the plaintiff of
?2,203.97, and the court entered judgment
thereon.
The defendant sued out a writ of error, and
assigned the answers of the court below for
error.
Fuller & Oliphant, for plaintiff in error.
Miller & Patterson, for defendant in error.
LOWRIE, J. "Express contracts are, where
the terms of the agreement are openly uttered
and avowed at the time of tlie making; as. to
deliver an ox or ten loads of timber, or to pay
a state3, and authorities
cited. So, it was held that the law will im-
ply a promise to pay toll for passing upon a
turnpike road, notwithstanding the defendant,
at the time of passing, denied his liability
and refused payment. Proprietors v. Taylor,
G N. II. 4'J'J. In the recent English case of
Railway Co. v. Swaffield, L. R. tJ Exch. 132,
the defendant sent a horse by the plaintiffs'
railway directed to himself at S. station. On
the arrival of the horse at S. station, at night,
there was no one to meet it, and the plain-
tiffs, having no accommodation at the station,
sent the horse to a livery stable. The de-
fendant's servant soon after arrived and de-
manded the horse. He was referred to the
livery stable keeper, who refused to deliver
the horse except on payment of charges which
were admitted to be reasonable. On the next
day the defendant came and demanded the
horse, and the station master offered to pay
the charges and let the defendant take away
the horse; but the defendant declined, and
went away without the horse, which remain-
ed at the livery stable. The plaintiffs after-
wards offered to deliver the horse to the de-
fendant at S. without payment of any charges,
but the defendant refused to receive it unless
delivered at his farm, and with payment of a
sum of money for his expenses and loss of
time. Some months after, the plaintiff's paid
the livery stable keeper his charges, and sent
the horse to the defendant, who received it;
and it was held that the defendant was liable,
upon the ground of a contract implied by law.
to the plaintiffs for the livery charges thus
paid by them.
Illustrations might be multiplied, but enongh
has been said to show that when a contract I'r
promise implied by law is spoken of, a very
different thing is meant from a contract in
fact, whether express or tacit. The evidence
of an actual contract is generally to be found
either in some writing made by the parties,
or in verbal comruunications which passed be-
tween them, or in their acts and conduct con-
sidered in the light of the circumstances of
each particular case. A contract implied by
law, on the contrary, rests upon no evidence.
It has no actual existence; it is simply a
10
COXTEACT AND QUASI-CONTRACT DISTINGUISHED.
mjiihical creation of the law. The law says
it shall be taken that there was a promise,
when, in point ot fact, there was none. Of
course this is not good logic, for the obvious
and sutficient reason that it is not true. It is
a legal fiction, resting wholly for its support on
a plain legal obligation, and a plain legal right.
If it were true, it would not be a fiction.
There is a class of legal rights, with their
correlative legal duties, analogous to the ob-
ligationes quasi ex contractu of the civil law,
which seems to lie in the region between
contracts on the one hand and torts on the
other, and to call for the application of a
remedy not strictly furnished either by ac-
tions ex contractu, or actions ex delicto. The
common law supplies no action of duty, as it
does of assumpsit and trespass; and hence
the somewhat awkward contrivance of this
fiction to apply the remedy of assumpsit
where there is no true contract, and no prom-
ise to support it.
All confusion in this matter might be avoid-
ed, as it seems to me, by a suitable discrim-
ination in the use of the term "implied con-
tract." In the discussion of any subject
there is always danger of spending breath and
strength about mere words, as well as of
falling into error when the same term is
used to designate two different things. If the
term "implied contract" be used indifferently
to denote (1) the fictitious creation of the
law spoken of above; (2) a true or actual but
tacit contract, — that is, one where a meeting
of the minds or mutual understanding is in-
ferred as matter of fact from circumstances,
no words, written or verbal, having been used;
and (3) that state of things where one is es-
topped by his conduct to deny a contract, al-
though, in fact, he has not made or intend-
ed to make one,— it is not strange that confu-
sion should result, and disputes arise, where
there is no difference of opinion as to the
substance of the matter in controversy;
whereas, were a different term applied to
each,— as, for example, that of legal duty to
designate the first; contract, simply, to des-
ignate the second; and contract by estoppel,
the third, — this difficulty would be avoided.
It would of course come to the same thing,
in substance, if the first were always called
an implied contract, while the other two were
otherwise designated in such way as to show
distinctly what is meant. This is not always
done, and an examination of our own cases
would perhaps show that more or less confu-
sion has arisen from such indiscriminate use
of the term. A better nomenclature is de-
sirable. But whatever terms are employed, it
is indispensable that the distinction, which is
one of substance, should be kept clearly in
mind, in order that the principles governing
in one class of cases may not be erroneously
applied to another. See remarks of Smith,
J., in Bixby v. Moore, 51 N. H. 402, and au-
thorities cited at page 404.
Much may doubtless be said against sup-
plying a remedy for the enforcement of a
plain legal right 'by so rude a device as a
legal fiction." Mame's Ancient Law, 2G. But
at this time of day that Is a matter for the
consideration of the legislature rather than
the courts. The remedy of indebitatus as-
sumpsit can hardly be abolished in that large
class of cases where it can only be sustained
by resorting to a fiction until some other is
furnished to take its place.
It by no means follows that this plaintifl: is
entitled to recover. In the first place, it
must appear that the necessaries furnished to
the defendant were furnished in good faith,
and with no purpose to take advantage of her
unfortunate situation. And tipon this ques-
tion the great length of time which was al-
lowed to pass without procuring the appoint-
ment of a guardian for her is a fact to which
the jury would undoubtedly attach much
weight. Its significance and importance must,
of course, depend very much on the circum-
stances under which the delay and omission
occurred, all of which will be for the jury tu
consider upon the question whether every-
thing was done in good faith towards the de-
fendant, and with an expectation on the part
of the plaintiff's intestate that he was to be
paid. Again, the jury are to consider whether
the support for which the plaintiff now seeks
to recover was not furnished as a gratuity,
with no expectation or intention that it should
be paid for, except so far as compensation
might be derived from the use of the defend-
ant's share of the farm. And upon this point
the relationship existing between the parties,
the length of time the defendant was there in
the family without any move on the part of
Enoch F. Sceva to charge her or her estate,
the absence (if such is the fact) of an ac-
count kept by him wherein she was charged
with her support and credited for the use and
occupation of the land,— in short, all the facts
and circumstances of her residence with the
family that tend to show the intention or ex-
pectation of Enoch P. Sceva with respect to
being paid for her support,— are for the jury.
Munger v. Munger, 33 N. H. 581; Seavey v.
Seavey, 37 N. H 125; Bundy v. Hyde, 50 N.
H. 116. If these services were rendered, and
this support furnished, with no expectation
on the part of Enoch P. Sceva that he was to
charge or be paid therefor, this suit cannot
be maintained; for then it must be regarded
substantially in the light of a gift actually
accepted and appropriated by the defendant,
without reference to her capacity to make a
contract, or even to signify her acceptance by
any mental assent.
In this view, the facts stated in the case
will be evidence for the jury to consider upon
the trial; but they do not present any ques-
tion of law upon which the rights of the par-
ties can be determined by the court.
Case discharged.
CO]SrTRACT AND QUASI-CONTRACT DISTINGUISHED.
11
O'BRIEN T. YOUNG.i
(95 N. y. 428.)
(^ourt of Appeals of New York. April 15, 1884.
Appeal from order of the peneral term of
the supreme court, in the First judicial de-
partment, made January 8, 1884, which af-
firmed an order of special term restraining
the sheriff of the county of New York from
collecting, upon a judgment issued to him
herein, interest at a greater rate than six
per cent, after January 1, 1880.
Judsmont was perfected in this action in
favor of plaintiff and against defendants
February 10, 1877. Execution thereon was
issued to the sheriff November 19, 1883, in-
structing the sheriff to collect the amount
thereof, with interest at the rate of seven
per cent, from the date of tlie enti-j- of judg-
ment.
Lawrence & Waehner, for appellants. Lu-
cien Birdseye, for respondent.
EARL, J. By the decided weight of au-
thority in this state, where one contracts to
pay a principal sum at a certain future time
with interest, the interest prior to the ma-
turity of the contract is payable by virtue
of the contract, and thereafter as damages
for the breach of the contract. Macomber v.
Dunham, 8 Wend. 550; United States Bank
V. Chapln, 9 N. Y. 471; Hamilton v. Van
Rensselaer, 43 N. Y. 244; Ritter v. Phillips,
.^3 N. Y. 586; Railroad Co. v. Moravia, 61
Barb. 180. And such is the rule as laid down
by the federal supreme court. Brewster v.
Wakefield, 22 IIow. 118; Burnhisel v. Fir-
man, 22 Wall. 170; Holden v. Trust Co., 100
U. S. 72. The same authorities show that
after the maturity of such a contract, the in-
terest is to be computed as damages accord-
ing to the rate prescribed by the law, and
not according to that prescribed in the con-
tract If that be more or less.
But when the contract provides that the
interest shall be at a specified rate until the
principal shall be paid, then the contract
rate governs until payment of the principal,
or until the contract is merged in a judg-
ment. And where one contracts to pay mou-
ed on demand "with interest," or to pay
money generally "with interest," without
specifying time of payment, the statutoi-y
rate then existing becomes the contract rate
and must govern until payment, or at least
until demand and actual default, as the par-
ties must have so intended. Paine v. Cas-
well, GS Me. 80; Eaton v. Boissonnault, 67
Me. 540.
If, therefore, this judgment, the amount
of which is by its terms payable with in-
terest, is to be treated as a contract— as a
bond executed by the defendants at its date,
then the statutoi*y rate of Interest existing
at the date of the rendition of the judgment
is to be treated as part of the contract and
1 Opinion of Andrews, J., omitted.
must be paid by the defendants according to
the terms of the contract, and thus the plain-
tiff's contention is well founded.
But is a judgment, properly speaking, for
the purposes now in hand, a contract? I
think not. The most important elements of
a contract are wanting. There is no aggre-
gatio mentium. The defendant has not vol-
untarily assented. All the authorities assort
that the existence of parties legally capable
of contracting is essential to every contract,
and yet they ncnrly all agree that judgments
onterole "with interest." Here the judgment
contains no direction as to Interest. The
reasoning of the oi)inion is applicable to this
ca.se and is, therefore, read to justify my
vote in this. Since writing the opinion, we
have decided in the case of Sanders v. Rail-
way Co., 94 N. Y. G41. the law to be as laid
down in the first paragraph of the opinion.
The orders of the general and special
terms should be reversed and the motion
granted, without costs in either court, the
parties having so stipulated.
14
M
THRUSTON V. THORNTON
(1 Gush. 89.)
Supreme Judicial Court of Massachuse'
Suffolk and Nantucket. March
Term, 18-iS.
OFFER AND ACCEFTAXCE.
This was an action of assumpsit to recover
compensation for services, rendered by the
plaiutiflf as a broker, in selling or aiding to
sell certain real estate belonging to the de-
fendant. The declaration contained the com-
mon money counts, a bill of particulars, and
a special count. The cause was tried in the
court of common pleas, before Wells, C. J.
The bill of particulars set forth a claim by
the plaintiff against the defendant of the
sum of one thousand dollars and interest, as
a commission of five per cent., "as per con-
tract, for selling his farm called 'Wood Park,'
in Vii-ginia. which was sold to Marcus Bull,
Esq.," through the plaintiff's agency, for
twenty thousand dollars.
In the special count, the plaintiff alleged,
in substance, that, in consideration that at
the request of the defendant, he would find
a purchaser for and sell and dispose of the
defendant's farm above mentioned, the de-
fendant promised to pay him five per cent,
of the amount for which he should sell
the same, as a commission for his serv-
ices; and that he, confiding in the defend-
ant's promise, did find a purchaser for the
estate, for the sum of twenty thousand dol-
lars, to whom the defendant sold and con-
veyed the same, and received therefor the
said sum.
The plaintiff claimed to recover— First, as
upon a special contract, on the part of the
defendant, to pay him a commission of five
per cent, on the sum for which the estate
should be sold; or, secondly, if that ground
should not be sustained by the evidence, then,
a reasonable compensation for his services in
effec-ting the sale.
In order to prove the special agreement
relied on by the plaintiff, he introduced the
deposition of Gary Selden, who testified:
"That some time in the fall of 1840, or early
in the following winter, the defendant was
In the city of Washington, and placed in the
hands of the deponent a written schedule of
certain real and other property, valued at
twenty-two thousand one hundred and thirty
dollars, with a view of having the same sold;
that some short time thereafter the defend-
ant came into the oflUce occupied jointly by
the deponent and the plaintiff', on which oc-
casion the deponent, at the request of the
plaintiff, introduced the latter to the defend-
ant, when the sale of the estate alluded to
became the subject of conversation; that in
the course of the conversation the plaintiff in-
quired of the defendant if he would pay a
commission for effecting a sale of the prop-
erty, to which the defendant replied that he
would pay a commission to any person who
could effect a sale of the property at the
price mentioned in the schedule; and that
this deponent caused a copy of the schedule
to be taken for the use of the plaintiff."
It was also testified, on behalf of the plain-
tiff", that he did recommend the estate to Mar-
cus Bull, who called upon the defendant, and
purchased the estate for the sum of twenty
thousand five hundred dollars.
It appeared in evidence that the plaintiff
was an attorney at law, and, in connection
with his business as an attorney, acted as a
real-estate broker. But it did not appear
that at the time of the interview, or at any
time prior to the sale of the estate, the de-
fendant knew that the plaintiff ever acted as
a broker, or that he was informed that the
purchaser was sent to him by the plaintiff.
The defendant contended, and introduced
evidence tending to show, that no such con-
versation as was testified to by Selden ever
took place, and that he never gave the plain-
tiff" any written description of the estate.
In relation to the special count the judge
instructed the jury that if they should be sat-
isfied that the conversation testified to by
Selden took place between these parties, then,
in order to determine whether the defendant
was liable in the present action, it would
be necessary for the jury to understand what
constituted a legal and binding contract; and
that, so far as the matters in difference in
this case were concerned, it was only neces-
sarj' for them to fix distinctly in their minds
the foUowuig part of the definition of a legal
contract:
"A contract implies the assent of two minds.
This idea is often expressed by the phrase,
Tt takes two to make a bargain.' Or, to
state it in other words, it must be understood
between the parties that the one party has
made an offer, and that the other has ac-
cepted it. If one party should make an of-
fer, and the other party should not accept
it, there would be no contract. There is
sometimes an apparent exception to this rule,
but it is only apparent. Thus, if a person
should put forth an advertisement, offering a
reward to any one who would recover lost
property, this oft"er is to no one in particular
and no one accepts it at the time it is made.
But the meaning of the offer is that it is
made to whomsoever will act upon it; and it
is an implied part of the offer that time shall
be afforded to any one who chooses to accept
it; and if a person, before the offer is with-
drawn, does that which by the terms of the
offer will entitle him to the reward, his so
acting upon the offer constitutes an accept-
ance of it, and the party making the offer is
bound to fulfill his promise. But when the
parties are face to face^^_to_ccjiiatitute_acon-
cepfrtrfiTe5?'w^B?Fe"lt is a part of the agree-
ment that time shall be given to the person
to whom the offer is made, to determine
whether he will accept or not, in which case,
the time given makes a part of the offer."
NECESSITY FOH OFFER AND ACCEPTANCE.
15
In view of those instructions, the Jury wore
directed to inquire whether it was proved that
at the interview referred to the minds of the
parties met, and they made a lej,'al and
binding contract; or whether the transaction
was, as contended by the defendant, a loose
conversation, not midorstood or intended by
them as an agreement; and, as a test, tlie
jury were directed to inquire and doterraine
whether, when the parties separated, it was
understood between them that the plaintiff
y should do or attempt anytliing for the de-
fendant, in relation to the sale of his estate,
In consequence of the conversation which had
taken place.
The jury, under those instructions, rendered
a verdict for the defendant, and the plaintiff
thereupon filed exceptions.
H. H. Fuller & R. F. Fuller, for plain-
tiff, argued that the instructions were wrong
as to the necessity of a formal acceptance
of an offer made when the parties were face
to face; and that the jury should have been
instructed that, if the plaintiff acted in conse-
quence of the defendant's offer, the former
was entitled to recover. Williams v. Car-
wardine, 5 Car. & P. 56G, 574, 4 Barn. &
Adol. 621 ; Lancaster v. Walsh, 4 Mees. & W.
16, 22; Murray v. Currie, 7 Car. & P. 584;
Horford v. Wilson, 1 Taunt. 12; 20 Am. Jur.
19. The defendant took less than the price
stipulated, but that was no reason why the
plaintiff should be deprived of his commis-
sion,
J.* Dana, for defendant, cited RoUe, Aur.
"Actioh of the Case" pi. 1; Com. Dig. "Ac-
tion of the Case upon Ass.," T, 2.
WILDE, J. On a careful examination of
the instructions to the jury, the court have
been unable to find any misdirection, or any
remarks tending to mislead the jury in their
consideration of the evidence. Certainly the
remarks of the judge as to the definition of
a legal contract, and as to the necessary
requisites to constitute such a contract, were,
we think, clearly correct. The jury were
then directed to consider the evidence, and to
decide whether, "at the interview between
the parties, their minds met, and they made
a legal and binding contract; or whether the
transaction, as was insisted by the defend-
ant, was a loose conversation, not under-
stood or intended by them as an agreement."
We are of opinion that this direction was en-
tirelj' correct. It was for the jury to decide
what was the meaning and intention of the
parties. The conversation was loose and in-
definite, and the jury, we think, might well
find, as they did, that no contract was in
fact made. But, however this may be, it was
a question of fact for the jury, and we think
they were in no respect misdirected.
Exceptions overruled.
It)
^
OFFER AND
WHITE V. CORLIES.j^W^^
(46 N. Y. 467.) / ^
Conrt of Appeals of New York. Nov. 20, 1S71.
Appeal from First judicial district.
The action was for an alleged breach of
contract.
The plaintiff was a builder with his place
of business in Fortieth street, New York City.
The defendants were merchants at 32 Dey
street.
In September, 1S65, the defendants fur-
nished the plaintiff with specifications, for
fitting up a suit of offices at 57 Broadway,
and requested him to make an,estiiuate of the
cost of doing the work.
Un September 2Sth the plaintiff left his es-
timate with the defendants, and they were
to consider upon it, and inform the plaintiff
of their conclusions.
On the same day the defendants made a
change in their specifications and sent a copy
of the same, so changed, to the plaintiff, for
his assent under his estimate, which he as-
sented to by signing the same and returning
it to the defendants.
On the day following, the defendants' book-
keeper wrote the plaintiff the following note:
"New York, September 29th. Upon an
agreement to finish the fitting up of offices
.57 Broadway in two weeks from date, you
can begin at once. The writer will call
again, probably between five and six this p.
ni. W. H. K., for J. W. Corlies & Co., 32 Dey
street"
No reply to this note was ever made by the
plaintiff; and on the next day the same was
countermanded by a second note from the
defendants.
Immediately on receipt of the note of Sep-
tember 29th. and before the countermand was
forwarded, the plaintiff commenced a perform-
ance by the purchase of lumber and begin-
ning work thereon.
And after receiving the countermand, the
plaintiff brought this action for damages for
a breach of contract.
The court charged the jury as follows:
"From the contents of this note which the
plaintiff received, was it his duty to go down
to Dey street ("meaning to give notice of as-
.sent) before commencing the work. In my
opinion it was not. He had a right to act upon
this note and commence the job, and that
was a binding contract between the parties."
To this defendants excepted.
L. Henry, for appellants.
The manife.station of assent must be such
as tends to give notice to proposing party.
Mactier v. Frith, G Wend. 103; Vassar v.
Camp, 11 N. Y. 441.
Mr. Field, for respondent
It was not necessary that the fact of con-
currence by one party should be made known
to the other. Mactier v Frith, 6 Wend. 103,
ACCEPTANCE.
117. An agent acting with apparent authori-
ty binds the principal. Story, Ag. § 443;
Clark V. Bank. 3 Duer, 241; President, etc.»
of Mechanics' Bank v. New York & N. H. R.
Co., 13 N. Y. 599; Farmers' & Mechanics'
Bank v. Butchers' & Drovers' Bank, 16 N.
Y. 125; Dunning v Roberts, 35 Barb. 46.3;
Cornell v. :Masten, Id. 157; Whitbeck v. Schuy-
ler, 44 Barb. 469.
FOLGER, J. We do not think that the
jury found, or that the testimony shows that
there was any agreement between the parties
before the written comnunication of the de-
fendants of September 30 was received by
the plaintiff. This note did not make an
agreement. It was a p roposition, and must
have bee n accepted by._th"g^pr ainti tr_jifilore"
either party w as b ouiid in__contract to. the
other. The only overt action which is claim-
"""ed DJT the plaintiff as indicating on his part
an acceptance of the offer, w^as the purchase
of the stuff necessary for the work, and com-
mencing work as we understand the testi-
mony, upon that stuff.
We understand the rule to be that where
an offer is made by one party to another
when they are not together, the acceptance
of it by that other, must be manifesto 1 by
some appropriate act It does not need that
the acceptance sl]all come to the knowledge
of the one making the offer before he shall
be bound. But though the manifestation need
not be brought to his knowledge before he
becomes bound, h e is not bound if, J-liat man-
ifestation is not put in a Dro ner way to be in
t h'eTis ual "course of even ^, in some re asonnlile
t Lme comfflum(J5tgg"Toniim^ Thus' a letter
received by mail containing a proposal may
be answered by letter by mail containing the
acceptance. And in general as soon as the
answering letter is mailed, the contract is
concluded. Though one party does not know
of the acceptance, the manifestation thereof
is put in the proper way of reaching him.
In the case in hand the plaintiff determined
to accept. But a mental determination not
indicated by .speech, or put in course of indi-
cation by act to the other party, is not an
acceptance which will bind the other. Nor
does an act which in itself is no indication of
an ac*ceptance, become such because accom-
panied by an unevinced mental determina-
tion. Where the act uninterpreted by con-
current evidence of the mental purpose ac-
companying it is as well referable to one
state of facts as another, it is no indication
to the other party of an acceptance, and does
not operate to hold him to his offer.
Conceding that the testimony shows that
the plaintiff did resolve to accept this offer,
he did no act which indicated an acceptance
of it to the defendants. He, a carpenter and
builder, purchased stuff for the work. But It
was stuff as fit for any other like work. He
began work upon the stuff, but as he would
have done for any other like work. There
was nothing in liis thought formed but not
NECESSITY FOR COMMUNICATION.
17
uttered, or in his acts that indicated or set
in motion an indication to the defendants of
his acceptance of their offer, or which could
necessarily result therein.
But the charge ot the learned judge was
fairly to be understood by the jury as laying
down the rule to them, that the plaintiff need
not indicate to the defendants bis acceptance
of their offer; and that the purchase of stuS
H0PK.8EL.CAS.CONT. — 2
and working on it after receiving the note,
made a binding contract betsveen the p.-.r-
tles. In this we think the learned judge feU
into error.
The judgment appealed from must be re-
venged and a new trial ordered, with costs to
abide the event of the action.
AH concur, but ALLEN, J., not voting.
Judgment reversed, and new trial ordered.
IS
OrrEK AND ACCEPTANCE.
PARKEK V. SOUTH EASTERN RY. CO.
GABELL V. SAME.
(2 C. P. Div. 416.)
Court of Appeal. April 25, 1877.
Actions against the South Eastern Rail-
way Company for the value of bags and
their contents lost to the plaintiffs respec-
tively by the negligence of the company's
servants.
The plaintifE in each case had deposited a
bag in a cloak-room at the defendants' rail-
way station, had paid the clerk 2d., and had
received a paper ticket, on one side of which
was written a number and a date, and were
printed notices as to when the oflace would
be opened and closed, and the words "See
back." Un the other side were printed sev-
eral clauses relating to articles left by pas-
sengers, the last of which was, "The com-
pany will not be responsible for any package
exceeding the value of £10." In each case
the plaintiff on the same day presented his
ticket and demanded his bag, and in each
case the bag could not be found and had not
been since found. Parker claimed £24. 10s.
as the value of his bag, and Gabell "claimed
£50. IGs. The company in each case plead-
ed that they had accepted the goods on the
condition that they would not be responsible
for the value if it exceeded £10; and on the
trial they relied on the words printed on the
back of the ticket, and also on the fact that
a notice to the same effect was printed and
hung up in the cloak-room. Each plaintiff
gave evidence and denied that he had seen
the notice, or read what was printed on the
ticket. Each plaintiff admitted that he had
often received such tickets, and knew there
was printed matter on them, but said that
he did not know what it was. Parker said
that he imagined the ticket to be a receipt
for the money paid by him; and Gabell said
he supposed it was evidence of the company
having received the bag, and that he knew
that the number on it corresponded with a
number on his goods.
Parker's case was tried at Westminster on
the 27th of February, 1876, before Pollock,
B.; and GabeU's case was tried at Westmin-
ster on the 15th of November, 1876, before
Grove, J. The questions left in each case
by the judge to the jury were: (1) Did the
plaintiff read or was he aware of the special
condition upon which the articles were de-
posited? (2) Was the plaintiff, under the
circumstances, under any obligation, in the
exercise of reasonable and proper caution,
to read or make himself aware of the condi-
tion?
The jury in each case answered both ques-
tions in the negative, and the judge there-
upon directed judgment to be entered for
the plaintiff for the amount claimed, re-
serving leave to the defendants to move to
enter judgment for them.
In Parker's rase the defendants moved to
enter judgment, and also obtained from the
common pleas division an order nisi foi a
new trial, on the ground of misdirection.
The order was discharged, and the motion
was refused by the common pleas division.
See 1 C. P. Div. 618, where the words
printed on the ticket are set out at length.
The defendants appealed.
In GabeU's case the defendants applied to
the common pleas division for the order nisi
for a new trial on the ground of misdirection,
but the court refused to grant the order.
The defendants then moved for judgment
and also obtained from the court of appeal
an order nisi for a new trial, on the ground
of misdirection.
The cases were heard together.
Feb. 6, 7.
Mr. Benjamin. Q. C, and Mr. Bremner, for
the defendants
The plaintiffs sue on an alleged contract
to keep the goods safely, but there is no con-
tract if one party means one thing and the
other party means, something else; there
m;ist be a consensus ad idem.
G. W. Digby, solicitor for Parker. M. J.
Pyke, solicitor for GabelL W. R. Stevens,
solicitor for the company.
BRAMWELiL., J. A. Not so. One of the
parties may so conduct himself as to lead the
other to believe that there was a contract.
A man cannot make such a claim saying
that he took the ticket, but took care not to
read what was printed on it, though he knew
that it related to the goods deposited. The
plaintiff proposes to the company that they
shall do something for him, and they an-
swer, "There are our terms." He had often
taken similar tickets, and knew that they
had on them printed matter, and he knew
that he must give blck the ticket in order to
get back his goods. If the porter had said,
"Read this," the plaintiff could not recover
if he asserted merely that he had not read
what was printed; and where is the differ-
ence? Henderson v. Stevenson, L. R, 2 H,
L. Sc. 470, was not a similar case. There
the passenger took the ticket in a hurry, and
knew nothing about it. Besides, in that
case the company wera common carriers,
bound to take the passenger on terms fixed
by law; but the company are under no obli-
gation to keep a cloak-room, and they have
an absolute right to prescribe the terms on
which they will accept articles left there.
They are not even warehousemen, for they
wiU only take small articles for the con-
venience of passengers. It is absurd to
hold that for a charge of 2d. a company
ought to become liable to make good a loss
of perhaps hundreds of pounds. Harris v.
Railway Co., 1 Q. B. Div. 515, was a stronger
case. A man is not compelled to read a
contract in order to be boimd by it Here
the plaintiff took the ticket, and that implies
an assent. The ticket contains the terms of
NECESSITY FOR COMMUNICATION.
19
the contract, and the plaintiff cannot, by re-
fusing to read it, force on the company a
different contract Lewis v. M'Kee, L. R.
4 Exch. 581. The company has not acted so
as to Induce the plaintiff to believe that they
would be liable. Cornish v. Abington, 4
Hurl. & N. 540, 28 L. J, Exch. 2G2. And if
the porter has done so he has exceeded his
autliority. The verdict ought to be entered
for the defendants, or if not, then a new
trial should be directed.
Mr. Prentice, Q. C, and D. Brynmor Jones,
for Gabell.
The question Is whether a man is bound
by the contents of a printed paper merely
put into his hands. It could not be pretend-
ed that any one would be bound by the
terms printed on o turnpike ticket or a thea-
tre ticket. The plaintiff says he thought the
ticket was a voucher for the goods, as it
was, and, if so, why should he read it? It
is not a question of law, but one of common
sense, to be left to the jury. The company
were clearly bailees for hire, and as such
are prima facie liable, and it is for them to
shew that they are not.
F. Pollock (Prentice, Q. C, with him), for
Parker.
Suppose that the company had put on the
ticket that if the goods were not redeemed
within twenty-four hours they would be for-
feited, or could njt be redeemed except on
payment of £5, would that have bound the
plaintiff? It is no answer that that would
be unreasonable, if the ticket is said to con-
stitute a conti*act; nor is a depositor obliged
to know what would be reasonable. To say
that he is at peril obliged to read this ticket,
is to say that the general law of bailments
is so absurd that a bailor must exi)ect spe-
cial conditions. No one can be expected
to know that a receipt or a mere voucher
given in order to secure the return of the
article to the proper person contains special
conditions. The questions were rightly put
to the jury, and the verdict ought to stand.
Mr. Bremner, in reply.
If the companies are for 2d. to incur in-
definite liabilities, they will shut up the
cloak-rooms. It is admitted that the terms
specified on the ticket are reasonable, and it
is needless to speculate on what would be
the consequence if the temis were unreason-
able. The depositor had plenty of time to
read what was printed, and if he did not
he must take the consequences.
Cur. adv. vult.
The judgments of MELLISH and BAG-
GALLAY, JJ., were read by BRAMWELL,
L. J.
MELLISH, L. J. In this case we have to
consider whether a person who deposits In
the cloak-room of a railway company, articles
which are lost through the carelessness of the
company's servants, is prevented from recov-
ering, by a condition on the back of the ticket,
that the company would not be lialjle for the
loss of goods exceeding the value of £10. It
was argued on behalf of the railway company
that the company's servants were only au-
thorized to receive goods on behalf of the com-
pany upon the terms contained in the ticket;
and a passage from Mr. Justice Blackburn's
judgment in Harris v. Railway Co., 1 Q. B.
Div., at page 533, was relied on in support of
their contention: "1 doubt much— inasmuch
as the railway company did not authorize
their servants to receive goods for deposit
on any other terms, and as they had done
nothing to lead the plaintiff to believe that
they had given such authority to their serv-
ants so as to preclude them from asserting,
as against her, that the authority was so lim-
ited—whether the true rule of law Is not that
the plaintiff must assent to the contract in-
tended by the defendants to be authorized,
or treat tlje case as one in which there was
no contract at all, and consequently no lia-
bility for safe custody." I am of opinion that
this objection cannot prevail. It is clear that
the company's servants did not exceed the au-
thority given them by the company. They
did the exact thing they were authorized to
do. They were authorized to receive articles
on deposit as bailees on behalf of the com-
pany, charging 2d. for each article, and de-
livering a ticket properly filled up to the per-
son leaving the article. This is exactly what
they did in the present cases, and, whatever
may be the legal effect of what was done, the
company must, in my opinion, be bound by
it. The directors may have thought, and no
doubt did think, that the delivering the ticket
to the person depositing the article would be
sufficient to make him bound by the condi-
tions contained in the ticket, and if they were
mistaken in that, the company must bear the
consequence.
The question, then, is whether the plaintilf
was bound bj* the conditions contained in the
ticket. In an ordinary case, where an ac-
tion is brought on a written agreement which
is signed by the defendant, the agreement is
proved by proving his signature, and, in the
absence of fraud, it is wholly immaterial
that ho has not read the agreement and does
not know its contents. The parties may,
howevei", reduce their agreement into writ-
ing, so that the writing constitutes the sole
evidence of the agreement, without signing it:
but in that case tliere must be evidence in-
dependently of the agreement itself to prove
that the defendant has assented to it. In
that case, also, if it is proved that the de-
fendant has assented to the writing consti-
tuting the agreement between the parties, it
is, in the absence of fraud, Immaterial that
the defendant had not read the agreement
and did not know its contents. Now If, in the
course of making a contract, one party de-
20
OFFER AND ACCEPTANCE.
livers to another a paper containing -nriting,
and the party receiving the paper knows that
the paper contains conditions which the party-
delivering it intends to constitute the con-
tract, I have no doubt that the party receiv-
ing the paper does, by receiving and keeping
it, assent to the conditions contained in it,
although he does not read them, and does not
know what they are. I hold, therefore, that
the case of Harris v. Ilailway Co., 1 Q. B.
Div. 515, was rightly decided, because in that
case the plaintiff admitted, on cross-examina-
tion, that he believed there were some con-
ditions on the ticket. On the other hand, the
case of Henderson v. Stevenson, L. K. 2 H. L.
Sc. 470, is a conclusive authority that if the
person receiving the ticket does not know
that there is any writing upon the back of the
ticket, he is not bound by a condition printed
on the back. The facts in the cases before us
differ from those in both Henderson v. Steven-
son, L. R. 2 H. L. Sc. 470, and Harris v. Rail-
way Co., 1 Q. B. Div. 515, because in both
the cases which have been argued before us,
though the plaintiffs admitted that they knew
there wag writing on the back of the ticket,
they swore not only that they did not read it,
but that they did not know or believe that
the writing contained conditions, and we are
to consider whether, under those circumstan-
ces, we can lay down as a matter of law
either that the plaintiff is bound or that he is
not bound by the conditions contained in the
ticket, or whether his being bound depends
on some question of fact to be determined by
the jury, and if so, whether, in the present
ease, the right question was left to the juiy.
Now, I am of opinion that we cannot lay
down, as a matter of law, either that the
plaintiff was bound or that he was not bound
by the conditions printed on the ticket, from
the mere fact that he knew there was writ-
ing on the ticket, but did not know that the
writing contained conditions. I think there
may be cases in which a paper containing
writing is delivered by one party to anothei
in the course of a business transaction, where
it would be quite reasonable that the party
receiving it should assume that the writing
contained la it no conditions, and should put
it in his pocket unread. For instance, if a
person driving through a turn-pike gate re-
ceived a ticket upon paying the toll, he might
reasonably assume that the object of the
ticket was that by producing it he might be
free from paying toll at some other turn-pike
gate, and might put it in his pocket unread.
On the other hand, if a person who ships
goods to be carried on a voyage by sea re-
ceives a bill of lading signed by the master,
he would plainly be bound by it, although
afterwards in an action against the shipown-
er for the loss of the goods, he might swear
that he had never read the bill of lading, and
that he did not know that it contained the
terms of the contract of carriage, and that the
shipowner was protected by the exceptions
contained in it. Now the reason why the per-
son receiving the bill of lading would be
bound seems to me to be that in the great ma-
jority of cases persons shipping goods do
know that the bill of lading contains the
terms of the contract of carriage; and the
shipowner, or the master delivering the bill of
lading, is entitled to assume that the person
shipping goods has that knowledge. It is,
however, quite possible to suppose that a per-
son who is neither a man of business nor a
lawyer might on some particular occasion
ship goods without the least knowledge of
what a bill of lading was, but in my opinion
such a person must bear the consequences of
his own exceptional ignorance, it being plain-
ly impossible that business could be carried
on if every person who delivers a bill of lad-
ing had to stop to explain what a bill of lad-
ing was.
Now the question we have to consider is
whether the railway company were entitled
to assume that a person depositing luggage
and receiving a ticket in such a way that he
could see that some writing was printed on
it would understand that the writing con-
tained the conditions of contract, and this
seems to me to depend upon whether people
in general would in fact, and naturally, draw
that inference. The railway company, as it
seems to me, must be entitled to make some
assumptions respecting tlae person who de-
posits luggage with them. I think they are
entitled to assume that he can read, and that
he understands the English language, and'
that he pays such attention to what he is
about as may be reasonably expected from a
person in such a transaction as that of de-
positing luggage in a cloak-room. The rail-
way company must, however, take mankind
as they find them, and if what they do is suf-
ficient to intorm people in general that the
ticket contains conditions, I think that a par-
ticular plaintiff ought not to be In a better
position than other persons on account of his
exceptional ignorance or stupidity or careles.s-
ness. But if what the railway company do is
not sufficient to convey to the minds of peo-
ple in general that the ticket contains condi-
tions, then they have received goods on de-
posit without obtaining the consent of the
persons depositing them to the conditions lim-
iting their liability. I am of opinion, there-
fore, that the proper direction to leave to the
jury in these cases is, that if the person re-
ceiving the ticket did not see or know that
there was any writing on the ticket, he is
not bound by the conditions; that if he knew
there was writing, and knew or believed that
the writing contained conditions, then he is
bound by the conditions; that If he knew
there was writing on the ticket, but did not
know or believe that the writing contained
conditions, nevertheless he would be bound,
if the delivering of the ticket to him in such
a manner that he could see there was writ-
ing upon it, was, in the opinion of the jury,
reasonable notice that the writing coutiiiued
conditions.
NECESSITY FOR COMIIL'NICATIOX.
21
I have lastly to consider whether the direc-
tion of the learned judge was correct, name-
ly, "Was the plaintiff, under the circumstan-
ces, under any obligation, in the exercise of
reasonable and proper caution, to read or to
make liimself aware of the conJition?" I
think that this direction was not strictly accu-
rate, and was calculated to mislead the Jury.
The plaintiff was certainly under no obliga-
tion to read the ticket, but was entitled to
leave it unread if he pleased, and the ques-
tion does not appear to me to direct the at-
tention of the jury to the real question, name-
ly, whether the railway company did what
was reasonably sufHcient to give the plain-
tiff notice of the condition.
On the whole, I am of opinion that there
ought to be a new trial.
BAGGALLAY, L. J. A railway company,
in the conduct of their cloak-room business,
become bailees for reward of the articles de-
posited with them for safe custody; and, as
such, in the absence of any special contract
constituted by the delivery and acceptance
of a ticket or otherwise, are responsible to the
deposirurs for the full value of the deposited
articles, if unable to restore them when de-
manded. This clearly would be the nature of
the contract if no ticket were delivered, as
occasionally happens.
In the present cases the question for con-
sideration is whether the ordinary contract of
bailment, which would have resulted from the
receipt by the company of the plaintiff's prop-
erty and the payment by the plaintiffs of the
prescribed charges, has been modilied by the
delivery of the tickets which were admitted-
ly accepted by the plaintiffs, though, as they
allege, in ignorance of the pui-port or effect of
the printed statements endorsed upon tliem.
If the practice of issuing cloak-room tickets,
containing statements of conditions intended
to be binding on depositors, had become gen-
eral, it might well be that a person deposit-
ing his property and accepting a ticket, even
though himself ignorant of the practice, must
' be treated as aware of it, and as bound to
ascertain whether any such conditions were
stated on the ticket delivered to him; but no
such practice has been shewn or even sug-
gested in either of the present cases, nor does
it, so far as I am aware, exist. The pninary
pui-pose of the ticket is to identify the articles
deposited and the party entitled to reclaim
them, but, practically, and by reason of the
recognised practice of not delivering the
ticket until the prescribed charge has been
paid, it becomes a voucher for the payment.
So far as these purposes are concerned, the
depositor has no occasion to look at the ticket
until he desires to reclaim his property, and
if the tickets were delivered for these pur-
poses onlj-, the ordinary contract of bail-
ment would be in no respect modified by the
deliveiy of them; and in the absence of any
such general practice as that to which I have
alluded, it appears to me that the depositor Is
prima facie entith d to regard the ticket as de-
livered to ;:im for these purposes only, and
that he is in no way put upon inquiry whether
the company have any further or ulterior ob-
ject. But it is, of course, open to the com-
pany to show, not only that they intended
that the ticket, which was delivered to the
depositor primarily for his own convenience
and protection, should also indicate to him
certain terms and conditions in favour of the
company, by which he was to be bound, but
also that he was aware of such intent ii>n at
the time when he accepted the ticket and that
ue agreed to give effect to it. The onus of
proof is, however, upon the company In re-
spect of these matters. Of the intention of
the company to modify the contract of bail-
ment in the cases under consideration by lim-
iting their liability, there can "be no question.
I also think that, if the plaintiffs were aware,
or ought, for reasons which will be indicated
presently, to be treated as being aware of the
intention of the company at the time when
they respectively received their tickets, and
did not express their dissent, they .must be
regarded as having agreed to give effect to
them.
The question then remains whether the
plaintiffs were respectively aware, or ought to
be treated as aware, of the intention of the
company thus to modify the effect of the ordi-
nary contract
Now as regards each of the plaintiffs, if at
the time when he accepted the ticket, he,
either by actual examination of it, or by rea-
son of previous experience, or from any other
cause, was aware of the terms or puriDoit or
effect of the endorsed conditions, it can hard-
ly be doubted that he became bound h\ them.
I think also that he would be equally boimd
if he was aware or had good reason to be-
lieve that there were upon the ticket state-
ments intended to affect the relative rights of
himself and the company, but intentionally
or negligently abstained from ascertaining
whether there were any such, or from mak-
ing himself acquainted with their puiqiort
But I do not think that in the absence of any
such knowledge or information, or good rea-
son for belief, he was under any obligation
to examine the ticket with the view of as-
certaining whether there were any such state-
ments or conditions upon it
Whether the plaintiff' had any such knowl-
edge or information, or good reason for be-
lief, is a question of fact to be determined by
the evidence. Had the determination of those
questions of fact in the cases under consid-
eration rested with myself, I should upon
the evidence, have decided in favour of the
plaintiffs in both cases; but having had the
opportunity of reading the proposed judg-
ments of both my colleagues, I feel the force
of the observations made by them as to the
directions given to the juries by the judges
who tried the actions. I do not think that
the second question was ouite right in form,
though I think that hau it been put in tlie
OFFEli AND ACCEPTANCE.
form suggested by Lord Justice Mellish,
which appears to me to be the more correct
form, the same result would have followed.
It is possible, however, chough 1 think hard-
ly probable, that the juries were misled by
the form of the quertions, and, under all the
circumstances, the best coui-se to pursue will
be. I think, to direct a new trial.
BRA^MWELL, L. J. It is clear that if the
plaintiffs in these actions had read the con-
ditions on the tickets and not objected, they
would have been bound by them. No point
was or could be made that the contract was
complete before the ticket was given. If,
then, reading the conditions, they would have
been bound, it follows that, had they been
told they were the conditions of the con-
tract and invited to read them, and they had
refused, saying they were content to take
them whatever they might be, then also they
would be bound by them. So, also, would
they be if they were so told, and made no
answer, and did nothing, for in that case
they would have tacitly said the same thing,
viz., that they were content to take them,
whatever they might be. It follows, further,
that if they knew that what was on the
tickets was the contract which the defend-
ants were willing to enter into, they, the
plaintiffs, would be bound, though not told
they were the conditions; for it cannot make
a difference that they were not told what
by the hypothesis they knew already. We
have it, then, that if the plaintiffs knew that
what was printed was the contract which the
defendants were willing to enter into, the
plaintiffs, not objecting, are bound by its
terms, though they did not inform themselves
what they were. The plaintiffs have sworn
that they did not know tnat the printing was
the contract, and we must act as though that
was true and we believed it, at least as far
as entering the verdict for the defendants
is concerned. Doe? this make any differ-
ence? The plaintiff- knew of the printed
matter. Both admit they knew it concerned
them in some way, though they said they did
not know what it was; yet neither pre-
tends that he knew or believed it was not
the contracu Im either pretends he thought
it had nothing to do with the business in
hand; that he thought it was an advertise-
ment or other matter unconnected with his
deposit of a parcel at the defendants' cloak-
room. They admit that, for anything they
knew or believed, it might be, only they did
not know or believe it was, the contract.
Their evidence is very much that they did
not think, or, thinking, did not care about
It. Now they claim to charge the company,
and to have the benefit of their own indiffer-
ence. Is this justV Is it reasonable? Is It
the way in which any other business Is al-
lowed to be conducted? Is it even allowed to
a man to "think " "judge," "guess," '\:a;iu:'.' '
a matter, without informmg himself when he
can, and then when his "thought," "judg-
ment," "guess," or "chance" turns out wrong
or unsuccessful, claim to impose a burthen
or duty on another which he could not have
done had he informed himself as he might?
Suppose the clerk or porter at the cloak-room
had said to the plaintiffs, "Kead that; it con-
cerns you," and they had not read it, would
they be at liberty to set up that though
told to read they did not because they
thought something or other? But what is
the difference between that case and the
present? Why is there printing on the pa-
per, except that it may be read? The put-
ting of it into their hands was equivalent to
saying, "Kead that." Could the defendants
practically do more than they did? Had they
not a right to suppose either that the plain-
tiff's knew the conditions, or that they were
content to take on trust whatever is printed?
Let us for the moment forget that the de-
fendants are a caput lupinum— a railway
company. Take any other case — any case of
money being paid and a paper given by the
receiver, or goods bought on credit and a pa-
per given with them. Take also the cases
put by Byles, J., in Van Toll v. Railway Co.,
12 C. B. (N. S.) at page 87; 31 L. J. (C. P.)
241. Has not the giver of the paper a right
to suppose that the receiver is content to deal
on the terms in the paper? What more can
be done? Must he say, "Read that?" As I
have said, he does so in effect when he puts
it into the other's hands. The truth is, peo-
ple are content to take these things on trust.
They know that there is a form which is al-
ways used. They are satisfied it is not un-
reasonable, because people do not usually put
um'easonable terms into their contracts. If
they did, then dealing would soon be stopped.
Besides, unreasonable practices would be
known. The very fact of not looking at the
paper shows that this confidence exists. It
is asked: What if there was some unreason-
able condition, as, for instance, to forfeit
£1000 if the goods were not removed in forty-
eight hours? Would the depositor be bound?
I might content myself by asking: Would he
be, if he were told "our conditions are on this
ticket," and he did not read them. In my
judgment, he would not be bound in either
case. I think there is an implied understand-
ing that there is no condition unreasonable to
the knowledge of the party tendering the doc-
ument and not insisting on its being read;
no condition not relevant to the matter in
hand. I am of opinion, therefore, that the
plaintiffs, having notice of the printing, were
in the same situation as though the porter
had said, "Read that; it concerns the matter
in hand;" that if the plaintiffs did not read it,
they were as much bound as if they had read
it and had not objected.
The difficulty I feel as to what I have writ-
ten is that it is too demonstrative. But, put
In practical language, it is this: The defend-
ants put into the hands of the plaintiff a pa-
per with printed matter on it, whicli in all
good sense and rea.son must be supposed to
NECESSITY FOR COMMUNICATION.
23
relate to the matter In hand. This printed
matter the plaintiff sees and must either read
it, and object if he does not agree to it,
or If he does read it and not object, or does
not read it, he must be held to consent to
its terms. Therefore, on the facts, the jud^'('s
should have directed verdicts for the defend-
ants.
The second question left, in my .:)pinion.
should not have been left, and was calculated
to mislead the jury. It might equally have
been put if the plaintiffs had been told that
the conditions of the contract were on the
ticket, and had been asked to read them. It
would then manifestly have been a question
of law, and so it is now. Besides, by its
terms it was calcula.ted to mislead the jury.
The question was whether the plaintiff was
under any obligation, in the exercise of rea-
sonable and proper caution, to read the ticket.
Obligation to whom? Not to himself, as peo-
ple sometimes say, for there is no such duty,
or, if any, be may excuse himself from per-
forming it If it means whether a reasonably
and properly cautious person might omit to
read it, I say, "Yes." At least I hope so.
Such a person might well take the matter
on trust, but then he ought to be content to
take the consequences of so doing. But he
. has no right, having omitted to inform him-
self, and having had the means of doing so,
to make a claim which he might have fairly
made had he had no such means of inform-
ing himself. The question probably means
"obligation to the defendants." That is, had
the plaintiff a right to omit to do so, and then
make his claim? I repeat that the same
question might be put if he were told that the
print contained the conditions of the contract,
and then it would obviously be a question of
law as it Is now. The question is imperfect
The question whether of law or fact is, "Can
a man properly omit to inform himself, be-
ing able to do so, and then justly claim, when
he could not have claimed if he had inform-
ed himself?" The latter part of the question
is left out The authorities are in favour of
this view. Stewart v. Railway Co., 3 HurL
& C. 135, 33 L. J. Exch. 100; Van Toll v.
Railway Co., 12 C. B. (N. S.) 75, 31 L, J.
(C. P.) 241. There is the opinion of Willes,
J., in Lewis v. McKee, L. R. 4 Exch. 58, and,
lastly, the case of Henderson v. Stevenson,
L. R. 2 H. L. Sc. 470. I need not say, if t
thought tliat that case supported the judg-
ment I should defer to it, but I cannot un-
derstand how that can be supposed. The
plaintiff there said that he had never looked
at the ticket or seen the notice on it, no one
having directed his attention to either, and
on this the house proceeded. The lord chan-
cellor says: "Your lordships may take it as a
matter of fact that the respondent was not
aware of that which was printed on the back
of the ticket" Here the plaintiffs knew there
was printed matter, and must have known it
concerned them. The lord chancellor adds:
"The passenger receiving the ticket in that
form, and without knowing of anything be-
yond, must be taken to have made a contract
according to that which was expressed and
shew'n to him." I am of opinion therefore,
that the judgment should be reversed, and be
given for the defendants. If not though I
think the question one of law, still, if it is of
fact it has not been left to the jury, and
there should be a new trial. The possible
question of fact is that set forth in the judg-
ment of the Lord Justice MELLISH, with a
penisal of which he has favoured me. But
I repeat I think it is a question of law. I also
think the verdict against evidence, and that
on that ground there should be a new triaL
No one can read the evidence of the plaintiffs
in this case without seeing the mischief of
encouraging claims so unconscientious as the
present
Orders absolute for new trials.
24
OFFER AND ACCEPTANCE.
ELIASON et al. v. HENSHAW.yl
(4 Wheat. 225.) ''^'^ '*^
liR^
Supreme Court of the United States. Feb.
Term. 1819.
Error to circuit coui't for the District of
Columbia.
Jones & Key, for plaintiffs In error. Mr.
Swann, for defendant in error.
WASHINGTON, J. This is an action,
brought by the defendant in error, to recov-
er damages for the non-performance of an
agreement, alleged to have been entered in-
to by the plaintiffs in error, for the purchase
of a quantity of flour at a stipulated price.
The evidence of this contract given in the
com't below, is stated in a bill of exceptions,
and is to the following effect: A letter from
the plaintiffs to the defendant, dated the 10th
of February, 1813, in which they say: "Cap-
tain Conn infoi-ms us that you have a quan-
tity of flour to dispose of. We are in the
practice of pxirchasing flour at all times, in
Georgetown, and will be glad to serve you,
either in receiving your flour in store, when
the markets are difll, and disposing of it
when the markets will answer to advantage,
or we will purchase at market price when de-
livered; If you are disposed to engage two
or three hundred barrels at present, we will
give you $9.50 per barrel, deliverable the
first water in Georgetown, or any service we
can. K you should want an advance, please
write lis by mail, and will send you part of
the money in advance." In a postscript they
add: "Please write by return of wagon
whether you accept our offer." This letter
was sent from the house at which the writer
then was, about two miles from Harpers'
Ferry, to the defendant at his mlU, at Mill
Creek, distant about 20 mUes from Harper's
Ferry, by a wagoner then employed by the
defendant to haul flour from his mill to Har-
per's Ferry, and then about to return home
with his wagon. He delivered the letter to
the defendant on the 14th of the same month,
to which an answer, dated the succeeding
day, was written by the defendant, address-
ed to the plaintiffs at Georgetown, and dis-
patched by a mail which left Mill Creek on
the 19th, being the first regular mail from
that place to Georgetown. In this letter the
writer says: "Your favor of the 10th inst
was handed me by Mr. Chenoweth last even-
ing. I take the earliest opportunity to an-
swer it by post. Your proposal to engage
300 barreLs of flour, delivered in Georgetown,
by the first water, at $9.50 per barrel, I ac-
cept, and shall send on the flour by the first
boats that pass down from where my flour
Is stored on the river; as to any advance,
will be unnecessary— payment on delivery Is
aH that is required."
On the 25th of the same month, the plain-
tiffs addressed to the defendant an answer
to the above, dated at Georgetown, in which
they acknowledge the receipt of it, and add:
"Not having heard from you before, had
quite given over the expectation of getting
your flour, more particularly as we requested
an answer by return of wagon the next day,
and as we did not get it, had bought all we
wanted."
The wagoner, by whom the plaintiffs' first
letter was sent, informed them, when he re-
ceived it, that he should not probably return
to Harper's Ferry, and he did not in fact
return in the defendant's employ. The flour
was sent down to Georgetown, some time in
March, and the delivery of it to the plaintiffs
was regularly tendered and ref used.
Upon this evidence, the defendants in the
court below, the plaintiffs in error, moved
that court to instruct the jury, that, if they
believed the said evidence to be true, as stat-
ed, the plaintiff in this action was not enti-
tled to recover the amount of the price of th«s
300 barrels of flour, at the rate of $9.50 per
barrel. The court being divided in opinion,
the instruction prayed for was not given.
The question is, whether the court below
ought to have given the instruction to the
jury, as the same was prayed for? K they
ought, the judgment, which was in favor of
the plaintiff in that court, must be reversed.
It is an undeniable principle of the law of
contracts, that an offer of a bargain by one
person to another, imposes no obligation up-
on the former, until it is accepted by the
latter, according to the terms in which the
offer was made. Any qualification of, or de-
parture from, those terms, invalidates the of-
fer, unless the same be agreed to by the per-
son who made it UntU the terms of the
agreement have received the assent of both
parties, the negotiation is open, and imposes
no obligation upon either.
In this case, the plaintiffs in error offered
to purchase from the defendant two or three
hundred barrels of flour, to be delivered at
Georgetown, by the first water, and to pay
for the same $9.50 per baiTel. To the let-
ter containing this offer, they required an
answer by the return of the wagon, by which
the letter was dispatched. This wagon was,
at that time, in the service of the defend-
ant, and employed by him in hauling flour
from his mill to Harper's Ferry, near to
which place the plaintiffs then were. The
meaning of the writers was obvious. They
could easily calculate by the usual length of
time which was employed by this wagon, in
travelling from Harper's Ferry to MiU Creek,
and back again with a load of flour, about
what time they should receive the desired
answer, and, therefore, it was entirely unim-
portant, whether it was sent by that, or an-
other wagon, or in any other manner, pro-
vided it was sent to Harper's Ferry, and
was not delayed beyond the time which was
ordinarily employed by wagons engaged in
havding flour from the defendant's mill to
Harper's Feriy. Whatever imcertainty there
might have been as to the time when the an-
MANNER OF COMMUNICATION.
25
swer would be received, there was none as
to the place to which it was to be sent; this
was distinctly indicated by the mode pointed
out for the conveyance of the answer. The
place, therefore, to which the answer was to
be sent, constituted an essential part of the
plaintiff's offer.
It appears, however, from the bill of ex-
ceptions, that no answer to this letter was
at any time sent to the plaintiffs, at Harper's
Ferry. Their offer, it Is true, was accepted
by the terms of a letter addressed George-
town, and received by the plaintiffs at that
place; but an acceptance communicated at a
place different from that pointed out by the
plaintiffs, and forming a part of their pro-
posal, Imposed no obligation binding upon
them, unless they had acquiesced In it, which
they declined doing.
It Is no argument, that an answer was re-
ceived at Georgetown; the plaintiffs in er-
ror had a right to dictate the terms upon
which they would purchase the flour, and,
unless they were complied with, they were
not bound by them. All their arrangements
may have been made with a view to the
circumstance of place, and they were the
only judges of its importance. There was,
therefore, no contract concluded beto-een
these parties; and the court ought, therefore,
to have given the instruction to the jury,
which Avas asked for.
Judgment reversed. Cause remanded, with
directions to award a venire facias de novo.
26 OFFER AXD ACCErTANCE
FOGG T. PORTSMOUTH ATHENEUmL
(44 N. H. 115.) fi^!l^
Supreme Judicial Court of New Hampshira./ALJt
Merrimack. Dec, 1862. %XiAir^^
Assumpsit, to recover the following account
to the writ annexed, namely:
The Proprietors of the Portsmouth Atheneum to
Fogg & Hadley, Dr.
1S60. Jan 1. To the Independent Dem-
ocrat from vol. 5, No. i, to vol. 15.
No. 35, inclusive ?21 37
Interest on same 12 00
?33 37
Also to recover the sum of forty dollars, for
the paper called the Independent Democrat,
for the space of eleven years before the date
of the writ, furnished, sold and delivered to
the defendants at their request, by the plain-
tiffs, at two dollars per year, and for interest
on money due and owing from the defendants
to the plaintiffs before the date of the writ
The writ was dated July 2G, 1861. Plea,
the general issue, with the statute of limita-
tions.
The case was submitted to the decision of
the court upon the following agreed state-
ment cf facts:
The defendants are a corporation whose ob-
ject is the support of a library and public
reading-room, at which latter a large number
of newspapers are taken. Some are sub-
scribed and paid for by the defendants; oth-
ers are placed there gratuitously by the pub-
lishers and others; and some are sent there
apparently for advertising purposes merely,
and of course grattiitously.
The Independent Democrat newspaper was
furnished to the defendants, through the mail
by its then publishers, from vol. 3, No. 1 (May
1, 1847). On the 29th day of November, 1818,
a bill for the paper, from voL 3, No. 1 (May
1, 1847), to vol. 5, No. 1 (May 1, 1849), two
years, at $1.5C per year, was presented to the
defendants by one T. H. Miller, agent for
the theu pubUshers, for payment. The de-
fendants objectecl that they had never sub-
scribed for the paper, and were not bound
to pay for it They at first refused on that
ground to pay for it, but finally paid the bill
to said Miller, and took upon the back there-
of a receipt in the following words and fig-
ures: "Nov. 29, 1848. The within bill paid
this day, and the paper is henceforth to be
discontinued. T. H. Miller, for Hood «& Co."
Hood & Co. were the publishers of the pa-
per from May 1, 1847, until February 12, 1S49,
when that firm was dissolved, and the paper
was afterward published by the present plain-
tiffs. The change of publishers was announ-
ced, editorially and otherwise, in the paper
of February 15, 1849, and the names of the
new publishers were conspicuously inserted
in each subsequent number of the paper; but
it did not appear that the change was actually
known to Mr. Hatch, the secretary and treas-
urer of the corporation, who settled the above-
named bill, and who continued in the office
till January, 1850.
-4.The plaintiffs had na knowledge of the
' agreement of the agent of Hood & Co. to dis-
continue the paper, as set forth in the receipt
of November 29, 1848, until notified thereof
by the defendants, after they had furnished
the paper to the defendants for a year or
more; the books of Hood & Co., which came
into their hands, only showing that the de-
fendants had paid for the paper in advance,
to May 1. 1849.
After the payment of the bill and the giv-
ing of the receipt above recited, the paper
continued to be regularly forwarded by its
publishers, through the mail, to the defend-
ants, from the date of said receipt until May
1, 1849, the expiration of the period named
in said bill; and was in like manner forward-
ed from May 1, 1849, to January 1, 1860, or
from vol. 5, No. 1, to vol. 15, No. 35, in-
clusive, the period claimed to be recovered for
in this suit; and w?s during aU that time
constantly taken from the post-office by the
parties employed by the defendants to take
charge of their reading-room, build fires, &c.,
and placed in their reading-room. Payment
was several times demanded during the lat-
ter period, of the defendants, by an agent or
agents of the plaintiffs; but the defendants
refused to pay, on the ground that they were
not subscribers for the paper.
Conspicuously printed in each number of
the paper sent to and received by the de-
fendants, were the following
"Terms of Publication: By mail, express,
or carrier, $1.50 a year, in advance; ?2 if not
paid within the year. No paper discontinued
(except at the option of the pubUshers) un-
less all arrearages are paid."
The questions arising upon the foregoing
case were reserved and assigned to the de-
termination of the whole court.
Fowler & Chandler, for plaintiffs. W. H.
Rollins and A. R. Hatch, for defendants.
NESMITH, J. There is no pretense upon,
the agreed statement of this case that the
defendants can be charged upon the ground
that they were subscribers for the plaintiffs'
newspaper, or that they were liable in conse-
quence of the existence of any express con-
tract whatever. But the question now is,
have the defendants so conducted as to make
themselves liable to pay for the plaintiffs'
newspaper for the six years prior to tlie date
of the plaintiffs' writ, imder an implied con-
tract raised by the law and made applicable
to this case?
If the seller does in any case what is
usual, or what the nature of the case makes
convenient and proper to pass the effectual
control of the goods from himself to the buy-
er, this is always a delivery. In like man-
ner, as to the question of acceptance, we must
inquire into the intention of the buyer, as
evinced by his declarations and acts, the
COMMUNICATION BY CONDUCT.
27
nature of the goods, and the circumstances of
the case. If the buyer Intend to retain pos-
session of the goods, and manifests this in-.^
tention by a suitable act, it is an actual ac-
ceptance of them; or this intention may be
manifested by a great variety of acts in ac-
cordance with the varying circumstances of
each case. 2 Pars. Gont. 325.
Again, the law will imply an assumpsit, and
the owner of goods has been permitted to re-
cover in this form of action, where they have
been actually applied, appropriated and con-
verted by the defendant to his own bcnelicial
use. Helepen v. Campbell, 2 W. Bl. 827;
Johnson v. Spiller, Doug. 1G7; Hill v. Davis,
3 N. II. 3S4, and the cases there cited.
Where there has been such a specific ap-
propriation of the property in question, the
propertj' passes, subject to the vendor's lien
for the price. Robae v. Thwaites, 6 Barn. &
C. 392. In Bavin v. Jenas, 7 Car. & P. G17,
the question was whether the defendant had
purchased and accepted a fire engine. It was
a question of fact for the jury to determine.
Lord Abinger told the jury, if the defendant
had treated the fire engine as his own, and
dealt with it as such, the plaintiff was enti-
tled to recover for its price. And the jury
so found. 2 Greenl. Ev. § lOS.
In Weatherby v. Bonham, 5 Car. & P. 228,
the plaintiff was publisher of a periodical
called the Racing Calendar. It appeared that
he had for some years supplied a copy of that
work, as fast as the numbers came out, to
Mr. Westbrook. Westbrook died in the year
1820. The defendant, Bonham, succeeded to
Westbrook's property, and went to live in his
house, and there kept an inn. The plaintiff,
not knowing of Westbrook's death, continued
to send the numbers of the Calendar, as they
were published, by the stage coach, directed
to Westbrook. The plaintiff proved by a
servant that they were received by the de-
fendant, and no evidence was given that the
defendant had ever offered to return them.
The action was brought to recover the price
of the Calendar for the years lS2o and 1S2C.
Talford. for the defendant, objected that there
never was any contract between the plaintiff
and the present defendant, and that the plain-
tiff did not know him. But Lord Tenterden
said: "If the defendant received the books
and used them, i think the action is main-
tainiible. Where books come addressed to
the deceased gentleman whose estate has come
to the defendant, and he keeps the books, I
think, therefore, he is clearly liable in this
form of action, being for goods sold and de-
livered."
The preceding case [Pembroke v. Epsom,
44 N. H. 113] is very similar, in many re-
spects, to the case before us. Agreeably to
the defendants' settlement with Hood & Co.,
their contract to take their newspaper ex-
pired on the 1st of May, 1S49. It does not
appear that the fact that the paper was then
to stop was communicated to the present
plaintiffs, who had previoiisly become the pro-
prietors and pubhshers of the newspaper es-
tablishment; having the defendants' name en-
tered on their books, and having for some
weeks before that time forwarded numbers of
tlieir newspaper, by mail, to the defendants,
they, after the first day of May, continued so
to do up to January 1, 18G0. During this
period of time the defendants were occasion-
ally requested, by the plaintiffs' agent, to pay
their bill. The answer was, by the defend-
ants, "We are not subscribers to your news-
paper." But the evidence is, the defendants
used, or kept the plaintiffs' books, or news-
papers, and never offered to return a nimiber,
as they reasonably might have done, if they
would have avoided the liability to pay for
them. Nor did they ever decline to t;ike the
newspapers from the post-office.
If the defendants would have avoided the
liability to pay the plaintiffs, they might rea-
sonably have returned the paper to the plain-
tiffs, or given them notice that they declined to
take the paper longer.
We aie of the opinion that the defendants
have the right to avail themselves of the stat-
ute of limitations. Therefore, the plaintiffs
can recover no more of their accoimt than is
embraced in the six years prior to the date
of their writ, and at the sum of $2 per year,
with interest, from date of writ, or the date
of the earliest demand of the plaintiffs' claim
upon the defendants.
28
OFFEB AND ACCEPTANCE.
DAY V. CATON. /
y (119 Mass. 513.) I
^ V Supreme Judicial Court of Massachusetts,
9 Y Suffolk. Feb. 29, 1876. dT
Contract to recover the value of one-half of
a brick party waU built by the plaintiff.
The defendant requested the judge to nile
that: "(1) The plaintiff can recover in this
case only upon an express agreement. (2) If
the jurj- find there was no express agreement
about the wall, but the defendant knew that
the plaintiff was building upon land in which
the defendant had an equitable interest, the
defendant's rights would not be affected by
such knowledge, and his silence and subse-
quent use of the wall would raise no implied
promise to pay anything for the wall."
The judge refused so to rule, but instructed
the jury as follows: "A promise would not be
implied from the fact that the plaintiff, with
the defendant's knowledge, built the wall and
the defendant used it, but it might be implied
from the conduct of the parties. If the jury
find that the plaintiff undertook and complet-
ed the building of the wall with the expecta-
tion that the defendant would pay him for it,
and the defendant had reason to know that
the plaintiff was so acting with that expecta-
tion, and allowed him so to act without ob-
jection, then the jury might infer a promise
on the part of the defendant to pay the plain-
tiff."
There was a verdict for the plaintiff. De-
fendant alleged exceptions.
F. W. Kittredgfc, for plaintiff. H. D. Hyde
& M, F. Dickinson, Jr., for defendant
DEVENS, J. The ruling that a promise to
pay for the wall would not be implied from
the fact that the plaintiff, with the defend-
ant's knowledge, built the wall, and that the
defendant used it, was substantially in ac-
cordance with the request of the defendant,
and is conceded to have been correct. Chit.
Cont (11th Ed.) 86; Wells v. Banister, 4 Mass.
514; Knowlton v. Plantation No. 4, 14 Me.
20; Davis v. School Dist., 24 Me. 349.
The plaintiff, however, contends that the
presiding judge incorrectly ruled that such
promise might be inferred from the fact that
the plaintiff undertook and completed the
building of the wall with the expectation that
the defendant would pay him for it, the de-
fendant having reason to know that the plain-
tiff was acting with that expectation, and al-
lowed him thus to act without objection.
The fact that the plaintiff expected to be
paid for the work would certainly not be suffi-
cient of itself to establish the existence of a
contract, when the question between the par-
ties was whether one was made. Taft v.
Dickinson, 6 Allen, 553. It must be shown
that in some manner the party sought to be
charged assented to it. If a party, however,
voluntarily accepts and avails himself of val-
uable services rendered for his benefit, when
he has the option whether to accept or reject
them, even if there is no distinct proof that
they were rendered by his authority or re-
quest, a promise to pay for them may be in-
ferred. His knowledge that they were val-
uable, and his exercise of the option to avail
himself of them, justify this mference. Ab-
bot V. Hermon, 7 Greenl. 118; Hayden v.
Madison, 7 Greenl. 76. And when one stands
by in silence, and sees valuable services ren-
dered upon his real estate by the erection of
a structure (of which he must necessarily
avail himself afterwards in his proper use
thereof), such silence, accompanied with the
knowledge on his part that the party render-
ing the services expects payment therefor,
may fairly be treated as evidence of an ac-
ceptance of it, and as tending to show an
agreement to pay for it
The maxim, "Qui facet consentire videtur,"
is to be construed indeed as applying only to
those cases where the circumstances are such
that a party is fairly called upon either to
deny or admit bis liability. But if silence
may be interpreted as assent where a propo-
sition is made to one which he is bound to
deny or admit, so also it may be if he is
silent in the face of facts which fairly call
upon him to speak. Lamb v. Bunce, 4 Maule
& S. 275; Conner v. Hackley, 2 Mete. (Mass.)
613; Preston v. Linen Co., 119 Mass. 400.
If a person saw day after day a laborer at
work in his field doing services, which must
of necessity inure to his benefit, knowing that
the laborer expected pay for his work, when it
was perfectly easy to notify him if his serv-
ices were not wanted, even if a request were
not expressly proved, such a request, either
previous to or contemporaneous with the per-
formance of the services, might fairly be in-
ferred. But if the fact was merely brought to
his attention upon a single occasion and cas-
ually, if he had little opportunity to notify
the other that he did not desire the work and
should not pay for it or could only do so at
the expense of much time and trouble, the
same inference might not be made. The cir-
cumstances of each case would necessarily
determine whether silence with a knowledge
that another was doing valuable work for his
benefit, and with the expectation of payment,
indicated that consent which would give rise
to the inference of a contract. The question
would be one for the jury, and to them it
was properly submitted in the case before us
by the presiding judge.
Exceptions overruled.
COMMUNICATION BV CONDUCT.
29
A
f^
ROYAL INS. CO. v. BEATTY.
(12 Atl. 607, 119 Pa. St. G.)
Supreme Court of Pennsylvania. Fob. 20, 1888.
Error to court of common pleas, Philadel-
phia county.
This was an action by William Beatty
against the Koyal Insurance Company, on a
policy of tire insurance, averrinj; a renewal,
and that it was in force at the time of the
fire. There was a verdict and judgment for
plaintiff. Defendant brings error.
R. C. McMurtrie, for plaintiff in error.
(1) If the facts as stated by the witnesses
entitled a jury to infer that an assent was
given, or that the plaintiff's agent was enti-
tled to presume an assent, the judgment must
be affirmed. It may even be conceded that
if the defendant beard the request and said
nothing, he may be within the rule relied on
by the court. But what is the rule? It ap-
plies only where there is a duty to speak,
and silence misleads. It is impossible to as-
sert that If I do not hear and understand, I
am compelled to speak on the pain of being
concluded. Hearing and understanding are
presupposed in the maxim-
(2) The plaintiff did not pretend to assert
that the defendant heard him. He implies,
of course, that he supposed he had; but when
the denial came it was necessary to do some-
thing more than rely on the presumption that
a remark had been heard. It was quite
clear on the defendant's side that his agent
had done nothing and said nothing to make
a contract. He had told his master there
was none made; that he had not been asked
to make it, and his master had acted on this.
(3) Was there any evidence that wananted
the inference that this was mistaken or false?
No one asserted that he had heard, or that
the speaking was such that he must have
heard. And after the denial and proof cor-
roborative that defendant had acted on the
footing that there was no contract, there was
no attempt to give any fact that could justify
the assumption of the unproved and denied
fact that a request to renew or bind was
heard and known to have been made.
(4) Then, the case being that the plaintiff
must affirmatively establish the making of
the contract, and there being nothing more
than a statement of a request not followed by
any act or by any assertion that the request
was so made as to be certainly heard, in
judging between the two the court seemed to
suppose it was a mere question of which was
to be believed, not seeing that if both spoke
the truth, which was at least possible, the
plaintiff had certainly failed to prove his case.
George H. Earle, Jr., and Richard P. White,
for defendant in error.
(1) It was established beyond controversy
that it was the settled custom of the defend-
ant company, in cases where a policy was
about to expire, to continue It upon notifica-
tion that the insured wauled it "bound." The
broker's clerk testiliod positively that he had
the policy so continued. The insurance clerk
admitted all the facts stated by the witness,
except that the particular policies in suit
were named. The sole question, therefore,
was the simple one whether it was the
broker's clerk or the insurance clerk, who
gave the con-ect testimony as to what took
place.
(2) As it is conceded that, if the policies in
suit were mentioned so as to be heard, ac-
cording to the custom a verbal assent was
not necessary, it seems unnecessary to quote
authorities to show that the circumstances as
testified to warranted the jury in finding a
contract. In Chisman v. Count, 2 M:lu. & G.
307, several items were submitted, and, as
in the present case, a part only were men-
tioned and objected to. Held, that there was
evidence of a binding contract as to the bal-
ance. Admission by silence also, as well as
admission by speech, may have a contractual
force, and may bind as effectually as may
words. When such silent admissions so oper-
ate as to put the actor in a specific attitude
to other persons, by which such other per-
sons are induced to do or omit to do a partic-
ular thing, then he is estopped from subse-
quently denying that he occupied such posi-
tion, and is compelled to make good any
losses which such other parties may have
sustained by his course in this relation.
Whart. Cont. § 6.
GREEN, J. We find ourselves unable to
discover any evidence of a contractual rela-
tion between the parties to this litigation.
The contract alleged to exist was not found-
ed upon any writing, nor upon any words,
nor upon any act done by the defendant. It
was founded alone upon silence. While it
must be conceded that circumstances may
exist which will impose a contractual obliga-
tion by mere silence, yet it must be admitted
that such circumstances are exceptional in
their character, and of extremely rare occur-
rence. We have not been furnished with a
perfect instance of the kind by the counsel
on either side of the present case. Those
cited for defendant in error had some other
element in them than mere silence which
contributed to the establishment of the rela-
tion. But, in any point of view, it is diffi-
cult to understand how a legal liability can
arise out of mere silence of the party sought
to be affected, unless he was subject to a
duty of speech, which was neglected, to the
harm of the other party. If there was no
duty of speech, there could be no harmful
omission arising from mere silence. Take the
present case as an illustration. The alleged
contract was a contract of fire insurance.
The plaintiff hold two policies against the
defendant, but they had expired before the
loss occurred, and had not Iteen formally re-
newed. At the time of the fire tJie plain,tiff
BO
OFFEK AND ACCEPTANCE.
held no policy against the defendant. But
he claims that the defendant agreed to con-
tinue the operation of the expired policies by
what he calls "binding" them. How does
he prove this? He calls a clerli who took
the two policies in question; along with other
policies of another person, to the agent of the
defendant to have them renewed, and this
is the account he gives of what took place:
"The Royal Company had some policies to be
renewed, and I went in and bound them.
Question. State what was said and done.
Answer. I went into the office of the Royal
Company, and asked them to bind the two
policies of Mr. Beatty expiring to-morrow.
The Court. Who were the policies for? A-
For Mr. Beatty. The Court. That is your
name, is it not? A. Yes, sir. These were
the policies in question. I renewed the poli-
cies of Mr. Priestly up to the 1st of April.
There was nothing more said about the Beat-
ty policies at that time. The Court What
did they say? A. They did not say anything,
but I suppose that they went to their books
to d-o it. They commenced to talk about the
night privilege, and that was the only subject
discussed." In his further examination he
was asked: "Question. Did you say anythmg
about those policies [Robert Beatty's] at that
time? Answer. No, sir; I only spoke of the
two policies for William Beatty. Q. What
did you say about them? A. I went in and
said, 'Mr. Skinner, will you renew the Beatty
policies, and the night privilege for Mr.
Priestly?' and that ended it. Q. Were the
other companies bound in the same way? A.
Yes, sir; and I asked the Royal Company to
bind Mr. Beatty." The foregoing is the whole
of the testimony for the plaintiff as to what
was actually said at the time when it is al-
leged the policies were bound.. It will be
perceived that all that the witness says is
that he asked the defendant's agent to bind
the two policies, as he states at first, or to
renew them, as he says last. He received
no answer; nothing was said, nor was any-
thing done. How is it possible to make a
contract out of this? It is not as if one de-
clares or states a fact in the presence of an-
other, and the other is silent. If the decla-
ration imposed a duty of speech on peril of
an inference from silence, the fact of silence
might justify the inference of an admission
of the truth of the declared fact. It would
then be only a question of hearing, which
would be chiefly, if not entirely, for the jury.
But here the utterance was a question, and
not an assertion; and there was no answer
to the question. Instead of silence being
evidence of an agreement to do the thing re-
quested, it is evidence, either that the ques-
tion was not heard, or that it was not in-
tended to comply with the request. Espe-
cially is this the case when, if a compliance
was intended, the request would have been
followed by an actual doing of the thing re-
quested. But this was not done; how, then,
can it be said it was agreed to be done?
There is literally nothing upon which to base
the inference of an agreement, upon such a
state of facts. Hence the matter is for the
court, and not for the jury; for, if there may
not be an inference of the controverted fact,
the jury must not be permitted to make it.
What has thus far been said relates only
to the effect of the non-action of the defend-
ant, either in responding, or doing the thing
requested. There remains for consideration
the effect of the plaintiff's non-action. When
he asked the question whether defendant
would bind or renew the policies, and ob-
tained no answer, what was his duty? Un-
doubtedly, to repeat his question until he ob-
tained an answer; for his request was that
the defendant should make a contract with
him, and the defendant says nothing. Cer-
tainly, such silence is not an assent in any
sense. There should be something done, or
else something said, before it is possible to
assume that a contract was established.
There being nothing done and nothing said,
there is no footing upon which an inference
of agreement can stand. But what was the
position of the plaintiff? He had asked the
defendant to make a contract with him, and
the defendant had not agreed to do so; he
had not even answered the question whether
he would do so. The plaintiff knew he had
obtained no answer, but he does not repeat
the question; he, too, is silent thereafter, and
he does not get the thing done which he asks
to be done. Assuredly, it was his duty to
speak again, and to take further action, if he
really intended to obtain the defendj^nt's as-
sent; for what he wanted was something af-
firmative and positive, and without it he has
no status. But he desists, and does and says
nothing further. And so it is that the whole
of the plaintiff's case is an unanswered re-
quest to the defendant to make a contract
with the plaintiff, and no further attempt by
the plaintiff to obtain an answer, and no ac-
tual contract made. Out of such facts it is
not possible to make a legal inference of a
contract. The other facts proved, and of-
fered to be proved, but rejected, improperly
as we think, and supposed by each to be con-
sistent with his theory, tend much more
strongly in favor of the defendant's theory
than of the plainti&"'s. It is not necessary
to discuss them, since the other views we
have expressed are fatal to the plaintift''s
claim. Nor do I concede that if defendant
heard plaintiff's request, and made no an-
swer, an inference of assent should be made;
for the hearing of a request, and not answer-
ing it, is as consistent, indeed more consist-
ent, with a dissent than an assent. If one is
asked for alms on the street, and hears the
request, but makes no answer, it certainly
cannot be inferred that he intends to give
them. In the present case there is no evi-
dence that defendant heard the plaintiff's re-
quest, and, without hearing, there was of
course no duty of speech. Judgment re-
versed.
COMMUNTICATION BY CORRESPONDENCE.
31
DUNLOP et aL v. HIGGINS et aLi
'1/ (1 H. L. Cas. 381.)
•^ Feb. 24, 1848.
This was an appeal against a decree of the
court of session, made under the following
circumstances: Messrs. Dunlop & Co. were
Iron masters in Glasgow, and Messrs. Ilig-
gius & Co. were iron merchants in Liverpool.
Messrs. Higgins had written to Messrs. Dun-
lop respecting the price of iron and received
the following answer: "Glasgow, 22d Jan-
uary, 1845. We shall be glad to supply you
with 2000 tons, pigs, at Go shillings per ton,
net, delivered here." Messrs. Iliggins wrote
the following reply: "Liverpool, 25th Janu-
ary, 1845. You say 65s. 382 net, for 2000
tons pigs. Does this mean for our usual
four mouths' bill? Please give this infor-
mation in course of post, as we have to de-
cide with other parties on Wednesday next."
On the 28th Messrs. Duulop wrote, "Our
quotation meant 65s. net, and not a four
months' bill." This letter was received by
Messra. Higgins on the 30th of January,
and on the same day and by post, but not
by the first post, of that day, they dispatch-
ed an answer in these terms: "We will take
the 2000 tons pigs you offer us. Your letter
crossed ours of yesterday, but we shall be
glad to have your answer respecting the ad-
ditional 1000 tons. In your first letter you
omitted to state any tei-ms; hence the de-
lay." This letter was dated 31st January,
It was not delivered in Glasgow until 2
o'clock p. m. on the 1st of February; and on
the same day Messrs. Dunlop sent the fol-
lowing reply: "Glasgow, 1st February, 1845.
We have your letter of yesterday, but are
sorry that we cannot now enter the 2000
tons pig iron, our offer of the 28th not hav-
ing been accepted in course." Messrs. Hig-
gins wrote on the 2d February to say that
they had erroneously dated their letter on
the 31st January; that it was really written
and posted on the 30th, in proof of which
they referred to the post mark. They did
not, however, explain the delay which had
taken place in its delivery. The iron was
not furnished to them, and, having risen
very rapidly in the market, the question
whether there had been a complete contract
between these parties was brought before a
court of law. Messrs. Higgins instituted a
suit in the court of session for damages as
• for breach of contract. The defence of
Messrs. Dunlop was that, their letter of the
28th, offering the contract, not having been
answered in due time, there had been no
such acceptance as would convert that offer
into a lawful and binding contract; that
their letter having been delivered at Liver-
pool before eight o'clock in the morning of
the SOlli of January, Messrs. Higgins ought,
according to the usual practice of merchants,
to have answered It by the first post, which
1 Irrelevant parts of opinion omitted.
left Liverpool at three o'clock p. ra. on that
day. A letter so dispatched would be due
in Glasgow at two o'clock p. m. on the 31st
of January. Another post left Liverpool for
Glasgow every day at one o'clock a. m., and
letters to be dispatched by that post must
be put into the office during the preceding
evening, and if any letter had been sent by
that post on the morning of the 31st it must
have been delivered in Glasgow in the regu-
lar course of post at eight o'clock In the
morning of the 1st of February. As no
comnmnication from Messrs. Higgins arriv-
ed by either of these posts, Messrs. Dunlop
contended that they were entitled to treat
their offer as not accepted, and that they
were not bound to wait until the third post
delivered in Glasgow at two o'clock p. m. of
Saturday, the 1st of February, at which time
Messrs. Higgins' letter did actxially arrive,
before they entered into other contracts, the
taking of which would disable them from
performing the contract they had offered to
Messrs. Higgins.
The cause came before Lord Ivory as lord
ordinary, who directed an issue, which he
settled in following terms:
"Whether, about the end of January, 1845,
Messrs. Iliggins purchased from Messrs.
Dunlop 2000 tons of pig iron at the price of
65s. per ton, and whether Messrs. Dunlop
wrongfully failed to deliver the same, to
the damage, loss, and injury of the pur-
suers? Damages laid at £6000." This is-
sue was tried before the lord justice general,
when it appeared that the letter of Messrs.
Higgins accepting the offer was written on
the 30th; that it was posted a short time
after the closing of the bags for the dispatch
at three o'clock p. m. on that day, and con-
sequently did not leave Livei-pool till the
dispatch at one o'clock in the morning ol
the 31st; that in consequence of the slippery
state of the roads the bag then sent did not
arrive at Warrington till after the departm-t
of the down train that ought to have con-
veyed it, and that this circumstance occa-
sioned it to be delajed beyond the ordinary
hour of delivery The lord justice general
told the jury "that he adopted the law as
duly expoundetl in the case of Adams v.
Lindsell, 1 Barn. & Aid. 681. and which is as
follows: 'A., by a letter, offers to sell to B.
certain specified goods, receiving an answer
by return of post, the letter being misdirect-
ed. The answer notifying the acceptance of
the offer arrived two days later than it
ought to have done. On the day following
that when it would have arrived if the orig-
inal letter had been properly directed, A.
sold the goods to a third person,' and in
M'hich it was held 'that there was a contract
binding the parties from the moment the
oft'er was accepted, and that B. was entitled
to recover against A. in an action for not
completing his contract.' "
The counsel for Messrs. Dunlop tendered
the following exceptions: The first excep-
OFFER AND ACCEPTANCE.
tion related to evidence, and alleged "that
no evidence to show that the letter purport-
ing to be dated on the 31st was reaUy writ-
ten on the 30th of January ought to have
been admitted." The other exceptions re-
lated to the charge, and were as follows:
(2) In so far as his lordship directed the
juiy in point of law that if Messrs. Higgins
posted their acceptance of the offer in due
time according to the usage of trade, they
are not responsible for any casualties in the
post-olEce establishment.
(3) In so far as his lordship did not direct
the jury in point of law that if a merchant
malies an offer to a party at a distance by
post-letter requiring to be answered within
a certain time, and no answer arrives with-
in such time as it should arrive if the party
had written and posted his letter within the
time allowed, the offerer is free, though the
answer may have been actually written, and
posted in due time, if he is not proved to be
aware of accidental circumstances prevent-
ing the due arrival of the answer.
(4) In so far as his lordship did not direct
the jury m point of law that in the case
above supposed, if an answer arrives, bear-
ing a date beyond the time limited as above
for making answer, and arrives by a mail
and is delivered at a tune corresponding to
such date, the offerer is entitled to consider
himself free to deal with the goods as his
, own, either to sell or to hold if he be not in
the knowledge that the answer received was
truly written of an earlier date, and de-
layed in its arrival by accident.
(5) In so far as his lordship did not direct
the jury in point of law that in case of fail-
ure to deliver goods sold at a stipulated
price and immediately deliverable the true
measure of damage is the difference between
the stipulated price and the market price on
or about the day the contract is broken, or
at or about the time when the purchaser
might have supplied himself.
These exceptions were afterwards argued
before the judges of the First division, who
pronounced an interlocutor disallowing the
exceptions, and that interlocutor was the
subject of the present appeal.
Mr. BetheU and Mr. Anderson, for appel-
lants.
The question raised in this case Is one of
considerable importance, and the decision of
It in accordance with the judgment of .the
court below will have the effect of reuderiug
the acceptance of contracts a matter oi' doubt
and uncertainty. If the decision of the
judges of the court of session is right, a con-
tract is complete when the acceptance of the
offer to enter into it is posted, although such
acceptance may not reach the person who
made the offer tUl long after the time at
which by the usage of trade he is entitled to
expect it. Such a decision, if iinreversed,
wiU leave the person making an offer under
the necessity of waiting for an indefinite
time in order to know whether his offer has
been accepted. During aU this time he will
be restrained frora freely dealing with his
own property.
The exceptions here ought to have been
sustained by the court. The first of them
relates to the evidence offered at the trial.
That evidence was improperly admitted.
The court ought not to have received evi-
dence to contradict a written document.
When a letter is sent to a party, he has a
right to assume that it is properly written,
and is entitled to rely on its contents. He
is at least entitled to do so as against the
writer of the letter. The writer is not at
liberty to show those contents to be errone-
ous. At all events he is not at liberty to do
so iif ter the person receiving it has acted up-
on it, and thus to affect the rights of that
party, and to give himself rights to which,
if the letter had been correctly written, he
would not have been entitled. To admit
such evidence is to unsettle all the rules of
business, and to prevent commercial men
acting with that certainty and confidence
which are necessary for the proper conduct
of commercial affairs.
[THE LORD CHANCELLOR: When a
party sends a letter actually sent on the 30th,
but dated by mistake on the 31st, may he not
shew that that date has been put in by mis-
take?]
It might be difficult to maintain the simple
negative of that question, but in consider-
ing the admissibility of such evidence, all
the circumstances of the case must be refer-
red to. In the present case, for instance,
as the letter was received on a day after
that of its date, and when, therefore, the
person receiving it had no reason to suspect
that the date was erroneously given, his
rights ought not to be affected by a subse-
quent explanation; and the evidence intend-
ed to afford that explanation ought not,
therefore, to have been admitted.
Then, as to the second exception, if a let-
ter sent is posted in due time, but is not re-
ceived in due time, who is to bear the loss
consequent upon its nondelivery? Cert:aiuly
not the person to whom it is sent. The fact
that it is sent by the post office makes no
difference in the matter. It is the same as
if the letter was sent by a special messenger,
in which case it is plain that the person
sending the messenger would be responsible
for any accident or delay. The appellants
are not to be made responsible for the casual-
ties of the iKJst office, and surely they cannot
be made so in a case in which the persons
sending an answer to an offer which they
had made toUilly disregarded the ordinary
usages of commercial houses as to the time
of sending such answer.
The clear principle set forth in the third
objection is that which ought to be adopted
in all cases of this kind. Where an individ-
ual makes an offer by post, stipulating for
or by the nature of the business, having the
COMMUNICATION BY CORRESPONDENCE.
33
right to expect an answer by return of post,
the offer can only endure for a limited time,
and tlie making of it is accompanied by an
iiui»lit'(l stipulation that the answer shall be
sent i)y return of post. If that implied stip-
ulation is not satisfied, the person making
the offer is released from it. When a per-
son seeks to acquire a right, he is bound to
act with a degree of strictness, such as may
not be required where he is only endeavour-
ing to excuse himself from a liability. The
question of reasonableness of notice which
may be admitted in cases of bills of ex-
change cannot be introduced in a case where
one party seeks to enforce on another the
acceptance of a contract. A bill of exchange
is already a binding contract; no new right
is acquired by notice; it is merely a neces-
sarj' proceeding to enable the party giving it
to enforce a right previously created. Then,
as to the exception. In the case of a con-
tract, the acceptance of the off-er creates the
contract. The acceptance implies that both
parties have knowledge of all the circum-
stances. On principle, it is plain that the
acceptance should be immediate, and that,
if there is a delay in making that acceptance
known, the offerer is free. In order to make
the contract perfect, there ought to have
been a co-existing assent. Countess of Dun-
more V. Alexander, 9 Shaw & D. 190. There
a lady, having written to another to engage
a servant for her, and then sent a second
letter to countermand the first, and the two
letters having been delivered to the sei'vaut
simultaneously, it was held that there was
not a complete contract, and that the serv-
ant was not entitled to wages. The coui't of
king's bench in Head v. Diggon, 3 Man. «&
R. 97, acted upon the same principle. There
A. and B. being together, B. offered goods to
A. at a certain price, and gave A. three days
to make up his mind. The court held that
this wiis not an absolute bargain, and that
within the three days B. had a right to re-
tract.
Such are the principles which ought to gov-
ern this case. Then as to authority: It is
curious enough that this exact question seems
never to have arisen. That circumstance is
some proof of the clearness of the principle
which is applicable to such transactions, for,
had there btMin any question as to that prin-
ciple, — had it been doubtful whether delay
might be excused, and whether in spite of
delay, a party guilty of it might not still in-
sist on a contract being complete, — cases
must have arisen as to the degree of laxity
permitted by the law in accept:ince of con-
tracts. None such is to be found. The case
of Adams v. Lindsell, 1 Bam. & Aid. GSl,
was the authority adopted by the lord justice
general in his direction to the jury; but that
case does not justify his ruling.
[THE LORD CHANCELLOR: If the let-
tesT of acceptance is sent in the usual ^vay,
is the sender still responsible for its due de-
livers' ?]
^OPK.SEL,.CAS.CO^'T. — 3
If not, then both parties are free. One
cannot be bound while the other is free.
Each party takes an equal risk, but suppos-
ing delay is to be permitted, to what extent
is it to be allowed? May the delay last one,
two, or three days, or a week, or a fortnight,
or a month? If any delay is to be permit-
ted, the extent of it must be defined. Other-
wise, all commercial matters will be in a
state of perpetual u^icertainty. But, in fact,
no delay is allowed. Each party is boimd to
write by return of post, and each is liable to
the consequences of his own letter arriving
in time. Such appears to be the mercantile
usage on the subject When an offer Is made
by one merchant to .send another a particular
commodity which varies in price, that offer
is made subject to the obligation of its being
answered by return post. It is therefore an
offer subject to a condition. It is condition-
al in point both of time and manner of ac-
ceptance. As to time, the offer enures till it
can be answered by return post. If it is
made on a condition, then it is clearly not
binding till that condition shall be accepted.
Here, too, the condition is a condition pre-
cedent. Nothing, therefore, can be substi-
tuted for it.
[THE LORD CHANCELLOR: Where is
this condition imposed?]
In mercantile usage, founded on law. The
legal condition is to return an answer in a
particular time. Mercantile usage has fixed
that time as the return of post. No decision
has ruled as a point of legal principle that,
if an individual addressed fails in perform-
ing this condition, still that the person mak-
ing the offer is bound. The principle of the
Scotch law, as stated in M'Douall's Insti-
tutes, is the other way. It is there said
(Book 1, tit. 4, p. 98, Pol. Ed.): "Conditional
obligations properly so termed, are presently
binding and irrevocable, and only the effect
is suspended, but sometimes the obligation
is only to be contracted upon a condition
which affects the very substance of it. Thus
an offer has an implied condition of accept-
ance whereby alone the consent of the other
party accedes and converts the offer into a
contract; so that it is not binding, but am-
bulatory or revocable, till it is accepted, and
therefore either revocation by the offerer or
death of either party before acceptance voids
it The same rule holds in mutual contracts,
—the one party subscribing is not bound
till the other subscribe likewise." The law
of England is in confonuity with the prin-
ciple of the Scotch law.
As the revocation by either party before
acceptance makes the offer void, the ac-
ceptance of the other side must be notified
within a definite period of time. Stair's
Inst, tit 2. § S. This rule of notification is
a condition precedent in the English as well
as the Scotch law. This principle was acted
on by the court of king's bench in the case
of Davison v. Mure. 3 Doug. 28. That was
the case of a ship which was captured by
34
OFFER AND ACCEPTANCE.
Americans while under convoy. The condi-
tion there was that the master should make
the best defence, and without it appeared to
a court-martial that he had done so, he was
not to be allowed to recover. It was held
that this condition was a condition preced-
ent. The same doctrine was applied by
that court to the condition in a policy of in-
surance against fire, that the party should
obtliin a certificate from the rector of his
parish and a certain uimiber of the inhabit-
ants, before entitling: himself to payment of
his claim for loss. Worsley v. Wood, 6 Term
R. 710. If this is a condition precedent, then
it must be exactly performed, and nothing
can be substituted for it. In this respect
there is a difference between a condition pre-
cedent and a condition subsequent The
former must be performed before an estate
can vest; while the performance of the lat-
ter, which is intended to defeat an existing
estate, may be dispensed with. The act of
God, the li:ing's enemies, or the impossibility
of performance will furnish an excuse as to
a condition subsequent This is a settled
principle of our law, and the case of Brodie
T. Todd, 17 Fac. Col., May 20, 1814, shows
that the law of Scotland recognises the
same rule. In that case, Amot a merchant
of Leith, agreed to purchase from Todd &
Co., of Hull, goods which were to be paid
for by his acceptance. They put the goods
on board a vessel at Hull; enclosed a bill
of lading and a draft for the price in a let-
ter advising Amot of the shipment, and re-
questing him to return the draft accepted "in
course.'- This letter was received by Amot
on the morning of the 24th of April, and if
answered by him by return of post the an-
swer might have been received by Todd &
Co. on the morning of the 2Gth. Arnot how-
ever, did not answer it till that day, when
he sent back the draft accepted. In the
course of the 2Gth, Todd & Co., not having
received the draft as expected, relanded the
^oods. Arnot brought an action, and the
question was whether the request to return
"in coui'se" meant a return by the earliest
post, and constituted a condition precedent.
The lords held that the words meant by re-
turn of post and did constitute a condition
precedent, and consequently that no action
was maintainable by Amot, since he had not
complied with the condition on which the
bargain was made. That case is completely
decisive as to what is the doctrine of the
Scotch law, and must govern the decision
here.
[THE LORD CHANCELLOR: Is it not a
question of fact whether the posting of the let-
ter, in this case, on the 30th of January, was
not a compliance with the duty of the party?
Here is no distinct stipulation— it is all mat-
ter of inference. The question is whether
putting in the post is not a virtual accept-
ance though by the accident of the post it
does not arrive. In the case quoted, one
whole day was allowed to Intervene. But
in this case if putting the letter in the post
is a compliance with the condition, there is
an end of the question.]
That would be so, if it was a condition
subsequent, for then something could be sub-
stituted for actual performance. But this is
a condition precedent, and must be literally
performed.
In considering this question Ix»rd Jeffrey
observed: "The party here only says, 'If
I do not hear by i-eturn of post' I have yet
to learn that the return of post is like the
return of the sun to the meridian at a par-
ticular time. I do not think that the use of
such a phrase is equivalent to the stipula-
tion of a particular time. I am inclined to
hold that the return of post means the ac-
tual return of the post. And the species
facti here was, the letter accepting the of-
fer having been sent in due time to the post
office, that it did come to hand at the hour
at which, according to the usual time re-
quired for its transmission. It should have
come. But the actual course of that post
was not till the morning of the 1st Febru-
ary." And the learned judge justifies his
doctrine by referring to the case of the post
coming by sea, where a general average
time is fixed, but where return of post is not
Galculated by that average, but by the actual
arrival of the post; and then he supposes
a universal snow storm affecting the deliv-
ery by land, and argues that if matter of
that geneiTil notoriety would affect the ques-
tion, so does any other accident to the post,
although not so generally known. But sure-
ly this is giving an entirely new inteiipreta-
tion to mercantile contracts, and is making
accidental circumstances or natural delays,
always counted upon, furnish ground for the
construction of a delay occasioned by an ac-
cident which neither party anticipated. Be-
sides, it is clear on the facts here, that had
the letter been put into the early post of the
30th Januai-y, this accident would not have
befallen it; so that the accidental delay in
the post office was i-eally the consequence
of the delay in posting the letter, and was
so far attributable to the respondents.
They cannot therefore, claim any advan-
tage, from their acceptance of the contract,
which acceptance they did not notify, nor
condemn the other parties for nonperform-
ance of a contract, the acceptance of which
they did not know. It is the acceptance
which comploles the contract. The agree-
ment is not suspended till the offerer has ac-
tually received notice of the acceptance, but
only until he might have received notice,
had that notice been foi-warded at the earli-
est moment. That is the nile declared in
Bell's Principles of the Law of Scotland
(page 35, § 78), and this rule must be applied
to and must govern the decision of the pres-
ent case.
COMMUNICATION BY CORRESPONDENCE.
35
Stewart Wortley and Hugh Hill, for re-
Bpondents, were not called on.
THE LORD CHANCELLOR. My lords,
overj-thing which learning or ingenuity can
suggest on the part of the appellants has
undoubtedly been suggested on tlie part
of the learned counsel who have just ad-
dressed the house; and. if your lordships
concur in my view, that they have failed
in making out their case, you will have the
satisfaction of knowing that you have come
to that conclusion after having had every-
Ihiug suggested to you that by possibility
could be advanced in favour of this appeal.
The case certainly appears to me one
which requires great ingenuity on the part
of the appellants, because I do not think
that in the facts of the case there is any-
thing to warrant the appeal. The contest
arises from an order sent from Liventool
to Glasgow; or rather a proposition sent
from Glasgow to Liven^ool, and accepted by
the house at Liverpool. It is unnecessary
to go earlier into the history of the case than
the letter sent from Liverpool by Iliggius,
bearing date the 31st January. A proposi-
tion had been made by the Glasgow house of
Dunlop, Wilson & Co. to sell 2000 tons of
pig iron. The answer is of that date of the
olst of January: "Gentlemen: We will take
the 2000 tons, pigs, you offer us." Another
part of the letter refers to other arrange-
ments; but there is a distinct and positive
offer to take the 2000 tons of pigs. To that
letter there is ajinexod a postscript in which
they say: "We have accepted your offer un-
conditionally; but we hope you will accede
to our request as to delivery and mode of
payment by two months' bill."
That, my lords, therefore, is an uncon-
ditional acceptance, by the letter datt^i tlie
I'.lst of January, which was proved to have
been put into the post office at Liverpool
on the 30th; but it was not delivered, owing
to the state of severe frosts at that time,
which delaj-ed the mail from reaching Glas-
gow at the time at which, in the ordinai"y
course, it would have arrived there. The
letter having been put in on the 30th of
Januarj', it ought to have arrived at Glas-
gow on the following day, but it did not
aiTlve till the 1st of Februaiy. It appears
that between the time of writing the offer
and 1st of February the parties making the
offer had changed tlieir minds, instead of
being willing to sell 2UO0 tons of pig iron on
the terms proposed, they were anxious to
be relieved from that stipulation, and on
that day, the 1st of February, they say:
"We have yours of yesterday, but are sori-y
that we cannot enter the 2000 tons of pig
iron, our offer of the 2Sth not having been
accepted in course."
Under these circumst « « * • * •
I believe that in these remarks I have ex-
hausted the whole of the objections made,
and my advice to your lordships is to affirm
the judgment of the court from which this is
appealed.
It was ordered that the interlocutor com-
plained of should be affirmed, with costs.
OFFER AND ACCEPTANCE.
MACTIER'S ADM'RS v. FRITH-
(6 Wend. 103.)
^' Court of Errors of New York. 1S30.
Appeal from chancery. At New York, in
the autumn of 1S22, the respondent and Hen-
rj Mactier the intestate, agreed to embark
In a commercial adventure, in which they
were to be jointly and equally interested.
Frith was to direct a shipment of 200 pipes
of brandy from France to N. Y., to be con-
signed to Mactier, who was to ship to the re-
spondent at Jacmel in St. Domingo, provisions
to the amount of the invoice cost of the bran-
dy, and the respondent was to place the ship-
pers of the brandy in funds by shipments
of coffee to France in French vessels, and the
parties were to share equally in result of the
speculation all around. In pursuance of this
arrangement. Frith, Sep. 5, 1822, wrote Fire-
brace, Davidson & Co., a mercantile house at
Havre, to ship 200 pipes of brandy to N. Y.
to the consignment of Mactier. Dec. 24,
Frith, who had returned to Jacmel, where he
did business as a merchant, wrote a letter
to Mactier on a variety of subjects, in which
was contained a paragraph in these words:
"I also have the pleasure of handing you
copies of Messrs. Firebrace, Davidson »& Co.'s
letters regarding the brandy order. By-the-
bye, as your brother before I left New York,
declined taking the interest I offered him in
this specuLition, and wishing to confine my-
self in business as much as possible, so as to
bring my concerns to a certain focus, I would
propose to you to take the adventure solely
to your own account, holding the value to
cover the transaction to my account in New
York." Jan. 17, 1823, Mactier wrote to Frith,
acknowledging tne receipt of his letter of the
24th ult.; thanks him for sending the copy of
Firebrace, Davidson & Co.'s letter on the sub-
ject of the brandy order; says that he has
received a letter from them, informing that
the brandy would be shipped and leave Bor-
deaux about Dec. 1 then past; and adds:
"This has been from the first a favorite spec-
ulation with me, and am pleased to say it still
promi.ses a favorable result; but to render it
complete, I am desirous the speculation should
go forward in the way first proposed, thereby
making it a treble operation; as you have,
however, expressed a wish that I should take
the adventure to my own account, I shall de-
lay coming to any determination till I again
hear from you. The prospect of war between
France and Spain may defeat the object of
this speculation, as far as relates to the ship-
ment of provisions hence to Hayti to be in-
vested in coffee for France, in which case I
will at once deciae to take the adventure to
my own account. Our London accounts, down
to the fifth of December, speak confidently of
a war between France and Spain, a measure
which, if carried into effect, would operate to
your disadvantage." Also: "The next ar-
rival from Europe will probably decide the
question of peace or war, and I will lose no
time in commumcating the same to you;" and
also, "let what will happen, I trust you will
in no w-ay be a sufferer." Mar. 7, 1823,
Frith wrote Mactier, making no other allusion
to the last letter of Mactier than the follow-
ing: "I have received your esteemed favors
of the 17th and 31st January, and note their
respective contents." Mar. 12, 1S23, the ship
La Claire arrived at N. Y., laden with the
brandy in question, and was at the wharf on
the morning of Mar. 13. A clerk of Mactier
testified tliat he had a conversation with Mac-
tier about the time the brandy arrived, per-
haps the morning after, and Mactier then said
he should take it to himself. A merchant of
N. Y. also testified that Mactier consulted
with him on the subject of some brandy
which he expected to arrive; there was some
offer for his taking it on his own account, and
he appeared inclined to take it. From the
state of things, he advised Mactier to take it.
and there was a l--jtter drafted by Mactier up-
on the subject, in which the merchant made
some alterations. The letter stated that he,
Mactier, should take the brandy to his own
account Mar. 17, Mactier entered the brandy
at the custom-house as owner, and not as con-
signee, took the usual oath, and gave a bond
for the duties. Mar. 22, he sold 150 pipes
of the brandy on the wharf to several com-
mercial houses, and took their notes for the
price of the same. The remaining 50 pipes
were put in the public store, and remained
there in bond, the liquidated duties not having
been secured to be paid by Mactier. Mar. 25,
Mactier wrote a letter, directed to Frith at
Jacmel, in which he said, "I have now to
advise the arrival of French ship La Claire
with the 200 pipes of brandy, and that in
consequence of the probability of war be-
tween France and Spain, and in compliance
with the wish expressed in your regarded
favor of the 24th December and my answer
thereto of the 17th January last, I have de-
cided to take this adventure to my own ac-
count. I, therefore, credit you with the
amount of the invoice," amounting to $14,-
254.57. To this letter was attached a post-
script, dated Mar. 31. Mar. 28, Frith wrote
a letter to Mactier, dated at Jacmel, in which,
speaking of the brandy in question, he says:
"With regard to this adventure, I would wish
to confirm, if altogether satisfactory to you,
what I mentioned to you some time ago, and
which I omitted to repeat to you in my pre-
vious letter, in reply to yours of the 17th
January. I fin^ the more one does in this
countiy, in the present state of trade, the
more one's affairs get shackled." Previous to
the an-ival of these last two letters at their
respective places of direction, Mactier was
dead, he having departed this life Apr. 10,
1823. Apr. 21, Frith again wrote a letter
addressed to Mactier, in which he acknowl-
edges the receipt of his letter of Mar. 25, says
he has noted its contents, and requests Mac-
tier to charter on his account a staunch first-
class vessel, and send out to Jacmel by her
COMMUNICATION BY CORRESPONDENCE.
39
400 barrels of flour, 150 barrels of pork, 150
barrels of beef, 100 barrels of mackerel, &c.,
&c. Ill the mean time, however, Mactler hav-
ing (lied, administratioa of his goods, &c.,
was granted to A. N. Lawrence and anotlier,
who in May, 182o, gave the requisite bonds
to secure the duties on the 50 pipes of brandy
which had not been bonded for by Maclier in
his lifetime, except by the general bond on
entering the goods at the custom-house, and
took the 50 pipes from the public store and
sold them at public auction.
The respondent, unwilling to come in as a
general creditor of Mactier and receive a pro
rata distribution, Apr 1, 1824, tiled his bill in
the court of chancery, alleging that the bran-
dy was shipped from France on his sole ac-
count, and that Mactier was only the con-
signee thereof. The respondent, in his bill,
admits that he proposed to Mactier to become
the purchaser of the brandy, but avers that
after the receipt of his letter of Jan. 17, he
considered him as having declined his pro-
posal, and that no other ofler was subsequent-
ly made by the respondent He sets forth a
letter written to him by Mactier Mar. 13,
1S23, in which, speaking of the brandy or-
dered from France, he says: "I am looking
daily for its arrival; it is to be regretted the
order was not more promptly executed, as the
delay, I fear, will operate to our disadvantage.
We have London dates to the 30th Januaiy;
war between France and Spain may now be
considered inevitable; France has recalled
her minister, and 100,000 Frenchmen hav4
been ordered to march into Spain." He al-
leges that the letter of Mactier to him of Mar.
25 was not received until several days after
the death of Mactier, and that his letter to
Mactier of Apr. 21 was written in ignorance
of the death of Mactier, and that he did not
intend thereby, and he conceives he did not
Anally consummate the sale as claimed. He
avers that the promissory notes received by
Mactier from tlie purchasers of the 150 pipes
of brandy remained in Mactier's possession
at the time of his death, not discounted or
passed away, and that the same came into
the possession of, and were at maturity col-
lected by the defendants; that the defendants,
by wrongfully and collusively representing
themselves as entitled to the 50 pipes of
brandy remaining in the public store, obtain-
ed possession of and sold the same; and that
July 2, 1823, he, by his attorney, claimed of
the defendants the part of the shipment or
invoice of brandy which remained unsold at
the decease of Mactier, and also demanded
the proceeds of that part of the invoice sold
by Mactier existing in notes or otherwise, and
the proceeds of the part sold by the defend-
ants. The bill concludes by praying an ac-
count of the sales of the brandy, and a decree
directing the defendants to retain in their
hands sufficient of the funds belonging to the
estate of Mactier to pay and satisfy the re-
spondent when his accounts shall be settled
and adjudged upon by the court
The defendants put in their answer, insist-
ing that the brandy, on its arrival at the port
of New York, was the sole and exclusive
property of Mactier, and that the purtion
thereof which c.tme to their hands at his de-
cease, and the proceeds of that part thereof
which was sold by him In his lifetime, and
which came to their hands, rightfully belong-
ed to his estate, and was subject to be dis-
posed of in a due coui-se of administration.
The defendants admit that they have in their
hands $13,035, belonging to the estate of Mac-
tier, after the payment of certain debts to the
United States, and various other sums of
money which they were directed to pay, have
credit for the payment of and are authorized
to retain, by virtue of a decree of the court of
chancery of June 14, 1S2:{, in a cause wherein
A. Mactier, Sr., in behalf of himself and the
creditors of Henry Mactier, deceased, is com-
plainant, and themselves defendants; and
they contend that such decree is in full force,
and that by virtue thereof they are bound to
pay the above mentioned sum of money and
such as may come to their hands pro rata, or
equally among all the creditors of Henry Mac-
tier, pursuant to such decree.
By the answer it was admitted that the de-
fendants had found- among the papers of
Henry Mactier two invoices of the 200 pipes
of brandy, similar in all respects, except that
one states the shipment to have been made
"to the address aLd for the account of Henry
Mactier," and the other states it to have been
made "for the account of the complainant to
the address of Henry Mactier." The first of
the invoices was used upon entering the
brandy at the custom-house. It also appeared
in evidence that ]\Iaf. 1, 1823, Mactier effected
an insurance on commissions arising on a con-
signment from Bordetiux to New York, to
the amount of $1,500. In a petty cash-book
of Mactier's there is the following entry:
"1823, March 17, John A. Frith's sales of
brandy, paid entry at custom-house, eighty
cents." The clerk of Mactier, who made this
entry, testified that the name of Frith pre-
fixed to the entry in the petty cash-book does
not necessarily prove that the brandy was
Frith's, but it shows that he at that time sup-
posed the brandy to be P^'rith's; if it had then
belonged to Mactier, or if Mactier had decided
to take it, ard any entry in the books had
been made showing that fact he would have
entered it. "Sales of brandy, Dr. for enter-
ing, &c." At the time of making the entry
he considered the fact of ownership contin-
gent. Mactier afterwards directed the ac-
count to be opened in the books, charging the
bmndy to himself, the account to be "Sales of
brandy." An entry was made in the day-
book of Mar. 2S, crediting Frith with the in-
voice amount of the brandy. Entries, he said,
are sometimes made several days after the
transaction; then the entry refers back to the
true date of the transaction, mentioning the
time. The entry was made by Mar. 31. He
also testified that the letter of Mar. 13, men-
40
OFFER xVXD ACCEPTAXCE.
tionod in tie complainant's bill, was copied
on the night of that daj-, but he had no recol-
lection when it left the office; it possibly
might not have gone until the La Claire ar-
rived.
May 20, 1S25. Chancellor Sanford made an
order of reference to a master to examine
witnesses, and to report whether, in his opin-
ion, the complainant was the owner of any
part, and what part of the shipment of brandy
at the time of the sale of the same or of any
part thereof, and if so, whether, as such own-
er, he had a lien by virtue of such ownership
on the brandy, or the proceeds thereof, in the
hands of the defendants; and that if the mas-
ter should be of opinion that he was entitled
as a special creditor, or had a lien, that then
he should take and state an account, and re-
port the amount due the complainant as such
special creditor, or having a lien. Under this
order witnesses were examined, and a mass
of documentary evidence produced before the
master, who, Oct 10, 1825, reported that the
complainant was not- the owner of the ship-
ment of brandy, neither at the time of the
sale of the part thereof made by Mactier in
his lifetime, nor of the other part thereof
made by the defendants as his administrators
since his death, and had no lien on the brandy,
or on the proceeds thereof in the hands of the
administrators To this report the complain-
ant excepted, and the cause was heard upon
the exceptions before Chancellor Walworth,
who, in Mar. 1829, allowed the exception to
that part of the master's report above stated
(other exceptions to other parts of the report,
which it has not been deemed essential to
state, were disallowed), and decreed that the
report be referred back to the master to alter
and correct the same, and to take and state
an account, and report the amount due the
complainant, on the principle that he, as sur-
vivor, is entitled to the net proceeds of the
adventure of brandy so far as they can be
traced and identified, and has a specific lien
on the net proceeds of the 50 pipes of brandy
sold by the administrators, and of the pro-
ceeds of the notes given for the 150 pipes
which remained uncollected or not passed
away at the time of Mactier's death, or on so
much as is necessary to satisfy the balance
due complainant for payment and disburse-
ments on account of that adventure, after de-
ducting from those proceeds the balance of
the amount paid for duties and expenses, if
any, over and above the amount of proceeds
of the shipment of brandy which were re-
ceived by Mactier in his lifetime. From this
decree the defendants appealed. For the rea-
sons of the chancellor, for the decree pro-
nounced by him, see 1 Paige, 434. The cause
was argued here by
S. Boyd and S. A. Talcott, for appellants.
S. Stevens and G. Griffin, for respondent
MAIICY, J. The object of the bill filed in
this case is to obtain from the administrators
of, Mactier the proceeds of the 50 pipes oi
brandy which came to their possession after
his death, and the amount of such notes taken
on the sale of the 150 pipes. Mar. 22, 1823,
as were uncollected and undisposed of at the
death of Mactier, or, at least, so much there-
of as may be necessary to pay the balance
due the respondent for disbursements on ac-
count of the adventure. The question on
which the decision in this case, as I appre-
hend, mainly depends, relates to the alleged
sale of the brandy to Mactier. There are
many definitions of what constitutes a con-
tract, but all of them are, of course, sub-
stantially alike. Powell states a contract to
be a transaction in which each party comes
under an obligation to the other, and each
reciprocally acquires a right to what is prom-
ised by the other. Pow. Cont 4. In testing
the validity of contracts, many things are to
be considered. The contract that the appel-
lant sets up in this case is alleged by the re-
spondent to be deficient in several essential
requisites. When that was done which, on
the assumption of there being parties capablt-
of contracting, was necessary, as the respond-
ent contends, to complete it, Mactier was
dead. If the contract was only in progress
of execution, and there remained but a single
act to be done to complete it, his death ren-
dered the performance of that act impossible;
it suspended the proceedings at the very
point where they were when it occurred.
The doctrine of relation was discussed on
the argument, and its application urged on us.
It was insisted that if notliing but a formal act
was to be done, and it was done by the sur-
viving party after the death of the other,
and in ignorance of it, this act might be ad-
judged to relate to a period antecedent to the
death of the party dying. If, as it was held
in the court below, the bargain in this case
cotild not be closed until Frith received Mac-
tier's letter accepting his ol3'er to sell, the re-
ceiving that letter, it was said, might be con-
sidered as having relation to the time when it
was sent, upon the principle that courts often
resort to this doctrine of relation to prevent
an injury resulting to a party from the act
of God. Where an agent without competent
authority makes a contract, a subsequent rat-
ification by the principal relates back to the
time when the agent acted. The ratification
is equivalent to an original authority; it is
considered in law as furnishing proof of an
authority in the agent at the time he assumed
to have it. If, however, he had disclosed his
want of authority, but had settled the terms
of the contract, in the belief that what he did
would be ratified, the doctrine of relation
would not apply; the bargain would take
effect from the time of the ratification. The
reason of the distinction which I apprehend
to exist in the two cases, is, that in the one
acts are done which make a perfect contract,
provided the actors had the authority they
assumed to have, and the ratification of their
acts by those from whom their power must
COMMUNICATION BY CORRESPONDENCE.
41
have been dorived, if they had it, is legal evi-
dence that they did have it when they acted.
In Ihe other case, the fact being made known
that there was not competent power in one of
the actors, the very foundation, on which
alone the presumption of authority can rest.
Is destroyed. A presumption will not be call-
ed in to supply an Impossibility. In a con-
tract of sale all agree that there must be two
minds, at least, concurring at the moment of
its completion; l)Ut this cannot be if there be
but one contracting party in existence. There
Is also, as I conceive, a difference between
acts essential to perfect an agreement and
those which relate to the forms prescribed in
certain instances as modes of proof. This
dilTerence is illustrated by those cases which
were referred to on the argument concerning
the enrollment of deeds. The enrollment is a
formal act, but necessary to be done, to enable
the party to prove the bargain and sale, but
when it is done it relates to the time when
the indenture was executed. It is as Lord
Bacon calls it, but a perfective ceremony of
the first deed of bargain and sale. Regula.,
14. So where chancery decrees the execu-
tion of a parol contract, on the ground of part
perfornwuce, the title certainly, as between
the parties, vests from the time of the con-
tract, and not from the performance of those
acts that remove the bar created by the stat-
ute of frauas. The doctrine of relation may
be permitted to operate on these formal acts,
but it cannot be used, as it is proposed to
use it here, to supply a party to a contract
who does not exist at the time when the act
is done which fixes to it the seal of vahdity;
or, what is the same thing, it cannot carry
back that act to a time when parties capa-
ble of contracting did m fact exist. This view
of the subject is conformable to the civil law
as well as the law of France. By these laws,
the death of the party offering to sell, is held
to be a revocation of the offer, and an ac-
ceptance subsequent to that event is inef-
fectual to close the bargain. Poth. Mar. Cont.
p. 1, § 2, art. 3, No. 82. My conclusion, in
regard to this objection to the alleged con-
tract, is, that if any act was required to be
done, even by Frith, to complete the sale
when Mactier died, that act could not be sub-
sequently performed.
I am now to consider whether there was a
contract, before Macticr's death, which had
the consent of the contracting parties so giv-
en and made known as to be binding on them.
That a consent is necessary all agree, but
what shall constitute it in a given case may
admit of much diversity of opinion. The con-
sent of the parties in a contract of sale, as
■explained by Pothier, consists in the concur-
rence of the will of the vendor to sell a par-
ticular thing to the purchaser for a specified
price, with the will of the purchaser to buy
the same thing for that price. Poth. Mar.
Cont pi. 1, § 2, art 3, No. 31. Delvincourt.
another eminent French writer on the Civil
Code of EYance, says, that although it is im-
possible that there should be a contract with-
out the consent of all parties, it is not indis-
pen.sable that the wills of the parties should
concur at the same instant, provided the will
of the one that did not concur at first is de-
clared before the will of the other is revoked.
5 Cours de Code Civil, 03. Although the will
of the party making the offer may precede
that of the party accepting, yet it must con-
tinue down to the time of the acceptance.
Where parties are together chaffering about
an article of merchandise, and one expresses
a present willingness to accept of certain
terms, that willingness is supposed to con-
tinue, unless it is revoked, to the close of
their interview and negotiation on the same
subject, and if during this time the other
party says he will take the article on the
terms proposed, the bargain is thereby closed.
Poth. Mar. Cont p. 1. § 2, art 3, No. 3L
What I mean by its being closed is, tliat noth-
ing mutual between the parties remains to be
done to give to either a right to have it car-
ried into effect; either can enforce it against
the other, or recover damages for the non-
fulfillment of it: but if there be conditions
expressed or implied to be performed by the
purchaser, he cannot compel the delivery un-
til they are performed. If the price is to be
immediately paid or security given, he cannot
have the propeity until payment made, or se-
curity given, or a tender thereof. Touch. 2(>4,
20.j; Noy, Max. c. 42; 2 Bl. Comm. 447.
Where the negotiation between the con-
tracting parties residing at a distance from
each other is conducted, as it usually is by
letters, it is necessary, in order iJiat their
minds may meet, that the will of the party
making the proposition to sell should con-
tinue until his letter shall have reached the
other, and he shall have signified, or at least
had an opportunity to signify his acceptance
of the proposition. This Pothier holds to be
the legal presumption unless the contrary ap-
pears. His language is: "Cette volonte est
presumee tant qu'il ne parait rien de contra-
rie." This doctrine, which presumes the con-
tinuance of a willingness to contract after it
has been manifested by an offer is not con-
fined to the civil law and the codes of those
nations which have constructed their systems
with the materials drawn from that exhaust-
less storehouse of jurisprudence: it is found
in the common law; indeed, it exists, of ne-
cessity, wherever the power to contract exists
In parties separated from each other. The
rule of the common law is, that wherever the
existence of a particular subject-matter or
relation has been once proved, its continuance
is presumed till proof be given to the contrary,
or till a different presimiption be afforded by
the nature of the subject-matter. 16 East
5.5; 3 Starkie. Ev. 12.52. The case of Adams
V. Lindsell, 1 Barn. & Aid. t'.Sl. proceeds upon
and atlirms the principle that the willingness
to contract thus manifested is presumed to
continue for the time limited, and. if that be
not indicated by the offer, until it is expressly
42
OFFEU AND ACCEPTANCE.
revoked or countervailed by a contrary pre-
sumption. In that case it was said, "Tlie de-
fendants must be considered in law as making
during every instant of time their letter was
traveling the same identical offer to the plain-
tiffs; and then the contract is complete by
the acceptance of it by tlie latter." Against
the authority of the case of Adams v. Lind-
sell, we have urged on us a decision of a
court of the highest respectability in one of
our sister states. The case of M'CuUoch v.
Insui-ance Co., 1 Pick. 27S, conflicts in prin
ciple, according to my views of it, with the
case decided by the king's bench. I should
have been pleased to see these tribunals har-
monize upon a question of no small impor-
tance to the commercial world; and I have,
therefore, deliberately weighed the ingenious
attempts made to reconcile these decisions up-
on this point; but these attempts appear to me
to have been unsuccessful. A refinement
which would distinguish between a contract
for insurance, and one for the sale of goods in
relation to the assent of the parties, might
reheve us from the embarrassment which
the different principles of these decisions is
calculated to produce; but to apply such a
distinction hereafter would doubtless involve
courts iu a still more disti'essing embarrass-
ment. Distinctions, which are not founded
on a difference in the nature of things, are
not entitled to indulgence; they tend to make
the science ot law a collection of arbitrary
rules appealing to factitious reasons for their
support, consequently difficult to be acquired,
and often of uncertain application. The two
cases referred to should have had applied to
them the same rule of law, and we are re-
quired to say what that rule is in deciding
the case now under consideration.
The principle of the decision of the king's
bench is simply that the acceptance of an
offer made, through the medium of a letter,
binds the bargain if the party making the
offer has not revoked it, as he has a right to
do before it is accepted. The rule laid down
by the supreme court of Massachusetts re-
gards the contract as incomplete until the
party making the offer is notified of the ac-
ceptance, or until the time when he should
have received it, the party accepting having
done what was incumbent on him to give
notice. The chancellor in deciding this case
gave his sanction to the latter rule: "To
make a valid contract," he says, "it is not
only necessary that the minds of the con-
tracting parties should meet on the subject
of the contract, but they must know that
fact." The decision of the court of Massa-
chusetts makes knowledge by the party ten-
dering the offer of the other's acceptance es-
sential to the completion of the contract. If
one party is not bound till he knows or might
know, and therefore is presumed to know that
the other has accepted, the accepting party,
on the same principle, ought not to be bound
till he knows the offering party has not re-
called the offer before knowledge of the ac-
ceptance. The principle of that case would
bring the matter to the point stated by the
chancellor, viz.: the parties umst know that
their minds meet on the subject of the con-
tract. If a bargain can be completed be-
tween absent parties, it must be when one ot
them cannot know the fact whether it be or
be not completed It cannot begin to be
obligatory on the one before it is on the
other; there must be a precise time when
the obligation attaches to both, and this time
must happen when one of the parties caimot
know that the obligation has attached to him;
the obligation does not, therefore, arise from
a knowledge of the present concurrence of
the wills of the contracting parties. All the
authorities state a contract or an agreement
(which is the same thing) to be aggregatio
mentium. Why should not this meeting of
the minds, which makes the contract, also
indicate the moment when it becomes obliga-
tory? I might rather ask, is it not and must
it not be the moment when it does become
obligatory? If the party making the offer is
not bound until he knows of this meeting
of minds, for the same reason the party ac-
cepting the offer ought not to be bound when
his acceptance is received, because he does
not know of the meeting of the minds, for the-
offer may have been withdrawn before his
acceptance was received. If more than a
concurrence of minds upon a distinct prop-
osition is required to make an obligatory con-
tract, the definition of what constitutes a con-
tract is not correct. Instead of being the
meeting of the minds of the contracting par-
ties, it should be a knowledge of this meet-
ing. It was said on the argument that if
concurrence of minds alone would make a
valid contract, one might be constructed oui
of mere volitions and uncommunica ted wishes;
I think such a result would not follow. The
law does not regard bare volitions and pure
mental abstractions. When it speaks of the
operations of the mind, it means such as have
been made manifest by overt acts; when it
speaks of the meeting of minds, it refers to
such a meeting as has been made known by
proper acts, and when thus made known it is
effective, although the parties who may claim
the benefit of, or be bound by a contract thus
made, may for a season remain ignorant of
its being made.
Testing the rules of the law laid down in
the two cases to which I have referred by
the authority of reason, and the practical
results that are likely to flow from them, it
does appear to me, that we are not left at
liberty to hesitate about the choice. If we
are inclined from the force of abstract rea-
son, to prefer the rule laid down by the
court of king's bench, that inclination will be
greatly strengthened by a recurrence to the
opinions of courts and jurists. The crown
pleas in England seem to me to have given
their approval to the decision of Adams v.
Lind.sell, 4 Bing. 653. Judge Washington, in
delivering the opinion of the court, in Eliason
COMMUNICATION BY CORRESPONDENCE.
43
V. Henshaw, 4 Wheat. 228, said, "Until the
terms of the agreoraont have received the as-
sent of both parties the noKoUation is open,
and imposes no obligation on either." The
inforcnce from this proposition is that the
assent of the parties to the terms of the
agreement, and not their knowledge of It,
completes the contract It was decided in
the circuit court of the United States, for
Pennsylvania, that contracts are formed by
the offer on the one hand, and an acceptance
on the other. After acceptance, the contract
is obligatory on both. Coxe, Dig. 192. In
this case, knowledge of the acceptance is not
brouglit into view as necessary to constitute
the obligation. Both the Roman law and the
French Civil Code, as we have seen by the
references already made, contain a doctrine in
accordance with the principle of tliese cases.
I think I am, therefore, warranted in saying
that the proposition may be considered as es-
tablished, that the acceptance of a written
offer of a contract of sale consummates the
bargain, providing the offer is standing at
the time of the acceptance.
What shall constitute an acceptance will
depend, in a great measure, upon circum-
stances. The mere determination of the mind,
unacted on, can never be an acceptance.
Where the offer is bj' letter, the usual mode
of acceptance is the sending of a letter an-
nouncing a con.sent to accept; where it is
made by a messenger, a determination to ac-
cept, returned through him, or sent by anoth-
er, would seem to be all the law requires, if
the contract may be consummated without
writing. There are other modes which are
equally conclusive upon the parties: keeping
silence, under certain circumstances, is an
assent to a proposition; anything that shall
amount to a manifestation of a formed de-
termination to accept, communicated or put
in the proper way to be communicated to the
party making the offer, would doubtless com-
plete the contract; but a letter written would
not be an acceptance, so long as it remained
in the possession or under the control of tlie
writer. An acceptiince is the distinct act of
one party to the contract as much as the offer
is of the other; the knowledge by the party
making the offer, of the determination of the
party receiving it, is not an ingredient of an
acceptance. It is not compounded of an as-
sent by one party to the terms offered, and
a knowledge of that assent by tlie other.
I will now apply this law to the facts of
this case. FriUi's offer to sell his interest in
the bi-andy certainly continued till his letter
of Dec. 24 was received at New York and
Mactier had a fair 'pportunity to answer it.
If the answer of Jan. 17 had contained an
unqualified acceptance, the bargain would
have been closed when it was sent away for
Jacmel; but the offer was not then accepted;
there was a promise to accept upon a con-
tingency, for Mactier says, after alluding to
the prospect of a war between France and
Spain, "in which case," that Is in case of such
I a war, "I will at once decide to take the
adventure to my own account." This con-
cluded nothing. If the event had actually
I happened, and Frith had insisted on enforcing
\ this conditional acceptance, it would not have
I been in his power to do so. The most that
I Mactier said was, that if an expected event
I happened, he would do an act which would
I complete tlie bargain. The happening of the
event could not, without the act, complete it.
The Roman law regarded the tense of the
verb used liy the contracting parties to de-
termine whether the bargain was concluded:
"Verbum imperfecti temporis rem adhuc im-
perfectam significat." There is a wide dif-
ference between a promise to give an assent
to a proposition for a contract on the happen-
ing of a contingency, and the annunciation of
a present assent to it. If the expected event
happens, and the act promised is performed,
the bargain is closed; but it is the promised
acceptance, and not the happening of the
event, that gives validity to the contract. If
in this case the offer of Frith had been to
Mactier to take the brandy on the happening
of a French and Spanish war, and Mactier
had promised to decide to take it in such an
event, the simple fact of his taking it after
the war would have enabled Frith to treat
him as the purchaser of it. Such an act
would have beer a valid acceptance; but a
conditional acceptance of an unconditional of-
fer, followed up by acts of the acceptor after
the condition was fulfilled on whicli the ac-
ceptance depended, might not be considered
as completing the bargain without the acquies-
cence of the party making the offer in those
acts, because the minds of the parties would
not have met on the precise terms of the
contract.
To conclude the bargain, ilactier must have
accepted the offer as tendered to him by
Frith, and that acceptance must have been
while the offer, in contemplation of law, was
still held out to him. That there was an ac-
ceptance, or rather that Mactier did all that
j was incumbent on him to do, to effect an ac-
, ceptance, was not denied; but it was insisted,
on the part of the respondent, that it was
noade after the offer was withdrawn. It will
be necessary to consider when this accept-
ance took place, as preparatory to settling the
fact of the continuance of the offer down to
tliat time. There is not the slightest evidence
of the determination on the part of Mactier to
take the brandy before Mar. 17. The insur-
ance that he effected on his commissions Mar.
1 disproves the existence of such a deter-
mination on that day; but if the situation of
the parties was changed, and Frith was now
endeavoring to set up the contract, I am at a
loss to conceive how Mactier"s representa-
tives could withstand the force of the facts
which took place Mar. 17. In answer to the
offer, Mactier delayed coming to a determina-
tion thereon, but promised to accept it if
there should be a war; Mar. 17, when that
event was considered as settled, he entered
44
OFFER AND ACCEPTANCE.
the brandy as his own property, and told his
clerk that he had determined to take it. But
If there should be any doubt as to the effect
of this conduct, there can be none as to his
subsequent acts. By a letter dated the 25th
with a postscript of Mar. 31, he accepted the
offer. This letter was immediately transmit-
ted to Frith, and as soon as Mar. 28, entries
were made in his books showing that he had
become the pm'chaser Enough was done by
the 31st to constitute an acceptance of Frith's
offer and to complete the bargain, if the offer
can be considered as standing till that day.
An offer, wher once made, continues, as I
have heretofore shown, to the satisfaction of
my own mind at least, until it is expressly
revoked, or imtil circumstances authorize a
presumption that it is revoked. The offer it-
self may show very clearly when the pre-
sumption of revocation attaches. Where it is
made to be replied to by return mail, the
party to whom it is addressed must at once
perceive that it is not to stand for an ac-
ceptance, to be transm'tted after that mail.
If an offer stands until it is expressly with-
drawn, or is presumed to be withdrawn,
whether it is held out to a party at a partic-
ular period or not, is a matter of fact. Then
we are to determine, as a matterof fact, wheth-
er Frith's offer was held out for Mactier's
acceptance untO Mar. 31; if Frith intended it
should stand on, and he viewed himself as
tendering it to Mactier down to tliat time, we
are bound to regard it as standing, unless his
intention was the result of the fraudulent
conduct of Mactier. The acts of Frith, after
the death of Mactier, could do nothing to-
wards completing an unfinished contract; but
I think they may be fairly adverted to for the
purpose of ascertaining his intentions in rela-
tion to the continuance of his offer. Mar. 7,
he acknowledges Mactier's letter of Jan. 17,
which did not decline, as it has been con-
strued to do, the offer, but apprised him that
it was kept under advisement; and by using
the expression, "noting the contents," Frith
is, I think, tc be understood as yielding to
the proposed delay If a doubt as to this
construction of that letter could spring up in
the mind, it would be at once removed by the
ptTusal of the letter of the 28th of the same
month. In that he expresses a wish to con-
firm what he had said in the letter making
the offer to sell, and declares that he had in
a previous letter, which must mean that of
the 7th, omitted to communicate the .same
thing. In answering Mactier's letter which
contained the acceptance of his offer, he rec-
ognizes the bargain as closed, and gives di-
rections as to investing the proceeds of the
brandy. All the subsequent correspondence
acquiesces in the sale. It appears to me to
be impossible to say, after reading the let-
ters of Frith written subsequent to his knowl-
edge of Mactier's acceptance, that he did not
consider the offer as held out to Mactier down
to the time when it was accepted, and the bar-
gain closed by that acceptance; and I think
we must adjudge it to have been closed, un-
less the agreement was nugatory by reason
that the thing to which it related had not an
actual or potential existence when the con-
tract was consummated.
Where both parties are under a mistake as
to the existence of the thing contracted to be
sold, the bargain fails. The cases put by
Pothier and Chancellor Kent ai-e, the sale of
a horse which happens to be dead, or of a
house consumed by fire before the contract
was concluded. The law which has been ap-
plied to such cases is not, in my judgment,
applicable to this. Property that has no ac-
tual existence is the subject of a valid con-
tract of sale, as a carriage not yet made, or
a crop not grown; they are considered to
have a potential existence. A pei-son may
sell an article to which he has no title or pre-
tense of title. Poth. Traite du Contract de
Vente, p. 1, § 2, art. 1. There is, I appre-
hend, no just ground for saying that the
principal part of this brandy was not in ex-
istence Mar. 31, the time when I consider the
contract to have become perfected. Fifty
pipes were in the public store; the remain-
der had been sold but a few days before, and
was probably but pailially consumed; but
whether it was or not is not, in my view of
it, material to this case. If the contract was
obligatory on one, it was on both. Could
Mactier have objected to it, and placed its
nullity on the ground that he had consumed
a part of the brandy before he accepted the
offer for the purchase? Such a defense
would not be listened to in any court; it
could invoke no principle of justice to its aid.
Another objection to the contract was
drawn fi'om the alleged fraudulent conduct
of Mactier. The bill does not seem to me to
put the claim to the interference of the court
below specifically upon that ground. It does
not seek to avoid the oonti-act on the ground
that Frith was inveigled into it by the con-
trivance and artifice of Mactier, but it de-
nies the existence of those formalities which
are requisite to conclude a contract. Frith
complains, it is true, that Mactier did not,
by his letter of Mar. 25, or any other, in-
form him of the sale of the brandy, of its
value in New York, or of the arrival of the
vessel with the brandy on board. The letter
of the 2.5th did apprise him that the brandy
had an-ived. If any act was to be done by
Frith to complete the bargain, the conceal-
ment of any fact that might influence his de-
termination with regard to that act, might
give rise to the imputation of fraud; and if
such fact was concealed with a view to pro-
cure an assent to a contract to which, it is
probable, his assent would not have been
given had he received information of the fact
concealed, he might allege the concealment to
exonerate himself from the obligation to ful-
fil it; but if he had no affirmative act to per-
form before the bargain might be closed, and
Mactier was in a situation that gave him tlie
right to close it, and he did so before the in-
COMMUNICATION BY CORRESPONDENCE.
45
formation wliirh is allo^^cd to have been kept
back could have reached Frith, if it had been
duly transmitted, he has suffered no injury;
indeed there is no ground for a presumption
of fraud. My conclusion, therefore, is, that
the contract was consummated between the
parties before the death of Mactier, by which
he acquired all Frith's right to the 200 pipes
of brandy.
The Uiw in relation to the right of the
vendor of goods to stop them during their
transit to the purchaser, was much' discussed
on the argument; but I have been unable to
discover how a question, in relation to such a
right, can properly arise from the facts in
this case. If there was not a sale, such a
question certainly cannot arise, for then there
would be no vendor or vendee and, conse-
quently, no transit of the brandy from the
one to the other. If there was a sale, and I
hold there was, the question does not arise,
because there was, in fact, no stoppage or any
act that can in law be regarded as amount-
ing to a stoppage. By virtue of the purchase
the title to the brandy vested in Mactier; no
actual deliver}', if it was not in his ix)sses-
sion, was necessary to perfect his title; if
the brandy had been destroyed Apr. 1, or the
notes taken for the portion previously sold
had proved utterly valueless, the loss would
have fallen entirely on Mactier. The un-
sold brandy was his absolute property, and
on his death the title to it vested in his rep-
resentatives. On the assumption that it was
on its transit, the right of the representatives
to it was subject to be affected in the same
manner as Mactier's might have been if he
had been in life; it might have been defeat-
ed by a stoppage in transitu. A right to stop
goods in their ti'ansit does not arise from the
circumstance that the bargain is not complete
until the purchaser gets actual possession of
them, but it is a right taking its origin im-
doubtedly in strong considerations of equity,
and dependent upon a fact usually happening
after the sale, and always unknown to the
seller at the time of it— the insolvency of the
purchaser. 3 Bos. & P. 584; 2 Kent, Comm.
393, 428. The stoppage does not take place
on the happening of the insolvency, but the
right to stop is thereby acquired. The acqui-
sition of the right works no beneficial result
to the seller unless he intercepts the goods
in their transit. I have seen no case where
this right has been held to attach on the
death of the purchaser, if his estate was sol-
vent I think the seller could not, in such
a case, justify an interference with the goods
sold while on their transit. It arises in case
of death and insolvency, but not otherwise
than it would exist in the case of insolvency
alone.
A question asked by Lord Kenyon, in Toole
V. Hollingworth, 5 Term R. 226, has given
rise to a suggestion, that death prevents the
deliver)-; but the doubt entertained by that
eminent judge did not spring from a case
where there had been a sale. Tlie property
there had been sent to answer a particular
purpose, which was to raise funds to meet the
consignee's acceptances; he having become
unable by rea.son of his insolvency to use
them for that purixjse, had no interest in
them that went to his assignees. Where
there is a general trading between two mer-
chants residing at a distance from each other,
and goods are sent by one to the other with-
j out being ordered, the title to them would
j not vest, as I conceive, in the merchant to
I whom they were sent untU they were re-
' ceived and accepted. If he at once returned
' them as untit for his use, or for any other
I cause, the title to them would not, in my
! opinion, have bt^en changed. In such a case
i Lord Kenyon might well ask, and mean there-
i by to expit'ss a strong doubt, whether the
' goods could be received bj' the executor if
the consignee was dead when they arrived-
I The sending of goods, under such circum-
stances, amounts to no more than an offer to
sell them to the party to whom they are
I sent, and his acceptance of them would be
necessary to complete a bargain. If he should
I be dead before they arrived, there would be
no contracting party to close the bargain by
an acceptiince. Chancellor Kent's remarks,
on the question put by Lord Kenyon, shows
that he did not consider that a doubt of the
nature of the one suggested could be indulged
in a case where the title to the property had
vested in the deceased person; for he says:
"Tlie language of the court," in the case last
referred to, "seems to be, that goods sent to
a person, who at the time was dead or dis-
abled by bankruptcy from dealing, and under
an incapacitj- to acquire property, could be re-
covered back upon the principle that there
was no contract." 7 Johns. Ch. 275.
Waiving aU the other diOiculties that were
presented in opposition to Frith's right to stop
the 50 pii>es of brandy, and granting at the
same time that he had the right, and that
they were to be considered as in their transit
while they remained in the custody of the
custom-house officer at N. Y., it may be asked
what did he do to stay the delivery of them
to the administrators of MactierV Did he
make an effort to get possession of them?
Did he forbid the public otficer to deliver
tliem to the administrators? This I believe
is not pretended. The administrators took
possession of them in May or June, and sold
them about that time as a part of the estate
of their intestate, and the first act in rela-
tion to them on the part of LMth was in
July. They had a right to the brandy as
property vested in Mactier at the time of his
death by virtue of the contract of sale; and
they can rightfully hold the avails thereof,
unless Frith had rescinded the contract by
stopping the brandy in its transit before it
came to their actual possession. This he
did not do, nor did he perform any other act
equivalent to iL
4G
OPFER AND ACCEPTANCE.
Upon the view of the whole of this case, I
entertain the opinion that the decree of the
chancellor ought to be i-eversed.
By Mr. Senator BENTON. From the plead-
ings and testimony in the cause, there can
be no ground for the assumption set up by
the respondent that he was the sole owner,
and was alone interested in the brandy. The
answer of the appellants is, in my opinion,
substantially supported by the proofs. We
are, then, to assume that the intestate and re-
spondent were partners, or jointly interested
in the 200 pipes of brandy; to share equally
In the profits, or to bear the loss jointly, if
any should be sustained. The transaction
was to be extended so as ultimately to pay
the invoice cost in France by a shipment of
coffee from the West Indies, which latter
operation was to result from provisions ship-
ped from this country to the West Indies.
It is worthy of notice that by the aiTange-
ment the brandy was to be shipped from
France for New York, in an American ves-
sel, and the coffee was to be sent in a French
bottom from the West Indies; and this, un-
doubtedly, with a view to advantages to re-
sult to the parties to the speculation.
The respondent, by his letter, dated Sep. 5,
1S22, to his agents in P^rance, having ordered
the brandy to be sent out to the consignment
of the intestate, and directing the invoice
amount to be insured. Dec. 24, 1822, wrote
the intestate to the following effect: "I also
have the pleasure of handing you copies of
Messrs. Firebrace, Davidson & Co.'s letters
regarding the brandy order. By-the-bye, as
your brother, before I left New York, de-
clined taking the interest I offered him in
this speculation, and wishing to confine my-
self on business as much as possible, so as
to bring my concerns to a certain focus, I
would propose to you to take the adventure
solely on your own accoimt, holding the
value to cover the transaction to my account
In New York."
This, it appears to me, is a distinct and un-
conditional offer to dispose of the interest
and property in the shipment of brandy at
its value; that is, the invoice cost in France,
or its value or price in the market of con-
sumption. And in this case it cannot, I ap-
prehend, be material which was intended by
the respondent, because the question here pre-
sented does not involve that particular in-
quirj'. And if the offer was accepted, the
intestate was only to carry the amount to the
credit of the respondent, holding the same
to cover any transaction which he might
deem it advisable to negotiate in New York.
On Jan. 17, 182.3, the intestate, in answer
to this proposition, wrote as follows: "I
thank you for sending me the copy of Fire-
brace, Davidson &. Co.'s letter on the subject
of the brandy order. This has been, from
the first, a favorite speculation with me, and
am pleased to say it still promises a favor-
able result; but to render it complete, I am
desirous the speculation should go forward
in the way first proiwsed, thereby making
it a treble operation. As you have, however,
expressed a wish that I should take the ad-
venture to my own account, I shall delay
coming to any determination till I again hear
from you. The prospect of war between
France and Spain may defeat the object of
this specidation, as far as relates to the ship-
ment of provisions hence to Hayti, to be in-
vested in coffee for France per Fi*ench ves-
sels, in which case I will at once decide to
take the adventure to my own account."
The intestate then states, as his opinion, that
the war would operate to the disadvantage of
the respondent, in relation, I suppose, to the
transactions connected with the purchase of
the brandy and the shipment of coffee to
France. This letter, although it is not an
acceptance of the proposition contained In
the respondent's to take immediate effect, is
not a rejection of it; the intestate replies, he
should delay coming to any determination in
regard to the wish expressed that he should
take the adventure on his own account, until
he again heard from the respondent; and in
another part of the letter he states, that
should a war intervene between France and
Spain, which would, he assumes, defeat the
objects of the speculation in the particulars
therein enumerated, he would decide to take
the adventure to his own account.
Under date of Mar. 7, 1823, the respondent
wrote the intestate, acknowledging the re-
ceipt of the letter dated Jan. 17, above re-
feiTcd to; but nothing is said about this let-
ter, except that the contents were noticed.
The letter from the intestate to the respond-
ent, dated Mar. 13, 1823, advised the respond-
ent that he had been informed of the ship-
ment of the brandy in a French ship, that
he was looking daily for its arrival, and ex-
pressing his regrets that the order had not
been more promptly executed, as the delay
would l>e likely to prove disadvantageous to
him and the respondent. At this time the
intestate was advised that a war between
France and Spain was inevitable; that France
had recalled her minister, and that a large
French army had been ordered into Spain,
and that the American insurance ollices de-
clined insuring on French vessels.
On Mar. 28, 1823, the respondent wrote the
intestate to the following effect, in relation to
the brandy transaction: "I have not heard
anything more from Firebrace, Davidson &
Co. respecting the brandy, but I have little
doubt of its having got out to you long ere
this, unless the rupture which we have a
report of between France and Spain took
place before the sailing of the vessel, or that
she has been captured by the Spaniards; if
either be the case, it would be a pity, as its
safe arrival with you would be much en-
hanced if there be a war. With respect to
this adventure, I would wish to confirm, if
COMMUNICATION BY CORRESPONDENCE
47
altogether satisfactory to you, what I men-
tioned to you some time ago, and wliich I
omitted to repeat to you in my previous
letter in reply to yours of the 17th January.
I find the more one does in this country, in
the present state of trade, the more one's af-
fairs get shackled." The letter here men-
tioned as the one in reply to that of Jan. 17,
is the letter from the respondent to tlie in-
testate, under date of Mar. 7, 1S2;3. It is al-
leged that the above, under date of Mar. 28,
did not arrive at its destination until after
the death of the intestate.
But wliat inference can properly, and with-
out violence, be drawn from the eoutcnts of
this last letter from the respondent? What
is the plain and fair import of it? It appears
to me the respondent fully acquiesced in the
proposal of the intestate to consider tlie offers
made by the letter of Dec. 24, 1822, as open,
and still at the option of the intestate to ac-
cept or refuse, as he might think proper. The
respondent's mind had probably at all times
no other inclination than to hold his offers
open to the intestate, and he had so intended
to have expressed himself in his reply under
date of Mar. 7; for he says he wished to con-
firm what he mentioned sometime ago, and
which he omitted to repeat in his previous
letter in reply to the one from the intestate
of Jan. 17. This letter, I apprehend, affords
sufficient evidence of the fact that the re-
spondent did not consider his proiwsitions as
rejected by the intestate, although they had
not been in terms accepted by him, from any
communications which had been received at
its date. It would, I apprehend, be compe-
tent for the appellants in this case to prove
that the respondent had, up to the date of
this letter, considered the intestate at liberty,
and that he had the right to take the adven-
ture to his own account; that the offer con-
tained in the letter of Dec. 24 was still open
to him. If I axu correct in this conclusion,
then I do not perceive why this letter does
not afford sufficient evidence that the respond-
ent never considered the intestate as conclud-
ed or barred from accepting them.
Then, under date of JNIar. 25, 1S2;>, and with-
in the time above assumed, the intestate
wrote the respondent and said: "I have now
to advise the arrival of the French ship La
Claire with the 200 pipes of brandy, and that
in consequence of the probability of war be-
tween France and Spain, and in compliance
with the wish expressed in your regarded fa-
vor of the 24th December, and my answer
thereto of the 17th January last, I have decid-
ed to take this adventure to my own account.
I therefore credit you with the amount of
the invoice, say fr. 70,978-58. which at the
exchange of the day, 5-40, makes the sum of
$14,254 57^100 of which you will please to
take note." Here the intestate closed with
tlie resi)ondent's proposal; and was it done
in time to constitute a contract binding upon
the parties? On Apr. 21, following, the re-
spondent wrote the intestate, advising him
of the receipt of the above letter of Mar. 25,
noting particularly the contents, to which
he liad replied, he says, by his previous re-
spects; and although he was then indelned
to the intestate in a considerable sum, if we
do not take into view the amount of the price
or value of the brandy, he requested the in-
testate to charter on his account a stauneh
first class vessel, and send out to liim by lier
a valualjle cargo of provisions and merchan-
dise; the vessel to proceed to Europe with
a cargo of coffee. The intestate resided in
New York, and it is admitted by the case
that he died Apr. 10, 1823. The respondent,
at the time this transaction and corresirjud-
dence took place, was a resident of Jacmel,
in the Island of St. Domingo. There are sev-
eral other letters from the respondent to the
intestate, which I deem not necessary to ad-
vert to in the view here taken of this case.
Upon a rigid and critical examination of tlie
correspondence and the testimony, I am un-
able to ix?rceive that the respondent ever in-
timated to the intestate that he withdrew his
proposition of Dec. 24, offering to dispose of
his interest in the shipment of brandy, or that
he considered the intestate's letter of Jan. 17
as a rejection of that offer; but, on the
other hand, the letter from the respondent of
Mar. 28 shows pretty clearly, not only that
this was not so considered by him, but that
he wished to confirm what he had previously
written, urging the intestate to close with
the offer upon the terms proposed in the let-
ter of Dec. 24. This would not probably have
been done in the terms here used, if the propo-
sition for the sale had been considered as re-
jected.
It cannot, I apprehend, be contended, with
any probability of success, that the respond-
ent's letter of Apr. 21 contains any matter
which goes to show he did not consider the
first offer of sale on his part, as still oi>en.
The respondent must have known, and did
know no doubt, that when he wrote this last
letter, his previous letter to the intestate,
dated Mar. '28, had not been received when
the letter under date of Mar. 25 was written,
advising tliat tlie adventure had been talion
agreeably to the proposition contained in tlie
respondent's letter of Dec. 24.
In my opinion it was competent for the
respondent to have limited the time in which
his offer might have been accepted, and to
have stated, "If you accept by Apr. 1 it will
be in time." or he might have left the pro-
posals open indefinitely. When advised of
the safe arrival of the brandy, and that the
intestate had decided to talce it to his own
accoimt, and while he still supposed the in-
testate was alive, the respondent made no
objection, but acquiesced in what had been
done. It is not urged that the contract de-
pends upon either of the letters written by
the respondent which were not received by
the intestate in his lifetime, any farther than
those letters afford evidence of the mind and
intent of the party.
4S
OFFER AND ACCEPTANCE.
If this mode of reasoning, in relation to the
facts in this case, be correct, and the intes-
tate accepted of an offer tendered to him by
the respondent, then was it necessary for the
Intestate to know, before the contract was
finally closed and binding upon the parties to
it, whether the respondent assented or not.
This brings me to a consideration of the
law involved in this case.
In the construction of contracts and agree-
ments, the intention of the parties and the
substance of the contract ai'e tx) be sought for
more than the form of the words. Pothier
says we ought to examine what was the com-
mon intent of the contracting parties, rather
than the grammatical sense of the terms (2
Com. Cont. 53o); and Plowden lays down a
rule, that in contracts it is not material which
of the parties speaks the words, if the other
agrees to them; for the agreement of the
minds of the parties is the only thing the law
respects in contracts; and such words as ex-
press the assent of the parties and have sub-
stance in them are sufficient. And again; if
any persons are agreed upon a thing, and
words are expressed or written to make the
agreement, although they are not apt and
usual words, yet, if they have STibstance in
them tending to the effect propos»!d, the law
will take them to be of the same effect as
usual words; for the law always regards the
intention of the parties, and will apply the
words to that which in common presumption
may be given to their intent. Ch. B. Comyn
also states, that an agreement or contract
shall have a reasonable construction accord-
ing to the intent of the parties; and the
rule of construction adopted by the courts in
this state and in England, is that in case of
doubt, the words of a promise or covenant
shall be taken most strongly against the
promisor or covenanter. An agreement is ag-
gregatio mentium; that is, where two or more
minds are united in a thing done or to be
done, or where a mutual assent is given to
do or not to do a particular act; and every
contract or agroement ought to be so cer-
tain and complete that each party may have
an action or other remedy upon it.
These general principles appear to be full
of sound sense and good reason. A review
of the numerous adjudged cases which have
a bearing either directly or indirectly upon
the questions now under consideration, seems
to me not necessary. I shall, therefore, ad-
vert to one of them only.
The case of Cook v. Ludlow, 5 Bos. & P.
2. 119, was this: The defendant, who re-
sided near Bristol, by letter, requested the
plaintiff, who lived in London, to send by
any conveyance which would reach Bristol a
patent chaff-cutter and two or three pairs of
knives, and also requested that he might be
informed when the same were sent, that he
might know when and where to send for the
articles. The articles were sent to a wharf
in London, directed to the defendant, and the
wharfinger's receipt taken by the plaintiff.
The defendant was advised by mail that the
articles had been shipped by a vessel called
the Commerce, Chas. Forquaroau. The pack-
age containing the chaff-cutter and knives
was not in fact shipped for Bristol by the
Commerce, but was put on board the Nancy,
which left Loudon about three months after
the articles were delivered at the wharf. No
correspondence or communication passed be-
tween the parties for about fifteen months
after the goods were actually shipped, when
the plaintiff applied for payment of the de-
mand, who shortlj' afterwards received a let-
ter from the defendant stating that he had
not received any chaff-cutter, although he
had repeatedly inquired for it at Bristol imtil
the time of the aiTival of the Commerce. The
plaintiff then wrote the defendant, informing
him that on inquiry it was ascertained that
the package, containing the chaft"-cutter, had
been sent by the Nancy to Bristol, and this
was the first intimation the defendant re-
ceived that the chaff-cutter had been sent by
this vessel. The question in this case was,
whether the plaintiff was entitled to recover^
and the court held he was, observing, the
article was sent in the common course accord-
ing to order, and the defendant was bound to
give notice in due time that he had not re-
ceived it. Heath and Kooke, JJ., observing
that the plaintiff" had done everything in that
case he was bound to do, and the defendant
was guilty of gross negligence in not giving
earlier notice. In this case, I apprehend, the
contract of sale was consummated upon the
delivery of the goods agreeable to the defend-
ant's order, and took effect from the time of
such delivery at the wharf or place from
whence they were to be transported to the
defendant at Bristol. The whai-finger or car-
rier was neither of them the agent of the
plaintiff. Here the minds of the parties met,
because the orders of the defendant had been
strictly followed and attended to; but did
the defendant know the fact at the time it
was done? Let us suppose a case that might
have arisen in the cause under consideration,
and test it by the above rule. Had Firebrace,
Davidson & Co. shipped the 200 pipes of
brandy in conformity to the order of the re-
spondent upon them, would he have been at
liberty to refuse taking it, on its arrival in
this country, and would he have been held
not liable to pay the amount of the invoice
price, suppose it to have been lost by ship-
wreck or capture. I do not doubt but the
resi)ondent would have been liable to pay for
the shipment of brandy from the time the
terms of his order had been fulfilled; and
this too, although he might not have known
that the article had been sent. The minds
of the parties met at the time the brandy
was actually shipped agreeably to directions.
Entertaining no doubt of the fact that the
respondent at all times, up to Apr. 21, con-
sidered his offer of Dec. 24, 1822, as open to
the intestate for his aceptance upon the terms
offei'ed, the letter of aceptance of Mar. 25.
COMMUXICATIOX BY CORRESPOXDENCE.
49
1823, clasing with the terms of the offer, con-
summated a valid and binding contract be-
tween the parties; and from that time the
intestate was liable to tlie respondent for the
full amount of the value. But it is now
urged by the respondent that certain infor-
mation was withheld by the intestate, and
that he has lost the interest on the amount,
aud that there was a difference in the rate
of excliange, which operated against him be-
tween the time the offer was made and the
acceptance; such, however, was not his com-
plaint when he wrote the intestate on the
21st Api-il. As a general creditor, he might
be entitled to interest, and compensation for
any loss he might have sustained in conse-
quence of the rate of exchange, being more
to his disadvantage at the time the contract
was closed, than it was when the offer was
made. Sound policy forbids that mercantile
contracts should depend for their validity
upon considerations of this kind.
Having arrived at the conclusion, that here
was an absolute sale of all the right and in-
terest of the respondent to the shipment of
brandy, it now remains to inquire, whether
he has a lien upon the whole or any pai't of
it as a creditor, and whether the doctrine of
stoppage in transitu, is applicable. K I am
right in respect to the sale of the respond-
ent's Interest, then clearly the transitus is
gone as to 150 pipes of brandy, which were
sold in the lifetime of the intestate; the sub-
ject was entirely out of the possession of the
vendor; aud I did not imderstand that it
was contended upon the argument, that the
right of the respondent to this portion of the
adventure could be sustained upon this prin-
ciple, if a contract had been made.
The question in regard to the 50 pipes
seems to me to be presented in the following
shape, and accompanied with these peculiar
circumstances. The goods were in the pos-
session of the vendor and vendee, as partners
by legal construction. The respondent was
never in actual possession, except by the in-
testate; and according to the iwsition here
assumed, the goods were in tlie actual and
uncontrollable possession of the intestate,
and when the contract was finally closed,
the 50 pipes of brandy lay in the public store,
under the direction of the vendee, who was
himself joint ovsTier with the respondent.
The transitus of the goods and, consequent-
ly, the right of stoppage, is determined by
the actual deliverj' to the vendee, or by cir-
cumstances which are equivalent to actual
delivery. It will continue until the place of
deliveiy be in fact the end of the journey of
the goods, and they have arrived to tiie pos-
session, or under the direction of the vendee
himself. 2 Kent, Comm. 430. If the goods
have an-ived at an intermediate place, where
they are placed under the orders of the
vendee, and are to remain statioiiaiy until
they receive his directions to put them again
in motion for some new and ulterior desti-
nation, the transitus is gone. 2 Kent, Comm.
HOPK. SE L. CAS. COST. — 4
431. The goods in this case were not In
their transit; they had amved at their des-
tination, and wei"e under the domiuiou, and
subject to the ownership of the intestate.
Nothing remained to be done by the re-
spondent to complete the transfer of the
brandy.
But in my judgment, another view of the
case is er to stand, that Mactier
might determine to take the brandy or not,
as he said he should on hearing ftirther. In
Poth. Mar. Cont. pt. 1, § 11, Nos. 31. 32, it is
said that: "In the contract of sale, as in oth-
er contracts, the consent of the parties can in-
tervene, not only between persons present,
but between the absent, by letters or by
messenger. In order that the consent should
S4
UFFER AND ACCEPTANCE.
Intervene in the latter case, it is uecessary
that the will of the party who has written to
the other to propose to him the bargain shall
have continued until the time at which his
letter shall have reached the other party,
and at which the other party shall have de-
clared that he accepted the bargain. This
will is presumed to have continued, so loug
as nothing appears to the contrary." Must
it not be so upon general principles? Again,
in 3 Starkie, Ev. 12C>2, it is said: "Where the
existence of a particular subject matter or
relation has once been proved, its continu-
ance is presumed till proof be given to the
contraiy." Lord EUeuborough, in IG East,
55, remarks: "It is fair to presume things
continue in the same state, in the absence of
all proof of their having been altered."
I admit that this presumption may be re-
butted by lapse of time, or by the fact that
the brandy was in an unsafe or perishable
coudition, which is not the case here. In the
present case the continuance of the vendor's
proposition is not left to presumption alone,
as in ordinary cases; Frith shows the con-
tinuance affirmatively by his letters, and tlms
places it beyond mere presumption, either one
way or the other. He remarks in his letter of
Mar. 28, "with regard to this adventure, I
would wish to confirm, if altogether satisfac-
tory to you, what 1 mentioned to you in my
previous letter, in reply to yours of the 17th
of ,Tanuai-y." It is manifest from this that he
still wished to sell as he before offered. If
this is not sufficient to show his intention to
sell, his letters of Apr. 21 and 22 clearly
prove that Frith never changed his mind as
to selling the brandy; that he considered the
offer to sell open, and not withdrawn or re-
tracted, but accepted; for his letter of Apr.
21 was after receiving Mactier's letter say-
ing that he had taken the brandy. Mar. 25
their minds meet. This completes the sale
in the present case; a formal delivery of the
brandy was not necessary, as it was in
Mactier's possession. It was iu"ged on the
argument that these letters of April and May
could not confirm the sale, as Mactier died
before they were written, to wit: Apr. 10;
but to my understanding there is sufficient
without these letters. It appears to me, as
I have before remarked, that Frith's letter
of Mar. 28, and the two in April, and his last
of May G, are sufficient to show that the
complainant's mind and continued desire was
to sell.
Again, what must Mactier have supposed?
He had done all in his power to the final con-
summation of this sale; Frith, by his subse-
quent act, it seems to me, ratified it, and
Mactier's death could make no difference;
it related to the time of Mactier's letter, and
confirmed his acceptance and perfected the
sale by that relation. 2 East, 227. Frith
could have insisted upon and enforced the
bargain, and the administrators could not
have refused.
Again, in 2 Ld. Raym. 930, Holt says, "A
consent subsequent will amount to an au-
thority precedent." In 1 Liv. 445, 9, per Pow-
ell, J., "A subsequent ratification is equiva-
lent to an original authority." Again, "There
are three sorts of agreements— an agreement
executed, an agreement subsequent to a thing
done, and an agreement executory." Flowd.
5a," Ga. In Com. Dig. tit. "Agi-eement," A, 1,
these rules are all cited. In 12 Johns. 300,
and in 3 Cow. 281, it is settled. "A subse-
quent assent may be inferred from circum-
stances which the law considers equivalent to
an express ratification." In Com. Dig. tit.
"Agreement," A, 2. An agreement executed
often amounts to a bargain and sale. So
where an assent subsequent is given to an act
precedent, by such assent the agreement is
executed. Is it not then just to say this con-
firmation of Frith's shall relate to the life-
time of Mactier'.' In Com. Dig. tit. "Bargain
and Sale," it is said: "If a bargainor or bar-
gainee die after the indenture executed, and
before enrollment, the estate passes to the
bargainee and his heirs, if it be enrolled with-
in six months, yet the seisin continues in the
bargainee." So in Cro. Jac. 512, and Vin.
Abr. tit "Relation," F, G, per Coke and Mon-
tague, "execution of all things executory, re-
spects the original act, and have relation
thereto, and all make but one act, though
done at several times." So, where there are
divers acts concurrent to make one estate, the
original act shall be preferred, and to this
the other acts shall come. So, where two
times are requisite to the perfection of an
act, it shall be said upon their consummation
to receive its perfection from the first. Dyer,
244. So, of two acts, as in Bingham's Case,
2 Coke, 93. "Where to the perfection or con-
summation of a thing two accidents are req-
uisite, and the one happens in the time of one,
and the other in the time of the other, in
such case neither the one nor the other shall
take benefit of this, because both are requisite
to the consummation of the thing." How,
then, does death make any difference? If it
does, it is to be referred to the consumma-
tion, to the first act, to the lifetime, where, if
neither party had died, it would not have
been referred to such first act. See Cro. Eliz.
622.
The view which I have taken of this case,
renders it wholly unnecessai-y for me to ex-
amine the point of stoppage in transitu.
Considering, then, that this agreement was
consummated in tlie lifetime of Mactier, upon
the principles and cases above adverted to, I
have come to the conclusion that the adminis-
trators had a right to act, and ^vould have
been justifiable in taking, if they had not al-
ready done so, the brandy into their own po.s-
session, as a part of the assets of the de-
ceased. It is laid down by Winter's Office of
Executor, 82, "Goods contracted for by tes-
tator, not delivered in his lifetime, must be
delivered to his executors," and I can see no
good reason why the same rule should not be
extended to administi'ators.
COMMUNICATION BY CORRESPONDENCE.
55
The view, therefore, which I have taken of
this case renders it unnecessary for me to
discuss the other points made on the argu-
ment; my opinion is, tliat the decree of the
chancellor, so far as it relates to the sale of
the brandy, should be reversed.
By Mr. Senator THKOOP. Mactier and the
respondent were equally interested as part-
ners In the triple adventure, of which the
brandy shipment was the commencement, but
which extended to a second shipment of pro-
visions to the amount of tlie invoice cost of
the brandy from New York by Mactier to the
respondent :.t Jacmel, and a third shipment
of coffee, with the proceeds, from thence to
France in French vessels, to be there applied
to the payment of the brandy. The order for
the brandy was sent by the respondent to his
friends in Havre, Sep. 5, 1822, expectinj,' the
arrival of the shipment "at New York, in
January or before." As early as Oct., how-
ever, he evinces a desire to be released from
the adventure, and offered his interest to the
brother of Mactier, without success. This
disposition appears to have continued, and is
expressed in his letters on this subject.
The account cm-rent, and the correspond-
ence show, that tlie respondent was largely
in arrear to Mactier, and he frequently al-
ludes to it, and excuses his inability or delay
to make remittances. To have the value of
the brandy shipment placed to his credit, or
made to cover his transactions on account at
New York, seems to have been one prevailing
object in offering to part with his interest.
He also wished to bring his concerns to a cer-
tain focus, and to confine his business as
much as possible; and one other prevailing
consideration was to be released from the two
shipments originally planned, and consequent
upon the brandy adventure. These considera-
tions received additional weight and urgency
from the prospect of a war between France
and Spain, and the inevitable embarrassment
of the trade of the island, thus likely to en-
sue, in which he was engaged. The joint ad-
venture, in all the three operations, would in
that event be subject to war risks, and even
the brandy shipment became a hazardous and
doubtful speculation. It was his desire to be
released from all; and the tenor of all his let-
ters evinces the continual interest which he
had in effecting such an object. But the
brandy had been ordered, and could not be
refused by the parties; it was afloat, or would
be so, before the order could be revoked; and
the consequences of this part of the adven-
ture were inevitable. Their interest was
joint, the profits or losses were to be ascer-
tained when the third and last shipment was
closed, and then to be shared equally; and
neither could arrest the adventure, or be re-
leased from any part of it, except by the con-
sent of the other.
It appears from the correspondence that
these parties were on terms of intimate and
confidential friendship and intercourse, and
when the respondent in his letter of Dec. 24,
1S22, proposed to Mactier. "to take the ad-
venture solely on your own account, holding
the value to cover the transactions to my 'ac-
count in New York," the proposition was not
probably new or unexpected to Mactier. His
letter in reply seems intended, or is calculated
to inspire greater confidence of a good issue,
and to quiet any doubts of a favorable result.
His answer is dated .Ian. 17, 1S23, saying that
he is informed that the brandy would be ship-
ped, and leave Bordeaux about Dec. 1. "This
has been from the first a favorite speculation
with me, and am pleased to say it still prom-
ises a favoraljle result; but to render it com-
plete, I am desirous the speculation should go
forward in the way first proposed, thereby
making it a triple operation; as you have,
however, expressed a wish that I should take
the adventure to my own account, I shall de-
lay coming to any determination, till I again
hear from you. The prospect of war between
France and Spain may defeat the object of
this speculation, as far as relates to ship-
ment of the provisions hence to Ilayti, to be
invested in coffee for France, per French ves-
sels; in which case I will at once decide to
take the adventure to my own account. "The
next arrival from Europe will probably de-
cide the question of peace or war, and I will
lose no time in communicating the same to
you." "Let what will happen, I trust you
will in no way be a sufferer." He commimi-
cates all his information of the prospect of
the war.
I consider this letter as declaring with suffi-
cient certainty, to this effect, "notwithstand-
ing my information which I communicate
herein, our triple operation promises a favora-
ble result and I shall delay till I hear from
you again, and then determine upon your
offer, either to take or reject. But if the pros-
pect of war shall cut up our two adventures
consequent upon this, I will at once decide to
take your offer, and will lose no time in com-
municating the same to you. In either case,
I trust you will not be a sufferer." I observe
here, that from the tenor of this letter, and
also of respondent's inclosing the order for
the brandy, both parties expected its an-ival
daily, and that the respondent's offer and his
answer were written under such expectation,
and that in the respondent's letter of Mar.
28, the offer is renewed, when he supposed it
had long since arrived.
That Mactier considered his reply to the
offer and obligation on his part to take, so
soon as the prospect of war was so far con-
firmed, as to render it proper to break up the
two succeeding shipments, appears in two
ways. The clerk of Mactier says, that wlien
the brandy arrived, the war. was uncertain,
Mactier then concluded that the original voy-
age should be broken up, being unprofitable.
He consulted Bane, and referred to this let-
ter, and upon that consultation, it was con-
cluded that "he was obliged to take the
brandy, whether it came to a good or bad
56
OFFER AXD ACCEPTANCE.
market." It appears, from Alexander Mac-
tier's testimony, that tlie speculation was
profitless to Mactier. The consultation with
Champlin agrees throughout so well with the
transaction and letter of Jan. 17, and with no
other, that it must have been at that time;
for then, it would seem from his letter, "he
was inclined to take the brandy."
But his letter of Mar. 25, explains and con-
firms his idea that this letter of Jan. 17 was
obligatory upon him, whether the market was
good or bad. He then says: "I have to ad-
vise the arrival of the 200 pipes of brandy,
and in consetiuonce of the probability of the
war between France and Spain, and in com-
pliance with the wish expressed in your re-
garded favor of the 24th December, and my
answer thereto of the 17th January, I have
decided to take the adventure to my own ac-
count." In consequence, he gave the respond-
ent ."redit. according to his original proposi-
tion. Nothing more was wanting to prove
iind enforce this bargain against Mactier or
his representatives, than these letters and
acts. Notwithstanding the bargain was com-
plete against Mactier, the fact of ownership,
as expressed by Bane in his testimony, was
contingent. The assent of the respondent was
not then known; it had not been expressly
given, and if the expected letter from the re-
spondent, in reply to the one of Jan. 17, had
contained his dissent or a retraction of his
original offer, the adventure would have been
thrown back to its original state and inter-
ests
Did the respondent ever assent to this con-
tract, so as to vest the title of the brandy ab-
solutely in Mactier before his death? An as-
sent to a contract may be inferred from cir-
cumstances, from voluntary inaction or for-
bearance to act. Thus, a man by his silence,
if he has an opportunity of speaking and
knowledge of what is doing, is supposed to
give his assent to what is done. On Mar.
25, when the credit was given, a long time
had elapsed since .Tan. 17, and no dissent to
that letter or retraction of the offer, had been
received; still the respondent's letter might
have been sent, and the delay reasonably ac-
counted for, if in fact he had dissented or re-
tracted. And here, I remark, that this cir-
cumstance siifiiciently explains the contents
of Mactier's letter of Mar. 1,3, in which he
Informs the respondent that from the last
dates received by him, war might be con-
sidered inevitable; and says of the brandy:
"I am looking daily for its arrival; it is to be
regretted the order was not more promptly
executed, as the delay, I fear, will operate to
our disadvantage." As promised in his let-
ter of Jan. 17, he communicates the first in-
telligence of peace or war, but having no let-
ter from the respondent since his of that date,
he does not retract what he had then said,
nor does he treat the lapse of time as an
assent or confirmation of it by the respondent.
The language, "our disadvantage," is used
in reference to the then state of the corre-
spondence, and expressed their joint interest
in case the respondent had in fact dissented
or retracted his offer.
But I consider the assent of the respondent
to this contract to rest upon surer ground than
any circumstance of the unsatisfactorj- and
doubtful character of mere lapse of time. His
letter of Mar. 7, must, under all the circum-
stances, be considered a legal acquiescence
and consent on his part. And while I would
admit that proof of any attempt by a "swift
messenger," or any other less rapid means,
to Avithdraw it, or to dissent from the condi-
tional acceptance of Mactier, or to retract his
original offer, would have materially weaken-
ed or annulled its effect, it is manifest that
no such attempt was made, and that all the
circumstances show a contrary intention.
When the respondent wrote the lettter of
Mar. 7, Mactier's letter of Jan. 17 was be-
fore him; and if he did not wish to have his
original offer stand the chances mentioned
by Mactier, be was bound to have improved
the first opportunity to withdraw it. In 1
Liv. Ag. 48, and the cases there cited, is found
this rule: "If a man receives a letter, the
relation of the parties favoring the presump-
tion, he is presumed to approve whatever is
contained in the letter unless he immediately
makes known his dissent. But the reception
of a letter not contradicted, does not always
amount to a ratification unless it is accom-
panied with circumstances capable of show-
ing an intention to ratify." Also, 2 .Johns.
Cas. 424; 12 Johns. 300; 3 Cow. 281. This is
the rule of reason and plain dealing, as well
as of the law. If this letter contained no ref-
erence to the negotiation, his silence and for-
bearance to improve this opportunity to dis-
sent should be held to bind him. He, how-
ever, says: "I have received your esteemed
favors of the 17th and 21st January, and note
their respective contents." Is there anything
wanting to bring the respondent within the
familiar case and known rule, of a man who,
knowing what is doing and having an oppor-
tunity of speaking, by his silence is held to
give his assent to what is done?
But if there could be any doubts of this case
coming ^'ully within the rule cited from Liv-
ermore, the letter of Mar. 7, is followed by
another from the respondent of the 28th, and
still another of Apr. 21, each capable of show-
ing his intention to ratify his original offer,
and confirming his assent to what had been
done by Mactier. On Mar. 28, after express-
ing his expectation that the brandy had ar-
rived long ere that time, unless the rupture
we have a report of, between France and
Spain took place before the sailing of the ves-
sel, he says: "With regard to this adventure
I wish to confirm, if entirely satisfactory to
you. what I mentioned to you some time ago,
and which I omitted to repeat in my previous
letter, in reply to yours of the 17th JanuaiT-"
In his letter of Apr. 21. he acknowledges the
receipt of Mactier's "esteemed favor of the
25th, with that of the 5th inst, and notes par-
COMMUNICATION BY CORRESPONDENCE.
57
ticularly tboir respective contents, to which
principaiiy mj' previous respects (.being his of
the 2Sth March and 12th current) reply;" and
he then ordered the shipment of a cargo to
him. Hence It appears that the presumed le-
gal effect of the letter of Mar. 7. is precisely
the intended meaning of the respondent, and,
as he expresses himself, "I note the contents,"
it means, he approves and assents to them.
Under all the circumstances, I can enter-
tain no doubt that the letter of Mar. 7, was
intended, and should be considered, as an ex-
press assent to the conditional acceptance
and the reply of Mactier in his of Jan. 17.
He allowed his correspondent and confiden-
tial friend to proceed to close the bargain, as
he had informed him he should do upon the
receipt of his letter then in writing, or upon
the happening of the contingency then in
prospect. His letters show of how little re-
gard, in comparison to his anxiety to be re-
leased from the adventure, was the fact of
the arrival of the brandy at New York, or the
price at which it would sell; his readiness to
bear the joint risks of transportation, if such
was the intention of Mactier, in delaying to
release him before its arrival, and his will-
ingness to wait the happening of the event
referred to by Mactier, upon which he would
determine to take it to his own account Mac-
tier died Apr. 10; but from Apr. 21 (if not be-
fore), until that event was known at Jacmel,
he could not have doubted, nor (as his letters
show) have regretted one moment his release
from the triple adventure, nor the absolute
sale of the brandy to Mactier. Shall he now
be heard to complain that Mactier did not
close the bargain till its safe arrival at New
York, and a sale of three quarters of the
brandy? — that he had run all the risks of the
s»^a? Before he does so, he must show that
Mar. 7, or some other early oppori;uiuty, or in
some way, he refused to encounter such risks;
or dissented from any release after the brandy
should have arrived, or expressed, or attempt-
ed to express his non-concurrence to the con-
ditional acceptance and understanding of Mac-
tier. Both parties expected its arrival before
the day when he was writing; and from the
contents of Mactier's letter of Jan. 17, he
must have supposed that it was then a long
time in New York; his letter was to encounter
a further delay in its transmission, and when
it should be received Mactier would see in it
the usual approbatory expression, "I note Its
contents." It would be sanctioning a danger-
ous departure from good faith and plain deal-
ing in a commercial correspondence if any
other construction or effect should be given
to this letter of Mar. 7. If this letter had
been received by Mactier in his lifetime, and
It is stated by the chancellor to have been so
received Apr. 7, before which time he had
taken the brandy to his own account, and
given the correspondent credit according to
his oi'iginal proposition, nothing would have
been wanting, according to my view of the
effect of these letters, to a perfect and con-
summated bargain Mar. 25.
The doctrine of stoppage in transitu, and
the question whether the representations of
this or any other vendee can ratify, consent to
or affirm a contract in fieri at the time of the
death, do not appear to me to form appro-
priate or necessary Inquiries in this case.
The case of Conyers v. Ennis, decided by
Judge Story (2 Mason, 23 Opinion of Baggallay, L. J., omitted.
Finlay & Dillwyn, for defendant, contend-
ed that the defendant was not a shareholder,
for it was necessary that the allotment of
shares should not only be made but also
commiuiicated to the defendant; that a let-
ter posted but not received was not a com-
munication to the defendant of the allot-
ment, and that there was therefore no con-
tract between the parties.
Mr. Wilberforce, and G. Arbuthnot (W.
G. Harrison, Q. C, with them), for plain-
tiffs, contended that the contract was com-
plete by acceptance when the letter was
posted, and that the plaintiffs were not an-
swerable for casualties at the post office
preventing the arrival of the letter.
In addition to the authorities mentioned in
the judgment, the following cases were cited
during the argument: Reidpath's Case, L.
R. 11 Eq. 8G; Townsend's Case, L. R. 13
Eq. 148; WaU's Case, L. R. 15 Eq. 18;
Gunn's Case, L. R. 3 Ch. 40; Dunmore v.
Alexander, 9 Shaw & D. 190; Pellatt's Case,
L. R. 2 Ch. 527: Ex parte Cote, L. R. 9 Ch.
27; Taylor v. Jones, 1 C. P. Div. 87; Pol.
Cont. p. 13.
Cur. adv. vult.
THESIGER, L. J. In this case the defend-
ant made an application for shares in the
plaintiffs' company, under circumstances from
which we must imply that he authorized the
company, in the event of their allotting to
him the shares applied for, to send the notice
of allotment by post. The company did al-
lot him the shares, and duly addressed to him
and posted a letter containing the notice of
allotment, but upon the finding of the jury
it must be taken that the letter never reach-
ed its destination. In this state of circum-
stances, Lopes, J., has decided that the de-
fendant is liable as a shareholder. He bas-
ed his decision mainly upon the ground that
the point for consideration was covered by
authority binding upon him, and I am of
opinion that he did so rightly, and that it is
covered by authority equally binding upon this
court.
The leading case upon the subject is Dun-
lop v. Higgins, 1 H. L. Cas. 381. It is true
that Lord Cottenham might have decided that
case without deciding the point raised in this.
But it appears to me equally true that he did
not do so, and that he preferred to rest and
did rest his judgment as to one of the mat-
ters of exception before him upon a principle
which embraces and governs the present case.
If so, the court is as much bound to apply that
principle, constituting as it did a ratio deciden-
di, as it is to follow the exact decision itself.
The exception was that the lord justice gener-
al directed the jury in point of law that, if the
pursuers posted their acceptance of the offer
in due time, according to the usage of trade
they were not responsible for any casualties
In the post office est.Tblishment This direc-
COMMUNICATION BY CORRESPONDENCE.
59
tion was wide enough in its terms to Include
the caae of the acceptance never being deliv-
ered at all; and I^ord Cottenham, in express-
ing hLs opinion that it was not open to objec-
tion, did so after putting the case of a letter
containing a notice of disliuuour posted bj' the
holder of a bill of exchange in proper time,
in which case he said (1 II. L. Cas., at page
300): "Whether that letter be delivered or not
is a matter quite immaterial, because for ac-
cidents happening at the post otiice he is not
responsible." In short. Lord Cottenham ap-
pears to me to have held that, as a rule, a
contract formed by correspondence through
the post is complete as soon as the letter ac-
cepting an offer is put into the post, and is
not put an end to in the event of the letter
never being delivered. My view of the ef-
fect of Dunlop V. Higgins, 1 H. L. Cas. 3S1,
is that talien by James, L. J., in Harris' Case,
L. R. 7 Ch. 587. There, at page 502, he speaks
of the former case as "a case which is bind-
ing upon us, and in which every principle
argued before us was discussed at length by
the lord chancellor in giving judgment." He
adds, the lord chancellor "arrived at the con-
clusion that the posting of the letter of ac-
ceptance is the completion of the contract;
that is to say, the moment one man has made
an offer, and the other has done something
binding himself to that offer, then the con-
tract is complete, and neither party can aft-
erwards escape from it." Mellish, J., also took
the same view. He says, at page 505: "In
Dunlop V. Higgins, 1 H. L. Cas. 3S1, the ques-
tion was directly raised whether the law
was truly expounded in the case of Adams
V. Lindsell, 1 Barn. & Aid. 681. The house
of lords approved of the ruling of that case.
The Lord Chancellor Cottenham said, in the
course of his judgment, that in the case of
a bill of exchange notice of dishonour, given
by putting a letter into the post at the right
time, had been held quite sufficient whether
that letter was dehvered or not; and he re-
ferred to Stocken v. Collin, 7 Mees. & W,
515, on that point, he being clearly of opiniou
that the rule as to accepting a contract was
exactly the same as the rule as to sending
notice of dishonour of a biU of exchange. He
then referred to the case of Adams v. Lind-
sell, 1 Barn. & Aid. 681, and quoted the ob-
servation of Lord Ellenborough, C. J. That
case therefore appears to me to be a direct
decision that the contract is made from the
time when it is accepted by post." Leaving
Harris' Case, L. R. 7 Ch. 587, for the moment,
I turn to Duncan v. Topham, 8 C. B. 1225, in
which Cresswell, J., told the jury that if the
letter accepting the contract was put into
the post office and lost by the negligence of
the post office authorities, the contract would
nevertheless be complete; and both he and
Wilde. C. J., and Maule, J., seem to have
understood this ruling to have been in ac-
cordance with Lord Cotteuham's opinion in
Dunlop V. Higgins, 1 H. L. Cas. 3S1. That
opinion therefore appears to me to constitute
an authority directly binding upon us. But
if Dunlop V. Higgins, 1 H. L. Cas. 381, were
out of the way, Harris' Case, L. R. 7 Ch. 5S7,
would still go far to govern the pre.sent. There
It was held that the acceptance of the offer
at all events binds both parties from the
time of the acceptance being posted, and so
as to prevent any retraction of the offer be-
ing of effect after the acceptance has been
posted. Now, whatever In abstract discus-
sion may be said as to the legal notion of its
being necessary, in order to the effecting of
a valid and binding contract, that the minds
of the parties should he brouglit togetlier at
one and the same moment, thiit notion is
practically the foundation of English law
upon the subject of the formation of contracts.
Unless therefore a contract constituted by
correspondence is absolutely concluded at the
moment that the continuing offer is accepted
by the person to whom the offer is addressed,
it is difficult to see how the two minds are
ever to be brought together at one and the
same moment. This was pointed out by Lord
Ellenborough in the case of Adams v. Luid-
sell, 1 Barn. & Aid. G81, which is recognized
authority- upon this branch of the law. But
on the other hand it is a principle of law,
as well established as the legal notion to
which I have referred, that the minds of the
two parties must be brought together by mu-
tual communication. An acceptance, which
only remains in the breast of the acceptor
without being actually and by legal imphca-
tiou communicated to the offerer, is no bind-
ing acceptance. How. then, are these ele-
ments of law to be harmonized in the case
of contracts formed by correspondence through
the post? I see no better mode than that of
treating the post office as the agent of both
parties, and it was so considered by Lord
liomilly in Hebb's Case, L. R. 4 Eq., at page
12, when in the course of his judgment he
said: "Dunlop v. Higgins, 1 II. L. Cas. 381,
decides that tlie posting of a letter accepting
an offer constitutes a binding contract, but
the reason of that is that the post office is the
common agent of both parties." Aldersou, B.,
also, in Stocken v. Collin, 7 Mees. .& W., at
page 516,— a case of notice of dishonour, and
the case referred to by Lord Cottenham,— says:
"If the doctrine that the post office is only
the agent for the delivery of the notice were
correct, no one could safely avail himself of
that mode of transmission." But if the post
office be such common agent, then it seems
to me to follow that, as soon as the letter of
acceptance is delivered to the post office, the
contract is made as complete and final and
absolutely binding as if Uie acceptor had put
his letter into the hands of a messenger sent
by the offerer himself as his agent to de-
liver the offer and receive the acceptance.
What other principle can be adopted short
of holding that the contract is not complete
by acceptance until and except from the time
that the letter containing the acceptance is
delivered to the offerer, a principle which has
€0
OFFER AND ACCEPTANCE.
been distinctly negatived? Tliis difficulty
was attempted to be got over in Telegrapli
Co. V. Colson, L. R. 6 Excb. IDS, which was
a case dii-ectly on all fours witti the present,
and in which Kelly, C. B., at page 115, is re-
ported to have said: "It may be that in gen-
eral, though not in all cases, a conti-act takes
effect from the time of acceptance, and not
from the subsequent notification of it As in
the case now before the court, if the letter
of allotment had been delivered to the de-
fendant in the due course of the post, he
would have become a shareholder from the
date of the letter. And to this effect is Pot-
ter V. Sanders, 6 Hare, 1. And hence perhaps
the mistake has arisen that the contract is
binding upon both parties from the time when
the letter is written and put into the post,
although never delivered; whereas, although
it may be binding from the time of acceptance,
it is only binding at all when afterwards duly
notified." But with deference I would ask
how a man can be said to be a shareholder at
a time before he was boimd to take any
shares, or, to put the question in the fonn in
which it is put by Mellish, L. J., in Harris'
Case, 7 Ch. App. 5S7, at page 596, how there
can be any relation back in a case of this
kind as there may be in bankruptcy. If, as the
lord justice said, the contract, after the letter
has arrived in time, is to be treated as having
been made from the time the letter is posted,
the reason is that the contract was actually
made at the time when the letter was posted.
The principle indeed laid down in Harris'
Case, 7 Ch. App. 587, at page 596, as well
as in Dunlop v. Higgins, 1 H. L. Cas. 381,
can really not be reconciled with the decision
in Telegi-aph Co, v. Colson, L. R. 6 Exch. 108.
James, L. J., in the passage I have already
quoted,— Harris' Case, L. R. 7 Ch. 592,— affij-ms
the proposition that when once the acceptance
is posted neither party can afterwards es-
cape from the contract, and refers with ap-
proval to Hebb's Case, L. R. 4 Eq. 9. There
a distinction was taken by the master of the
roUs that the company chose to send the
letter of allotment to their own agent, who
was not authorized by the applicant for shares
to receive it on his behalf, and who never de-
livered it; but he at the same time assumed
that if, instead of sending it through an au-
thorized agent, they had sent it through the
post office, the applicant would have been
bound although the letter had never been
delivered. Mellish, L. J., really goes as far,
and states forcibly the reasons in favour of
this view. The mere suggestion thrown out
at the close of his judgment, at page 597,
when stopping short of actually overruling
the decision in Telegraph Co. v. Colson, L.
R. 6 Exch. 108, that although a contract is
complete when the letter accepting an offer
is posted, yet it may be subject to a condition
subsequent that, if the letter does not arrive
in due course of post, then the parties may act
on the assumption that the offer has not been
accepted, can hardly, when contrasted with
the rest of the judgment, be said to represent
his own opinion on the law upon the subject.
The contract, as he says, at page 596, is
actually made when the letter is posted. The
acceptor, in posting the letter, has, to use the
language of Lord Blackbiu-n, in Brogden v.
Directors of Metropolitan Railway Co., 2 App.
Cas. 666, 691, "put it out of his control, and
done an extraneous act which clenches the
mattter, and shews beyond all doubt that
each side is bound." How, then, can a casual-
ty in the post, whether resulting in delay,
which in commercial transactions is often as
bad as no delivery, or in nondelivery, unbind
the parties or unmake the contract? To me
it appears that in practice a contract com-
plete upon the acceptance of an offer being
posted, but liable to be put an end to by an
accident in the post, would be more mis-
chievous than a contract only binding upon
the parties to it upon the acceptance actually
reaching the offerer; and I can see no prin-
ciple of law from which such an anomalous
contract can be deduced.
There is no doubt that the implication of a
complete, final, and absolutely binding con-
tract being formed, as soon as the acceptance
of an offer is posted, may in some cases lead
to Inconvenience and hardship. But such
there must be at times in every view of the
law. It is impossible in transactions which
pass between parties at a distance, and have
to be carried on through the medium of cor-
respondence, to adjust conflicting rights be-
tween innocent parties, so as to make the con-
sequences of mistake on the part of a mutual
agent fall equally upon the shoulders of both.
At the same time I am not prepared to admit
that the implication in question will lead to
any great or general inconvenience or hard-
ship. An offerer, if he chooses, may always
make the formation of the contract which he
proposes dependent upon the actual communi-
cation to himself of the acceptance. If he
trusts to the post he trusts to a means of
communication which, as a rule, does not
fail, and if no answer to his offer is received
by him, and the matter is of importance to
him, he can make inquiries of the person to
whom his offer was addressed. On the other
hand, if the contract is not finally concluded,
except in the event of the acceptance actually
reaching the offerer, the door would be open-
ed to the perpetration of much fraud, and,
putting aside this consideration, considerable
delay in commercial transactions, in which
despatch is, as a rule, of the greatest conse-
quence, would be occasioned; for the acceptor
would never be entirely safe in acting upon
his acceptance until he had received notice
that his letter of acceptance had reached its
destination.
Upon balance of conveniences and incon-
veniences it seems to me, applying with slight
alterations the language of the supreme court
of the United States in Tayloe v. Insurance
Co., 9 How. SOU, more consistent with the
acts and declarations of the parties in this
COMMUNICATION BY CORRESPONDENCE.
61
case to considor th^^ contract complete and
absolutely binding on the transmission of the
notice of allotment through the post, as the
medium of communication that the parties
themselves contemplated, instead of postpon-
ing its completion until the notice had been
received by the defendant. Upon principle,
therefore, as well as authority, I think that
the judgment of Lopes, J., was right and
should be affirmed, and that this appeal should
therefore be dismissed.
62
OFFEli AND ACCEPTANCE.
^
LEWIS T. BROWNING.
(130 Mass. 173.)
i1
V Supreme Judicial Court of Massachusetts.
Suffolk. Jan. 6, ISSl.
Action foi breach of covenants in a lease.
The question was whether the terms of a
proposed new lease had been accepted by de-
fendant The negotiations with reference to
the new lease were carried on by letter and
telegraph. The facts sufficiently appear in
the opinion of the court
O. T. Gray, for defendant D. E. Ware,
for plaintiff.
GRAY, C. J. In M'Culloch v. Insurance Co.,
1 Pick. 2TS, this court held that a contract
made by mutual letters was not complete
until the letter accepting the offer had been
received by the person making the offer;
and the correctness of that decision is main-
tained, upon an able and elaborate discus-
sion of reasons and authorities, in Langd.
Gont. (2d Ed.) 989-996. In England, New
York and New Jersey, and in the supreme
court of the United States, the opposite view
has prevailed, and the contract has been
deemed to be completed as soon as the letter
of acceptance has been put into the post
office duly addressed. Adams v. Lindsell, 1
Barn. & Aid. 681; Dumop v. Higgins, 1 H.
L. Gas. 381, 398-400; Newcomb v. De Roos,
2 El. & El. 271; Harris' Case, L. R. 7 Gh.
587; Lord Blackburn, in Brogden v. Rail-
way, 2 App. Cas. 666, 691, 692; Insurance
Go. v. Grant, 4 Exch. Div. 216; Lindley, J.,
in Byrne v. Van Tienhoven, 5 C. P. Div. 344.
348; 2 Kent, Comm. 477, note c; Mactier v.
Frith, 6 Wend. 103; Vassar v Gamp, 11 N,
Y. 441; Trevor v. Wood, 36 N. Y. 307" Hal-
lock V. Insurance Co., 26 N. J. Law. 268,
27 N. J. Law, 645; Tayloe v. Insurance Co.,
9 How. 390.
But this case does not require a considera-
tion of the general question; for, in any
view, the pei-son making the offer may al-
ways, if he chooses, make the formation of
the contract which he proposes dependent
upon the actual communication to himself
of the acceptance Thesiger, L. J., in In-
surance Go. V. Grant, 4 Exch. Div. 223; Pol.
Gont. (2d Ed.) 17; Leake, Gont. 39, note.
And in the case at bar, the letter written in
the plaintiff's behalf by her husband as her
agent on July 8, 1878, in California, and ad-
dressed to the defendant at Boston, appears
to us clearly to manifest such an intention.
After proposing the terms of an agreement
for a new lease, he says, "If you agree to
this plan, and will telegraph me on receipt
of this, I wiU forward power of attorney to
Mr. Ware," the plaintiff's attorney in Bos-
ton. "Telegraph me 'Yes or 'No.' If 'No,'
I will go on at once to Boston with my wife,
and between us we will try to recover our
lost ground. If I do not hear from you by
the ISth or 20th, I shall conclude 'No.' "
Taking the whole letter together, the offer
is made dependent upon an actual communi-
cation to the plaintiff of the defendant's ac-
ceptance on or before the 20th of July, and
does not discharge the old lease, nor bind
the plaintiff to execute a new one, imless the
acceptance reaches California within that
time. Assuming, therefore, that the defend-
ant's delivery of a despatch at the telegraph
office had the same effect as the mailing of
a letter, he has no ground of exception to the
ruling at the trial.
Exceptions overruled.
CnARACTER OF ACCEPTANCE.
63
HARRIS V. SCOTT et aL
(32 Atl. 770.)
fiupremc Court of New Hampshire. Rocking-
ham July 28, 1893.
Bill by Arthur Harris against Annie G.
Scott, administratrix of the estate of George
Scott, deceased, and others, for the specific
performance of a contract for the sale to
plaintiff by defendant administratrix of 20
shares of the capital stock of the Portsmouth
Brewing Company. Bill dismissed.
Tlie capital stock of the company consists
of SO shares, of the par value of $.100 each.
In March, 1888, the plaintiff, owning 21
shares, and George Scott, owning 20 shares,
entered into the following written agreement:
"For the purpose of having a better admin-
istration of the affairs of the Portsmouth
Brewing Company, and to prevent deals and
combinations between various stockliolders
for unworthy purposes, we hereby mutually
and severally agree: (1) To vote the forty-
one shares we own, control, or can influence,
Invariably, on the same side, for the purpose
of elecUcm, or on any motion made at any
meeting. (2) To prevent any disagreement
for whom, or for what motions, our votes
should be cast, we severally agree to vote at
every election for every officer and director
now in office, unless both parties to this con-
tract agree not to so vote, and, in case of any
vacancy, not to vote for any candidate unless
both parties are in favor of his election, and,
further, not to vote for any change of any
kind, enlargement, alterations, improvements,
purchase of real estate, or change in salaries
or wages, unless both are willing to vote for
such purpose or purposes. (3) Tliis agree-
nient to apply to directors' meetings, the
same as stoc-kholders'. No dividend to be de-
clared unless both are in favor of it, and the
amount determined beforehand. (4) Neither
party to sell his shares, or any of them, nor to
buy any other shares at a higher price than
the holder paid for them. (5) Either party
having his .salary increased above the pres-
ent amount, the other to have an Increase of
similar amount (6) This agreement to re-
main in force two years from date." Octo-
ber 8, 1890, they agreed in writing that the
foregoing contract, in all its provisions, be
extended for five years from that date, and
"that directions shall be left, by will or oth-
erwise, to the execTitors of eivch, that, shoidd
either party to this agreement die during the
continuance thereof, the survivor shall have
a prior right, ovei any other party, to pur-
chase the shares of the capital stock * ♦ •
hitherto the property of the deceased."
George Scott died intestate April 24, 1892,
and the defendant Annie Scott is administra
trix of his estate. About the 1st of July,
1892, Annie, in answer to a letter of the plain-
tiff inquiring what she proposed to do with
the stock, wrote him that she desiretl to sell
it; that she had' received several offers, and
would give him the first right to purchase the
20 shares at $.800 each. He replied July 5th.
saying: "If you have a bona tide offer of
$800 for the whole twenty shares, I will pay
you the same, provided you send me the
names of tho.se who will pay you thLs amount,
so that I may be able to resell without loss
if I wish." He inclosed a check for $100,
and an unconditional bill of sale for her to
sign. After depr)fiiting the letter in a letter
box, he received a telegram from Annie say-
ing, "I wish to reconsider the letter I wrote
you for the present." The next day, July
Cth, the plaintiff replied as follows: "Your
telegram received late yesterday afternoon.
I had ineviously written you, accepting your
offer." July 11th Mrs. Scott wrote the plain-
tiff: "I was informed, immedmtely after
sending you the letter aljout the twenty
shares at $800 a share, that the parties want-
ed to take only part of them, but my lawyer
Informed me that a gentleman wished to
take the whole twenty shares at $815 a share,
so I have concluded at tliat price. The gen-
tleman's name is Mr. John Sise. • • • So,
if you wish to accept that price, I will comply
to your demands." And the next day she re-
turned the check. This offer the plaintiff, by
letter, July 13th, declined to consider, claim-
ing that the shares had already been sold to
him. Mrs. Scott afterwards sold the shares,
through Sise, to the defendant Conlon, but
the formal transfer has not been executed.
The plaintiff prays for a specific performance
of Mrs. Scott's contract of sale, or, if that is
denied, that she be decreed "to give him the
first right to purchase the shares at the ex-
piration of the agreement of October 8, 1890."
S. W. Emery and W. H. Looney, for plain-
tiff. Frink & Batchelder, for defendant An-
nie G. Scott C. Page, for defendants Sise
and Conlon. Mr. Mai-vin and J. E. Young,
for defendant Ellen T. Scott.
CARPENTER, J. No contract for the sale
of the shares to the plaintiff was completed.
His acceptance of Mrs. Scott's offer was con-
ditional. Their minds did not meet" If,
without disclosing the names of those who
had offered her $S(X) a share, she had signed
and returned to the plaintiff the bill of sale,
he would have had the right to reject it and
decline to take the stock. His letter of July
5th was a rejection of Mrs. Scott's offer, and
a new proposal. Benj. Sales. § 39. To this
proposal she did not assent. If the plaintiirs
letter of the next day was an unconditional
acceptance of her offer, it was ineffectual,
because too late. It was made after he had
notice that the offer was withdrawn. If,
when she dispatched the telegram, she had
known the contents of the plaintiff's letter
of July 5th, it might be evidence tending to
show that she did not object to the accept-
ance on the ground that it was conditional.
But at that time she had neither actual nor
constructive knowledge of the condition. She
made the public post her agent to receive
from the plaintiff an unqualified acceptance
64
OFFER AND ACCEPTANCE.
of her offer, but not to receive a counter pro-
posal or conditional acceptance. She was
not chargeable with knowledge of the con-
dition until she received the letter. Byrne
V. Van Tienhoven, 5 C. P. Div. 344; Dunlop
T. Higgins, 1 H. L. Gas. 3S1; Insurance Co.
V. Grant, 4 Exch. Div. 216. 221, 228; Benj.
Sales, §§ 6S-75; Abbott v. Shepard, 48 N. H.
14.
The plaintiff is not entitled to a decree re-
quiring Mrs. Scott to give him, now or at any
time, the prior right to purchase the stock.
The contract of March 5, 1888, was unlaw-
ful. Northern R. Co. v. Concord R. Co., 50
N. H. 1G6, 179, 180; Fisher v. Railroad Co.,
Id. 200. 205, 200, 209-211; Woodstock Iron
Co. V. Richmond & D. Extension Co., 129 U.
S. 643, 9 Sup. Ct 402; West v. Camden, 135
U. S. 507, 520, 521, 10 Sup. Ct 838; Fuller v.
Dame, 18 Pick. 472; Guernsey v. Cook, 120
Mass. 501; Woodruff v. Wentworth, 133
Mass, 309; Mor. Priv. Corp. §§ 516-519. The
contract of October 8, 1890, in so far as it
provides for the survivor's prior right to buy
the shares, is not. In Itself, unlawful. Wheth-
er it is so connected with the previous contract '
as to be tainted with its illegality is a ques-
tion not considered. If it is construed liter-
ally, it was broken when Scott died without
leaving, by will or otherwise, directions that
the plaintiff should have a prior right overany
other party to purchase the shares, and the
plaintiff's remedy for the breach is by action
at law. Assuming that it may properly be
construed as an agreement that the survivor
should have the prior right to purchase the
shares of the legal representatives of the de«
ceased party, and that such an agreement is
not a testamentary disposition of property
(Towle V. Wood, 00 N. H. 434), the plaintiff
las already received all that the contract
secured to him. An opportunity to buy the
shares at the price for which they were final-
ly sold was offered to him, and rejected. Bill
dismissed.
CLARK, J., did not sit The others con-
curred.
CHARACTER OF ACCEPTANCE.
65
TIIO:\rAS V. GREENWOOD, ct al.i
(37 N. W. 195, 69 Mich. 215.)
Supreme Court of Michigan. April C, 1SS8.
Appeal from circuit court, Bay county; S.
M. Green, Judge.
Henry II. Tlionias sued George C. Green-
wood et al. for damages for breach of con-
tract. Judgment for defendants. Plaintiff
appeals. All other material facts appear in
the opinion.
Simonson, Gillett & Courtright, for appel-
lant Hatch & Cuuley, for respondents.
CIIAMPLIN, J. The defendants were, in
ISSG, doing business at Duluth, Minn., under
tlie firm name of G. C. Greenwood & Co. The
plaintifC on the 9th of Febniary, ISSG, wrote
to defendants from Bay City, Mich., as to
the puri3ort of which letter we arc not in-
formed. Defendants replied February 11,
1886, as foUows:
"Duluth, Minn., February 11, 1886.
"Mr. H. H. Thomas, No. 9 Munger Blocli,
Bay City, Michigan— Dear Sir: We are juist
in receipt of yours of the 9th inst., in refer-
ence to Hercules powder. Replying, would
say that we have the following in stock: GOO
IT)S. No. 2, 21^ inch; 2,800 lbs. No. 2, li^, inch;
2,600 lbs. No. 2. S. V^ inch; 1,150 lbs, No. 2,
S. S. VA inch; 1,550 lbs. No. 1, X. X. I14
inch. Of this we would lilce to reserve about
1,500 lbs. Our Mr. Mundy, who was talking
with you, is not at home, and is bumming
around tlie country in the cant-liook business.
We quote this powder to you at 10c. per lb. f.
0. b. here, we to reserve about amount stat-
ed. We also quote 4 X caps, see inclosed
circular, which we are told are the best caps
made, at $5.90 per thousand. Fuse, Lake
Superior mining, single and double tape, at
20 per cent, off Toy & Biekford & Co.'s or
Aetna Powder Co.'s list; terms, cash or ap-
proved notes. Should you decide to order
these goods, you may give us indorsed note,
that we can use the same as cash, dated
March 1st four months, without interest.
"Hoping to receive your order, we remain,
"Yours truly, G. C. Greenwood & Co."
— Which said letter was duly received by
said plaintiff, and immediately on the re-
ceipt of which said plaintiff wrote and mail-
ed to said G. C. Greenwood & Co. a letter
of which the following is a copy:
"Bay City, Mich., February 15, ISSG.
"Messrs. G. C. Greenwood & Co., Duluth,
Minnesota— Gentlemen: Your letter or st^ite-
ment, showing amount of Hercules powder
to hand, showing 8,700 lbs. I will take 7,-
200 lbs. of same, leaving you the 1,500 lbs.
in reserve, as you wished; so please ship
promptly by freight.
1 Irrelevant part of opinion omitted.
HOPK. SBL. CAS. COST. — 5
1,900 lbs. No. 2, S. V,i Inch, Hercules.
2,GU0 Hjs. No. 2, S. V/^ inch, Hercules.
1,150 lbs. No. 2, S. S. V/i ihch, Hercules.
l,r.,"(j lbs. No. 1, X. X. 11/4 inch, Hercules.
$720.00.
"Plea.se ship above goods at once, and on
receipt of invoice will forward indorsed note,
due four mouths from March 1, IS&G. I do
not undei-stand what grade No. 4 X. is. I
use l\ipper force caps of same brand in my
trade here. You are too high on caps and
fuse.
"Respectfully, II. H. Thomas."
These letters plaintiff claims made a bind-
ing contract between the parties on its re-
ceipt by defendants. They did nut ship the
goods as requested, and plaintiff' brings this
action to recover his damages based upon
the alleged contract. He also added anoth-
er count to his declaration, as follo-,v.s:"And
also for that whereas, the said defendants
heretofore, to-wit, at Bay City, in the county
of Bay, OL, to-wit, the 20th day of Januaiy,
1887, were indebted to and jusUy owed siiid
plaintiff" the sum of three thousand dollars
for damages sustained by him by rea.sou of
the failure of said defendants to ship, fiu--
nish, and deliver to plaintiff seven thousand
two hundred pounds of Hercules powder,
then before bought by plaintiff at Bay City
of said defendants at Duluth, in the state
of Minnesota." The court below sustained
a demurrer to the declaration, and this rul-
ing presents the only question for our deci-
sion.
Do these letters form a valid completed
contract between the parties? Counsel for
plaintiff concede that, to have this effect, the
letter of acceptance must in every respect
correspond with the offer, neither falling
short nor going beyond the terms proposed;
and they insist that it complies with the re-
quirements of the law in this regard. Coun-
sel for defendants dispute this, and insist
that the minds of the parties never met, be-
cause— Fii-st. The offer is indehnite, and left
two matters open for further consideratioo,
namely, the grade, and quantity of each
grade, of the 1,500 pounds of powder to be
reserved by Greenwood & Co.; also the sutfi-
ciency of the note to be accepted in payment
of the goods. We think the position of the
counsel for defendants is correct. . The right
to select the powder reserved is clearly im-
plied in the reservation. It applied to one
grade no more than another, and the fact
the price at which the whole quantity was
off'ered being a uniform price of 10 cents a
pound, made no difference with the exercise
of this right. Presumably it was reserved to
fill some other order, or to supply the wants
of some other customer, and the selection
must be made before a delivery could be en-
forced. They did not agree to take any in-
dorsed note plaintiff might send. Quality
was essential. It was to be such a note as
66
OFFER AND ACCEPTANCE.
tliey could nse the same as cash. Who was
to pass upon this qualification? Not the one
who gave the note, but they who received it.
But the plaintiff annexed a new condition. It
was this: "On receipt of invoice, will forward
indoi'sed note." The letter of Greenwood &.
Co. contains no such proposition. They did
not say, "If you order tliese goods, we will
ship them at once, and forward invoice, on
receipt of which you may send us indorsed
note due four months from March 1, 1SS6."
Nor did the plaintiff say that he would for-
ward defendants an indorsed note that they
could use the same as cash. Second. The
offer is for the sale of the powder, and of
the caps and fuse. The offer is, "Should
you desire to order these goods." The ac-
ceptance is of the powder only. We think
this point is weU taken. Caps and fuse can-
not be used without powder. Would it he
likely that defendants would offer to sell
nearly all of their powder without trying to
sell also the caps and fusel They made
their prices on each class of goods offered,
and then said, "Should you decide to order
these goods." Had plaintiff considered the
price for the powder high, and caps and fuse
low, we do not think he could accept or or-
der the caps or fuse alone without the fur-
ther assent thereto of defendants. Offers of
this kind become binding only when the
proposition is met with an acceptance which
corresponds with it entirely and adequately,
without qualification or the addition of new
matter. 1 Pars. Cont. (7th Ed.) 476, 477.
Wo do not think this has been done in this
case.
/
GENEIIAL OFFERS.
G7
CARLILL V. CARBOLIC SMOKE RAXL
CO.i
ly
O.
([1893] 1 Q. B. 256.) (^tV ^ J
Court of Appeals. Dec. 7, 1892. ^
Appeal from a decision of Hawkins, J.
[1892] 2 Q. B. 484.
The defendants, wlio were the proprietors
and vendors of a medical preparation called
"The Carbolic Smoke Ball," inserted in the
Pall Mall Gajcette of November 13, 1891, and
in other newspapers, the following adver-
tisement:
"£100 reward will be paid by the Carlwlic
Smoke Ball Ck>mpauy to any person who
contracts the increasing epidemic influenza,
colds, or anj» disease caused by taking cold,
after having used the ball three times daily
for two weeks according to the printed di-
rections supplied with each ball. £1000 is
deposited with the Alliance Bank, Regent
Street shewing our sincerity in the matter.
"During the last epidemic of influenza
many thousand carbolic smoke balls were
sold as preventives against this disease, and
in no ascertained case was the disease con-
tracted by those using the carbolic smoke
ball.
"One carbolic smoke ball will last a family
several months, making it the cheapest rem-
edy in the world at the price, 10s., post free.
The ball can be refilled at a cost of 5s. Ad-
dress, Carbolic Smoke Ball Company, 27
Princes Street, Hanover Square, London.**
The plaintiff, a lady, on the faith of this
advertisement, bought one of the balls at a
chemist's and used it as directed, three times
a day, from November 20, 1891, to January
17, 1892, when she was attacked by influen-
za. Hawkins, J., held that she was entitled
to recover the £100. The defendants ap-
pealed.
Mr. Finlay, Q. C, and T. Terrell, for the
defendants.
The facts shew that there was no bind-
ing contract between the parties. The case
is not like Williams v. Carwardine, 4 Barn.
& Adol. G21, where the money was to be-
come payable on the performance of cer-
tain acts by the plaintiff. Here the plain-
tiff could not by any act of her own es-
tablish a claim, for to establish her right to
the money it was necessary that she should
be attacked by influenza, — an event over
which she had no control. The words ex-
press an intention, but do not amount to a
promise. Week v. Tibold. 1 Rollc, Abr. G,
M. The present case is similar to Harris v.
Nickerson, L. R. 8 Q. B. 28G. The adver-
tisement is too vague to be the basis of a
contract. There is no limit as to time, and
no means of checking the use of the ball.
Any one who had influenza might come for-
ward and depose that he had used the ball
1 Opiuiou of Smith, L. J., omitted.
for a fortnight, and it would be impossible
to disprove it. Guthing v. Lynn, 2 Bam. &
Adol. 232, supix)rts the view that the terms
are too vague to make a contract. There
being no limit as to time, a person might
claim who took the influenza ten years after
using the remedy. There is no consideration
moving from the plaintiff. Gerhard v. Bates,
2 El. & Bl. 47G. Tile present case differs
from Denton v. Railway Co., 5 El. & Bl.
8(W, for there an overt act was done by the
plaintiff on the faith of a statement by the
defendants. In order to make a contract by
fulfilment of a condition, there must either
be a communication of intention to accept
the offer or there must be the performance
of some overt act. The mere doing an act
in private will not be enough. This prin-
ciple was laid down by Lord Blackburn in
Brogdcn v. Railway Co., 2 App. Cas. GG6.
The terms of the advertisement would en-
able a person who stole the balls to claim
the reward, though his using them was no
possible benefit to the defendants. At all
events, the advertisement should be held to
apply only to persons who bought directly
from the defendants. But, if there be a con-
tract at all, it is a wagering contract, as be-
ing one where the liability depends on an
event beyond the control of the parties, and
which is therefore void under 8 «& 9 Vict. c.
109. Or, if not, it is bad under 14 Geo. HI.c.
48, § 2, as being a policy of insurance on the
happening of an uncertain event, and not
conforming with the provisions of that sec-
tion.
Mr. Dickens, Q. C, and W. B. Allen, for
plaintiff.
[The court intimated that they required
no argument as to the question whether the
contract was a wager or a policy of insur-
ance.] The advertisement clearly was an
offer by the defendants. It was published
that it might be read and acted on, and
they cannot be heard to say that it was an
empty boast, which they were under no ob-
ligation to fulfil. The offer was duly accept-
ed. An advertisement was addressed to all
the public. As soon as a person does the act
mentioned, there is a contract with him. It
is said that there must be a communication
of the acceptance; but the language of Lord
Blackburn in Brogden v. Railway Co.. 2
App. Cas. GG6, shews that merely doing the
acts indicated is an acceptance of the pro-
posal. It never was intended that a person
proposing to use the smoke ball should go
to the office and obtain a repetition of the
statements in the advertisement. The de-
fendants are endeavoring to inti-oduce words
into the advertisement to the effect that the
use of the preparation must be with their
privity or under their superintendence.
^^^lere an offer is made to all the world,
nothing can be imported beyond the fulfil-
ment of the conditions. Notice before the
event cannot be required. The advertise-
68
OFFER AND ACCEPTxVNCE.
ment is an offer made to any person who
fulfils the condition, as is explained in Spen-
cer V. Harding, L. R. 5 C. P. 5G1. Williams
V. Carwardine, 4 Bam. & Adol. G21, shews
stronjrly that notice to the person making
the offer is not necessary. The promise is
to the person who does an act, not to the
person who says he is going to do it and
then does it. As to notice after the event,
it could have no effect, and the present case
is within the language of Lord Blackburn
in Brogden v. Railway Co., 2 App. Cas. 6GG.
It is urged that the tonus are too vague and
uncertain to make a contract; but as re-
gards parties, there is no more uncertainty
than in all other cases of this description.
It is said, too, that the promise might apply
to a person who stole any one of the balls.
But it is clear that only a person who law-
fully acquired the preparation could claim
the benefit of the advertisement. It is also
urged that the terms should be held to ap-
ply only to persons who bought directly from
the defendants; but that is not the import
of the words, and there is no reason for
implying such a limitation, an increased
sale being a benefit to the defendants,
though effected through a middleman, and
the use of the balls must be presumed to
serve as an advertisement and increase the
sale. As to the want of restriction as to
time, there are several possible construc-
tions of the terms. They may mean that,
after you have used it for a fortnight, you
will be safe so long as you go on using it,
or that you will be safe during the preva-
lence of the epidemic. Or the true view may
be that a fortnight's use will make a person
safe for a reasonable time. Then as to the
consideration. In Gerhard v. Bates, 2 El. &
BI. 476, Lord Campbell never meant to say
that if there was a direct invitation to take
shares, and shares were taken on the faith
of it, there was no consideration. The de-
cision went on the foiTn of the declaration,
which did not state that the contract ex-
tended to future holders. The decision that
there was no consideration was qualified by
the words "as between these parties," the
plaintiff not having alleged himself to be a
member of the class to whom the promise
was made.
Mr. Finlay, Q. C, in reply.
There is no binding contract. The money
is payable on a person's taking influenza
after having used the ball for a fortnight,
and the language would apply just as well
to a person who had used it for a fortnight
before the advertisement as to a person who
used it on the faith of the advertisement.
The advertisement is merely an expression
of intention to pay £100 to a person who ful-
fils two conditions; but it is not a request
to do anything, and there is no more con-
sideration in using the ball than in contract-
ing the influenza. That a contract should
be completed by a private act is against the
language of Lord Blackburn In Brogden v.
Metropolitan Ry. Co., 2 App. Cas. 692. The
use of the ball at home stands on the same
level as the writing a letter which is kept
in the writer's drawer. In Denton v. Rail-
way Co., 5 El. & Bl. S6, the fact was ascer-
tained by a public, not a secret, act. The
respondent relies on Williams v. Carwardine,
4 Barn. & Adol. 021, and the other cases of
that class; but there a service was done
to the advertiser. Here no service to the de-
fendants was requested, for it was no bene-
fit to them that the balls should be used;
their interest was only that they should be
sold. Those cases also differ from the pres-
ent in this important particular: that in
them the service was one whic^ could only
be performed by a limited number of per-
sons, so there was no difliculty in ascertain-
ing with whom the contract was made. It
is said the advertisement was not a legal
contract, but a promise in honor, which, if
the defendants had been approached in a
proper way, they would have fulfilled. A re-
quest is as necessai"y in the case of an exe-
cuted consideration as of an executory one
(Lampleigh v. Braithwait, 1 Smith, Lead.
Cas. [9th Ed.] pp. 153, 157, 159), and here
there was no request. Then as to the want
of limitation as to time, it is conceded that
the defendants cannot have meant to con-
tract without some limit, and three limita-
tions have been suggested. The limitation
"during the prevalence of the epidemic" is
inadmissible, for the advertisement applies
to colds as well as infiuenza. The limita-
tion "during use" is excluded by the lan-
guage "after having used." The third is,
"within a reasonable time," and that is prob-
ably what was intended; but it cannot be
deduced from the words; so the fair result
is that there was no legal contract at all.
LIXDLEY, L. J. (after stating the facts).
I will begin by referring to two points which
were raised in the court below. I refer to
them simply for the purpose of dismissing
them. First, it is said no action will lie upon
this contract because it is a policy. You have
only to look at the advertisement to dismiss
that suggestion. Then it was said that it is a
bet. Hawkins, J., came to the conclusion that
nobody ever dreamt of a bet, and that the
transaction had nothing whatever in common
with a bet I so entirely agree with him that
I pass over this contention also as not worth
serious attention.
Then, what is left? The first (jbservation I
will make is that we are not dealing with
any inference of fact. We are dealing with
an express promise to pay £100 in certain
events. Read the advertisement how you
will, and twist 't about as you will, here is a
distinct promise expressed in language which
is perfectly unmistakable: "£100 reward will
be paid by the Carbolic Smoke Ball Company
to any person who contracts the influenza
after having used the ball three times daily
GENERAL OPFERS.
69
for two weeks according to the printed direc-
tions supplied withi eacli ball."
We must first consider whether this was
intended to be a promise at all, or whether it
was a mere pu£f which meant nothing. Was
it a mere puffV My answer to that question
is "No," and I base my answer upon tliis
passage: "£1000 is deposited with the Al-
liance Bank, shewing our sincerity in the
matter." Now, for what was that money de-
posited or that statement made except to
negative the suggestion that this was a mere
puff and meant nothing at all-? The deposit
is called in aid by the advertiser as a proof of
his sincerity in the matter— that is, the sin-
cerity of his promise to pay this £100 in the
event which he has specified. I say this for
the purpose of giving point to the observation
that we are not inferring a promise; there is
the promise, as plain as words can make it.
Then it is contended that it is not binding.
In the first place, it is said that it is not made
with anybody in particular. Now that point
is comuion to the words of this advertisement
and to the words of all other advertisements
offering rewards. They are offers to anybody
who performs the conditions named in the ad-
vertisement, and anybody who does perform
the condition accepts the offer. In point of
law this advertisement is an offer to pay
£100 to anybody who will perform these con-
ditions, and the performance of the condi-
tions, is the acceptance of the offer. That
rests upon a string of authorities, the earliest
of which is Williams v. Carwardine, 4 Barn.
& Adol. G21, which has been followed by
many other decisions upon advertisements of-
fering rewards.
But then it is said, "Supposing that the
performance of the conditions is an accept-
ance of the offer, that acceptance ought to
have been notified." Unquestionably, as a
general proposition, when an offer Is made, it
is necessary in order to make a binding con-
tract, not only that it should be accepted, but
that the acceptance should be notified. But
is that so in cases of this kind? I apprehend
that they are an exception to that rule, or, if
not an exception, they are open to the ob-
servation that the notification of the accept-
ance need not precede the performance.
This offer is a continuing offer. It was
never revoked, and if notice of acceptance is
required,— which I doubt very much, for I
rather think the true view is that which was
expressed and explained by Lord Blackburn
in the case of Brogden v. Railway Co., 2 App.
Cas. GGG, G91,— if notice of acceptance is re-
quired, the person who makes the offer gets
the notice ot acceptance contemporaneously
with his notice of the performance of the con-
dition. If he gets notice of the acceptance
before his offer is revoked, that in principle
is all you want I, however, think that the
true view, in a case of this kind, is that the
person who makes the offer shews by his lan-
guage and from the nature of the transaction
that he does not expect and does not require
notice of the acceptance apart from notice of
the performance.
We, therefore, find here all the elements
which are uoces.sary to form a binding con-
tract enforceable in point of law, subject to
two observations First of all it is said that
this advertisement is so vague that you can
not really construe it as a promise — that the
vagueness cf the language shows that a legal
promise was never intended or contemplated.
The language is vague and uncertain in some
respects, and particularly in this, that the
£100 is to be paid to any person who contracts
the increasing epidemic after having used tlie
balls three times daily for two weeks. It is
said, when are they to be used? According
to the language of the advertisement no time
is fixed, and, construing the offer most strong-
ly against the person who has made it, one
might infer that any time was meant. I do
not think that was meant, and to hold the
contrary would be pushing too far the doc-
trine of taking language most strongly against
the person using it. I do not think that busi-
ness people or reasonable people would under-
stand the words as meaning that if you took a
smoke ball and used it three times daily for
two weeks you were to be guaranteed against
influenza for the rest of your life, and I think
it would be pushing the language of the ad-
vertisement too far to construe it as meaning
that. But if it does not mean that, what does
it mean? It is for the defendants to shew
what it does mean; and it strikes me that
there are two, and possibly three, reasonable
constructions to be put on this advertisement,
any one of which will answer the purpose of
the plaintiff. Possibly it may be limited to
persons catching the "increasing epidemic"
(that is, the then prevailing epidemic), or any
colds or diseases caused by taking cold, dur-
ing the prevalence of the increasing epidemic.
That is one suggestion; but It does not com-
mend itself to me. Another suggested mean-
ing is that you are warranted free from catch-
ing this epidemic, or colds or other diseases
caused by taking cold, whilst you are using
this remedy after using it for two weeks. If
that is the meaning, the plaintiff is riglit. for
she used the remedy for two weeks and went
on using it till she got the epidemic. An-
other meaning, and the one which I rather
prefer, is that the reward is offered to any
person who contracts the epidemic or other
disease within a reasonable time after hav-
ing used the smoke ball. Then it is asked,
what is a reasonable time? It has been sug-
gested that there is no standard of reasonable-
ness; that it depends upon the reasonable
time for a germ to develop! I do not feel
pressed by that. It strikes me that a reason-
able time may be ascertained in a business
sense and in a sense satisfactory to a law-
yer, in this way: Find out from a chemist
what the ingredients are; find out from a
skilled physiciau how long the effect of such
ingredients on the system could be reasonaldy
expected to endure so as to protect a person
70
OFFER AND ACCEPTANCE.
from an epidemic or cold,— and in that way
you will get a standard to be laid before a
jury, or a judge without a jury, by which
they might exercise their judgment as to
what a reasonable time would be. It strikes
me, I confess, that the true construction of
this advertiserient is that flOO will be paid
to anybody who uses this smoke ball three
times daily for two weeks according to the
printed directions, and who gets the influenza
or cold or other diseases caused by taking
cold within a reasonable time after so using
it; and if that is the true construction, it is
enough for the plaintiff.
I come now to the last point which I think
requires attention: that is, the consideration.
It has been argued that this is nudum pactum
— that there is no consideration. We must
apply to that argument the usual legal tests.
Let us see whether there is no advantage to
the defendants. It is said that the use of the
ball is no advantage to them, and that what
benefits them is the sale; and the case is put
that a lot of these balls might be stolen, and
that it would be no advantage to the defend-
ants if the thief or other people used them.
The answer to that, I think, is as follows: It
is quite obvious that in view of the adver-
tisers a use by the public of their remedy, if
they can only get the public to have confi-
dence enough to use it, will react and pro-
duce a sale which is directly beneficial to
them. Therefore, the advertisers get out of
the use an advantage which is enough to con-
stitute a consideration.
But there is another view. Does not the
person who acts upon this advertisement
and accepts the offer put himself to some in-
convenience at the request of the defend-
ants? Is It nothing to use this ball three
times daily for two weeks according to the
directions at the request of the advertiser?
Is that to go for nothing? It appears to me
that there is a distinct inconvenience, not
to say a detriment, to any person who so
uses the smoke baU. I am of opinion, there-
fore, that there is ample considei-ation for
the promise.
We were pressed upon this point with the
ease of Gerhard v. Bates, 2 El. & Bl. 476,
which was the case of a promoter of com-
panies who had promised the bearers of
share warrants that they should have divi-
dends for so many years, and the promise
as alleged was held not to shew any consid-
eration. Lord Campbell's judgment when
you come to examine it is open to the ex-
planation, that the real point in that case
was that the promise, if any, was to the
original bearer and not to the plaintiff, and
that as the plaintiff was not suing in the
name of the original bearer there was no
contract with him Then Lord Campbell
goes on to enforce that view by shewing
that there was no consideration shewn for
the promise to him. I cannot help thinking
that Lord Campbell's observations would
have been very different if the plaintiff in
that action had been an original bearer, or
if the declaration had gone on to shew what
a societe anonyme was, and had alleged the
promise to have been, not only to the first
bearer, but to ajiybody who should become
the bearer. There was no such allegation,
and the court said, in the absence of such
allegation, they did not know (judicially, of
course) what a societe anonyme was, and,
therefore, there was no consideration. But
in the present case, for the reasons I have
given, I cannot see the slightest difficulty in
coming to the. conclusion that there is con-
sideration.
It appears to me, therefore, that the de-
fendants must perform their promise, and,
if they have been so unwaiy as to expose
themselves to a great many actions, so much
the worse for them.
BOWEN, L. J, [ am of the same opinion.
We are asked to say that this document
was a contract too vague to be enforced.
The first observation which arises is that
the document itself is not a contract at aU:
it is only an offer made to the public. The
defendants contend next, that it is an offer
the terms of which are too vague to be treat-
ed as a definite offer, inasmuch as there is
no limit of time fixed for the catching of the
influenza, and it cannot be supposed that
the advertisers seriously meant to promise
to pay money to every person who catches
the influenza at any time after the inhaling
of the smoke ball. It was urged also, that
if you look at this document you will find
much vagueness as to the persons with
whom the contract was intended to be
made; that, in the first place, its terms are
wide enough to include persons who may
have used the smoke ball before the adver-
tisement was issued; at all events, that it is
an offer to the world in general, and, also,
that it is unreasonable to suppose it to be a
definite offer, because nobody in their senses
would contract themselves out of the oppor-
timity of checking the experiment which
was going to be made at their own expense.
It is also contended that the advertisement
is rather in the nature of a puff" or a procla-
mation than a promise or offer intended to
mature into a contract when accepted. But
the main point seems to be that the vague-
ness of the document shews that no con-
tract whatever was intended. It seems to
me that, in order to arrive at a right con-
clusion, we must read this advertisement in
its plain meaning, as the public would im-
derstand it. It was intended to be issued
to the public and to be read by the public.
How would an ordinary person reading this
document construe it? It was intended un-
questionably to have some effect, and 1
think the effect which it was intended to
have, was to make people use the smoke
ball, because the suggestions and allegations
which it contains are directed immediately
to the use of the smoke ball as distinct from
GENERAL OFFEHS.
71
the purchase of it. It did not follow that
the smoke ball was to be purchased from the
defendants directly or even from aj;ents of
theirs directly. The intention was that the
circulation of the sinoko ball should he pro-
moted, and that the use of it should be in-
creased. The advertisement begins by say-
ing that a reward will be paid by the Carbol-
ic Smoke Ball Company to any person who
contracts the increasing epidemic after us-
ing the ball. It has been said that the
words do not apply only to persons who con-
tract the epidemic after the publication of
the advertisement, but include persons who
had previously contracted the influenza. I
cjinnot so read the advertisement. It is
written in colloquial and popular language,
and I think that it is equivalent to this:
"£100 will be paid to any person who shall
contract the increa.sing epidemic after hav-
ing used the carbolic smoke ball three times
daily for two weeks." And it seems to me
that the way in which the public would read
it would be this; that if anybody, after the
advertisement was published, used three
times daily for two weeks the carbolic
smoke biill, and then caught cold, he would
be entitled to the reward. Then again it
■was said: "flow long is this protection to
endure? Is it to go on for ever, or for
what limit of time?" I think that there are
two constructions of this document, each of
which is good sense, and each of which
seems to me to satisfy the exigencies of the
present action. It may mean that the pro-
tection Is warranted to last during the epi-
demic, and it was during the epidemic that
the plaintiff contracted the disease. I think,
more probably, it means that the smoke ball
will be a protection while it is in use. That
seems to me the way in which an ordinary
person would understand an advertisement
about medicine, and about a specific against
mfluenza. It coidd not be supposed that
after you have left off using it you are still
to be protected for ever, as if there was to
be a stamp set upon your forehead that you
were never to catch influenza because you
had once used the carbolic smoke ball. I
think the immunity is to last during the use
of the ball. That is the way in which I
should naturally read it, and it seems to me
that the subsequent language of the adver-
tisement supports that construction. It says:
"During the last epidemic of influenza many
thou.sand carbolic smoke balls were sold,
and in no ascertained case was the disease
contracted by those using" (not, "who had
used") "the carbolic smoke ball," and it
concludes with saying that one smoke ball
will last a family several months (which
imports that it is to be efficacious while it
Is being used), and that the ball can be re-
filled at a cost of 5s. I, therefore, have
myself no hesitation in saying that I think,
on the construction of this advertisement,
the protection was to enure during the time
that the carbolic smoke ball was used. My
brother the lord Justice who preceded me,
thinks that the contract would be sufficient-
ly definite if you were to read It in the
sense that the protection was to be war-
ranted during a reasonable period after use.
I have some difliculty myself on that point;
but it is not neces.sary for me to consider it
further, because the disease here was con-
tracted during the use of the carbolic smoke
ball.
Was it intended that the £100 should, if
the conditions were fulfilled, be paid? The
advertisement says £1000 is lodged at the bank
for the purpose. Therefore, it cannot be said
that the statement that £100 would be paid
was intended to be a mere puff. I think it
was intended to be understood by the public
as an offer which was to be acted upon.
But it was said there was no check on the
part of the persons who issued the adver-
tisement, and that it would be an insensate
thmg to promise £100 to a person who used
the smoke ball unless you could check or
superintend his manner of using it. The an-
swer to that argument seems to me to be that
if a person chooses to make extravagant prom-
ises of this kind he probably does so because
it pays him to make them, and, if he has
made them, the extravagance of the promises
is no reason in law why he should not be
bound by them.
It was also said that the contract is made
with all tlie w-orld,— that is, with everybody,
—and that you cannot contract with every-
body. It is not a contract made with all the
world. There is the fallacy of the argu-
ment. It is an offer made to aU the world;
and why should not an offer be made to all
the w'orld which is to ripen into a contract
with anj'body who comes forward and per-
forms the condition? It is an offer to be-
come liable to any one who, before it is re-
tracted, performs the condition, and, although
the offer is made to the world, the contract is
made with that Umited portion of the pubhc
who come forward and perform the condition
on the faith of the advertisement. It is not
like cases in which you offer to negotiate, or
you issue advertisements that you have got
a stock of books to sell, or houses to let, in
which case there is no offer to be bound by
any contract. Such advertisements are offers
to negotiate, offers to receive offers, offers to
chaffer, as, I think, some learned judge in one
of the cases has said. ' If tliis is an offer to
be bound, then it is a contract the moment
the person fulfils the condition. That seems
to me to be sense, and it is also the ground
on which all these advertisement cases have
been decided during tlie century; and it can-
not be put better than in Willes. J.'s. judg-
ment in Spencer v. Harding, L. R. 5 C. P. oGl,
563. "In the advertisement cases," he says,
"there never was any doubt that the adver-
tisement amounted to a promise to pay the
money to the person who first gave informa-
tion. The diflEiculty suggested was that it
was a contract with all the world. But that.
72
OFFER AJ^D ACCEPTANCE.
of course, was soon overruled. It was an
offer to become liable to any person who
before the ofEer should be reti-acted should
happen to be tlie ix?rson to fulfil the con-
tract, of which the advertisement was an
offer or tender. That is not the sort of dif-
ficulty which presents itself here. If the
circular had gone on, 'and we undertake to
sell to the highest bidder,' the reward cases
would have applied, and there would have
been a good contract in respect of the per-
sons." As soon as the highest bidder pre-
sented himself, says Willes, J., the person
who was to hold the vincvilum juris on the
other side of the contract was ascertained, and
it became settled.
Then it was said that there was no notifica-
tion of the acceptance of the contract. One
cannot doubt that, as an ordinary rule of law,
an acceptance of an offer made ought to be
notified to the person who makes the offer,
in order that the two minds may come to-
gether. Unless this is done, the two minds
may be apart, and there is not that consensus
which is necessary according to the English
law — I say nothing about the laws of other
countries — to make a contract But there is
this clear gloss to be made upon that doc-
trine, that as notification of acceptance is re-
quired for the benefit of the person who makes
the offer, the person who makes the offer may
dispense with notice to himself if he thinks it
desirable to do so, and I suppose there can
be no doubt that where a person in an offer
made by him to another person, expressly or
impliedly intimates a particular mode of ac-
ceptance as sufiicient to make the bargain
binding, it is only necessary for the other
person to whom such offer is made to follow
the indicated method of ac-ceptance; and if the
person making the offer, expressly or im-
pliedly intimates in his offer that it will be
sufficient to act on the proposal without com-
municating acceptance of it to himself, per-
formance of the condition is a sufficient ac-
ceptance without notification.
That seems to me to be the principle which
lies at the bottom of the acceptance cases,
of which two instances are the well-known
judgment of Mellish, L. J., in Harris's Case,
L. R. 7 Ch. 587, and the very instructive
judgment of Lord Blackburn in Brogden v.
Railway Co., 2 App. Cas. GGC, 601, in which
he appears to me to take exactly the line I
have indicated.
Now, if that is the law, how are we to find
out whether the person who makes the offer
does intimate that notification of acceptance
will not be necessary in order to constitute
a binding bargain? In many cases you look
to the offer itself. In many cases you extract
from the character of the transaction that
notification is not required, and in the adver-
tisement cases it seems to me to follow as
an inference to be drawn from the transac-
tion itself that a person is not to notify his
acceptance of the offer before he performs the
condition, but that if he performs the condi-
tion notification is dispensed with. It seems
to me that from the point of view of common
sense no other idea could be entertained. K
I advertise to the world that my dog is lost,
and that anybody who brings the dog to a par-
ticular place wUl be paid some money, are all
the police or other persons whose business it
is to find lost dogs to be expected to sit down
and write a note saying that they have ac-
cepted my proposal? Why, of course, they
at once look after the dog, and as soon as
they find the dog they have performed the
condition. The essence of the transaction is
that the dog should be found, and it is not
necessary under such circumstances, as it
seems to me, that in order to make the con-
tract binding there should be any notification
of acceptance. It follows from the nature
of the thing that the performance of the con-
dition is sufficient acceptance without the no-
tification of it, and a person who makes an
offer in an advertisement of that kind makes
an offer which must be read by the light of
that common sense reflection. He does, there-
fore, in his offer impliedly indicate that he
does not require notification of the accept-
ance of the offer.
A further argument for the defendants was
that this was a nudum pactum,— that there
was no consideration for the promise; tlmt
taking the infiuenza was only a condition,
and that the using the smoke ball was only
a condition, and that there was no considera-
tion at all; in- fact, that there was no request,
express or implied, to use the smoke ball.
Now, I will not enter into an elaborate dis-
cussion upon the law as to requests in this
kind of contracts I will simply refer to
Victors V. Davies, 12 Mees. & W. 758, and
Serjeant Manning's note to Fisher v. Pyne, 1
Man. & G. 265, which everybody ought to
read who wishes to embark in this contro-
versy. The short answer, to abstain from
academical discussion, is, it seems to me, that
there is here a request to use involved in the
offer. Then as to alleged want of considera-
tion. The definition of "consideration" given
in Selwyn, N. P. (8th Ed.) p. 47, which is
cited and adopted by Tindal, C. J., in the case
Laythoarp v. Bryant, 3 Scott, 238, 250, is this:
"Any act of the plaintiff from which the de-
fendant derives a benefit or advantage, or any
labour, detriment, or inconvenience sustain-
ed by the plaintiff, provided such act is per-
formed or such inconvenience suffered by the
plaintiff, with the consent, either expressed
or implied, of the defendant." Can it be
said here that if the person who reads this
advertisement applies thrice daily, for such
time as may seem to him tolerable, the car-
bolic smoke ball to his nostrils for a whole
fortnight, he is doing nothing at all; that it
Is a mere act which is not to count towards
consideration to support a promise (for the
law does not require us to measure the ad-
equacy of the consideration). Inconvenience
sustained" by one party at the request of the
other is enough to create a consideration. I
GENERAL OFFERS.
73
think, therefore, that It Is consideration
enough that the plaintiff took the trouble of
using the smoke ball. But I think also that
the defendant received a benefit from this
u.ser, for the use of the smoke ball was 'con-
templated by the defendants as being indirect-
ly a benefit to them, because the use of the
smoke balls would promote their sale.
Then we are pressed with Gerhard v. Bates,
2 El. & Bl. 476. In Gerhard v. Bates, 2 EL
& Bl. 47G, which ar'^se upon demurrer, the
point upon which the action failed was that
the plaintiff did not allege tliat the promLse
was made to the class of which alone the
plaintiff was a member, and that therefore
there was no privity between the plaintiffs
and the defendants. Then Lord Campbell
went on to give a second reason. If his first
reason was not enough, and the plaintiff and
the defendant there had come together as
contracting parties and the only question was
consideration. It seems to me Lord Campbell's
reasoning would not have been sound. It is
only to be supported by reading it as an addi-
tional reason for thinking that they had not
come into the relation of contracting parties;
but, if so, the language was superfluous. The
truth is, that if in that case you had found a
contract between the parties there would have
been no diflicultj' about consideration; but
you could not find such a contract Here, in
the same way, if you once make up your mind
that there was a promise made to thi.s lady
who is the plaintiff, as one of the pubhc,—
a promise made to her that if she used the
smoke ball three times daily for a fortnight
and got the influenza, she should have flCXJ,
— It seems to me that her using the smoke ball
was sufficient consideration. I cannot pic-
ture to myself the view of the law on which
the contrary could be held when you liave
once found who are the contracting parties.
If I say to a person, "If you use such and
such a medicine for a week I will give you
£5," and he uses it, there Is ample considera-
tion for the promise.
• *«•••
Appeal dismissed.
OrrEll AND ACCEPTANCE.
^^
\.
20. III. V
PAINE V. CAVE.
(3 Term R. 148.
Hilaiy Term, 29 Geo.
This was an action, tried at the sittings
after last term at Gtiildhall before Loi-d Keu-
yon, whei-ein the declaration stated that the
plaintiff on 22d September, 178S, was pos-
sessed of a certain worm-tub, and a pewter
worm in the same, which were then and
there about to be sold by public auction by
one S. M., the agent of the plaintifE in that
behalf, the conditions of which sale were to
be the usual conditions of sale of goods sold
by auction, &c. of all which premises the
defendant afterwards, to wit, &c. had no-
tice; and thereupon the defendant in consid-
eration that the plaintiff, at the special in-
stantii and i-equest of the defendant, did then
and there undertake, and promise to perform
the conditions of the said sale, to be per-
formed by the plaintiff, as seller, &c. under-
took, and then and there promised the plain-
tiff to perform the conditions of the sale, to
be perfoi-med on the part of the buyer, &c.
And the plaintiff avei-s, that the conditions
of sale, herein after mentioned, are usual
conditions of sale of goods sold by auction,
to wit, that the highest bidder should be the
purchaser, and should deposit five shillings
in the pound, and that if the lot purchased
were not paid for and taken away in two
days time, it should be put up again and re-
sold, &c. [stating all the conditions]. It then
stated that the defendant became the pur-
chaser of the lot in question for £40. and
was requested to pay the usual deposit which
he refused, &c At the trial, the plaintiff's
counsel opened the case thus;— The goods
were put up in one lot at an auction; there
were several biddei-s, of whom the defend-
ant was the last who bid £40; the auction-
eer dwelt on the bidding, on which the de-
fendant said "why do you dweU, you will not
get more;" the auctionerr said that he was
informed the worm weighed at least 1300
cwt, and was worth more than £40; the de-
fendant then asked him whether he would
warrant it to weigh so much, and received
an answer in the negative, he then declared
that he would not take it, and refused to pay
for it. It was re-sold on a subsequent day's
sale 'for £30 to the defendant, against whom
the action was brought for the difference.
Lord Kenyon, being of opinion on this state-
ment of the case, that the defendant was at
liberty to withdraw his bidding any time be-
fore the hammer was knocked down, non-
suited the plaintiff.
Walton now moved to set aside the non-
suit, on the ground that the bidder was
bound by the conditions of the sale to abide
by his bidding, and could not retract By
the act of bidding he acceded to those con-
ditions, one of which was, that the highest
bidder should be the buyer. The hammer
is suspended, not for the benefit of the bid-
der, or to give him an opportunity of repent-
ing, but for the benefit of the seller: in the
mean time the pereon who bid last is a con-
ditional pui-chaser, if nobody bids more. Oth-
erwise it is in the power of any person to
injure the vendor, because all the former
biddings are discharged by the last: and, as
it happened in this very instance, the goods
may thereby ultimately be sold for less than
the person who was last out-bid would have
given for them. The case of Simon v. Metiv-
ier, 3 Burrows, 1921, which was mentioned
at the trial, does not apply. That tiimed on
the statute of frauds.
THE COURT thought the non-suit very
proper. The auctioneer is the agent of the
vendor, and the assent of both parties is
necessaiy to make the contract binding; that
is signified on the part of the seUer, by
knodiing down the hammer, which was not
done here till the defendant had retracted.
An auction is not unaptly called locus poen-
itentiae. Every bidding is nothing more than
an offer on one side, which is not binding on
either side tUl it is assented to. But accord-
ing to what is now contended for, one party
would be bound by the offer, and the other
not, which can never be allowed.
Rule refused.
REVOCATION OF OFFER OR ACCEPTANCE.
75
BARTLETT et
^4
BOSTON & M. R. R. V
(3 Gush. 224.)
Supreme Judicial Court of Massachuset
Suffolk. Nantucket. March \^
Term. 1849.
This was a bill in equity for the specific
performunce of a contract In writing. ;
The plaiatilTs allogcfl, that the defendants,
on the 1st of April, 1844, being the owners
of certain laud situated In Boston, and par-
ticularly described in the bill, "in considera-
tion that said corporation would take into
consideration the expediency of buying said
laud for their use as a corporation, signed
a certain writing, dated April 1st, 1844,"
whereby they agreed to convey to the plain-
tiffs "the said lot of land, for the sum ot
twenty thousand dollars, if the said corpo-
ration would take the same within thirty
days from that date;" that afterwards and
within the thirty days, the defendants, at
the request of the plaintiffs, "and in consid-
eration that the said corporation agreed to
keep in consideration the expediency of tak-
ing said land," etc, extended the said term
of thirtj- days, by a writing underneath the
written conti"act above mentioned, for thirty
days from the expiration thereof; that, on
the 29th of May, 1844, while the extended
contract was in full force, and unrescinded,
the plaintiffs elected to take the land on the
terms specified in the contract, and notified
the defendants of their election, and offered
lo pay them the agreed price (producing the
same in money) for a conveyance of the
land, and requested the defendants to ex-
ecute a conveyance thereof, which the plain-
tiffs tendered to them for that purpose; and
that the defendants refused to execute such
conveyance, or to perform the contract, and
had ever since neglected and refused to per-
form the same.
The defendants demurred generally.
J. P. Healy, for defendants, contended,
that there was no allegation in the bill of a
consideration for the contract, as originally
made, or as extended; and, consequently,
that the same was not enforceable either at
law or in equity. Howel v. George, 1 Madd.
1; 2 Story, Eq. § 787; Brownsmith v. Gil-
borne, 2 Strange, 738; Colraan v. Sarel, 2
Brown, Ch. 12; 1 Madd. 328; 1 Fonbl. 42.
The counsel also referred to 1 Harr. Dig.
G03; Burnet v. Bisco, 4 Johns. 235; Tucker
v. Woods, 12 Johns. 190; Bean v. Burbank,
16 Me. 458.
G. Minot, (with whom was R. Choate.) for
the plaintiffs, suggested, that if the demur-
rer was sustained, it would uot be for the
reason stated, but on the authority of Cooke
V. Oxley, 3 Term R. G53, and Tucker v.
Woods, 12 Johns. 190, which are not now
law. The question is one of mutuality rath-
er than of consideration. The offer of the
defendants was a continuing one. which
might have been withdrawn at any time;
but, when accepted, the effect was the same,
as If the offer had only been made the mo-
ment before. Such an offer requires no con-
sidoi-ation. When accepted, there is prom-
ise for promise.
The case of Cooke v. Oxley Is overruled
by Adams v. Lindsell, 1 Bam. & Aid. 081;
Maetier v. Frith, G Wend. 103; Peru v.
Turner, 10 Me. 185; Kennedy v. Lee, 3 Mer.
441; Averill v. Hedge, 12 Conn. 424; Carr v.
Duval, 14 Pet. 77; 1 Sugd. Vend. 104; M'Cul-
loch V. Insurance Co., 1 Pick. 278. It is vir-
tually overruled by the following cases de-
cided by this court: Thayer v. Insurance
Co., 10 Pick. 320; Foster v. Boston. 22 Pick.
33; Bird v. Richardson, 8 Pick. 252. See,
also, the remarks in 20 Am. Jur. 17, on the
case of Cooke v. Oxley, and the case of
Hamilton v. Insurance Co., 5 Pa. St. 339. in
which it was virtually overruled.
Mr. Healy, in reply, said that In all the
cases cited for the plaintiffs, except the last,
there was a consideration.
FLETCHER, J. In support of the de-
murrer, in this case, the only groimd as-
sumed and insisted on by the defendants is,
that the agreement on their part was with-
out consideration, and therefore not obliga-
tory. In the view taken of the case by the
court, no importance is attached to the con-
sideration set out in the bill, namely, "that
the plaintiffs would take into consideration
the expediency of buying the land." The
argument for the defendants, that their
agreement was not binding, because without
consideration, erroneously assumes that the
writing executed by the defendants is to be
considered as constituting a contract at the
time it was made. The decision of the
court in Maine in the case of Bean v. Bur-
bank, 16 Me. 458, which was referred to for
the defendants, seems to rest on the ground
assumed by thom in this case.
In the present case, though the writing
signed by the defendants was but an offer,
and an offer which might be revoked, yet
while it remained in force and unrevoked, it
was a continuing offer during the time lim-
ited for acceptance; and, during the whole
\ of that time, it was an offer every instant,
but as soon as it was accepted, it ceased to
be an offer merely, and then ripened into a
contract. The coimsel for the defendants
Is most surely in the right, in saying that
the writing when made was without consid-
eration, and did not therefore form a con-
tract It was then but an offer to contract;
and the parties making the offer most un-
doubtedly might have withdrawn it at any
time before acceptance.
But when the offer was accepted, the
minds of the parties met, and the contract
was complete. There was then the meeting
of the minds of the parties, which consti-
tutes and is the definition of a contract. The
acceptance by the plaintiffs constituted a
s ufhoieut legal consideration for the eng;ag e-
ment on the part of the di-fou'hints. There
76
OFFER AND ACCEPTANCE.
was then nothing wanting, in order to per-
fect a valid contract on the part of the de-
fendants. It was precisely as if the parties
had met at the time of the acceptance, and
the offer had then been mad e and accepted
and the bargain completed at once.
A different doctrine, however, prevails In
France, and Scotland, and Holland. It is
there held, that whenever an offer is made,
granting to a party a certain time within
which he is to be entitled to decide, whether
he will accept it or not, the party making
such offer is not at liberty to withdraw it
before the lapse of the appointed time.
There are certainly very strong reasons in
support of this doctrine. Highly respecta-
ble authors regard it as inconsistent with
.Uie plain principles of equity, that a person,
who has been induced to rely on such an
engagement, should have no remedy in case
of disappointment But, whether wisely
and equitably or not, the common law im-
yieldingly insists upon a consideration, or a
paper with a seal attached.
The authorities, both English and Ameri-
can, in support of this view of the subject,
are very numerous and decisive; but it is not
deemed to be needful or expedient to refer
particularly to them, as they are collected
and commented on in several reports as well
as in the text books. The case of Cooke v.
Oxley, '6 Term R. 6-53, in which a different
doctrine was held has occasioned consider-
able discussion, and, in one or two instances,
has probably influenced the decision. That
case has been supposed to be Jnaccura tely
reporte d ;_and thaj in fa cLJilsrejgag^in that
'gtrggTlg'acc eptaa ce! ButThowever that may
'^eTTT^'n^'case has not been directly over-
ruled, it has certainly in later cases been
entirely disregarde d, and cannot now be
considered as of any authority.
As, therefore, in the present case, the bill
sets out a proposal in writing, and an ac-
ceptance and an offer to perform, on the
part of the plaintiffs, within the time lim-
ited, and while the offer was in fuU force,
all which is admitted by the demurrer, so
that a valid contract in writing is shown to
exist, the demurrer must be overruled.
REVOCATION OF OFFER Oil ACCEPTANCE.
77
DICKINSON V. DODDS.
(2 Ch. Div. 463.)
Chancery Division, Court of Appeal.
187G.
April 1,
On Wednesday, the 10th of June, 1874, the
defendant John Dodds signed and delivered
to tlie phiintiir, (Jeorgo Dicliinsou, a mem-
orandum, of which the material part was as
follows:
"I hereby agree to sell to Mr. George Dick-
inson the whole of the dwelling-houses, gar-
den ground, stabling, and outbuildings there-
to belonging, situate at Croft, belonging to me,
for the sum of £800. As witness my hand
this tenth day of June, 1874.
"fSOO. [Signed] John Dodds."
"P. S.— This offer to be left over until Fri-
day, 9 o'clock a. m. J. D. (the twelfth), 12th
June, 1874,
"[Signed] J. Dodds."
The bill alleged that Dodds understood and
intended that the plaintiff should have until
Friday, 9 a. m., within which to determine
whether he would or would not purchase, and
that he should absolutely have until that
time the refusal of the property at the price
of fSOO, and that the plaintiff in fact de-
termined to accept the offer on the morning
of Thursday, the 11th of June, but did not
at once signify his acceptance to Dodds, be-
lieving that he had the power to accept it un-
til 9 a. m. on the Friday.
In the afternoon of the Thursday the plain-
tiff was informed by a Mr. Berry that Dodds
had been offering or agreeing to sell the prop-
erty to Thomas Allan, the other defendant. !
Tiiereupon the phiintiff, at about half past '
seven in the evening, went to the house of
Mrs. Burgess, the mother-in-law of Dodds,
where he was then staying, and left with her
a formal acceptance in writing of the offer
to sell the property. According to the evi-
dence of Mrs. Burgess this document never
in fact reached Dodds, she having forgotten
to give it to him.
On the following (Friday) morning, at about
seven o'clock. Ben-y, who was acting as
agent for Dickinson, found Dodds at the Dar-
lington railway station, and handed to him a
duplicate of the acceptance by Dickinson,
and explained to Dodds its puri)ort. lie re-
plied that it was too late, as he had sold the
property. A few minutes later Dickinson
himself found Dodds entering a railway car-
riage, and handed him another duplicate of
the notice of acceptance, but Dodds declined
to receive it, saying: "You are too late. I
have sold the property."
It appeared that on the day before, Thurs-
day, the 11th of June, Dodds had signed a
formal contract for the sale of the property to
the defendant Allan for fSOO, and had re-
ceived from him a deposit of £40.
The bill in this suit prayed that the de-
fendant Dodds might be decreed specifically
to perform the contract of the 10th of June.
1874; that he miglit be restrained from con-
veying the prop<.'i-ty to Allan; that Allan
might be restrained from taking any such
conveyance; that, if any such conveyance
had been or should be made, Allan might be
declared a trustee of the property for. and
might be directed to convey the property to,
the plaintiff; and for damages.
The cause came on for hearing before Vice
Chancellor BACON on the 25th of January
1870.
Mr. Kay, Q. C, and Mr. Caldecott, for pUiin-
tiff.
The memorandum of the 10th of June, 1874,
being in writing, satisfies the statute of
frauds. Though signed by the vendor only,
it is effectual as an agreement to sell the
property.
Supposing it to have been an offer only, an
offer, if accepted before it is withdrawn, be-
comes, upon acceptance, a binding agreement.
Even if signed by the person only who is
sought to be charged, a proposal, if accepted
by the other party, is within the statute.
Reuss V. Picksley, L. R. 1 Exch. 342, follow-
ing Warner v. Willington, 3 Drew, 523.
In Kennedy v. Lee, 3 Mer. 441, 4.54, Lord
Eldon states the law to be that: "If a per-
son communicates his acceptance of an offer
within a reasonable time after the offer being
made, and if, within a reasonable time of the
acceptance being communicated, no variation
has been made by either party in the terms
of tlie offer so made and accepted, the ac-
ceptance must be taken as simultaneous with
the offer, and both together as constituting
such an agreement as tue court wiU execute."
So that, not only is a parol acceptance sutfi-
cient, but such an acceptance relates back to
the date of the offer. This is further shewn
by Adams v. Lindsell, 1 Barn. & Aid. GSl,
where an offer of sale was made by letter to
the plaintiffs "on receiving their answer in
course of post." The letter was misdirected,
and did not reach the plaintiffs imtil two
days after it ought to have reached them.
Tlie plaintiffs, immediately on receiving the
letter, wrote an answer accepting; and it
was held that they were entitled to the bene-
fit of the contract.
The ruling in Adams v. Lindsell, 1 Barn. &
Aid. GSl, was appi-oved by the house of lords
in Dunlop v. Iliggins, 1 H. L. Cas. 3S1. as
appears from the judgment of Sir G. Mellish,
L. J., in Han-is' Case, L. R. 7 Ch. 587, 595;
and it is now settled that a contract which
can be accepted by letter is complete when a
letter containing such accept;! nee has been
posted. The leaving by the plaintiff of the
notice at Dodds' residence was equivalent to
the delivery of a letter by a postman.
That Allan is a necessary party appears
from Potter v. Sanders, G Hare, 1; and if
Allan has had a conveyance of the legal es-
tate, the court will decree specific perform-
ance against him.
OrrEli AND ACCEPTANCE.
Mr. Swanston, Q. C, aud Mr. Crosslcy, for
defendant Dodds.
The bill puts the case no higher than that of
an offer. Taking the memorandum of the
10th of June, 1S74. as an offer only, it is well
established that, until acceptance, either par-
ty may retract. Cooke v. Oxley, 3 Term R.
653; Beuj. Sales (2d Ed.) p. 52.
After Dodds had retracted by selling to Al-
lan, the offer was no longer open. Having an
option to retract, he exercised that option.
Humphries v. Carvalho, 16 East, 45; Pol.
Cout. p. S; Routledge v. Grant, 4 Bing. G53,
In delivering judgment in Martin v. Mitch-
ell. 2 Jac. & W. 413, Sir T. Plumer, M. R., put
the case of a contract signed by one party
only. He asked (page 42S), "What mutuality
is there, if the one is at liberty to renounce
the contract, and the other not?" And in
Meyuell v. Surtees. 1 Jur. (N. S.) 737, the dis-
tinctions between an offer and an agreement
in respect of binding land were pointed out.
Fry, Spec. Perf. p. 80.
The postserip^^ being merely voluntary, with-
out consideration, is nudum pactum; and the
memorandum may be read a^ if it contained
no postscript.
Mr. .Jackson, Q. C, and Mr. Gazdar, for de-
fendant Allan.
Allan is an unnecessary party. If Dodds
has not made a valid contract with the plain-
tiff, he is a trustee for Allan; if Dodds has
made a binding contract, rights arise be-
tween Allan and Dodds which are not now in
controversy.
We agree with the co-defendant that, in
order that the plaintiff may have a locus
standi, there must have been a contract. If
the postscript is a modification of the offer,
it is nudum pactum, and may be rejected.
It may be conceded that if there had been
an acceptance, it would have related back in
point of date to the offer. But there was no
acceptance. Notice of acceptance sem^ed on
Mrs. Burgess was not enough.
Even if it would have been otherwise suf-
ficient, here it was too late. Dodds had no
property left to contract for. The property
had ceased to be his. He had retracted his
offer; and the property had become vested iu
some one else. Hebb's Case, L. R. 4 Eq. 9, 12.
The plaintiff would not have delivered the
no'tice if he had not heard of the negotiation
between Dodds and Allan. What retracta-
tion could be more effectual than a sale of the
property to some one else?
The defendant Allan was a bona fide pur-
chaser without notice.
Mr. Kay, in reply.
The true meaning of the document was a
sale. The expression is not "open," but
"over." The only liberty to be allowed by
that was a liberty for the plaintiff to reti'act.
But, taking it as an offer, the meaning was
that at any day or hour within the intoiTal
named the plaintiff had a right to indicate to
the defendant his acceptance, and from that
moment the defendant would have had no
i'ight of retractation. Then was there a re-
tractation before acceptance? To be a retrac-
tation, there must be a notification to the oth-
er party. A pure resolve within the recesses
of the vendor's own mind is not sufficient.
There was no communication to the plaintiff'.
He accepted on two several occasions. There
could have been no parting with the property
without conmaunciation with him. He was
told that the offer was to be left over.
The groimds of the decision in Cooke v.
Oxley, 3 Term R. 653, have been abimdantly
explained by ^Ir. Benjamin in his work on
Sales. It was decided simply on a point of
pleading.
BACON, V. C, after remarking that the
case involved no question of unfairness or
inequality, and after stating the terms of the
document of the 10th of Jime, 1874, and the
statement of the defendant's case as given
in his answer, continued:
I consider that to be one agreement, and 1
think the terms of the agreement put an end
to any question of nudum pactum. I think
the inducement for the plaintiff to enter into
the conti-act was the defendant's compliance
with the plaintiffs request that there should
be some time allowed to him to determine
whether he would accept it or not. But
whether the letter is read with or without the
postscript, it is, in my judgment, as plain and
clear a contract for sale as can be expressed
in words, one of the terms of that contract
being that the plaintiff shall not be called
upon to accept or to testify his acceptance,
matil 9 o'clock on the morning of the 12th of
June. I see, therefore, no reason why the
court should not euforc-e the specific perform-
ance of the contract, if it finds that all the
conditions have been complied with.
Then, what are the facts? It is clear that
a plain, explicit acceptance of the conti'act
was, on Thursday, the 11th of June, delivered
by the plaintiff at the place of abode of the
defendant, and ought to have come to his
hands. Whether it came to his hands or not.
the fact remains that, within the time limit-
ed, the plaintiff did accept and testify his ac-
ceptance. From that moment, the plaintiff
was bound, aud the defendant could at any
time, notwithstanding Allan, have filed a bill
against the plaintiff for the specific per-
formance of the contract which he had en-
tered into, and which the defendant had ac-
cepted.
I am at a loss to guess upon what ground
it can be said that it is not a contract which
the court will enforce. It cannot be on the
ground that the defendant had entered into
a contract with Allan, because, giving to the
defendant all the latitude which can be de-
sired, admitting that he had the same time
to change his mind as he, by the agreement,
gave to the plaintiff, the law, I take it, is
clear on the authorities, that if a contract,
REVOCATION OF OFFER OR ACCEPTANCE.
79
unilateral in its shape, is completed by the
acceptauee of the party on the other side,
It becomes a perfect valid and binding con-
tract. It may be withdrawn from by one of
the parties iu the meantime, but, in order
to be withdrawn from, information of thai
fact must be conveyed to the mind of the per-
son who is to be affected by it. It will not
do for the defendant to say: "I njade up my
mind that I would withdraw, but I did not
tell the plaintiff. I did not say anything to
the plaintiff until after he had told me by a
written notice and with a loud voice that he
accepted the option which had been left to
him by the agreement." In my opinion, after
that liour on Friday, earlier than 9 o'clock,
when the plaintiff and defendant met, if not
before, the contract was completed, and nei-
ther party would retire from it.
It is said that the authorities justify the de-
fendimt's contention that he is not bound to
lx?rform this agreement, and the case of
Cooke V. Oxley, 3 Term R. G53, was referred
to. But I find that the judgment in Cooke
V. Oxley went solely upon the pleadings. It
was a rule to shew cause why judgment
should not be arrested, therefore it must have
been upon the pleadings. Now, the plead-
ings were tliat the vendor in that case pro-
posed to sell to the defendant. There was
no suggestion of any agreement which could
be enforced. The defendant proposed to the
plaintiff to sell and deliver, if the plaintiff
would agree to purchase upon the terms of-
fered, and give notice at an earUer hour tlian
4 of the afternoon of that day; and the plain-
tiff says he agreed to purchase, but does
not say the defendant agreed to sell. He
agreed to purchase, and gave notice before
4 o'clock in the afternoon. Although the case
is not so clearly and satisfactorily reported
as might be desired, it is only necessary to
ri'ad the judgment to see that it proceeds
solely upon this allegation in the* pleadings.
Mr. Justice Buller saj-s: "As to the subse-
quent time, the promise can only be supported
upon the ground of a new contract made at
4 o'clock; but there was no pretense for that."
Nor was there the slightest allegation in the
pleadings for tliat; and judgment was given
agjiinst the plaintiff.
Routlcdge v.Grant,4 Bing.653, is. plainly dis-
tinguishable from this case upon the grounds
which liave been mentioned. There the con-
tract was to sell on certain terms; possession
to be given upon a particular day. Those
terms were varied, and therefore no agree-
ment was come to; aud when the intended
purchaser was willing to relinquish the con-
dition which he imposed, the other said: "No;
I withdiaw. I have made up my mind not
to sell to you;" and the judgment of the
court was that he was perfectly right.
Then Warner v. Wellington, 3 Drew. 523,
seems to point out the law in the clearest
and most distinct manner possible. An offer
was made,— call it an agreement or offer, it
is quite indififerent; it was so far an offer,
that It was not to be binding unless there
was an acceptiiuce,— and before acceptance
was made, the offer was retracted, the agree-
ment was rescinded, and the person who had
then the character of vendor declined to go
further with the arrangement, which had
been begim by what had passed between
them. In the i)resent case I read the agi-ee-
ment as a positive engagement on the part of
the defendant Dodds that he will sell for £800,
and, not a promise, but an agreement, part of
the same instrument, that the plaintiff shall not
be called upon to express his acquie.scence in
that agreement until Fridiiy at U o'clock. Before
Friday at 9 o'clock the defendant receives no-
tice of acceptance. Upon what ground can the
defendant now be let off his contract? It is
said that Allan can sustain his agreement
with the defendant, because at the time they
entered into the contract the defendant was
possessed of the property, and the plaintiff
had notliing to do with it. But it would be
opening the door to fraud of the most flagrant
description if it was permitted to a defendant,
the owner of property, to enter into a bind-
ing contract to sell, and then sell it to som'e-
body else and say that by the fact of such
second sale he. has deprived him.'self of the
property which he has agreed to sell by the
first contract That is what Allan says in sub-
stance, for he says that the sale to him was
a retractation which deprived Dodds of the
equitable interest he had in the propertj-, al-
though the legal estate remained in him. But
by the fact of the agreement, and by the re-
lation back of the acceptance (for such I must
hold to be the law) to the date of the agree-
ment, the property in equity was the property
of the plaintiff, and Dodds had nothing to sell
to Allan. The property remained intact un-
affected by any contract with Allan, and there
is no ground, in my opinion, for the contention
that the contract with Allan can be support-
ed. It would be doing violence to principles
perfectly well known and often acted upon
in this com-t. I think the plaintiff has made
out very satisfactorily his title to a decree
for specific performance, both as having the
equitable interest, which he asserts is vested
in him, and as being a purchaser of the prop-
erty for valuable consideration without no-
tice against both Dodds, the vendor, aud Al-
lan, who has entered into the contract with
him.
There will be a decree for specific perform-
ance, with a declaration that Allan has no
interest in the property; and the plaintiff will
be at liberty to deduct his costs of the suit
out of his purchase-money.
From this decision both the defendants ap-
pealed, and the appeals were heard on the
31st of March aud the 1st of April, 1S76.
JAMES, L. J., after referring to the docu-
ment of the 10th of June, 1ST4, continued:
The doi.'umeut, though beginning "I here-
by agree to sell," was nothing but an offer.
80
OFFER AND ACCEPTANCE.
and was only intended to be an offer, for the
plaintiff himself tells us that he required
time to consider whether he would enter
into an a^eement or not. Unless both par-
ties had then agreed, there was no con-
cluded agreement then made; it was in ef-
fect and substance only an offer to sell The
plaintiff, being minded not to complete the
bargain at that time, added this memoran-
dum: "This offer to be left over until Fri-
day, 9 o'clock a. m. 12th June, 1874." That
shows it was only an offer. There was no
consideration given for the undertaliing or
promise, to whatever extent It may be con-
sidered binding, to keep the property un-
sold until 9 o'clock on Friday morning; but
apparently Dickinson was of opinion, and
probably Dodds was of the same opinion,
that he (Dodds) was bound by that promise,
and could not in any way withdraw from it,
or retract it, until 9 o'clock on Friday morn-
ing, and this probably explains a good deal
of what afterwards took place. But it is
clear settled law, on one of the clearest prin-
ciples of law, that this promise, being a
mere nudum pactum, was not binding, and
that at any moment before a complete ac-
ceptance by Dickinson of the offer, Dodds
was as free as Dickinson himself. Well,
that being the state of things, it is said that
the onlj- mode in which Dodds could assert
that freedom was by actually and distinctly
saying to Dickinson, "Now I withdi'aw my
offer." It appears to me that there is nei-
ther principle nor authority for the propo-
sition that there must be an express and ac-
tual withdrawal of the offer, or what is
called a retractation. It must, to constitute a
contract, appoar that the two minds were at
one, at the same moment of time, that is,
that there was an offer contmuing up to the
time of the acceptance. If there was not
such a continuing offer, then the acceptance
comes to nothing. Of course it may well be
that the one man is bound in some way or
other to let the other man know that his
mind with regard to the offer has been
changed; but in this case, beyond all ques-
tion, the plaintiff knew that Dodds was no
longer minded to sell the property to him
as plainly and clearly as if Dodds had told
him in so many words, "I withdraw the of-
fer." This is evident from the plaintiff's
own statements in the bill.
The plaintiff says in effect that, having
heard and knowing that Dodds was no lon-
ger minded to sell to him, and that he was
selling or had sold to some one else, think-
ing that he could not in point of law with-
drav/ his offer, meaning to fix him to it, and
endeavoring to bind him: "I went to the
house where he was lodging, and saw his
mother-in-law, and left with her an accept-
ance of the offer, knowing all the while that
he had entirely changed his mind. I got an
agent to watch for him at 7 o'clock the next
morning, and I went to the train ju-st before
9 o'clock, in order that I might catch him
and give him my notice of acceptance just
before 9 o'clock, and when that occurred
he told my agent, and he told me, 'You are
too late,' and he then threw back the pa-
per." It is to my mind quite clear that be-
fore there was any attempt at acceptance by
the plaintiff, he was perfectly well aware
that Dodds had changed his mind, and that
he had in fact agreed to sell the property to
Allan. It is impossible, therefore, to say
there was ever that existence of the same
mind between the two parties which is es-
sential in point of law to the making of an
agreement. I am of opinion, therefore, that
the plaintiff has failed to prove that there
was any binding contract between Dodds
and himself,
MELLISH, L. J. I am of the same opin-
ion. The fii-st question is, whether this doc-
ument of the 10th of June, 1874, which was
signed by Dodds, was an agreement to sell,
or only an offer to sell, the property therein
mentioned to Dickinson; and I am clearly
of opinion that it was only an offer, although
it is in the first part of it, independently of
the postscript, worded as an agreement. I
apprehend that, until acceptance, so that
both parties are bound, even though an in-
strument is so worded as to express that
both parties agree, it is in point of law only
an offer, and, until both parties are bound,
neither party is bound. It is not necessary
that both parties should be boimd within the
statute of frauds, for, if one pax-ty makes an
offer in writing, and the other accepts it
verbally, that will be suflBcient to bind the
person who has signed the written docu-
ment. But, if there be no agreement, either
verbally or in writing, then, until acceptance,
it is in point of law an offer only, altogether
worded as if it were an agreement. But it
is hardly necessary to resort to that doc-
trine in the present case, because the post-
script calls it an offer, and says, "This of-
fer to be left over until Friday, 9 o'clock
a. m." Well, then, this being only an offer,
and the law says— and it is a perfectly clear
rule of law — that, although it is said that
the offer is to be left open until Friday morn-
ing at 9 o'clock, that did not bind Dodds.
He was not in point of law bound to hold
the offer over until 9 o'clock on Friday morn-
ing. He was not so bound either in law or
in equity. Well, that being so, when on the
next day he made an agreement with Al-
lan to sell the property to him, I am not
aware of any ground on which it can be said
that that contract with Allan was not as
good and binding a contract as ever was
made. Assuming Allan to have known
(there is some dispute about it, and Allan
does not admit that he knew of it, but I will
assume that he did) that Dodds had made
the offer to Dickinson, and had given him
till Friday morning at 9 o'clock to accept
it, still in point of law that could not pre-
vent Allan from making a more favorable
REVOCATION OF OFFER OR ACCEPTANCE.
81
offer than Dickinson, and entorini? at once
into a binding agreement with Dodds.
Then Dieliinson is infonned by Berry that
the property has been sold by Dodds to Al-
lan. Berry does not tell us from whom he
hoard it, but he says that he did hoar it,
that he knew it, and that he informed Dick-
inson of it. Now, stopping there, the ques-
tion wJiich arises is this: If an offer has
been made for the sale of property, and be-
fore that offer is accepted the person who
has made the offer enters into a binding
agreement to sell the property to somebody
olse. and the person to whom the offer was
lirst made receives notice in s59, are sufficient to entitle plaintiff to
a conveyance as demanded. No tender of
money or demand for a deed was made
during the 10 days limited in the original
instrument; but were made during the
period defined in the extension indorsed on
the instrument.
A. C. Botkin, for appellant. McCutebeon
& Mclntire, for respondent.
DE WITT, J., (after stating the facts a«
above.) For convenience of terms we will
designate the oi'iginal document pleaded as
the first instrument, and the option therein
as the first option, and the indorsement ex-
tending the time as the second instrument
and option. We will not discuss the validity
of the first instrument as a foundation for
an action for specific performance. We will
assume, for the purpose of this decision,
that it is good. The option assumed to
be granted therein was not exercised with-
in the time limited, and expired October 4.
The consideration for this option was one
dollar, whether paid b.y Ide to Leiser, or
still a debt owing from Ide to Leiser, is
immaterial. That consideration was ex-
hausted by the expiration of the option on
October 4. Ide paid his money, the one
dollar, and received his g(H")ds, tiie option.
Leiser took the one dollar, and deliveied
a consideration therefor, viz., the option.
The transaction was complete, and the
terms performed by each party to the
agreement.
OFFER AND ACCEPTAXCE.
We come to the second instrument :ind
option. No consideration is named there-
in, specifically or by reference. The con-
sideration for the first option cannot do
service for the second. That considera-
tion was functus officio in the first instru-
ment. A consideration determined by the
parties to be the consideration for the sale
of one article on one day, and so declared
in writing, cannot, in the face of such de-
claration, be construed by the court as a
declaration for the sale of another article
on another day. The first 10 days' oi)tion
was a thingof value, and paid for as such.
The second was another separate valuable
article. Was there any consideration for
its sale? We believe the same definitions
and distinctions will aid this discussion.
There may be (1) a sale of lands; (2) an
agreement to sell lands; and (3) what is
popularly called an "option." The first is
the actual transferor title from grantor to
grantee by appropriate instrument of con-
veyance. The second is a contract to be
performed in the future, and if fulfilled re-
sults in a sale. It is a preliminary to a
sale, and is not the sale. Breaches, rescis-
sion, or release maj-^ occur by which the
(Contemplated sale never takes place.
The third, an option originally, is neither
a sale nor an agreement to sell. It is
simply a contract by which the owner of
property (real estate being the species we
are now discussing) agrees with another
person that he shall have the right to buy
his property, at a fixed price, within a time
certain. He does not sell his land ; he does
not then agree to sell it; but he does
then sell something, viz., the right or
privilege to buy at the election or option
of the other party. The second party
gets, in pr^senii, not lands, or an agree-
ment that he shall have lands, but he does
get something of value; that is, the right
to call for and receive lands if he elects.
The owner parts with his right to sell his
lands, except to the second party, for a
limited period. The second party receives
this right, or rather, from his point of
view, he receives the right to elect to buy.
That which the uecond party receives is
of value, and in times of rapid inflations
of prices, perhaps of great value. A con-
tract must be supported by a considera-
tion, whether it be the actual sale oi
lands, an agreement to sell lands, or the
actual sale of the right to demand the
conveyance of lands. A present convey-
ance of lands is an executed contract. An
agreement to sell is an executory contract.
The sale of an option is an executed con-
tract; that is to say, the lands are not
sold; the contract is not executed as to
them; but the option is as completely
sold and transferred in pnesenti as a piece
of personal property instantly delivered
on payment of the price. Now this op-
tion, this article (if value and of commerce,
must have a consideration to support its
sale. As it is distinct from a sale of lands,
or an agreement to sell lands, so its con-
sidei-ation must be distinct; although, if
a sale of the lands afterwards follows the
option, the consideration for the option
may be agreed to be applied, and often is,
as apart payment on the price of the land.
But there must be some consideration
IIEVOCATIOX OF OFFER OR ACCEPTANCE.
83
upon which the finger may be placed, and
of whicli it may be saicl, "This was f?ivqn
by tlie proposed vendee to the proposed
vtMulor of the lands as the iirice for liie
option, or privilege to ])nrehase. " We
have been led into this endeavor to make
clear our views of these distinctions, l)e-
cause, in the argument, counsel did not
seem to give them »s much weight as they
seem to us to demand. We refer to the
following authorities: Gordon v. Darnell,
5Colo. ;!tJL'; Bradford v. Foster, 87 Tenn.
4, S. \V. Kep. 11).'); Railroad Co. v. Bart-
lett, 3 Cush. 224; Bean v. Burbank, 16 Me.
45S; De Rutte v. Muldrovv, ]6 Cal. fjO.");
Johnston v. Trippe, ;13 Fed. Rep. 5:10;
Thomason v. Dill, :K) Ala. 444; Mers v. In-
surance Co., 6s Mo, ll!7; Thorne v. Deas,
4 .Johns. H4; Burnet v. Biscoe, Id. li^.j;
Lees v. Whitoomb, o Bing. 'M; Bish. Cout.
§<^ 77,78; McDonald v. ]5eAvick, 51 Mich.
7'J, 16 N. \V. Rep. 240; Schroeder v. Ge-
meinder, 10Nev.o.")6; Woodruff v. Woodruff,
44 N. J. Kq. 055, IB Atl. Rep. 4; Perkins v.
Hadsell, 50 111. 216; AVat. Sj-ec Perf. § 200.
Examine the two options granted in the
case before us. L. sold I. an option for 10
days from September 24th for one dollar.
He' then gives an option for another 10
days from October 3d, for what? For
noVliing. L. transfers this option, this in-
corporeal valuable something, for noth-
ing. The transfer of the option was nu-
dum pactum, and void. But. the point
jnst discussed being conceded, ai)pellant
still contends that this second instrument
ov option was a continuing offer to sell,
at a given price, and was accepted by re-
spondent before retracted, and that such
acceptance, evidenced by, and accompanied
with, the tender of the price, and demand
for a deed, constitute an agreement to sell
land, which n^ay be enforced in equity.
We leave behind now our views of op-
tions, and consideration therefor, and
meet a wholly different proposition.
Reading the two instruments together
we find that on October 3d L. extended to
I. an offer to sell his lands at the price of
.i!!l,000. There was no consideration for
the offer, and it could have been nullilied
by L. at any time by withdrawal. But it
was accepted by I., while outstanding,
the price tendered, and deed demanded.
It must be plain from the previous discus-
sion that we do not hold that the offer,
when made, or at any moment before ac-
ceptance, was a sale of lands, an agree-
ment to sell lands, or an option. But ui)-
on acceptance and tender was not a con-
tract completed? If one person offers to
another to sell his property' for a named
price, and while the offer is unretracted
the other accepts, tenders the money, and
demands the property, that is a sale. The
l)roposition is elementary. The prt^perty
belongs to the vendee, and the money to
the vendor. Such is precisely the situ-
ation of the parties herein. L. offered to
sell for .?1.000, I. accepted, tendered the
price, and demanded the property. Every
element of a contract was present, jiarties,
subject-matter, consideration, meeting of
the minds, and mutuality. And as to the
matter of mutuality we are now beyond
the defective option. We have simi)!y an
offer at a price, acceptance, iiaymeut or
tender, and demand. That this was a
valid contract we cannot for a moment
doubt. In discussing a transaction of
this nature, in Gordon v. Darnell, 5 Colo.
304, BiccK, C. J., in one of his clear opin-
ions, says: "Its legal effect is that of a
continuing offer to sell, which is capable
of being converted into a valid contract
b3' a tender of the purchase money, oj- per-
formance of its c(jnditiged
in the complaint. The complaint alleges
that the defendant was the owner on Sep-
tember 24th, when he executed the writ-
ing. He has never withdrawn his offer to
sell. The offer ripened into a contract Oc-
tober 11th. The complaint was filed the
same day. If a person, having executed
a contract forthe sale of lands, knowingly
executes any other agreement to sell or
dispose of the same lands to another per-
son, he is guiltj' of a felony. Section 200,
Crim. Laws. 5lust the complaint allege
that defendant has not committed a fel-
ony? If defendant has parted with the
land ad interim it is a fact peculiarly with
in his own knowledge; knowledge whict
it may well be impossible to come to the
plaintiff. "It must be that in an action
of this kind the complaint must make
a case in which the defendant is at
least prima facie able to perform." Jo-
seph V. Holt, 37 Cal. 256; Elliott, C.
J., in Cottrell v. Cottrell, 81 Ind. 8^,
says: "The princii)al objection urged
against it [the complaint] is that the first
paragraph does not allege that the ances-
tor of the appellants had any title to the
property, which it is alleged he agreed t«
convey, and is therefore bad. There are
facts stated which show title in the de-
cedent. » » * If the appellee is con-
tent with such title as a conveyance from
the heirs of the deceased vendor will con-
vey, the appellants should not be allowed
to prevent him from securing it. The an-
cestor had bai-gained away all the title he
had, and, whether that was much or little,
the appellee's contract vested in him the
right to have that for which he had con-
tracted. It cannot be of importance to
appellants whether that title was perfect
or imperfect, for the appellee has a right
to it, whatever its character may be. If
he is satisfied, they cannot complain, for it
never descended to them, but had vested
in the appellee prior to the death of their
ancestor. "
In the case before us the plaintiff could
preserve the status in quo against inno-
cent purchasers from the defendant, by fil-
ing a notice of lis pendens. It is not neces-
sary to say what might be our views
upon the question of the inability of the
defendant to perform on the api^earance
of further facts at the hearing. We are of
the opinion under all the circumstances of
this case that the comi)laint shows a
prima facie case, as to this point, and that
the demurrer in this behalf should be over-
ruled. These views seem to us to be the
exercise of a sound discretion. Schrocder
V. Gemeinder, 10 Kev. 3G9; Poul Eq. .lur.
§§ SGO, 1404. The judgment of the district
court is reversed, and the cause is i-emand-
ed, with directions to that court to over-
rule the demurrer.
BLAKE, C. J., and HARWOOD, J., con-
cur.
LATSE OF OFFER.
85
fr. f LONGWORTH ct al. v. MITCHELL.!
\ r (26 Ohio St. 334.)
Supreme Court of Ohio. Dec. Term, 1875.
Ou the 1st of August, 1857, Nicholas Long-
worth, the testator, being seised in fee of
the uudivided half of a lot iu city of Cin-
ciuuati, by his deed of that date leased tOie
entire lot to the defendant, Mitchell, for the
term of fourteen years, reserving an annual
rent of fifteen dollars per "front foot" for
the lii-st seven years; of eighteen dollars per
front foot for the last seven years. The
lease contained a covenant for quiet enjoy-
ment, and Mitchell believed at the time of
its execution that Lougworth was the owner
of the entire lot. The lease also contained
a provision that Mitchell might elect to be-
come the pui'chaser of the lot, and have a
general wari*antj' deed therefor, at any time
within the first seven years, at the rate of
$2.">0 per front foot, or at any time within the
last seven years, at the rate of $300 per front
foot, with interest from the date of the
lease, and that, in case of such election, the
ground rent paid should be deducted from
the interest
Just before the close of the first seven
years, Mitchell elected to become the pur-
chaser of the lot, and tendered to the execu-
tors of Longworth the stipulated $2o0 per
front foot, togetlier with some $400 of ground
rent then due, and demiuided a deed for the
lot, the executors being authorized and re-
quired by the will of the testator to execute
and fulfil all his real estate contracts. The
tender was made in United States treasuiy
notes, and the executoi-s refused to make a
deed, but made no objection to the kind of
money tendered, placing their refusal on oth-
er grounds; and the case below was an ac-
tion brought by Mitchell against the execu-
toi-s to compel a specific execution of the con-
tract by conveyance of the lot agreeably to
the stipulations of the lease.
To this action the executors set up three
several grounds of defense:
(1) That the testator owned only a moiety
of the lot, and the contract could not the-e-
fore be specifically executed.
(2) That the tender should have been made
in gold, the contract having been made prior
to the passage of the legal tender act.
(3) That prior to the making of tlie ten-
der, the executors being in negotiation with
the Cincinnati and Indiana Railroad Com-
pany for the sale of the lot to that company,
Mitchell, who was aware of said negotiation,
agreed with the executors that he would sur-
render his lease to them if they would pay
him .*?2.000 and receipt for tlie rent due. and
gave them two weeks in which to accept and
comply with the offer; that the executors,
relying upon the faith of said agreement or
offer, verbally contracted to sell the lot to
the railroad company, and within said peri-
1 Irrelevant parts omitted.
od of two weeks, to wit, on the 29th of May,
1SG4, accepted said offer, and demanded of
Mitchell a surrender of his lease, tendering
him at the same time said sum of .^2,0 JU and
a receipt fur the rent; but that Mitchell re-
fused to accipt the tender, or to surrender
the lease; and the executors say that they
have since conveyed all their interest in the
lot to said railroad company, in pursuance
of their said verbal contract with the com-
pany.
Mitchell replied, denying that he ever made
"any agreement" with the executors to sur-
rend'^u* the lease, and alleging that his "offer"
to do so was obtained by misrepreseutatioua
as to the value of the lot, and the price
which the railroad company were to pay
therefor.
Subsequently, the railroad company, and
also the heirs of Nicholas Longworth, were
made parties defendant, and the company
filed an answer, insisting that the company
was a bona fide i)urchaser without notice of
Mitchell's alleged rights.
At the hearing, it was proven that Mitch-
ell, at the time of these negotiations, was in
possession of the lot. The fact that Mitch-
ell made the offer to surrender the lease, on
the terms set up in the answer of the exec-
utors, and that they accepted the offer, and
offered to comply therewith on the said 2'Jih
of May, was also provcA, or admitted; but
there was a conflict of evidence as to wheth-
er this acceptance and offer by the execu-
tors was made within the two weeks al-
lowed. The court found that the offer was
made on the 13th of May, sixteen days be-
fore it was accepted by the executors, and
thereupon rendered a judgment in favor of
Mitchell, ordering a specific execution of the
contract as to one moiety of the lot, with a
release of title by tlie railroad company, and
a compensation in money by the executors
for the value of the other moiety. The rec-
ord sets forth aU the evidence in the case,
and shows that a motion for a new trial was
made by the plaintiff's in error, and over-
ruled by the court
The plaintiffs in error now seek to reverse
the judgment of the superior court assi.irn-
ing the following as grounds of error:
(1) The finding of the court that the offer
of Mitchell wps not accepted by the execu-
tors within the two weeks allowed is con-
trary to the evidence.
(2) The time allowed for acceptance of the
offer was not material, and its acceptance
two days after the expiration of the two
weeks was sufficient
Hoadly, Johnson & Colston, for plaintiffs
in error. Lincoln, Smith & Stephens, for de-
fendant in error.
WELCH, C. J. A5 to tlie question wheth-
er the finding of the court that the offer of
Mitcliell was not accepted within the two
weeks is supported by the evidence, it need
OFFER A^'D ACCEPTANCE.
86
only be said that a majority of us c^^J^t an-
swer the question in the negative with that
^rtaintv which would justify us in revers-
ing the judgment and granting a new trial.
Nor do we think that the ground assumed
bv counsel for the plaintiffs in error that
time was not of the essence of Mitchell s of-
fer is maintainable. The rule frequently
adopted in a court of equity that time is not
of the essence of a contract does not apply,
a^ we understand tlie law, to a mere ofter
to make a contract. The offer rests upon no
consideration, and may be withdrawn at any
time before acceptance. An offer without
time given for its acceptance must be ac-
cepted immediately, or not at all; and a lim-
itation of time for which a standing offer is
to run is equivalent to the withdrawal of
the offer at the end of the time named. A
standing offer is in the nature of a favor
granted to the opposite party, and cannot on
any just principle be made available after
the time limited has expired.
LAPSE OF OFFER.
87
^
MINNESOTA LINSEED OIL CO. ▼. COL-
LIER WHITE LEAD CO. ^
(Fed. Cas. No. 9.G35.) ^^'^I,
Circuit Court, D. Minnesota. 18
176. ^1
This action was removed from the state
court and a trial bj' jury waived. The plain-
tiff seeks to recover the sum of !?12, 151.50, with
Interest from September 20, 1875— a balance
claimed to be due for oil sold to the defend-
ant. The defendant, in its answer, alleges
that on August 3d, 1875, a contract was
entered into between the parties, whereby
the plaintiff agreed to soli and deliver to
the flofenclant, at the city of St. Louis, dur-
ing the said month of August, twelve thou-
sand four hundred and fifty (12,450) gallons
of linseed oil for the price of fifty-eight (58)
cents per gallon, and that the plaintiff has
neglected and refused to deliver the oil ac-
cording to the contract; that the market
value of oil after August 3d and during the
month was not less than seventy (70) cents
per gallon, and therefore claims a set-off or
counter-claim to plaintiff's cause of action.
The reply of the plaintiff denies that any
contract was entered into between it and de-
fendant.
The plaintiff resided at Minneapolis, Min-
nesota, and the defendant was the resident
agent of the plaintiff, at St Louis, Missouri.
The contract is alleged to have been made
by telegraph.
The plaintiff sent the following dispatch to
the defendant: "Minneapolis, July 29, 1875.
To Alex. Easton, Secretary Collier White
Load Company, St. Louis, Missouri: Ac-
count of sales not enclosed in yours of 27th.
Please wire us best offer for round lot named
by you — one hundred barrels shipped. Min-
nesota Linseed Oil Company."
The following answer was received: "St.
Louis, Mo., July 30, 1875. To the Minne-
sota Linseed Oil Company: Three hundred
barrels fifty-five cents here, thirty days, no
commission, August delivery. Answer. Col-
lier Company."
The following reply was returned: "Minne-
apolis, July 31, 1875. Will accept fifty-eight
cents (5Sc), on terms named in your tele-
gram. Minnesota Linseed Oil Company."
This dispatch was transmitted Saturday,
July 31, 1875, at 9:15 p. m., and was not de-
livered to the defendant in St. Louis, until
Monday mornim,', August 2, between eight
and nine o'clock.
On Tuesday, August 3, at 8:53 a. m., the
following dispatch was deposited for trans-
mission in the telegraph ofhce: "St. Louis,
Mo., August 3, 1875. To Minnesota Linseed
Oil Company, Minneapolis: Offer accepted —
ship three hundred barrels as soon as pos-
sible. Collier Company."
The following telegrams passed between the
parties after the last one was deposited in
the office at St. Louis: "Minneapolis, August
3, 1875. To Collier Company, St. Louis: We
must withdraw our offer wired July 31st.
Minnesota Lin-fcd Oil Company."
Answered: "St Louis, August 3, 1875.
Minnesota Linseed Oil Company: Sale effect-
ed before your refpiest to withdraw was re-
ceived. When will you ship? Collier Com-
pany."
It ai)poarcd that the market was very much
unsettled, and that the price of oil was sub-
ject to sudden fluctuations during the mouth
previous and at the time of this negotiation,
varying from day to day, and ranging be-
tween fifty-five and seventy -five cents per
gallon. It Is urged by the defendant that
the dispatch of Tuesday, August 3(1. 1875,
accepting the offer of the plaintiff transmit-
ted July 31st, and delivered Monday morn-
ing, August 2d, concluded a contract for the
sale of the twelve thousand four hundred
and fifty gallons of oil. The plaintiff, on the
con'.rary, claims, 1st, that the dispatch ac-
cepting the proposition made July 31st, waa
not received until after the offer had been
withdrawn; 2d, that the acceptance of the
offer was not in due time; that the delay was
unreasonable, and therefore no contract waa
completed.
Young & Newel, for plaintiff.
Geo. L. & Chas. E. Otis, for defendant.
NELSON, District Judge. It is well set-
tled by the authorities in this country, and
sustained by the later English decisions, that
there is no difference in the rules governing
the negotiation of contracts by corespond-
ence through the post-office and by telegraph,
and a contract is concluded when an ac-
ceptance of a proposition is deposited in the
telegraph office for transmission. See 14 Am.
Law Reg. 401, "Contracts by Telegraph," arti-
cle by Judge Redfield, and authorities cited;
also, Trevor v. Wood, 3G N. Y. 307.
The reason for this rule is well stated in
Adams v. Lindsell, 1 Bam. & Aid. GSl. The
negotiatirvn in that case was by post The
court saia: "That if a bargain could not be
closed by letter before the answer was re-
ceived, no contract could be completed
through the medium of the post-office; that
If the one party was not bound by his offer
when it was accepted (that is, at the time
the letter of acceptance is deposited in the
mail), then the other party ought not to be
bound until after they had received a notifi-
cation that the answer had been received and
assented to, and that so it might go on ad
infinitum." See, also. 5 Pa. St. 330; 11 N.
Y. 441; Mactier v. Frith, 6 Wend. 103; 48
N. H. 14; 8 C. B. 225. In the case at bar the
delivery of the message at the telegraph of-
fice signified the acceptance of the offer. If
any contract was entered into, the meeting
of minds was at 8:53 of the clock, on Tues-
' day morning, August od. and the subsequent
dispatches are out of the case. 1 Pars. Cont
482. 483.
This rule is not strenuously dissented from
88
OFFER AND ACCEPTANCE.
on the argument, and it is substantially ad-
mitted that the acceptance of an offer by
letter or by telegraph completes the contract,
•when such acceptance is put in the proper
and usual way of being communicated by the
agency employed to carry it; and that when
an offer is made by telegraph, an acceptance
by telegraph takes effect when the dispatch
containing the acceptance is deposited for
transmission in the telegraph ofhce, and not
when it is received by the other party. Con-
ceding this, there remains only one question
to decide, which will determine the issues:
Was the acceptance of defendant deposit-
ed in the telegraph office Tuesday, August
3d, within a reasonable time, so as to con-
summate a conti'act binding upon the plain-
tiff?
It is undoubtedly the rule that when a
proposition is made under the circumstances
In this case, an acceptance conclu(Ees the con-
tract if the offer is still open, and the mu-
tual consent necessary to convert the offer
of one party into a binding contract by the
acceptance of the other is established, if
such acceptance is within a reasonable time
after the offer was received.
The better opinion is, that what is, or is
not. a reasonable time, must depend upon the
circumstances attending the negotiation, and
the character of the subject matter of the
contract, and In no better way can the in-
tention rf the parties be determined. If the
negotiation is in respect to an article stable
in price, there is not so much reason for an
immediate acceptance of the offer, and the
same rule would not apply as in a case where
tlie negotiation related to an article subject
to sudden and great fluctuations in the mar-
ket.
The rule in regard to the length of the time
an offer shall continue, and when an accept-
ance completes the contract, is laid down in
Parsons on Contracts (volume 1, p. 482). He
says: "It may be said that whether the offer
be made for a time certain or not, the in-
tention or understanding of the parties is to
govern. * * * If no definite time is stated,
then the inquiry as to a reasonable time re-
solves itself into an inqtiiry as to what time
it is rational to suppose the parties contem-
plated; and the law will decide this to be
that time which as rational men they ought
to have understood each other to have had
in mind." Applying this nile, it seems clear
that the intention of the plaintiff, in making
the offer by telegraph, to seU an article which
fluctuates so much in price, must have been
upon the understanding that the acceptance.
If at all, should be immediate, and as soon
after the receipt of the offer as would give a
fair opportunity for consideratiort The de-
lay here was too long, and manifestly unjust
to the plaintiff, for it afforded the defendant
an opportunity to take advantage of a change
in the market, and accept or refuse the offer
as would best subsei-ve its interests.
I Judgment will be entered in favor of the
i plaintiff for the amount claimed. The eoun-
i ter-claim is denied. Judgment accordingly.
LAPSE OF OFFER.
89
/ HYDE V. WRENCH.
0.^ (3 Beav. 334.)
9 Rolls Court. Dec. 8. 1840.
This case came en upon general deranrrer
to a bill for specific performance, which
stated to the effect following:
The defendant being desirous of disposing
of an estate, offered, by his agent, to sell it
to the plaintiff for £1200, which the plaintiff,
by his agent, declined; and on the Gth of
June the defendant wrote to his agent as
follows: "I have to notice the refusal of
your friend to give me £1200 for my farm.
I will only make one more offer, which I
shall not alter from; that is, £1000 lodged in
the bank until Michaelmas, when title shall
be made clear of expenses, land tax,
CONTRACTUAL INTEXTION.
6
93
f
STAMPER V. TEMPLE et al
(6 Humph. 113.)
Supreme Court of Tennessee. Doc Term, 1845.
This i.s an action of as.sumpsit brought in
the county of Franklin. The declaration
avers that defendant eharj^ed that G. B. and
A. D. Alexander had murdered his son, D.
M. Stamper; that he promised that if any
person should arrest the said G. B. and A. D.
Alexander, so that they should be brought to
justice, he would pay to such person two
hundred doUai-s; and that plaintiffs, after
said promise, and confiding in the .same, did
arrest them and commit them to the custody
of the sheriff of the county.
The defendant pleaded non assumpsit, and
the case came on for ti'ial, and was tried by
Judge Marchbanks and a jury, and a verdict
and judgment were rendered for the plain-
tiffs for $200. The defendant appealed.
Mr. Turney, for plaintiff in error. Mr.
Venable, for defendants in error.
TUIILEY, J. This is an action brought by
Lassater and Temple against Stamper to re-
cover the sum of two hundred dollars, which
they allege is due to them as a reward for
arresting Granville B. and Alfred D. Alex-
ander, charged with murdering the son of
Stamper.
The bill of exceptions discloses the follow-
ing state of facts:
Some time in the month of September, 1S43,
the sou of Stamper was killed, and himself
severely wounded by the two Alexanders.
On the evening after the unfortunate affi'ay
there were several persons at Stamper's house.
He was lying on a bed, laboring under great
bodily pain from his wounds, and great men-
tal anguish for the loss of his son, who was
at the time a corpse in his house, his wife
and daughters half distracted. The subject
of arresting the Alexanders was spoken of.
Stamper said that he did not expect they
would be taken that night; that he would put
out a reward ahead of them; that he got up
and went into the yard, where most of the
company were assembled, and observed that
he would give a reward of two hundred dol-
lars to any person who would apprehend the
Alexanders. To this remark one of the coyi-
pany observed, "Mr. Stamper, I don't want
your money;" to which Stamper replied,
"Gentlemen, I did not mean it for you."
This is all the proof as to the reward for the
arrest being offered by Stamper.
.Joseph iS'ewman, the sheriff of the county,
deposes that on the evening of a day in Sep-
tember, 1843, he received a message from
Stamper informing him that his son had
been murdered and himself severely wound-
ed, and requesting him to come immediately
to his house. Witness having just returned
from Nashville, and being much fatigued, de-
clined going, but sent his deputy Jonathan
I>assater, one of the plaintiffs, who. on ihe
next morning, delivered to him the bodies of
the two Alexanders, whom he had arrested
without process.
This was all ♦^he testimony in the case. The
court charged the jury, "that to entitle the
plaintiffs to recover against the defendant, he
must have made hinuself liable to them by
contract. If the Alexanders murdered his
son and fled, and were arrested by the plain-
tiffs, the defendant, In the absence of a con-
tract to that ef-^ct, would not be bound to
pay them any reward. If the Alexanders
killed defendant's son and fled, and upon that
defendant offered a reward of two hundred
dollars to any person who would arrest them,
saying at the sam? time that he did not make
his proposition to any person who was pres-
ent, and the plaintiffs were present, they
would not bfc entitled to a recovery; that if
the defendant offered a reward of two hun-
dred dollars to any person who would arrest
the Alexanders, and the phiintiffs after the
offering the reward by the defendant, but be-
fore they knew tliat it had been offered, ar-
rested the Alexanders for the murder, the
fact that they were at the time ignorant that
the reward had been offered would be no
ground of defence against a suit brought for
its recovery."
In this charge, the whole court agree that
there is error. The judge in the first place
charged the jury that there must be a con-
tract of reward to be paid before a suit could
be maintained for the recovery of the reward.
To make a good contract there must be an
aggregatio mentium, an agreement on the one
part to give and on the other to receive. How
could there be such an agreement if the plain-
tiffs in this case made the arrest in ignorance
that a reward had been offered? The arrest
would have been made not for the reward,
but in discharge of the public duty.
But there are other objections arising out
of the proof of higher character than this er-
ror in the charge of the judge.
We do not think that the proof establishes
the fact that a reward of two hundred dol-
lars was actually offered.
It appears that the defendant and his fam-
ily were in deep aflliction at the loss of his
son; that he himself was laboring under the
effect of severe wounds received from the
same persons who had killed his son; that
when the arresting of the persons who had
perpetrated the outrage was spoken of he ob-
served that he would givt two hundred dol-
lars to have them arrested. But to a remark
of one of the company that he did not want
any of his money, he said he did not intend
it for them. Who did he intend it for then?
For others who were not present? How did
he suppose they were to know it? He made
no public offer. He authorized no one to
make it for him. We are constrained to be-
lieve that what is called an offered reward
of two hundred dollars was nothing but a
strong expression of his feelings of anxiety
for the arrest of those who had so severely
injured him, and this greatly increased by the
94
distracteer's services. The other swore
that she had been 11 years in the employ-
ment business in Chicago, and was acquaint-
ed with the wages of housekeepers during
that time. A sufficient foundation was laid
to justify the expression of an opinion by
each witness as to the value of the services
rendered by appellee.
2. Objection is made to two instructions
given for the plaintiff, and to the modifica-
tion of two instructions asked by the defend-
ant, and to the refusal of one instruction
asked by the defendant As to the latter, its
substance is sufficiently embodied in the in-
structions given, and therefore no injury
was done by its refusal. All the points
urged against the instmctions given and the
instructions modified may be summed up in
one objection, — that those instructions au-
thorize the jury to find whether there was a
contract, express or implied, to pay for ap-
pellee's services. It is claimed that no re-
covery could be had by the plaintiff unless
there was an express conti-aet by the appel-
lant to pay her for her services, and that, if
there was no express contract, none could be
implied from the facts or circumstances.
Where services are rendered by one admit-
ted into the family as a relative, the pro-
sumption of law is that such sersMces are
gratuitous, and that the parties do not con-
template the payment of wages therefor.
This presumption, however, may be over-
come by proof. The proof necessary to over-
come the presumption may be either of an
express contract or of a contract established
by such facts and circumstances as show
that both parties, at the time the services
were rendered, contemplated or intended pe-
cuniary recompense other than that which
arises naturally out of the family relation.
96
OFFER AND ACCEPTANCE.
Miller v. Miller, IG 111. 296. A contract is
express "when it consists of words written
or spoken, expressing an actual agreement
of the parties." It is implied "when it is
evidenced by conduct manifesting an inten-
tion of agreement." 3 Am. & Eng. Enc.
Law, p. 842. Anderson, in his Law Diction-
aiy. says that a contract is express "when
the agreement is formal, and stated either
verbally or in writing, and is implied when
the agreement is matter of inference and de-
duction." In Ex parte Ford, 16 Q. B. Div.
307, it was said that "whenever circumstan-
ces arise in the ordinary business of life in
which, if two persons were ordinarily honest
and careful, the one of them would make a
promise to the other, it may properly be
infeiTed that both of them understood that
such a promise was given and accepted."
In Marzetti v. Williams, 1 Bam. & Adol. 415,
Lord Tenterden said: "The only difference
between an express and an implied contract
is in the mode of substantiating it. An ex-
press contract is proved by an actual agree-
ment; an implied contract, by circumstan-
ces, and the general course of dealing be-
tween the parties." In the same case Parke,
J., said: "The only difference, however, be-
tween an express and an implied contract is
as to the mode of proof. An express con-
tract is proved by direct evidence, an implied
contract by cii'cumstantial evidence." And
Patterson, J., said: "Bt.t the only distinc-
tion between the two species of conti-acts is
as to the mode of proof. The one is proved
by the express words used by the parties;
the other, by circumstances showing that
the parties intended to contract." An agree-
ment may be said to be implied when it is
inferred from the acts or conduct of the
parties, instead of their spoken words. "The
engagement is signified by conduct, instead
of words." Bixby v. Moor, 51 N. H. 402.
This question has been before the supreme
court of Wisconsin in a number of cases. In
Hall v. Finch, 29 Wis. 278, where the plain-
tiff presented a claim against the estate of
her deceased brother for the value of her
services as hoasekeeper during several years
while she resided in his house, acting and
ti'eated as the mistress thereof, the coxirt,
after stating the general rule that the rela-
tion existing between the parties, as parent
and child, stepparent and stepchild, brother
and sister, and the like, raises a presumption
that no payment or compensation was to be
made beyond that received by the claimant
at the time, holds that this presumption can
only be overcome by clear and unequivocal
proof to the contrary; that the evidence must
be clear, direct, and positive that the relation
between the parties was that of debtor and
creditor; that the party seeking to recover
compensation for services rendered under
euch circumstances must show an "agree-
ment or understanding that they were to be
paid for." And the court there uses the fol-
lowing language: "In regard to such agree-
ment or understanding, it is manifest from'
the nature of the case that it can in general
be arrived at only by express stipulation be-
tween the parties, and accordingly we find
the best considered authorities holding that
an express contract must be shown." Then
follows a review of quite a number of author-
ities, mostly Pennsylvania decisions, two of
which (Hai-tman's Appeal, 3 Grant's Gas. 271,
and Lynn v. Lynn, 29 Pa. St. 3G9) hold that
there can be no recoveiy for services in such
cases without proof of an express conti-act
In Pcllage v. Pellage, 32 Wis. 130, where the
action was by a son against his father for
services rendered to the latter by the former
after he became of age, it was held that,
where such a relation of' kindred exists, the
law will imply no promise on the part of the
father to pay for the services of the son, the
presumption being that he rendered them
gratuitously, or in consideration of having a
home with his father, and being furnished
with board and clothing and care and atten-
tion in sickness; that the son cannot recover
for his services in such a case without show-
ing that a contract existed between him and
his father by which the latter agreed to pay
for such services; that the proof of such con-
tract is not to be placed upon the same
grounds as a contract between strangers, un-
affected by any personal relation; that the
evidence of the contract must be positive and
direct; that the contract cannot bo inferred
from circumstances and probabilities; and
that "there should be evidence which would
warrant a jury in finding that there was an
express contract or agreement to that effect."
In Tyler v. Burrington, 39 Wis. 376, where
the plaintiff, having been received in infancy
into a family not of kin to her, sought to re-
cover for services rendered to such family,
the doctrine of the Hall and Pellage Cases
seems to be somewhat modified, it being held
that "an express contract to pay, or the rela-
tion of master and servant, may be as fairly
and incontrovertibly established by circum-
stantial evidence as by direct evidence"; that
the mere fact of plaintiff's reception in her in-
fancy into the family of the deceased implied
no contract to pay her for any services she
might render to it, "though such a contract
might be implied from the surrounding cir-
cumstances"; "that, if it appeared expressly
or from the surrounding circumstances that
she was so received in the relation of a child,
the law excludes an implied contract to pay
her wages for her services; but that she
could recover upon an express contract to pay
her, which might be established by direct and
positive evidence, or by circumstantial evi-
dence equivalent to direct and positive"; that,
failing to prove an express contract, "it rest-
ed with her to establish an implied contract
by the surrounding circumstances"; that
"mere expectation on his part to pay, and on
her part to receive, wages, would not consti-
tute an express contract, unless, by mutual
expression of the expectation, it became con-
CONTRACTUAL INTENTION.
97
sensual"; that "expectation looks rather to
an implied tlian an express contract"; and
that, "if established by competent evidence as
entering into the res gestaj, such expectations
of these parties might give color to circum-
stances tending to show that they ripened
Into a mutual understanding,— an express "con-
tract." In Wells V. Perkins, 43 Wis. IGO,
whore a stepson sued his stepfatlier for serv-
ices rendered the latter after the plaintiff
reached his majority, an instimction was con-
demned because it was open to the objection
"of confounding circumstances from which a
contract might be implied with circumstan-
tial evidence of an express cttntract"; and it
was held that the law excludes an implied
contract, and that the plaintiff could only re-
cover upon an express contract, which "might
bo established by direct and positive evidence,
or by circumstantial evidence equivalent to
direct and positive," It will be noticed that
the cases in Wisconsin differ from the Eng-
lish cases in holding tliat an express contract
may be established by circumstantial evi-
dence.
In Ayers r. Hull, 5 Kan. 419, It was held
that where the sister resides in the family of
her brother, performing the ordinary services
of a housekeeper, and receiving clothing and
the benefit of a house for nearly eight years,
without keeping any account, and witiiout
any promise or contract or understanding that
she should receive wages, the law will not
imply a contract for services rendered, nor
hold the brothei-'s estate chargeable with a
claim made for such services for the first
time after the death of the brother. See, also,
Williams v. Hutchinson, 3 N. Y. 319, 5 Barb.
128. In Mills v. Joiner, 20 Fla. 479, where a
daughter of full age brought suit against her
father for services while li>ing with him at
his house and as one of his family, it was
held to be a presumption of law that he was
not bound to pay her, but that "tliis presump-
tion may be overcome by proof of a special
contract, express promise, or an implied prom-
ise, and such implied promise or undersUind-
ing may be inferred from the facts and cir-
cumstances shown in evidence; and that "the
jury should have been furtlier instructed that
if, under all the eircumstiinces of tlie case,
the services were of such a nature as to lead
to a reasonable belief that it was the under-
standing of the parties that compensation
should be made for such services, then the
jury should find an implied promise." In
Scully V. Scully, 28 Iowa, 548, where a sis«
ter filed a claim against the estate of her d»
ceased brother, a bachelor, for services in do
ing his housework while a member of his
family, It was said: "AVhere it is shown
that the person rendering the soi-vice is a
member of tlie family of the person served,
and receiving support therein, either as a
child, a relative, or a visitor, a presumption of
law arises that such services were gratuitous;
and in such case, before the person rendering
the service can recover, the express promise
HOPK. SEL. CAS. CONT. — 7
of the! party served must be shown, or such
facts or circumstances as will authorize the
jury to find that the services were rendered
in the expectation by one of receiving, and
by the other of making, compensation there-
for." In Smith v. Johnson, 4~} Iowa, 308, it
was held that no recovery can be had in such
cases where there is no express contract, and
"it is not shown in the record that the serv-
ices were i)erformed with the expectation 06
the part of either that they were to ba paid
for."
We are inclined to hold that an express
contract may be proved, not only by an
actual agreement, by direct evidence, by tha
express words used by the parties, but also
by circumstantial evidence; and that ao
implied contract may be proved by circnim-
stances showing that the parties intend-
ed to contract, and by general course of deal-
ing between them. In Miller v. Miller, su-
pra, an instruction was approved which
stated that it was "incumbent on the plain-
tiff to prove an express hiring or circum-
stances from which an express hiring
may be reasonably inferred," etc. And in
Brush V. Blanchard, 18 111. 4G, It was said:
"There is no evidence of an express contract
to pay for services, nor are there any facts
in evidence from whiclr such contract can be
implied." Similar langn.Tgo is also used in
Faloon v. Mclntyre, IIS IIL 2U2, 8 N. E.
315, and in Collar v. Patterson, 137 111. 403,
27 N. E. G04. The strict rule laid down in
the cases in Wisconsin and Pennsylvania has
its basis in the danger of fraud and perjury
by permitting any member of a family to
insist on a greater share of the property of
an estate than is given by the law, or by a
will, upon the ground that it is due for serv-
ices. The encouragement of claims for such
services is to destroy the peace and harmony
of families through the strife and contro-
versy resulting therefrom. The rule in this
state is stated in Miller y. Miller, supra,
where we said: "Where one remains with
a parent, or with a person standing in the
relation of parent after arriving at major-
ity, and remains in the same apparent rela-
tion as when a minor, the presumption is
that the parties do not contemplate pay-
ment of wages for services. This presump-
tion may be overthrown, and the reverse
establisliod, by proof of an express or im-
plied contract, and the implied contract may
be proven by facts and circumstances which
show that both parties, at the time the serv-
ices were performed, contemplated or intend-
ed pecuniary recompense other than such
as naturally arises out of the relation of
parent and child." This lan.guage was quot-
ed and approved in the recent case of Switzer
v. Kee, 146 111. 577, 35 N. E. 100. But. where
it is said that a contract to pay for such serv-
ices may bo implied. something more is meant
than the more promise to pay which the
law implies where one person does work for
another with the knowledge and approbatioa
ys
OFFER AND ACCEPTANCE.
of that other. The implied promise thus
raised by the law is rebutted when there is
shown such a relation between the pai-ties as
to exclude the inference that they were deal-
ing on the footii:!,' of a contract. Ayers v.
Hull, supra; 3 Am. & Eng. Enc. Law, p.
$61. The evidence must show that, when the
services were rendered, both i)arties expected
them to be paid for. Miller v. Miller, supra;
Byers v. Thompson, 66 111. 421; Fruitt v.
Anderson, 12 111. App. 421. The facts and
circumstances must be such as to show that,
at the time the services were rendered, the
one expected to receive payment and the
other to make payment. Fruitt v. Anderson,
supra.
If the expectation of each would not con-
stitute a contract unless there was an ex-
pression of that expectation, such criticism
would not apply here, because the jury were
instracted as follows: "If the jury believe
from the evidence that the defendant re-
quested the plaintiff to do the services in
question, and, by words or acts, knowingly
gave her to understand that she would be
paid for doing it, and that plaintiff, in com-
pliance with such request (if there was any),
did the work in question for the defendant,
then she is entitled to recover." "The re-
lationship existing between the parties, and
the fact that they and defendant's mother
lived together as a single household while
the work was being done for which this suit
is brought, will not bar a recovery in this
case if the jury believe from the evidence
that the defendant requested the plaintiff to
do the service in question, and promised to
pay her for it, or, by words or acts, know-
ingly led her to believe that she wotild be
paid for doing it." The jm-y were further in-
structed that, where voluntary services are
rendered by those sustaining family rela-
tions, the presumption of law is that the
parties do not contemplate payment or re-
ceipt of wages; and that where services are
rendered by those near of kin, or by those
sustaining family relations, the law will im-
ply no contract for compensation; and that,
unless a contract to pay is shown in such
case, no recovery can be had. It is true that
in instructions asked by the defendant, and
given for him, the jury were told that the
plaintiff could not recover unless she proved
by the preponderance of the evidence an
express contract to pay for her services; but
they were told, in another instruction, that
an express contract might be established
by circumstances and the conduct of the par-
ties, or by words in connection therewith;
and we do not think that the jury could have
been misled when all the instructions are
considered together as one charge, and in
view of the evidence heretofore and here-
inafter referred to. In Morton v. Rainey, 82
111. 215, plaintiff presented a claim for serv-
ices against the estate of his deceased uncle,
in whose family he had lived from the time
he was 11 years old until he reached his
majority, and during that time had labored
for the deceased, and received his board,
clothing, and medical attendance; and we
there said: "While appellee, during minor-
ity, was provided by the deceased with cloth-
ing, medical attendance, and all the neces-
saries furnished by a parent to a child, after
his majority he provided his own clothing,
paid for his own washing, and in fact re-
ceived nothing from the deceased except his
board. Under such circumstances, the pre-
sumption that appellee was working as he
did when a minor is removed, and the facts
are sufficient to establish an implied contract
on the part of the deceased to pay appellee
what his services were reasonably worth."
Such facts as were there held sufficient to es-
tablish an implied contract exist in the case
at bar. In addition, appellee swore that,
on three different occasions while she lived
in appellant's house, she talked with his
mother, in his presence, about her compen-
sation, and during these conversations he
said that he would pay her for her time. It
is true that he contradicted her in reference
to this matter, but it was for the jury to
pass upon the evidence. The facts are set-
tled by the judgment of the appellate com-t
so far as we are concerned. We find no error
in the record which, in our opinion, would
justify a reversal. The judgment of the ap-
pellate com't is affirmed. Affirmed.
COXTHACTUAL INTENTION.
99
n MOULTON v. KERSHAW et aj. d/|
J^f^ (18 W. W. 172, 59 Wis. 31G.) \Jl
I? Supreme Court of Wisconsin. Jan. 8. 1SS4.
\- Appeal from circuit court, Milwaukee coun-
ty.
Fiucbes, Lynde & Miller, for appellants.
Jenkins, Winkler & Smith, for respondent.
TAYLOR, J. The complaint of the respond-
ent alk'Ki'S that the appellants were dealers
in salt in the city of Milwaukee, including
salt of the Michigan Salt Association; tliat
the respondent was a dealer in salt in the
city of La Crosse, and accustomed to buy salt
in large quantities, which fact was known to
the appellants; that on the nineteenth daj-
of September, 1882, the appellants, at Milwau-
kee, wrote and posted to the respondent at
La Crosse a letter, of which the following is
a copy:
"Milwaukee, September 19, 1SS2.
"J. H. Moulton, Esq., La Crosse, Wis.—
Dear Sir: In consequence of a rupture in the
salt trade, we are authorized to offer Michi-
gan fine salt, in full car-load lots of SO to 95
bbls., delivered at your city, at S5c. per bbl.,
to be shipped per C. & N. W. R. R. Co. only.
At this price it is a bargain, as the price in
general remains unchanged. Shall be pleased
to receive your order.
"Yours truly. C. J. Kershaw -fc Son.';.
The balance of the compla*/!! reads as fol-
lows:
"And this plaintitT alleges, upon information
and belief, that sai8, Lord Chancellor Cranworth said:
"If parties have entered into an agreement,
they are not the less bound by that agree-
ment because they say, 'We sent it to a so-
licitor to have it reduced into form;' but when
the parties negotiate, and do not say so, the
mere fact that they do send it to a solicitor
to have the matter reduced into form affords
to my mind generallj^ cogent evidence that
they do not intend to bind themselves till it
is reduced into form." Lord Wensleydale
said: "I'hese cases often occur in courts of
law, and the question then always is whether
the parties mean to embody the contract
made by parol in writing. If they do, noth-
ing binds them till it is written. If they en-
ter into a contract with a view to a written
agreement nothing will bind them btit that
written agreement and that quite independ-
ently of the statute of fi-auds, applying to all
104
OFFER AND ACCEPTANCE.
agreements. * » * If the parties agree
finallv to be bound by auy terms, and then,
for the sake of preserving a memorial, hav-
ing agreed to the original terms, they get a
document drawn up, there is no doubt they
are boimd by the original terms." In Mor-
rill V. Mining Co., 10 Nev., at page 135, the
com-t declai-ed the genei*al rule to be tliat
where the parties enter into any general
agi-eement, and the undei-standing is tliat it
is to be reduced to writing, or, if it is al-
ready in a written form, that it is to be
signed before it is to be acted on or to take
effect, it is not binding until it is so written
or signed. In Methudy v. Ross, 10 Mo.
App. 106, the court said: "The mere fact that
a written contract was to be subsequently
prepared does not show that a final agree-
ment between the parties was not made, but
it tends to show it; and in this case we think
it clear that there was to be a more explicit
agi-eement, which was to be reduced to writ-
ing, that this was not done, and that there
was no meeting of minds." In Eads v. Ca-
rondelet, 42 Mo. 113, the plaintiff made to the
city of Carondelet a written proposition, con-
taining the terms on which he would build
gunboats in that city. The city council
passed an ordinance reciting the proposition,
and expressly accepting it as made, but, in
the second section of the ordinance, directed
and empowered the mayor to enter into a
written contract with the plaintiff, and em-
ploy counsel to draft the contract. The
plaintiff carried out his proposition, but the
city failed to perform any part. Held, that
the city was not boimd, as further formality
was contemplated. In. Commissioners v.
Brown, 32 N. J. Law, 504, Brown made a
proposition to the commissioners to do cer-
tain work in laying pipe. The commission-
ers accepted the proposition, and directed a
written contract to be prepai*ed. This was
done, but it was not signed. Held, that the
commissioners were not boimd. In this case,
however, the law provided that the contracts
of the water commissioners should be in
vsTiting. This fact showed conclusively that
a written contract must have been contem-
plated. In Congdon v. Darcy, 46 Vt. 478, the
negotiation was for building a dwelling
house by the plaintiff for the defendant
Everything was agreed upon, and it was also
agreed that the contract should be put in
writing if the defendant desired- The de-
fendant afterwards expressed such desire,
and a writing was prepared, embodying the
agreement, but the defendant refused to sign
it Held, there was no completed contract
From those expressions of courts and ju-
rists, it is quite clear that, after all, the ques-
tion is mainly one of intention. If the party
sought to be charged intended to close a con-
tract prior to the formal signing of a written
draft, or if he signified such an intention to
the other party, he will be bound by the con-
tract actually made, though the signing of
the written draft be omitted. If, on the oth-
er hand, such party neither had nor signified
such an intention to close the contract until
it was fully expressed in a written instru-
ment, and attested by signatiu'cs, then he
will not be bound until the signatures are
affixed. The expression of the idea may be
attempted in other words: If the written
draft is viewed by the parties merely as a
convenient memorial or record of their pre-
vious conti'act its absence does not affect the
binding force of the contract- If, however,
it is viewed as the consummation of the ne-
gotiation, there is no contract until the writ-
ten draft is finally signed.
In determining which view is entertained
in any particular case, several circumstances
may be helpful, as whether the contract is
of that class which are usually found to be in
writing, whether it is of such nature as to
need a formal writing for its fuU expres-
sion, whether it has few or many details,
whether the amount involved is large or
small, whether it is a common or unusual
contract, whether the negotiations them-
selves indicate that a written draft is con-
templated as the final conclusion of tlie nego-
tiations. If a written draft is proposed, sug-
gested, or referred to dm-ing the negotiations,
it is some evidence that the parties intended
it to be the final closing of the contract
Still, with the aid of all rules and sugges-
tions, the solution of the question is often dif-
ficiilt, doubtf;il, and sometimes unsatisfac-
tory. An illustration of this is the case of
Rossiter v. Miller, above quoted from- In
that case. Lord Chief Justice Coleridge and
Lord Justices James and Baggallay, three of
England's most distingruished judges, were
clear that there was no contract, for want of
a formal draft Lord Chancellor Cairns and
Lords Hatherly, Blackburn, and Gordon,
equally able and eminent jurists, were confi-
dent in the contrary opinion.
We come now to the consideration of the
circumstances and correspondence in this
case.
The attempt was to negotiate a contract
for the use of space on ocean steamers, of
which the shippers were to have contix)! to
some extent, and in which they were to set
up their appliances, and load and care for
their own merchandise. This arrangement
is quite different from the ordinary contract
of affreightment It is like a charter party,
which is almost universally reduced to for-
mal written draft.
The negotiations contemplated not simply
a contract for one area of space on a single
steamer for a single trip. The contract Mas
to be for a year, and for different areas of
space on three different ships. The inter-
ests of the contracting parties in those spaces
were so various, and, if not conflicting, yet
In such close contact that a contract would
need to contain many stipulations in order
to sufficiently define the rights and duties of
the parties- The draft prepared by the
CONTRACTUAL INTENTION.
105
steamship company would, if printed in this 1
type, occupy over three pages of this volume.
It contained some 21 distinct stipulations,
many of them nowhere alluded to in the cor-
respondence or conversations, and yet seem-
ingly essential to be agreed upon in a con-
tract for chai-teriug space on ocean steamers
for the transportation of dressed meats. It
had annexed, as a part of itself, a long, print-
ed, blank biU of lading. The elder Tori-ance
testified that all the details in the written
draft were the well-understood custom of the
trade, and understood in every similar con-
tract He also testified that "the contract
was carefully drawn up," and that when he
drew it he had before him several other con-
tracts. So far as the case shows, the draft
was entirely In manuscript No printed
blanks seem to have been in existence, as
there probably would have been, had the nu-
merous details become crystaUzed into a weU-
understood custom. The defendants deny
the existence of any such custom or under-
standing.
The claim of the plaintiff company that it
would have made nearly $25,000 profits by
Buch a contract shows that the negotiations
were not about a trifle.
The correspondence seems to Indicate that
a formal draft of the contract was in the
minds of the parties, or at least in the mind
of the defendants, as the only authoritative
evidence of a contract In the first letter,—
that of November 19th,— Torrance ct Co., the
plaintiff's agents, write that they are author-
ized "to make a contract for dressed beef on
our steamers Samia and Oregon, and we
hasten to advise you that we are prepared
to discuss the matter with you." In the sec-
ond letter, they Invite a bid. In the letter of
March 3, 1890, they name terms, and then
say, "If you are inclined to do anytliing on
these terms, you might further communicate
with us, or our Portland house." In the let-
ter of March 24th, from Portland, they say,
"We would not be prepared to enter into a
contract with you for the Vancouver, Sarnia,
and Oregon, unless for one year, from Mon-
treal during the summer, and PorUaud in
winter, we reserving tlie right to withdraw
Vancouver during the winter." In the letter
of AprU 1st, they say, "You can arrange with
our Portland house in reference to the con-
tract" July 8th the defendants wired toe a
copy of the contract to be sent On the same
day, Torrance & Co. write, apologizing for
neglect to send copy. July 10th, Torrance &
Co. send the written draft which has been
above described, and write, "We now inclose
you copy of our proposed contract, which we
trust may be found in accordance with the
understanding arrived at last March."
Neither party, during all the correspond-
ence, seems to have made any change in his
business operations by reason of anything in
the corresix)ndence. No dressed meats were
shipped by the defendants, or offered for
shipment No space was reserved by the
plaintiff, and there was no delay or hin-
drance suffered in its regular business.
The case is by no means free from doubt
and difficulty, but due reflection and study
of the evidence have at the last brought us
to the conclusion that what the plaintiff
claims to have become a perfected contract
on April 5, 1890, by the defendants' letter of
that date, was at the most only the accept-
ance of the proposed basis of a contract
which was yet to be perfected 'as to details,
and put in writing, and that the defendants
did not have, nor signify, any intention to be
bound until the written draft had been made
and signed.
Judgment for defendants.
106
CONTRACTS UNDER SEAL.
W
MARTIN T. FLAHARTY et aL ^
c(j (32 Pac. 2S7, 13 Mont. 96.) )^
Supreme Court of Montana. Feb. 6, 1893.
Appeal from distilct court, Gallatin county;
Frank K. Armsti'ong, Judge.
Ejectment by J. P. Martin, administrator,
against Martha Flaharty and others. Judg-
ment for defendants. From an order refus-
ing a new trial, plaiutifiE appeals. Affirmed.
E. P. Cadwell and J. L. Staats, for appel-
lant Luce Sc Luce, for respondents.
PEMBERTON, C. J. This is a suit in eject-
ment instituted in the court below by appellant
as administiator of Rebecca Githens, deceased.
The complaint is such a one as is ordinarily
employed in such actions. The answer con-
tains a denial of all of the material allega-
tions contained in the complaiut, and alleges
affijmatively that the deceased was not the
owner of the demanded premises at the time
of her death, but was the tenant of the re-
spondents; that, as she did not die seised of
any estate in the premises, her administrator,
the appellant, cannot maintain this action.
Both parties in the court below having ex-
pressly waived a jury, the case was tried by
the court. The findings and judgment of the
court below were in favor of the respondents.
The appellant filed his motion for a new trial,
which was overruled, and from the order of
the court, overruling his motion for a new
trial, this appeal is taken.
The facts of the case are substantially as
follows: The deceased, Rebecca Githens, was
the mother of the respondents. On the 2d
day of January, 1888, the deceased, who was
then seised in fee of the premises in dispute,
executed a deed to the demanded premises to
the respondents. On the same day the re-
spondents executed a lease to the same prem-
ises to the deceased for the term of her
nattu"al life, and delivered the same to the de-
ceased. The proof is not positive that the
deed was actually then delivered by the gran-
tor to the grantees; that is, by manual de-
livery. Some months after the execution of
the said deed and lease, the deceased, in com-
pany with Mrs. Flaharty, one of the grantees,
took both of said instruments to the Gallatin
Valley Bank, and dehvered them to the as-
sistant cashier. This inscription was written
on the outside of said paper: "To deliver to
Mrs. Githens, and, in case of her death, to
Mrs. Flaharty." Mrs. Githens died some
months after the delivery of these papers to
the bank, without even calling for them, and
without even attempting or expressing any
desire to regain the possession of them. After
the death of Mrs. Githens the papers were de-
livered to Mrs. Flaharty. While these papers
were in the bank, Mrs. Githens spoke of them
to witnesses, saying the "gii'ls' deed" (meaning
the respondents) was in the bank. The evi-
dence also shows that the deceased occupied
the demanded premises under said lease from
its execution until her death. After the death
of Mrs. Githens the respondents took posses-
sion of the demanded premises, and have
exercised control thereof ever since. The de
ceased, in her lifetime, while said papers were
in tlie bank, spoke of both the deed and lease
bemg in the bank, and of the deed as be-
longing to the respondents. Upon this show-
ing of facts appellant contends there was no
delivery of said deed, that the deceased never
lost control over it dm-ing her lifetime, and
that the deliveiy thereof was void. Coimsel
for the appellant concedes that if the deed
was delivered he has no case. Respondents,
of course, claim that the deed was delivered.
What, then, is a deliveiy? And how can the
delivery be shown?
In 5 American and English Encyclopedia
of Law, (page 447,) we find this doctrine
asserted: "The intention always controls the
determination of what constitutes a sutfi-
cient delivery; and it may be manifested
by acts or by words, or by both, in the most
informal manner. But either acts or words
manifesting the intention must be present, in
order to constitute a good deliverj'. But the
deed need not be actually delivered, if the
grantor intends the execution to have the ef-
fect of a delivery, and the parties act upon this
presumption. Delivery will be presumed from
the fact that the deed was executed before
the witnesses, and declared to be delivered
in their presence." And see cases cited in
notes.
In Washburn on Real Property (volume 3,
5th Ed., p. 305, par. 28) the author says:
"Thus, a deed may be delivered to the gran-
tee himself, or it may be delivered to a
stranger unknown to the person for whose
benefit it is made, if so intended by the mak-
er; and this may be an effectual delivery
the moment it is assented to by the grantee,
even though the grantor may in the mean time
have deceased." See authorities cited in note.
In Devlin on Deeds (volume 1, § 202) the au-
thor holds the doctrine of delivery of a deed
to be one of intention: "As no particular form
of delivery is reqiured, the question whether
there was a delivery of a deed or not, so as
to pass title, must in a great measm-e, where
It is not clear that an actual delivery has been
efl!ected, depend upon the peculiar circumstan-
ces of each particular case. The question of
delivery is one of intention, and the rule is
that a delivery is complete when there is an
intention manifested on the part of the grantor
to make the instrument his deed. 'The doc-
trine seems to be settled beyond a reasonable
doubt,' remarks Justice Atwater, 'that where
a party executes and acknowledges a deed,
and afterwards, eitlier by acts or words, ex-
presses his will that the same is for the use
of the grantee, especially where the assent
of the grantee appears to the transaction, it
shall be stifficient to convey the estate, though
the deed remains in the hands of the grantor.
* * * The main thing which the law looks
at is whether the grantor indicates his will
DELIVERY.
107
that the instrument should pass into the pos-
session of the grantee; and, if that will is
manifest, then the convoj-ance Inures as a
valid grant, although, as above stated, the
deed never comes into the hands of the gran-
tee.' A deed does not become operative until
It is delivered with the intent that it shall be-
come effective as a convejance. Whether
such intent actually existed is a question of
fact to be determined by the circumstances of
the case, and cannot, in the majority of in-
stances, be declared as a matter of law. A
deed was held complete and valid where it
had been prepared for execution, read, signed,
and aclinowledged before a proper officer, not-
withstanding tlie testimony of the witnesses
present at its execution that there was no
formal delivery, and the fact that the deed,
after the grantor's death, was found among
his private papers in his desk."
In Doe dem. Garnons v. Knight, 11 E. C.
L. 032, Bayley, J., holds that "where a party
to an instrument seals it, and declares, in the
presence of a witness, that he delivers it as
his deed, but Icoi^'ps it in liis own possession,
and there is nothing to qualify that, or to
show that the executing party did not in-
tend it to operate immediately, except the
keeping of the deed in his hands, it is a valid
and effectual deed; and delivery to the party
who is to take by the deed, or to any per-
son for his use, is not essential;" and cites
a gi'oat number of cases in support of this
doctrine.
^^ In Wheelwright v. Wheelwright, 2 Mass.
447, in a case very similar to the one at bar,
Parsons, C. J., delivering the opinion of the
court, holds that "a deed signed, sealed, de-
livered, and acknowledged, which is commit-
ted to a third person, as the deed of the
grantor, to be delivered over to the grantee
on a future event, is the deed of the grantor
presently; and the third person is a trustee
of it for the grantee."
In Woodward v. Camp, 22 Conn. 459, 460,
Waite, J., speaking of what constitutes a
valid delivery of a deed, says: "And, in or-
der to constitute a valid delivery, it is not
necessary that it should be delivered per-
sonally to the grantee. It will be sufficient
if delivered to some third person for the use
of the grantee, although the latter was not
present at the time, had no knowledge of the
existence of the deed, and never gave any
authority to the person receiving it to act in
his behalf. Merrills v. Swift, IS Conn. 257.
And if a deed be delivered to a third person,
to be by him kept, during the life of the
grantor, subject to his order, and at his death,
if not previously recalled, to be delivered over
to the grantee, and the grantor die without
having recalled the deed, such delivery will
become effectual, and the title of the grantee
consummated. In the death of the grantor.
Belden v. Carter, 4 Day, GG. According to
these authorities, had the deed, in the present
case, been delivered to some third person, to
have been kept during the life of Mi-s. Camp,
and then delivered to the grantee, such deliv-
ery, upon her death, would have become per-
fected, and the title would have vested in
him."
In Farrar v. Bridges, 5 Humph. 411, the
court say: "A formal, ceremonious deliv-
ery of a deed Is not essential to its validity.
If no condition be annexed, if nothing remains
to be performed in order to give effoct to the
instrument, its signing, sealing, and attesta-
tion as a valid instrument between the par-
ties will make it complete and effectual, al-
though the insti-ument may be left in the
possession of the bargainor or grantor." See
authortties cited.
In Thatcher v. St. Andrew's Church, 37
Mich. 2G'J, speaking of what constitutes the
delivers' of a deed, the court say: "The act
of delivery is not, neccs.sarily, a transfer of
the possession of the instrument to the gran-
tee, and an acceptance by him; but it is that
act of the grantor, indicated either by acts
or words, or both, which shows an intention
on his part to perfect the transaction, by a
surrender of the instrument to the grantee,
or to some third person for his use and bene-
fit. The whole object of a delivery is to in-
dicate an intent upon the part of the grantor
to give effect to the instrument. The deed
may be delivered to the grantee, or to a
stranger unknown to the person for whose
benefit it is made; and it has been held that
such was a good delivery, when assented to
by the grantee after the death of the gran-
tor." See authorities cited.
In McLure v. Colclough, 17 Ala. 9G, the
court say, speaking of what constitutes de-
livery: "Then, although there was no deliv-
ery by the hand, there was enough to con-
stitute a good delivery in law. This may be
accomplished by mere words, or by such
words and actions as indicate a clear inten-
tion that the deed shall be considered as ex-
ecuted, as when a party to an insfrumeni
seals it, and declares in presence of a wit-
ness that he delivers it as his deed, but keeps
it in his own possession, and there is nothing
to qualify that, or to show that the execut-
ing party did not intend it to operate imme-
diately, except the keeping of the deed in his
hands, it is a vahd and effectual deed; and
actual delivery to the party who is to take
by the deed, or to any person for his use, is
not essential. Doe dem. Garnons v. Knight,
5 Barn. & C. 671."
In Belden v. Carter, 4 Day, GG, a Connecti-
cut case, depending on this statement of facts:
"Delivery of deed. When takes effect. A
grantor, having signed, sealed, and acknowl-
edged a deed, took it up, in the absence of
the grantee, and said to another: 'Take this
deed, and keep it. If I never call for it, de-
liver it to B. after my death. If I call for
it, deliver it to me.' The party then took the
deed, and the grantor d>iug soon afterwards,
and never having called for it, it was deliv-
ered to the grantee." Upon these facts the
court say and hold: "The grantor delivered
108
co:n'tracts under seal.
the deed to Wright with a reservation of a
power to countermand it, but this makes no
difiference; for it was in the nature of a tes-
tamentary disposition of real estate, and was
revocable by the grantor during his life, with-
out an express reservation of that power.
The case, then, stands upon the same footing
as if there had been no reservation of a pow-
er to countermand the deed. It was a de-
liveiT of a writing as a deed to the use of the
grantee, to take effect at the death of the
grantor, deposited in the hands of a third per-
son to hold till that event happened, and then
to deliver it to the grantee. The legal opera-
tion of this delivery is that it became the deed
of the grantor presently; that Wright held
it as a trustee for the use of the grantee;
that the title became consummate in the
grantee by the death of the grantor; and
that the deed took effect, by relation, from
the time of the first delivery."
In Newton v. Bealer, 41 Iowa, 334, in a
case nearly on all fours with the case at bar,
Day, J., delivering the opinion of the court,
on page 339, says: "Where one who has the
mental power to alter his intention, and the
physical power to destroy a deed in his pos-
session, dies without doing either, there is,
it seems to us, but little reason for saying
that his deed shall be inoperative, simply be-
cause, during life, he might have done that
which he did not do. It is much more con-
sonant with reason to determine the effect of
the deed by the intention existing up to the
time of death than to refuse to give it that
effect because the intention might have been
changed. Applying this doctrine to the deed
in question, there can be no doubt that it
should be sustained. The deceased, as he
frequently declared, had made all the provi-
sions for his ocher children that he intended
to make. When within a veiy few days of
his death, and evidently, as appears, contem-
plating approaching dissolution, he says that
he has his property all fixed, and points to
the chest in which the deed would be found,
which, as he supposed, had the effect to fix
his property so that there would be no 'fuss-
ing' about it when he was gone. He thus
manifested an unequivocal intention, within
a very short time of his death, to have this
deed operate as a disposition of his property;
and any construction of tlie law which ig-
nores this intention, and defeats this purpose,
prefers shadow to substance." See cases
cited.
In Hathaway v. Payne, 34 N. Y. 92, a case
wherein the facts are as nearly like the facts
in the case at bar as usually happens, the
court hold that, "where a deed is to be de-
livered to the grantee on the death of the
grantor, the title, by relation, passes at the
time the deed was left for delivery." Pot-
ter, J., delivered the opinion in this case, and
after viewing at great length the facts, in
stating the law and citing the authorities,
says: "Looking to the language of the agree-
ment itself for the purpose and intent of this
conveyance, it left no condition to be per-
formed before delivery. It required nothing
but the lapse of time, to wit, the death of
both gi-antors, when Herrendeen, the agent,
trustee, or depositary of the deed, (by what-
ever name he may be called,) by mutual di-
rection of the parties, not alone that of the
grantor, who alone could not revoke a mu-
tual agreement, immediately to deliver it, as
a good and valid convej-ance of all the lands
therein contained. If we look at the intent
of the parties to the deed, as manifested by
their acts, indopondeut of the language of
their agreement, — the one granting, the other
accepting the grant of, this part of the same
premises, — it is equally apparent that the par-
ties intended the first deed as a present con-
veyance. In Ruggles v. Lawson, 13 Johns.
2S5, A. executed a deed of lands, in consid-
t eration of natural love and affection, to his
two sons, and delivered it to C, to be deliv-
ered to his sons in case A. should die with-
out making a will; and, A. having died with-
out a will, C. delivered the deed to the sons.
It was held that this was a valid deed, and
took effect from the first delivery; that this
was not an escrow. In Tooley v. Dibble, 2
Hill, G41, a father signed and scaled a deed
purporting to convey to his son a farm,
placing the deed in the hands of B., with in-
sti-uctions to deliver it after the father's
death, but not before, imless both parties
called for it; and after the father died B.
delivered the deed accordingly. It was held
that the title of the son took effect, by rela-
tion, from the time the deed was left with B.,
and that the son's quitclaim, executed inter-
mediate the leaving the deed with B., and the
father's death, though importing a mere con-
veyance of the son's 'right in expectancy'
in the land, would pass his title. The cases
of Goodell V. Pierce, Id. 659, and Himter v.
Hunter, 17 Barb. 25, are but confirmations of
this view of the title taking effect from the
first delivery of the deed. In the case of
Belden v. Carter, reported in 4 Day, G6, a deed
was delivered to a third person to keep, and,
if not called for, to deliver it after the death
of the grantor. It was held that by legal
operation it became the deed of the grantor
presently, and that the depositary held it as
a trustee for the use of the grantee, and that
the title becarne consummate in the grantee
by the death of the grantor, and the deed
took effect, by relation, from the time of the
first delivery. In the case of Wheelwright
V. Wheelwright, 2 Mass. 447, a distinction is
made which I regard as sound, and which
I think has not been questioned since, that
applies to this case. It was held that a deed,
signed, sealed, delivered, and acknowledged,
which is committed to a third person as the
deed of the grantor, to be delivered over to
the grantee on a future event, is the deed
of the grantor presently, and the third per-
son is a trustee of it for the grantee. But if
it be delivered to the third person as the
writing or escrow of the grantor, to be deliv-
DELIVERY.
orod on some future event, it is not the g:i'an-
tor's deed until the second delivery. That is,
its being a pivseut deed depends upon the
fact whether it was dclivored as an escrow.
The cases can be multiplied, each varying
from every other by some nice shade of dif-
ference, upon the que.'^tion whether, in the
present case, the deed was an escrow in the
hands of the depositary, or whether the de-
positary was made the trustee of the grantor.
In the former case a second delivery is gen-
erally required before the title passes; in the
latter, the title passes at the instant of deliv-
ering the deed to the deijositai-y. This, I
think, is the true distinction. In the case at
bar there was no direction by the grantors
that the deed was left as an escrow, and it
presents no evidence of intent on the part of
the grantors to make this deed an escrow.
There is no condition mentioned in the agree-
ment, to be performed before delivery, which
In law would create it an escrow; and pre-
sumptions arising from the language of the
agreement, being taken ni)nt 14L The
covenantee in such cases may have the ben-
efit of the contract but subject to the condi-
114
CONTRACTS UNDER SEi^L.
tions and provisos in the deed. These obliga-
tions frequently take the form of bonds,
which is only another method of forming a
contract, in which a party binds himself as if
he had made a contract to perform; a consid-
eration being necessai-ily implied from the
solemnity of the kistniment. The considera-
tion of a sealed instrument may be inquired
into; it may be shown not to have been
paid, (Bo wen v. Bell, 20 Johns. 338,) or to
be different from that expressed, — Jordan v.
White, 20 Minn. 99, (Gil. 77;) McCrea v. Fur-
mort, 16 Wend. 460.— or as to a mortgage
that there is no doubt to secure, (Wearse v.
Peirce, 24 Pick. 144,) etc.; but, except for
fraud or Illegality, the consideration impUod
from the seal cannot be impeached for the
pui-pose of invalidating the instrument or de-
stroying its character as a specialty. It is
true that equity will not lend its auxiliary
remedies to aid in the enforcement of a con-
tract which is inequitable, or is not supported
by a substantial consideration, but at the
same time it will not on such grounds inter-
fere to set it aside. But no reason appears
why equity might not have decreed specific
performance in this case, (had the land not
been sold,) because the substantial and mer-
itorious consideration required by the court
In such cases would consist in that stipulated
in the instrument as the condition of a con-
veyance, performance of which by the plain-
tiff would have been exacted as a prerequisite
to relief, so as to secure to defendant mu-
tuality in the remedy, and all his rights under
the contract. The inquiry would not, in such
case, be directed to the constructive consid-
eration evidenced by the seal, for a mere
nominal consideration would have supported
defendant's offer or promise upon the pre-
scribed conditions. Leake, Gont 17, 18; Rail-
road V. Babcock, 6 Mete. (Mass.) 353; Yard
V. Patton, 13 Pa. St 285; Candor's Appeal,
27 Pa. St. 119.
If, then, defendant's promise was irrevoca-
ble within the time limited, plaintiff might
certainly seek his remedy for damages, upon
the facts alleged in the pleadings, upon show-
ing performance or tender thereof on his
part. There is a growing tendency to abro-
gate the distinction between sealed and un-
s€?alod instruments; in some states by legis-
lation, in others to a limited extent by usage
or judicial recognition. State v. Young, 23
Minn. 557; 1 Pars. Cont. *429. But tlie sig-
nificance of the seal as importing a considera-
tion is everywhere still recognized, except as
affected by legislation on the subject. It has
certainly never been questioned by this court
In Pennsylvania the courts allow a party,
as an equitable defense in actions upon seal-
ed instruments, to show a failure to receive
the consideration contracted for, where an
actual valuable consideration was intended
to pass, and furnished the motive for enter-
ing into the contract. Candor's Appeal, 27
Pa. St. 119; Yard v. Patton, supra. But
whatever the rule as to equitable defenses
and counter-claims under our system of prac-
tice may be held to be in the case of sealed
instruments, it has no application, we think,
to a case like this, where fuU effect must be
given to the seal. Under the civil law the
rule is that a party making an offer, and
granting time to another in which to accept
it, is not at liberty to withdraw it within
the appointed time, it being deemed inequita-
ble to disappoint expectations raised by such
offer, and leave the party without remedy.
Xhe co mmon law, as we have^seen^ though
requiring a consideration, issatisfi^d with_the
v ^den c g thereof s'ignmea Dyri rsftair~Railroad
V. BarGett, supra. The same principle applies
to a release under seal, which is conclusive
though disclosing on its face a consideration
otherwise insufficient Staples v. Welling-
ton, 62 Me. 9; Wing v. Chase, 35 Me. 260.
These considerations are decisive of the
case, and the order denying a new trial must
be reversed.
STATUTE OF FRAUDS.
116
THOMPSON V. BLANCHARD.i
(3 N. Y. 335.)
Court of Appeals of New York. April, 1850.
N. HiU, Jr., for appellant S. Stevens, for
respondent.
GAllDINER, J. The undertaking of the
appt'llaut in this case was drawn with refer-
ence to, and is In precise conformity witti,
the requirements of section 335 of the Code.
In this we all agree. It is a necessary im-
plication from the statute, that an undertak-
ing thus executed shall be effectual to svis-
tain an appeal and an action in beliulf of the
appellee, if the judgment appealed should be
alhrmed in whole or in part. The legisla-
ture, however, have not left the matter to
implication. They have enacted that "when
an appeal shall be perfected as provided by
the 335tli section, it shall stay all proceed-
ings in the court below upon the judgment
appealed from, or the matter embraced there-
in." Section 339.
It is objected, notwithstanding, that the in-
strument is nudum pactum, not because there
is no consideration in fact, but because none
is expressed in the writing. The answer is,
that the statute required an undertaking in
writing with certain prescribed stipulations,
and nothing else. An undertaking is a prom-
ise. Bouv. Law Diet It may be made
with or without consideration. If the prom-
ise was in writing, the consideration need
not be expressed, it might be proved in all
cases by parol. The common law was sat-
isfied if there was a consideration in fact to
sustain the undertaking. Neither before nor
since the statute of frauds, has it ever been
hold that an undertalcing, or promise, ex vi
termini, imports a consideration. In Wain
V. Wariters, 5 East 10, luider the English
statute of frauds, it was for the first time
decided that the word agreement implied a
consideration. But that case proceeded upon
the dLstinction between an agreement and an
luidortaking. Lord Ellenborough stated the
question to be, whether "agreement, in the
statute, was synonymous with promise or un-
dertaking, or signified a mutual contract up-
on consideration." And all the judges con-
curred in saying, that had the statute re-
quired only that the promise should be in
writing, instead of the agreement in respect
to which the promise was made, their opin-
ion would have been different.
The legislature, in the section referred to,
have said that an undertaking, to the effect
proscribed, shall be effectual. We have no
authority to add other conditions. If It be
said that such an instrument would not be
obligatory by the statute of frauds, the very
obvious answer is, that the legislature of
1 Dissenting opinion of Bronson, C. J., omit-
ted.
1848 had the same power to restore the com-
mon law, as to this class of securities, that
their predecessors had to abolish it 2d.
The imdertaking prescribed by the 335th sec-
tion is a statute security and not a common-
law agreement Agreements which derive
their obligation from the common law, and
no others, are enumerated in our statute, and
required to be made in writing, expressing
a consideration. 2 Rev. St. 13G. The oli-
jection I am considering assumes that the
undertaking in question falls within one of
the classes of agreements there specified. It
has, however, been genei-ally supposed that
the assent of more than one party was es-
sential to the validity of an agi-eoment at
common law. Lord Ellenborough calls it a
mutual contract upon consideration. The
consideration being one element of the agree-
ment, must, of course, be the subject of ar-
rangement between the parties before it can
be expressed in writing. Accordingly where
a contract has been executed by both par-
ties, evidence is required, in addition, of de-
livery and acceptance, or something equiva-
lent, in order to show their assent to It as a
perfected instrument, mutually obligatory up-
on them. The necessity for this, when it is
executed by one of the parties only. Ls app.ar-
ent. Now the undertaking Ln question was
properly prepared, executed, and filed with
the clerk by the appellant,without any com-
munication or arrangement with the appel-
lee. Sections 343,340. The assent of the lat-
ter was not necessaiy to the creation of the
obligation, nor would his dissent defeat or in
the slightest degree modify its effect upon
his own, or the rights of the otlier party.
And so we have In effect decided, in a case
between these parties. 2 N. Y. 562. The
only consideration that can be imagined, for
the imdertaking of the defendant and his
sureties, is the stay of proceedings upon, and
the right to review the judgment obtained
by the plaintiff. But this delay and privi-
lege is the act of the law, against the wish-
es and in spite of the opposition of the re-
spondent What possible application, there-
fore, has the statute designed to prevent
frauds and perjunes in reference to common-
law contracts, to an undertaking, the con-
tents and legal effect of which are written
on the face of the statute? What fraud is to
be suppn^ssed, or perjury avoided, by making
this appolhint certify, under his signature, to
a consideration which, if it exist at all, did
not arise from the agreement of parties, but
from a law which this court and all others,
ai-e bound judicially to notice? At most it
would be but cumulative evidence of the pro-
visions of a stxitiite.
We think, for the reasons assigned, the un-
dertaking sufficient and the appeal well
brought.
116
STATUTE OF FRAUDS.
i;^V
STONE T. DENNISON.i /
(13 Pick. 1.) (p
Lj- Supreme Judicial Court of Massachusetts.
Sept Term, 1S32.
At the trial, before Wilde, J., the plaintiff
proved that he had been in the service of the
defendant from October, ISIS, to October,
1S2S, when he became twenty-one years of
age; and he introduced evidence tending to
show that his services were worth more tlian
the support and education f\imished him by
the defendant. Evidence was offered by the
defendant tending to show the contrary, and
that the agreement was a reasonable one.
The defendant contended that he was not
liable, because at the time when the plaintiff
was fourteen years of age, his father being
dead, George Eels was duly appointed his
guardian, and it was agreed between the
plaintiff, the defendant and the guardian that
the plaintiff should continue in the service of
the defendant, until he should arrive at the
age of twenty-one, for his board, clothing and
education, and the defendant had performed
the contract on his part
The plaintiff objected to the admission of
evidence to prove these allegations:
(1) Because the supposed contract was void
by the statute of frauds, it not being in writ-
ing.
(2) Because, the plaintiff having no prop-
erty and his mother being living at the time,
the appointment of the guardian was void;
or, at least, if valid, it gave the guardian no
power to bind the plaintiff by the contract
stated; and the plaintiff could not be bound
by any assent given by himself to the agree-
ment, during his infancy.
But the judge admitted the evidence, and
instructed the jury that if the plaintiff en-
tered into thir agreement as contended for by
the defendant, and entered into the service of
the defendant in pursuance of the same, and
continued in it during all the time agreed
upon, he could not waive the contract and go
upon a quantum meruit, unless the contract
was obtained by unfair means, and so was
fraudulent on the part of the defendant; and
that, if the con.Ti^ct was so unreasonable as
to show that the plaintiff was overreached,
that would be evidence of fraud and would
I'endcr the contract null and void.
The jury found a verdict for the defend-
ant, and the plaintiff moved for a new trial.
If the foregoing opinions and instructions
were erroneous, a new trial was to be grant-
ed; otherwise judgment was to be rendered
on the verdict.
Mr. Wells, for plaintiff. Bates & Dewey,
for defendant.
SHAW, C. J. Several points were left to
the jury in the present case, which may be
considered as settled by their verdict.
1 Irrelevant parts omitted.
By the report it appoars that after the
plaintiff aiTived at the age of fourteen years,
having then lived several years with the de-
fendant, it was agreed between the plaintiff
and his guardian on the one side, and the de-
fendant on the other, that the plaintiff should
continue in the sei-vice of the defendant urftil
he should arrive at the age of twenty-one, for
his board, clothing and education. By the
finding of the ju'y, under the instructions giv-
en to them by the court, it must be taken to
have been settled, that the contract was not
obtained by any unfair means, or fraudulent,
on the part of the defendant, and that it was
not unequal, so as to show that the plaintiff
was overreached.
The case then is one of a minor over four-
teen years of age, entering into an agreement
with a person, for labor and service to be fur-
nished on one side, and subsistence, clothing
and education on the other, an agreement in
which the minor was not overreached, which
was not so unreasonable as to raise any sus-
picion of fi-aud, and which was assented to
and sanctioned by the guardian of the minor.
This agreement is fully executed on both
sides. The labor and services are performed
by the minor, and the stipulated compensa-
tion is furnished by his employer. And the-
question is, whether the plaintiff, notwith-
standing such agreement, can maintain a
quantum meruit for his services, merely by
showing that in the event which has happen-
ed his services were worth more than the
amount of the stipulated compensation; and
we think he cannot.
The first point taken by the plaintiff is that
the evidence of the agreement ought not to
have been admitted, because the agreement,
not being to be performed within a year, and
not being in writing, was void by the stat-
ute of fi-auds. St 17SS, c. 16, § 1.
But we think this objection is answered by
the consideration that here the contract has
been com^jletely performed on both sides.
The defendant is not seeking to enforce this
agreement as an executory contract, but sim-
ply to show that the plaintiff is not entitled to
recover upon a quantum meiniit as upon an
implied promise. But the statute does not
make such a contract void. The provision" is,
tfiaf" no" 'action stall be brought, whereby to
charge any person upon any agreement, which
is not to be performed within the space of
one year, unless the agreement shall be in
writing. The statute prescribes the species
of evidence necessary to enforce the execu-
tion of such a contract. But where the con-
tract has been in fact performed, the rights,
duties, and obligations of the parties result-
ing from such performance stand unaffected
by the statute.
In the case of Boydell v. Drummond, 11
East, 142, a case was put in the argument of
goods sold and delivered at a certain price, by
parol, upon a credit of thirteen months.
There, as a part of the contract was the pay
ment of the price, which was not to be per-
EXECUTED CONTRACTS.
117
formed within the year, a quustion is made,
whether by force of the statute the purchaser
is exempted from the obligation of the agree-
ment as to the stipulated price, so as to leave
it open to the jury to give the value of the
goods only, as upon an implied contract. "In
that case," said Lord EUenborough, "the de-
livery of the goods, which is supposed to be
made within the year, would be a complete
execution of the contract on the one part; and
the question of consideration only would be
reserved to a future period."
If a performance upon one side would avoid
the operation of the statute, a fortiori would
the entire and complete performance on both
sides have that effect. Take the common case
of a laborer entering into a contract with his
employer towards the close of a year, for an-
other year's service, upon certain stipulated
terms. Should either party. refuse to perfonn,
the statute would prevent either party from
bringing any action whereby to charge the
other upon such contract. But It would be a
very different question were the contract ful-
filled upon both sides, by the performance of
the services on the one part and the payment
of money on account, from time to time, on
the other, equal to the amount of the stipu-
lat-^d wages. In case of the rise of wages
within the year, and *he consequent increased
value of the sen- ices, could the laborer bring
a quantum meruit, and recover more; or in
case of the fall of labor and the diminished
value of the services, could the employer
bring money had and received and recover
back part of the money advanced, on the
ground that by the statute of frauds the orig-
iiial contract could not liave been enforced?
Such, we think, is not the true corustructioa j-t
the statute. ^Ve are of the opinion that it has
no application to executed contracts, and that
the evidence of this contracr was rigTitly ad-
mitted-
118
STATUTE or FRAUDS.
.<
[s
' Oct.,
BELLOWS V. SOWLES.
(57 Vt. 164.)
Supreme Court of Vermont. Montpelier.
1SS4.
Assumpsit. Heard on demurrer to the
declaration, September Term,lSS3, Frank-
lin County, RoYCE, Ch. J., presiding. De-
murrer overniled. The declaration alleged
in substance: That the plaintiff was a
relative and heir-at-law of Hiram
Bellows, deceased ; *that by the terms "IGo
of said Bellows' will, presented to
the Probate Court for allowance, no pro-
vision was made for the plaintiff; that
the plaintiff "claimed and insisted tliat he
was left out of said will, and that no pro-
vision ♦ ♦ ♦ was made for the plaintiff
thrt'Ugh undue influence had and used
jpon said Bellows by said defendant and
nis wife, Maggie Sowles, and that said will
was void, and should not be approved;
that he had employed counsel to test the
validity of said will before the Probate
Court; that similar claims were made by
other heirs"; "and whereas the said de-
fendant being then and there the executor
named in said will, and being largely in-
terested pecuniarily in said estate as leg-
atee and the husband of the princijial leg-
atee under said will, and well knowing the
claim of the plaintiff, and that he had
employed counsel as aforesaid, and that
otlier heirs were then and there making
similar claims, and being anxious to have
said will sustained, had also employed
counsel for that purpose; and it was theu
and there expected by the parties that a
contest would be had upon the approval
of said will, which would involve the ex-
penditure of a large amount of money,
and hinder and delay the settlement of
said Bellows' estate, and the receipt by the
said defendant and his said wife of their
said legacies"; that the plaintiff met the
defendant by appointment at defendant's
house, and that the matters relating to
the will were talked over; that"the plain-
tiff, at the special instance and request of
the said defendant, would see one Char-
lotte Law, who was one of the heirs of
said Bellows, and who was then and
there intending to contest the validity of
said will, and use his influence to have her
allow said will to be approved, and that
the plaintiff forbear to contest the ap-
proval of Faid will of said Bellows, and
allow the same to be approved by the
Probate Court aforesaid, and would not
appeal from the decision of said court, he,
th2 said defendant, undertook, and then
and there faithfully promised to pay the
plaintiff the sum of $5,000, whenever, after
twenty days had elapsed from the date of
the approval of said will by said Probate
Court, he should be thereunto requested."
• * * "And the plaintiff avers, that, con-
fiding in the promise and undertaking of
the said defendant so made as aforesaid,
afterwards, to wit, on the day and year
aforesaid, he did see said Charlotte Law,
and did use his influence with her to
*166 allow said will to be ap*proved, and
did forbear to contest the approval
of said will of said Bellows, and did al-
low the same to be approved by said Pro-
bate Court, and did not appeal from said
approval"; • • • thatsaid will was duly
approved on the 7th day of December,
INTO; that no appeal was taken; that the
twenty days has ela[)sed; and that de-
fendant, though requested, has wholly
neglected and refused to pay the said
$5,000, &c. There was a second count, sub-
stantially like the first, alleging, that the
plaintiff was heir-at-law of said Bellows;
that he received nothing under the will ;
that the will was made as it was, and
plaintiff left out, "through undue influence
and by procurement of the said defendant
and his said wife, and that said will was
void"; that he had arranged to contest
the validity of the will; that this was
known to the defendant; that it was "ex-
pected by the parties that long and ex-
pensive litigation would ensue, which
would delay the settlement of said Bel-
lows' estate, and prevent the said defend-
ant and his said wife from receiving the
large sums of money which they expected
from said estate, as they otherwise
would"; that the defendant "being pe-
cuniarily interested in said estate to a
large amount as legatee, as husband of
the largest legatee under the will,"&c. ;
that defendant promised to pay plaintiff
the sum of $5,000 if he would forbear to
contest the will; that he did forbear, in
consideration of the promise, &c., &c.
The common counts followed.
Geo. A. Ballard, Fartlngton & Post, Wil-
son & Hall, and Noble & Smith, for plain-
tiff. Defendant pro se ( with him H, S.
Royce and L. P. Poland).
POWERS, J. Counsel for the defendant
have demurred to the declaration in this
case upon two grounds; first, that the
consideration alleged is insufficient; sec-
ondly, that the promise not being in writ-
ing comes within, and is therefore not en-
forceable under, the Statute of Frauds.
It has been so often held that forbear-
ance of a legal right affords a sufficient
consideration upon which to found a valid
contract, and that the consideration re-
quired by the Statute of Frauds does not
differ from that required by the common
law, it does not appear to us to be neces-
sary to review the authorities, or discuss
the principle. As to the second point
urged in behalf of the defendant, this case
pre.sents greater difficulties. Although
the Statute of Frauds was enacted two
centuries ago, and even then was little
more than a re-enactment of the pre-exist-
ing common law, and though cases have
continually arisen under it, both in Eng-
land and America, yet so confusing and
at times inconsistent are the decisions,
that its considei-ation is always attended
with difficulty and embarrassment.
The best understanding of the statute
is derived from the language itself, viewed
in the light of the authorities which seem
to us to interpret its meaning as best to
attain its object. That clause of the stat-
ute under which this case falls, reads:
"No action at law or in ecjuity shall be
brought * * * upon a special promise
of an executor or administrator to answer
damages out of his own estate."
This special promise referred to is, in
PROMISE BY EXECUTOR OR ADMINISTRATOR.
119
short, any actual promiso made by an ex-
ecutor or administrator, in distinction
from promiHes implied bj' law, which are
hold not within tli«' statute.
Tlie promiHe must be " to answer dam-
ages out of ills o wn estate. " Tl)is pJirtise-
olo^y clearly implies an obligation, duty,
or liability on the part of the testator's
estate, for which the executor promises to
pay damages out of his own estate. The
statute, then, was enacted to pre-
vent executors *or administrators *170
from beinj;- fraudulently held for the
debts or liabilities of the estates upon
which they were called to administer. In
this view of the case, this clause of the
Btatnte is closely allied, if not identical in
principle, with the followinp: clauKe. name-
ly : "No action, etc., upon a special prom-
ise to answer for the debt, default or mis-
doinj^s of another." And so Jud^^eUoYCK,
in delivering the opinion of the court in
Harrington v. Rich, 6 Vt. GGG. dtH.'lares
tlu'se two classes of uudertaUings to bo
"very nearly allied," and considers them
together. This seems to as to be the true
idea of this clause of the statute:— that
the undertaking contemplated by it, like
that contemplated by the next clause, is
in the nature of a guaranty; and that
reasoning ap|)licable to the latteris equal-
b' applicable to the former.
We believe this view to be well support-
ed by the authorities. Browne, in his
work on the Statute of Frauds, p. loO,
says: "In the ft)nrth section of the Statute
of Frauds, special promises of executors
and administrator to answer damages
out of their own estates appear to be
spoken of as on« class of that large body
of contracts known as guaranties. " And
soon page 184, he interprets "to answer
damages" as equivalent to pay debts of
the decedent. This seems to be the con-
struction given to the statute by Chief
Justice Redfikli), in his work on Wills.
Vol. II. p. 290, et seq.
The Revised Statutes of New York, Vol.
II. p. 113, have improved upon the phrase-
ology of the old statute as we have adopt-
ed it. by adding, or to pay the debts of
the testator or intestate out of his own
estate.
If we are correct in this view of the re-
lation between these twoclauscs, the solu-
tion of the question presented by this case
is comparatively easy.
It has been held in this State, that when
the contract is founded upon a new and
distinct consideration moving between
the parties, the undertaking is original
and independent, and not within the
statute. Templeton v. Bascom,
*33 Vt. 132; Cross v. Richardson. 30 nTl
Vt. G41; Lampson v. Hobart. 28 Vt.
097. Whether or not it would be safe to
announce this as a general rule of uni-
versal application, it is a principle of law
well fortified by authority, that where
the principal or immediate object of the
promisor is not to pay the debt of an-
other, but to subserve some jturpose ot
his own, the promise is original and inde-
pendent, and not within the statute.
Branilt Sur. 72; 3 Par. Cont. 24; Rob. Fr.
232; Fmerson V. Slater, 22 How. 28. And
this seems to be the real ground of the de-
cisions above cited in the 28th and 30th
Vt., in which the c(jurt seems to blend the
two rules just laid down.
PiKuroiNT, J., in delivrring the opinion
of the court in Cross v. Richardson, sujn-a,
says: "The consideration must l)e not
only suflicient to supjtort the promise, but
of such a nature as to take the promise
out of the statute; and that requisite, we
think, is to be found in the fact that it
ojicrates to theadvantageof the promisor,
and places him under a pecuniary obliga-
ticjn to the promisee, entirely independent
of the original debt."
Ai)ply this rule to this case. Here the
main pur|)(jsej)f Jiiiis promise wasTllOtJTg^
aiiisweT'~naTiTages"7JL)r t he" tesUTlT OTrVouT of
-trlS"TJWir^STUTerT5Trr^\^as^
-eerrc — Eome pill i)0.>e~of Jur^ c lefeiu lant.
~ Tt re c o nBidc' rarrrm did Iapt__aiEL(rL the es-
t ^te, bjT f ^vas'a mat t er p urel^^_x^ersonaJI£Q-
^t h e jCjei tTTTl an t TTeTT^TncMv^vvasnoTTabi 1 i-
ty or obligaTton on the part of the estate
to be answered for in damages. It could
make no difference to the executor of that
estate whether it was to be divided ac-
cording to the will, or by the law of de-
scent. If the subject matter of this con-
tract had been something entirely foreign
to this estate, no one would maintain that
the defendant Avas not bound by it, because
he happened to be named executor in this
will, ilere the subject matter of the con-
tract was connected with the estate, but
in such a way that it was practically im-
material to the estate which way the
question was decided. There exists,
•172 therefore, in *this case, no sufficient,
actual, primary liabilitj' to which this
promise could be collateral. This seems
to us to be the fairest interpretation of
the law. The statute was passed for the
benelit of executors and administrators;
but it might be said of it, as has been said
of the protection afforded to an infant by
the law of contracts, that "it is a shield
to protect, not a sword to destroy." If
this class of contracts was allowed to be
avoided under it, instead of being a pre-
vention of frauds, it would become a pow-
erful instrument for fraud. As in this case,
the plaintiff would be deprived of his legal
right to contest the will, by a party who
has reaped all the l>enefit of the transac-
tion, and is shielded from resi)onsibility
by a technicality. We do not believe this
was the result contemplated by the stat-
ute.
The judgment of the Connty Court over-
ruling the demurrer and adjudging the
declaration suflieient is aflirmed, and case
remanded with leave to the defendant to
replead on the usual terms.
120
A
LARSON V. JENSEN.
(19 N. W. 130, 53 Mich. 427.)
Supreme Court of Michigan. April 23,
Error to Manistee.
L. W. Fowler, for plaintiff. L. G. Ruther-
ford, for defendant and appellant
/
ISSi.
CHAMPLIN, J. The plaintiff claimed that
he entered into an agreement with defendant
by which he was to furnish and deliver to one
John Labonta an unlimited amount of mer-
chandise, as he, Labont:!, might call for, or
order by mail, or otherwise; and defendant
was to pay plaintiff for all the goods so or-
dered or called for by Labonta; that in pur-
suance of that agreement plaintiff dehver-
ed goods to Labonta, from time to time, at
the request of defendant, and, at the time
this action was brought, plaintiff claimed a
balajice due him of about $400. On the trial
the plaintiff gave evidence tending to prove
the contract as alleged in the declaration. The
plaintiff was the only witness who testified
to the contract, and his statement of it was
denied by the defendant, who testified that he
told plaintiff that Labonta, his son-in-law, was
intending to engage in trade in a small way;
that he had a little money and that he would
help him a little; and asked plaintiff if he
could not let Labonta have some goods, and
he said he would.
The defendant contends that the contract,
as set out in the plaintiff's declaration, is void
as being against the statute of frauds, for the
reason that the promise of defeudant is col-
lateral, and is only to pay the debt or de-
fault of Labonta. This is a mistake. The
promise and undertaking of defendant, as al-
leged in the declaration, is an original promise,
and rests upon a sufficient consideration. The
goods were to be furnished to Labonta, it is
ti-ue, but upon the express agreement that
defendant should pay for them. Under the
declaration, the entire credit was originally
given to defendant.
The defendant also insists that, under the
evidence, which is all returned in the record,
it was the duty of the trial judge to have
taken the case from the jury, and decide the
case as matter of law in favor of defendant.
But this the trial judge could not do, if there
was any evidence tending to prove the plain-
tiff's claim. The testimony of the plaintiff,
however inconsistent with itself, tended, "in
some parts thereof, to sustain the declaration,
and the effect and weight to be given to it
was solely a question for the jury, and it
would have been error in the court to have
taken the case from them.
The court instructed the jury that the bur-
den of proof was upon the plaintiff to show
by a fair preponderance of evidence of the ex-
istence of the contract, and that in pursuance
of such contract he delivered the goods, rely-
ing entirely upon the promise of Jensen to pay
the debt And if the jury was satisfied by a
STATUTE OF FRAUDS.
jr/ fair preponderance of evidence that the bar-
gain was made as plaintiff claimed, and that
he relied entirely upon it and never looked
to Labonta for his pay, then he was entitled
to recover; otherwise he was not entitled to
recover. But if the jury believed the theory
0^ defendant that no contract of this kind
■was ever made, and that he never agreed to
pay any sum whatever absolutely, he is not
liable and they should find no cause of action.
The circuit judge placed the case very fully
and fairly before the jury, and at the conclu-
sion instructed them as follows: "The only
question for you to determine is, 'Was this
bargain made between the plaintiff and de-
fendant, whereby goods were to be delivered
to Labonta upon the credit of the defendant,
and did the plaintiff, reljing upon it, deliver
the goods solely upon the credit of this man
Jensen, and looking to no one else at all for his
pay?' That is the question. If you solve that
question in favor of the plaintiff, then he is
entitled to a verdict; if you solve it against
him, then he is not entitled to a verdict. The
plaintiff must have looked to the defendant
Jensen, from the beginning to the end of the
transaction." There is no error in the charge
of the court We do not think it is open to the
criticism that "the charge, as given, assumed
that the evidence made out an absolute prom-
ise to pay." On the contrary, it was the very
question he submitted to the jury, to be de-
termined by them from all the evidence in the
case.
The plaintiff testified: "Last August Mr.
Jensen came up to me, in Manistee, and made
aiTangements to furnish his son-in-law goods
when he called for them. The object that Mr.
Jensen wanted goods for his son-in-law was be-
cause he was a roving character, and he would
see them paid for. I should deliver the goods
to John Labonta, and he would see them paid.
He stated the object in wanting the goods:
His son-in-law was a sailor by profession, and
he wanted to settle him down. He wanted
his daughter to run the store, and his son-
in-law to work around the mills, if the store
didn't require his services. And I agreed to
do so."
K this testimony of the plaintiff was foimd
by the jury to be true, the agreement was not
within the statute of frauds. The statute does
not prevent a person from buying goods on
his own credit, to be delivered to another, un-
less in writing. In such case the important
question is, to whom was the credit given?
And this question the court fairly submitted
to the jury. And the fact that the goods ai-e
charged on the books of the seller to the
person to whom they were delivered is not
conclusive that they were sold upon his credit
Foster v. Persch, 68 N. Y. 400; Huzen v.
Bearden, 4 Sneed, 48; Walker v. Richard-s,
41 N. H. 388; Swift v. Pierce, 13 AUen, 136;
BaiTett V. McHugh, 128 Mass. 165; Champion
V. Doty, 31 Wis. 190; Ruggles v. Gatton, 50
111. 412. The plaintiff charged the goods de-
livered as follows: "John Labonta, by order
piiOMisE TO a:^swer foe debt of another.
121
of Charles Jensen." The plaintiff testified
that he gave credit to the defendant when he
let the goods go, and, Ln response to a ques-
tion put to him on cross-examination by de-
fendant's attorney, "Who did you look to for
pay for those goods?" replied: "Jensen;" and
that he did not look to Labunta for it. The
court Instructed the jury that "tlie way the
goods are charged upon the books does not
exclude the parties from showing the exact
fact to whom the credit waa given." While
there was no error in this portion of the
charge, we think the charge made upon the
books is quite as consistent with the view that
credit was originally given to defendant as to
Labonta; and the testimony received upon the
subject as to whom credit was given was un-
exceptionable.
There are no errors In the record that call
for a reversal of the judgment, and therefore
it is affirmed.
The other justices concurred
STATUTE OF FIJAUDS.
CRANE V. WHEELER.
"y (51) N. W. 1033. 48 :Minn. 207.)
Supreme Court of Minnesota. Jan. 25, 1S92.
Appeal from district court, Mower coun-
ty ; Faumrr. Judg:e.
' Petition of Henry Wheeler for allowance
of a claim ap:ainst insolvents, of whom
F. I. Crane was assiojnee. Judgment for
petitioner. The assignee appeals. Re-
versed.
Kina:sley & Shepherd, for appellant.
French & Wright, for respondent.
GILFILLAN.C. J. In the insolvency pro-
ceedings Wheeler filed his petition, verified
bj' his attorney, setting forth his claim
against the insolvents. The assignee dis-
allowed the claim, and the claimant ap-
pealed to the district court. Upon such
appeal the claim is to be tried as other
civil actions. Laws 1881, c. 148. § 8. When
the appeal came on for trial the assignee
objected to evidence being offered to prove
the claim on about this proposition, as
near as we can tell from the statement of
the objection in the settled case and from
the brief: That the court is to hear the
appeal only upon such proof of the claim
as was offered before the assignee, and, if
none was offered before him, then none
can be received by the court. There is
nothing in the statute to suggest such an
idea. No trial except upon an appeal is
contemplated. The claim was based upon
the insolvent's guaranty of a promissory
note. The facts found by the court and
the evidence fully sustained the findings.
Stating such facts briefly, they are: That
in June, 1882, Wheeler left with.Wilkins &
Smith, to loan for him, a sum of money,
with instructions to make no loan except
upon security of first-class real estate,
and paper indorsed by good indorsers.
That, contrary to such instructions, they,
in said June, loaned of said money $1,500
to one Gregson, taking his note therefor,
payable to said Wheeler in one year. Aft-
erwards, when informed they had made
Bald loan to Gregson, Wheeler stated to
them that he should look to them for the
money they had loaned contrary to his
instructions, and they agreed to be re-
Bponsible for the same, as though they
had borrowed the money, and to pay the
note in case Gregson made default in pay-
ment; and they thereupon wrote and
signed this guaranty on the note: "We
hereby guaranty the collection of the
within note. June 2, 1885." The note
seems, up to that time, to have been in
the possession of Wilkins and Smith. The
question mainly argned in the case is,
doe.s the guaranty come within the stat-
ute 'of frauds, so as to be void because it
does not express the consideration? In
form, at least, it is a promise to answer
for the debt or default of another. The
form, however, is not decisive; for where
vne leading purpose of the promise is, noli
to become surety for another, not for the
benefit in any way of such other, but to
promote the interest, to effect some pur-
pose, of the promisor, as independent of
the debt or contract guarantied, as where
it is to enable the guarantor to transfer
the debt or contract, (Nichols v. Allen, 22
Minn. 283; Wilson y. Hentgcs, 29 Minn.
102, 12 N. W. Kep. 1.51,) or to satisfy or
discharge an obligation resting on him-
self, (Sheldon v. Butler, 24 Minn. .51:^,) it is.
notwithstanding its form, and altliough
it incidentally guaranties the debt of an-
other, regarded as an original, and not a
collateral, undertaking, and so not with-
in the statute of frauds. This case cannot
be distinguished from Sheldon v. But-
ter. The insolvents had misappropriate'?
Wheeler's money, and they were liable to
him for it. If he could be induced to ac-
cept the Gregson note, and thus ratify
what they had done, it would discharge
their liability. To induce him to do it
they guarantied the note. Under the cir-
cumstances, the guaranty, while in form
a promise to answer for the default of an-
other, was in fact and in substance a
promise to pay and discharge their own
liability if Wheeler could not collect it
from Gregson. The claimant must stand
on the terms and nature of the guaranty.
It is a guaranty of collection,—/, p., that
the note is collectible. The condition of
the guarantor's liability is that the cred-
itor shall be unable to collect the debt, he
using due diligence. Ordinarily, in such
cases, due diligence requires of the creditor
to promptly bring suit, and diligently pros-
ecute it to the return of an execution.
There may be circumstances that will ex-
cuse omission to bring suit, — as, if the prin-
cipal debtor be insolvent, so that a suit
against him would be fruitless; or if the
guarantor should waive the use of dili-
gence. The only effort which the court
finds the claimant made to collect the
debt fromGregs()n was that September 20,
1886, he brought an action against him,
in due time recovered judgment and issued
execution, which was returned unsatis-
fied. The note was past due when the
guaranty was made, so that there was a
delay of nearly 15 months before suit was
brought. No fact is found to excuse this
delay. The court found that since Octo-
ber 8, 188G, Gregson has been insolvent,
but that, of course, would not excuse the
prior delay. Whether the qijestion of due
diligence in such cases be one of law or of
fact, or a mixed question of law and fact,
an unexplained delay of nearly 15 months
in bringing suit makes a case of omission
to use due diligence. Moaklev v.Riggs, 19
Johns. 69; Kies v. Tifft, 1 Cow. 98; Penni-
man v. Hudson, 14 Barb. 579; Craig v.
Parkiss, 40 N. Y. 181. For failure of claim-
ant to show^ due diligence to collect from
Gregson, or to show any excuse for omit-
ting it, there must be a new trial. Order
reversed.
PROMISE TO ANSWER FOR DEBT OF ANOTHER.
123
/ WAIT V. WAIT'S EX'R.
/ (28 Vt. 350.)
Supreme Court of Vermont. Rutland. Feb.
Term. 1856.
Appeal from the decision and report of com-
missioners, disallowing a part of the appellant's
claim against the estate of Joseph H. Wait, de-
ceased. The nature of the claim, and the facts
in relation thereto, sufliciently appear in the
opinion of the court. The county court, Sep-
tember Term, 18m,— PiKRPOiNT, J., presiding,
—rendered judgment in favor of the appellant
for the amount of his claim. Excei)tions by
the appellee.
*351 *U. A'. Xicholson and C. L. Williams for
the appellant.
B. Fristne. and hJ. Edrjerion for the appellee.
The opinion of the court was delivered by
ISilAM, J. This is an appeal from the decis-
ion of the probate court, disallowing the plain-
tiff's claim against the estate of Joseph II. ^VaiL
The plaintiff claims the sum of .^140,00 for his
expenses in erecting a barn on premises then
owned by Joseph Wait. The barn was erected
at the request of Joseph Wait, under his assur-
ance that by some arrangement the premises
should be conveyed to the plaintiff, so that he
should have the benefit of his labor and ex-
penses; 01 if the premises were conveyed to an-
other, that person should pay the amount e.x-
pended in erecting the building. In 1847, Jo-
seph Wait conveyed these premises and this
barn to Joseph H. Wait, and they now consti-
tute a part of his estate. The fact is found by
the auditor, that soon after that conveyance,
Joseph H. Wait informed the plaintiff that there
was an understanding between him and Joseph
Wait, that he was to pay him for building the
barn, and that he would do it as soon as he
could. This promise the auditor finds was re-
peated on several occasions down to 1851. and
that intheirlast conversation, the deceased rec-
ognized the debt as due from him, and prom-
ised to pay it. It is now insisted that this prom-
ise to pay the plaintiff his claim is void under
the statute of frauds, it not being in writing,
and being a promise to pay the debt of another.
The payment of this claim due the plaintiff was
a part "of the consideration for which those
premises were conveyed to the deceased, and
was made at the request of Joseph Wait, in ful-
filment of those assurances which had been
given to the plaintiff. That is plainly the find-
ing of the auditor, and the only reasonable con-
struction that can be given to his language
throughout his report. Under those circum-
stances, we think, the authorities are clear that
this promise is founded upon a sufficient con-
sideration, and that it is to be regarded as an
original and binding contract. There is no
doubt that a premise to pay the debt of another,
though made at the same time the credit was
given to the principal debtor, will be void, un-
der the statute, if not in writing. The same re-
sult follows, where such a promise is subse-
quently made, if the consideration of that
promise is the subsis*ting liability of the *352
original debtor. The promise in those
cases is collateral, and therefore void; and the
promise will be deemed collateral, so long as
the liability of the original debtor continues.
The cases of Fish v. Hutchinson. 2 Wils. 94;
Chater v. Beckett, 7 Term 11. 201, and Wain v.
Warlters, 5 East 10, are illustrations of that
principle. But that principle has no applica-
tion to cases where the original debtor places
property of any kind in the hands of a third
person. "and that person promises to pay the
claim of a particular creditor of the debtor.
The promise in such case is an original prom-
ise, and the property placed in his hands is its
consideration. In this class of cases, it is im-
material whether the liability of the original
debtor continues or not. In the case of Farley
V Cleveland, 4 Cowen 432, Savagk, Cn. J. ob-
served that "when there is a new and original
consideration of benefit to the defendant, or
harm to the plaintiff, moving to the party mak-
int; the promise, the subsisting liability of the
original debtor, is no objection to the recov-
ery " In 1 Smith's Lead, cases 32'J. this subject
is examined by the American editor, and from
a review of the authorities on this question, he
observes that "a promise to paj' an antecedent
debt, in consideration of property placed in the
haniis of the promisor by the debtor, has been
held not to require a writing to give it validity,
and that it seems reasonably well settled, that
a verbal promise to be answerable for the ante-
cedent debt of another will be valid, where it is
made upon a new and independent considera-
tion, although the debt itself still remain in full
force; but that where the consideration grows
out of the original contract, the promise will
be within the statute." The cases there re-
ferred to on this subject are numerous, and
fully sustain this principle. The case under
consideration clearly falls within the applica-
tion of that doctrine. The promise by the de-
fendant to pay this debt of the plaintiff is fully
found by the auditor; its consideration was not
the subsisting liability of Joseph Wait, neither
did it arise out of the original contract, but
from property placed in the defendant's hands
for that purpose by the original debtor. We
are satisfied that the promise of the defendant
in this case, is to be regarded as an original
promise founded upon a new consideration, and
legally binding upon him.
On the trial of this case it was insisted
*353 that parol evidence was *inadmissible to
show that the jjaymentof this debt was a
part of the consideration for which the premises
were conveyed by Joseph Wait to the deceased,
as it contradicted the deed and bond which is
made part of this case. The consideration of the
deed is expressed to be for the sum of three
thousand doll-ars. The bond was given to sup-
port the grantor and his wife during their lives,
and to pay specified sums in money to his three
daughters, amounting to the sum of five hun-
dred dollars. As between Joseph Wait and the
deceased, it is possible the bond would be
evidence of the extent of his claim. The object
of the bond was to secure the support of the
grantor and his wife, and the payment of certain
sums as a family settlement of his estate. It was
not intended to cover all the obligations as-
sumed by the grantee. The plaintiff is not a
party to the deed or bond. The object of the
testimony is not to show a different obligation
from that expressed in the bond, nor to vary or
affect the leiral operation of the deed, but to
show that the payment of this debt was a part of
the three thousand dollars which is expressed to
be the consideration of the deed. The execution
of the bond was reducing to writing only a part
of the consideration of the deed, and that part
onh', which was to be rendered to the grantor.
In such case, it is competent to prove an addi-
tional and suppletory agreement by parol, as
that the remaining part of the consideration
was to be paid to the plaintiff: Bowen v. Bell
20 John. 341; Greenl. Evid. § 284. a. i$ 304; Jef-
fery v Walton. 1 Starkie 267; Rockwood's case,
1 Cro. Eliz. 164. We think the testimony was
admissible, and that the plaintiff is entitled to
recover the amount of his claim.
The judgment of the county court isaflirmed,
and the case is to be certified to the probate
court.
124
STATUTE OF FRAUDS.
'b
^
^
MALLORT V. GILLETT. l^\
(21 N. Y. 412.) \ \ *
■Court of Appeals of New York.
June, ISGO.
Henry
George T. Spencer, for appellant
M. Hj-de, for respondent
COMSTOCK, C. J. This case ought to be
one of first impression. By the statute of
frauds, all promises to answer for the debt
of a third person are void tmless reduced to
writing. One Haines owed the plaintiff a
debt for repairs on a boat, for which the lat-
ter had a lien on the chattel. In considera-
tion of the relinquishment of that lien, and
of forbearance to sue the original debtor, the
defendant promised the plaintiffs without
writing, to pay the debt at a certain future
time. There is no pretense that the defend-
ant's promise was given or accepted as a
substitute for the original demand, or that
such demand was in any manner extinguish-
ed. The promise was, therefore, to answer
for the existing and continuing debt of an-
other, or, in the language of the books, it was
a collateral promise. The consideration was
perfect, but as there was no writing, the
case seems to fall within the very terms of
the statute. Authorities need not be cited
to prove that the sufficiency of the considera-
tion never takes a case out of the statute.
Indeed, there can be no question imder the
statute of frauds in any case, tmtil it is as-
certained that there is a consideration to
sustain the promise. Without that element
the agreement is void before we come to the
statute. A naked promise is void on general
principles of law, although it be in writing.
The mere existence of a past debt of a third
person will not sustain an agreement to pay
it, unless there be forbearance to sue, or
some other new consideiution. In such a
case, when we find there is a new considera-
tion, we then, and not till then, reach the
inquiry whether the agreement must be in
writing. Such is this case. It is nothing
to say that here was a new consideration.
If such was not the fact, there would be no
question in the case.
There is sometimes danger of error creep-
ing into the law through a mere misunder-
standing or misuse of terms. The words
"original" and "collateral" are not in the
statute of frauds, but they were used at an
early day — the one to mark the obligation of
a principal debtor, the other that of the per-
son who xmdertook to answer for such debt.
This was, no doubt, an accurate use of
language; but it has sometimes happened
that, by losing sight of the exact ideas rep-
resented in these terms, the word "original"
has been used to characterize any new prom-
ise to pay an antecedent debt of another
person. Such promises have been called
original, because they are new; and then as
original undertakings are agreed not to be
within the statute of frauds, so these new
promises, it is often argued, are not within
it If the terms of the statute wei-e adhered
to, or a more discnminating use were made
of words not contained in it, there would be
no danger of falling into errors of this de-
scription.
What is a promise to answer for the
"deot or default" of another person? Un-
der this language, perplexing questions may
arise, and many have arisen, in the courts.
But some propositions are extremely plain;
and one of them is, that the statute points
to no distinction between a debt created at
the time when the collateral engagement is
made, and one having a previous existence.
The requirement is, that promises to answer
for the debt etc., of a third person, be in
writing. The original and collateral obliga-
tions may come into existence at the same
time, and both be the foundation of the cred-
it, or the one may exist and the other be
created afterward. In either case, and equal-
ly in both, the inquiry under that statute is,
whether there be a debtor and a surety, and
not when the relation was created. The lan-
guage of the enactment is so plain that there
is no room for interpretation; and its policy
is equally cleai'. If A. say to B.: "If you
will suffer C. to incut a debt for goods which
you will now or hereafter sell and deliver to
him, I will see you paid," the promise is with-
in the statute. This no one ever doubted.
But if A. say to B.: "If you will forbear to
sue C. for six months on a debt heretofore
incurred by him for goods sold and delivered
to him, I will see you paid"— is not the case
equally plain? So, if, in such a case, instead
of forbeai"ance, there is some other sufficient
consideration, for example, forgiving a part
of the debt or relinquishing some security
for it, the difference is still one of circiuu-
stance, but not of principle. In the case
first put, „the consideration of the guaranty
is the original sale of the goods on the faith
of it; in the other, it may be forbearance or
the relinquishment of some advantage, the
original debt still remaining. Looking at
the comparative merit of these considera-
tions, it would seem to be" the highest in the
first case, for the whole debt owes its origin
to the collateral promise, while in the other
the debt remains as before, and only some
collateral advantage is lost. But the appli-
cation of the statute depends on no such
test. These considerations are, all of them,
sufficient, and simply sufficient, to sustain
the auxiliary undertaking. But if they also
dispense with a wi-iting, then, so far as 1
can see, there are no cases to which this
branch of the statute of frauds can be ap-
plied.
Such an extreme position has not been tak-
en; but it is said that the promise now in
question need not be in writing, because it
was new and original, and was founded on
the relinquishment to the debtor of a secu-
rity which the creditor held. To say that it
was new and original expresses no idea of
PROMISE TO ANSWER FOR DEBT OF AXOTHER.
125
any Importance. Every promise Is new and
original that was never made before. An
undertaliiug to answer for an old debt of a
third porson certainly has no more of orig-
inality than one to answer for a debt now
contracted. As to the relinquishment of the
lien or security, this, althougli a meritorious
consideration, is, in judgment of law, no
more so than any other which is sufticient
to sustain a contract Forbearance to sue
has the same legal merit, and so has the re-
lease of a part of the debt.
There is nothing so remarkable or pecvdiar
about this case that it may not be included
in some general proposition which involves
a principle of law. Now, one of these two
propositions must, I think, be true: 1. The
statute of frauds never applies to a promise,
the subject of which is an antecedent debt of
a third person to whom it is collateral; or,
2. It applies to all such promises where the
consideration moves solely between the cred-
itor and original debtor and the debt still
remains. If the first is true, then the prom-
ise in question is valid without a writing,
and so would any such promise be, without
regai-d to the particular nature of the consid-
ei-ation; it being necessary, of course, that
there should be some sufficient consideration.
If the first be not true, and the second is,
then the promise in this ease is void, because
it falls directly within it The first proposi-
tion cannot be tme, upon the plain terms and
evident policy of the statute; and no such
doctrine was ever asserted. The universal
tnith of the second one necessarily follows,
unless the law will discriminate between dif-
ferc-ut promises according as the considera-
tion may diffier in the particular nature or
kind. But is such a discrimination possible, so
long as, in anygiven case,the consideration is
sufficient in the eye of the law, and moves
solely between the original parties? No one,
it seems to me, can hesitate to answer such
a question in the negative. Yet we are told,
without reason or principle, that when a
creditor releases a security to the debtor, al-
though without releasing the debt a promise
of another person, foimded on that peculiar
consideration, is not within the statute. The
inevitable logic of such a proposition will in-
clude a like promise founded on any other
consideration equally sufficient to sustain a
contract; and, therefore, we are carried back
to the first general proposition above stated,
which is admitted to be false. It has al-
ready been observed, that, without a consid-
eration, no question on the statute of frauds
can arise.
In this elementary view of the question, I
do not understiiud that much difference of
opinion exists. It is claimed, however, tliat
the course of adjudication has been such,
that we cannot determine the case before us
according to a consistent inile of law. This
argument is foundeid in a misapprehension of
the authorities, some reference to which will
be necessary.
In this state, an early case, and one of vei7
high authority, is that of Leonard v. Vreden-
burgh, 8 .lohns. 29, in which Chief Justice
Kent divided the c-ases on this branch of the
statute of frauds into three classes, as fol-
lows: (1) Where the promise is collateral
to the i)rincipal contract, but is made at the
same time, and becomes an essential ground
of the original credit. (2) "Cases in wliich v
the collateral undertaking is subsequent to
the creation of the debt, and was not the (
inducement to it, though the subsisting lia- ,
bility is the ground of the promise." "Hfre,"
the chief justice observed, "there must be
some further [or new] consideration shown,
having an immediate respcKit to such liabil-
ity; for the consideration of the original dibt
will not attach to this subsequent promise.
(3) Cases where the promise to pay the debt
of another arises out of some new and orig-
inal cousidei-ation of benefit or harm moving
between the newly contracting parties."
"The two fii"st classes," he further obsen'cd,
"are within the statute of frauds, but the
last is not" I suppose, in the light of later
decisions, that the opinion of that great
jurist, delivered in the case cited, may con-
tain some inaccurate remarks respecting the
right to prove a consideration for a collateral
agreement where none appeared in the writ-
ing. It would be so considered, especially
since the change we have made in the lan-
guage of the statute of frauds, requiring the
consideration to be expressed in the collat-
eral insti-ument But the above classifica-
tion of the cases, and the connected remarks
respecting each class, are strictly correct, and
they have been a landmark of the law for
forty years. Does the present case belong
to the second class, which is within the stat-
ute, or to the third, which is not? Manifest-
ly it belongs to the second, because that is a
class where the undertaking is subsequent to
the creation of the debt. It does not fall
without that class in consequence of the
newness of the consideration, because, the
learned chief justice said, "here must be
some further [new] consideration having an
immediate respect to such liability." It can-
not fall within the third class, because if we
arrange it there, we necessarily compress the
two classes into one, or. more properly
speaking, we merge the second wholly into
the third. In such a disposition of the pres-
ent question no second class is left of collat-
eral undertakings subsequent to the creation
of the original debt, founded, as they must
be, on some new or "further consideration."
The classification referred to. on a casual
reading, is perhaps open to some misappre-
hension, and I think it has been occasionally
misapprehended. What then, is the tme
distinction between the second and third
classes? They are both of them promises,
in form at least to pay the antecedent debt
of a third person, and in that respect they
are alike. The distinction, therefore, is in
the consideration of the promises which be-
126
STATUTE or FEAUDS.
long to the two classes; not in respect to its
particular nature or kind, but in respect to
the parties between whom it moves. In the
one class, the consideration is characterized
as a "further one, having immediate respect
to the [original] liability" of the debtor; in
the other, as "new and original moving be-
tween the newly contracting parties." In
the second class, the new or "further" con-
sideration moves to the primary debtor. It
may consist of forbear-ance to sue him, of a
release to him of some security, or of any
sufficient bejiefit to him or harm to the cred-
j itor, but in which the collateral promisor has
' no interest or concern. In the third class,>
the consideration, whatever its nature, moves
I to the person making the promise, and that
i also, as in all other cases of contract, may|
I consist of benefit to him or harm to the party!
with whom he is dealing. This distinction'^
is also extremely well expressed by Chief
Justice Shaw of the supreme court of Massa-
chusetts. One class of cases (within the
statute), he says, is "where the direct and
leading object of the promise is to become
the surety or guarantor of another's debt;"
the other class (not within the statute) is
"where, although the effect of the promise
is to pay the debt of another, yet the lead-
ing object of the undertaker Ja^o sub serve
..O.r promote some interestjor_imnHase]]o|Jiis_
. own." Nelson vT^^nton, 3 Mete. (Mass.)
390-^5150. Chief Justice Savage, in this state
(Farley v. Cleveland, 4 Cow. 432, 439), made
the same classification. "In all these eases,"
he observed, referring to those which fall
within tlie third class, "founded on a new
and original consideration of benefit to the
defendant or harm to the plaintiff, moving to
the party making the promise, either from
the plaintiff or original debtor, the subsisting
liability of the original debtor is no objection
to a recovery." In one respect, this lan-
guage of Chiel Justice Savage, has greater
precision than that of Chief Justice Kent.
The latter speaks of the consideration as
"moving between the newly contracting par-
ties." The former characterizes it as mov-
ing to the party making the promise. This
description is more exact, as well as more
comprehensive, because it includes a variety
of cases found in the books, where the new
consideration springs from the original debt-
or and not the creditor, as, for example,
where the debtor, by conveyance of property
or otherwise, places a fund in the hands of
a third person, the latter promising, in con-
sideration thereof, to pay the debt. But the
difCerence is not one of principle, because
there is a sense in which, even in such cases,
the new consideration moves from the cred-
itor through the debtor to the person making
the promise, and on that ground many cases
hold that the creditor may himself sue on the
promise, although it was made to the debtor.
Lawrence v. Fox, 20 N. Y. 268, and the cases
cited. Where the promise in this particular
description of cases has been made directly
to the creditor, the only question has been
on the statute of fi-auds; and the rule is very
properly settled that they are not within the
statute. The cases of Farley v. Cleveland,
supra, Gold v. Phillips, 10 Johns. 412, and
Olnistead v. Greenly, 18 Johns. 12, belong to
this class.
Omitting, then, the first class of collateral
undertakings — I mean those made at the
same time with the creation of the debt — as
having nothing to do with the present ques-
tion, there are two kinds of promises of ex-
tensive use in the dealings of community,
which, in form and effect, very much re-
semble each other; each being to answer for
or pay a debt already due or owing from a
third person, yet wholly different in respect
to the motive and consideration. In the one
class the promisor has no personal interest
or concern, and his undertaking is made sole-
ly upon some fresh consideration passing
between the creditor and his debtor. This
class is within the statute. In the other,
the promise may be in the same form, and,
when performed, may have the same effect,
but it is made as the incident of some new
dealing in which the promisor is himself con-
cerned, and upon a consideration passing be-
tween the creditor or the debtor and himself.
This class, which may include a great varie-
ty of particvilar examples, is not within the
statute. The distinction is broad and in-
telligible, although the formal resemblance
in such transactions may have occasionally
led to inaccuracy of expression or decision.
The great body of the cases, however, will
be found to illustrate this distinction, and to
establish it fiiTQly as a guide in this branch
of the law. If such a distinction were a
questionable one, the tendency of the doubt
woidd necessarily be in the direction of hold-
ing both classes of oases to be within the
statute, but never in the direction of placing
without the statute any one of the cases be-
longing to the first of these classes.
With this classification before us, it wiU
be proper to notice more in detail the cases
cited on the argument, and others not cited.
In Skelton v. Brewster, 8 Johns. 376, the
promise was held not within the statute, be-
cause the delator had delivered goods to tlie
defendant as the consideration of the under-
taking, and the plaintiff, the creditor, had
discharged the debt. For two reasons, there-
fore, the promise by parol was good: First,
it was founded on a new consideration re-
ceived by the promisor; and, second, it was
accepted as a substitute for the original debt;
it could not be collateral.
In Gold V. Phillips. 10 Johns. 412, one Wood
owed the plaintiffs. He conveyed land to
the defendants, who, upon that considera-
tion, bound themselves to him to pay that
and other debts. Being thus bound, they so
informed the plaintiffs, and agreed to pay
them. The case, therefore, very distinctly
falls within the third class, according to the
distinctions above set forth. Bailey v. Free-
PROMISE TO ANSWER FOR DEBT OF ANOTHER.
12?
man, 11 Johns. 221, was on a written guax-
anty made at the same time with the prin-
cipal contract, and it has nothing to do
with the present question. Nelson v. Dubois,
13 Johns. 175, is equally foreign to the in-
quiry. The plaintiff sold a horse to one
Bnmdige, taking tlierefor the note of Bruu-
dige, payable to hiinsolf or beai-er, and in-
dorsed by the defendant. The lejjral propo-
sition in the case was, that a guaranty might
be written over the defendant's name, it be-
ing a condition of the sale that he should be-
come securitj' for the price. In Myers v.
Morse, 15 Johns. 425, the plaintiffs were lia-
ble as indorsers of a note of one H- Morse,
and they held a note of the same person in-
dorsed by the defendant The declaration
set forth that the plaintifSs had agreed not
to hold the defendant liable on his indorse-
ment, in consideration of which, the defend-
ant agreed to indemnify them ag^iinst one-
third of any loss they might sustain on their
own indorsement of the same person's note.
A plea of the statute of frauds was held
bad. This was plainly a case where the con-
sideration moved to the defendant himself,
and, therefore, it was held to fall within the
third class of cases, according to the distinc-
tion which has been explained. The defini-
tion of Chief Justice Kent, in Leonard v.
Vredenburgh, was expressly adopted and ap-
plied to the facts. In Olmstead v. Greenly,
18 Johns. 12, the plaintiff was an accom-
modation indorser on the note of B., and B.
also owed him a sum of money; B. there-
upon placed money and property in the
hands of the defendant to provide for pay-
ing the note and the debt, and upon that con-
sideration the defendant promised the plain-
tiffs to make such payment. The coui't said
this was an original contract on an inde-
pendent consideration received by the de-
fendant Farley v. Cleveland, 4 Cow. 432,
and same case in error, 9 Id. G39, already
mentioned, was entirely similar. The plain-
tiff held the note of one Moon, which the de-
fendant promised to pay in consideration of
fifteen tons of hay sold to him by Moon. The
promise was hold to be not within the stat-
ute. The reporter's note truly expresses the
principle of the decision. It is as follows:
"Where a promise to pay the debt of a third I
f person arises out of some new consideration!
of benefit to the promisor or harm to the^
j pi'omisee, moving to the promisor, either i
' from the promisee or the original debtor,)
' such promise is not within the statute of
frauds, although the original debt still sub-
' sists and remains entirely unaffected by the
-t new agreement" In Chapin v. Merrill, 4
Wend. 657, the promise was not within the
statute, because it was not collateral to any
debt or liability of a third person to the
promisee. The third person proposed to con-
tract a debt with fourth parties, and the
plaintiff agreed to guarantee , that debt, the
defendant at the same time agreeing to in-
demnify him for so doing. The plaintiff
might have invoked the statute. If his guar-
anty had not been in writing. But the de-
fendant was his indemnitor merely. It was
a contingent liability, of necessity original,"
because there was nothing to which It could
be collateral. There \vas no debt of the
third person to the plaintiff. The case there-
fore, had not even the formal resemblance
to the present one, which, existing in other
cases, has misled the plaintiff's counsel. The
eases of Gardiner v. Hopkins, 5 Wend. 23;
Ell wood V. Monk, Id. 235; King v. Despard,
Id. 277; and Meech v. Smith, 7 Wend. 315,—
are, all of them, in principle, with differences
of detail, like Parley v. Cleveland, supra. In
each of them the consideration of the new
promise moved to the defendant proceeding
either from the original debtor or the cred-
itor, and the decisions were placed distinctly
on that ground.
It cannot faU to be seen, that nearly all
the cases which have been mentioned; in
fact, all of them which exhibit a promise to
pay or answer for the debt of another per-
son, are essentially of one type. With great
variety in the circumstances, one controlling
characteristic pei-vades them all. In__every
instance the consideration of Jhe promise, was.
beneHcTaTliJTEe person pro mising. This was
the' fSTture whicinmparted to the promise
the character of originality, as that term is
used with reference to the statute of frauds.
In not one of them is it true that the under-
taking was entered Into upon a consideration
merely beneficial to the debtor, but of no con-
cern to the promisor; and I can confidently
say that not one of those cases cont ains even
a dictum, which, being understood, coxuite-
nances the doctrine contended for on the part
of the plaintiff in this case. The principle
involved is tlie same which loms through oth-
er cases that have not been cited. For ex-
ample, A., holding the note of B., transfers
it to C. upon a consideration moving from C
to him, and with a parol guaranty of the
payment This, in a merely formal sense, is
a promise to answer for the debt of the mak-
er of the note, and it has been strenuously
contended that such a promise is within the
statute. But the rule is otherwise; it be-
ing considered tliat such transactions, how-
ever close to the letter, are not within the
intent of the statute; because they have
their root in a new dealing which concerns
the promisor, and in a new consideration
which moves to him. Brown v. Curtiss, 2
N. Y. 225, was such a case, in which Judge
Bronson remarked: "This belongs to the
third class of cases mentioned by Kexit, C.
J., in Leonard v. Vredenburgh; there was a
new and distinct consideration independent
of the debt of the maker, and one moving
between the parties to the new promise."
Such are also the cases of Johnson v. Gil-
bert, 4 Hill, 178, and the very recent one in
this court of Cardell v. McNiel (decided at
the last term) 21 N. Y. 336.
I have not yet referred to the case of Slin-
128
STATUTE or FRAUDS.
gerland v. Moi"se, 7 Johns. 463, which seems
to be much relied on; but it does not pi'e-
isent the question now before us. The pLiin-
tiff had distrained the goods of his tenant
for rent, but did not remove them. There-
upon the defendants signed a writing in
these words: "We do hereby promise to de-
liver to Peter Slingerland all the goods and
cliattels contained in the within inventory in
six days after demand, or pay the said Peter
51450." Looking at the face of that writing,
it is only siirprising that any one could ever
thinli^ it was within the statute of frauds.
In its very terms it was original, and not col-
latei-al. It discloses no debt of any one else
than the defendant who signed it Looliing
outside of it, we leara there was at least a
claim made for rent due from another per-
son, but it is quite obvious that, as a substi-
tute for that claim, the creditor accepted the
original promise of the defendant to deliver
the goods or pay a sum of money. This is
the evident import of the agreement itseK,
for it recognizes no continuing debt or lia-
bility of the tenant, nor does it undertalie to
pay his debt or answer for him in any way.
The goods were the fund. The defendant
took them under his own control (a fact
which the agreement assumes), and upon that
consideration made himself the primary debt-
or, and not the guarantor or surety. I think
the case was weU decided, although it is
veiy obscurely and scantily reported.
So far, then, we find no cases or dicta in
point. Yet it would not be true to say that
the plaintiff's position is wholly unsupported
by any authority in the coui^ts of this state.
In Mercein v. Andrus, 10 Wend. 461, Savage,
C. J., made this remark on a motion for a
new trial: "The judge correctly stated to the
jury tliat where the promise of one person
to pay the debt of another was founded upon
the consideration of surrendering up proj)-
erty levied on by an execution, the promise
was an original undertaking, and need not
be in writing to be valid." Of course, no
such point wa.s decided, because the decision
granted a new trial upon another question
not material to the present inquiry. The
chief justice cited no authority. If he meant
to lay down the doctrine, that a new consid-
eration, moving from the creditor to the debt-
or, the debt still remaining, would sustain
the unwritten promise of another person to
pay the debt, there was no authority to be
cited, for no such proposition had ever been
advanced in this state. If, however, the
charge at the trial and the obsei-vation of
the chief justice assumed, as the law was,
that the levy of an execution extinguished
the debt, and that the release of the levy re-
mitted the creditor to the new promise as
his only remedy, then the remark was strict-
ly correct, but it has no application to this
case.- Such is probably the true explana-
tion; and we shall presently see there are
English cas<^ under the statute standing on
that ground. The plaintiff's counsel has been
able, however, to cite one case which is en-
tirely to his purpose. In Fay v. Bell, La-
lor's Supp. 251, the plaintiff had a lien on a
pair of boots which he had mended, and in
consideration of releasing that lien and giv-
ing up the boots, the defendant promised ta
pay his demand, which amoimted to fifty
cents. So far as appears, the debt still re-
mained. The case went up from a justice's
court, through the common pleas, to the su-
preme court, where the question was dis-
posed of with the single observation that the
promise was "a new undertaking, founded on
a new and distinct consideration, the relin-
quishment by the plaintiff of his lien on the
boots, and which was sufficient to uphold the
promise made." The remark, as made, is
strictly true. The consideration was dearly
sufficient to uphold the promise, but the stat-
ute of fi-auds requires not only a considera-
tion but a writing. The case was of very
slight importance, and the principles of the
question were not examined. In the same
book is another case, precisely the other way>
the opinion being given by another judge.
In Van Slyck v. Pulver, Lalor's Supp. 47, the
promise was made in consideration that the
plaintiff would suspend proceedings on an
execution against his debtor. This forbear-
ance was admitted to be a sufficient consid-
eration, and it was certainly a new one; but
the promise was held void within the statute.
In all the judicial history of this state,
then, there is but one adjudged case which
sustains the doctrine contended for, and that
is one entitled to no great consideration. I
wUl now refer to several of a very decisive
character, which furnish a true exposition
of the statute, and show that the rule is the
other way. One case I have just mentioned,
which is directly in point, and is of a date
comparatively recent Going back to an ear-
ly day, in Simpson v. Patten, 4 Johns. 422,
the plaintiff forebore to sue his debtor, and
upon that consideration the defendant prom-
ised to pay the debt as soon as he could sell
a piece of land which belonged to the debtor.
The promise was held void within the stat-
ute of frauds, the court observing: "A prom-
ise to pay the debt of a third person must
be in writing, notwithstanding it is made
on a sufficient consideration." I have some
hesitation in citing Jackson v. Rayner, 12
Johns. 291, because it seems to me to have
gone too far. The defendant had received
an assignment of the debtor's property, and
upon that consideration, as well as forbear-
ance, the defendant promised to pay the de-
mand. The court regarded the uncondition-
al promise as evidence that the fund was
adequate. Upon the discrimination made in
the later cases (heretofore cited), the convey-
ance of the property to the defendant was a
new considei-ation, moving to him from the
debtor, and made the promise an original
one. Nevertheless, on the ground that the
original debt still remained, the promise was
held void under the statute. In Smith v
PROMISE TO ANSWER FOR DEBT OF ANOTHER.
129
Ives, 15 Wend. 182, the declaration was on
a written guaranty of a note, the considera-
tion alleged being forbearance to sue the
maker. Plea, that no consideration was ex-
pressed in the writing. The plea was held
good, the cc^urt saying: "Forbearance has
never been considered a new consideration
passing between the newly contracting par-
ties, so as to take the case out of the stat-
ute." In Packer v. Willson, 15 Wend. 343, a
guaranty of the same nature, and upon the
same consideration, was again held to be
void. In Watson v. Randall, 20 Wend. 201,
these propositions were expressly aihriued:
(1) An agreement to forbear to sue a debtor
is a good consideration for the promise of a
third pei-son to pay the debt, but, to render
the promise obligatoi-y, it must be in writ-
ing. (2) While the debt remains a subsist-
ing demand against the original debtor the
promise of a third person is collateral, and
must be in writing. In Barker v. Bucklin,
2 Denio, 45, a new ti'ial was ordered upon a
point not now material; but the present
question was quite fully examined by Mr.
Justice Jewett According to his views, the
promise in tliis case is clearly void. If I
were to criticise his opinion, I should say he
goes somewhat too far, by reason of not dis-
criminating so as to uphold promises where
(the original debt still remaining) the new
consideration moves from the creditor to the
promisor as well as from the primary debt-
or. In Kiugsley v. Balcome, 4 Barb. 131, the
principal cases were reviewed by Mr. Jiistice
Sill, and his conclusion is thus stated: "The
true rule is, that the new original considera-
tion spoken of must be such as to shift the
actual indebtedness to the new pi-omisor, so
that, as between him and tlie original debtor,
he must be bound to pay the debt as his own,
the latter standing to him in tlie relation of
surety." I do not tliink this a perfect defi-
nition of an original promise to pay a sum
for which another was previously bound as
the primary debtor, because, as I have shown,
there are many cases which such a defini-
tion does not include. The more we exam-
ine the original classification of Chief Justice
Kent in Leonard v. Vredenburgh, the more
we shall find it the result of a profound and
masterly view of the subject; it being ucc-
essaiy, however, to the completeness of his
definition, that the new or original consid-
eration may move to the promisor as well
from the debtor as the creditor, the funda-
mental requisite being that such considera-
tion must not be one wholly existing or
moving between the debtor and the creditor.
These numerous authorities are decisive.
They all present examples where tlie collat-
eral undertaking was founded on a consid-
eration sufficient to sustain the promise, but
of no personal concern to the promisor; yet
the promises were void, because they fell
within the precise terms and the undoubted
policy of the statute of frauds. Certainly
that statute was not enacted for cases where
nOPK.SEL.CAS.CONT. — 9
the promise woidd be void at the common
law for want of a consideration to sioistain
it If it was not I'uacted for the very eases
where a new consideration arises, additional
to the original debt, that being insufficient
according to aU authority, then why was it
ever passed? Indeed, the struggle in the
courts has been to withdraw from its inUu-
ence. not such cases as these, but otliers
having a close formal resemblance, yet dis-
tinguishable, not because there is a consid-
eration, but because it moves to the promis-
or, and so gives to his undertaking an origi-
nal character. A perM»n who receives a con-
sideration may be bound by any hiwful prom-
ise founded upon it, and that promise may
as well lie to pay another man's debt as to
do any other act. The success of this stinig-
gle, in a variety of instances not within the
intent of the statute, shoidd not overthrow
the very object for which it was enacted.
This discussion would be incomplete with-
out referring to the rule elsewhere than in
this state. I have already mentioned the
case of Nelson v. Boynton, 3 Mete. (Mass.)
39G, which may be regarded as settling the
question in Massachusetts. The creditor in
that case sued his debtor, and seized his
property under an attachment. The defend-
ant promised to pay the debt in considera-
tion of a discontinuance of the suit. The
suit was discontinued accordingly, and the
lien of the attachment was thereby lost, but
the debt remained against the original debt-
or. It was held, upon the fullest considera-
tion, Chief Justice Shaw giving the opiuiou,
that the promise was void because it was
not in writing. I regard the decision as of
great value, because the cases were exam-
ined, and the discrimination between the dif-
ferent classes was made with entire accu-
racy.
Upon the argument of the present case a
passage from an English text-book was read
(Add. ConL 38), to the effect that, if the
creditor has a lien or security which he is
Induced to part with on the faith of a promise
of another person to pay the debt, the prom-
ise so made is notwithin the mischief intend-
ed to be provided against by the statute of
frauds, and may be good by parol. This ex-
tract, according to its apparent meaning,
seemed to indicate that in England the stat-
ute of frauds was essentially disregarded.
The authorities referred to by the writer to
sustain the proposition are: Barker v. Birt,
10 Mees. & W. Gl; Haigh v. Brooks, 10 AdoL
& E. 309-335; Barrell v. Tnisscll, 4 Taunt
117; :Meredith v. Short, 1 Salk. 2.".; Castling
V. Aubert, 2 East, 325; and Walker v. Tay-
lor, 6 Car. & P. 752 I have looked at these
cases, and find that none of them have
the slightest connection with such a propo-
sition, except the two last, which are alike,
and do not sustain It In the last case, the
creditor had the possession and a lien upon
certain licenses as a security for his demand,
and he gave them up to the defendant, who
130
STATUTE OF FRAUDS.
promised tx> pay the debt The case was at
nisi prius. Tindal, C. J., said: "It is a new
contract, under a new state of circumstaji-
ces. It is not, 'I will pay, if the debtor can-
not;' but it is, 'in consideration of that which
is an advantage to me, I will pay you this
money.' " "There is a whole class of cases
in which the matter is excepted from the
statute on account of a consideration arising
immediately between the parties." Here is
the very distinction so well established in
our own cases. It should be added, that the
text-wi-iter referred to could not have in-
tended what his lajiguage apparently means;
for hp add5, in the same connection. "In
these cases, the plaintiff must so shape his
case as not to show or admit that there is
a princiijal debtor liable, and that the prom-
Vie of the defendant is a promise to pay that
6ebt"
The early case in England, of Williams v.
Leper, 3 Bm-rows, 1886, 2 Wils. 308, is cited
anc relie»j on to sustain the plaintiff's posi-
tion; anJ it is, perhaps, the only one in the
EiiiJjsh courts capable of a misinterpretation.
But the case does not, in fact, sustain any
such do<±iiDe, and it has never been so un-
derstood in the courts of that ctyontry. One
Taylor owed the plaintif £45 for rent. He
conveyed all his effects for the benefit of
his creditors, who employed Leper, the de-
fetdant, to sell them; aiid he advertised
them ftr sale ac-coidingly. The plaintiff then
came to distrain, and the defendant proui-
ised tc piiy the rent if he would not dis-
trahi: and be desisted accordingly. Lord
Mansfieid saia the defendant was a trustee
for ai tbj creaitors, and was obliged to pay
the lar;dioi*d, whv had the prior lien. Jus-
tice Wilmot said the defendant became the
bailiff ol the landlord, and, when he had
sold thd goods, the money ws.'^ the landlord's
in his ovrn bailiff s hands. Therefore, he
said, an action would have lain against the
defendant for money had and received to the
plaintiff's use. Justice Yates said, it was an
original consideration to the defendant. Jus-
tice Aston thought tte goods were a fund be-
tween both, "and on that foot he concurred."
From the reasoning of these judges, it seems
to me perfectly evident that, if the tenant
had not assigned his goods, and the defend-
ant had no connection with them as trustee
or otherwise, but the plaintiff had simply re-
leased his distress, or right to distrain, for
the benefit of the debtor alone, the promise
to pay the debt on that consideration would
have been held within the statute. But as
the facts were, the law would imply an ob-
ligation on the defendant's part to pay over
the money to the plaintiff after selling the
goods; and where the law will imply a debt
or duty against any man, his express prom-
ise to pay the same debt, or perform the
same duty, must, in its nature, be original.
The distinguishing feature of the case was,
that the creditor relinquished his distress.
not to the debtor, but to other creditors of
the same debtor who beneficially owned the
goods, and the defendant was the represent-
ative of those creditors, having the fund in
his possession. K this early case had not
been sometimes misapprehended, it is prob-
able that no doubt would ever have arisen
in questions like the one before us.
The cases also cited of Houlditch v. Milne,
3 Esp. 86; Casthng v. Aubert, 2 East, 325;
Edwards v. Kelly, 6 Maule & S. 204; Bird
v. Gammon, 3 Bing. N. C. 883; Bampton v.
Paulin, 4 Bing. 204; Walker v. Taylor, 6
Car. & P. 752; and Stephens v. Pell, 2 Cromp.
&, M. 710, — differing only in immaterial cir-
cumstances, all involved the same general
principles as Williams v. Leper. In each of
them the creditor relinquished some lien or
advantage incident to his debt; but in each
of them whatsoever he relinquished was ac-
quired by the defendant — either as a matter
of personal interest and concera to himself
or to other parties whom he represented—
and on that considei-ation he promised to
pay. In none of them was any such doc-
trine asserted as the plaintiff contends for
in this case. In all of them the engagement
was deemed original, either because the pri-
mary debt was gone or because the consider-
ation moved to the promisor; and in some
of them the decision was put on both these
grounds. These cases not only elucidate
more perfectly the principle of Williams v.
Leper, but they are in themselves illustra-
tions of the distinction which, as we have
seen, is recognized in our own courts. Re-
ferring now to Read v. Nash, 1 Wils. 305,
it was the case of a promise to pay the plain-
tiff a certain sum if the latter would with-
draw his record in an action of assault and
battery against anotl:ier person, and would
not proceed to trial. This pixamise was held
not to be within the statute of frauds; the
decision being placed on the ground that the
person sued for the assault was not a debtor
at all within the meaning of the statute, and
could not be so considered until after ver-
dict against him. "For aught we can tell,"
the court said, "the verdict might have been
in his favor." The pi-omise, therefore, stood
as at the common law. In Goodman v.
Chase, a debtor, taken on a ca. sa. at the suit
of the plaintiff, was discharged with the
plaintiff's consent on the defendant's prom-
ise to pay the debt. This was held an origi-
nal promise, because the debt itself was ex-
tinct and satisfied by the ca. sa. and its dis-
charge; and the principle of the decision is
a veiy plain one.
I have now referred to all the decisions in
the English courts which can be supposed to
favor in any degree the doctrine on whicli
the plaintiff in this case relies; and I think
it may be safely affirmed, that no case has
ever been determined in those courts tend-
ing to the proposition that a parol promise
to pay the debt of another person is valid
where the consideration is beneficial only to
tJie debtor, and where there is a debt which
PKOMISE TO ANSWER FOR DEBT OF ANOTHER,
131
still remains against him. I will now men-
lion a I'ew cases, among many oLliei'S, which
show what the hiw in England is upon the
precise question now to be decided.
In Fish V. Hutchinson, 2 Wils. i)4, the pliiin-
tiff had commenced a suit against his debt-
or, and the defendant, in cousidei-ation that
he would stay that suit, promised by parol
to pay the debt The whole court of king's
bench were of opinion that tJie undertaking
was void by the statute of frauds; observ-
ing that there was a debt still subsisting
against another person and a promise to pay
it The consideration was manifestly good,
but that, moving as it did to the debtor only,
did not sustain the promise without a writ-
ing. This case was decided just one hun-
dred years ago, and the principle of it was
never departed fix)m in succeeding times.
Coming down to a recent period, in Chmcy
V. Piggott, 2 Adol. & E. 473, one Moore was
indebted to the plaintiff, for which tlie lat-
ter held his goods in pledge. In considei-a-
tion of surrendering the pledge to the debtor,
the defendant promised, by a writing which
did not express the considei-ation, to pay tlie
plaintiff his debt Williams v. Leper, and
the other cases above referred to, belonging
to that class, were cited to sustain the un-
dertaking; but the court held it within the
statute and void. Williams v. Leper, and
the kindi-cd decisions, were not overniled, or
even questioned, and the case, therefore,
shows how those decisions are understood in
England. In Tomlmson v. Gell, 6 Adol. &
E. 564, the plaintiff's client was indebted to
him for costs in a pending chancery suit, and
in consideration of a discontinuance of that
suit, the defendant promised to pay those
costs to the plaintiff. Held void within the
statute. Patterson, J., observed: "It is said
that a new ccnsideration arose from the dis-
continuance of the suit But I do not think
it is a new one. The eases on tliat point are
where sometlimg has been given up by the
plaintiff, and acquired by the partj- making
the promise, as a secoirity of goods for a
debt."
Without pursuing this discussion fuilher,
the general riile is, tliat all promises to an-
swer for the debt or default of a third per-
son must be in writing, whether Uie prom-
ise be made before, at the time, or after the
debt or liability is created. Such is the rule,
because so is the statute of frauils. The
stitute makes no exception of any promise
which is of that character. The courts have
made no exceptions; as clearly tlioy should
not. But a considerable variety of uudertiik-
ings, having points of resemblance and an-
alogy to such promises, have been held not
to be witliin the statute. These may be
chiefly, if not wholly, arranged in the fol-
lowing classes: (1) Whore there was no orig-
in.T.1 debt to which the auxiliary promise
could be collateral; for example where the
promisee was a mere guarantor for the tiiird
pei-son to some one else, and the promisor
agrees to indemnify him, or where his de-
mand was founded in a pure tort (2) Where
the origimil debt becomes extinguished, and
the creditor has only the new promise to
rely upon; for example where such new un-
dertaking is accepted as a substitute for the
original demand, or where the original de-
mand Ls deemed satislied by the arrest of the
debtor's body or a levy on his goods, the
arrest or levy being discharged by the cred-
itor's consent (3) Where, although the debt
remains, the promise is founded on a new
consideration which moves to the promisor.
This consideration may come from the debt-
or, as where he puts a fund in the hands
of the promisee, either by absolute transfer
or upon a trust, to pay the debt, or it may
be in his hands charged with the debt as a
prior lien, as in the case of Williams v. Le-
per, and many others. So the cjnsideration
may originate in a new and Independent
dealing between the promisor and the cred-
itor, tlie undertaking to answer for the deljt
of another being one of the incidents of that
dealing. Thus, A., for any compensation
agreed on between him and B., may under-
take that C. shall pay his debt to B. So A..
himself being the creditor of C, may trans-
fer the obligation to B. upon any sufficient
consideration, and guarantee it by parol. If
we go beyond these exceptional and peculiar
cases, and withdraw from the statute all
promises of this nature, where the debtor
alone is benefited by the consideration of the
new undertaking, and the debt still subsists,
then we leave absolutely nothing for the
statute to operate upon.
The judgment should be affirmed. t
BACON, J. (dissenting). This case preset ts "^^^
a single question, and a proposition apparent-
ly so simple that the first emotion is, perhaps,
one of surprise that there could be any ques-
tion in regard to it, since, in the multitude of
decisions with which the books are filled
touching the construction of the statute of
frauds, it would seem that the rule applicable
to a case which, in its essential features,
must so often have arisen, must be settled by
authority. My own conviction is, that the
nde which governs this case has been long
and well established in opposition to the con-
clusion of the referee and the judgment of
the supreme court; but, at the same time, it
may readily be admitted that reservations
and doubts have been suggested, and dis-
criminations attempted, from time to time,
that if they have ser^-ed no other purpose,
have at least involved the matter in some ob-
scurity.
"Every special promise to answer for the
debt, default or miscarriage of another per-
son," the statute declares, "shall be void, un-
less such agreement, or some note or mem-
orandum thereof, expressing the considera-
tion, be in writing and subscribed by the
party to be charged therewith," 2 Rev. St
135, § 2. This statute, as is well known. Is
132
STATUTE OF FliAUDS.
an almost literal transcript of the English
statute of frauds (29 Car. II. c. 3); the only
noticeable change being, that in our statute
the consideration is required to be expressed
iu the writing. This, however, so far as the
construction of the two statutes is concerned,
is of no special moment, inasmuch as the
courts, both in England and in this state, had
held, before the words were inserted in the
section as it now stands, that it was neces-
sary to a valid agreement that the considera-
tion should, in some terms, be incorporated
therein. Whatever, then, has, by the course
of adjudication in England upon this clause of
the statute, been deemed or acquiesced in as
the settled law, must be accepted with us as
controlling authority, unless, upon due consid-
eration, and by the solemn judgment of some
court whose decisions are recognized, any pe-
culiar and special construction has been ques-
tioned or repudiated.
It would probably have been better if there
had been less of what may, perhaps, without
irreverence, be called legal, and even judicial
tampering with the words of the statute, to
force, at times, a constraetion seemingly at
war with its natural and more obvious Import.
But all regrets on this subject are vain, since
the business of construction began with the
infancy of the law, and has not yet ceased,
and will doubtless attend it even down to old
age. One of the earliest attempts to create
and define a distinction by which agreements
were to be held withm or without the scope
of the statute was to express them by the
terms "original" and "collateral." It is true
that neither of these words is to be found m
the statute, but they have been so long em-
ployed in connection with it as to have attach-
ed to them an established and recognized
meaning; and the struggle always is, in de-
termining the validity of such an agreement
as seems to fall within the general purview
of the law, to ascertain whether it is collat-
eral and ancillary to the principal contract,
having no aliment whatever independently of
that, or whether it can be sustained and en-
forced as an independent, original undertak-
ing altogether outside of, and, therefore, not
needing to be evidenced by the written agree-
ment required by the statute.
An attempt was made as early as 1811 by
Chancellor Kent, then chief justice of the su-
preme court, in the well-knov\Ti case of Leon-
ard V. Vredenburgh, 8 Johns. 29, to arrange
into three classes the cases where a promise,
to be answerable for the debt of another, was
within or without the statute. They are fa-
miliar to the profession, and for a long time
stood their ground as a just exposition of the
law. The third class, in which he held that a
promise to pay the debt of another was not
within the statute "when it arose out of some
new and original consideration of benefit or
barm moving between the newly contracting
parties," has been subjected to much criticism;
and it may be fairly admitted that it is not
now, in the naked and unqualified terms m
which it is expr-issed, to be received as the
true construction of the statute. And yet this
rule did obtain, and was followed in several
well-considered cases in our own courts.
Thus, in Farley v Cleveland, 4 Cow. 432, the
classification of Kent was stated and reafiirm-
ed, and the case then on argument held to
fall within his third class; and the court lay
down the broad proposition, that, where a
promise to pay the debt of a third person
arises out of some new consideration of bene-
fit to the promisor, or harm to the promisee,
moving to the promisor either from the prom-
isee or the original debtor, such promise is
not within the statute. And it is added,
that this is so, although the original debt still
subsists, and is entirely unaffected by the new
agreement. This case was carried up to the
court of errors, and was there aflinned. 9
Cow. 639. The doctrine of the supreme court
Is reiterated in the precise language of the
marginal note in 4 Cow., and by an entirely
undivided court; the report merely stating
that Jones, Ch., examined the question, and
was of opinion that the judgment should be
aflirmed; "whereupon, per totam curiam, the
judgment was affirmed."
In Meech v. Smith, 7 Wend. 315, the same
rule is again repeated and the court say that
it has long been settled, that, although the
promise be by parol, yet, if it arises out of
some new and original consideration of bene-
fit or harm moving between the newly con-
tracting parties, the case is not within the
statute. Alluding to Leonard v. Vredenburgh.
and the above cited case of Farley v. Cleve-
land, the court say: "This rule has been rec-
ognized by all writers upon contracts, and by
the highest court In the state, and is, there-
fore, as much the law of the land as the stat-
ute itself." The authority of Leonard v. Vre-
denburgh. and especially the third class of
Chancellor Kent, has been cited approvingly
and followed in the courts of several of our
sister states; and in the case of De Wolf v.
Rabaud, 1 Pet. 47G, the judgment of the su-
preme court of the United States proceeded
substantially upon an aflirmance of the au-
thority of Leonard v. Vredenburgh, as a just
construction of the statute of this state.
If these cases are to be received as approv-
ed law at the present day, tliey decide more
than enough to reverse the judgment now be-
fore us; and there need be no further exam-
ination of authorities upon the discussion
which this case has opened. But it is impor-
tant to a just appreciation of the ground upon
which, as I suppose, the agreement in this
case, and the consequent right of the plain-
tiff to recover, is to be upheld, to notice the
several cases in which the dLscrimination be-
tween original and collateral promises has
been established, or affirmed, by the courts.
This discrimiuation will be found to exist, I
think, and the requirements of the statute not
to apply, under four conditions, within some
one of which most of the authorities upon this
particular section of the statute, and which,.
PEOMISE TO ANSWER FOR DEBT OF ANOTHER.
133
In some respects, have been thought to con-
flict with each other, may be arranged.
1. Where tlie primary afjreement has been
in effect extinguished, and the promise super-
seded, bj the new agreement and promise
which have talien their place, and the credit
is given wholly to the new promisor.
2. Where a fund has been provided, or prop-
erty has been placed in the hands of the new-
ly contracting p;irty, from which the means
are to be procured to pay, or the promisor
derives an equivalent or advantage therefrom.
3. Where the purport and intent of the
agreement Is to accomplish the payment of
the promisor's own debt, although the effect
is to pay the debt of another, and where that
debt is used to measure the extent of the lia-
bility, as where A. owes B., and C. is indebt-
ed to A., and in consideration of that liability
promises, at A.'s request, to pay B. the debt
A. is owing him.
4. Where the creditor, in consideration of
the promise, surrenders some pledge, or re-
linquishes some lien actually held by him and
capable of enforcement, and by means of
which the original debt was rendered secure.
In all these classes, excepting the first, it
does not affect the liability of the newly con-
tracting party that the original debt subsists
and the liability of the debtor remains in full
force, "Wherever the conditions exist which
I have arranged under these four heads, there
is not only a sufficient consideration for the
promise to pay another's debt, but the prom-
ise is good although by parol.
Numerous illustrations might be gathered
from the authorities under these several
heads; and although it must be admitted that
the current of decisions is not uniform, and
some apparently irreconcilable cases may be
found, I am persuaded that a careful sifting
of the facts, and an attention to the proper
discrimination which should be made, would
reconcile many which stand seemingly in con-
flict, and in the result make this branch of the
law more homogeneous and reliable. At pres-
ent, however, it only concerns us to trace the
course of decisions which have established
the distinction expressed under the fourth
head of exceptions to the operation of the stat-
ute; and if it shall be found, as I think it
will, a distinction fully recognized and up-
held by a long and almost unbroken series of
decisions, the right of the plaintiff to recover
upon the facts of this case will be put beyond
question.
And, first, as to the condition of the English
law upon this subject One of the earliest
cases to be found in the books is Tomlinson
v. Gill (decided by Lord Ilardwicke, in 17.")»i)
Amb. 330. That case was briefly this: Gill,
the defendant, promised the widow and ad-
ministratrix of tlie intestate that, if she would
permit him to be joined with her in the letters
of administration, he would make good any
deficiency of assets to discharge the debts of
the intestate; and the action was brouglit by
a creditor to enforce that agreement The de-
fendant Insisted that the promise was void
by the statute of frauds. It was holden to be
not within the statute. Here was the reliu-
quishirtent by the widow of a part of her ex-
clusive lien upon and interest in the goods
and effects of her husband, and which were a
fund in her hands for the payment of the
debts of the estate, and the defendant by the
agreement, acquired that interest Lord
Hardwicke goes even further than tnls in his
decision, wherein he says it is not witliin the
statute, "for there is," he adds, "a distinction
between a promise to pay the original debt
and on the foot of the original contract, and
where it is on a new consideration. Here is
quite a new consideration."
There is a short case reported in Salkeld,
standing apparently upon the .same ground.
It was to this effect: The sheriff took goods
upon an execution, and a stranger promised
the officer to pay the debt in consideration
that he would restore them. The action was
brought upon that promise, and on demurrer
it was held to be a good consideration. No
benefit so far as the case discloses, accrued
to the promisor, the goods being restored to
the debtor; but the consideration which up-
held the promise, and which was good as an
original undertaking, was the relinquishment
of the lien which the sheriff had upon the
property by virtue of the levy under his exe-
cution. Love's Case, 1 Salk. 2S. It is true
that the statute of frauds is not called in
question in this decision, but the case clearly
presented that objection, which would, be-
yond doubt, have been urged if either the
counsel or the court had deemed it tenable.
The next case, and the one, perhaps, most
frequently cited and commented on in con-
nection with the particular question we are
considering, is Williams v. Leper, 3 Burrows,
1S8G, and reported also more briefly in 2
Wils. 308. The case was tried before Lord
Mansfield, at Guildhall, and a verdict taken
for the plaintiff upon the following state of
facts: One Taylor was indebted to the plain-
tiff in the sum of £45 for rent of premises he
held of him as his landlord. Taylor, becom-
ing insolvent, conveyed his property to the
defendant Leper, for the benefit of his cred-
itors. Leper took possession, when the plain-
tiff came as landlord, to distrain for the rent
due him; whereupon Leper promised that, if
he would desist from distraining, he would
pay the debt. The plaintiff, accordingly, in
consideration of this promise, refrained from
enforcing his distress, and the action was
brought upon that agreement. In the court
of king's bench, all the judges gave brief
opinions. Lord Mansfield said, emphatically:
"The case has nothing to do with the statute
of frauds. The landlord had a legal pledge.
He enters to distrain, and has the pledge in
his custody. The defendant agrees that the
goods shall be sold, and the plaintiff be paid
in the first place. The goods are the fund.
Leper was obliged to pay the landlord, who
had the prior lien." The other judges con-
131
STATUTE OF PKAUDS.
cxirred in the result; but Justice Astou was
inclined to put it upon the fooring that the
goods were a fund and Leper the bailiff of
the landlord, and when he had sold the 'goods
the money was in his hands substantially as
the landlord's agent. The case may, perhaps,
be safely maintained upon that special
groimd, and is thus an authority within what
I have ventured to designate as the second
class of promises not within the statute; but
I think the language of Lord Mansfield pre-
sents very clearly the ground of the distinc-
tion to be, that the plaintiff had, in conse-
quence of the promise of defendant, relin-
quished a lien operative and efficient to pro-
duce satisfaction of the debt, and that it is a
very ample authority to support the validity
of such a promise upon that consideration.
The case of Houlditch v. Milne, 3 Esp. 86,
presents the point more clearly, and is a very
decisive authority on the proposition we are
discussing. The plaintiff had repaired car-
riages for one Cofey, and charged the ac-
count to him. The defendant sent an order
to have them packed and sent on board a ship,
and promised to pay the bill. On the trial the
defendant's counsel asked that the plaintiff be
nonsuited, on the ground that the promise be-
ing to pay a debt of Cofey, who was himself
liable, and not being in writing, it was void
by the statute. But Lord Eldon refused to
nonsuit the plaintiff, and held that it was an
original undertaking. He cited the case of
Williams v. Leper, saying that it appeared
to apply precisely to the case then before him.
'•The plaintiff," he adds, "had, to a certain
extent, a lien upon the carnages, which he
parted with on the defendant's promise to
pay. This took the case out of the statute,
and made the defendant liable."
Castling v. Aubert, 2 East, 325, presented
the following facts: The plaintiff was a
broker, aud had in his hands policies of in-
surance upon which he had a lien for certain
acceptances he had given for one Grayson.
The defendant, upon the plaintiff delivering
him the policies that he might collect them,
promiscHi that he would provide for the ac-
ceptances as they became due. The plaintiff,
being prosecuted on one of his acceptances,
brought this suit to recover of the defendant
upon his promise. It appeared that the de-
fendant had collected the policies. Tliis was
held to be an original undertaking, and not
within the statute. It is true that it pre-
sented another ground upon which the recov-
ery could be sustained, to-wit, that the de-
fendant had possessed himself of the fund
created for the express purpose of meeting
the debt, and this would sustain a count for
money had and received. Lord Ellenborough
puts it in both aspects, and says, at the close
of his opinion, citing Williams v. Leper, that
he agrees with that decision to the full extent
of it. "I agree," he says, "with those of the
judges who thought the c-ase not within the
statute at all, and I aLso agree with the
ground on which Mr. Justice Aston proceed-
ed, that the evidence sustains the count for
money had and received."
A distinction had crept into the books found-
ed upon a remark of Buller in Matson v.
Wharam, 2 Term R. 80, to the effect that if
the person to whose use goods are furnished
or property delivered is liable at all, any other
promise by a third person to pay that debt
must be in writing, otherwise it is void by the
statute of frauds; and upon this distinction
the case of Croft v. Smallwood, 1 Esp. 121,
was decided. But this distinction was repu-
diated in the cases already cited, in all which
it is manifest that the original debt was still
subsisting and remained unaffected by the
new undertaking; and in this state that pre-
cise poLat has been expressly adjudged in the
case of Farley v. Cleveland, heretofore refer-
red to, and in Rogers v. Kneeland, 13 Wend.
114.
The principle of the cases I have thus cited
has been affirmed, and the doctrine fully rec-
ognized in two or three modem English cases,
among which are Edwards v. Kelly, 6 Maule
& S. 204; Bird v. Gammon, 3 Bing. N. C. 8S3;
and Wiilker v. Taylor, 6 Car. & P. 752 (which
is, pyerhaps, the most recent one), aud is to
the following effect: The widow of a pub-
lican employed an undertaker to conduct the
funeral of her deceased husband, and deposit-
ed with him the licenses of the house as a
security for the payment of his bill. A., one
of a firm who supplied the house with liquors,
took out letters of administration on the es-
tate, and B., the other partner, promised the
undertaker that, if he would give up the li-
censes to him, he would pay the funeral ex-
penses. It was held that the undertaker, hav-
ing surrendered the licenses, might recover
his bill against R, although the widow was
his employer and he had charged the admin-
istrator as his debtor. Tindal, C. J., said on
the trial: "Here is a new contract, under a
new state of circumstances. It has nothing
whatever to do with the statute of frauds."
In view of these authorities, I think it may
be safely atlirmed that the rule in England is
too well settled to admit of question that the
promise in this case is not within the statute
of frauds. No case that fairly holds the con-
trary has been produced, or even referred to,
on the argument; and so well established
does this doctrine seem to be, that the elemen-
tary writers substantially concur in the prin-
ciple derived from them. Thus Chitty says:
"Although the debt of another form the sub-
ject-matter of the defendant's undertaking,
still, if he promised to pay the debt upon
some new consideration raised by himself^
and the consideration be the resignation of a
charge or lien which afforded a remedy, or
fund, to enforce the payment, the case does
not fall within the statute." Chit. Cont.
(Springfield Ed. 1851) p. 446.
Thus, also, Burge, Surety. 26, expresses in
substance the same proposition: "Though the
debt of another may have been the original
cause of the promise, yet, if the person to
PROMISE TO ANSWEIl FOR DEBT OF AXOTIIEU.
135
whom it is made rcliuiiimhes some right or
advantiige which lie possessed, and which
might have enabled him to obtain satisfaction
of his debt, the promise by a third party to
pay tlie debt in consideration of ^uch relin-
quishment is an original promise, and not
witliin the statute." See, also, Fell, Guar, c
2, §§ 7, S, to the same effect.
Tlie rule is, perhaps, still more clearly and
strongly stated by Addison, In his recent
treatise on Contracts, who, on a collation of
the authorities, both ancient and modern,
states his conclusion in the following terms:
"A contract or promise, although made con-
cerning the debt or default of a third party,
may yet be an original promise, not within
the statute. If the plaintiff has a lien upon
the property of his debtor in his possession,
or holds securities for the payment of his
debt, and is induced to give up the lien, or
part with his securities, upon the faith of the
defendant's promise to pay the debt, the
promise so made is not within the mischiefs
provided against by the statute, although the
amount promised to be paid, on the surrender
of the securities, may be the subsisting debt
of the third party due to the plaintiff, and the
possession of the promise may have the ef-
fect of discharging the debt" Add. Cont 3S,
39.
To the English cases above cited and com-
mented on, I add that of B.arrell v. Trussell,
4 TaunL 117, where the same point is ad-
judged. It was a case where the plaintiff
was about to sell the property of one Abbott,
under a bill of sale executed to him by Ab-
bott. Having taken the property, the de-
fendant, in consideration that the plaintiff
would relinquish the possession to Abbott,
promised verbally to pay the plaintiff £122,
being the debt of Abbott due to the plaintiff,
and to collect which the plaintiff was about
to make the sale. The plaintiff obtained a
verdict, but, on a rule to show cause, the de-
fendant insisted that tlie plaintiff was not en-
titled to recover because this was an agree-
ment to answer for the debt of another, and
there was no signature of the party sought to
be charged. The counsel for the defendant,
on the argument, insisted that here was no
benefit derived to the defendant, as there was
no delivery of the goods to the defendant;
but Heath, J., said: "There was a detriment
moving to the plaintiff, which is a good con-
sideration; for in consequence of his forbear-
ance, the goods were afterward taken aud
sold on an execution against Abbott." At a
subsequent day the rule was discliaigcHl,
Mansfield, C. J., saying: "Wliat is this but
the case of a man, who, having the absolute
power of selling goods, refrains upon the re-
quest of another? It is not a promise to pay
another's debt"
The cases decided in this state, with per-
haps an occasional exception, affirm the same
rule, even if they do not carry the doctrine
somewhat further. It will be sufficient for
our present purpose, however, if they shaU be
found to be substantially in accordance with
the English cases. I will examine them very
briefly:
Sliiigerland v. Morse, 8 Johns. 474, is the
earliest reported case whore this question was
presented. The plaintiff in that case had dis-
trained the goods of his tenant for rent The
defendant agreed that hu would deliver the
goods in six days, or pay the amount of the
rent, and thereupon the distre.ss was aban-
doned and the goods left with the tenant
This was held to be an original, and not a
collateral undeilaking, and that no writing
was, therefore, necessary. It was decided,
substantially, upon the authority of Williams
V. Leper. It has been said in regard to this
case, that it may perhaps be sustained on the
ground that the goods were a fund in the
hands of the defendant, from the possession
of which his liability resulted. But in an-
swer to this it is only necessary to say, that
no such reason is given for the decision, and
in the case it is expressly stated that the
goods were left with the tenant
The cases of Skelton v. Brewster, 8 .Tolins.
37G, and Gold v. Phillips, 10 Johns. 412, I do
not cite in this connection; for, although they
both recognize the doctrine of Chancellor Kent
in Leonard v. Vredenburgh, and hold the
promise good because it was founded upon a
distinct consideration arising between the
newly contracting parties, yet, as in both
cases property had been delivered to the de-
fendant to enable him to discharge the debt,
they do not fall within that precise class to
which this case belongs.
The case of Chapui v. Merrill, 4 Wend. 0.17,
was an agreement to indemnify another for
becoming the guarantor of a third; and it
was held not to be within the statute, and is
in point to show that it is not necessary that
tlie defendant should receive any benefit from
what w^as done by the plaintiff, the consid-
eration in that case being purely harm to the
plaintiff.
Jackson v. Rayner, 12 Jolms. 291, is some-
times cited as conflicting with the prior cases
of Skelton v. Brewster and Gold v. Phillips,
and with the distinction I am seeking to il-
lustrate. It clearly does not with the latter,
for no lien was surrendered or benefit waived
by the plaintiff. The case came fairly within
that class where tlie agreement is valid by
reason of property being placed in the hands
of the promisor to pay the debt, in consid-
eration of which he agrees to discharge it.
The court put the decision, however, upon the
express ground that the original debt was
still subsisting; a distinction which is no
longer recognized. There cannot be a doubt
that on the precise state of facts disclosed in
tbat case, the decision would now be the oth-
er way.
In the case of Gardiner v. Hopkins, 5 Wend.
23, the plaintiff had a lien upon the sheets of
a law-book he was printing for one Wiley,
and the defendant promised that, if he would
deliver the sheets, he would pay the balance
136
STATUTE or FRAUDS.
of his account— tlie claim against Wiley still
remaining in force. The case, as stated,
leaves it a little uncertain whether the de-
livery was made to Wiley, or to the defend-
ant, who was his assignee. The decision pro-
ceeded upon ihe ground that the plaintiff
gave up what was claimed to be a valid lien,
and the defendant derived a benefit from the
surrender by obtaining the property. It Is not
a case proceeding upon the simple ground of
a lien surrendered; although, if that had
been the only feature presented, I think it
clear the verdict would have been sustained.
The case of Mercein v. Andrus, 10 Wend.
461, presented the precise point. The plain-
tiff had a levy by virtue of an execution upon
the property of one Reed; and one of the de-
fendants agreed that, in consideration of the
release of the levy, the defendants would pay
the plaintiff $150 at the expiration of some
eighty days, or give their note for that
amount. The judge at the trial ruled that a
promise founded upon the consideration of
surrendering up property levied on by execu-
tion is an original undertaking and need not
be in writing; and on the other ground, of
the partnership liability, he left it to the jury
to say, upon the evidence, whether the firm
was bound by what had been shown upon
that point A new trial was granted for a
misdirection of the court upon this branch of
the case; but upon the other. Chief Justice
Savage stated that the ruling was right, and
that a promise made upon such a considera-
tion as appeared in the case was not within
the statute of frauds. In reference to this
case, it is said, in the able opinion of the su-
preme court given in the present case at the
general term, that what was said by Judge
Savage in his decision on tliis point was en-
tirely obiter, and that he cited no authority to
support his conclusion. I cannot agree with
the learned justice who gave the opinion, on
this point So far from the remark being
obiter, the precise question was presented. Lf
the ruling at the circuit had been wrong, that
would have been an end of the case, and a
new trial would have been, perhaps, unneces-
sary on the other ground. If, however, it
was to be sent back, it was equally necessary
to determine the other question, which was
vital to the maintenance of the action itself;
and as to the remark that no authority was
cited, the chief justice probably deemed that
the doctrine had been so often and well set-
tled as to have become almost elementary,
and requiring no array of cases to sustain it.
Indeed, so well had the rule been establish-
ed, that in the case of Smith v. Weed, 20
Wend. 184, the point was not even raised by
the counsel on the argument It presented
the case of a naked parol promise of a third
person to pay the debt to the plaintiff, in con-
sideration of the release of an attachment
which the plaintiff had levied on the property
of his debtor; and the court held, without any
hesitation, that the lien was valid, and the re-
lease thereof constituted a sufficient considera-
tion for the undertaking of the defendant to
pay the debt. Being an original promise, it
was, of course, not within the statute.
The last case which has arisen in our courts
where this precise question has been present-
etl is Fay v. Bell, Lalor, Supp. 251. The deci-
sion is brief, but emphatic, and is given by an
able and eminent judge, who, until his recent
lamented decease, continued, with intellectual
vigor unimpaired, and "natural force" almost
unabated, by his large learning and ripened
experience, to enlighten the tribimal over
which he once presided. The facts were
briefly these: One Daharch had employed the
plaintiff to mend a pair of boots. The work
had been done, and the boots remained in the
possession of the plaintiff, and he had, of
course, a lien for the amount of his charge.
Upon the promise of the defendant to pay the
demand, the boots were delivered to Daharclu
There was a recovery, and on appeal it was
Insisted that the promise was within the stat-
ute of frauds; but the coui't held otherwise.
Beardsley, J., who gave the decision, enters
upon no argument to vindicate it He simply
says: "It was a new imdertaking, founded
on a new and distinct consideration, to-wit,
the relinquishment by the plaintiff of his lien
on the boots, and which was sufficient to up-
hold the promise made. It was not within
the statute of frauds." He then adds the au-
thorities, some ten or twelve in number,
among which are several we have particular-
ly considered. Here, then, is an opinion not
obiter— not unsustained, but fortified by au-
thority, and presenting a state of facts abso-
lutely identical with the case now before us.
The decision has never been questioned or
doubted by any succeeding case; and I pro-
pose to abide by it, as a clearly expressed,
well-considered and authoritative exposition
of the law, and which determines the present
case in favor of the plaintiff. Whatever we
might be disposed to say of this as an orig-
inal question— (and, were I at liberty to view
it as such, I confess I should find diificulty in
so construing the language of the statute as
to exempt these cases from its operation) — I
think the current of authority has too long
and steadily set in one direction to be now
turned aside, and that the rule stands too
firmly, not only "super antiquas," but "super
novas vias," to be disturbed.
I need scarcely add that the cases of Barker
V. Bucklin, 2 Denio, 45, and Brewster v. Si-
lence, 8 N. Y. 207, to which we have been
referred by the defendant's counsel, hold no
doctrine whatever inconsistent with the great
"cloud of witnesses" that have been summon-
ed to the stand. The former case was where
property had been sold to the defendant, in
consideration of which he promised to pay the
debt of the party delivering the property to
the plaintiff. It was not a promise to pay the
debt of a third party merely, but was, in ef-
fect, an agreement to pay the defendant's
own debt. The case was rightly decided upon
all the authoritifcs, and it was unnecessary to
PKOMISE TO ANSWER FOR DEBT OF ANOTHER.
137
go beyond this simple and plain proposition to
upliold the recovery. Tbe case of Brewster
V. Silence Is purely that of a naked written
guaranty to pay another's debt, expressing no
consideration. The court hold that the con-
sideration could not be supplied by parol
proof. There was no preten.se that, in con-
sideration of the uudiTtaliiug, any lien was
Burrendered or right relinquished which the
plaintiCE held, and which was operative in his
hands. Some evidence was attempted to be
given on the trial ttiat the property was
placed In the hands of the defendant, on
which fact his undertaking was founded; but
the court of appeals held that this was not
only outside of the issue, but that the evi-
dence given did not conduce to prove the point
Bought to be establis'.ied. Tliis case also fl-
Dally settled the doctrine whicJ} had been
floating loosely through the reports, tlxat a
guaranty could not be changed into a prom-
issory note so as to charge the party by some
other contract than the one he had in fact
entered into; but beyond Uiis, and the other
proposition that a guaranty which does not
express the consideration is void under the
statute of frauds, the case Is not to be in-
voked as authority The deci-slon Is not,
tlierefore, in contlict with the rule which is
to be applied to this case, which is controlling
upon the question before us.
My opinion Is, tliat the judgment should be
reversed, and a new trial granted, with costs
to abide the event
DA VIES and WRIGHT, Ji^ also dissented.
Judgment affirmed.
138
STATUTE OF FRAUDS.
[o
^
t\ MALLORY'S ADM'K v. MALLORY'S^I/^
ADM'K et aL i "
(17 S. W. 737, 92 Ky. 316.)
Court of Appeals of Kentucky. Dec, 3, 1891.
Appeal from circuit court, Todd county.
"To be officially reported."
Action by C. L. Mallory's administrator
against A. W. Mallory's administrator and
others to recover personal property. Judg-
ment for defendants. Plaintiff appeals. Re-
versed.
E. W. Hines and Ben T. Perkins, Jr., for
appellant. BL G. Petrie and W. B. Rives, for
appellees.
BENNETT, J. A. W. Mallory, the appel-
lee's intestate, was a widower with children,
and C. I.. Mallory, the appellant's intestate,
was a widow with one child, a son. Both of
these persons owned property, and married
each other. The husband, the appellee's in-
testate, died, and in a few days thereafter,
and before the personal property that the
statute gives to the widow, and which is to
be set apart to her, was set apart, C. L. Mal-
lory, wife of A W. Mallory, and the appel-
lant's intestate, died. This suit was insti-
tuted by appellant's administrator to recover
of the appellee, as administrator, the value of
the said personal property, the same not hav-
ing been set apart, and was, or some of it, on
hand at the death of A. W. Mallory, but dis-
posed of by the appellee. The contention of
appellee is that, as there was an antenuptial
contract between C. L. and A. W. Mallory,
that entitled each to retain the title of his
and her property, and dispose of the same as
though no marriage had taken place, C. L.
Mallory was not entitled to the property that
the statute directs to be set apart to the
widow upon the death of her husband. It is
not alleged that the antenuptial contract was
in writing; and as chapter 22, § 1, requires
contracts in consideration of marriage to be
in writing, if the contract relied upon comes
within said provision. It was necessary to al-
lege that the contract was In writing; and the
answer, because of not alleging that fact, is
not sufiic ent. Besides, the proof fails to
show that the contract was in writing. Does
the alleged contract come within said provi-
sion? It seems that the question has been
settled and put beyond dispute by this court
in the case of Potts v. Merritt, 14 B. Mon.
406. That case, like this, was a case of verbal
and antenuptial contract, and the Revised
Statutes, then in force, had the same provi-
sion, as to requiring the antenuptial contract
to be in \\Titing, as the General Statutes, su-
pra; and this court held that the contract was
not enforceable, in law or in equity, unless
it was in writing. An antenuptial contract
is one by which the parties agree to antici-
pate the general law controlling the maritiil
relation, and make a law in that regard to
suit themselves; and consideration for the
contract is the agreement to marry each other,
which must be consummated, else the con-
sideration fails. So the contract clearly
comes within the provision, supra, requiring
contracts in consideration of marriage to be
in writing. If they are not in writing, no ac-
tion can be maintained on them, and, in a
case like this, such contract is no defense to
an action by the widow or her representative
to enforce her marital rights. It is a mistake
to say that the property that chapter 31, S
11, Gen. St., directs to be set apart to the
widow, only vests in the widow upon the set-
ting the same apart to her. By said statute
the right to a certain kind of property, if on
hand, if not, its value, etc., vests eo instanti,
by operation of law, in the widow upon the
death of her husband. The setting apart of
said property is merely for the purpose of
designating the individual pieces of property,
and valuing them, and supplying their places
with other property when required. Said
property vests in the widow, and must be set
apart to her whether or not she has any in-
fant children; the only difference being that,
if there are no infant children residing in the
family, there shall be nothing set apart for
their support. The case of Southerland v.
Southerland's Adm'r, 5 Bush, 591, is relied on
as establishing the fact that a verbal ante-
nuptial agreement is valid between the con-
ti-acting parties and volunteers. The leadin.i,'
facts of that case are that the husband before
marriage verbally agreed that his intended
v/ife should retain her slaves, etc., after mar-
riage, as her separate estate; and after mar-
riage, and until her death, he uniformly ad-
hered to that agreement, and recognized said
property as her separate estate, and she al-
ways claimed it and controlled it, as such;
and, after the husband's death, the court said
that, as between volunteers claiming the prop-
erty by virtue of the husband's marital rights
and the wife, equity would uphold that agree-
ment as consistent with the husband's pow-
er, he being sui juris all the time, to let the
wife retain her property as her separate es-
tate; but the wife has no power to relinquish
her marital rights unless she pursues the law
in that regard. The fact that the agreement
was called antenuptial simply had reference
to the fact In that case that it was made be-
fore marriage. The judgment is reversed,
and cause remanded for further proceedings
consistent with this opinion.
",1
AGREEMENTS RELATING TO LAND.
133
/>r
May
riAVILAND V. SAMMIS et aL
(25 Atl. 394, G2 Conn. 44.)
Supreme Court of Errors of Connecticut.
28. 1892.
Case reserved from court of common pleas,
Fairfield county.
Action by Annie C. Haviland against Wil-
liam A. Samrais and others to recover money
paid by plaintiff to defendants under a mis-
apprehension, Ha part of the purchase price
of land, and which defendants had promised
orally to repay. Case reserved for advice
of this court on demurrer to the complaint.
Advice that the demurrer be overruled.
R. Frost, for plaintiff. M. W. Seymour and
H. H. Knapp. for defendants.
ANDREWS, C. J. The complaint alleges, in
substance, that on the 2Gth day of June,
1SS8, the defendants were the owners of a
tract of land on West avenue, in the city
of Norwalk, which they represented to the
plaintiff to be 110 feet wide; that the plain-
tiff, relying on their representation, agreed
to buy the land, and made on that day a
part payment of the ^purchase money, and
on the 29th day of the same month paid
the balance of the purchase price to the de-
fendants; that thereafter the defendants
tendered to the plaintiff a deed, which de-
scribed the land to" be 110 feet, more or less,
wide on West avfcnue, and 89 feet wide in
the rear. Apparently the plaintiff refused
to accept the deed, for the complaint avers
"that the said defendants, by their said
agent, agreed by parol with the plaintiff,
through her said agent, that if she would
accept said deed they would pay her the
difference between the value of the tract
described in the deed and the value of the
tract as represented by them, and that the
plaintiff, under this agreement, accepted
said deed." The complaint alleges the dif-
ference in the value to be .?7.50, and that
the defendants have refused to pay it. The
plaintiff claims damages to the amoimt of
$800. The defendants demur to the com-
plaint, "because it appears from the allega-
tions thereof that the agreement upon which
the plaintiff seeks to maintain her action,
if any such was made, was for the sale
of real estate, or an interest in or concern-
ing it, and was bj* parol, and not in writing,
as required by the statute of frauds." The
proposition of law maintained by the de-
fendants, "that when an entire and indivis-
ible contract is partially within the statute
of fraiids, the whole is avoided by the stat-
ute if that part is by parol," is undoubtedly
correct. But this case is not affected by
that proposition. The defendants had con-
tracted to convey to the plaintiff a certain
piece of land, for which she had paid them.
They propo.sed to convey a smaller piece.
She refused to accept it. They then say to
her: "If you will accept the deed of the
smaller piece, we will return to you the
difference in value between the piece of land
we agreed to convey to you and the piece of
land which in fact we do convey to you."
The promise to return the excess of money
is not affected by any sale of land.
Analj'ze the transaction between these
parties more minutely, and this becomes
clear. The defendants had had negotia-
tions with the plaintiff by which they had
contracted to convey to her a certain piece
of land, for which she had paid them.
They tender her a deed of a smaller piece,
which she refuses to accept. At that mo-
menj all contract for the sale of th:it piece
'fi?~lnnjj js^nt nn end" "ThTTrtlle'parties be-
gin to negotiate for the sale by the defend-
ants to the plaintiff of a different piece of
land,— a smaller piece. The plaintiff con-
sents to take a smaller piece at a smaller
price. This is a new contract. A deed is
given and accepted. The price had been
paid. All contracts respecting land or any
interest in or concerning land between these
parties were then concluded, — executed on
both sides. But the money representing the
difference in price between the piece of land
agreed by the first negotiation to be con-
veyed and the price of the land actually
conveyed remained in the hands of the de-
fendants. They had promised to return it
to the plaintiff. They have not done so.
This action is brought to recover it. "The
statute of frauds does not apply to such an
action, whether brought on an implied or
upon an express agreement. The obligation
to repay the money advanced by the plam-
Tnr is indepeudenT of the character of__the
consideration upon which the advance_was
made.- And if an express promise to that
effect be separable from the principal agree-
ment to which it is an Incident, it may be
enforced, although the principal agreement
might be avoided. The fact that a certain
stipulation is made at the same time, and
forms a part of an arrangement for the sale
of an interest in land, does not prevent an
action from being maintained upon it: pro-
vided—First, that the action does not tend
to enforce the sale or purchase of the in-
terest in land; and, second, that in other
respects the stipulation is susceptible of be-
ing separately enforced by action. Such
stipulations, collateral to the sale, but con-
tained in the same contract, have been re-
peatedly enforced." Wetherbee v. Potter,
99 Mass. 354. 3G1; Wilkinson v. Scott, 17
Mass. 258; Hall v. Solomon. Gl Conn. 47G.
23 Atl. S7G. The court of common pleas is
advised to overrule the demurrer. The other
judges concurred.
STATUTE OF FRAUDS.
MUMFORD T. WHITNi.j..i
(15 Wend. oSO.)
Supreme Ccurt of New York. May, 1836.
This was an action on tlie case tried at the
Monroe circuit, in April, 1S32, before the Hon.
Addison Gardiner, one of the circuit judges.
The suit was brought for the recovery of
damages for the flowing of lands, by the erec-
tion of a dam by the defendant, in the Genesee
river. The plaintiff showed title to the prem-
ises, and proved the injury alleged Ln his dec-
laration. The dam complained of was erected
in 1S26, abutting upon the land of the plain-
tiff and partly placed upon it. The defendant
proved a parol licence from the plaintiff for
the erection of the dam, and also insisted that
the plaintiff had recognized its existence in
deeds executed by him, conveyiag mill-sites
suppUed with water for hydraulic purposes by
means of such dam. To support this groimd
of defence the defendant gave in evidence:
(1) A deed from the plaintiff to one Sylvester
Felt, bearing date 1st December, 1825, convey-
ing a mill-site, on a canal situate on the west-
erly side of the river, which was supplied with
water from the westerly channel of the Gen-
esee river, formed by an island near Rochester
owned by the plaintiff; together with the
privilege of taking such proportion of the
water as the w-idth of the lot conveyed, bore
to the whole length of the line of the canal;
to be held and enjoyed in common with the
other proprietors upon the canal, and subject
to a proportion of the expense of repairs, t&c.
(2) A contract dated 2d December, 1825,
whereby the plaintiff agreed to convey unto
one Silas Ball a lot upon the same canal, with
the same rights as to the use of water, and
subject to the same limitations and restrictions
as c-ontaincd in the plaintiff's deed to Sylves-
ter Felt And (3) a deed from the plaintiff to
Sidney S. Allcott, dated 7th April, 1828, con-
veying another lot on the canal, with the like
privilege of water and with the like condi-
tions as contained in the deed to Felt and in
the contract with Ball; and then proved that
those several lots were supplied with water
for hydraulic purposes by means of the dam
erected by the defendant. To rebut this evi-
dence, it was shown on the part of the plain-
tiff, that previous to 182G the canal mentioned
in the plaintiff's deeds was supplied with wa-
ter by means of a dam erected across the Gen-
esee river in 1812, at the upper or southerly
end of the island owned by the plaintiff, the
half of which dam was cut away in 1824, by
one Solomon Cleveland, an owner of property
on the east side of the river, who then erected
a dam near the lower or northerly end of the
island, which, after being carried off by a
freshet, rebuilt, and again swept away, was
replaced in 1826 by the dam in question. The
plaintiff also proved that the deed from him
to Allcott was executed pursuant to the terms
1 Irrelevant parts omitted.
of a contract entered into between him and
Allcott in October, 1825, and that the descrip-
tion of the lot with the water privileges con-
nected therewith, as expressed in the deed,
had been taken verbatim from the contract.
Several minor questions arose on the triaL
The plaintiff had examined a witness as to
declarations made by the defendant at and
about the time of the erection of the dam Ln
1826, and of and concerning such erection.
The defendant's counsel, on the cross-exam-
ination of the same witness, asked him wheth-
er, in the same conversation, the defendant
had said that the plaintiff had given his con-
sent to the erection of the dam. The plain-
tiff's counsel objected to proof of the defend-
ant's declarations, except for the purpose of
explaining the declarations called for by the
plaintiff, and insisted that the defendant was
not entitled to give proof of his own declara-
tions upon a distinct subject, although made in
the course of the same conversation. The
judge overruled the objection, and the witness
testified that the defendant did at that time
say that the plaintiff had consented to the
erection of the dam. Another question arose
as follows: it was proved, on the part of the
plaintiff, that in 1824 an agreement took place
between him and Cleveland, who cut away
the old dam in 1824, in respect to the build-
ing of a dam on the site of the dam subse-
quently erected, in 1826; that the agreement
was reduced to writing, but not executed;
that Cleveland took a copy of it to show to
others interested in the mattei", and that short-
ly afterwards he commenced the erection of
the dam. After showing these facts, the
plaintiff offered the agreement thus reduced
to writing in evidence; but the judge refused
to receive it. The witness who had given this
account of the written agreement, also testi-
fied that Cleveland, at the time, agreed to con-
struct a stone wall along the east line of the
island, to protect it from injui-y; and after
giving such testimony, the plaintiff's counsel
enquired of the witness whether it was under-
stood between the plaintiff and Cleveland,
that Cleveland should not build the dam, im-
less he built a wall to secure the island. To
this enquiry the defendant's counsel objected,
and was sustained by the judge.
The judge charged the jury, as to the ground
of defence assumed by the counsel for the de-
fendant, that by virtue of the plaintiff's con-
tract and deed, executed previous to the year
1826, the grantee acquired the right to locate
the dam in question where it had been placed,
or to maintain it, that those instruments were
to be construed in reference to the actual state
of things and the nature of the plaintiff's
rights, and could have no application to the
dam erected in 1826; and also that those in-
struments could not be used by the defendant
as constituting an estoppel to the plaintiff's
right of action against the defendant, because
the defendant was not a party to them; but
he charged them that a licence, by the plain-
tiff to the defendant and others, to construct
AGREEMENTS RELATING TO LAND.
141
the dam in question, would constitute a valid
defence to the action, because the plaintiff
would thus be a party to the nuisance, and
he could not recover for any injury it produ-
ced, and submitted the evidence on the sub-
ject of the licence to the consideration of the
jury. The judge also charged the jury that
the conveyance by the plaintiff to Allcott of
mill privileges and the right of using water
on the canal, referred to and adopted the
means of furnishing water to the canal as
they existed at the date of the deed, and as
the present dam was then erected the deed
was a full confirmation and recognition of it,
and that such confirmation and recognition
»
applied to the effects of the dam upon the
property of the plaintiff. He told the jury
that it had been fully proved that the plaintiff
had sustained some Injury, and that as to the
measure of damages, they were the exclusive
judges. The jury found a verdict for the de-
fendant. The plaintiff's counsel having ex-
cepted to the charge of the judge and to va-
rious decisions in the progress of the trial,
now moved to set aside the verdict.
The cause was argued by
J. C. Spencer, for plaintiff. F. M. Haight
and D. D. Barnard, for defendant
SAVAGE, C. J. The questions are: (1)
Whether the defendant was entitled to prove
his own decLirations, made in the same con-
versation about which the plaintiff had ex-
amined the witness; (2) whether the copy of
the agreement reduced to writing, but not ex-
ecuted, should have been received in evidence;
(3) whether the witness should have been per-
mitted to testify as to the licence being con-
ditional; (4) whether a parol licence in this
case is valid; (5) whether the deed to Allcott
was a recognition of the dam erected by the
defendant
4. Suppose, however, the licence to have
been properly and fully proved, was It valid
and available as a defence to this action?
Did it purport to convey an interest in or con-
cerning the lands of the plaintiff, which re-
quired an agreement in writing? The 9th sec-
tion of the statute of frauds of 1S13 (1 R. L.
78, § 9) declares that all leases, estates, in-
terest of freeholds or terms of years, or any
uncertain interests of, in, to or out of any
lands, made by parol and not in writing, shall
have tlie effect of estates at will only. This
clause excepts leases for three years. The
10th section declnri/>, the only rational ground, the cases
of Evans v. Roberts^ 5 Bam. & C. S29;
Smith V. Surman, 9 Barn. & C. 561; and.
Scored V. Boxall, 1 Younge & J. 396,— have
been decided. And as we think that grow-
ing crops have all the consequences of chat-
tels, and are like them, liable to be taken in
execution, we must rule the points saved for
the plaintiff.' "
Various other decisions have proceeded on
the same principle, although it has no where
been stated and illustrated with the same
clearness and force as m the opinion of
Chief Baron Joy.
The following cases may be cited to show
that growing crops of grain and vegetables,
fructus industriales, being goods and chat-
tels, and not real estate, may be conveyed
by a verbal contract, as they may also be
sold on execution as personal chattels. Car-
rington v. Roots, 2 Mees. & W. 248; Sams-
bury V. Matthews, 4 Mees. & W, 343; Ran-
dall V. Ramer, 2 Johns. 421, note; Mumford
V. Whitney, 15 Wend. 387; Austin v. Sawyer,
9 Cow. 39; Jones v. Flint, 10 Adol. & E.
753; Warwick v. Bruce, 2 Maule & S. 205;
Graves v. Weld, 5 Barn. & Adol. 105.
But where the subject matter of a contract
of sale, is growing trees, fruit or grass, the
natural produce of the earth, and not annual
productions raised by manurance and the
industry of man, as they are parcel of the
land itself, and not chattels, the contract,
in order to be valid must be In writing.
Teal V. Auty, 2 Brod. & B. 99; Putney v.
Day, 6 N. H. 430, Olmstead v. NUes, 7 N. H.
522; Crosby v. Wads worth, 6 East, 602;
Rodwell V. PhUlips. 9 Mees. &r. W. 501; Jones.
V. Flint, 10 Adol. & K 753.
The contract in this case was within the
statute, and being by parol was void. The
judgment, of the common pleas must be af-
firmed.
Judgment affirmed.
.^
AGREEMENTS RELATING TO LAND.
147
V
/> 0> I HIRTH V. GRAHAM.1
[7 (33 N. E. 90, 50 Ohio St. 57.)
SuprenjL' Court of Ohio. Jan. 24, 1893.
Error to circuit court, Morrow couuty.
Action for breach of contract by one Hirth
against one Graham. PlaiutifC recovered a
judj;uieut before a justice of the peace of
Morrow couuty, which, upon error being
brouj4ht to the court of common pleas, was
alhrmed. The case was then talien on error
to the circuit court, where the judgments of
the court of common pleas and of the justice
were both reverscnl, and plaintiff brings er-
ror. AfUrmed.
James H. Beebe, for plaintiff in error. An-
drews & Simms, for defendant in error.
BRADBURY, J. The plaintiff in error
brought an action before a justice of the
peace to recover of tbe defendant in error
damages alleged to have been sustained on
account of the refusal of the latter to per-
form a contract by which he had sold to the
plaintiff in error certain growing timber.
The defendant attempted to secure the dis-
missal of the action, on the ground that the
justice had no jurisdiction of an action for
the breach of such a contract. Failing in
this, and the action being tried to a jury, he
requested the justice to instruct the jury
"that if they find from the evidence that the
trees at>out which this action is brought were
at the time of said alleged contract then grow-
ing upon the land of defendant, and that no
note or contract or memorandum was made
of the contract of sale was at the time made
in writing, the plaintiff cannot maintain this
action, and your verdict should be for tbe de-
fondant," which instruction the justice re-
fused to give, but on the contrary gave to
them the following instructions on the sub-
ject: "This is an action for damage, not on
the contract, nor to enforce the same; and if
you find that a contract was made verbal or
otherwise and the defendant refused or fail-
ed to comply with its terms, the plaintiff is
entitled to any damage you may find him to
liave sustained by way of such noncompli-
ance." The defendant in error, who was also
the defendant in the justice's court, excepted,
both to the charge as given and to the re-
fusal to charge as requested; the verdict and
judgment being against him, he embodied
tlie cliargo as given, as well as that refused,
in separate bills of exceptions, and brought
the cause to the court of common pleas on
error, where the judgment of the justice of
the peace was attirmed. He thereupon
brought error to the circuit court, where the
judgments of the court of common pleas and
tliat of the jtistice were both reversed, and
it is to reverse this judgment of the circuit
court, and reinstate and affirm those of the
court of common pleas and justice of the
peace, that this proceeding is pending.
1 Irrelevant parts omitted.
Ckiun.sel for plaintiff in error contends that
the record contains nothing to show that the
trees which were the subject of the contract
were standing or growing, and that there-
fore it does not appear that the defendant
was injured by the In.structions given and re-
fused. The record does not support this con-
tention. During the trial three separate bills
of exceptions were taken, and, when all of
them are considered together. It clearly ap-
pears that evidence was given tending to
prove .that the trees, the subject of the con-
tract, were growing on the land at the time
it was made, and that the contract was not
evidenced by any note or memorandum in
writing. The instruction refused was, there-
fore, pertinent, and if It contained a sound
legal proposition the refusal to give it in
charge to the jury was prejudicial to the de-
fendant. The court, however, not only re-
fused to give the instructions requested by the
defendant, but told the jury in substance that
no written memorandum was necessary.
Whether a sale of growing trees Is the sale
of an interest in or concerning land has long
been a much controverted subject In the
courts of England, as well as in the courts
of the several states of the Union. The ques-
tion has been differently decided in different
jurisdictions, and by different courts, or at
different times by the same court within the
same jurisdiction. The courts of England,
liarticularly, have varied widely in their lioUl-
ings on the subject. Lord Mansfield held that
the sale of a crop of growing turnips was
within this clause of the statute. Emmereon
V. Heelis, 2 Taunt. 3S, following the case of
Waddington v. Bristow, 2 Bos. & P. 452,
where the sale of a crop of growing hops was
adjudged not to have been a sale of goods
and chattels merely. And in Crosby v. Wads-
worth, 6 East, 602, the sale of growing grass
was held to be a contract for the sale of an
interest in or concerning land. Ivord Ellen-
borough saying: " Upon the first of these
questions," (whether this purchase of the
growing crop be a contract or sale of lands,
tenements, or hereditximents, or any interest
in or concerning them,) "I think that the
agreement stated, conferring, as it professes
to do, an exclusive right to the vesture of the
land during a limited time and for given pur-
poses, is a contract or sale of an interest in,
or at least an interest conceniing. lands." Id.
010. Afterwards, in Teal v. Auty, 2 Brod. &
B. 99, the erv.rt of common pleas held a con-
tract for the sale of growing poles was a sale
of an interest in or concerning lands. Many
decisions have been announced by the Eng-
lish courts since the cases above noted were
decided, tlie tendency of which have been to
greatly narrow the application of the fourth
section of the statute of frauds to crops, or
timber, growing upon land. Crops planted
and raised annually by the hand of man are
practically withdrawn from its operation,
while t-he sale of other crops, and in some in-
148
STATUTE or FRAUDS.
stances growing timber, also, are withdrawn
from the statute, where, in the contemplation
of the contracting parties, the subject of the
contract is to be treated as a chattel. The
latest declaration of the English courts upon
this question is that of the common pleas di-
vision of the high court of justice, in Mar-
shall V. Green, 1 C. P. Div. 35, decided in
1S75. The syllabus reads: "A sale of grow-
ing timber to be taken away as soon as pos-
sible by the purchaser is not a contract or
sale of land, or any interest therein, within
the fourth section of the statute of frauds."
This decision was rendered by the three jus-
tices who constituted the common pleas divi-
sion of the high court of justice, Coleridge,
C. J., Brett and Grove, JJ., whose characters
and attainments entitle it to great weight;
yet, in view of the prior long period of un-
settled professional and judicial opinion in
England upon the question, that the court
was not one of final resort, and that the de-
cision has encountered adverse criticism from
high authority (Benj. Sales [Ed. 1892] § 126),
it cannot be considered as finally settling the
law of England on this subject. The con-
flict among the American cases on the sub-
ject cannot be wholly reconciled. In Mas-
sachusetts, Maine, Maryland, Kentucky, and
Connecticut sales of growing trees, to be pres-
ently cut and removed by the vendee, are
held not to be within the operation of the
fourth section of the statute of frauds. Claf-
lin V. Carpenter, 4 Mete. (Mass.) 580; Nettle-
ton V. Sikes, 8 Mete. (Mass.) 34; Bostwick v.
Leach, 3 Day, 476; Erskine v. Plummer, 7
Me. 447; Cutler v. Pope, 13 Me. 377; Cain v.
McGuire, 13 B. Mon. 340; Byassee v. Reese, 4
Mete. (Ky.) 372; Smith v. Bryan, 5 Md. 141.
In none of these cases, except 4 Mete. (Ky.)
373, and in 13 B. Mon. 340, had the vendor
attempted to repudiate the contract before
the vendee had entered upon its execution,
and the statement of facts in those two cases
do not speak clearly upon this point. In the
leading English case before cited, (Marshall
v. Green, 1 C. P. Div. 35,) the vendee had also
entered upon the work of felling the trees,
and had sold some of their tops before the
vendor countermanded the sale. These cases,
therefore, cannot be regarded as directly hold-
ing that a vendee, by parol, of growing tim-
ber to be presently felled and removed, may
not repudiate the contract before anything is
done under it; and this was the situation in
which the parties to the case now under con-
sideration stood when the contract was re-
pudiated. Indeed, a late case In Massa-
chusetts, (Giles V. Simonds, 15 Gray, 441),
holds that "the owner of land, who has made
a verbal contract for the sale of standing
wood to be cut and severed from the free-
hold by the purchaser, may at any time re-
voke the license which he thereby gives to
the purchaser to enter his land to cut and car-
ry away the wood, so far as it relates to any
wood not cut at the time of the revocation."
The courts of most of the American states,
however, that have considered the question,
hold expressly that a sale of growing or
standing timber is a contract concerning an
interest in lands, and within the fourth sec-
tion of the statute of frauds. Green v. Arm-
strong, 1 Deuio, 550; Bishop v. Bishop, 11 N.
Y. 123; Westbrook v. Eager, 16 N. J. Law,
81; Buck V. PickweU, 27 Vt 157; Cool v. Lum-
ber Co., 87 Ind. 531; Terrell v. Frazier, 79
Ind. 473; Owens v. Lewis, 46 Ind. 488; Ann-
strong V. Lawson, 73 Ind. 498; Jackson v.
Evans, 44 Mich. 510, 7 N. W. 79; Lyle v. Shin-
nebarger, 17 Mo.App.66; Howe v. Batchelder,
49 N. H. 204; Putney v. Day, 6 N. H, 430;
Bowers v. Bowers, 95 Pa. St. 477; Daniels v.
Bailey, 43 Wis. 506; Lillie v. Dunbar, 62 Wis.
198, 22 N. W. 467; Knox v. Haralson, 2 Tenn.
Ch. 232. The question is now, for the first
time, before this court for determination;
and we are at liberty to adopt that rule on
the subject most conformable to sound rea-
son. In all its other relations to the affairs
of men, growing timber is regarded as an «
I Integral part of the land upon which it stands; /
'it is not subject to levy and sale upon execu-,
tion as chattel property; it descends with the
land to the heir, and passes to the vendor
with the soil. Jones v. Timmons, 21 Ohio Sti
1596. Coal, petroleum, building stone, and]
many other substances constituting integral
parts of the land, have become articles of
commerce, and easily detached and removed,
and, when detached and removed, become
personal property, as well as fallen timber;
but no case is foimd in which it Is suggested
that sales of such substances, with a 'view to
their immediate removal, would not be with-
in the statute. Sales of growing timber are
as likely to become the subjects of fraud and
perjury as are the other integral parts of the
land, and the question whether such sale is a
sale of an Interest in or concerning lands
should depend not upon the intention of the
parties, but upon the legal character of the
subject of the contract, which, in the case of
growing timber, is that of realty. This rule
has the additional merit of being clear, sim-
ple, and of easy application, — qualities en-
titled to substantial weight In choosing be-
tween conflicting principles. Whether cir-
cumstances of part performance might re-
quire a modification of this rule is not be-
fore the court, and has not been considered.
Judgment aflirmed.
0,1
AGREEMENTS NOT TO BE PERPOliMED WITHIN A YEAR
149
7
BLAKE V. COLE.i
17 (-22 Pick. 97.)
Supreme Judicial Court of Massachusetts.
Mii-ch Term, 1839.
This was an action brought by the plaintiff
as administrator of the estate of Jabez Hatcii
senior, deceased, to recover the sum of $2UO0
paid by the plaintiff as such administrator to
the use of the defendant
At the trial, before Sluiw, C. J., it appeared,
that on the 11th of August, 1834, the plain-
tiff's intestate and the defendant became sure-
ties on a bond at the probate otiice, given by
Jabez Hatch junior (son of the intestate) as
principal, on his appointment as the adminis-
ti'ator of one Gallagher; tliat the principal
made default, and he and his sureties be-
came liable to tlie amount of $400
contract or not If a manufacturer is to
produce an article which at the time of the
delivery could be the subject of sale by him,
the case is within the statute of frauds. The
rule excludes all cases where work is done
upon the goods of another, or even mate-
rials supplied or added to the goods of an-
other. Thus if a carriage-maker should re-
pair my carriage, both furnishing labor and
supplying materials, it would be a contract
for work and labor, as the whole result of
his efforts would not produce a chattel which
could be the subject of sale by him. If on
the other hand, by the contract he lays out
work or materials, or both, so as to produce
a chattel which he could sell to me, the con-
tract is within the statute. This conclusion
has been reached only after great discussion
and much fluctuation of opinion, but must
now be regarded as settled. The leading
case upon this point is Lee v. Griffin, 1 Best
&, S. 272; Benj. Sales, 77. The action was
there brought by a dentist to recover £21
sterling for two sets of artificial teeth, made
for a deceased lady of whose estate the de-
fendant was executor. The court held thia
to be the sale of a chattel within the stat-
ute of frauds. Blackburn, J., stated the
principle of the decision in a clear manner:
"If the contract be such that it will result in
the sale of a chattel, then it constitutes a
sale, but if the work and labor be bestowed
in such a manner as that the result would
not be any thing which could properly be said
to be the subject of sale, the action is for
work and labor."
The Massachusetts rule, as applicable to
goods manufactured or modified after the
bargain for them is made, mainly regards
the point whether the products can, at the
time stipulated for delivery, be regarded as
"goods, wares and merchandise," in the
sense of being generally marketable com-
modities made by the manufacturer. In that
respect it agrees with the English rule. The
test is not the non-existence of the commod-
ity at the time of the bargain. It is rather
whether the manufacturer produces the arti-
cle in the general course of his business or as
the result of a special order. Goddard v.
Binney, 115 Mass. 450, 15 Am. Rep. 112. In
this very recent case, the result of their de-
cisions is stated in the following terms: "A
contract for the sale of articles then exist-
ing, or such as the vendor in the ordinary
course of his business manufactures or pro-
cures for the general market, whether on
hand at the time or not, is a contract for
the sale of goods to which the statute ap-
plies. But on the other hand, if the goods
are to be manufactured especially for the
purchaser and upon his special order, and
not for the general market, the case is not
within the statute." Under this rule it was
held in Gardner v. Joy, 9 Jletc. 177, that a
conti-uct to buy a certain number of boxes of
candles at a fixed price per pound, which the
vendor said he would manufacture and de-
liver in about three months, was held to be
a contract of sale. On the other hand in
Goddard v. Binney, supra, the contract with
a carriage manufacturer was that he should
make a buggy for the person ordering it,
that the color of the lining should be drab,
and the outside seat of cane, and have on it
the monogram and initials of the party for
whom it was made. This was held not to
be a contract of sale within the statute.
SALE OF GOODS.
157
See, also, Mixer v. Howarth, 21 Tick. 205, 32
Am. Dec. 2l)G; Lamb v. Cral'ts, 12 Mete. 353;
Speucer v. Cone, 1 Mete. 283.
The New York rule is still different. It
is held here by a long course of decisions
that an agreement for the sale of any com-
modity not in existence at the time, but
which the vendor is to manufacture or put
in a condition to be delivered, such as flour
from wheat not yet ground, or nails to be
made from iron belonging to the manufac-
turer, is not a contract of sale. The New
York rule lays stress on the word "sale."
There must be a sale at the time the con-
tract is made. The latest and most authori-
tative expression of the rule is found in a
recent case in this court. Parsons v. Loucks,
48 N. Y. 17, 10, 8 Am. Rep. 517. The contrast
between Parsons v. Loucks, in this state, on
the one hand, and Lee v. Griffin, supra, in
England, on the other, is that in the former
case the word sale refers to the time of en-
tering into the contract, while in the latter,
reference is had to the time of deliver^-, as
contemplated by the parties. If at that time
it is a chattel it is enough, according to the
English rule. Other cases in this state
agreeing with Parsons v. Loucks are Crook-
shank V. Burrell, 18 Johns. 58; Sewall v.
Fitch, 8 Cow. 215; Robertson v. Vaughn, 5
Sandf. 1; Parker v. Schenck, 28 Barb. 38.
These cases are based on certain old deci-
sions in England, such as Towers v. Os-
borne, 1 Strange, 50G, and Clayton v. An-
drews, 4 Burrows, 2101, which have been
wholly discarded in that country.
The case at bar does not fall within the
rule in Parsons v. Loucks. The facts of
that case were that a manufacturer agreed
to make for the other party to the contract,
two tons of book paper. The paper was not
in existence, and so far as appears, not even
the rags, "except so far as such existence
may be argued from the fact that matter is
indestructible." So in Sewall v. Fitch, su-
pra, the nails which were the subject of the
contract were not then wrought out, but
were to be made and delivered at a future
day.
Nothing of this kind is found in the pres-
ent case. The lumber, with the possible ex-
ception of the clapboards, was nil in exist-
ence when the contract was made. It only
needed to be prepared for the purchaser-
dressed and put in a condition to fill his or-
der. The court accordingly is not hampered
in the disposition of this cause by autliority,
but may proceed upon principle.
Were this subject now open to full discus-
sion upon principle, no more convenient and
easily understood rule could be adopted than
that enunciated in Lee v. Griffin. It is at
once so philosophical and so readily compre-
hensible, that it is a matter of surprise that
it should have been first announced at so
late a stage in the discussion of the stat-
ute. It is too late to adopt it in full in this
state. So far as authoritative decisions have
gone, they must be respected, even at the
expense of sound principle. The court liow-
ever in view of tlie present state of the law,
should plant itself, so far as it is not pre-
cluded from doing so by authority, up<»n
some clearly intelligible ground, and intro-
duce no more nice and perplexing distinc-
tions. I think that the true rule to be ap-
plied in this state, is that when the chattel
is in existence, so as not to be governed by
Parsons v. Loucks, supra, the contract
should be deemed to be one of sale, even
though it may have been ordered from a
seller who is to do some work upon it to
adapt it to the uses of the purchaser. Such
a rule makes but a single distinction, and
that is between existing and non-existing
chattels. There will still be border cases
where it will be difficult to draw the line,
and to discover whether the chattels are in
existence or not. The mass of the cases
will however readily be classified. If, on
further discussion, the rule in Lee v. Griffiu
should be found most desirable as applicable
to both kinds of transactions, a proper case
will be presented for the consideration of
the legislature.
The view that this case Is one of sale is
sustained by Smith v. Central R. Co., *43 N.
Y. ISO, and by Downs v. Ross, 23 Wend. 270.
In the first of these cases there was a con-
tract for the sale and delivery of a quantity
of wood, to be cut from trees standing on
the plaintiff's laud. The court held that it
could not be treated as an agreement for
work and labor in manufacturing fire-wood
out of standing trees. The cases already
cited were distinguished in the fact that no
change in the thing sold and to be delivered
was contemplated, and that the transaction
could be regarded as a sale in perfect con-
sistency with the cases which hold that
where the substance of the contract consists
in the act of converting materials into a new
and wholly different article, it is an agree-
ment for work and labor. It was further
considered that the case of Towers v. Os-
borne, 1 Strange, 500, where an agreement
for the manufacture of a chariot was a con-
tract for work and labor, was extreme in its
natui'e, and was not to be carried any fur-
ther. Page 200. The cases of Garbutt v.
Watson, 5 B. & Aid. G13, and Smith v. Sur-
man, 9 B. & C. 501, were cited with ap-
proval. In Garbutt v. Watson a sale of
flour by a miller was held within the statute,
although not ground when the bargain was
made.
In Downs v. Ross there was a contract
for the sale of seven hundred and fifty bush-
els of wheat, two hundred and fifty of the
quantity being in a granary, and the residue
unthreshed, but which the vendor agreed to
get ready and deliver. The court held the
contract to be within the statute of frauds,
notwithstanding that the act of threshing
was to be done by the vendor. The rule
that governed the court was that if the
158
STATUTE OF FRAUDS.
thing sold exist at the time in solido, the
mere fact that something remains to be done
to pnt it in a marlietable condition will not
talie the contract out of the operation of the
statute. Page 272. This proposition is in
marlied contrast to the view expressed by
Cowen, J., in a dissenting opinion. His the-
ory was that where the article which forms
the subject of sale is understood by the par-
ties to be defective in any particular which
demands the linishing labor of the vendor in
order to satisfy the bargain, it is a contract
for worli and labor and not of sale. The
two theories (where the goods exist at the
time of sale) have nowhere been more terse-
ly and distinctly stated than in the conflict-
ing opinions of Bronson and Cowen, JJ., in
this case. See also Courtright v. Stewart,
19 Barb. 455.
The fallacy in the proposition of Cowen,
J., is in assuming that there is any "work
and labor" done for the vendee. All the
work and labor is done on the vendor's prop-
erty to put it in a condition to enable him
to sell it. His compensation for it is found
in the price of the goods sold. It is a juggle
of words to call this "a mixed contract of
sale and work and labor." When the goods
leave the vendor's hands and pass over to
the vendee they pass as chattels under an
executed contract of sale. While any thing
remained to be done the contract was exec-
utory There is abundance of authority for
maintaining that a contract in its origin ex-
ecutory may, by the performance of acts un-
der its terms, by one of the parties, become
in the end executed. Rohde v. Thwaites, 6
B. & C. 3S8, Benj. Sales, chap. 5, and cases
cited.
The case of Donovan v. Willson. 2G Barb.
138, and Parke v. Scheuck, 28 Barb 38, are
to be upheld as falling within the principle
of Parsons v. Loucks, supra. Both of these
cases concerned articles not in existence,
but to be produced by the manufacturer; in
the one case beer was to be manufactured,
and in the other a brass pump. So in Pas-
saic Mauuf. Co. V. Hoffman, 3 Daly, 405, the
contract was for the manufacture and deliv-
ery of tifty warps. None of these were in
existence when the order was received.
While the case appears to fall within the
rule of Parsons v. Loucks, the eminent
judge who wrote an elaborate opinion ex-
pressing the views of the court would seem
to rely upon the Massachusetts rule rather
than our own. Whatever view might be en-
tertained of the soundness of that distinc-
tion it is now too late to adopt it here, and
the case cannot be sustained on that ground.
The only case in our reports appearing to
stand in the way of the conclusion arrived
at in this cause is Mead v. Case, 33 Barb.
202. The court in that case recognized the
distinction herein upheld. The only doubt
about the case is whether the court coiTect-
ly applied the rule to the facts. These were
that several pieces of marble put together in
the form of a monument were standing in
the yard of a marble-cutter. That person
agreed with a buyer to polish, letter and fin-
ish the article as a monument, and to dis-
pose of it for an entire price — $200. The
court held that there was no monument in
existence at the time of the bargain. There
were pieces of stone in the similitude of a
monument, and that was all.
It is unnecessary to quarrel with this case.
If unsound, it is only a case of a misapplica-
tion of an established rule. If sound, it is a
so-called "border case," showing the refine-
ments which are likely to arise in applying
to various transactions the rule adopted in
Sewall v. Fitch, and kindred cases. It is
proper however to say that the notion that
such an arrangement of marble placed in a
cemetery over a grave cannot be regarded
as a monument, in the absence of an inscrip-
tion, seems highly strained. Then there
could not be a memorial church without an
inscription. Then it could not have been
said of Sir Christopher Wren, in his relation
to one of his great architectural productions,
"Si quteris monumentum, circumspice." It
would seem to be enough if the monument
reminds the passer-by of him whom it is in-
tended to commemorate, and this might be
by tradition, inscriptions on adjoining or
neighboring objects, or otherwise.
In the view of these principles, the defend-
ants had the right to set up the statute of
frauds. I think that this was so even as
to the clapboards. Although not strictly in
existence as clapboards, they fall within the
rule in Smith v. Central R. Co. They were
no more new products than was the wood in
that case. There was simply to be gone
through with a process of dividing and
adapting existing materials to the plaintiffs'
use. It would be difficult to distinguish be-
tween splitting planks into clapboards, and
ti'ees into wood. No especial skill is re-
quired, as all the work is done by machinery
in general use, and readily managed by any
producers of ordinary intelligence. The case
bears no resemblance to that of Parsons v.
Loucks, where the product was to be created
from materials in no respect existing in the
form of paper. The cases would have been
more analogous had the contract in that
case been to divide large sheets of paper in-
to small ones, or to make packages of en-
velopes from existing paper. In Oilman v.
Hill, 36 N. H. 311, it was held that a con-
tract for sheep pelts to be taken from sheep
was a contract for things in existence, and
a sale.
The next inquiry is, whether there have
been sufficient acts done on the part of the
buyers to comply with the statute. In order
to properly solve this question, it is neces-
sary to look more closely into the nature of
the contract As has been already suggest-
ed, the contract was in its origin executory.
It called for selection on the part of the sell-
ers from a mass of materials. At the time
SALE OF GOODS.
159
of the bargain there was no sale. There
was at most only an agreement to sell. The
plaintiffs however laj- much stress on the
fact that after the oral bargain and after
the defendants had inspected the lumber,
they gave directions, also oral, to the plain-
tiffs to place the lumber after it had been
made ready for delivery upon the dock and
to give notice to Porcival. They urge that
the subsequent compliance with these direc-
tions by the plaintiffs satisfy the terms of
the statute.
It will be observed that all of these direc-
tions were given while the contract was still
wholly executory, and before any act of se-
lection had been performed by the plaintiffs.
It will thus be necessary to consider whetli-
er these directions are sufficient to turn the
executory contract of sale into an executed
one, independent of the statute of frauds,
and afterward to inquire whether there was
any sufficient evidence of "acceptance and
receipt" of the goods to take the case out of
the statute. These questions are quite dis-
tinct in their nature and governed by differ-
ent considerations: (1) If the contract had
been for goods less than ?50 in value, or for
more than that amount, and ordered by the
defendants in writing, it would still have
been executory in its nature, and would have
passed no specific goods. It would have
been an agreement to sell and not a sale.
The case would not have fallen within such
authorities as Crofoot v. Bennett, 2 N. Y.
258, and Kimberly v. Patchin, 19 N. Y. 330.
Since the goods could not have been identi-
fied at all, except by the act of the seller in
selecting such as would comply with the or-
der, nor could the purposes of the contract
have been performed except by the labor
of the plaintiffs in adapting the goods to the
defendants' use, the case falls within a rule
laid down by Mr. Blackburn in his work on
Sales (pages 151, 152): "Where, by the agree-
ment, the vendor is to do any thing to the
goods for the purpose of putting them into
that state in which the purchaser is to be
bound to accept them, or as it is some times
worded, into a deliverable state, the per-
formance of these things shall, in the ab-
sence of circumstances indicating a conti'ary
intention, be taken to be a condition preced-
deut to the vesting of the property." Acra-
man v. Morrice, 8 C. B. 449; Gillett v. Hill,
2 C. & M. 530; Campbell v. Mersey Docks,
14 C. B. (N. S.) 412.
Proceeding on the view that this was an
executory contract, it might still pass into
the class of executed sales by acts "of sub-
sequent appropriation." In other words, if
the subsequent acts of the seller, combined
with evidence of intention on the part of the
buyer, show that specific articles have been
set apart in performance of the contract,
there may be an executed sale and the prop-
erty in the goods may pass to the purchaser.
Blackburn, Sales, 12S; Benj. Sales, c. 5;
Fragano v. Long, 4 B. & C. 219; Kohde v.
Thwaites, 6 B. & C. 3SS; Aldridge v. John-
son, 7 E. & B. 885; Calcutta, etc.. Company
V. De Mattos, 33 L. J. (Q. B.) 214, in Exch.
Cham. This doctrine requires the assent
of both parties, though it is held that it is
not necessary that such assent should be
given by the buyer subseciuently to the ap-
propriation by the vendor. It is enough
that the minds of both parties acted upon
the subject and assented to the selection.
The vendor may be vested with an implied
authority by the vendee to make the selec-
tion and thus to vest the title in him. Browne
v. Hare, 3 H. & N. 484; s. c, 4 H. & N. 822.
This doctrine would be applicable to existing
chattels where a mere selection from a mass
of the same kind was requisite. On the other
hand, if the goods are to be manufactured
according to an order, it would seem that
the mind of the purchaser after the manu-
facture was complete, should act upon the
question whether the goods had complied
with the contract. See Mucklow v. Mangles,
1 Taunt. 318; Bishop v. Crawshay, 3 B. &
C. 415; Atkinson v. Bell, 8 B. & C. 277. This
point may be illustrated by the case of a sale
by sample, where the seller agrees to select
from a mass of products certain items cor-
responding with the sample, and forward
them to a purchaser. The act of selection by
the vendor will not pass the title, for the
plain and satisfactory reason, that the pur-
chaser has still remaining a right to deter-
mine whether the selected goods correspond
with the sample. Jenner v. Smith, L. R. 4
C. P. 270. In this case the plaintiff at a fair
orally conti-acted to sell to the defendant two
pockets of hops, and also two other pockets
to correspond with a sample, which were
lying in a warehouse in Loudon, and which
he was to forward. On his return to Lon-
don, he selected two out of three pockets
which he had there, and directed them to be
marked to "wait the buyer's order." The
buyer did no act to show his acceptance of
the goods. The court held that the appro-
priation was neither originally authorized
nor subsequently assented to by the buyer,
and that tlie property did not pass by the
contract. Brett, J., put in a strong form the
objection to the view that the buyer could
have impliedly assented to the appropriation
by the seller. It was urged, he said, "that
there was evidence that by agreement be-
tween the parties, the purchaser gave author-
ity to the seUer to select two pockets for him.
If he did so, he gave up his power to object
to the weighing and to the goods not cor-
responding with the sample; for he could
not give such authority and reserve his right
to object, and indeed it has not been contend-
ed that he gave up those rights. That seems
to me to be couclusive to show that the de-
fendant never gave the plaintiff authority to
m:ike the selection so as to bind him. Un-
der the circumstances therefore it is impos-
sible to say that the property passed." Page
27S. The same general principle was main-
i60
STATUTE OF FRAUDS.
tained in Kein v. Tupper, 52 N. Y. 550, where
U was held that the act of the vendor put-
uug the goods in a state to be delivered did
aot pass the title, so long as the acceptance
)t the vendee, provided for under the terms
of the contract, had not been obtained.
The result is, that if this sale, executory as
it was in its nature, had not fallen within
the statute of frauds, there would have been
no sutficient appropriation by the vendor to
pass the title. The transaction, so far as
it went, was even at common law an agree-
ment to sell and not an actual saie.
(2) But even if it be assumed that this
would have been an executed contract of
sale in its own nature, without reference to
the statute of frauds, was there "an accept-
ance and a receipt" of the goods, or a part of
them, by tJie buyer, so as to satisfy the stat-
ute?
The acceptance and receipt are both neces-
sai-y. The contract is not valid unless the
buyer does both. These are two distinct
things. There may be an actual receipt
without an acceptance, and an acceptance
without a receipt. The receipt of the goods
is the act of taking possession of them.
When the seller gives to the buyer the actual
control of the goods, and the buyer accepts
such control, he has actually received them.
Such a receipt is often an evidence of an ac-
ceptance, but it is not the same thing. In-
deed the receipt by the buyer may be, and
often is, for the express purpose of seeing
whether he will accept or not. Blackb. Sales,
lOG; see Brand v. Focht, 3 Keyes, 409; Stone
v. Browning, 51 N. Y. 211.
There are some dicta, of various judges,
cited by the plaintiffs to the effect that ac-
ceptance and receipt are equivalent. Per
Crompton, J., and Cockburn, Ch. B., in Cas-
tle V. Sworder, 6 H. & N. 832; per Erie, C.
J., in Mai-vin v. Wallis, 6 E. «& B. 726. These
remarks cannot be regarded as of any weight,
being contrary to the decided current of au-
thority. Indeed a late and approved writer
says: "It may be confidently a.ssumed how-
ever that the constniction which attributes
distinct meanings to the two expressions, "ac-
ceptance' and 'actual receipt,' is now too
firmly settled to be treated as an open ques-
tion, and this is plainly to be infen-ed from
the opinions delivered in Smith v. Hudson."
6 B. «fe S. 43G; Benj. Sales.
It cannot be conceded that there was any
acceptance in the present case by reason of
the acts and words occurring between the
parties after the parol contract and before
the goods were prepared for delivery. There
could be no acceptance without the assent
of the buyers to the articles in their changed
condition, and as adapted to their use. If
the case had been one of specific goods to be
selected from a mass without any preparation
to be made, and nothing to be done by the
vendor but merely to select, the matter would
have presented a very different aspect. This
distinction ia well pointed out by Willes, J.,
in Bog Lead Min. Co. v. Montague, 10 C. B.
(N. S.) -ISl. In this case the question turned
upon the meaning of the word "acceptance,"
in another statute, but the court proceeded
on the analogies supposed to be derived from
the construction of the same word in the
statute of frauds. The question was as ta
what was necessary to constitute an "ac-
ceptance" of shares in a mining company, un-
der 19 & 20 Vict. c. 47. The court having
likened the case to that of a sale of chattels,
said: "It may be that in the case of a con-
tract for the purchase of unascertained prop-
erty to answer a particular description, no
acceptance can be properly said to take place
before the purchaser has had an oppoitimity
of rejection. In such a case, the offer to
purchase is subject not only to the assent or
dissent of the seller, but also to the condition
that the property to be delivered by him shall
answer the stipulated description. A right
of inspection to ascertain whether such con-
dition has been complied with is in the con-
templation of both parties to such a conti-act;
and no complete and final acceptance, so as
irrevocably to vest the property in the buy-
er, can take place before he has exercised or
waived that right. In order to constitute
such a final and complete acceptance, the
assent of the buyer should follow, not pre-
cede, that of the seller. But where the con-
tract is for a specific, ascertained chattel,
the reasoning is altogether different. Equal-
ly, where the offer to sell and deliver has been
first made by the seller and afterwards as-
sented to by the buyer, and where the offer
to buy and accept has been first made by
the buyer and afterwards assented to by
the seller, the contract is complete by the
assent of both parties, and it is a contract
the expression of which testifies that the sell-
er has agreed to sell and deliver, and the
buyer to buy and accept the chattel." Pages
489, 490.
This view is confirmed by Maberley v. Shep-
pard, 10 Bing. 99. That was an action for
goods sold and delivered, and it was proven
that the defendant ordered a wagon to be
made for him by the plaintiff, and, during
the progress of the work, furnished the iron
work and sent it to the plaintiff', and sent a
man to help the plaintiff in fitting the iron
to the wagon, and bought a tilt and sent it
to the plaintiff to be put on the wagon. It
was insisted, on these facts, that the defend-
ant had exercised such a dominion over the
goods sold as amounted to an acceptance.
The court, per Tindal, C. J., held that the
plaintiff had been rightly nonsuited, because
the acts of the defendant had not been done
after the wagon was finished and capable of
delivery, but merely while it was in progress,
so that it still remained in the plaintiff's yard
for further work until it was finished. The
court added: "If the wagon had been com-
pleted and ready for delivery and the de-
fendant had then sent a workman of his own
to perfoiTH any additional work upon it, su'h
SALE OF GOODS.
161
conduct on the ijait of the defendant mit;ht
have amounted to an acceptance." See also
Benj. Sales, c. 4, and cases cited.
The plaintiffs, in the case at bar, rely much
upon the decision in Morton v. Til:)bett, 15
Ad. & El. (N. S.) 428. Thoy maintain that
this case clearly establishes that there may
be an acceptance and receipt of goods by a
purchaser, within the statute of frauds, al-
though he has had no opportunity of exam-
ining them, and although he has done noth-
ing to preclude himself from objecting that
they do not correspond with the contract.
The expressions in :Mortou v. Tibl>ett are
not to be pressed any further than the facts
of the case require. The buyer of wheat by
sample had sent a carrier to a phice named
in a verbal contract between him and the
seller on August 25. The wheat was received
ou board of one of the carrier's lighters for
conveyance by canal to Wi-sbeach, where it
arrived ou the 2Sth. In the mean time it
had been resold by the buyer, by the same
sample, and was returned by the second pur-
chaser because foimd to be of short weight.
The defendant then wrote to the plaintiff on
the 30th, also rejecting it for short weight.
An action was brought for goods bargained
and sold. There was a verdict for plaintiff,
with leave to move for a nonsuit. The ques-
tion for the appellate court was, whether
there was auj' evidence that the defendant
had accepted and received the goods so as to
render him liable as buyer. The court held
that the acceptance under the statute was
not an act subsequent to the receipt of the
goods, but must precede, or at least be con-
tempoi'aneous with it; and that there might
be an acceptance to satisfy the statute,
though the purchaser might on other grounds
disaffirm the contract.
Morton v. Tibbett decides no more than
this, viz., that there maj' be a conditional
acceptance. It is as if the purchaser had
said: "I take these goods on the supposi-
tion that thej' comply with the contract. I
am not bound to decide that point at this
moment. If, on examination, they do not
correspond with the sample, I shall still
return them under my common-law right,
growing out of the very nature of the con-
tract, to declare it void, because our minds
never met on its subject-matter— non in haec
foedera veni." It is not necessary to decide
whether this distinction is sound. It is
enough to say that it is Intelligible. The
case. In no respect, decides that there can be
an acceptance under the statute of frauds
without a clear and distinct intent, or that
unfinished articles can be presumed to be
accepted before they are finished. The act
of acceptance was clear and unequivocal.
There was a distinct case of interraoddliug
with the goods in the exercise of an act of
ownershii) — a fact entirely wanting in the
case at bar. The proof of acceptance was the
act of resale before examination. The point
of the decision is, that this was such an ex-
HOPK. SEL. CAS. CONT. — 1 1
ercise of dominion over the goods an Is In-
consistent with a continuance of the rights
of property in the vendor, and therefore evi-
dence to justify a jury in finding acceptance
as well as actual receipt by the buyer.
Hunt V. Hecht, 8 Exch. 814.
Even when interpreted in this way, Mor-
ton V. Tibbett cannot be regarded as abso-
lutely settled law in England. See Coombs
V. Bristol 4S: Exeter Ry. Co., 3 II. & N. 510;
Castle V. Sworder, 6 H. & N. 828. The
court of queen's bench recognizes it, vrhile
the court of exchequer has not received it
with favor. Later cases distinctly hold that
the acceptance must take place after an op-
portunity by the vendee to exercise an op-
tion, or after the doing of some act waiving
it. Bramwell, B., said in Coombs v. Bristol
& Exeter Ry. Co.: "The cases establish
that there can be no acceptance where there
can be no opportunity for rejecting." All
the cases were reviewed in Smith v. Hud-
son, 6 Best & Smith, 431 (A. D. 1SG5), where
Hunt V. Hecht was approved. The two
last cited cases disclose a principle applica-
ble to the case at bar.
In Hunt V. Hecht the defendant went to
the plaintiff's warehouse and there inspect-
ed a heap of ox bones, mixed with others
inferior in quality. The defendant verbally
agreed to purchase those of the better quali-
ty, which were to be separated from the
rest, and ordered them to be sent to his
wharfinger. The bags were received on the
9th, aiid examined next day by the defend-
ant, and he at once refused to accept them.
There was held to be no acceptance. The
case was put upon the ground that no ac-
ceptance was possible till after separation,
and there was no pretense of an acceptance
after that time. Martin, B., said that an ac-
ceptance, to satisfy the statute, must be
something more than a mere I'eceipt. It
means some act done after the vendee has
exercised or had the means of exercising
his right of rejection.
In Smith v. Hudson, supra, barley was
sold on November 3, 1SG3, by sample, by
an oral contract. On the 7th it was taken
by the seller to a railway station, where he
had delivered grain to the purchaser on
several prior dealings, and where it was
his custom to receive it from other sellers.
The barley was left at the freight-house of
the railway, consigned to the order of the
purchaser. It was the custom of the trade
lor the buyer to compare the sample with
the bulk as delivered, and if the examination
was not satisfactory, to reject it. This right
continued in the present case, notwithstand-
ing the delivery of the grain to the railway
company. On the 9th the purchaser became
bankrupt, and on the 11th the seller notified
the station-master not to deliver the barley
to the purchaser or his assignees. The court
held that there was no acceptance sulficient
to satisfy the statute. The most that could
be said was, that the delivery to the com-
16::
STATUTE OF FRAUDS.
pany, considered as an agent of the buyer,
was a receipt. It could not be claimed that
it was an acceptance, the carrier having no
implied authority to accept. The buyer had
a right to see whether the bulk was accord-
ing to the sample, and until he had exercis-
ed that right there was no acceptance. Opin-
ion of Cockburn, Ch. J., 440; see, also. Caul-
kins V. Hellman, 47 N. Y. 449; Halterline v.
Rice, 62 Barb. 593; Edwards v. Grand Trunk
Ry. Co., 4S Me. 379, 54 Me. 111.
The case at bar only differs from these
cases in the immaterial fact that the defend-
ants, after the verbal contract was made,
gave verbal directions as to the disposition
which should be made of the goods after
they were put into a condition ready for
delivery. All that subsequently passed be-
tween them was mere words, and had not
the slightest tendency to show a waiver of
the right to examine the goods to see if they
corresponded with the contract. Whatever
effect these words might have had in indicat-
ing an acceptance, if the goods had been spe-
cific and ascertained at the time of the di-
rections (see Cusack v. Robinson, 1 Best &
S. 299), they were without significance under
the circumstances, as the meeting of the
minds of the parties upon the subject to be
settled was necessary. Shepherd v. Pressey,
32 N. H. 57. In this case the effect of subbe-
quent engagements by the buyer was passed
upon as to their tendency to show a receipt
of the goods by him. The court said: "As
mere words constituting a part of the origi-
nal contract do not constitute an acceptance,
so we are of opinion that mere words after
words used, looking to the future, to acts
afterward done by the buyer toward carry-
ing out the contract, do not constitute an
acceptance or prove the actual receipt re-
quired by the statute." The case was stron-
ger than that under discussion, as the goods
were specific and fully set apart for the pur-
chaser at the time of the subsequent con-
versations. No distinction is perceived be-
tween future acts to be done by the buyer
and by the seller, as both equally derive
their force from the buyer's assent.
I see no reason in the case at bar to hold
that the defendants received the goods, in-
dependent of the matter of acceptance.
There was no evidence that Percival became
their agent for this purpose. The most that
can be said is that they promised the plain-
tiffs that they would make Percival their
agent. This promise being oral and connect-
ed with the sale, is not binding. They did
not in fact communicate with him, nor did
he assume any dominion or control over the
property. The promissory representations of
the plaintiffs are clearly within the rule In
Shepherd v. Pressey, supra.
The whole case falls within the doctrine
In Shindler v. Houston, 1 N. Y. 261, there
being no sufficient act of the parties amount-
ing to transfer of the possession of the lum-
ber to the buyer and acceptance by him.
The judgment of the court below should be
affirmed.
Ail concur.
Judgment affirmed.
SALE OF GOODS.
163
PRATT et al. v. MILLER et al.
(18 S. W. 965, 109 Mo. 78.)
Supreme Court of Missouri, Division No. L
March 14, 1892.
Appeal from circuit court, Johnson coun-
ty; CiiAiti.KS W. Sloan, .ludRo.
Action by Pratt, Warren & Co. aRoinst
Miller & Hel)«,'rlinK to recover the price of
a bill of goods ordered by defendants, but
not accepted. From a judRinent of the
Kansas f'ity court of appeals allirrainjz a
judgment for plaintiffs, defendants appeal.
Reversed.
S. p. Sparks, for appellants. 5. T.Allen,
for respondents.
BR/VCE, J. This is an appeal from the
Johnson circuit court to the Kansas City
' court of appeals, certilied here from the
latter court (jn the ground tiiat the con-
clusion reached by that court is in conllict
vvitii the decision of the St. Louis court of
a()peals in Burrell v. Highleyman, 83 Mo.
App. 183. Plaintiffs' cause of action, set
out in the petition, is that the defendants
ordered and requested plaintiffs to manu-
facture for and furnish to them divers
goods, wares, and merchandise, being
boots and shoes, of which an itemized ac-
count, the price amounting to f 205. 4.5, is
filed; that plaintiffs accepted said order,
manufactured said goods, and shipped
and tendered them to defendants, who
refused to pay for them. The defendants'
answer was a denial of the material alle-
gations of the petition, a plea of the stat-
ute of frauds, a warranty of quality and
breach thereof. The evidence tended to
show that the plaintiffs are wholesale
dealer.^ in boots and shoes in the city of
Boston, Mas^., and that they are either
themselves manufacturers, or have manu-
factured for them their stock in trade;
that the defendants were retail merchants
in llolden, Mo.; that on the 31st of May,
1N77, the defendants, at Holden, gave the
commercial traveler and solicitor of plain-
tiffs a verbal order for the bill of goods
sued for; that the solicitor made a memo-
randum of the order in writing, signed it
himself, gave a copj' to the defendants,
and forwarded it to the plaintiffs, who
thereafter proceeded to have the goods
made; that on the Sth of July the defend-
ants wrote the plaintiffs, countermanding
the order, and again on the 2sth to the
same purport. On the 29th of July, plain-
tiffs replied to defendants' letter of the Sth,
refusing to accept the countermand, and
advising the defendants that the goods
would bo shipped at the time named in
the order; and, on the 13th of August,
they shipiied the goods, addressed to the
defendants at Holden, Mo., where they
arrived, and defendants refused to receive
or pay for them. There was no evidence
tending to show that the goods were not
of the quality contracted for; and the de-
fendants refused to receive the goods, not
on account of defect in quantity or qual-
ity, but for the reasons assigned in their
letters, which was a dissolution of their
partnership, in the first letter, and the
excessive drought prevailing in the coun-
tr3', curtailing trade, in their second. The
court refused an instruction asked for by
the defendants in the nature of a demurrer
to the evidence, and submitted the case to
the jury on the following instruction for
the i)lMintiffs: "The court instructs tlie
jury that if they believe from the evith-nce
that the defendants ordered plaintiffs t,) Dwigiit, J.,
remarks: " Were this subject now open to
full discussion on principle, no more con-
venient and easily-understood rule could
be adopted th'an that enunciated in Lee v.
Griffin. It is at once so philosophical and
so readily comprehensible that it is a mat-
ter of surprise that it should have been
first announced at so late a stage in the
discussion of the statute. It is too late to
adopt it in full in this state. So far as au-
thoritativedecisions have gone, they must
be respected, even at the expense of sound
principles. "
In Marvland, in Eichelberger v. Mc-
Cauley, 5 Har. & J. 213, (decided in 1821,)
the rule of the earlier English decision.s
was maintained; Eahle, J., in delivering
the opinion of the court, saying: " What-
ever opinion may be entertained of the
true meaning of the seventeenth section of
the statute, the court thinks the distinc-
tion between mere contracts of sale of
goods and those contracts for the sale of
goods where work and labor is to be be-
stowed on them previous to delivery, and
subjects are blended together, some of
which are not in contemplation of the
statute, has too Jong prevailed to be at
this day questioned." Citing the English
cases of Clayton v. Andrews, (decided in
17(57,) and Rondeau v. Wyatt, (in 1792,) in
support of the conclusion. In the later
case of Rentch v. Long, 27 Md. 188, the
ruling in Eichelberger v. McCauley was
affirmed; Baktol, J., speaking for the
court, saying: "Whatever o[)inion we
might entertain on this question if it
were presented for our consideration for
the first time, we are not willing to
disturb the rule established by that
case." It will be observed that the rule
of construction established in these
states is not maintained in the later
case upon the ground of sound principle,
nor yet upon the ground that the courts
were concluded by the early English rul-
ings made before the statute was enacted
in those states, but upon the ground
that, those rulings having received a
particular construction by their own
courts in their early rulings, they felt
constrained to maintain them, to the ex-
tent stated, on the principle of stare de-
cisis.
In most of the other states where the
courts were not thus fettered, while the
rulings cannot be said to go the length of
that in Lee v. Griffin, which is now
the settled rule in England, they trend
in that direction. As illustrative of this
fact the following cases may be cited:
Mixer v. Howarth, 21 Pick. 205; Spencer
V. Cone, 1 Mete. (Mass.) 28;j; Gardner v.
Joy, 9 Mete. (Mf^ss.) 177; Lamb v. Crafts,
12 Mete. (Mass.) 3.'):5; Goddard v. Binney,
115 Mass. 450; Pitkin v. Noyes. 48 N. H.
294; Prescott v. Locke, 51 N. H. 94;
Atwater v. Hough, 29 Conn. 508; Fin-
ney v. Apgar, 31 N. J. Law, 20(5; Cason v.
Cheely, Ga. 554; Edwards v. Railway
Co., 48 Me. 379 ; Sawyer v. Ware, 36 Ala, 675 ;
Mo.ncke v. Falk, .55 Wis. 427, 13 N. W. Rep.
545; Brown V. Sanborn, 21 Minn. 402. In
many of these cases, rules are laid down
for distinguishing a contract of sale from
one for work and labor and materials,
not always harmonious or entirelj' con-
sistent with each other, but from whict?
a general rule may be drawn, broadly
stated as well in Brown on Frauds as
elsewhere: "That if the contract is essen^
tially a contract for the article manufact-
ured or to be manufactured the statu t«>
SALE OF GOOD>^.
165
applies to it. If it is for tlie \vorI<, Ifibor,
and skill to be htstowcd in producing tlie
article, the statute does not apply;
• * • the true qncstion i)einji whether
the essential consideration of the j)ur-
chase is the worlc and labor of the seller,
to bo a[)yjlied upon his material, or the
product itself, as an article of trade."
Sections .30X,.'U)Sifl. And, within the f;:eneral
scope of the American authorities, this ri!;8
may be formulated, determinative of the
case in hand: That where tlie contract is
for articles cominj; under the general de-
nouiinaticin of goods, wares, and mer-
chandise, the vendor being at the same
time a manufacturer and a dealerin them,
as a merchant, or, so dealing, lias them
manufactured for his trade by others,
and the vendee being also a merchant
dealing in and pui'chasing the same line
of goods for his trade, of which fact the
vendor is aware, the quantitj' reqtiired
and the price being agreed upon, and the
goods contracted for being of the same
general line which the vendor manufactures
or has manufactured for his general trade
as a merchant, requiring the bestowal of
no peculiar care or personal skill, or the
use of material or a plan of construction
different from that obtaining in the ordi-
nary production of such manufactured
goods for the vendor's general stock in
trade, the contract is one of sale, and
within the statute of frauds, although the
goods are not in solido at the time of the
contract, but are to be thereafter made
and delivered. This rule, predicated upcju
the undisputed facts of this case, is with-
in the ruling in Burrell v. Highleyman,
by the St. Louis court of appeals, and in
conflict with tlie conclusion reached by
the Kansas City court of appeals. And,
while sufficient for the disposition of this
case, it is proper to add generally, this be-
ing the first time tliis court has been called
upon to pass upon this question directly,
that while we adhere to the rulings here-
tofore made in Skouton v. Woods. 57 Mo.
:{S0; Skrainka v. Allen, 76 Mo. 384; and
Snyder v. Railroad, 86 Mo. 6i:j, — in
adopting the statute of another state te the purchase, the prop-
erty was sold by the plaintiffs at public auc-
tion, pursuant to the notice; and the suit
was brought by them to recover the differ-
ence between the net proceeds of such sale
and the contract price. A verdict was tak-
en, subject to the opinion of the court, on a
case containing the facts above stated, and
which either party was to be at liberty to
turn Into a special verdict.
On the argument of the case In the su-
preme coui"t, Mr. Baldwin, one of the coun-
sel of the defendants, among other ques-
tions, raised the point, on the authority of
Champion v. Plummer, 4 Bos. &. P. 252, that
a memorandum signed by the seller only
was not sufficient; that the plaintiffs were
not bound thereby, and if they were not,
neither could the defendant be bound.
PLatt, J., In delivering the opinion of the
court, stated that the only point was whether
the memorandum made by John Townsend
was a sufficient memorandum of the con-
tract, within the statute of frauds, to bind
the defendant; and after expressing an
opinion on other questions presented by the
case than that raised by Mr. Baldwin as
above stated, as to which he said nothing,
he came to the conclusion that the memoran-
dum stated with reasonable certainty, every
essential part of the agreement, and that
the plaintiffs were entitled to judgment.
The case was carried to the court for the
correction of errors on a special verdict find-
ing the facts above stated (with two other
causes in which the facts, so far as affected
the questions involved, were substantially
the same), and is reported In 14 Johns. 484,
imder the title of Executors of Clason v.
Merritt; and one of the other cases is by
same plaintiffs in error against Bally, and
that case is the one particularly referred to
in the opinion of the court. In that court
the point was raised on the part of Clason's
executors, that the agreement wus not sign-
ed by both parties; and Chancellor Kent,
in giving the opinion of the court, said:
"Clason's name (that of the purchaser) was
Inserted In the contract by his authorized
agent; and if it were admitted that the
name of the other party was not there by
their direction, yet the better opinion is that
Clason, the party who is sought to be char-
ged, is estopped by his name from saying
that the contract was not duly signed with-
in the purview of the statute of frauds,
and that it was sufficient if the agreement
was signed by the party to be charged,"
adding: "It appears to me that this is the
result of the weight of authority, Doth in the
courts of law and equity;" and after review-
ing several cases in both courts sustaining
that result, he said: "There was nothing to
disturb the strong and united current of au-
thority of those cases, but the observations
of Lord Chancellor Redesdale, In Lawreu-
son V. Butler, 1 Schoales & L. 13, who
thought that the contract ought to be mutu-
al to be binding, and that If one party
could not enforce it, the other ought not;
and said that to decree performance when
one party only was bound, would "make
the statute really a statute of frauds, for it
would enable any person who had procured
another to sign an agreement to make it
depend on his own will and pleiusure whether
it shoiild be an agreement or not" He then
after remarking that the intrinsic force of
the argument, the boldness with which It
was applied, and the commanding weight
of the very respectable character who used
it, caused the courts for a time to pause,
but that they had on further consideration
resumed their former track, and citing au-
thorities on both sides of the question, added:
"I have thought and have often intimated,
that the weight of argument was in favor of
the constniction that the agreement con-
cerning lands, to be enforced in equity,
should be mutually binding, and that the
one party ought not to be at liberty to en-
force at his pli'asure, an agreement which the
other was not entitled to claim. It ap-
pears to be settled (Hawkins v. Holmes, 1
P. Wms. 770), that though the plaintiff has
signed the agreement, he never can enforce
it against the party who has not signed it
The remedy therefore In such case is not
mutual. But notwithstanding this objec-
tion, it appears from the review of the cases,
that the point is too well settled to be now
questioned." He then says: "There Is a
slight variation in the statute respecting
agreements concerning the sale of lands, and
agreements concerning the sale of chattels,
inasmuch as the one section (being the
fourth section of the English and the
eleventh section of our statute) speaks of
the pai-ty, and the other section (being the
seventeenth of the English and the fifteenth
of ours) speaks of the 'parties' to be charged;
but I do not find from the cases that this
variation has produced any difference in the
decisions. The construction as to the point
under consideration has been uniformly the
same in both cases;" and after the full dis-
cussion and consideration of this question
he comes to the conclusion that "Clason who
signed the agreement, and is the p.arty
sought to be charged, is then, according to
the authorities, bound by the agreement, and
he cannot set up the statute in bar;" adding,
"but I do not deem It absolutely necessary
to place the cause on this ground, though
as the question was raised and discussed. 1
thought it would be useful to advert to the
most material cases, and to trace the doc-
trine through the course of authority."
He then says that In his opinion "the ob-
jection Itself is not well founded In point
of fact;" and after a reference to the memo-
randum and its contents, and the facts found
by the special verdict, he concludes that the
contract was. In judgment of law. reduced
to writing and signed by both parties.
Another objection taken by Clason in the
192
STATUTE OF FRAUDS.
supreme court axid by the executors in the
court for the correction of errors, to the
validity of the contract (not material to the
case now under review), was then consider-
ed by the learned chancellor, and held to be
untenable; and thereupon the judgment of
the supreme court was affirmed (two sena-
tors dissenting).
It may be important in this connection to
advert to the fact that this opinion was de-
livered in 1817, nea:iy nine years after what
was said by him as chief justice in Bailey
V. Ogden, supra, and about three years after
the intimations made by him in Parkhurst
V. Van Coi-Uandi, 1 Johns. Ch. 282, and
Benedict v. Lynch, Id 370, to the effect
that an agreement concerning lands, to be
enforced in equity, should be mutually bind-
ing, and to which he probably had refer-
ence in that opinion, and as to which he
said therein, that it appeared from the view
of the cases that the point was too well set-
tled to be then questioned.
Although, in view of the conclusion ar-
rived at by the learned chancellor on the
other point (that the contract was, in judg-
ment of law, reduced to writing and signed
by both parties), it was not, as he himself
stated, absolutely necessary to place the
cause on the groimd first discussed and con-
sidered by him as above mentioned; yet
as it was raised by the facts found by the
special verdict, on which the supreme court
had given judgment, and on the argument
in the court for the correction of errors,
it was material that it should be considered
by him. He remarked, in the commence-
ment of that opinion, that the case struck
him on the argument as being plain; but
as it may have appeared to other members
of the court in a different, or at least in a
more serious light, he deemed it proper and
necessary to state the reasons for his opin-
ion on both the questions subsequently ex-
amined and discussed by him. It, as it
appears to me, is a perversion of terms and
an entire misconception of the effect and
force of the able and elaborate opinion of
that learned and distinguished jurist, to
characterize or treat it as a mere obiter dic-
tum.
Gardiner, J., in James v. Patten, G N. Y.
9, in which it had been claimed by comisel
that a case cited on the argument in sup-
port of, and indeed decisive of, the question
then under review and consideration, might
have been decided on other grounds than
those stated in the prevailing opinion on that
point, said: "We are now gravely informed
that it was possible to reverse the judgment
upon other grounds. The effect of any de-
cision in a court composed of more than a
single judge might in this way be avoided.
But when two questions are presented to
the appellate court, upon which their deci-
sion is asked, both of which are discussed
by counsel, and each is considered and de-
termined in the only opinions read in the
hearing of the members, the majority must
be deemed to acquiesce in the conclusions
upon those questions reached in those opin-
ions, unless some one dissents. With a dif-
ferent rule there could be no such thing as
the establishment of a principle by the court
of last resort, when more than a single point
was pre.sented." And Paige, J., said in the
same case: "Where several questions arise
in a cause and the opinions delivered agree
in regard to all of them, and the other mem-
bers give a silent vote of concurrence, then
all the questions will be deemed to have
been determined by a majority of the court,
and the case will be regarded and respected
as an authoritative adjudication of all such
questions."
In the case of Exocutoi-^ of Clason v. Baily,
supra, the opinion of the chancellor was the
only one delivered, and must be held to be
an authority of the court of last resort on
the very question now presented for our de-
cision and adjudication.
The question again aix>se in the supreme
court in 1829, in Russell v. Nicoll, 3 Wend.
112, 20 Am. Dec. 670, which was an action
by the plaintiffs claiming damage for the
non-delivery of a quantity of cotton alleged
to have been purchased by them of the de-
fendants.
The contract was substantially in all essen-
tial particulars like the one in the present
case. It was in these words:
"Sold by Daniel Rapalye, for our account,
to R. M. and J. Russell five hundred bales
of cotton, at sixteen and a half cents per
pound. Said cotton was purchased for our
account at Huntsville, and is to be delivered,
on its arrival at this port from New Orleans,
at any time between the present date and
the first day of June next, and the amovmt
to be cash on delivery, to be reweighed, and
two per cent tare allowed.
"New York. Febmary 9, 1825.
"Francis H. NicoU & Co."
The plaintiffs were nonsuited on the trial
at the circuit, on grounds other than that
now under consideration. But on the re-
view of the case by the supreme court, the
counsel for the defendants stated that the
plaintiffs, if an, action had been brought
against them on the contract, might have
interposed the statute of frauds as a defense,
they not having signed any note or memo-
randum in writing of the bargain; and, the
agreement produced being signed only by
the defendants, that the plaintiff could not
have been holden, and the defendants were
not boimd, and that, though this objection
was not taken at the circuit, the court woiild
not grant a new trial if they perceived that
the plaintiffs mu.st be nonsuited on that
ground; as to which point the court, by
Marcy, J., said, in the commencement of
his opinion: "It was insisted on the argu-
ment that the contract declared on was
within the statute of frauds, and void for
THE MEMORANDUM IN WUITING.
193
not being reduced to writing and signed as
the statute directs. This objection is not
sustainable. If the contract be within the
statute, it is very clear that the signing by
the defendants is a compliance with its re-
quirements. Egerton v. Mathews, G East,
307; Saunderson v. Jackson, 2 Bos. & P.
238."
Tlie question was thus distinctly raisefl
and d<^eided in the supreme court, and the
decision is a distinct and positive authority
thereon. If the objection had been well
founded, it would have been decisive against
the plaintiffs' right of recovery, and there
would have been no necessity to consider
tlie questions raised at the circuit, and which
were afterward elaborately discussed in the
opinion. Those questions were based on
the assumption that the contract was valid
Mild obligatorj' on the defendants. The cir-
cumstance that the question arising on the
statute of frauds was not raised at the cir-
cuit does not impair, or in the least weaken,
the effect of the decision thereon by the su-
preme court. On the contrary, it shows that
the eminent counsel for the defendants did
not at that time deem it available and ef-
fectual, and they proljably presented it in
opposing the motion to set aside the nonsuit,
on the principle that they would not then
fail to present and urge any point on which
the nonsuit might be sustained or supported
The next case referred to by the counsel
was that of Dykers v. Towusend, 24 N. Y.
57, etc. That was an action to recover dam-
ages for the failure of the defendant to re-
ceive any pay for one thousand one hundred
shares of the capital stock of the New York
and Erie Railroad Company, purchased un-
der three several contracts, one of which
is set forth in the ease, and is in the follow-
ing foiTo:
"New York, May 2d, 1854.
"I have purchased of Dykers, Alstyne &
Co. 500 shares of the New York and Erie
Railroad Company at seventy (70) per cent,
and deliverable in sixty days, buyer's option,
with interest at the rate of six per cent per
annum. W. S. Hoyt"
The other two were in the same form, ex-
cept that one of them was signed by one
Brown. It was alleged and proved on the
trial that Hoyt and Brown were brokers,
and acted as the agents of the defendant in
making the contract.
When the plaintiff rested, the defendant
moved to dismiss the complaint, on the
grounds that the contracts were signed by
Brown and Hoyt in their own names, and
that the name of the defendant nowhere
appeared upon them; that parol evidence
could not be introduced to show that the de-
fendant was the person for whose benefit
the contracts were made, and that tlie plain-
tiffs had not shown any valid contract be-
tween themselves, and the defendant took
an exception. Proof was then offered of cer-
UOPK. SEL. CAS. CONT. — 13
tain facts for the purpose of showing the
contract void under the stock-jobbing act, in
force at the time of the sale, which was re-
jected, and the defendant took an exception.
The plaintiff recovered a verdict, and judg-
ment thereon was rendered at general term,
in the First district, which, on an appeal to
this court, was affirmed without any dissent
to such alhrniance. One of the judges, Sel-
den, J., was absent, and another, James, J.,
expressed no opinion. That decision, so far
as it affects the present question, gives no
color for sustaining the judgment in the case
now under review. It is true that Judge
Hoyt, in giving las opinion for its athrmance,
remarked that as an original question, he
should have had no hesitation in saying, In
a ease where the contract was entirely ex-
ecutoiy on both sides, and no part of the
consideration had been paid, that it was nec-
essary that it should be in writing, under the
statute, and be signed by both parties there-
to, or their agents, in order to be binding
upon either; or, in other words, there being
no considei-ation paid, the promise of one
party would be the consideration for the
promise of the other, and that both must be
in writing to charge either; and after re-
ferring to the distinction between the sec-
tion of the statute applicable to that case
and section 8, relating to a contract for the-
sale of land, which he concedes, on the au-
thority of this court, in Worrall v. Munn, 5
N. Y. 244, Is only required to be signed by
the party by whom the sale is to be made,
and after adding that in the case of a con-
tract for the sale of goods, he should say the
party to be charged means the vendor upon
his contract to seU, and the vendee upon his
contract to accept and pay for the goods,
he added that this question did not appear
to have been directly raised on the trial; if
it had been, it might, perhaps, have been
obviated by the profluction of a counterpart
of the contract, signed by the plaintiffs, and
then said: "As there are several authorities
which seemingly, at least, give a different
construction to this and similar provisions in
the former statute of frauds, I do not pn^x)se
further to discuss the question at this time."
And after a more particular reference to the
requirements of the statute, he concludes
with the remark: "In this case, a note or
memorandum of the contract was made In
writing, and signed by the lawful agent of
the defendant, and we think that this was
sufficient compliance with the statute, ac-
cording to the settled construction that has
been given to it."
The only other ease referred to by the re-
spondent's coimsel, on this question, was that
of Brabin v. Hyde, 32 N. Y. 519, which he
says decided that the memorandum must be
signed by both parties. This is clearly a mis-
take.
The action was brought by the plaintiff to
recover the possession of a mare and colt,
which he claimed as owner, by purchase
194
STATUTE or FRAUDS.
from one Milton Blackmer in Au^iist, lSo7;
and whicli, on the tliird day of September
next thereafter, the defendant took from his
possession, under a claim that he owned
them under a purchase from the same ven-
dor in the month of July preceding. The
plaintiff recovered a verdict, on which judg-
ment was entered. That judgment was re-
versed by the general term on appeal, and
the plaintiff thereupon appealed to this court.
The judge on the trial in his charge to the
jury, after stating tliat the defendant had
given evidence of a prior bargain, and that
it was objected by the plaintiff that the
contract under which he claimed ownership
was void by the statute of frauds, read and
explained the statute, and then cliai-ged,
"that according to the defendant's nan-ative
of facts, the contract rested solely in words.
There was no other evidence of it; there
was no deliveiy of the property or memo-
randum made, as the contract was narrated
by him. nor any payment, nor was the prop-
erty present at any time, or any thing to
save it from the statute of frauds. I advise
you that the contract for the purchase of the
horse by the defendant, as narrated by him-
self,- is invalid." To which there was an
exception. When the case was reviewed by
this court. Brown, J., in giving the opinion
on the reversal of the order of the general
term granting a new trial, referred to the
facts detailed in the narrative of the defend-
ant; and from the learned judge's statement
of them, it appeared that a part of the price,
agreed to be paid by the defendant for the
mare and colt, was to be credited on his
books when he got to his house, on account
of a debt owing and due to him from Black-
mer; that he went home and made the en-
try in his book, giving him credit on the day
of the purchase for the amount that was to
be so credited. It was an original entry.
On his cross-examination, it further appeared
that he kept a day-book and a ledger, for the
purposes of his business; that the entries to
Blackmer's credit were not upon those books,
or in any account of his daily transactions;
and that all that appeared upon any book
was an entry made of the mare and colt
upon a blank leaf, on which there were no
other entries. It was not claimed that he
gave Blackmer any receipt, or discharge for
the money for the mare and colt, or that he
communicated to him what he had done.
There were some additional facts stated, for
the purpose of showing a delivery of the
mare and colt, which are immaterial to be
noticed here, and the learned judge, after the
conclusion of his .statement of the facts, said:
"These are the facts upon which the defend-
ant relied to take the case out of the statute
of frauds. There was no deliveiy of the
property to the purchaser, and no memoran-
dum of the sale signed by the parties;" and
then, after stating the charge to the jury as
above set forth, and making some general re-
marks on the insufficiency of words merely,
and the necessity of acts as evidence of a
purpose to part with, or to accept, the own-
ership of personal property, he said: "There
must have occiirred one of the three acts
mentioned in the statute, or the sale will
not bo affected. These acts are not to be
performed by one party only, they are to
be concurred in by both parties to the con-
tract. If the memorandum in writing is re-
lied upon, it must be signed by the parties,
not the party, to be charged thereby." He
then, after giving his views of what is nec-
essary, when either a delivery of the goods,
or a part of them, or the payment of some
part of the purchase-money is depended up-
on as the consummation of the conti-act, and
after the application of his construction of
the requirements of that statute to the facts
of the case, closes the opinion with this re-
mark: "I think the judge at the circuit, in
his charge to the jury, was entirely right;"
and thereupon the order of the general term
granting a new trial was reversed, and the
judgment on the verdict was affirmed.
No other opinion appears to have been giv-
en in the case.
It is evident from the opinion and the con-
clusion arrived at by the learned judge, that
there was no question involving the construc-
tion of the section of the statute now under
consideration. On the contrary, he declares
that the judge at the circuit, who had char-
ged the jury, "that according to the defend-
ant's narrative of the facts, the contract
rested solely in words," was entirely right
The remark, that it was necessary that a
written memorandum in writing of a con-
tract should be signed by both parties to it,
was gratuitous; and certainly there is not
the least color for saying that this court Ln
that case "decided that the memorandum
must be signed by both parties."
I have now examined, with much and per-
haps unnecessary particularity, the cases re-
ferred to by the counsel to sustain his po-
sition that there has been no decision in the
court of last resort, and no weU-considered
one in the other courts, holding it to be vm-
necessary that the note or memorandum of
the contract for the sale of goods should be
signed by both parties. That examination
shows not only that all of them, except the
case of Bailey v. Ogden, 3 Johns. 399, in-
volve the question, and hold that the statute
is complied with when the note or memoran-
dum of the contract is signed or subscribed
by the party to be charged thereby, but also
that the question has been decided after a
careful consideration thereof; and in the case
of Bailey v. Ogden, supra, tJie same principle
is distinctly and f uUy recognized by Kent C.
J., as appears by his statements above re-
ferred to.
I wiU add another case, that of Davis v.
Shields, 2G Wend. 341, in the court for the
correction of errors, decided in 1841, where
the question was again raised and consid-
ered by Chancellor Walworth and Senator
THE MEMORANDUM IN WRITING.
195
Vorjil.'ink. Tho chancellor, at page 350, said
that "the former statute of frauds required
the note or memorandum of the agreement to
be signed by the parties to be chaiged there-
by, and the courts had not only decided that
it was not necessary tliat it should be signed
by both parties, so as to nxake it legally bind-
ing on both, or upon neither, but they had
in many cases held that a literal signing of
the memorandum by the party who was
sought to be charged tliereby was not neces-
sary." Senator Verplank, at page 3G2, said:
"A doubt naturally arises whether, under our
Revised Statutes, the words to 'be subscrib-
ed by the parties to be charged' do not re-
quire that the agreement should be from the
first binding, by means of an authorized sign-
ing, upon all the pai-ties to the bargain;"
and, after referring to the case of Clason v.
j\Ierritt, which he considered as having set-
tled the question in that court, and stating
that the decision was Ln conformity with nu-
merous prior decisions, as was shown in the
opinion of Chancellor Kent in that case, he
said: "It seems to me these words must be
taken in their fixed and adjudicated sense,
according to which it is enough that the
agreement be signed, or be authorized to be
signed by the party to be charged in the
suit;" and adds, "nor is this interpretation
without the support of reasons of equity in-
dependent of authority. It is within the lit-
eral sense of the words used;" and then, aft-
er some remarks in support of those views,
he concludes: "I adhere then to the old ad-
judicated meaning of the words retained
from the original statute, and consider it suf-
ficient if the memorandum was authorized by
the vendors who are now to be charged, al-
though it might not have been originally
binding on the vendee."
In that case the question was also pre-
sented whether the contract was "subscrib-
ed" within the requirements of the Revised
Statutes, witliout being actually signed be-
low or at the end of the memorandum, and
it was decided that it was not; and the de-
cision of the supreme court holding to the
contrary, as the case is reported in 24 Wend.
324, was reversed.
In addition to the above cases I wUl cite,
as authority sustaining the sufiiciency of the
signature by the party to be charged, tlie
following: West v. Newton, 1 Duer, 277-2S3;
Woodward v. Harris, 3 Sandf. 272-277; Fen-
ley V. Stewart, 5 Sandf. 101-105. These au-
thorities are In conformity to the decisions
on the English statute, which were recog-
nized as authority by Chancellor Kent in
Clason V. Baily. 14 .Johns. 4S4, etc. Among
those were Saunderson v. .Tackson, 2 Bos. &
P. 238; Champion v. riiunmer. 4 Bos. & P.
252; Egerton v. Matthews, 6 East. 307; Al-
len V. Bennett. 3 Taunt. 1G9. In Egerton v.
Matthews, tlie action was brought by the
seller against the buyers for not accepting
and paying for certain goods, which the de-
fendants had contracted to purchase by the
following memorandum In writing: "We
agree to give Mr. Egerton nineteen cents per
pound for thirty bales of Smyrna cotton, cus-
tomary allowance cash, three per cent as soon
as our certificate is complete." It was dau-d
2d September, 1803, and was signed by the
defendauLs, the buyers, only. They had be-
fore that time become bankrupts, and their
certificate was waiting for the lord chancel-
lor's allowance, and after it was allowed,
they signed the memorandum again. On the
opening of the case upon the trial it was ob-
jected that the contnxct was altogether ex-
ecutory, that no con.sid(;ration appeared on
the face of the writing for the promise, and
that there was not any mutuality in tlie en-
gagement, and therefore that it was void by
the statute of frauds. 20 Car. II. c 3.
The objection prevailed, and the plaintiff
was nonsuited; but on a motion to set aside
the nonsuit, Lord Elleuborough, C. J., ob-
served that the seventeenth clause of that
statute required "some note or memorandum
in writing of the bargain signed by the par-
ties to be chiirged by the contract;" and that
this memorandum above quoted was a mem-
oi-andum of the bargain, or at least so much
of it as was sufiicient to bind the parties to
be charged tlierewith, and whose signature
to it was all that the statute required.
The question again arose in Allen v. Ben-
nett, 3 Taunt 1G9. The action was brought
by the buyer against the seller for the non-
delivery of goods, and was based on ceitain
entries of the sale made by defendant's
agent in a book of the plaintiff. The sale
was subsequently recognized in a correspond-
ence by the plaintiff with the defendant, but
there was no evidence that the plaintiff had
signed any contract to bind himself. It was
objected on the trial that there was not a
sufficient note in writing within the statute
of frauds for the sale of the goods, inasmuch-
as It did not at all appear by the contract
who was the buyer; that all that could be
gathered from the entries was, that they
were contracts entered into by Bennett, to
seU goods to persons not named, and who
the persons were could not be supplied by
oitil evidence. There was a verdict for tne
plaintiff. On a motion to set it aside, the
correspondence was held sufficient to connect
the parties. It was then objected that the
party who had not signed was not bound, as
to which Mansfield. C. J., said that the cases
of Egerton v. Matthews, Saunderson v. Jack-
son, and Champion v. Plummer, supra, "sup-
pose a signature by the seller to be suifi-
cient, and every one knows it is the daily
practice of the court of chancery to estab-
lish contracts signed by one person only;
and yet a court of equity can no more dis-
pense with the statute of frauds than a court
of law can." and he held that the verdict
should be sustained. Heath, J., was of the
same opinion, and said there was a case in
Strange by which it appeared that a voidable
promise was sufficient to sustain a promise.
196
STATUTE OF FRAUDS.
Lawrence, J., after showing that it was evi-
dent that the contract was entered into by
the authority of the defendants, said that
the objection would quite overturn the aises
of Egei-ton v. Matthews, Saunderson v. Jacli-
son. and Champion v. Plummer, and the
statute of frauds clearly supposes the proba-
bility of there being a signature by one per-
son only.
"VMthout multiplying cases, I will content
myself with quoting the remark of Earl, C.
J., in the case of Parton v. Crofts, IG C. B.
(N. S.) Ill, E. C. L. 11, where he, after dis-
cussing and considering the effect of bought-
and-sold notes, in reference to the require-
ment of the statute of frauds, says: "To sat-
isfy the seventeenth section of the statute, it
is enough to produce a memorandum of the
contract signed by the party to be charged
thereby, or by an agent thereunto duly au-
thorized."
This is recognized as the rule by the ele-
mentary writers. Chancellor Kent, in his
Commentaries (volume 2, p. 510), says: "The
signing of the agreement by one party only
is sufficient, provided it be the pai-ty sought
to be charged. He is estopped by his sig-
nature from denying that the contract was
validly executed, though the paper be not
signed by the other paity, who sues for the
performance."
Starkif, in his work on Evidence (volume 2,
p. 614), says: "It is sufficient if there be a
momoi-andum signed by the defendant, the
vendor, although it be not signed by the
plaiutifiC, the vendee, and although it could
not have been enforced by the latter." See,
also, Comyn, Cont. 123. In view of the nu-
merous decisions, both in this state and in
England, it appears to me to be impossible
now to hold a different rule by giving a dif-
ferent construction to the statute of frauds.
Assuming then that the memorandum, on
which the present action is based, is valid
and binding on both parties at common law,
and that the statute only requires it to be
signed by the party to be charged, it ap-
pears to me to follow a;s a necessary con-
sequence, that the defendants, the vendors,
in this case having by their signature in
writing given the written evidence to charge
them, are liable thereon; and that the non-
suit in the court below was improperly grant-
ed.
As however a majority of this court was
unable to concur in a judgment on the first
argument, it may be proper to refer briefly
to the opinion then read in affirmance of
the nonsuit, and which has been presented
to us on the present argument. It concedes
that it is not necessary, under the require-
ments of the statute of frauds, that the con-
tract should be signed by both parties; and
that prior to the statute, it would have been
valid and binding upon both of them with-
out being reduced to writing and signed by
either. But the learned justice, by whom it
was delivered, adds that: "The statute
makes the contract void, although reduced
to writing, as to the party not subscribing
it; and it follows that the void promise of
the latter furnished no consideration for the
agreement of the party who subscribes it."
This appears to me to be a misconstruction
of the statute. TTaat does not define or pre-
scribe what shall be necessaiy to constitute
a contract. On the contraiy, it assiimes the
existence of one that is valid and binding in
all respects, and on that assumption declares
that it shall be "void," not unlawful but in-
effectual, of no binding force to charge any
0* the parties with a liability thereon who
does not subscribe a note or memorandum
thereof in writing. It did not affect nor
was it intended to affect an oi-al agreement,
otherwise, or to a greater extent, than by
the requirement of written evidence of its
terms by the signature or subscription of the
party who was to be charged with a legal
liability thereon. It is true that the party
who does not sign or subscribe it may not be
liable thereon in an action, as to which I
deem it unnecessary to express an opinion;
but that fact does not destroy or annul the
consideration and terms which form the in-
ducement of the other party to make it ob-
ligatory on himself by compliance with all
the requirements of the law to make it so.
On the contrary, the same consideration con-
tinued without being impaired or annulled,
and no new or further evidence of it was
requisite.
It is too late for him, after executing an
agreement conformable in all respects with
the requirements of lue law, and with the
avowed intention to bind and charge him-
self, for the purpose of avoiding the liability
thus voluntarily assumed, to say that the
other party thereto cannot be charged there-
on, on the sole ground that he himself did
not take the precautionary means required
by the law to charge such other party, either
through neglect or in reliance on his promise
to fulfill his part of it without being legally
bound thereto.
The object of the statute is attained by
protecting a vendor against a liability, found-
ed on oral evidence only of his contract,
without relieving him from an obligation
clearly assumed and created by a written
evidence thereof, the evidence of which un-
der such circuDJStancos, would make the stat-
ute the means of pei-petrating fraud, as well
as a protection against it, and against per-
jury or subornation of perjury. A construc-
tion that leads to such a result is not neces-
sary and is, in my opinion, unwaiTanted.
The .substance of these views is tersely ex-
pressed by Parsons in his work on Mercan-
tile Ivaw (page 78), where he, after consider-
ing the several clauses of the statute of
frauds, says: "The operation of the statute
in the clauses we have considered is not to
avoid the contract, but only to inhibit and
prevent actions from being brought upon it.
In other respects it is valid."
THE MEMORANDUM IX WRITING.
197
Concediug it to be true that the considera-
tion for a promise, as well as the promise it-
self, must be in writing to give any right of
action thereon against a party who has sign-
ed it, as was decided in Waine v. Wailters,
5 East, 10, and in Sears v. Bnnli, 3 Johns.
210, it does by no means follow that when
those and the other requisite elements to
constitute a valid contract appear, it is also
necessary that there should be a mutuality
of obligation to give a right of action against
either party.
Chancellor Kent, in Executors of Clason
V. Baily, 14 Johns. 4S8, supi-a, says that al-
though Lord Chancellor Redesdale, in Law-
renson v. Butler, 1 Schoales & L. 13, had ex-
pressed the opinion that the contract ought
to be mutual to be binding, and that if one
party could not enforce it the other ought
not, and that he himself had thought, and
had often intimated, that the remedy ought
to be mutual, yet it appeared fi*om a review
of the cases that it had been too well settled
to the contrary to be now questioned.
It was subsequently (in 1836) said by Tin-
dal, J., in Laythoarp v. Bryant, 2 Bing. N. C.
735, speaking of the clause of the English
statute requiring an agreement for the sale
of lands or any interest therein, or a note
or memorandum thereof in writing, to be
signed by the party to be charged therewith,
or some other person thereunto lawfully au-
thorized by him, that the party who has sign-
ed the agreement is the party to be charged,
and he cannot be subject to any fraud; that
there had been some confusion in the argu-
ment of the case between the consideration
of the agreement and the mutuality of claim;
and although it was true that the considera-
tion must appear on the face of the agi'ee-
ment, yet he had found no case nor any rea-
son for saying that it is the signature of
both parties that makes the agreement.
Vaughn,. J., in the same case, said that the
argument had proceeded on a fallacy arising
out of a misconception of the case of Waine
v. Wailters; that the decision therein never
turned on the groimd that the mutuality of
the contract must appear, but only that the
note or memorandum must show the consid-
eration, as well as the promise.
An objection of the same nature as that
now under consideration was raised in Bal-
lard V. Walker, 3 Johns. Cas. 60, which was
an action by the vendee on a written agree-
ment for the sale of land to him, which was
signed by the vendor alone. In which the
name of the parties and all the terms of sale
were stated, as to which RadcliCf, J., said:
"The first objection, so far as it rests on
the want of consideration, appears to mo in-
applicable to the case. If the contract would
be valid, as a contract by parol merely, there
would certainly be an ample consideration.
The defendant agreed to convey lands to
the plaintiffi for a stipulated price, and the
plaintiff, in consideration of such convey-
ance, agreed to pay the price to the defend-
ant. Here were mutual and valid consid-
erations. If the agreement was not suffi-
ciently reduced to writing, or signed by the
parties, agreeably to the statute of frauds, it
is void by force of that statute, but not for
want of consideration." He then proceeded
to show that the plaintiff could not be de-
prived of a recovery becau.se it was not
signed by the plaintiffs. And Kent, J., said:
"This contract is valid so far as a considera-
tion is in question. One agrees to sell, and
the other to convey. It is suflicient if the
writing be signed by one party only, and ac-
cepted by the other. This takes the case
out of the statute of frauds."
The objection based on a want of mutual-
ity, was also urged in Re Hunter, 1 Edw.
Ch. 1, and overruled by Vice-Chancellor Mc-
Cown. That decision wns recognized and
approved in McCrea v. Purmort, 10 Wend.
460; decided in the court for the correction
of errors, in 1836, where Cowan, J., said, that
the objection that the agreement there in
question was void, as being signed by one
party only, and thus wanting mutuality, and
that it must therefore go for nothing, was
fuUy answered by the learned vice-chancel-
lor in Hunter's Case, supra, and Paige, J.,
in the case of Worrall v. Munn, 5 N. Y. 229
(decided in this court), said: "A contract,
valid within the statute, even if not binding
on the party who has not subscribed it, can
nevertheless be enforced, either at law or in
equity, against the party (if the contract is
for the sale of land) by whom the siile is to
be made, or (if for the sale of goods) who is
to be charged thereby, if subscribed by him.
Want of mutuality is no defense to the suit.
The vendor, a party to be charged, who has
subscribed tlie contract, is estopped by his
signature from denying that the contract
was validly executetl, although not signed
by the other party who sues for the perfonn-
ance;" and added, "it is the constant prac-
tice of the court of chancery to compel a
specific performance, by a vendor, of a con-
ti-act for the sale of lands subscribed by him.
although the vendee has not bound himself
by subscribing the contract. These eases
show a clear distinction between a consider-
ation and the mutuality of obligation, and
that the former is necessary while the latter
is not. See, also, Fenley v. Stewart, 5 Saudf.
101, supra.
The views above expressed show that the
defendants had boimd themselves by the
contract in question to deliver the rifies
therein agreed to be delivered, and that there
was a good and suflicient consideration for
their obligation-
It follows that the judgment of the court
below should be reversed, and a new trial
ordered, costs to abide the event.
All concur, except INGALLS, J., dissent-
INGALLS, J. (dissenting). The defendi-
ants executed and delivered to the plaintiff
198
STATUTE OF FRAUDS.
an insti-ument in writing, of which the fol-
lowing is a copy:
-New York, May 13, 1S61.
-We agree to deliver P. S. Justice, one
thousand Enfield pattern rifles (with bayonets,
no other extras), in New York, at eighteen
dollars each, cash upon such delivery; said
rifles to be shipped from Liverpool not later
than 1st July, and before if possible.
"W. Bailey Lang & Co."
The plaintiff subscribed no agreement or
memorandum, paid no money, parted with
nothing of value, and assumed no obligation
on account of the defendants' promise. The
contract remains wholly executory, no part
of the rifles having been delivered. The
plaintifG instituted this action to recover
damages for the failure of the defendants to
deliver the rifles. The only question of any
importance is, whether the mere subscribing
and delivery of the above instrument by the
defendants created a legal obligation on
their part, which entitles the plaintiff to
damages for a failure to deliver the rifles.
The counsel for the appellant insists that the
mere subscribing and delivery of the said in-
strument by the defendants constituted a
valid and binding obligation on their part,
within the provisions of the statute of
frauds, and consequently the defendants
were liable to respond in damages for a vio-
lation of their agreement. The provision of
the statute of frauds, which has any appli-
cation to this case, is as follows: "Every
contract for the sale of any goods, chattels
or things in action for the price of fifty dol-
lars or more, shall be void; unless: 1st. A
note or memorandum of such contract be
made in writing and be subscribed by the
parties to be charged thereby." The instru-
ment in question was subscribed by the de-
fendants; and so fa-r the statute was com-
plied with. But something further was re-
quired to constitute it a valid and binding
contract; the agreement being wholly ex-
ecutory, it was indispensable that there
should be some consideration for the agree-
ment of the defendants, without which it
was void. K the defendants uad offered the
rifles, the plaintiff was at liberty to refuse
to receive them, and the defendants would
have been wholly without remedy. The
statute of frauds, while it declares that a
contract for the sale of personal property
for the price of $50 or more shall be void,
unless there is a note or memorandum sub-
scribed by the party to be charged, does not
declare that such note or memorandum so
subscribed, is all that is essential to consti-
tute a valid contract. The statute may be
complied with in the above particular, and
yet the contract be wholly void because there
is no consideration to support it. It was
not the intention of the legislature, in adopt-
ing that statute, to dispense with the neces-
sity of having a consideration to support an
agreement, but to require such note or mem-
orandum in addition to such consideration.
If there had been a consideration, however
slight, for the defendants' promise, they
would have been bound, because they com-
plied with the statute so far as the writing
was concerned. If the instrument in ques-
tion had been subscribed by the plaintiff,
and had contained a promise on his part to
receive the rifles and pay for them, such
promise would have been a good considera-
tion for the defendants' undertaking. We
are not called upon to examine the numerous
cases cited by the counsel, touching the stat-
ute of frauds, because most of them have
little or no bearing upon the question involv-
ed in the disposition of this appeal. In my
judgment the case is reduced to one ques-
tion; whether an executory contract can be
enforced when sub.scribed by one party only,
and there is no consideration whatever for
such contract. I cannot bring my mind to
doubt but that such agreement is. wholly
void. The judgment of the general term
should be affirmed, with costs.
THE MEM011ANI)UM I\ WRITING.
109
WILKINSON T. HEAVENRICH et aL
(26 N. W. 139, 58 Mich. 574.)
Supreme Court of Michigan. Jan. 6, 18S6.
Error to Saginaw.
Wheeler & McKnight, for plaintiff and ap-
pellant. Wisner & Draper, for detendoiits.
CHAMPLIN, J. But one question 13 in-
volved in this case, and that is as to plain-
tiff's right to maiuLain the action. The dec-
laration alleges that on or about the four-
teenth day of October, 1S82, the defendants
entered into a written contract with plaintiff
as follows:
"We promise and agree to pay Thomas
Wilkinson wages or salary at the rate of
$3,500 a year, for three years, from the sec-
ond day of October, 1SS2, in consideration of
his working for us for that length of time as
cutter in our merchant tailoring department
in the city of East Saginaw, Michigan. Pay-
ments to be made, as earned, in such sums
and at such times as he may desire.
"Dated October 14, 1SS2.
"[Signed] Heaveurich Bros. & Co."
—That he worked for defendants under tliis
contract, and in the business and employ-
ment aforesaid, and was always ready and
willing to so work and be employed for de-
fendants for the term of three years in said
contract mentioned, and so worked until on
or about the fifth day of July, 1SS4, when,
without cause and against the wishes and
contrary to the will and against the consent
of the plaintiff, the defendants wrongfully
dismissed and discharged the plaintiff from
their employment, and refused to allow the
plaintiff to work for them in the employment
mentioned in said contract, whereby plain-
tiff lost the wages and profits and advantages
which he would have derived from being
continued in said employ, was thrown out of
work, and was unable to get any employment
for a long space of time, to-wit, for four
months. A second count alleges that on the
fourteenth day of October, 1SS2, defendants
entered into another contract with plaintiff,
and in consideration that plaintiff would
work for them promised and agreed to em-
ploy the plaintiff for three years as cutter in
defendants' merchant tailoring department,
and pay him, as such cutter, at the rate of
$3,500 each year, as earned, in sums and at
times desired by plaintiff"; that plaintiff en-
tered upon such employment as cutter and
worked until about the fffth day of July,
1SS4, when he was wrongfully and against
his will discharged, etc. The plea was the
general issue, with notice that plaintiff did
not perform the contract on his part, and for
that reason they discharged him.
On the trial, after the introduction of the
agreement in evidence. It was admitted that
the defendants constituted the firm of Heav-
eurich Bros. &. Co. at the time of the making
of the contract that is off'ered in evidence;
that plaintiff was discharged on the seventh
day of July, 1881; that the defendants paid
the plaintiff in full for his services up to the
time of his discharge; that upon the eighth
day of July the plaintiff served upon the de-
fendants the following notice:
"Heavenrich Bros. & Co., East Saginaw,
Michigan — Gentlemen: I hereby protest
against your attempt to cancel our contract.
I hold your written agreement for a three-
j-ears term of service, from October 2, 1882,
That contract I am ready and willing to per-
form on my part, and I hereby ottVjr to con-
tinue, and request you to furnirih mt.- employ-
ment, under the terms of that arrangement
"Datfd East Saginaw, July S, 1884.
"[Signed] Thomas Wilkinson."
The plaintiff was sworn in his own behalf,
and was cross-examined relating to his per-
formance of the contract on his part; bat
the scope of his evidence was unimportant,
in view of the charge given by the court,
which wus that there was no mutuality in
the agreement, for Mr. Wilkinson was not
bound to stay three years, and Heavenrich
Bros. & Co. cotild not be bound to keep him
three years, and, for want of such mutuality,
the plaintiff could not recover; and he di-
rected a verdict for the defendants.
The conflict of authority upon questions of
the kind raised upon this record is truly be-
wildering, and the cases are incapable of
being reconciled with each other; a large
and respectable class holding that a contract
which the statute of frauds declares shall not
be valid unless in writing, and signed by the
party to be charged therewith, need only be
signed (by the party defendant in the suit,
and thaTTTTs^o objection^ Tmrniiutaining
such suit, and recovering upon such conti-act,
that the other party did not also sign, and
was not bound by its terms. 2 Kent, Comm.
510; 2 Stavkie, Ev. 614; Smith's Appeal, 69
Pa. St. 481; Tripp v. Bishop, 50 Pa. St. 428;
Perkins v. Hadsell, 50 111. 217; Old Colony B,
Coi"p. v. Evans, 72 Mass. 31; Williams v.
Robinson, 73 Me. ISO. Another and equally
respectable class of jurists hold that, unless
the party bringing the action is bound by the
contract, neither is bound, because of the
want of mutuality. Lees v. Whitcomb, 14 E.
G. L. 572; Sykes v. Dixon, 36 E. C. L. 300,
9 Adol. & E. 693; Krohn v. Bantz. OS Ind.
277; Stiles v. McClellan, Colo. 89. And see.
also, as bearing upon the question. Hall v.
Soule, 11 Mich. 496; Scott v. Bush, 26 Mich.
418; Liddle v. Needham, 39 Mich. 147; Mc-
Donald V. Bewick, 51 Mich. 79, 16 N. W. 240.
The cases above cited are not intended to be
exhaustive on either side of the proposition.
I shall not attempt a reconciliation when
reconciliation Is impossible; but as the ques-
tion is new in this state, the court is left to
adopt such view as appears to rest upon
principle. It is a general principle in the law
of contracts, but not without exception, that
an agreement entered into between parties
competent to contract, in order to be bind-
ing, must be mutual; and this is especially
200
STATUTE OF FRAUDS.
so when the consideration consists of mutual
promises. In such cases, if it appears that
the one party never was bound on his part
to do the act which forms the consideration
for the promise of the other, the agreement
is void for want of mutuality. Hopliins v.
Logan. 5 Mees. & W. 241; Dorsey v. Pack-
wood, 12 How. 126; Ewins v. Gordon, 49 N.
H. 444; Hoddesdon Gas Co. v. Haselwood, 6
C. B. (N. S.) 239; Souch v. Strawbridge, 2 C.
B. SOS; Callis v. Bothamly, 7 Wkly. R. 87;
Sylies V. Dixon, 9 Adol. & E. 693; Add. Gont,
§'lS; Pars. Cont § 449; Railroad Co. v.
Brinckerhoff, 21 Wend. 139; Lester v. Jewett,
12 Barb. 502.
Such was the case here. The consideration
consisted of mutual promises of the parties,
not to be performed within a year from the
making thereof. The defendants' promise
was in writing, and signed by them; but the
plaintiff's promise does not appear in the
writing signed by the defendant, nor was
any note or memorandum made and signed
by him promising to labor for defendants
three years or any length of time. Plaintiff
was never bound by the agreement. There
never was, then, any consderation to support
defendants' promises. The agreement was
void for _\maL.of_ mut uality . The plaintiff
. was imder no legal obligation to work for de-
fendants a moment longer than he chose, and •
the defendants were under none to keep him i
Vin their employment. The plaintiff could nei-
ther revive nor make a contract with defend-
ants after he was discharged by them with-
out their consent and concurrence. The let-
ter written after he was discharged was of
no avail.
The judgment is affirmed.
The other justices concurred.
THE MEMORANDUM IX WRITING.
201
XJLASOX V. BAILEY et al
.iV TUX et al. SAME v. IS
yV 11 A T«l,..„ /I
SAME V. DEN-
MEKIUT et al^n
ij^ (14 Johns. 484.) Q^^i I
Court of Errors of New York. March, x817.
These causes carae before this court on
writs of error, to the supi-fine court. The
facts in all were, substantially, the same.
See Merrit v. Clason, 12 Johns. 102.
Townsend, a brolvor, was employed by
Clason, a merchant, in the city of New York,
. in February, 1812, to purchase a quantity of
rye for him. Townsend applied to Bailey &
Voorhees, to linow if they had rye for sale;
and they agreed to sell him, for Clason, 3,000
bushels of rye, at one dollar per bushel, pay-
able on delivery, and authorized him to make
sale thereof to Clason, accordin.idy. Townsend
informed Clason of the quantity of rye he
could purchase of Bailey «fc Voorhees. and the
terms of sale, and he was directed by Clason
to purchase it. Townsend then went to Bailey
& Voorhees and closed the bargain; and there-
upon wrote the following memorandum in his
memorandum book, in the presence of Bailey
& Voorhees: "February 29th, bought for Isaac
Clason, of Bailey & Voorhees, three thousand
bushels of good merchantable rye, deliverable
from the 5th to the loth of April next, at one
dollar per bushel, and payable on delivery."
The memorandum was made the 29th of Feb-
ruary, 1812, and was written, as well as the
other memoranda, in the same book, with a
lead pencil. The day after making the bar-
gain, Townsend informed Clason of it; and
be gave him a copy of the memorandum, in
the latter part of the month of April, but not
before. On the 14th of April, 1812, Bailey &
Voorhees tendered 3,000 bushels of good mer-
chantable rye to Clason, requesting him to
take the same away, and paj- for it, according
to the terms of the bargain; but Clason re-
fused to accept and pay for it. On the IGth
of April, Bailey & Voorhees addressed a let-
ter to Clason, giving him notice, that unless
he took the rye and paid for it, in the mean
time. It would be sold on the Tuesday follow-
ing, at public auction, etc., and that they
should hold him accountable for whatever
deficiency there might be, after charging the
original price, charges, &c. Clason neglecteil
to receive and pay for the rye, which was
sold pursuant to the notice, at the best price
that could be got for it; and the deficiency,
after deducting the uett proceeds from the
price at w'hicU it was purchased by Clason,
was $1,150.50 to recover which sum, the suit
was brought by Bailey & Voorhees against
Clason. There was a special verdict, on
which the court below gave judgment for the
plaintiffs below, on which the defendant
brought a writ of error.
Tlie reasons of the judgment below, were as-
signed by the chief justice; being the same as
delivered by the supreme coui't, in Merrit v.
Clason, 12 Johns. 100.
Mr. "\'an Bouren, Atty. Cen., for plaintiff
in error. S. Junes, Jr., and Mr. Henry, for de-
fendants in error.
THE CHANCELLOR. The case struck me
upon the argument as being very plain. But
as it may have appeared to other members of
the court in a dlfterent, or, at least, in a more
serious light, I will very briefly state the rea-
sons why I am of opinion, that the judg-
ment of the supreme court ought to be af-
firmed.
The contract on which the controversy aris-
es, was made in the following manner:
Isaac Clason employed John Townsend to
purchase a quantity of rye for him. He, in
pursuance of this authority, purchased of
Bailey & Voorhees 3,0U0 bushels, at one dollar
per bushel, and at the time of closing the bar-
gain, he wrote a memorandum in his memo-
randum book, in the presence of Bailey &
Voorhees, in these words: "February 29th,
bought for Isaac Clason, of Bailey & Voorhees,
3,000 bushels of good merchantable rye, deliv-
erable from the 5th to the 15th of April next,
at one dollar per bushel, and payable on deliv-
ery."
Tlie terms of the sale and pm-chase had
been previously communicated to Clason, and
approved of by him, and yet at the time of
delivery, he refused to accept and pay for the
rye.
The objection to the contract, on the part of
Clason, is that it was not a valid contract
within the statute of frauds:
(1) Because the contract was not signed by
Bailey «& Voorhees.
(2) Because it was written with a lead pen-
cil, instead of pen and ink.
I will examine each of these objections.
It is admitted that Clason signed this con-
tract, by the insertion of his name by his
authorized agent, in the body of the memo-
randum. The counsel for the plaintiff in error
do not contend against the position, that this
was -A sufficient subscription on his part. It
is a point settled, that if the name of a party
appears in the memorandum, and is applicable
to the whole substance of the writing, and is
put there by him or by his authority, it is
immaterial in what part of the instrument
the name appears, whether at the top, in the
middle, or at the bottom. Saunderson v.
Jackson, 2 Bos. & P. 238; Welford v. Beaz-
ely, 3 Atk. 503; Stokes v. Moor, cited by Mr.
Coxe in a note to 1 P. Wms. 771. Forms are
not regarded, and the statute is satisfied if the
terms of the contract are in writing, and the
names of the contracting parties appear.
Clasou's name was inserted in the contract, by
his authorized agent, and if it were admitted
that the name of the other party was not there
by their direction, yet the better opinion is,
that Clason, the party who is sought to be
charged, is estopped, by his name, from say-
ing that the contract was not duly signed
within the purview of the statute of frauds;
202
STATUTE OF FEAUDS
and that It is sufficient, if the agreement be
signed by the party to be charged.
It appeai-s to me, that this is the result of
the weight of authority both in the courts of
law and equity.
In Ballard v. Walker, 3 Johns. Cas. GO, de-
cided in the supreme court, in 1S02, it was
held, that a contract to sell land, signed by
the vendor only, and accepted by the other
party, was binding on the vendor, who was
the party there souglit to be charged. So in
Eoget V. Merritt, 2 Caines, 117, an agree-
ment concerning goods, signed by the seller,
and accepted by the buyer, was considered a
valid agreement, and binding on the party
who signed it.
These were decisions here, under both branch-
es of the statute, and the cases in the English
courts are to the same effect.
In Saunderson v. Jackson, 2 Bos. & P. 23S,
the suit was against the seller, for not deliv-
ering goods according to a memorandum sign-
ed by him only, and judgmeut was given for
the plaintiff, notwithstanding the objection
that this was not a sufficient note within the
statute. • In Champion v. Plumer, 4 Bos. & P.
252, the suit was against the seller, who alone
had signed the agreement. No objection was
made that it was not signed by both parties,
but the memoraudum was held defective, be-
cause the name of the buyer was not men-
tioned at all, and consequently there was no
certainty in the writing. Again, in Egerton
V. Matthews, 6 East, 307, the suit was on a
memorandum for the purchase of goods, sign-
ed only by the defendant, who was the buyer,
and it was held a good agreement within
the statute. Lastly, in Allen v. Beunet, 3
Taunt. 1C.9, the seller was sued for the non-
delivery of goods, in pursuance of an agree-
ment signed by him only, and judgment was
rendered for the plaintiff. In that case. Chief
Justice Mansfield made the observation, that
"the cases of Egerton v. Matthews, Saunder-
son V. Jackson, and Champion v. Plumer, sup-
pose a signatm-e by the seller to be suflicicnt;
and every one knows it is the daily practice
of the court of chancery, to establish con-
tracts signed by one person only, and yet a
court of equity can no more dispense with
the statute of frauds than a court of law can."
So Lawrence, J., observed, that "the statute
clearly supposes the probability of there being
a signature by one person only."
If we pass from the decisions at law to the
courts of equity, we meet with the same uni-
form construction. Indeed, Lord Eldon has
said (18 Ves. 183) that chancery professes to
follow courts of law, in the construction of the
statute of frauds.
In Hatton v. Gray, 2 Ch. Cas. 164, 1 Eq.
Ca.s. Abr. 21, pi. 10, the purchaser of land
signed the agreement, and not the other party,
and yet the agreement was held by Lord
Keeper North to be binding on him, and this
too, on a bill for a specific performance. So
in Coleman v. Upcol, 5 Vin. Abr. 527, pi. 17,
the Lord Kpeper Wright held, that an agree-
ment concerning lands was within the stat-
ute, if signed by the party to be charged, and
that there was no need of its being signed by
both parties, as the plaintiff, by his bill for
a specific performance, had submitted to per-
form what was required on his part to be
performed.
Lord Hardwicke repeatedly adopted the
same language. In Buckhouse v. Crosby, 2
Eq. Cas. Abr. 32, pi. 44, he said, he had often
known the objection taken, that a mutual
contract in writing, signed by both parties,
ought to appear, but that tlie objection had as
often been overruled; and in Wefford v,
Beazely, 3 Atk. 503, he said, there were cases
where writing a letter, setting forth the terms
of an agreement, was held a signing within
the statute; and in Owen v. Davies, 1 Ves. Sr.
82, an agreement to sell land, signed by the
defendant only, was held binding.
The modern cases are equally explicit. In
Cotton V. Lee, before the lords commissioners,
in 1770, which is cited in 2 Brown, Ch. 564,
it was deemed sufficient, that the party to be
charged had signed the agreement So in
Seton V. Slade, 7 Ves. 275, Lord Eldon, on a
bill for a specific performance, against the
buyer of laud, said, that the agreement being
signed by the defendant only, made him,
within the statute, a party to be charged. The
case of Fowle v. Freeman, 9 Ves. 351, was an
express decision of the master of the rolls, on
the veiy point, that an agreement to sell
lands, signed by the vendor only, was bind-
ing.
There is nothing to disturb this strong and
united current of authority, but the observa-
tions of Lord Chancellor Redesdale, in Law-
reuson v, Butler, 1 Schoales & L. 13, who
thought that the contract ought to be mutual,
to be binding, and that if one party could not
enforce it, the other ought not. To decree
performance, when one party only was
bound, would "make the statute really a stat-
ute of frauds, for it would enable any per-
son who had procured another to sign an
agreement, to make it depend on his own
will and pleasure whether it should be an
agreement or not." The intrinsic force of
this argument, the boldness with which it
was applied, and the commanding weight of
the very respectable character who used it,
caused the courts, for a time, to pause.
Lord Eldon, in 11 Ves. 592, out of respect to
this opinion, waived, in that case, the dis-
cussion of the point; but the courts have,
on further consideration, resumed their for-
mer tract. In Western v. Russell, 3 Ves. &
B. 192, the master of the rolls declared he
was hardly at liberty, notwithstanding the
considerable doubt thrown upon the point
by Lord Redesdale, to refuse a specific per-
formance of a contract to sell land, upon the
ground that there was no agreement signed
by the party seeking a performance: and in
Ormond v. Anderson, 2 Ball & B. 370, the
present lord chancellor of Ireland (and whose
authority, if we may judge from the ability
THE MEMORANDUM IN WRITING.
203
of his decisions, Is not far short of that of
his predecessor), has not felt himself au-
thorized to follow the opinion of Lord liedes-
dale. "I am well aware," he observes, "that
a doubt has been entertained, by a judse of
this court, of very hiyh authority, whether
courts of equity would specUically execute
an agreement where one party only was
bound; but there exists no provision in the
statute of frauds to prevent the execution of
such an agreement." He then cites, with ap-
probation, what was said by Sir J. Manslield,
in Allen v. Bonnet,
I have thought, and have often intimated,
that the weiglit of argmnent was in favour of
the construction that the agreement concern-
ing lands, to be enforced in equity, should
be mutually binding, and that the one party
ought not to be at liberty to enforce, at his
pleasure, an agreement which the other was
not entitled to claim. It appears to be set-
tled (Hawkins v. Holmes, 1 P. Wms. 770),
that though the plaintiff has signed the
agreement, he never can enforce it against
the party who has not signed it. The reme-
dy, therefore, in such case, is not mutual.
But, notwithstanding this objection, it ap-
pears from the review of the cases, that the
point is too well settled to be now questioned.
There is a slight variation in the statute
respecting agreements concerning the sale of
lands, and agreements concerning the sale
of chattels, in as much as the one section
(being the fourth section of the English, and
the eleventh section of our statute,) speaks
of the party, and the other section (being
the seventeenth of the English, and the fif-
teenth of ours,) speaks of the parties to be
charged. But I do not find from the cases
that this variation has produced any differ-
ence in the decisions. The construct;on. as
to the point under consideration, has been
uniformly the same in both cases.
Clason, who signed the agreement, and Is
the party sought to be charged, is then, ac-
cording to the authorities, bound by the
agreement, and he cannot set up the statute
In bar. But I do not deem it absolutely nec-
essary to place the cause on this ground,
though as the question was raised and dis-
cussed, I thought it would be useful to ad-
vert to the most material cases, and to trace
the doctrine through the course of authoritj'.
In my opinion, the objection itself is not well
founded in point of fact.
The names of Bailey & Yoorhecs are as
much in the memorandum as that of Clason.
The words are, "Bought for Isaac Clason, of
Bailey & Voorhees, 3,000 bushels," &c.; and
how came their names to be inserted? Most
undoubtedly they were inserted by their di-
rection and consent, and so it appears bj' the
special verdict. The jury find, that when
the bargain was closed, Towusend, the agent
of Clason, did, at the time, and In their pres-
ence, write the memorandum; and if so,
were not their names inserted by their con-
sent? Was not Townsend their agent for
that purpose? If they had not assented to
the memorandum, they should have spoken.
But they did assent, for the memorandum
was made to reduce the bargain to writing
In their presence, at the time it was closed.
It was, therefore, as much their memoran-
dum as if they had written it themselves.
Townsend was, so far, the acknowledged
agent of both parties. The auctioneer wlio
takes down tlie name of the buyer, when he
bids, is quoad hoc his agent. Emmerson v.
Heells, 2 Taunt. 38. The contract was, then,
in judgment of law, reduced to writing, and
signed by both parties, and it appears to me
to be as unjust as it is illegal, for Clason, or
his representatives, to get rid of so fair a
bargain, on so groundless a pretext.
2. The remaining objection Is, that the
memorandum was made with a lead pencil.
The statute requires a writing. It does not
undertake to define with what instrument,
or with what material the contract shall be
written. It only requires it to be in writing,
and signed, &c.; the verdict here finds that
the memorandum was written, but it pro-
ceeds further, and tells us with what instru-
ment it was written, viz. with a lead pencil.
But what have we to do with the kind of in-
strument which the parties employed, when
we find all that the statute required, viz. a
memorandum of the contract in writing, to-
gether with the names of the parties?
To write is to express our ideas by letters
visible to the eye. The mode or manner of
impressing those letters is no part of the
substance or definition of writing. A pencil
is an instrument with which we write with-
out ink. The ancients understood alpha-
betic writing as well as we do, but it is cer-
tain that the use of paper, pen, and ink, was,
for a long time, unknown to them. In the
days of Job they wrote upon lead with an
iron pen. The ancients used to write upon
hard substances, as stones, metals, ivory,
wood, &c. with a style or iron instrument.
The next improvement was writing upon
waxed tables; until, at last, paper and parch-
ment were adopted; when the use of the
calamus or reed was introduced. The com-
mon law has gone so far to regulate writ-
ings, as to make it necessary that a deed
should be written on paper or parchment,
and not on wood or stone. This was for the
sake of durability and safety; and this is
all the regulation that the law has prescrib-
ed. The instrument, or the material by
which letters were to be impressed on paper
or parchment, has never yet been defined.
This has been left to be governed by public
convenience and usage; and as far as ques-
tions have arisen on this subject, the courts
have, with great latitude and liberality, left
the parties to their own discretion. It has,
accordingly, been admitted (2 Bl. Comm. 297;
2 Bos. & P. 23S: 3 Esp. ISO), that printing
was writing, within the statute, and (2 Brown,
Ch. 5So) that stamping was equivalent to
signing, and (S Yes. 175) that making a mark
204
STATUTE OF FRAUDS.
was subscribing within the act. I do not
find any case in the courts of common law
in which the very point now before us has
been decided, viz. whether writing with a
lead pencil was sufficient; but there are sev-
eral cases in which such writings were pro-
duced, and no objection taken. The courts
have impliedly admitted that writing with
such an instrument, without the use of any
liquid, was valid. Thus in a case in Comyn
(page 451), the counsel cited the case of
Loveday v. Claridge, in 1730, where Love-
day, intending to make his will, pulled a pa-
per out of his pocket, wrote some things
down with ink, and some with a peucil, and
it was held a good will. But we have a more
full and authentic authority in a late case
decided at doctors commons (Rymes v. Clark-
son, 1 Phillim. Ecc. Judgm. 22), where the
very question arose on the validity of a codi-
cil written with a pencil. It was a point
over which the prerogative court had com-
plete jurisdiction, and one objection taken
to the codicil was the material with which
it was written, but it was contended, on the
other side, that a man might write his will
with any material he pleased, quocuuque
modo velit, quocunque modo possit, and it
was ruled by Sir John NichoU, that a will
or codicil written in pencil was valid in law.
The statute of frauds, in respect to such
contracts as the one before us, did not re-
quire any formal and solemn instrument.
It only required a note or memorandum,
which imports an informal writing done on
the spot, in the moment ahd hurry and tu-
mult of commercial business. A lead pencil
is generally the most accessible and conven-
ient instrument of writing, on such occasions,
and I see no good reason why we should wish
to put an interdict on all memoranda written
with a pencil. I am persuaded it would be
attended with much inconvenience, and af-
ford more opportunities and temptation to
parties to break faith with each other, than
by allowing the writing with a pencil to
stand. It is no doubt very much in use. The
courts have frequently seen such papers be-
fore them, and have always assumed them
to be valid. This is a sanction not to be dis-
regarded.
I am, accordingly, of opinion that the judg-
ment of the supreme court ought to be af-
firmed.
This was the opinion of the court, BLMEN-
DORF and LIVINGSTON, Senators, dissent-
ing.
It was thereupon ordered, adjudged, and
decreed, that the judgment of the supreme
court be, in all things, affirmed, and that the
defendants recover from the plaintiffs their
double costs, to be taxed, and that the rec-
ord be remitted, etc. Judgment affirmed.
EFFECT OF NON-COMPLIANCE WITH STATUTE.
:u5
TOWNSEND V. HARGRA
(U8 Mass. 325.)
Supreme Judicial Court of MassachusettaT*
Suffolk. Sept. 17, 1875.
M. Storey, for plaintiff,
defendant.
F. A. Brooks, for
COLT, J. The plaintiff relied on an oral
contract of sale to the defendant of a quantity
of wool in bales then in Boston, and held in
store by one Williams. The sale was by
sample at the invoice weight for a given price
per pound, and the bales were specifically
designated and appropriated by the terms of
the contract
At the time of the great fire of November
9, 1872, a part of the wool had been sent to
the railroad station in Boston, and was either
there or at the defendant's mill in Maine, or
in transit to the mill, and a part remained and
was burned in the storehouse of Williams.
The defendant denies his liability for the wool
burned.
He contends, first, that the contract was not
a completed contract of sale, because some-
thing connected .with^tlie shipment or dcliv-
_ory of tho wool remained to bcnlbne by the
j3l;iin tirr. r.ut the instructions upon this point"
were sufliciently favorable to the defendant,
and upon evidence which, though conflicting,
was sufficient to warmnt the finding. The
jury must have found that nothing remained
to be done on the part of the seller in the way
of ascertaining, appropriating or delivering
the property. It is well settled that by such
a conti-act, independently of the statute of
frauds, the property immediately vests in the
buyer, and a right to the price in the seller,
unless it can be shown that such was not the
intention of the parties. Morse v. Sherman,
lOG Mass. 430; Foster v. Ropes, 111 Mass. 10;
Haskins v. Warren, 115 Mass. 514; Goddard
V. Binney, Id. 4.j0.
The defendant next relies upon the statute
of frauds set up in his answer, and contends
that there was. ,n^ acceptance or receipt p£_. by railroad at the defendant's expense.
art of the_ wool sufficient tQ_taJ^ thp,
ont Q f , iti^ ^ provisions as t o t he pa rt
any
case
b urned.
mere was, however, evidence which justi-
fied the jury in finding that the storekeeper,
Williams, after Wing uotilicd of the sale by
both parties, and of the fact that the property
belonged to the defendant, undertook at his
request to deal with and hold it for him.
Such an arrangement the jury may have
found constituted a sufficient accopt;ince and
receipt to make the contract "good and valid."
It is well settled that the warehouseman in
such case becomes the agent of the buyer and
holds possession for his principal. Gushing v.
Brood, 14 Allen, 376; Boardman v. Spooner,
13 Allen, 353; Hatch v. Bayley, 12 Cush. 27;
Browne, St. Frauds. § 31S. But the evidence
upon this point was conflicting, and some of
it tended to prove that there was no accept-
ance of the vool or any part of it through
the agency of Williams, or until after the
fire. It cannot be certainly known that the
verdict was not founded upon an acceptance
by the defendant at his mill in Maine, after
the fire, of a part of the wool which had been
sent on by railroad.
The instructiqns given by the court appli-
cable to this aspect of the case were not ex-
cei)ted to, and are not reported. It is to be
presumed that they were apt and sufficient,
unless the specific instructions requested by
the defendant should have been given in
whole or in part; and that is the remaining
question.
The first two instructions requested were
designed to support the statute defence, by
avoiding the legal effect of the alleged ac-
ceptance, at the mill, of part of the wool. The
acceptance referred to is that which the stat-
ute requires to give validity to the contract.
It must be with intention to perform the
whole contract and assert the buyer's owner-
ship under it, but it is sufficient if it be of
part of the goods only. Such an acceptance
implies the existence of a completed contract,
sufficient to pass the title, which is not to be
confoimded with that actual transfer of pos-
session necessary to defeat the vendor's lien
or his right of stoppage in transitu, or to
show an actual receipt under the statute.
Morse v. Sherman, supra; Browne, St.
Frauds, § 317.
The first request In all its parts is to be
taken together and treated as one; the prop-
osition that delivery of part to the Eastern
Railroad Company would not satisfy the stat-
ute of frauds, even as to that part, being
preliminary only, and for the purpose of lead-
ing up to the main proposition in regard to
the subsequent acceptance of such part.
The judge properly declined to rule that an
acceptance, as thus defined, of part of the
wool would not operate to take the contract
out of the statute, as to the part which the
plainiff had 'not sent, although by the terms
of the contract the seller was to ship it all
In the second request the judge was asked
distinctly to rule that an acceptance of part
of the wool would not operate upon the con-
tract to render it valid retrospectively, or
malce the defendant liable to pay for that
which had been destroyed by fire. This pre-
sents the question whether the date of the ac-
ceptance or tlie date of the agreement will be
treated, as between the parties, as the time
when the contract was made, and the risk of
loss of the goods was cast on the buyer. No di-
rect adjudication of tliis precise point is cited,
if we accept a New York case in which it seems
to bo held, in a per curiam opinion, that a loss
which happens after the original agreement
and before the acceptance required by the
statute, must fall on the purchaser. Vincent
v. Germond, 11 .Johns. 2S3.
The decision of it depends upon the con-
struction to be given to that part of the stat-
ute applicable to sales of personal prooerty,
206
STATUTE OF FilAUDS.
which Is Incorporated in Gen. St. c. 105,
§ 5, and follows, with slight variation, the
words of the seventeenth section of the Eng-
lish statute.
The pm-pose of this celebrated enactment,
as declared in the preamble and gathered
from all its provisions, is to prevent fraud and
falsehood, by requiring a party, who seelis to
enforce an oral contract in court, to produce,
as additional evidence, some written memo-
randum signed by the party sought to be char-
ged, or proof of some act confirmatory of the
contract relied on. It does not prohibit sucli
contract. It does not declare that it shall be
void or illegal, unless certain formalities are
observed. If executed, the effect of its per-
formance on the rights of the parties is not
changed, and the consideration may be recov-
ered. Stone V. Dennison, 13 Pick. 1; Bas-
ford V. Pearson, 9 Allen, 3S7; Nutting v.
Dickinson, S Allen, 540. The memorandum re-
quired is the memorandum of only one of the
parties. The alternative acts of the seven-
teenth section proceed from one only. They
presuppose a contract, and are in affirmance
or partial execution of it They are not es-
sential to its existence, need not be contem-
poraneous, and are not prescribed elements
in its formation. It is declared in the fourth
section that no action shall be brought upon
the promises therein named, unless some
niemorandum of the agreement shaU be in
writing; and in the seventeenth that no cou-
ti-act for the sale of goods "shall be allowc»d
to be good," or, as m oiu- statute, "shall De
good and valid," unless the buyer accepts and
receives part or gives earnest or there is some
memorandum signed by the parties to be char-
ged, or, as in om- statute, by the party to be
charged. It is true there is difference in
phraseology in these sections; but in view of
the policy of the enactment and the necessity
of giving consistency to all its parts, this
difference cannot be held to change the force
and effect of the two sections. "Allowed to be
good" means good for the purpose of a recov-
ery under it; and the clause in the last part
of the latter section, which requires the mem-
orandum to be signed by the party or parties
to be charged, implies that the vahdity in-
tended is that which will support an action
on the contract. We find no case in which
it is distinctly and authoritatively held other-
wise. See Leroux v. Brown, 12 C. B. 801;
Carrington v. Roots, 2 Mees. & W. 248; Reade
V. Lamb, 6 Exch. 130; Browne, St. Frauds.
§§ 115, 136. With reference to the change
in our statute by the use of the words "good
and valid," which first appears in Rev. St
c. 74, § 4, it is enough to say that the provin-
cial statute of 1692, c. 15, § 7, and St. 1788,
c. 16, § 2, foUow the precise words of the
English statute; and the commissioners on
the Revised Statutes, in their report (page
107) declare that they intend to retam the
well-known and familiar phraseology of the
old statute, which has received judicial con-
struction. Tisdide v. Harris, 20 Pick. 9, 12.
It is apparent that the legislature of this state
did not intend to change the meaning of the
original provision.
In carrying out its puriJose, the statute only
affects the modes of proof as to all contracts
within it. If a memorandum or proof of any
of the alternative requirements peculiar to the
seventeenth section be furnished, if acceptance
and actual receipt of part be shown, then the
oral contract, as proved by the other evi-
dence, is established with all the consequen-
ces which the common law attaches to it If
it be a completed contract according to com-
mon-law rules, then, as between the parties
at least, the property vests in the purchaser,
and a right to the price in tlie seller, as soon
as it is made, subject only to the seller's lien
and right of stoppage in transitu.
Many points decided in the modern cases
support by the strongest implication the con-
stniction here given. Thus, if one party has
signed the memorandum, the contract can be
enforced against him, though not against the
other,— showing that the promise of the other
is not wholly void, because it affords a good
and valid consideration to support the promise
which by reason of the memorandum may be
enforced. Reuss v. Picksley, L. R. 1 Exch.
342.
The memorandum is sufficient if it be only
a letter written by the party to his own agent,
or an entry or record in his own books, or
even if it contain an express repudiation of
the contract. And this because it is evidence
of, but does not go to make, the contract.
Gibson v. Holland, L. R. 1 C. P. 1; Buxton
V. Rust, L. R. 7 Exch. 1, 279; Allen v. Ben-
net, 3 Taunt. 169; Tufts v. Mining Co., 14
Allen, 407; Argus Co. v. Albany, 55 N. Y.
495.
A creditor, receiving payment from his debt-
or, without any direction as to its application,
may apply it to a debt upon which no action
can be maintained under the statute. Haynes
v. Nice, 100 Mass. 327.
The contract is treated as a subsisting valid
contract when it comes in question between
other parties for purposes other than a re-
covery upon it Hence the statute cannot be
used to charge a trustee, who may set up
against his debt to the principal defendant a
verbal promise within the statute to pay the
defendant's debt to another for a greater
amount. Cahill v. Bigelow, 18 Pick. 369.
And a guarantor may recover of his principal
a debt paid upon an unwritten guaranty. Beal
v. Brown, 13 Allen, 114.
On the ground that the statute affects the
remedy and not the validity of the contract,
it has been held that an oral contract, good
by the law of the place where made, will not
be enforced in the com-ts of a country where
the statute prevails. Leroux v. Brown, 12 C.
B. 801. The defendant may always waive
its protection, and the court will not interpose
the defence. Middlesex Co. v. Osgood, 4 Gray,
447. And, except that the statute provides
that no action sliaU be brought, there would
EFFECT OF NON-COMPLIANCE WITH STATUTE.
207
be no good reason to hold that a memorandum
signed, or an act of acceptance proved, at any
time before the trial would not be sufficient.
Bill V. Bameut, 9 Mees. & W. 3G; Tisdale v.
Harris, 20 Pick. 9.
In a recent case In the queen's bench, a
memorandum in writing made by the defend-
ant, after the goods had been delivered to a
carrier and been totally lost at sea while In
his hands, was held sufficient to take the case
out of the statute, and no notice is taken of
the fact that the goods were not in existence
when the memorandum was furnished. Cloth
Co. V. Hieronimus, L. R. 10 Q. B. 140.
In the case of Marsh v. Hyde, 3 Gray, 331,
relied on by the defendant, although there are
some inconsistent expressions in the opinion,
the general course of reasoning supports this
result The facts in that case showed a com-
pleted sale by oral agreement, with an ac-
ceptance and receipt of part, which was held,
although subsequent In point of time to the
original contract, to tike the case out of the
statute. The point decided Is not in conflict
with tlie law here stated.
The case of Stockdale t. Dunlop, 6 Mees.
& W. 224, also fails to sustain the defendant's
case. That was a sale of goods "to arrive,"
and it was expressly found tliat by the use
of this mercantile term, if the property or the
vessel named did not arrive, the buyer would
have no right to the goods, and so no present
insurable interest in them.
It follows that it would have been erroneous
to have given the instructions requested. Up-
on the point closely allied, namely, what ef-
fect, if any, the defendant's mistake or ig-
norance of a material fact, such as the destruc-
tion ofthe rest of the wool, would have on the
alleged act of acceptance, we are not required
by the terms of the request to pass.
The third and last request was also properly
refused for the reasons above given. /If the
property in the wool passed by the terms of
the original agreement, and the contract was
taken out of the statute by the subsequent
acceptance and receipt, then, as we have seen,
as between the parties, the risk of loss was
on the defendant at the tim'^ of the fire, and
the plaintiff may recover the agreed price 5I
the whole.
Exceptions overruled.
:03
STATUTE OF FRAUDS.
^^
WHEELER V. REYNOLDS.
(66 N. Y. 227.)
3'
Court of Appeals of New York- May 23, 1876.
Action for specific performaDce of a parol
agreement in reference to lands. The facts
appear in the opinion. Judgment for plain-
tiff.
John Van Voorhis, for appellant
The agreement claimed by plaintiflf was
void by the statute of frauds. 2 Rev. St.
(Edm. Ed.) 139, § G; Lathrop v. Hoyt, 7 Barb.
59; Levy v. Brush, 45 N. Y. 5S9; Sturtevant
V. 'sturtevant, 20 N. Y. 39; 2 Story Eq. Jur.
61, § 1201; Getman v. Getman, 1 Barb. Ch.
499.
Geo. H. Humphrey, for respondent
Equity will not allow defendant to retain the
property obtained on the faith of the oral con-
tract without performing the same on his
part. Ryan v. Dox, 34 N. Y. 307; Church v.
Kidd, 3 Hun, 254. This case was not within
the statute of frauds. 2 Rev. SL (Edm. Ed.)
139; 2 Story, Eq. § 759; 34 N. Y. 311; Stod-
dard V. Whiting. 46 N. Y. 627; Dodge v. WeU-
man, 43 How. Prac. 427.
EARL, J. In 1S55 the plaintiff was the
owner in fee of the lands described in the
complaint, and then executed to the defend-
ant a mortgage upon the lands, which is also
described in the complaint. In April, 1SP.5,
the plaintiff had become insolvent, and the
mortgage remained unpaid, and he was una-
ble to pay it. At that time the plaintiff claims
a parol agreement was made as to the fore-
closure of the mortgage, which he seeks to
enforce in this action. No one was present
when the agieement was made except the
parties, and they are the only witnesses
thereto. The defendant, as a witness, denied
the agreement The plaintiff, as a witness,
stated the agreement as follows: That he
went to the defendant and stated to him that
he would like to have him foreclose the mort-
gage and bid m the land at the sale, and then
sell the land or hold it to such time until they
could sell it for what it was worth; that he
would do what he could toward soiling the
land and that defendant should do the same;
and that when the land was sold he should
take out the amount due upon his mortgage,
and his costs and expenses, and pay the bal-
ance to the plaintiff. This was the whole
agreement as proved by the plaintiff. It was
not agreed that plaintiff should not attend
the sale, or that he should prevent others
from attending. The judge who tried the
cause found that this agreement was made,
and also found that it was made by the de-
fendant upon the consideration that the plain-
tiff would not attend the sale or procure
others to bid against the defendant at the
sale. There was no proof whatever of such
a consideratioiL The learned judge probably
inferred it from all the facts of the case. It
would doubtless have defeated the agreement
if plaintiff had attended at the sale and bid,
or if he had procured others to bid; and yet
it could not be said that in either event he
would have violated his agreement The al-
leged agreement was wholly for his benefit,
and if he had before the day of sale obtained
the money to bid 'in the land, and thus ena-
bled the defendant to realize all that w:\3
due him, there would have been no ground of
complaint on the part of the defendant, and
no breach of faith on the part of the plaintiff;
so if the plaintiff had procured other parties
to bid sufficiently, the substantial purpose of
the agreement would have been accomplish-
ed. The plaintiff therefore gave up no right
which he possessed, and the defendant, by
virtue of the agreement, could receive no
more than his due, and obtained no right
which he did not before have. The judge
found that in pursuance of this agreement
the defendant proceeded to foreclose his mort-
gage. There was however no proof that he
foreclosed it in pursuance of the agreement
The defendant testified that he did not.
Nothing was said at the sale about the agree-
ment; and there was no act of either party in-
dicating that the foreclosinre was in pursuance
of the agreement. Nothing was done at the
sale by the defendant to prevent competition;
and one or more other parties did bid. There
was no proof or finding that plaintiff omit-
ted to attend the sale, or to procure others to
attend, in reliance upon the agreement, or
that the plaintiff, but for the agreement
could or would have bid off the property, or
procured some one else to do so for him. The
defendant bid off the property for $S00, but
the amount due him upon his judgment in
foreclosure, including costs and expenses of
sale, was about $1,800, which was substan-
tially all the land was worth. There was no
allegation in the complaint, nor proof upon
the trial of any fraud practiced by the de-
fendant upon the plaintiff in making the
agreement, or in the foreclosure of the mort-
gage and the sale of the land. The defend-
ant, after the sale, took possession of the
land under his deed, and retained it, and paid
the taxes and received the rents, and this
suit was not commenced until nearly nine
years after the sale, when the land had great-
ly increased in value. If under such circum-
stances this alleged parol agreement can be
enforced, our statute in reference to fraudu-
lent conveyances and contracts, relative to
lands will, in large part, be nullified.
It must be conceded that the parol Hgree-
ment was of itself absolutely void and con-
ferred no rights and imposed no obligations
upon any one. But one ground upon which
it is sought to maintain this action is that
the agreement was partly performed so as to
take it out of the statute of frauds. 2 Rev. St
135, §§ 6, 10. To have such effect the part per-
formance must be substantial, and nothing
will be considered as part performance which
EFFECT OF XOX-COMPLIANCE Willi STATUTE.
2uy
does not put the party into a situation which
is a fraud upou him unless the agreement be
fullj' perforniod; and the acts of part per-
forniauce should clearly appear to be done
solely with a view to the agreement being
performed. Generally if they are acts which
might have been done with other views, they
will not take the case out of the statute, since
they cannot properly be said to be done by
way of part performance of the agreement
The acts should be so clear, certain and defi-
nite in their object and design as to refer ex-
clusively to a complete and perfect agree-
ment, of which they are a part execution. 2
Story, Eq. Jur. §§ TGI, 7t;2; Phillips v. Thomp-
son, 1 Johns. Ch. lol; Byrne v. Romaine, 2
Edw. Ch. 445; Jervis v. Smith, Iloff. Ch. 470;
Wolfe V. Frost, 4 Sandf. Ch. 77. The object
of the statute is to prevent frauds and per-
juries, and hence courts of equity will take
uo notice of agreements dopcndiiig upon parol
evidence and otherwise within the statute,
unless there are acts of part performance
which go along with, relate to, and confirm
the agreement, and which were clearly done
in part execution thereof, and thus with the
parol evidence established the existence of the
a.grcement. Now, what have we in this case?
Every act done by the defendant was such as
he had a perfect right to do by virtue of his
mortgage and his deed upon the foreclosure
sale, and apparentlj' had no reference what-
ever to any agreement with the plaintiff. There
was no act of the plaintiff which could be re-
ferred exclusively to the agreement. The only
act of part performance pretended is that the
plaintiff did not attend the sale and bid. But
his absence from the sale was just as con-
sistent with other circumstances. He was in-
solvent and luiable to pay the mortgage; and
the amount due thereon, with the costs and ex-
penses of sale, was equal to the value of the
land. Hence he could have had little motive
to attend the sale, of which public notice was
given, as required by the statute. To hold
that his mere omission to attend the sale un-
der such circumstances was a part perform-
ance would be an application of the equity
rule upon the subject wholly unauthorized by
the best authorities.
The court at general term atfinued the
judgment upon the authority of the case of
Kyan v. Dox, 34 N. Y. 307. That case *ls
quite unlike this in its essential fesitures.
There there was a sale under a foreclosure
judgment, and the plaintiffs, the owners of
the land, procured the defendant to bid off
the same under a parol agreement that he
would attend the sale and bid off the land
for their benefit and advantage, and take the
deed as his security for the amount paid by
him, they agreeing that they would not find
any other person to attend the sale and bid
for them. He was to hold the deed as his se-
curity, and whenever the plaintiffs repaid him
the amount paid at the sale, together with in-
terest and a reasonable compensation for his
services, he was to convey the land to them.
nOPE.SEL.CAS.COXT. — 14
In pursuance of the agreement he attended
the sale and bid off the laud for $100, which
was then worth ?4,0. 32 Law .1. C. P. 152. was contrary
to our decision. It seems to me that that ca.se
contains two things, — one a decision, and the
other a dictum. The decision is not against
our judgment; for it was that, although the
parties spoke to each other on a Sunday, there
was evidence upon which the jury might find
that the contract was made on the Monday,
and that that contract was for sei-vice for a
year from that Monday, and that the service
was to be performed within a year from that
time. That decision was in accorda.^e with
all the other cases. If the contract w«is made
on the Monday, and If the service was to com-
mence on the Monday, it is obvious tnat the
sei-vice was to be performed within oae year
from the making of the contract. There was,
however, a dictum of Willes, J., which seems
to be supported by the opinion of Byles, J.
These are great authorities, and that dictum
seems to have been that if a contract is made
on a day, say Monday, for a .service for a year,
to commence on the following day, say a
Tuesday, the service is to be performed within
365 daj-s from the making of the contract,
but that inasmuch as the law takes no notice
of part of a day, and the contract was made
in the middle of the Monday, the service to
be perf(jrmed within 305 days after tliat, the
law did not count that half day of the Monday,
and therefore the contract was to Ix; perform-
ed within 3G5 days after it was made, and
that was within a year. This view was found-
ed upon a fiction, namely, that the law does
not take notice of part of a day. I am not
prepared to say that under like circumstances
one might not follow that dictum and carry
it to the length of a decision. It is not neces-
sary to say so here, becaase the case has not
arisen. This conti-act was made on the Sat-
urday, and the service was not to begin until
the Mondaj-; that is, not the next day to Sat-
urday, but the day save one after. The dic-
tum does not apply. To say that the Simday
is not to be counted in the year's sei'vice would
not do, because if one Sunday is not to be
counted, no Sunday is to be coimted. As to
Cawthorne v. Cordrey, 13 C. B. (N. S.) 403. 32
Law J. C. P. 152, the decision is not differ-
ent from other cases. As to the dictum, we
can say nothing about it in this case, because
the point does not arise. Therefore we have
not to overrule Cawtliorne v. Cordrey, 13 C.
B. (N. S.) 406, 32 Law J. C. P. 152. either aa
to its decision or its dictum. I think that the
contract falls clearly within the statute and
within the principle of Bracegirdle v. Heald, 1
Barn. & Aid. 722. Therefore no rule will be
gitinted as to the point whether the contract
is within the statute; but the plaintiff may
take a rule upon the questions whether the
operation of the statute of frauds (section 4)
may be defeated by part performance. ;iud
also whether the plaintiff was entitled to any
notice of dismissal, a verbal contract being in
existence.
COTTON and THESIGER, L. JJ., concur-
red.
1879, March 4. J. C. Lawrence, Q. C. and
P. B. Hutcliins, shewed cause. The plaintiff
cannot recover in this action. Snelling v. Lord
Huntingfield, 1 Cromp., M. & R. 20, shews
that the express verbal contract of Satur-
day, the 21st of April, was still in existence,
and that no fresh contract can be implied
from acts done in pursuance of it That con-
tract was for a year's service to commence at
a future day, and was therefore a contract not
to be performed within a year. Bracegirdle
214
STATUTE OF FRAUDS.
V. Heald, 1 Bam. & Aid. 722; Banks v. Cross-
land. L. R. 10 Q. B. 97. Nevertheless, whilst
it remained uurescinded no other contract be-
tween the pai'ties can be implied. The words
of the statute of frauds (section 4) are ex-
press, and no action can be brought upon a
contract falling within its prohibition. Lerous
V. Brown, 12 C. B. SOI. The fact that the con-
tract has been partly performed, does not af-
fect the position of the parties. Giraud v.
Richmond, 2 C. B. 835. The eq uitabl e doc-
■ tiine of part performance, whereby the oper a-
tion of the statute of frauds has been defeat -
f>d, han always been^onfined to contracts fo r
the sale and p u rchase of lands, and has no t
bee n extended to contracts of o ther kinds.
Mr. Firth, in support of the rule. A con-
tract falling within the prohibition of the stat-
ute of frauds (section 4) is void to all intents
and purposes. Carrington v. Roots, 2 Mees.
& W, 248; Reade v. Lamb, 6 Exch. 130; In-
man v. Stamp, 1 Starkie, 12. A contract that
is void in part is void altogether. Thomas v.
Williams, 10 Barn. & C. 6G4. Therefore the
conti-act of Saturday, the 21st of April, may
be treated as no contract, and a fresh contract
of service may be implied from the acts of the
parties.
As to the doctrine of part performance it is
true that the court of chancery formerly applied
it only to contracts for the sale of land, and there
may have been a difficulty in decreeing specific
performance of a contract for personal serv-
ices. Pickering v. Bishop of Ely, 2 Younge
& C. 249; Johnson v. Railway Co., 3 De Gex,
M. & G. 914. But the court of chancery
would not allow the provisions of a statute
to defeat a claim which good conscience re-
quired to be carried out. Bond v, Hopkins,
1 Schoales & L. 413; Morphett v. Jones, 1
Swanst. 172. The defence set up by the de-
fendant is wholly against good conscience.
Ajid now by Judicature Act 1873 (36 & 37
Vict. c. 6G) § 2.5, subsec. 7, the doctrines of
equity may be applied to cases decided in the
f'ommon law divisions.
BRETT, L. J. Upon the best considera-
tion which I can give to this case, it seems
to me that this rule should be discharged.
I think that Hawkins, J., was right, and that
the exchequer division was also right. It
was clearly established that on Saturday,
the 21st of April, a contract of service was
in express terms entered into between the
plaintiff and the defendant that the plaintiff
should serve the defendant for one year, the
contract to commence the Monday following.
It cannot be disputed that a contract of that
kind is within the 4th section of the statute
of frauds, — that is to say, it is a promise
founded upon a sufficient consideration,— but,
it being only verbal, neither party can bring
an action upon it so as to charge the other.
It is, however, contended that as the plaintiff
did on Monday, the 23d of April, enter into
the defendant's service and continue in it for
some months, another contract to serve for a
year ought to be Implied, attended with the
same consequences as the original contract,
but outside the statute of frauds. It is al-
leged that this contract can be implied, be-
cause the conti"act originally entered into is
voia. But, according to the true construction
of the statute, it is not correct to say that the
contract is void; and, in my opinion, no dis-
tinction exists between the 4th and the 17th
sections of the statute. At all events, the
contract is not void under the 4th section.
The contract exists, but no one is liable upon
it. It seems to me impossible that a new
contract can be implied from the doing of
acts which were clearly done in performance
of the first contract only, and to infer from
them a fresh contract would be to draw an
inference contrary to the fact. It is a prop-
osition which cannot be disputed that no new
conti"act can be implied from acts done un-
der an express contract, which is still sub-
sisting. All that can be said is that no one
can be charged upon the original contract be-
cause it is not in writing. At the bar re-
liance was placed upon Carrington v. Roots,
2 Mees. & W. 248, and Reade v. Lamb, 6
Exch. 130. In the former case Parke, B., said:
"I think the right interpretation of" the 4th
section of the statute of frauds "is this: that
an agreement which cannot be enforced on
either side is as a contract void altogether."
In the latter, Pollock, C. B., said: "Carring-
ton v. Roots, 2 Mees. & W. 248, is in effect a
decision that, for the pui-poses of the present
question, there is no distinction between the
4th and 17th sections of the statute of frauds,
and that not only no action can be brought
upon an agreement within the 4th section of
that statute if it be not reduced into writ-
ing, but that the contract is also void." With
regard to these dicta it is enough to say that
the doctrine thereby laid down was unnec-
essary for the decisions in those cases; for it
being clear that no action can be brought on
the verbal contract itself, it is also clear that
neither party can be held liable upon it in-
directly in any action which necessitates the
admission of the existence of the contract.
The two cases which I have mentioned were
considered in Leroux v. Brown, 12 C. B. 801;
and Jervis, C. J., undoubtedly took the same
view of them as I do, and gave the inteii:)re-
tation necessary for that case, namely, that
the contract is not void, but only incapable
of being enforced, and that any claim which
depends upon the contract as such cannot be
maintained. If the contrai-y view had pre-
vailed, it would have been decided in that
case that the statute of frauds (section 4),
had a territorial operation; whereas if it ap-
plies merely to the enforcement of the con-
tract, then it is a statute with respect to the
procedure of the English courts, and it is ap-
plicable to contracts made abroad as well as
in England. Moreover, the case of SnoUing
V. Lord Huntingfiold, 1 Cromp., M. & R. 20,
has not been overiniled by subsequent cases,
but the doctrine there laid down has been
EFFECT OF NON-COMPLIANCE WITH STATUTE.
215
fftrongly supported by subsuqueut cases, and
in my opiuion it certainly ought uot to be
overruled now. In my view the contract
entered into on the 21.st of April Nvas not
void, but existing, and from a part perform-
ance of it a fresh contract ought uot to bo
implied. The plaintiff, therefore, is driven
to rely upon the ori;;inal contract, but he can-
not maintain an action upon that, inasmuch
as it is not in wi'itiug.
It has been further contended that, as the
contract of the 21st of April has been partly
performed, it may be enforced, notwithstand-
ing the statute of frauds, and that the equi-
table doctrine as to part performance may
be applied to it. It is well laiown that where
a contract for the sale of laud had been part-
ly performed, courts of equity did in certain
cases recognize and enforce it; but this doc -
t rine was exercised only as to cases concern -
in^^lnnd, nnrl Tjyas ^iever_PYtp nded to c.nn -
tra cts like that before us. because they coid d
not be brought \vithin__jyic_JiiiiadicUon_-«f
cCTTrts of equity. . Those courts could not en-
tertam siITTS^ibr specific performance of con-
tracts of service, and therefore a case iike
the present could not come before them. As
to the application of the doctrine of part per-
formance to suits concerning land, I will
merely say that the cases in the com-t of
chanceiy were bold decisions on the words
of the statute. The doctrine was not ex-
tended to any other kind of contract before
the judicature acts. Can we so extend it
now? I think ttiat the true construction of
the judicature acts is that they confer no
new rights; they only confirm the rights
which previously were to be found existing
in the courts either of law or of equity. If
they did more, they would alter the rights of
parties, whereas in tinith they only change
the procedure. Before the passing of the
judicature acts no one could be charged on
this contract either at law or in equity; and
if the plaintiff could now enforce this con-
tract, it would be an alteration of the law.
I am of opinion that the law remains as it
was, and that the plaintiff cannot maintiiin
this action for breach of contract
COTTON, L. J. We refused to grant a
nile on the ground that the contract entered
into on Saturday, the 21st of April, was to
be performed within a year, and therefore
not within the operation of the 4th section of
the statute of frauds. The contract clearly
was within that enactment. On the otlier
points we granted a rule, but after having
heard the arguments on behalf of the plain-
tiff, I tliink that the rule for a new trial must
be discharged. It has been contended that
although the express contract cannot be en-
forced, nevertheless a contract which can l>e
enforced may be implied from conduct of the
parties, and it has been argiied that tlie
rule does not apply which forbids a contract
to be implied where an express contract has
been concluded, because the contract was
void under the provisions of the statute of
frauds (.section 4); but in my opinion that
is not the true construction of the enact-
ment, which provides that no action shall be
brought to charge any person upon the ver-
bal contract.
In the lirst place, I may observe that to
hold that this enactment makes void verbal
contracts falling within its provisions, would
be inconsistent with the doctrine of the
courts of equity with regard to part per-
formance in suits concerning land. If such
contracts had been rendered void by the leg-
islature, courts of equity would not have
enforced them, but their doctrine was that
the statute did not render the contracts void,
but required written evidence to be given of
them; and courts of equity were accustomed
to dispense with that evidence in certain in-
stances. During the argument some deci-
sions were relied upon as shewing that the
contract in the present case was void. In
Carrington v. Roots, 2 Mees. & W. 248, cer-
tain expressions were used by the judges
which indicated that in their opinion a ver-
bal contract falling within section 4 was void;
but I think that their language, when care-
fully analyzed, merely means that the con-
tract was uot enforceable, either directly or
indirectly by action at law. I think it un-
necessary to go into the case of Reade v.
Lamb, 6 Exch. 130. It was a case decided
upon special demurrer, and the question to
which the attention of the judges was direct-
ed, was whether the pleadings were correct
in point of form.
It has been further argued that the con-
tract may be enforced, because it has been
in part performed. Let me consider what
is the nature of the doctrine as to part per-
formance. Tt has been said that the prin-
ciple of that doctrine is that the court will
not allow one party to a contract to take ad-
vantage of part performance of the contract,
and to permit the other party to change his
position or incur expense or risk under the
contract, and then to allege that the con-
tract does not exist; for this would be con-
trary to conscience. It is true that some
dicta of judges may be found to support this
view, but it is not the real explanation of
the doctrine, for if it were, part payment of
the purchase money would defeat the opera-
tion of the statute. But it is well estab-
lished and cannot be denied that the receipt
of any sum, however large, by one party un-
der the contract, will not entitle the other
to enforce a contract which comes within the
4th section. What can be more contrary
to conscience than that after a man has re-
ceived a large sum of money in pursuance of
a contract, he should allege that it was nev-
er entered into? The true ground of the doc-
trine in equity is that if the court foimd a
man in occupation of land, or doing such acts
with regard to it as would, prima facie, make
him liable at law to an action of trespass,
the court would hold that there was strong
216
STATUTE or FRAUDS.
evidence from the nature of the user of the
land that a contract existed, and would there-
fore allow verbal evidence to be given to
show the real circumstances under which
possession was taken. Does this doctrine,
when so explained, apply to the present case?
I will first mention the provisions of Judica-
ture Act 1S73, § 24, subsecs. 4, 7. These
provisions enable the courts of common law
to deal with equitable rights and to give
relief upon equitable grounds; but they do
not confer new rights. The different divi-
sions of the high com! may dispose of mat-
ters within tlie jurisdiction of the chancery
and the common law courts; but they can-
not proceed upon novel principles. Coiild the
present plaintiff have obtained any relief in
equity before the passing of the judicature
acts? I think that he could not. The doc-
ti-ine as to part performance has always been
confined to questions relating to land; it has
never been applied to contracts of service,
and it ought not now to be extended to eases
in which the court of chancery never inter-
fered.
THESIGER, L. J. Two questions must be
considered in this case: First, whether the
plaintiff could maintain an action at law;
secondly, whether, if he could not maintain
an action at law, he could maintain a suit
in equity. I am compelled to subscribe to
the opinion that the plaintiff had no remedy
either at law or in equity. I have been un-
willing to come to this conclusion, because it
is manifestly unjust that where a contract
of hiring has been acted on for a certain
time, one party who has had the advantage
of it should be able to put an end to it; and
I should have been glad to decide that the
plaintiff was entitled to a reasonable notice
of dismissal. First, has the plaintiff a right
of action at law? It is clear that a con-
tract was made on Saturday, the 21st of
April, and it cannot be contended that a con-
tract made at that date to commence from
the 2.3d of April is not within the 4th sec-
tion of the statute of frauds. It is neces-
sary to consider what is the effect of the
statute upon such a contract. Is it that the
contract is wholly null so that it does not
prevent the proof of any other contract, or is
it that the contract exists but cannot be en-
forced? Certain dicta are to be found in the
books from which it might appear that some
of the judges have considered the verbal con-
tract as absolutely void. But if those dicta
are carefully examined, it will be found that
they are not necessary for the decision of
the cases in which they appear, and upon re-
ferring to subsequent cases it will be found
that it has been decided in clear terms that
the verbal contract is not actually void. It
is im.possible to say that the words of the
statute make the verbal contract void. That
a verbal contract is not void, is proved by
the circumstance that where one party has
signed the contract and the other has not.
the party who has signed may be charged
upon it, but that the party who has not sign-
ed cannot be charged. It may also be urged
with some show of reason that though there
is a difference in language between the 4th
and 17th sections of the statute of frauds,
they are substantially identical in construc-
tion, and Carrington v. Roots, 2 Mees. & W.
248, and Reade v. Lamb, 6 Exch. 130, may
perhaps be cited in support of that argument.
And it is plain that verbal contracts under
the 17th section are not absolutely void for
all pui-poses, for the section provides that part
performance by payment or acceptance and
receipt of goods stiall authorize the court to
look at the terms of the contract, although
it is not in writing. But I need not discuss
this question further, for in Snelling v. Hunt-
Ingfield, 1 Cromp., M. & R. 20, which has
never been overruled, but, on the contrary,
has been often followed, it was held that a
contract not enforceable by reason of the
statute of frauds (section 4) nevertheless ex-
isted, and no contract can be implied where
an express contract exists. I thinlc that we
are bound by the authori-ty of that case.
There was, therefore, in existence a contract
made in express terms on Saturday, the 21st
of April, and the plaintiff cannot sue upon it,
as it is not in writing. It appears to have
been held that, though there may be no right
to recover on an executory contract, never-
theless, if it has been executed to the extent
of the oontractee entering upon the service,
that is euougb to entitle him to be paid^r
his servicers , and if we were not bound by
authority it would be difficult to understand
why, if the plaintiff can sue for services ren-
dered, he should not equall y be en titled to
allege tliat he shall not be^dismissed with-
out notice or without such notice as was
stipulated for in the contract But in Snell-
ing V. Huntingfield, 1 Cromp., M. & R. 20,
the court of exchequer appears to have
thought that the contractoe can recover for
services rendered but not for dismissal with-
out notice. This seems to have been the con-
struction at common law. If we turn to
equity, we find that it has been held, as re-
gards a sale of land, that when there has
been an entry by one party to the contract,
that is an overt act apparently done under
a contract which entitles the court to look
at the contract to see to what contract the
overt act is really referable. I confess that
on principle I do not see why a similar doc-
trine should not be applied to the case of a
contract of service, and as the doctrine of
equity is based upon the theory that the
court will not allow a fraud on the part of
one party to a contract on faith of which the
other party has altered his position, I do not
see why a similar doctrine should not com-
prehend a contract of service. At the same
time I feel that doctrines of this nature are
not to be unwarrantably extended, and that
we ought not to go further than the decisions
of courts of equity as to the principles of re-
EFFECT OF NON-COMPLIANCE WITH STATUTE.
217
lief, and as to the Instances to which the
doctrine of part porformance is to be ap-
plied. Therefore, as we cannot clearly see
that the equitable doctrine of part perform-
ance ought to be extonded to contracts of
service, I think that we ought to keep with-
in the limits observed by the court of chan-
cery before the passing of the judicature acts
of 1873 and 1875.
Rule discharged.
218
STATUTE OF FRAUDS.
.'^
V J} BAKER et aL v. LAUTERBAC
\0 (11 Atl. 703. 68 Md. 64.)
Coart of Appeals of Maryland. Dec. 13,^8S7.
Appeal from circuit court, Howard coun-
ty.
Catherine Lauterback, administratrix of
John Lauterback, plaintiff, sued Baker Bros.
& Co., defendants, to recover balance due
for services of deceased. Judgment was
rendered for plaintiff for $160, and defend-
ants appealed.
John T. Mason, W. A Hammond, and E.
C. Williams, for appellants. T. C. Weeks,
R. D. Johnson, and W. Reynolds, for ap-
pellee,
BRYAN, J. John Lauterback entered the
service of Baker Bros. & Co. on the first
day of March, ISSO, and remained in their em-
ployment until August, 1S83, when he was
killed by an accident. He was 20 years of
age on the twenty-ninth of March, ISSO.
His father died some years previously to
his entering this service. But it_ appears
that his mother signed a written contract
with Baker Bros. & Co., by which she un-
dertook to bind him to them as an appren-
tice for five years to learn the art and trade
of glass-blowing. The contract stipulated
t^aTT^if the Hboy was considered competent
to learn and be instructed, he was to re-
ceive for his services one-half of the rate
of wages paid journeymen for similar work
for the first four ye^rs, and two-thirds of
such wages for the fifth year; and it was
further stipulated that $200 should be held
by the employers out of his wages as se-
curity, to be paid at the expiration of the term
of the apprenticeship, or forfeited if he should
leave their employment for any cause whatev-
er before the expiration of the term of Sv,e
^ears._ All the wages were paid with the
exception of $200, and the present suit was
brought by the administratrix of the deceased
apprentice against Baker Bros. & Co. to re-
cover this amoimt. The verdict was for $1G0.
The contract was not signed by the employ-
ers, but only by the mother of the boy. In
the view which we have taken of the case,
this circumstance is immaterial. A father
may bind out his son as an apprentice until
he reaches the age of 21 years, provided he
pursues the mode authorized by the twentietli
section of article 6 of the Code; Ijut a- con-
tract of apprenticeship executed by the moth-
er Ls simply void. The boy would not be
obhged to serve according to the terms of such
an instrument; nor would the employer, by
force of it, acquire any control over him. He
did, however, serve for three years and five
months, with a full knowledge of the terms
of this contract He knew, therefore, the rate
of compensation which his employers expected
to pay for his work; it would not then be just
that he should receive more. The law would
Imply a contract on the part of his employ-
ers to pay him what his services were rea-
sonably worth. It would not, however, imply
a contract on the part of the boy to serve for
five years, nor to pay a forfeiture in case he
should leave the service before the expiration
of that time. A contract of this kind is re-
quired, by the fourth section of the statute
of frauds, to be in writing. The terms of the
statute are that no action shall be brought
"upon any agreement that is not to be per-
formed within the space of one year from the
making thereof, unless the agreement upon
which such action shall be brought, or some
memorandum or note thereof, shall be in writ-
ing, and signed by the party to be charged
therewith, or by sonTe person tlu'idu nEo bv him
lawfully authorized." If, therefore, the boy
"had in express terms made a verbal contract
to serve for five years, it could not have been
enforced against him by the other party. And
if, after serving a portion of the time, he
should refuse to caiTy out his contract, and
bring suit to recover the value of the serv-
ices rendered, the verbal contract would not
avail the employer as a defense. It could
not be set up as a contract at all; the breadi
of it would impose no liability which the law
could enforce; the obligation to perform it
could not be maintained in an action at law.
In Browne on the Statute of Frauds the law
is thus stated: "As a general proposition, how-
ever, we shall hereafter see that a verbal con-
tract within the statute cannot be enforced in
any way, directly or indirectly, whether by
action or in defense." Section 122. "The su-
preme court of Connecticut, in a case where
the plaintiff, by oral agreement, bound him-
self to serve the defendant for a term longer
than one year, for a consideration to be paid
at the end of that time, and having repudiated'
the contract, and quitted his employer at the
end of six months, brought his action to re-
cover the value of the services so rendered,
held that he could recover, and that the de-
fendant could not set up the existing ver-
bal agreement to defeat his claim." Section
122a. "The clear rule of law is that such
a contract cannot be made the ground of de-
fense any more than of a demand. The obli-
gation of the plaintiff to perform it is no more
available to the defendant in the former case
than the obligation of the defendant to per-
form it would be to the plaintiff in the latter
case." Section 131. It appears to us, there-
fore, upon the uncontested facts in the case,
that the plaintiff is entitled to recover the full
value of the boy's services, less such sums
as have been paid. It seems to be unneces-
sary to notice in detail the rulings of the court
below. It is suflicient to say that they accord
with the views which we have expressed.
It must be observed that, although contracts
within the statute of frauds are void unless
they are in writing, yet the voluntary per-
formance of them is in no respect unlawful.
If services be rendered in pursuance -of a,
contract of this kind by one party, and be. ac-
cepted by the other, they must be compen-
sated. EUicott v. Peterson's Ex'rs, 4 Md. 491.
EFFECT OF NON-COMPLIANCE WITU STATUTE.
219
And if an action be brought against a defend-
ant for acts done, which were in performance
of such a contract, or authorized by its terms,
no recovery can be had against him. Cane v.
Gough, 4 Md. 333; Browne, St. Frauds, § 133.
It is said that the contract operates as a li-
cense to do these acts, although it cannot be
set up as conferring any right of action. As
said by Lord Ablnger in Carrington v. Roots,
2 Mees. & W. 248, in speaiving of a case with-
in the statute: "I tliink the contract cannot
be available as a contract at all, unless an ac-
tion can be brought upon it. What is done
undgr the contract may admit of apologj' or ex-
cuse, diver.so intuitu, if I may so speak; as
where, under a contract by parol, the party is
put in possession, that possession may be set
up as an excuse for a trespass alleged to have
been committed by him. * • •" The agree-
ment might have been available in answer to
a trespass by setting up a license; not setting
up the contract itself as a contract, but only
showing matter of excuse for the trespass.
Judgment affirmed.
220
CONSIDERATION.
*\
HAMER V. SIDWAY.
(27 N. E. 256, 124 N. Y. 538.)
Court of Appeals of New York, Second Divi-
sion. April 14, 1891.
Appeal from an order of the greneral
term of the supreme court in the fourth
judicial department, reversing a judgment
entered on the decision of the court at spe-
cial term in the county clerk's office of
Chemuns county on the 1st day of Octo-
ber, 18S9. The plaintiff presented a claim
to the executor of William E. Story, 8r.,
for |.5,000 and interest from the 6th day of
February, 1S75. She acquired it through
several mesne assignments from \A'illiam
E. Story, 2d. The claim being rejected by
the executor, this action v^-as brought. It
appears that William E. Story, Sr., was
the uncle of William E. Story, 2d; that at
the celebration of the golden wedding of
Samuel Storv and wnfe, fatherand mother
of William E. Story, Sr., on the 20th day
of March, 1869. in the presence of the fami-
ly and invited guests, he promised his
nephew that if he would refrain from
drinking, using tobacco, swearing, and
plaving cards or billiards for money until
he became 21 years of age, he would pay
him the sum of §5,000. The nephew assent-
ed thereto, and fully performed the condi-
tions inducing the promise. When the
nephew arrived at the age of 21 years, and
on the :51st day of January, 1875, he wrote
to his uncle, informing him that he had
performed his part of the agreement, and
had thereby become entitled to the sum of
$5,000. The uncle received the letter, and
a few days later, and on the 6th day of
February, he wrote and tnailed to his
nephew the following letter: "Buffalo,
Feb. 6, 1S75. W. E. Story, .7r.— Dear
Nephew: Your letter of the ;51st ult. came
to hand all right, saying that you had
lived up to theprtmiise made to me several
years ago. I have no doubt but you
have, for which you shall have five thou-
sand dollars, as I promised you. I had
the money in the bank the day you was
twenty-one years old that I intend for
you, and you shall have the money cer-
tain. Now, Willie, I do not intend to in-
terfere with this money in any way till I
think you are capable of taking care of it,
and the sooner that time comes the better
it will please me. I would hate very
much to have you start out in some ad-
venture that you thought all right and
lo.se this money in one year. The first live
thousand dollars that I got together cost
me a heap of hard work. You would
hardl3' believe me when I tell you that to
obtain this I shoved a jack-plane many a
day, butchered three or four years, then
came to this city, and, after three months'
perseverance, I obtained a situation in a
grocery store. I opened this store early,
closed late, slept in the fourth story of
the building in a room 80 by 40 feet, and
not a human being in the building but my-
self. All this I done to live as cheap as
I could to save something. I don't want
you to take up with this kind of fare. 1
was here in the cholera season of '49 and
'52, and the deaths averaged 80 to 125
daily, and plenty of small-pox. I wanted
to go home, but Mr. Fisk, the gentleman
I was working for, told me, if 1 left them,
after it got healthy he probably would
not want me. I stayed. All the money
1 have saved I know just how I got it.
It did not come to me in any mysterious
way, and the reason I speak of this is that
money got in this way stops longer with
a fellow that gets it with hard knocks
than it does when he finds it. Willie, you
are twenty-one, and you have many a
thing to learn yet. This money you have
earned much easier than I did, besides ac-
quiring good habits at the same time, and
you are quite welcome to the money.
Hope you will make good use of it. 1 was
ten long years getting this together after
T was your age. Now, hoping thi^ will be
satisfactory, I stop. One thing more.
Twenty-one years ago I bought you 15
sheep. These sheep were put out to double
every four years. I kept track of them
the first eight years. I have not heard
much about them since. Your father and
grandfather promised me that they would
look after them till you were of age. Ha ve
they done so? I hope they have. By this
time you have between five and six hun-
dred sheep, worth a nice little income this
spring. Willie, I have said much more
than I expected to. Hope you can make
out what I have written. To-day is the
seventeenth day that I have not been out
of my room, and have had the doctor as
many days. Am a little better to day.
Think I will get out next week. You need
not mention to father, as he always wor-
ries about small matters. Truly yours,
W'. E. Stoky. p. S. You can consider this
money oninterest." The nephew received
the letter, and thereafter consented that
the money should remain with his uncle in
accordance with the terms and conditions
of the letter. The uncle died on the 29th
day of January, 1887, without having paid
over to his nephew any portion of the
said $5,000 and interest.
H. J. Swift, for appellaut. Adelbert
Moot, for resi)ondent.
PARKER, J., (after stating the facts as
above.) The question which provttkfd
the most discui-sion l»y counsel on this ap-
peal, and which lies at the foundation of
plaintiff's asserted right of recovery, is
whether bv virtue of a contract defend-
ant's testator, William E. Story, became
indebted to his nephew, William E. Story,
2d, on his twenty-first birthday in the
sum of $5,000. The trial court found as a
fact that "on the 20th day of March, 1869,
* * * William E. Story agreed to and
rtMth William E. Story, 2d, that if he
would refrain from drinking liquor using
tobacco, swearing, and playing cards or
billiards for money until should become
twenty-one years of age, then he, the said
William E. Story, would at that time pay
him, the said William E. Story, 2d, the
sum of .$5,000 for such refraining, to which
the said William E. Story, 2d, agreed,
and that he " in all things fully performed
his part of said agreement." The defend-
ant contends that the contract was with-
out consideration to support it. and there-
fore invalid. He asserts that the prom-
DEFINED.
221
isee, by refraining from the use of liquor
find tohacco, wuh not luirnied, l)ut bene-
fited; that tiiat whicli he did was best for
him to do, independently of his uncle's
promise, — and insists that it follows that,
unless the promisor was benefited, the
contract was without consideration, — a
contention whicli, if well founded, would
seem to leave open for controversy' in
many cases whether that which the
I)romisee did or omitted to do was in fact
of such benefit to him as to leave no con-
sideration to 8uj)port the enforcement of
the promisor's agreement. Such a rule
could not be tolerated, and is without
foundation in the law. The exchequer
chamber in 1S75 defined "consideration"
as follows: "A valuable consideration, in
the sense of the law, may consist either in
some riffht, interest, profit, or l)cnefit ac-
cruin{2: to the one tnirty, or some forbear-
ance, detriment, loss, or responsibility
given, Buffered, or undertaken l)y the oth-
er. " Courts "will not asic whether the
thing which form.s the consideration does
in fact benefit the promisee or a third par-
tj', or is of any substantial value to any
one. It is enough that something is
promised, done, forborne, or suffered by
the party to whom the promise is mad(!
as consideration for the promise made to
liim." Anson, Cont. (')8. "In general a
waiver of any legal right at the request of
another party is a sufficient cojisidera-
tion for a promise." Pars. Cont. *444.
"Any damage, oi" suspension, or forbear-
ance of a right will be suHlcient to sustain
a promise." 2 Kent, Comm. (12th Ed.)
*4(')'y. Pollock in his work on Contracts,
([•age 1()G,) after citing the definition giv-
en by the exchequer chamber, already
quoted, says: "The second branch of this
judicial description is really the most im-
portant one. 'Consideration ' means not
so much that one party is profiting as
that the other abandons some legal
right in the present, or limitshis legal free-
dom of action in the future, as an induce-
ment for the promise of the first. " Now,
applying this rule to the facts before us,
the promisee used tobacco, occasionally
drank liquor, and he had a legal right to
do so. That right he abandoned for a pe-
riod of years upon the strength of the
promise of the testator that for such for-
bearance he would give him .f.".,OU(i. We
need not speculate on the effort wiiich
may have been required to give up the use
of those stimulants. It is suHicient that
he restricted his lawful freedom of action
within certain prescribed limits upoTi the
faith of liis uncle's agreement, and now.
having fuU^- performed the conditions im-
I»osed, it is of no moment whether such
I)erformance actually proved a benefit to
the promisor, and the court will not in-
quire into it; but, were it a proper sub-
ject of iiHjuiry, we see nothing in this rec-
ord that would pertnit a determination
that the uncle was not benefited in a legal
sense. Few cases liave been found wliiili
may be said to be precisely in point, but
such as l)ave been, su|)port the position
we have taken. In Sliadwell v. Shad well,
9 C. B. (N. S. ) 159, an uncle wrote to his
nephew as follows: "ily dear Lancey : I
am so glad to hear of your intended
marriage with Ellen Nicholl, and, as I
promised to assist you at starting, I am
happy to tell you that I will pay you 150
[lounds yearly during my life and until
your annual income derived from y(Hir
pr(jfessi(;n of a chancery barrister shai!
amount to fJOiJ guineas, of which your own
admission will be the only evidence that I
shall receive or require. Your affectionate
uncle, CuA HI, Es Suauwei.i.. " It was held
that the promise was binding, and made
upon good C(insideration. In Lakota v.
Newton, (an unrei)orted case in the supe-
ricjr court of Worcester, Mass..) the com-
plaint averrefl defendant's i)romise that
"if you [meaning the plaintiff] will leave
off drinking for a year I will give you
$100, " plaintiff's assent thereto, perform-
ance of the condition by him, and demand-
ed judgment therefor. Defendant de-
murred, on the ground, among others,
that the plaintiff's declaration did not al
lege a valid and su/licient consideration
for the agreement of the defendant. The
demurrer was overruled. In Talbott v.
Stemmons, 12 S. \V. Rep. 297, (a Ken-
tucky case, not yet officially reported.)
the step-grandmother of the plaintiff
made with him the following agreement:
"I do i)romise and bind myself to give mv
grandson Albert 11. Talbott fioOO at my
death if he will never take another cliew
of tobacco or smoke another cigar during
my life, from this date up to my death ;
and if he breaks this pledge he is to refund
double the amount to his mother." The
executor of Mrs. Stemmons demurred to
the complaint on the ground that the
agreement was not based on a sufficient
consideration. The demurrer was sus-
tained, and an apjjcal taken therefrom
to the court of appeals, where the de-
cision of the court below was reversed.
In the opinion of the court it is said that
"the right to use and enjoy the use of to-
bacco was a right that belonged to the
plaintiff, and not forbidden by law. The
abandonment of its use maj- have saved
him money, or contributed to his iiealth ;
nevertheless, the surrender of that right
caused the promise, and, having the riglit
to contract with reference to the subje.-t-
matter, the abandonment of the use was
a sulficient consideration to uphold the
promise." Abstinence from the use of in-
toxicating liquors was held to furnish a
good consideration for a promissorv note
in Lindell v. Hokes, ()0 Mo. 249. The cases
cited by the defendant on chis question
are not in point. In Malloi-v v. Uiilett, 21
N. Y. 412; Belknap v. liender, 75 N. Y. 44(5;
and Berry v Brown, 107 N. Y. 059, 14 N.
E. Rep. 2^9, — the promise was in contra-
vention of that provision of the statute of
frauds which declares void all i)romises to
answer for the debts of third persons unless
reduced to writing. In Beaumont v.
Reeve, Shir. Lead. Cas. 7, and Porter-
field V. Butler, 47 .Miss. I(i5, the question
was whether a moral obligation furnishes
sufficient consideration to uphold a subse-
(juent expr(>ss promise. In Uuvoll v. Wil-
son, 9 Barb. 4S7, and Wilbur v. Warren,
104 N. Y. 192, 10 N. E. Rep. 203, the propo
sition involved was whether an executory
covenant against incumbrances in a deed
given in consideration of natural love and
222
CONSIDERATION.
affecHon coukl be enforced. In Vandei-bilt
V. Schreyer. 91 N Y. 392, the plaintiff con-
tracted Witli defendant to build a house,
ajri'eeing to accept in part payment there-
for a specific bond and mortgage. After-
wards he refused to finish his contract un-
less the defendant would guaranty its
payment, which was done. It was held
that the guaranty could not be enforced
for want of ccmsideration ; for in building
the house the plaintiff only did that
which he had contracted to do. And in
Robinson v. Jewett, 11(5 N. Y. 40, 22 N. E.
Rep. 224, the court simply held that "the
performance of an act which the party is
under a legal obligation to perform can-
not constitute a consideration for a new
contract." It will be observed that the
agreement which we have been consider-
ing was within the condemnation of the
statute of frauds, because not to be per-
formed within a year, and not in writing.
But this defense the promisorcould waive,
and his letter and oral statements subse-
quent to the date of final performance on
the part of the promisee must be held to
amount to a waiver. Were it otherwise,
the statute could not now be invoked in
aid of the defendant. It does not appear
on the face of the complaint that the
agreement is one prohibited by the stat-
ute of frauds, and therefore such defense
could not be made available unle^ss set up
in the answer. Porter v. Wormser, 94 N.
Y. 431, 450. This was not done.
In further consideration of the questions
presented, then, it must be deemed estab-
lislied for the purposes of this appeal that
on the 31st day of January, 1875, defend-
ant's testator was indebted to William E.
Story, 2d, in the sura of |5,000; and, if this
action were founded on that contract, it
would be barred by the statute of limita-
tions, which has been pleaded, but on
that date the nephew wrote to his uncle
as follows: "Dear Uncle: I am 21 years
old to-day, and I am now my own boss;
and I believe, according to agreement,
that there is due me $5()00. I have lived
up to the contract to the letter in every
sense of the word. " A few days later, and
on February 6th, the uncle replied, and, so
far as it is material to this controversy,
the reply is as follows: "Dear Nephew;
Your letter of the 31st ult. came to hand
all right, saying that you had lived up to
the promise made to me several years ago.
I have no doubt but you have, for which
you shall have $5,000, as I promised you.
I had the money in the bank the day you
was 21 years old that I intend for you,
and you shall have the money certain.
Now, Willie, I don't intend to interfere
with this money in any way until I think
you are capable of taking care of it, and
the sooner that time comes the better it
will please me. 1 would hate very much
to have you start out in some adventure
that you'thought all right, and lose this
money in one year. * * * This money
you have earned much easier than I did,
besides acquiring good habits at the same
time; and you are quite welcome to the
money. Hope you will make good use of
it. * • » W. E. Stouy. p. S. You can
consider this money on interest." The
trial court found as a fact that "said letter
was received by said William E. Story, 2d,
who thereafter consented that said money
should remain with the said William E.
Story in accordance with the terms and
conditions of said letter." And further,
"that afterwards, on the 1st day of March,
1S77, with the knowledge and consent of
his said uncle, he duly sold, transferred,
and assigned all his right, title, and intei'-
est in and to said sum of $5,000 to his wife,
Libbie H.Story, who thereafter duly sold,
transferred, and assigned the same to the
plaintiff in this action." We must now
consider the effect of the letter and the
nephew's assent thereto. W^ere the rela-
tions of the parties thereafter that of
debtor and creditor simply, or that of
trustee and cestui que trust? If the for-
mer, then this action is not maintainable,
because barred by lapse of time. If the
latter, the result must be otherwise. No
particular expressions are necessary to
create a trust. Any language clearly
showing the settler's intention is sufficient
if the property and disposition of it are
definitely stated. Lewin, Trusts, 55. A
person in the legal possession of money or
property acknowledging a trust with the
as.sentof the cestui que trust becomes from
thattime a trustee if the acknowledgment
be founded on a valuable consideration.
His antecedent relation to the subject,
whatever it may have been, no longer con-
trols. 2 Story, Eq. Jur., § 972. If before a
declaration of trust a party be a mere
debtor, a subsequent agreement recogniz-
ing the fund as already in his hands, and
stipulating for its investment on the cred-
itor's account, will have the effect to cre-
ate a trust. Day v. Roth, 18 N. Y. 448. It
is essential that the letter, interpreted in
the light of surrounding circumstances,
must show an intention on the part of the
uncle to become a trustee before he will be
held to have become such; but in an effort
to ascertain the construction which
should be given to it we are also to ob-
serve the rule that the language of the
promisor is to be interpreted in the sense
in which he had reason to suppose it was
understood by the promisee. White v.
Hoyt, 73 N. Y. 505, 511. At the time the
uncle wrote the letter he was indebted to
ills nephew in the sum of $5,000, and pay-
ment had been requested. The uncle, rec-
ognizing the indebtedness, wrote the neph-
ew that he would keep the money until he
deemed him capal)le of taking care of it.
He did not say, "I wiU pay you at some
other time," or use language that would
indicate that the relation of debtor and
creditor would continue. On the con-
trary, his language indicated that he had
set apart the money the nephew had
"earned, " for him, so that when he should
be capable of taking care of it he should
receive it with interest. He said: "I had
the money in the bank the day you were
21 years old that I intend for you, and
you shaU have the money certain." That
he had set apart the money is further evi-
denced by the next sentence: "Now, Wil-
lie, I don't intend to interfere with this
money in any way until I think you are
capable of taking care of it." Certainly
the uncle must have intended that his
nephew should understand that the prom-
DEFINED.
223
iwe not "to iiitcifere with this mone^'" re-
ferred to tlie money in tlie bank, which he
declared was not only there when the
nephew became 21 years old. but was in-
tended for him. True, he did not use the
word "trust, "or state that the money
was deposited in the name of William E.
.Story, L'd, or in his own name in trust for
liim, but the lanjifuage used must have
been intended to assure the nephew that
his money had been set apart for him, to
be kept without interference until he
should be capable of taking care of it, for
the uncle said in substance and in effect:
"This money you have earned much easier
than I did. • • • You are quite wel-
come to. I had it in the bank the day vou
were 21 years old, and don't intend to in-
terfere with it in any way until I think
you are capable of taking care of It; and
the sooner that time comes the better it
will please me." In this dechiration there
is not lacking a single element necessary
for the creation of a valid trust, and to
that declaration the nephew assented.
The learned judge who wrote the opinion
of the general term seems to have taken
the view tliat the trust was executed dur-
ing the life-time of deferid;int's testator by
payment to the ne[)hevv, but, as it does
not appear from the order that the judg-
ment waft reversed on the facts, we must
assume the facts to be as found by the
trial court, and those facts support its
judgment. The order appealed from
Khoiild be reversed, and the judgment of
the special term affirmed, with co.sts pay-
able out of the estate. All concur.
Is
224
/
CONSIDERATION.
y
A
RANN et al. v. HUGHES. \A 'n
' rk (7 Term R. 350, note.) I \ H
The declai-ation stated that on the 11th of
June, 1764. divers disputes had arisen be-
tween the plaintiffs' testator and the defend-
ant's intestate, which they referred to arbi-
tration; that the arbitrator awarded that
the defendant's intestate should pay to the
plaintiffs' testator £983. That the defend-
ant's intestate afterwards died possessed of
effects sufficient to pay that sum; that ad-
ministi-ation was granted to the defendant;
that Mary Hughes died, having appointed
the plaintiffs her executors; that at the time
of her death the said sum of £983 was un-
paid, "by reason of which premises the de-
fendant as administratrix became liable to
pay to the plaintiffs as executors the said
sum, and being so liable she in consideration
thereof undertook and promised to pay &c."
The defendant pleaded non assumpsit; plene
administravit; and plene administravit, ex-
cept as to certain goods &c. which were not
sufficient to pay an outstanding bond debt
of the intestate's therein set forth &c. The
replication took issue on all these pleas.
Verdict for the plaintiff on the first issue,
and for the defendant on the two last; and
on the first a general judgment was entered
in B. R. against the defendant de bonis pro-
priis. This judgment was reversed in the
exchequer-chamber; and a writ of error
was afterwards brought in the house of
lords, where after argument the following
question was proposed to the judges by the
lord chancellor, "Whether sufficient matter
appeared upon the declaration to warrant
after verdict the judgment against the de-
fendant in error in her personal capacity;"
upon which the Lord Chief Baron Skynner
delivered the opinion ,of the judges to this
effect— It is undoubtedly true that every
man is by the law of natxire bound to fulfil
his engagements. It is equally true that the
law of this country supplies no means, nor
affords any remedy, to compel the perform-
ance of an agreement made without suffi-
cient consideration; such agreement is nu-
dum pactum ex quo non oritur actio, and
whatsoever may be the sense of this maxim
In the civil law, it is in the last-mentioned
sense only that it is to be imderstood in our
law. The declaration states that the de-
fendant being indebted as administratrix
promised to pay when requested, and the
judgment is against the defendant generally.
The being indebted is of itself a sufficient
consideration to ground a promi.se, but the
promise must be coextensive with the con-
Eideration unless some particular considera-
tion of fact can be found here to warrant the
extension of it against the defendant in her
own capacity. If a person indebted in one
right in consideration of forbearance for a
particular time promise to pay in another
right, this convenience will be a sufficient
consideration to warrant an action against
him or her in the latter right: but here no
sufficient consideration occurs to support this
demand against her in her personal capac-
ity; for she derives no advantage or con-
venience from the promise here made. For
if I promise generally to pay upon request
what I was liable to pay upon request in
another right, I derive no advantage or con-
venience from this promise, and therefore
there is not sufficient consideration for it
But it is said that if this promise is in writ-
ing that takes away the necessity of a con-
sideration and obviates the objection of nu-
dum pactum, for that cannot be where the
promise is put in writing; and that after
verdict, if it were necessary to support the
promise that It should be in writing, it wiU
after verdict be presumed that it was in
writing: and this last is certainly true; but
that there cannot be nudum pactum in writ-
ing, whatever may be the rule of the civil
law, there is certainly noue such in the law
of England. His lordship observed upon
the doctrine of nudum pactum delivered by
Mr. J. WUmot in the case of PUlans v. Van
Mierop and Hopkins, 3 Burrows, 1663, that
he contradicted himself, and was also con-
tradicted by Vinnius in his Comment on Jus-
tinian.
All contracts are by the laws of England
distinguished into agreements by specialty,
and agreements by parol; nor is there any
such third class as some of the counsel have
endeavoured to maintain, as contracts in
writing. If they be merely written and not
specialties, they are parol, and a considera-
tion must be proved. But it is said that the
statute of frauds has taken away the neces-
sity of any consideration in this case; the
statute of frauds was made for the relief of
personal representatives and others, and
did not intend to charge them further than
by common law they were chargeable. His
lordship here read those sections of that
statute which relate to the present subject.
He observed that the words were merely
negative, and that executors and adminis-
trators should not be liable out of their own
estates, maless the agreement upon which
the action was brought or some memoran-
dum thereof was in writing and signed by
the party. But this docs not prove that the
agreement was still not liable to be tried
and judged of as all other agreements mere-
ly in writing are by the common law, and
does not prove the converse of the proposi-
tion that when in writing the party must be
at all events liable. He here observed upon
the case of Pillans v. Van Mierop in Bur-
rows, and the cast of Losh v. Williamson,
Mich. 16 Geo. HI. in B. R.; and so far as
these cases went on the doctrine of nudum
pactum, he seemed to intimate that they
were erroneous. He said that all his broth-
ers concurred with him that in this case
there was not a sufficient consideration to
NECESSITY.
225
support this demand as a personal demand
afxainst the defendant, and that its being
now supposed to have been in writing malies
no diffL'rence. The consequence of which is
nOPK.SEL. CAS. CONT. — 15
that the question put to ufl must be answered
in the negative.
And the judgment In the exchequer-chana-
ber was aflBrmed.
226
COKSIDEKATION.
HAIGH et al. v. BROOKS.*
(10 AdoL & E. 309.)
Trinity Term. June 6, 1S39.
W. W. Follett, for plaintifiL J. Campbell,
Atty. Gen., contra.
LORD DENMAN, C. J. Tliis action was
brought upon an assumpsit to see certain ae-
ceplances paid, in consideration of the plain-
tiffs giving up a guarantee of £10,000, due
from the acceptor to the plaintiffs. Plea, that
the guarantee was for the debt of another,
and that there was no writing wherein the
consideration appeared, signed by the defend-
ant, and so the giving it up was no good con-
sideration for the promise. Demurrer, stat-
ing for cause that the plea is bad, because the
consideration was executed, whether the
guarantee were binding in law or not The
form of the guarantee was set out in the plea.
"In consideration of your being in advance
to Messrs. John Lees and Sons, in the sum of
£10,000, for the purchase of cotton, I do here-
by give you my guarantee for that amo^mt,
(say £10,000,) on their behalf. John Brooks."
It was argued for the defendant, that this
guarantee is of no force, because the fact of.
the plaintiffs being already in advance to
Ijees could form no consideration for the de-
fendant's promise to guarantee to the plain-
tiffs the payment of Lees' acceptances. In
the first place, this is by no means clear.
That "being in advance" must necessarily
mean to assert that he was in advance at
the time of giving the guarantee, is an asser-
tion open to argument. It may, possibly,
have been intended as prospective. If the
1 Irrelevant parts omitted.
phrase had been "in consideration of your
becoming in advance," or, "on condition of
your being in advance," such would have
been the clear import. As it is, nobody can
doubt that the defendant tooli a great inter-
est in the affairs of Messrs, Lees, or believe
that the plaintiffs had not come under the
advance mentioned at the defendant's re-
quest Here is then sufficient doubt to make
it worth the defendant's while to possess him-
self of the guarantee; and, if that be so, we
have no concern with the adequacy or inade-
quacy of the price paid or promised for it.
But we are by no means prepai*ed to say
that any circumstances short of the imputa-
tion of fraud in fact, could entitle us to hold
that a party was not bound by a promise
made upon any consideration which could
be valuable; while of its being so the promise
by which it was obtained from the holder of
it must always afford some proof.
Here, whether or not the guarantee could
have been available within the doctrine of
Wain V. Warlters, 5 East, 10, the plaintiffs
were induced by the defendant's promise to
part with something which they might have
kept, and the defendant obtained what he de-
sired by means of that promise. Both being
free and able to judge for themselves, how
can the defendant be justified in breaking
this promise, by discovering afterwards that
the thing in consideration of which he gave
it did not possess that value which he sup-
posed to belong to it? It cannot be ascer-
tained that that value was what he most re-
garded. He may have had other objects and
motives; and of their weight he was the only
judge. We, therefore, think the plea bad:
and the demurrer must prevail
Judgment for the plaintiffs.
ADEQUACY.
227
JUDY V. LOUDERMAN.
(29 N. E. 181, 48 Ohio St 502.)
Supreme Coiirt of Ohio. Nov. 17. 1S91.
Error to circuit court, Fa\'fttto county.
Action by Ileury .ludy a^ainKt Natlifui
Loudernian, executor of Henry Louder-
man, deceuHed. to recover on a written
agreement made by deceased. I'lain tiff's
demurrer to the answer beinp: overruled,
lie brin{?8 error. Reversed.
'I'iie other facts fully aiipear in the fol-
lowinjr statement by DICKMAN, .1. :
The orifrinal action was commenced by
Henry .ludj', the plaintiff in error, aj^ainst
the defendant in error, Nathan Louder-
man, executor of the last will and testa-
ment of Henry Louderman, deceased.
The followinj.?is aco[)y of the petition filed
in the court of common i)le.iH of Faj-ette
county. "Plaintiff says: On the .5th day
• )f October, 18S2, he was the owner and
holder of a certain promissory note, signed
by one Jesse Louderman, for the sum t)f
$2G9.52, dated January 18, 1873, due six
months after date, with eif:;ht per cent,
interest from date. On said ,">thdaj-of Oc-
tober, 18S2, he turned overand surrendered
to said Henry Louderman, then in full life,
said promissory note; and in consideration
therefor said Henry Louderman executed
and delivered to plaintiff an agreement of
which the following is a copy, viz. : 'New
Holland, O., Oct. 5, 18S2. Inconsideration
of the following described note oS my son
Jesse Louderman, being turned over to
me by Henry Judy, the owner and holder
thereof, this day,! agree to pay tcjthe said
Henry Judy, from my personal estate at
my decease, the sum of $209.52. to be paid
by my executor or administrator, as the
case may be; and I hereby make this a
charge and advancement to the heiis of
ni3' son, the said Jesse Lo.uderman. The
following is a copy of said note: "$20!). 52.
Six months after date I promise to i)ay
to Henry Judy or order the just and full
sum of two hundred and sixty-niiunioUars
and fifty-two cents, for value received this
18th day of January, A. D. ]s7;i, bearing
eight per cent, interest from date. Jkssk
LouDEHMAN." In Witness whercof I have
hereunto set mv hand and seal this 5th
day of October, A. D. 1SS2. Hkmjy Lou-
derman, [Seal.] Signed and sealed in our
presence this 5th day of October, lss2.
Witness: John LornicuMAN. Natha.v
Louderman.' Plaintiff further says that
the said Henry Louderman died on the
day of ,188—, and that thesaid
Nathan Jjouderman is his duly appointed
and qualified executor. That on the ■
day of , 1SS5. he presented to the said
Nathan Louderman, as such executor, the
said claim of this plaintiff, on said agree-
ment of Henry Louderman duly certified
as required by law, and asked to have the
same allowed as a valid claim against
the estate of said Henry Loudernian, de-
ceased ; but the said Nathan Louderman,
as executor, refused to allow the same, anil
on the 4th day of April, A. D. 1SS5. indorsed
thereon his rejection thereof. There is due
to plaintiff by reason of the premises, from
the estate of said Henry Loucl(>rnian, de-
ceased, the sum of ?L(;!).52. with interest at
six per cent, from April 4, 1885. Plaintiff
therefore asks Judgment against said de-
ft ndant that his said claim be allowed and
I)aid out of the estate of said Henry I^ou-
dertnan, deceased. " To this petition there
was a general demurrer, which was over-
rulr'd.
The defendant thereup(;n filed the folbjw-
ing answer: "And now comes the defend-
ant, and, answerinir the plaintiff's petition,
says: Tliat for many years pri(jr to the
date of said pretended written obligalidu
set forth in the petition the said .Jesse
Louderman had been dead. That his es-
tate was insolvent, and had, long befijre
the making of said jjretended agreement,
been fully settled ; and said note of said
.lesse Loudernian was on said 5th of Oc-
tober. 1SS2, and for years before had been,
wholly worthless, all of which was then
fully known to said f)laintiff. That there
was no ])erson who was liable to be or
could have been sued thereon or against
whom a judgment could have been ren-
dered thereon, which plaintiff then well
knew. 1 hat said pretended written olili-
gation w,i.-> not an instrument required by
the laws of Ohio to be sealed. That the
alleged and pretended seal attached there-
to was simply a pen scrawl, which the de-
fendant denies was a seal, or that the said
pretended written obligation was a sealed
instrument. That said Henry Louderman
was in no way connected with or liable
in an3' way ou said promissory note of
said Jesse Louderman, either morally,
legally, or equitably. That said pretend-
ed written obligation was and is wholly
without consideration, and created no ob-
ligation or liabilitj' on said Henry Lou-
derman or his estate. The defendant de-
nies any indebtedness or liability of said
estate to pay the same. The defendant,
further answering, says: That there is
no personal property of said estate which
can be applied to the payment of said
written oliligation. That the just and
legal debts of said estate are more than
all the personal i)roperty. That all the
real estate of deceased was specifically de-
vised, and there is no estate or property
belonging to said estate with which to
pay said written obligation, if it should be
held to be a valid instrument. Wherefore
defendant asks to go hence and recover
his costs. "
There was a general demurrer to this
answer", which was sustained, and the de-
fendant excepted. The defendant having
failed to make any amendment to his an-
swer, it was adjudged that the plaintiff,
Henry .ludy, recover of the defendant the
sum of $278 and costs, to be levied upon
the property of the estate coiiiing into his
hands as such executor. Tliecircuit court,
on petition in error, held that the court of
common pleas erred in sust.-iining the de-
murrer to the defendant's answer, reversed
the judgment of that court, and remanded
the cause for further ])roceedings. Tore-
verse the judgment of the circuit court the
present petition in error is filed.
IJidy S- Putton, for plaintiff in error.
iJi/ls Gurdiicr, for defendant in error.
DICKMAN, J., (after stating the facts.) If
there was no actual consideration for the
obligation executed and delivered to the
228
CONSIDERATION.
plaintiff iii error, it was competent to
prove the want or failure of such consider-
ation, uotwithstanding a "scrawl seal"
was attached to the instrument. By the
act of February 24, 1S84, (1 Curw. Rev. St.
1:.'4,) it was provided " that, in any action
founded upon any specialty or written con-
tract for the payment of money or deliv-
ery of property, the defendant by special
p'ea. or b3' notice attached to and filed
witii the R-eneral issue, may allege the
want or failure of consideration in the
whole or any part thereof." This act
was repealed' by the act establishing a
Code of Civil Procedure, but secticjn 9H of
the Code, which is continued in section
5071 of the Revised Statutes, provided
that "the defendant may set forth in his
answer as many grounds of defense, coun-
ter-claim, and' set-off as he maj' have,
whether they be such as have been hereto-
foredenomiiiated 'legal' or ' eciuitable,' or
both." As against a strictly legal cause
of action, a defendant, therefore, may now
set up an equitable defense, and there-
by not only bar the plaintiff's action, but
obtain the proper affirmative equitable re-
lief connected with the subject-matter.
And although the common law, in requir-
ing a valuable consideration in order to
render an agreement valid and binding,
declared, in its strictness, that a seal was
cunclusive evidence of such a considera-
tion, yet, in determining the rights of par-
ties upon equitable principles, a seal has
been divested of the apparent sacredness
-uith which it was clothed by the comuKm
law; and equity, looliing rather to reality
than form, does not permit a seal to sup-
ply the place of a real consideration, and,
notwithstanding the seal, will allow the
want or failure of such consideration to
be shown in the enforcement of executory
contracts of every description. In Rich-
ardson v. Bates, 8 Ohio St. 264, it was
said by Sdtliff, J.: "Under thestatute of
February 24, 1834, allowing the failure, or
part failure, of consideration to be given
in evidence, in a suit upon a specialty, the
facts stated in the answer would have
constituted a perfect defense. And the
provision of the Code, allowing a defend-
ant to set forth in his answer equitable as
well as legal grounds of defense, permitted
the same defense to be made in this case;
and therefore the failure of consideration,
stated in the answer, constituted a good
defense. "
Conceding, then, that it was competent
to setup a want or failure of ctjnsidera-
tion as a defense to the original action,
The decisive question in the case before us
is whether the written obligation entered
into by Henry Louderraan was wholly
without consideration, or was not found-
ed upon sufficient consideration to sup-
port the plaintiff's action. It is alleged in
the answer that for many years prior to
the date of the written obligation de-
scribed in the petition .Jesse Louderm.an
had been dead ; that his estate was insolv-
ent, and long before the making of the
obligation had been fully settled ; and
that the note of .Jesse Louderman was, on
the 5th day of October. 1SS2, and for years
before had been, wholly worthless, — all of
which, it is alleged, was then fully known
to the plaintiff. It is evident, however,
that the father did not treat the note of
his son as without value, for he stipu-
lated for the payment to the plaintiff, out
of his personal estate at his decease, of a
sum equal to the full amount called for
by the note. The motive or inducement
operating upon the father seems to have
been so controlling that he was deter-
mined upon paying his son's outstanding
note, though postponing payment until
his decease, when It was to be paid out of
his personal estate, and the sum paid to
be a charge and advancement to the son's
heirs. For aught that appears, there may
have been circumstances, best known to
the father, which in his estimation ren-
dered his possession of the note a valuable
acquisition. And the manifest wish and
design of the father to acquire the owner-
ship and possession of the note obviously
tended to enhance the value of the instru-
ment while in the hands of the plaintiff.
It cannot well be said, we think, that the
chose in action surrendered by the plain-
tiff was valueless, or was inadequate as a
consideratiou for the execution and de-
livery of the written obligation, the ade-
quacy or inadequacy of consideration
having been left to the free exercise of
the judgment of the contracting parties.
It is an elementary principle that the
law will not enter into an inquiry as to
the adequacy of the consideration, but
will leave the parties to judge of that for
themselves. The reason of the rule is suc-
cinctly expressed by Alderson, B., in
Pilkington v. Scott, 15 Mees. & W. 657.
"Before the decision in Hitchcock v.
Coker," 6 Adol. & E. 440, he says, "a no-
tion prevailed that theconsideration must
be adequate to the restraint. That was,
in truth, the law making the bargain, in-
stead of leaving the parties to make it, and
seeing only that it is a reasonable and
proper bargain." It is considered unwise
to interfere with the facility of contract-
ing, and the free exercise of the judgment
and will of the parties, by not allowing
them to be sole judges of the benefits to
be derived from their bargains. "It is,
indeefl, necessary that the consideration
should be of some value; but it is suffi-
cient if it be of slight value only, or even
if it be such as could be valuable to the
party promising." 1 Chit. Cont. (Uth
Amer. Ed.) 20, and cases cited. When a
contract is founded on a transfer of an ar-
ticle of property, the authorities are nu-
merous in illustration of tliedoctrinethat,
in determining adetjuacy of consideration,
the extent of benelit derivable from it is
not considered. A value, however small
or nominal, if given or stipulated for in
good faith, is, in the absence of fraud,
sufficient to support an action on the con-
tract or promise. "Thus, the mere sur-
render and delivery of a letter or other
written document which the promisee has
a right to keep and retain in his posses-
sion is a sufficient consideration for the
promise, although the possession of it
may turn out eventually to be of no value
in a pecuniary point of view, or no bene-
fit may have resulted to the one party,
nor prejudice to the other, from the sur-
render and delivery of the document.," 1
ADEQUACY.
229
Add. Cont. (Sth Ed.) C. In Hni;,'h v.
Brooks. 10 Ado). & i:. :;():>, ;;_'(), {he declara-
tion In assumpsit Htalcd that tlio defend-
ant prcjmised to see certain bills accepted
by L. paid at maturity, in consideration
that the i)laintilT.s, at ills rccincKt, woidd
give up to him a certain j;iiai'anty on l)e-
lialf of L., then held by plaintiffs. It was
averred that the plaintiffs ffave up the
guaranty, l)ut that the defendant did not
perform his promise. There was a plea
tliat tlie j?uai-ii!ity was a promise to an-
swer for the dr i)t of another, and that
there was no aKr('«ment in writing where-
in any sufficient consideration was stated,
according to St. 2!) Car. II. It was lield
that it appeared on the i)leadinji.s tliat the
j»laint:ffs had delivered something to the
defendant, on the faith of liis promise,
Avliicli he at the time considered valuable;
and tliis being so, and no fraud imf)uted,
lie could not afterwards excuse a ijreach
of the promise, by alleging that tlie thing
given up was not of the value ho luid sup-
posed. Lord Drnaia-v, C. J., in delivering
the judgment of the court, said : " We are
Ity no means prepared to say that an^- cir-
cumstances sliort of the imputation of
fraud in fact could entitle us to hold tliat
a party was not l)ound by a promise made
upon any consideration which could be
valuable; while of its being so. the prom-
ise l)y which it Avas obtained from the
holder of it must always afford some
proof. Here, whether or not the guaran-
ty could have been available witliin the
doctrjne of Wain v. Warlters, 5 Ea-^t, 10,
tile plaintiffs were induced by the defend-
ant's ijromise to part witli something
which they might have kept, and the de-
fendant obtained what lie desired by
means of that promise. Both being free
and ai)le to judge for themselves, how can
the defendant be jnstilied in breaking this
promise, on discovering afterwards that
tlie thing in consideration of which he
gave it did not possess that value which
lie supposed to belong to it? It cannot be
ascertained that that value ^-as what he
most rej-arded. He ma\- have had other
objects and motives, and of their weight
he was the only judge."
As alleged in tlie original petition, and
as stated in the written obligation upon
whicli the action is founded, tlie consider-
ation of Henry Louilerman's executing
and delivering the oljJigation was the sur-
rendering and turning over to him of the
note of his son. The facts constituting
the cause of action were admitted by the
demurrer to the petition; and in the an-
swer thereto subsequently tiled there was
no denial of tlie allegations in the petition
as to the consideration of the written
ol)ligation. The answer, in the nature of
a confession and avoidance, avers, sub-
stantially, that the note of Jesse LoudcM'-
man was, at the time it was surrendered,
and for years before had been, uncollect-
ible; and tliat therefore the written obli-
I gation was wholly withoutconsifleratloD,
and created n(j valid claim against Henr^'
Louderman or his estate. If, before and
at the time the note was surrendererl, it
was not collectible out of Jesse Louder-
man's estate, it would notfollow— for rea-
sons before assigned —that the written ob-
ligation was necessarily without con-id-
eraticju. Henry Louderman received fi-o in
the plaintiff that for whirl) he contracted,
and (jbtained that whifli. by the terms (jf
the contract, was evidently deemed by
the contracting parties an (djject (jf value.
In contemplation of law, there was, in our
view, no want or failure of consideration
for the written obligation of Henry Lou-
derman. It is alleged in the answerof the
defendant "that the just and legal debts
of said estate of Henry Loiulerman are
more than all the i)ersonal pro[)erty, "
and "that all the real estate of deceased
was specifically devised." Henry Louder-
man, by his written oldigation, made tlie
claim f)f Henry Judy a debt against his es-
tate. It was to be paid out of ids per-
sonal estate at his decease, by his execu
tor or administrator, as the case miglit
be. What was his personal estate?
Not, as contended, that which would re-
main after the payment of his debts, and
out of which a distributive share would
ffo to the heirs of Jesse Louderman, but
the body of his personal proi)erty exist-
ing at the time of his death. The person-
al estate is the regular and primary fund
for the payment of deljts. and this will be
first applied until exhausted. And, "as
soon as the executor or administrator
shall ascertain that the personal estate in
his liands will be insuflicient to jiay all
tlie debts of the deceased, " it is made his
duty, by statute, to apply to the probate
court or the court of common pleas for
authority to sell the real estate of the
deceased. Section ()1:5(;, Kev. St. Where,
for a valuable consideration, one promises
to pay a debt out of his personal estate at
his decease, without a siiecific limitation
to that estate alone, if, at his decease,
the personal estate is insufficient to jiay
the debt, the creditor will not beiirecluded
from res(jrting to the real estate of the
debtor, if any there be. Otherwise it
might be in the power of the deli tor. in his
life-time, to convert his personal into real
estate, and tlius evade his obligations
by sim[)ly changing the form of his jirop-
erty. Under his written cbligaliou, the
personal i)roperty of Henry I^ouderman
was made the primary fund for the pay-
ment of the plaintiff's claim; but if. at
his death, his just and legal debts exceeded
all his personal property, the residue of
his estate, if any, was not thereby dis-
ciiarg(>(l from the payment of his debt to
the plaintiff. 'I'he demurrer to the an-
swer was rightly sustained, and the judg-
ment of the circuit court should l)e re-
versed, and that of the court of common
pleas affirmed. Judgment accordingly.
2o0 (
CONSIDERATION.
SCHXELL T. NELL
(17 Ind. 29.)
Supreme Court of Indiana. Nov. 25, 1S61.
Appeal from court of common pleas, Marion
county.
James Morrison and C. A. Ray, for appel-
lant. N. B, Taylor and A. Seidensticker, for
appellee.
PERKINS, J. Action by .7. B. Nell against
Zacliarias Schnell, upon the following instru-
ment:
"This agreement, entered into this 13th
day of February, laoG, between Zach.
SchneU, of Indianapolis, Marion county,
state of Indiana, as party of the first part,
and J. B. Nell, of the same place, Wendelin
Lorenz, of Stilesrille, Hendricks coimty,
state of Indiana, and Donata Lorenz, of
Frickingor, Grand Duchy of Baden, Ger-
many, as parties of the second part, witness-
eth: The said Zacharias Schnell agrees* as
follows: Whereas his wife, Theresa Schnell,
now deceased, has made a last will and tes-
tament in which, among other provisions, it
was ordained that every one of the above-
named second parties, should receive the sum
of .?20<}; and whereas the said provisions of
the will must remain a nullity, for the reason
Ihat no property, real or personal, was in
tiie possession of the said Theresa Schnell,
deceased, in her own name, at the time of
her death, and all property held by Zach-
arias and Theresa Schnell jointly, therefore
reverts to her husband; and whereas the
said Theresa Schnell has also been a duti-
ful and loving wife to the said Zach. Schnell,
and has materially aided him in the acquisi-
tion of all property, real and personal, now
possessed by him; for, and in consideration
of all this, and the love and respect he bears
to his wife; and, furthermore, in considera-
tion of one cent, received by him of the sec-
ond parties, he, the said Zach. Schnell,
agrees to pay the above named sums of mon-
ey to the parties of the second part, to wit:
S200 to the said J. B. Nell; $200 to the said
Wondelin Lorenz; and .?2(X) to the said Do-
nata Lorenz, in the following installments,
viz., $200 in one year from the date of these
presents; .?200 in two years; and $200 in
three years; to be divided between the par-
ties in equal portions of $GG% each year, or
as they may agree, till each one has received
his full sum of $200. And the said parties
of the second part, for, and in consideration
of this, agree to pay the above named sum
of money (one cent), and to deliver up to
said Schnell, and abstain from collecting any
real or supposed claims upon him or his es-
tate, arising from the said last will and tes-
tament of the said Theresa Schnell, deceased.
In witness whereof, the said parties have,
on this 13th day of February, 18.5G, set here-
unto their hands and seals. Zacharias
B. Nell. [Seal.] Wen.
Schnell. [Seal.] J.
Lorenz. [Seal.]"
The complaint contained no averment of a
consideration for the instinimcnt, outside of
those expressed in it; and did not aver that
the one cent agreed to be paid, had been
Ijaid or tendered.
A demurrer to the complaint was over-
ruled.
The defendant answered, that the instru-
ment sued on was given for no consideration
whatever.
He further answered, that it was given for
no consideration, because his said wife,
Theresa, at the time she made the will men-
tioned, and at the time of her death, owned,
neither separately, nor jointly with her hus-
band, or any one else (except so far as the
law gave her an interest in her husband's
property), any property, real or personal, etc.
The will is copied into the record, but need
not be into this opinion.
The court sustained a demurrer to these
answers, evidently on the ground that they
were regarded as contradicting the instru-
ment sued on, which particularly set out the
considerations upon which it was executed.
But the instrument is latently ambiguous on
this point See Ind. Dig. p. 110.
The case turned below, and must turn
here, upon the question whether the instru-
ment sued on does express a consideration
stifficient to give it legal obligaRon, as against
Zacharias Schnell. It specifies three dis-.
tinct considerations for his promise to pay
$000:
(1) A promise, on the part of the plaintiffs,
to pay him one cent.
(2) The love and affection he bore his de-
ceased wife, and the fact that she had done
her part, as his wife, in the acquisition of
the property.
(3) The fact that she had expressed her de-
sire, in the form of an inoperative will, that
the persons named therein should have the
sums of money specified.
The consideration of one cent will not sup-
port the promise of Schnell. It is true, that as
a general proposition, inadequacy of consider-
ation will not vitiate an agreement Baker
V. Roberts, 14 Ind. 552. But this doctrine
does not apply to a mere exchange of sums
of money, of coin, whose value is exactly
fixed, Tjjit tn thQ-^-vrVinri£0 of_Somcllung_of,
in itself, indoter i'lioa te value, for m miev^ or,
perhaps, for other thing of indeterminate
value. In this case, liad the one cent men-
tioned been some particular one cent a fam-
ily piece, or ancient, remarkable coin, pos-
sessing an indeterminate value, extrinsic
from its simple money value, a different view
might bo taken. As it is, the mere promise to
pay six hundred dnllai's for one cent, even
had the jwrtion of tliat cent due from the
plaintiff been tendered, is an unconscionable
contract void, at first blush, upon its face, if
it be regarded as an earnest one. Hardesty
ADEQUACY.
231
V. Smith, 3 Ind. 39. The consideration of one
cent Is, plainly, In this case, merely nominal,
and Intended to be so. As the will and tes-
tament of Schnell's wife imposed no legal ob-
ligation upon him to discharge her bequests
out of his property, and as she had none of
her own, his promise to discharge them was
not legally binding upon him, on that ground.
A moral consideration, only, will not supixirt
a promise. Ind. Dig. p. 13. And for the
same reason, a valid consideration for his
promise cannot be found in the fact of a com-
promise of a disputed claim; for where such
claim Is legally groundless, a promise upon a
compromise of it, or of a suit upon it, is not
legally binding. Spahr v. HoUingshead, 8
Blackf. 415. There was no mistake of law or
fact in this case, as the agreement admits
the will inoperative and void. The promise
was simply one to make a gift The past
services of his wife, and the love and affec-
tion he had borne her, are objectionable as
legal considerations for Schnell's promise, on
two grounds: (D They are past considera-
tions, thd. Dig. p. 13. (2) The fact that
Schnell loved his wife, and that she had been
industrious, constituted no consideration for
his promise to pay J. B. Nell and the Lorenzes
a sum of money. Whether, if his wife, in her
lifetime, had made a bargain with Schnell,
that, in con-sideration of his promising to pay,
after her death, to the person named, a sum
of money, she would be industrious, and
worthy of his affection, such a promise would
have been valid and consistent with public
policy, we need not decide. Nor is the fact
that Schnell now venerates the memory of his
deceased wife, a legal consideration for a
promise to pay any third person money.
The instrument sued on. Interpreted in the
light of the facts alleged hi the second para-
graph of the answer, will not support an ac-
tion. The demurrer to the anfswer should
have been ovenoiled. See Stevenson v. Dru-
ley, 4 Ind. 5ia
PER CURIAM. The Judgment is reversed,
with costs. Cause remanded, etc
282
CONSIDERATION.
COLEMAN T. EYRE.
(45 N. Y. 380
CoTirt of Appeals of New York. Feb. 21, 1871.
W. M. Macfai-land, for appellants. John
H. Reynolds, for respondents,
RAPALLO, J. The plaintiff was interest-
ed to the extent of one-fourth in the profits
or losses of a shipment of coffee undertaken
by him jointly with other parties. After the
adventure had been begun, and before the
coffee had reached its port of destination, it
was mutually agreed between the plaintiff
and the defendant that the latter should have
one-half interest in the plaintiff's one-fourth
interest in the adventure. The speculation
resulted in a loss, and this action was brought
to recover one-half of the plaintiff's propor-
tion of such loss. It is now claimed on the
part of the defendant that no valid contract
was made between him and the plaintiff;
that inasmuch as the plaintiff had embarked
in the speculation before and without refer-
ence to any arrangement with the defendant,
and the defendant had not done or con-
tributed any thing to aid in the joint enter-
prise, there was no partnership, and no con-
sideration for the undertaking of the plaintiff
to give him one- half of the profits; that there-
fore the defendant could not have enforced
payment of half the profits, if the adventure
had been successful, and consequently no
agreement on Ms part to contribute to the loss
can be implied.
This argument assumes that the agreement
was simply that the defendant should have
one-ba.Jf of the profits, which the plaintiff
might make out of the adventure, in case it
should prove suecessfuL But such was not the
agreeraent proved. The agreement was that
the flefenda.nt should share with the plaintiff
in the adventure, and it seems to havp been
clearly understood tJiat he should participnhe
tn the result, whether it should prove a prufit
or a loss. That It might result in a loss was
contemplated by the parties. There is evi-
dence in the case that the possibility of tlat
event was the subject of conversation be-
tween them at the time of making the con-
tract; tliat the hope was then expressed that
the plaintiff would not be compelled to call
upon the defendant to contribute to a loss;
and that afterwards, when they did caU upon
him to contribute, he did not dispute his lia-
bility, but sought to reduce the amount by
claiming a portion of the i^aintiff's commis-
sions.
The evidence fully justified a ficnding that
in consideration of the agreement by the
plaintiffs to account to the defendant for half
the profits in case of success, the defendant
undertook to bear half the loss in the con-
trary event; and the intendment is that the
referee did so find. Indeed, .such is a propar
construction of the actual finding. It is a
clear case of mutual promises; and the obli-
gation of each party was a good considera-
tion for that of the other. Briggs v. TfQot-
son, 8 Johns. 304.
The evidence was conflicting as to whether
the defendant was to share in the commis-
sions. The referee found in the plaintiffs'
favor on that point, and the court below, at
general term, refused to interfere with that
finding. We cannot disturb it.
The agreement was not within the statute
of frauds. It was not an agreement for the
sale of any personal property or chose iji
action, but an executory agreement, whereby
one party undertook to bear one port of a
possible loss in consideration of a share of an
expected profit.
The judgment of reversal and order grant-
ing a new trial should be revised, and the
judgment for the plaintiffs entered on the re-
port of the referee should be affinned, with
costs.
All concur.
Order of general term reversed, and judg-
ment for the plaintiffs affirmed.
^
<
MUTUAL PROMISES.
233
SEWARD et al. v. MITCHELL..
/ (1 Cold. 87.)
Supreme Court of Tennessee. Nov. Term, 1859.
T. J. E'reeman, for plaintiffs lu error. M.
R. Hill, for defendant in error.
CARUTHERS, J. On the IGth Oct. IS.jG,
Mitchell sold to Seward & Scales, for the
consideration of ?8,596.50, a tract of laud in
the county of Gibson, described in a deed of
that date, by metes and bounds, "containing
521 acres, being a part of a 5000-acre tract
granted to George Dougherty, and bounded
as follows," etc.
The title is warranted with the usual cov-
enants, but nothing more said about the
grants than what is above recited.
Some time after the deed was made, the
parties, differing as to the quantity of land
embraced in the tract, made an agreement,
that it should be surveyed by Gillespie, and
if there were more than five hundred and
twenty-one acres, the vendee should pay for
the excess at the rate of $1G.J50 per acre,
that being the price at which the sale was
made, and if less, then the vendor should
pay for the deficiency, at the same rate. It
turned out that there was an excess of fiity-
seven acn>-<. and the tract embraced in the
deed was five hundred and seventy -eight
acres, instead of five hundred and twenty-
one, as estimated In the sale. For this ex-
cess, the present suit was brought, and re-
covery had, for ?1,079.
It is objected here, that the court below
erred in refusing to charge, as requested,
that the agreement sued upon was void for
want of a writing, and because there was
no considei*ation for the promise.
1. The contract, or promise sued upon, is
not for the sale of land, so as to require a
writing, under the statute of frauds.
The sale had already been reduced to writ-
ing. This was a subsequent collateral agree-
ment in relation to the price, which was
binding by parol and to which the statute
can have no application whatever. This is
too plain for argument.
2. There is more plausibility in the second
objection, that there was no sufficient con-
sideration for the promise. But this Is also
untenable. The argument Is that the deed
embraced the whole tract, and passed a per-
fect title to the extent of the boundaries,
and consequently there was nothing passing
as a consideration for the new promise that
the party did not own before by a perfect
legal right.
It is true that if the sale was by the tract
and not by the acre, as appears from the
deed, and no stipulations as to quantity, that
the title was good for the whole and covered
the excess. But, if the sale was not in
gross, but by the acre, and the recitation In
the deed would not be conclusive in a court
of equity on that point, if the fact could be
shown to be otherwise, then there would bo
mutual remedies for an excess or deficiency
in proper cases, as we held in Miller v.
Bents, 4 Snoed, and a more recent case;
but, independent of that, and taking it to
have been purely a sale in gross, and both
parties desiring to act justly, and being of
different opinions as to the quantity, mutual-
ly agreed to abide by an accurate survey to
ascertain which was bound to pay, and re-
cover from the other, and what amount.
We see no good reason in law or morals,
why such an agreement should not be bind-
ing upon them. The case of Howe v. O'Mal-
ley, 1 Murph. L. & Eq. R. 287, is precisely in ,
\ point The court there held that a promise
I to refund in case of deficiency, is a good
^consideration for a promise to pay for any
iexcess over what is called for in the deed.
That such mutual promises are sufficient
considerations for each other.
I The case of Smith v. Ware, 13 Johns. 259,
which is supposed to conflict with this, is
entirely different; "there was no mutuahty,"
because the promise sued upon was to pay
for the deficiency, without any obligation on
the other party to pay for an excess, if any
there had been.
The principle of the North Carolina case,
commends itself to our approbation, because
of its equity and justice.
Without further citation of authorities, we
are satisfied to hold that the promise in this
case was binding upon the defendant, as his
honor charged, and therefore affirm the judg-
ment
i;
k^
234
CONSIDERATION.
PRESBYTERIAN CHURCH v. COOPER
et al. /)
(20 N. E. 352, 112 N. Y. 517.) y
Court of Appeals of New York. March 5, 1SS9
Appeal from supreme com't, general term
Third department
Action by the Presbyterian Church of Al-
bany ajjainst Thomas C. Cooper and another,
administrators of Thomas P. Crooli, deceased,
on a subscription made by the decedent to-
wards paying ofE a mortgage debt owing by
the plaintiff. .Judgment was given for de-
fendants, and plaintiff appeals.
Matthew Hale, for appellant Walter E.
Ward, for resjKjndents.
ANDREWS, J. It is, we think, an insuper-
able objection to the maintenance of this ac-
tion that there was no valid consideration to
uphold the subscription of the defendants'
intestate. It is of course unquestionable tJia't
no action can be maintained to enforce a
gratuitous promise, however worthy the ob-
ject intended to be promoted. The perform-
ance of such a promise rests wholly on the
will of the person making it He can refuse
to perform, and his legal right to do so cannot
be disputed, although his refusal may dis-
appoint reasonable expectations, or may not
be justified in the forum of conscience.
By the terms of the subscription paper the
subscribers promise and agree to and with
the trustees of the First Presbyterian Church
of Albany to pay to said trustees within three
years from its date the sums severally sub-
scribed by them, for the purpose of paying
ofC "the mortgage debt of $45,000 on the
church edifice," upon the condition that the
whole sum shall be subscribed or paid in with-
in one year. It recites a consideration, viz.:
"In consideration of one dollar to each of us
(subscribers) in hand paid, and the agreement
of each other in this contract contained." It was
shown that the one dollar recited to have been
paid was not in fact paid, and thefactthat
the pro mi.se of g ^ch gulj gcribc j ^yas'lw Sfl^!!!]^
reaTT^~of''an S^ reliance uponsi m jiar .pi'QrQ-
Is es^ljy "tKe*'^rEers, constitutes no copsiclora-
tion~ as between tn||^ca2oratijaa-''ior whose
Benefit Jthe promise was~'made..and.the promis-
5rs. The TecitaT^o'f a cwTSIfleration paid does
not preclude the promisor from disputing the
fact in a case like this, nor does the stiite-
ment of a particular consideration, which on
its face is insufficient to support a promise,
give it any validity, although the fact recited
may be true. It has sometimes been suppos-
ed that when several persons promise to con-
tribute to a common object desired by all,
the promise of each may be a good considera-
tion for the promise of others, and this al-
though the object in view is one in which the
promisors have no pecuniary or legal inter-
est, and the performance of the promise would
not in a legal sense be beneficial to the
promisors entering into the engagement This
seems to have been the view of the chan-
cellor, as expressed In the Hamilton CoUege
Case, when it was before the court of errors,
(2 Denio, 417;) and dicta of the judges will
be found to the same efl'ect in other cases.
Trustees v. Stetson, 5 Pick. 508; Watkins v.
Eames, 9 Cush. 537. But the doctiine of the
chancellor, as we understand, was repudiated
when the Hamilton College Case came before
this court, (1 N. Y. 581,) as have been also
the dicta in the Massachusetts cases, by the
court in that state, in the recent case of
Church V. Kendall, 121 Mass. 528. The doc-
trine seems to us unsound in principle. It
proceeds on the assumption that a stranger
both to the coasideration and the promise,
and whose only relation to the transaction is
that of donee of an executory gift, may sue
to enforce the payment of the gratuity for
the reason that there has been a breach of
contract between the several promisors, and
a failure to carry out, as between themselves,
their mutual engagement. It is in no proper
sense a case of mutual promises as between
the plaintiff and defendant If any action
would lie at all, it would be one between the
promisors for breach of contract.
In the disposition, therefore, of this case,
we must reject the consideration recited in
the subscription paper as groimd for support-
ing the promise of the defendants' Intestate,
—the money consi derati on,— because it had
no basis in fact, aiW TIi^"mutual promise be-
' tw^^t-n^tbe"" su bscnbe rs, becau se^__as_.to__Jbeir
promises there is noprivify'of co njHHlbetween
■thii IjUiluLlli iiuiPthe promisorsT Some con-
sirlfcrilLibU mUfelL Lhyiefure be'tound other than
that expressly stated in the subscription paper
in order to sustain the action. It is urged
that a consideration may be found in the ef-
forts of the trustees of the plaintiff during the
year, and the time and labor expended by
them during tliat time, to secure subscriptions
in order to fulfill the- condition upon which
the liability of the subscribers depended.
There is no doubt that labor and services ren-
dered by one party at the request of another
would constitute a good consideration for a
promise made by the latter to the former,
based on the rendition of the service. But
the pLaintiff encounters the difficulty that
there is no evidence, express or implied, on
tlie face of the subsa-iption paper, nor any
evidence outside of it, thgUJie^corporation or
its _trustcef! di^, or_unde'rtook^td 35^ ghyfSTng
npnii th.Q^JnYilation or request of IBe^sub-
scribers. IsfoTlOTjere " aTfy^evidPnce'thlTE' the
tnisieos' of the plaintiff, as representatives
of the corporation, in fact did anything in
their corporate capacity, or otherwise than as
individuals interested in promoting the gen-
eral olijcct in view. Leaving out of the sub-
scription paper the affirmative statement of
the consideration, (which for reasons stated
may be rejected,) It stands as a naked prom-
ise of the subscribers to pay the several
amounts subscribed by them for the purpose
of paying the mortgage on the church prop-
erty, upon a condition precedent limiting their
MUTUAL PROMISES.
ZX
liability. Neither the church nor the trustees
promLse to do anything, nor are they request-
er] to do anything, nor can such a request be
imi)lied. It was held in the Hamilton College
Case, 1 N. Y. 581, that no such request could
be implied from the terms of the suljscripUon
In that case, In which the ground for such
an implication was, to say the least, as strong
as in this case. It may be assumed from tlie
fact that the subscriptions were to be paid
to the trustees of the church for the purpose
of paying the mortgage that it was under-
stood that the trustees were to make the
payment out of the moneys received. Rut
the duty to make such payment in case tJiey
accepted the money, would arise out of their
duty as trustees. This duty would arise up-
on the receipt of the money, although they
iiad no antecedent knowledge of the subscrip-
tion. They did not assume even this obliga-
tion by the terms of the subscription, and the
fact that the trustees applied money paid on
subscriptions upon the mortgage debt did not
constitute a consideration for the promise of
the defendants' Intestate. We are unable to
distinguish this case in principle from the
Hamilton College Case, 1 N. Y. 5S1. There
is nothing that can be urged to sustain this
subscription that could not with equal force
have been urged to sustain the subscription
in that case. In both the promise was to the
trustees of the respective corpoi'ations. In
each case the defendant had paid part of his
subscription, and resisted the balance. In both
part of the subscription had been collected
and applied by the trustees to the purpose
specified. In the Hamilton College Case,
(which in that respect is imlike the present
one,) it appeared that the trustees had incur-
red expense in employing agents to procure
subscriptions to make up the required amount,
and it was shown also that professors had been
employed upon the strength of the fund sub-
scribed. The Hamilton College Case is a con-
trolling authority In this case. It has not been
overruled, and has been frequently cited with
appnjval in the courts of this and other states.
The cases of Barnes v. Ferine, 12 N. Y. IS,
and Roberts v. Cobb, 103 N. Y. GOO, 9 N. E.
GOO, are not in conflict with the decision in
the Hamilton College Case. There is, we sup-
pose, no doubt that a subscription invalid at
the time for want of consideration may be
made vaUd and binding by a con.sideration
arismg subsequently between the subscribers
and the church or corporation for whose bene-
fit it is made. Both of the cases cited, as we
undorst;ind them, were supported on this prin-
ciple. There was, as was held by the court
in each of these cases, a subsequent recjuest
by the subscriber to the promisee to go on and
render service, or incur liabilities, on the faith
of the subscription, which request was com-
plied with, and services were rendered or Ija-
bihties incurred pursuant thereto. It was as
if the request was made at the very time of
the subscription, followed by performance of
tlie request by the promisor. Judge Allen, in
his opinion in Barnes v. Ferine, said "the re-
quest and promise were to every legal eCLect
simultaneous;" and he expressly disclaims
any intention to interfere with the decision in
the Hamilton College Case.
In the present case it was shown that indi-
vidual trustees were active in procuring sub-
scriptions. But, as has been said, they acted
as individuals, and not in their official ca-
pacity. They were deeply interested, as was
;Mr. Crook, in the success of the effr,rt to pay
the debt on the church, and they acted in uni-
son. But what the trustees did was not
prompted by any request from Mr. Crook.
They were all co-laborers in promoting a com-
mon object. We can but regret that the in-
tention of the intestate in respect to a mat-
ter in which he was deeply interested, and
whose interest was manifested up to the very
time of his death, is to be tliwarted by the
conclusion we have reached; but we think
there is no alternative, and that the Judgment
must be affirmed.
AU concur.
CONSIDERATION.
KEEP et al. v. GOODRICH.
(12 Johns. 397.)
Supreme Court of New York. Oct., 1815.
Th^i was an action of assumpsit. The decla-
i-ation contained three counts. The first stat-
ed, that certain differences having arisen be-
tween the plaintiffs, as executors of Nathan
Hale, deceased, and the defendant, concern-
ing a promissory note, made by the defendant
to their testator, dated the 7th day of Feb-
ruary, 1797, by which the defendant promised
to pay him. for valui? received, fG9 3s. 8d.
lavful money, on demand, with lawful inter-
est, at sir per eftnt- in certain liquidated se-
curities given by the treasurer of Connecti-
cut; and that to put an end to such differ-
ences, the parties, heretofore, to wit, &c., "re-
Bpectivelv submitted themselves to the award
of John Elmore, to be made between them,
of and concerning the said differences; and
iri consideration thereof, and that the plain-
tiffs, at the special instance and request of the
defendant, hiid, then and 'there, undertaken j
and j^romised the defendant to perform and
fulfil thf-' awa\-d of the said John Elmore, to
be mad?, &c of and concerning the said dif-
ference?, in aH thingi? on their part to be
perfonned aad fulfilled, he, the defendant
undffrtooli. &e. to perform and fulfil the said
award, in all tilings," &•_•. The plaintiffs
averred that Earaore, having taken upon him-
self the biQtfcen of the arbitrament, did, en
the 15th of Mfl.y, 1814, at, &c, make his award
in writing, &c., and thereby awarded, that
the defendant shculd pay the said plaintiffs.,
fts ((ixecutors aforesaid, the snm of 391 dollars
aiid 31 centE, in fuU satisfaction of their
cluiia Oil the sj-.id note, of which said award,
th^ Pif.:fA «el€Gdani., afterwards, to wit, &c., had
notice; Jind although often requested, «S:c. to
pa7 tW said tmm, &c., according to the tenor
and eiftct of tee said Kward, and of his prom-
ise, &(.:; yet, not regarding, &c., he did not
pay, &ic. The second count was on an insimnl
cornptitassent The third count was also on
an insimul computassent, with the plaintiffs,
as executors, &c
The defendant pleaded the general issue,
with notice of set-off.
At the trial, the plaintiffs give in evidence
a letter of the defendant, dated Albany, Au-
gust 19th, 1811, addressed to John Elmore,
In which, speaking of the claim of the plain-
tiff.s, and alleging that he owed nothing, he
says: "But I have agreed for you to say what
I shall do in this case, and hold myself obli-
gated accordingly," &c. On the 23d of No-
vember, 1811, the defendant again wrote to
Elmore on the same subject, and promised
to send him some papers relative to his pay-
ments, &c.
On the 8th of January, 1814, he again wrote
to Elmore, and, after mentioning that he had
been called on again by the plaintiffs, about
the business, he says: "I still wish you to
make up your mind on this business, as I am
willing to agree to your decision, and abide
your judgment."
The defendant, on the 8th of January, 1814,
wrote to ELmore as follows: "I wrote you
some time since, concerning Squire Hale and
myself. I wish you to make up your mind
according to what you have understood, as
you have had more knowledge than any other
person about my business. I think I made a
kind of statement to you. I am called upon
by Mr. Keep, and have renewed a line to
j-ou on the matter; and I wish you to look in-
to the business, and give your opinion, for a
full settlement of the business," &c. "N. B.
I am willing to have the note matter settled
on your opinion."
On the 28th of January, 1814, Elmore, who
lived at Canaan, in the state of Connecticut,
wrote to the defendant, at Albany, acknowl-
edging the receipt of Jiis letter of the 8th of
Januai-y, saying he should have no objection
to determine what was right in the matter,
if they (the plaintiffs) would agi-ee to it, after
having the circmnstances stated to him again,
as they were somewhat out of his mind.
"But they will not agree to abide my judg-
ment; for J. Hale (one of the plaintiffs) told
me, when he called on me, some time since,
for my opinion in the matter, that you was
bound to abide my judgment, but he was not,
unless he liked it. I then told him, I would
not determine it, unless he was bound also.
If they will agree with you, to refer their
claim to me, and give me a statement of
the fact, I will determine the question be-
tween you."
Elmore testified, that he had not seen the
defendant for some time previous to the 19th
of August, 1811, nor since, until after he made
his award; and that the defendant had never
appeared before him, nor submitted the mat-
ter in controversy to him, otherwise than as
is contained in the above letters. That after
writing the letter to the defendant, of the
2Sth of January, 1814, one of the plaintiffs,
who resided at Goshen, in Connecticut, called
on him, and agreed that they would be bound,
and abide by his award. No notice of the
time and place where he would meet, to
make up an award, was given by him to the
defendant; nor did he inform the defendant,
that he had taken upon himself to decide be-
tween the parties; nor that the plaintiffs had
agreed to abide by his decision; nor was
the defendant present when he undertook to
make up his decision.
The plaintiffs produced an award in writ-
ing, dated Canaan, May 15th, 1814, which,
after reciting that the plaintiffs, as execu-
tors, &c. and the defendant, had submitted
the controversy subsisting between them,
relative to a promissory note, &c., and that,
"having heard the parties, and taken the
case into consideration," he was of opinion
that there was due to the plaintiffs, as ex-
ecutors, &c., on the said note, 391 dollars
and 31 cents; and. therefore, he awarded,
that the defendant should pay to the plain-
MUTUAL PROMISES.
237
tiffs the said sum, In full satisfaction for
their claim on the said note.
The judge charged the jury, that, in his
opinion, there was sufHcient evidence of a
submission, on the part of the defendant, of
the matter in difference between the plain-
tiffs and defendant; and that, without re-
garding the matter as a submission to El-
more, he might be considered as having been
constituted the agent of the defendant, to
adjust and ascertain the amount duo on the
note. The jui-y found a verdict for the plain-
tiffs, for 417 dollars and 50 cents.
A motion was made to set aside the ver-
dict, and for a new trial.
Mr. Parker, for the motion, H. Bleecker,
opposed.
SPENCER, J. It is very clear, that El-
more did not act as the private agent of the
defendant, in adjusting the claim made on
him by the plaintiffs. He made a formal
award between the parties, and refused to
act, unless the plaintiffs agreed to be boimd
also. The count on an insimul computassent
cannot be maintained.
The real question is, whether the defend-
ant is bound by the award, it appearing
clearly in evidence, that the plaintiffs re-
fused to be concluded by it, up to the 2Sth of
.January, 1S14. Subsequent to that time, the
plaintiffs agreed to be bound by the award;
but the defendant's agreement to submit to
Elmore, and to be bound by his decision,
was on, or anterior to, the Sth of January,
1814; so that there was no point of time
when both parties bound themselves, by
agreement with each other, to submit their
controversy to Elmore, and to be bound by
his awai'd.
In Livingston v. Rogers, 1 Caines, 583, it
was decided, that in assumpsit on mutual
promises, the declaration must allege that
they were concurrent. In that case, the
promise was stated, "and that in considera-
tion the plaintiffs had, at the defendant's
request, promised to perform his part; the
defendant, afterwards, to wit, the same day,
promised," &c. The court were of opinion
that the judgment ought to be arrested; but
there being a good count, and a motion to
amend, leave was given for that pu. -pose, on
payment of all the costs.
The only consideration, in this case, for
the defendant's promise, is the plaintiffs'
promise; and It is alleged, in both counts
on the award, that the defendant's promise
was made in consideration of the plaintiffs'
promise, and both promises are laid as con-
current acts; and we have seen, that if the
promises were not alleged to have been
made concurrently, it would have been good
ground for arresting the judgment. It is a
necessary consequence, that the proof should
support this allegation in the declaration,
and show that, in point of fact, the promises
were considerations reciprocally for the par-
ties. Here the proof negatives the fact, that
the consideration of the defendant's promise
to submit and abide by the award of Elmore,
was, that the plaintiffs had, at the same
time, made the like promise; for it clearly
appears that the plaintiffs refused to submit
and be bound by Elmore's award, long after
the defendant professed a willingness to
make the submission.
In Tucker v. Wo*^)ds, 12 Johns. 190, we recog-
nized the principle that, in contracts where
the promise of one party is the consideration
for the promise of the other, the promise
must be concurrent and obligatory upon both
at the same time; and, in addition to the
case in Caines, 1 Chit. PI. 297, and 3 Term
R. G.o3, were cited, which fully warrant the
position. The same doctrine is contained in
Paine v. Cave, 3 Term R, 148, and in King-
ston V. Phelps, Peake, N. P. 227. The plain-
tiff' proved that the defendant consented to
be bound by an award to be made on a snb-
mi.ssion by other underwriters on the same
policy, but the witness proved no agreement
on the part of the plaintiff to be bound by
the award. Lord Kenyon held, that there
was no mutuality, and, therefore, the de-
fendant's agreement was a mere nudum
pactum. It is correctly stated by Kent, J.,
in Livingston v. Rogers, that Hobart (SS)
observes, that the promises must be at one
instant; for, else, they wiE be both nuda
pacta.
There must be a new trial, with costs to
abide the event of the suit
New trial granted.
CONSLDERATION.
y L'AMOREUX T. GOULD.
(7 N. y. 349.)
Court of Appeals of New York. 1852.
The defendant in this action was an en-
dorser upon five promissory notes made by
J. W., amounting in the aggi-egate to $1,140.
Two of them, amounting to $490, had be-
come payable before May 2G, 1S41, and the
remaining three were payable after that day.
The defendant held as trustee a judgment
against Woodward given to secure certain
creditore, and among them the plaintiff as
endorser of the notes. Upon that day an
agreement in writing was entered into be-
tween the defendant and plaintiff of which
the following is a copy:
"James L'Amoreux, Esq., being an endors-
er on several notes drawn by J. W., some of
which have become due, and on some of
them prosecutions have been commenced,
and thie subscriber having a judgment ren-
dered in his faVor against the said J. W. en-
tered in the supreme court for securing cer-
tain creditors agreeably to a certain decla-
ration of trust in writing in which the en-
dorsers on the defendant's paper are in-
cluded in the first class of creditors and in
which it is declared that such creditors shall
be first paid: Now in consideration of the
premises and in consideration that the said
.James L'Amoreux shall advance and pay
the sum of one thousand dollars towards
satisfying or in part satisfying the notes on
which he is holden as endorser as aforesaid,
and shall exhibit to the said Charles D.
Gould the evidence of such payment; the
said Charles hereby agrees with the said
James, that within one year from this date
he will cause to be raised under the said
judgment given as aforesaid the said sum of
one thousand dollars with interest, and will
pay the same over to the said James in sat-
isfaction of the money so to be advanced
towards satisfying said endorsements.
"Charles D. Gould.
"Dated August 2G, 1841."
The plaintiff subsequently paid the five
notes and exhibited them to the defendant,
at the same time teUiug him that he did it
in compliance with the agreement, and the
defendant replied that it was all right. The
defendant refusing to comply with the terms
of the agreement an action of assumpsit was
brought thereon in September, 1842. The
cause was tried by a referee, who found for
the plaintiff the amount due by the terms of
the agreement, upon which a judgment was
entered in November, 1848. The defendant
appealed therefrom.
J. C. Spencer, for appellant. N. Hill, Jr.,
for respondent
EDMONDS, J. (after disposing of some ob-
jections arising upon the pleadings which
were cured by the finding by the referee).
The only question to be determined, there-
fore, is, whether there was such a want of
mutuality between the parties that there
was in fact no cause of action.
The proposition is stated by Chitty as
broadly as the defendant's counsel claims it,
that if the one party never was bound on his
part to do the act which forms the con-
sideration for the promise of the other, the
agreement is void for want of mutuality
(Chit. Cont. 15); but the proposition is too
broadly stated. It is confined to those cases
where the want of mutuality would leave
one party without a valid or available con-
sideration for his promise. Arnold v. Mayor
of Poole, 4 Man. & G. 860. For there are
many valid contracts not mutually binding
at the time when made; as where A. says
to B., if you will furnish goods to C. I wiU
pay for them, B. is not bound to furnish
them, but if he does he may recover on the
promise. 2 Saund. 137h; Morton v. Burn,
7 Adol. & E. 19; Kennaway v. Treleavan,
5 Mees. & W. 498. And the question in this
case is not whether the plaintiff was bound
to pay the $1,000, but whether, if he did pay
it, the defendant was without any valid or
available consideration for his promise. The
agreement is, that if the plaintiff will pay
$1,000 on notes on which he is holden as in-
dorser, etc. Now I am not very clear wheth-
er this means on notes on which he was ab-
solutely fixed and liable as indorser by
means of due protest, or those on which he
was merely liable to be, in case of non-pay-
ment by the drawer. The pleading do not
help us out of the difliculty at all, but the
evidence shows that three of the five notes
were not due at the time the agreement was
made, and the agreement recites that he
was indorser on several notes some of which
had become due, etc. Those notes which
had become due at that time and on which
alone the plaintiff could then have become
"holden" by due protest, did not amount to
one-half of the $1,000 that he was to pay,
while all of the five notes which he had in-
dorsed amounted to more than $1,000. I
should infer that the parties meant by this
equivocal expression to refer to the fact of
his indorsement only, and not to the fact of
his being fixed as indorser. This is a ma-
terial consideration, because if the plaintiff
was to pay the $1,000 merely upon notes up-
on which he was finally fixed and "holden"
by due protest, he would do nothing more by
paying that sum than merely discharge an
obligation which he was bound to perform,
and that would form no consideration for the
defendant's promise.
But if on the other hand he voluntarily paid
the money, without reference to his being fix-
ed as indorser, and in fact waived the va-
rious acts of demand and protest which were
neces.sary to fix him as indorser, he thus as-
sumed a liability and performed an act detri-
mental to himself, which would furnish a
good consideration for the promise. And in-
MUTUAL PROMISES.
239
ferring as I do from the facts proved on the
trial and from the language of the agreement
that the parties meant all Uie notes, as weU
those not due as those due and protested, I
have no difficulty in finding a sufficient con-
sideration to support the promise, in the fact
of the plaintiff's having paid the $1,000 and
thus enlarged his liability beyond what It was
when the agreement was made.
This disposes of the only point not cured by
the finding, and I am of opinion the Judgment
ought to be affirmed.
All the judges concurred.
Judgment affirmed.
''240
CONSIDEKATION.
DAVIE et al. t. LUMBERMAN'S MIN. CO.
(53 N. W. 625, 93 Mich. 491.)
Supreme Court of Michigan. Nov. IS, 1S92.
Error to circiiit cotirt, Menominee county;
John W. Stone, Judge.
Action by Josiah Davie and another
against the Lumberman's Mining Company
for breach of contract From a judgment
for plaintiffs, defendant appeals. Reversed.
Ball &, Hanscom. (B. J. Brown, of counsel,)
for appellant. R. C. Flannigan, (F. O. Clark,
of coiinsel,) for appellees.
DURAND, J On October 7, 1889, the
plaintiffs, who were practical miners, en-
tered into a verbal agreement with the de-
fendant company, through its mining cap-
tain, to go to work in what is called the
"Cave Pit," and were to receive $1.50 per
ton for all the ore they produced, as long as
they could make it pay. The plaintiffs prac-
tically agree that the mining captain, with
whom the contract was made, said to them
that he would give $1.50 a ton for all the
ore they could produce anywhere in the pit,
to which they responded, "All right; we will
take the contract, and work it as long as
we can make it pay." The plaintiffs were
to put in skip roads for hoisting the ore,
and were to put it in position for hoisting,
and the defendant was to furnish the hoist-
ing machinery and do the hoisting. Acting
tinder this contract, the plaintiffs went to
work in the pit. They leveled off a place,
and put down some plank platform to pile
ore upon, and sorted out some ore from the
loose rock, and took some ore also out of a
seam in the foot wall of the pit, and placed
it on these platforms. On the morning of
the third day after they began to work, the
captain of the defendant company went
down, and found the plaintiffs digging into
the foot wall of the pit, upon which he or-
dered them to quit mining at that point. A
controversy then arose between him and the
plaintiffs in reference to where they had a
right to dig, and as to the extent of their
right, which ended by the plaintiffs quitting
the work. The plaintiffs contend that they
had a right to mine at any point they chose,
and that they had a right to dig into and
through the foot wall, and that they had a
right, under their contract, to mine all ore
w^hich might be newly discovered by them
after digging through the walls of the pit,
and that they were not confined to such ore
as they might find within the pit, as it had
already been opened and worked. The de-
fendant contends that, even if the contract
is a valid one, it merely had reference to
such ore as might be found within the pit as
it had been opened and worked, and that it
gave them no right to dig or break through
the walls of the pit, and mine ore found
outside of the walls; that it was essentially
what is known among miners as a "scram-
ming contract," which is one that confers:
the right to mine and gather such ore as may
be left within the limits of a mine or pit as
it has been opened and mined before; that
nothing beyond that was ever thought of,
and that the act of the plaintiffs in breaking
through the walls of the pit, and mining in
a newly-discovered vein of ore, was never
contemplated by the parties; and that it
wotild greatly endanger the property of the
defendant, as well as the lives of the miners,
by rendering it likely to cave, as had hap-
pened before, and for which reason it is al-
leged this pit was named "Cave Pit;" and
the defendant insists that the plaintiffs were
stopped from digging in the foot walls for
the reasons stated, while the plaintiffs con-
tend that the real reason was that the de-
fendant thought they would make too much
money if allowed to mine in the rich vein
of newly-discovered ore beyond the foot
wall. The plaintiffs also contend that the
term employed in the contract, "as long as
we can make it pay," has a special signifi-
cation among miners, and means as long as
they cotild make "company account" wages,
being such wages as the company was then
paying by the day for such work; and they
introduced some testimony, against the de-
fendant's objection, tending to prove this to
be so, while the defendant denies that this is
so, and contends that the term has no spe-
cial signification. The plaintiffs also contend
that they had discovered a body of ore which
amounted to at least 17,000 tons, and that,
if they had been allowed to mine it,— as tney
claim they had a right to do under the con-
tract referred to,— they would have realized a
profit of $22,000; while the defendant con-
tends that this is not true, and that the
dangers and contingencies were so great that
no estimate of profits could be made which
would be at all reliable, or upon which the
jury could mtelligently act in attempting to
decide upon what the damages should be.
The questions of fact were all fairly submit-
ted to the jury, who found a verdict of $1,000
for the plaintiffs, and a judgment for that
amount was thereupon rendered in their fa-
vor. The defendant claims error.
The questions we are called upon to consid-
er all relate to and depend upon the two
main propositions in the case, which are
whether or not the contract is of such a char-
acter as to entitle the plaintiffs to damages
for its breach, and, if it is, then whether or
not the profits which the plaintiffs claim they
would have made if they had been allowed to
proceed to mine the ore, as long as they could
make it pay, are not so speculative, uncertain,
and contingent as to make it improper to per-
mit the jury to pass upon them in deciding
upon the damages to which the plaintiffs are
entitled. We have sought in vain for a valic
reason to sustain the plaintiffs in their conten-
tion in this case, but we cannot do so. Wc
do not think the contract is of such a char-
acter as to be enforceable as an executory
MUTUAL PROMISES.
J41
contract. The aprreement was simply tbat
the plaintiffs would work at miniuj,' the ore
in "Cave Pit" for $1.50 per ton as long as
they could make it pay. No limitations
were put upon their methods, or how or in
what manner they should conduct the work
in order to make It pay, nor does it give the
defendant any voice in deciding upon whether
or not the plaintifis could make it pay, nor
does it place the subject of the contract upon
any certain basis upon which a jui-y can law-
fully and justly arrive at a fair rule of dam-
ages in ease of its violation. Under this con-
tract, the plaintiffs must be presumed to be
the sole judges of whether or not it would pay
them to do the work, and of how long they
should continue it. Neither do we think that
the clause, "as long as they could make it
pay," has any special signification in this
case. It Is not in any sense ambiguous, and
can have no different meaning when applied
to mining than it has in any mechanical or
agricultural employment. It is a term used
daily In all the different entei^p rises and occu-
pations In which men are engaged, and its
scope is so weU understood that no evidence
Is necessary to show what it is, or that it
means anything different in one case than in
another. "When a party agrees to sell arti-
cles of merchandise, or deliver the produc-
tions of his labor to another at a certain price
as long as he can make it pay, every one must
clearly understand that the term is dependent
on conditions over which the promisee has no
control, and, in so far as any one has tlie
power to make the term effective, it is lodged
solely In the promisor, who by judicious pur-
chases or skillful manipulations of labor may
be able to make a transaction pay when a
more careless, negligent, or improvident per-
son would be unable to do so. This serious
element of uncertainty destroys all mutuality
in the contract, and gives tlie promisor full
power to say when a further execution of
the contract will not be advantageous, be-
cause he cannot make it pay. Contracts can-
not arise where there is no mutuality, nor can
they arise from the action of one party alone
HOPK.SEL.CAS.CONT. — 16
where the other has no power to prevent his
action. The uncertainty of the term, "as long
as we can make it pay," employed iu this
contract, is illustrated iu the case of Cummer
V. Butts, 40 Mich. 3122. In that case the con-
tract stipuhited that on CO days' notice it
might be canceled by either party for "good
cause." One of the parties terminated the
contract, whereupon the other party, who in-
sisted that no "good cause" for his dismiss-
al existed, brought suit to recover for the
pro (its he would have made If the arrange-
ment had not been interrupted. Mr. Justice
Graves, in an opinion concurred in by the
entire court, says: "The difficulty is inher-
ent. It exists in tlie terms adopted by the
parties. The requirement of 'good cause,' as
something on which the right to revoke by
one or the other should depend, is, as here In-
troduced, too vague to be fairly intelligible.
The phrase in such connection, as to parties
and subject-matter, has no such distinct sense
as to furnish a common and intelligible cri-
terion for the parties, or any determinate
sense whatever. It is lmi)ossfble to say that
the wills of the parties concurred, and that
each meant exactly what the other did, or
even to say what either meant. The case is
one where the parties have failed to express
themselves in terms capable of being reduced
to lawful certainty by judicial effort." The
same general iTile is laid down in cases cited
in Am. & Eng. Enc. Daw, 844, 845. and notes;
Blanchard v. Railroad Co., 31 Mich. 43; Cas-
well V. Gibbs, 33 Mich. 331; Wilkinson v.
Heavenrich, 58 Mich. 574, 26 N. W. 139. Un-
der this view of the law, we must hold that
the plaintiffs cannot recover under this con-
tract for any prospective profits which they
might have made if they had been allowed to
complete it, and the jury should have been
so instructed. As this disposes of the case in
favor of the defendant, it is unnecessary to
discuss the question of dajnages, or any other
question raised by the record. It follows that
the judgment must be reversed, with wists of
this court, and a new trial granted. The oth-
er justices concurred.
242
CONSIDERATION.
k>'
? COOK et al. v. WRIGHT. A/ ^
(1 Best & S. 559.) ^^1
Court of Queen's Bench, July 9, 1861.
Declaration by plaintiffs, as payees, against
the defendant, as maker of two promissory
notes, dated the 7th February, 1856. The
first coimt was upon a note for £10 10s., pay-
able twelve months after date; the second
was upon a note for £11, payable twenty-four
months after date. There was also a count
upon an account stated. Claim, £50.
First plea to the whole declaration: That
after the passing and coming into operation
of the 'Whitechapel improvement act, 1853,
and after the passing and coming into opera-
tion of the Metropolis local management act,
1855, the defendant made the several prom-
issory notes in the said first and second
counts mentioned at the request of the plain-
tiffs, and that, at the time of making the
said promissory notes, the plaintiffs asserted
and represented to the defendant, and the
defendant believed such assertion and rep-
resentation to be true, that there was then
due and owing, and payable from him, the
defendant, as the owner of certain lands and
buildings in certain streets called "FiBch
Street," '"John Street" and "Dawson's Place,"
situate within the parish of St. Mary, White-
chapel, to the trustees of the parish of St.
Mary, Whitechapel, under the provisions of
the Whitechapel improvement act, 1853, di-
vers large sums of money in respect of paving
the streets fronting, adjoining and abutting
on such lands and buildings. And the de-
fendant says that, at the time of making the
said promissory notes no sum of money what-
soever was due or owing or payable from the
defendant as such owner to the said trustees,
nor was the defendant such owner as afore-
said, and that there never was any consider-
ation or value for the defendant making the
said promissory notes in the first and sec-
ond counts mentioned, or either of them, or
for his paying the same, or any part there-
of; and the plaintiffs never were, nor was
any person, ever a holder of the said notes,
or either of them, for value or consideration;
and that the account stated, in the declara-
tion mentioned, was stated of and concerning
the matters and things in this plea mentioned,
and was not stated of or concerning any other
matter or thing whatsoever.
Second plea, to the first and second counts:
That the defendant was induced to make, and
did make, the promissory notes in those
counts mentioned, and each of them, by the
fraud, covin, and misrepresentation of the
plaintiffs and others in collusion with them.
On the trial, before Wightman, J., at the
sittings in London, during Easter term, 1800,
it appeared that the plaintiffs were four of
the commissioners or trustees acting under
and incorporated by section 27 of the White-
chapel improvement act, 1853 (16 & 17 Vict.
c. cxli.); and the action was brought to re-
cover the amount of the two notes mentioned
in the declaration. The evidence as to w'uit
took place at the time of the giving of the
notes was as follows: Mitchell, the clerk to
the trustees, said that, certain parts of the
district not being in repair in 1854, notices
to do repairs were sent or left addressed to
the owners; and in October, 18.55, he wrote
a letter to the defendant demanding £70 for •
expenses incurred by the trustees in doing
paving works in front of houses, of which the
defendant was the owner or occupier, situate
in and abutting on public highways within
the district of the Whitechapel improvement •
act The defendant complained that the
works done by the trustees had seriously in-
jured the property, and that the tenants were
dissatisfied, and requested him to get an
abatement made. He informed the defend-
ant that the trustees assented, and the bal-
ance to be paid by the defendant was agreed
to at £30. The defendant then requested
time, and time was given, upon condition that
he paid interest; and three promissory notes
were given by the defendant, the first of
which was paid by him under protest. The
defendant was called, and stated that Mrs.
Bennett was owner of the three houses in
question, and that he was tenant of one of
them at a rack rent under her, and collected
the rents of the others for her; that he paid
the paving rate of the house which he occu-
pied, and the paving rates of the other houses
he paid for Mrs. Bennett and in her name;
that, upon receiving the notice of October,
1855, he went before the board of trustees and
told them that he was not th*? owner of the
property, and shewed them Mrs. Bennett's
receipts for the rent. They replied that, as
he paid the rates, they considered he was the
owner within the meaning of the Whitechapel
improvement act, 1853, and, if he did not give
notes, they would sei"ve him as they had serv-
ed Goble, which was by levying an execution
on him; that there was another case in which
the question of the liability of the inhabitant^
was to be tried, and, if decided against the
trustees, he should not be called on to pay.
When the first note became due he complain-
ed to Mitchell that the trustees had not car-
ried out their promise to try one of the cases.
Mitchell said that, as the defendant had sign-
ed the notes, he must pay them, and that the
promised trial should take place. Thereupon
the defendant paid the first note. The ^e-
fen dant was afterwards ^ told by Mrs. B ennett
" thilt tie wiis-oo t the owner within'''lhe migJi-
Tng of tl ^p n/>t,~"nnfi liP thprpnpnn wpnt tO a
board meeting of the trustees and told them
that he would not pay the other notes. It
was contended for the defendant that the
notes were given without consideration, the
defendant not being an "owner" within sec-
tion 7 of the Whitechapel improvement act.
The jury, in answer to the qiiestions put to
them by the learned judge, found that the
defendant told Mitclifll or the board, before
he gave the notes, tliat he was not the own-
er; that the defendant mentioned, before he
FORBEAUANCE.
243
gave the notes, that Mrs. Bennett was the
owner; and that Mitchell, or some member
of the board, told the defendant, in the board-
room, that, unless he gave the notes, he would
be served as Goble had been. The verdict
was thereupon entered for the defendant,
leave being reserved to move to enter a ver-
dict for the plaintiffs. In the same term
(May 4).
Montagu Chambers obtained a rule to shew
cause accordingly, on the ground that tlie evi-
dence did not prove want of consideration for
giving the notes, and that, upon the evidence,
the plaintiffs were entitled to a verdict.
This rule wtis argued in this term, May 23d,
before COCKBURN, C. J., and WIGIITMAN,
CROMPTON, and BLACKBURN, JJ.
Mr. Shoe, Serjt., and Mr. Barnard, shewed
cause. There was no consideration for the
notes. The defendant signed them upon the
representation by the trustees that they con-
sidered him the owner of the houses because
he collected the rents, and was liable to pay
the rates. But the defendant was not the own-
er withm section 7 of St. 16 & 17 Vict c
cxli., by which "the word 'owner,' used with
reference to any lands or buikhngs in respect
of which any work is required to be done, or
any rate to be paid under this act, shall mean
the person for the time bemg entitled to re-
ceive, or who, if such lands or buildings were
let to a tenant at rack rent, would be entitled
to receive, the rack rent from the occupier
thereof."
The existence of disputes and controversies
between a plaintiff and defendant, as to wheth-
er the defendant is indebted to the plaintiff,
is not a sufficient consideration for a promise;
there must be a debt in existence. Edwards
V. Baugh, 11 Mees. & W. U41. These notes
were not given for the debt of another pai'ty:
the trustees did not profess to take them in
payment of the rates due from Mrs. Bennett
[CROMPTON, J. Suppose money had been
paid by the defendant could he have recover-
ed it back? The maxim "Quod lieri non debet
factum valet" seems to apply. WIG HTM AN,
J., referred to Southall v. Rigg and Formau v.
Wright, 11 C. B. 481.] In Addison on Con-
tracts, p. 15 (4th Ed.), It is said: "So if the
consideration prove to be a nullity, the prom-
ise founded upon it is void, as if the con-
sideration be the forbearance of a suit when
there is no cause of action * • * or a prom-
ise to pay a debt which never had an existence
In point of law."
Mr. Hanuen, in support of the rule. 1. The
plea was not proved. The defendant did not
believe the representation of the trustees that
he was hable as owner of the houses under
the provisions of the Whitochapel improve-
ment act, lSo3.
2. The plea is not good. In Edwards v.
Baugh, 11 Mees. & W. 041, the defendant
might have been imposed upon as to their be-
ing a debt due from him to the plaintiff, but
in this case there is no statement tliat the de-
fendant yielded to the assertion that he was
owner of the houses; it amounts to no more
than that he thought it doubtful whether he
was liable. [CROMPTON, J. Did the trus-
tees put themselves in a worse position by tak-
ing the notes? Might they not the next day
have said, "We have mistaken our position,"
and have returned the notes?] No. In Baker
V. Walker,n4 Mees. & W. 4aj, Parke. B., said
(page 4G7), "If I give a promissory note for the
debt of a third person, I am bound to pay it
when due." [CROMPTON, J. The defendant
gave the note in discliargo of his own liabihty.
He took the debt upon himself, whosesoever
it was, if the trustees would give him time.]
The defendant signed the notes because the
trustees threatened to sue him, not because he
believed himself to be liable; and he obtained
time for payment of the d(;bt of a third person,
which is a sufhciont consideration for giving
the notes. Sowerby v. Butcher, 2 Cromp. &
M. 308. Suppose the trustees had sued .Mrs.
Bennett for the rates, she might have pleaded
that the trustees had taken notes for the
amount from her agent. The notes were giv-
en for the debt claimed to be due in respect of
a particular property. [COCKBURN, C. J.
The difficulty which I feel is that I do not see
in what character the defendant acted when
he gave the notes. WIGHTMAN, J. By
section 11 of St 16 & 17 Vict c. cxli., the pro-
visions of the "Towns Improvement Clauses
Act 1S47" (10 & 11 Vict c 34.) are incor-
porated with the first mentioned act, "with re-
spect to the paving and maintaining the
streets, except sections 54 and 55; and provid-
ed that section 53 shall extend to such streets
only as shall be public highways at the time
of the passing of this act, and that the ex-
penses incurred under the last mentioned sec-
tion shall be repaid by the owners of the
lands therein mentioned, and shall be recov-
erable from the owners or occupiers in the
same manner as is provided with respect to
the recovery of expenses imder the provisions
for insuring the execution of works required
to be done by the owners and occupiers of
lands."]
Cur. adv. vult
BLACKBURN, J. (.Tuly 9th) delivered the
judgment of COCKBURN. C. J., WIGHT-
MAN, J., and himself; CROMPTON, J., hav-
ing left the court before the argument was
concluded.
In this case it appeared on the trial that
the defendant was agent for a Mrs. Bennett,
who was nonresident owner of houses in a
district subject to a local act. Works had
been done in the adjoining street by the
commissioners for executing the act, the ex-
penses of which, under the provisions of
their act they charged on the owners of the
adjoining houses. Notice had boon given to
the defendant, as if he had himself been
owner of tlie houses, calling on him to pay
the proportion chargeable in respect of them.
He attended at a board meeting of the com-
missioners, and objected both to the amount
241
CONSIDERATION.
and nature of the charge, and also stated
that he was not the owner of the houses,
and that Mrs. Bennett was. He was told
that, if he did not pay, he would be treated
as one Goble had been. It appeared that
Goble had refused to pay a sum charged
against him as owner of some houses, and
the commissioners had taken legal proceed-
ings against him, and he had then submitted
and paid, with costs. In the result it was
agreed between the commissioners and the
defendant that the amount charged upon
liim should be reduced, and that time should
be given to pay it in three instalments. He
gave three promissory notes for the three
instalments. The first was duly honoured;
the others were not, and were the subject
of the present action. At the trial it ap-
peared that the defendant was not in fact
owner of the houses. As agent for the own-
er he was not personally liable under the act.
In point of law, therefore, the commission-
ers were not entitled to claim the money
fiom him; but no case of deceit was alleged
against them. It must be taken that the
commissioners ho n estly b elieved that the
de fendant was per5onalLy~lia bl£;>_aad _really
intended to take legal proceedings agains t
hi m, as they hacTcTone ag ainst GobTe^ The
defendant, accoramg to" his own evidence,
never believed that he was liable in law, but
signed the notes in order to avoid being sued
as Goble was. Under these circiunstances the
substantial question reserved (irrespective
of the form of the plea) was whether there
was any consideration for the notes. We
are of opinion that there was.
There is no doubt that a bill or note given
in consideration of what is supposed to be
a debt is without consideration if it appears
that there was a mistake in fact as to the
existence of the debt (Bell v. Gardiner, 4
Man. & G. 11), and, according to the cases
of Southall V. Rigg and Forman v. .Wright,
11 C. B. 481, the law is the same if the bill
or note is given in consequence of a mistake
of law as to the existence of the debt. But
here there was no mistake on the part of the
defendant, either of law or fact. What he
did was not merely the making an erroneous
account stated, or promising to pay a debt
for which he mistakingly believed himself
liable. It appeared on the evidence that he
believed himself not to be liable; but he
knew that the plaintiffs thought him liable,
and would sue him if he did not pay, and in
order to avoid the expense and trouble of le-
gal proceedings against himself he agreed
to a compromise; and the question is wheth-
er a person who has given a note as a com-
promise of a claim honestly made on him,
and which but for that compromise would
have been at once brought to a legal deci-
sion, can resist the payment of the note on
the ground that the original claim thus com-
promised might have been successfully re-
sisted.
If the suit had been actually commenced,
the point would have been concluded by au-
thority. In Longridge v. Darville, 5 Bam. &
Aid. 117, it was held that the compromise of
a suit instituted to try a doubtful question
of law was a sufficient consideration for a
promise. In Atlee v. Backhouse, 3 Mees. &
W. 633, where the plaintiff's goods had been
seized by the excise, and he had afterwards
entered into an agreement with the commis-
sioners of excise that all proceedings should
be terminated, the goods delivered up to
the plaintiff, and a sum of money paid by
him to the commissioners, Parke, B., rests
his judgment (page G50) on the ground that
this agreement of compromise honestly made
was for consideration, and binding. In
Cooper v. Parker, 15 0. B. 822, the court of
exchequer chamber held that the withdraw-
al of an untrue defence of infancy Ln a suit,
with payment of costs, was a sufficient con-
sideration for a promise to accept a smaller
sum in satisfaction of a larger.
In these cases, however, litigation had been
actually commenced; and it was argued be-
fore us that this made a difference in point
of law, and that though, where a plaintiff
has actually issued a writ against a defend-
ant, a compromise honestly made is binding,
yet the same compromise, if made before the
writ actually issues, though the litigation is
impending, is void. Edwards v. Baugh, 11
Mees. & W. 641, was relied upon as an au-
thority for this proposition. But in that
case Lord Abinger expressly bases his judg-
ment (pages 645, 646) on the assumption that
the declaration did not, either expressly or
impliedly, shew that a reasonable doubt ex-
isted between the paities. It may be doubt-
ful whether the declaration in that case
ought not to have been construed as dis-
closing a compromise of a real bona fide
claim, but it does not appear to have been
so consti-ued by the court. We agree that,
unless there was a reasonable claim on the
one side, which it was bona fide intended to
pursue, there would be no gi-ound for a com-
promise; but we cannot agree that (except
as a test of the reality of the claim in fact)
the issuing of a writ is essential to the valid-
ity of the compromise. The position of the
parties must necessarily be altered in everj-
case of compromise, so that, if the question
is afterwards opened up, they cannot be
replaced as they were before the compro-
mise. The plaintiff may be in a less favour-
able position for renewing his litigation; he
must be at an additional trouble and expense
in again getting up his case, and he may
no longer be able to produce the evidence
which would have proved it originally. Be-
sides, though he may not in point of law be
bound to refrain from enforcing his rights
against third persons during the continu-
ance of the compromise, to which they are
not parties, yet practically the effect of the
compromise must be to prevent his doing so.
For instance, in the present case, there can.
be no doubt that the practical effect of the
FORBEARANCE.
245
■compromise must have been to induce the
commissioners to refrain from taliing pro-
ceedings against Mrs. Bennett, the real own-
er of the houses, while the notes given by
the defendant, her agent, were running;
though the compromise might have afforded
no ground of defence had such proceedings
been resorted to. It Is this detriment to the
party consenting to a compiomise arising
from the necessary alteration in his posi-
tion which, ill my opinion, forms the reai
consideration for the promise, and not the
technical and almost illusory consideration
arising from the extra costs of litigation.
The real consideration therefore depends,
not on the actual commencement of a suit,
but on the reality of the claim made and
the bona fides of the compromise.
In the present case we think that there
was sudicient consideration for the notes Id
the compromise made as it was.
The rule to enter a verdict for the plaintiff
must bC' made absolute.
Rule absolute.
CONSIDERATION.
RECTOR, ETC., OF ST. MARK'S CHURCH
V. TEED.
(24 N. E. 1014, 120 N. Y. 583.)
Court of Appeals of New York, Second Divi-
sion. June 24, 1890.
Appeal from an order of the seneral
term of the supreme court, in the second
judicial department, reversing a judgment
entered upon the decision of the court at
special term.
Action on a written instrument where-
by the defendant promised to pay to the
plaintiff, a religious corporation, the sum
of $500. The answer alleged tliat said
promise to pay was made without any
consideration, — good, valuable, or other-
wise, — and that it is of no force or effect.
Upon the trial it appeared that on Febru-
ary 1, 1S7.5, one Lewis T. Wright died,
leaving a last will and testament, which
in due time was presented for probate to
the surrogate of the proper county by the
defendant, who was the executor na»ned
therein. Objections to the probate of the
will were filed by Thomas Wright, the
only brother, heir at law, and next of kin
of the decedent. On the 14th of April, 1875,
while the issue was on trial, the defendant,
desiring that the contest should be with-
drawn, made an arrangement with Thom-
as Wright, whereby the latter agreed to
withdraw his opposition to the probate
of the will, provided the former would pay
the plaintiff the sum of f 500 "in the man-
ner, at the time, on the conditions, and
for the purpose expressed in the undertak-
ing or obligation hereinafter set forth."
The defendant agreed to and accepted
said terms of compromise, and thereupon,
executed and delivered the following in-
strument, viz.: "For value received, I
hereby promise to pay to Saint Mark's
Church, New Castle, Westchester county,
the sum of five hundred dollars. It is un-
derstood that said church will appropri-
ate the interest of said, money to the im-
provi-mcnt, adf)rnment, and care-taking of
the church-yard of said church; but the
payment thereof shall not be exacted till
the decease of Thomas Wi*ight. It is fur-
ther understood that, upon the execution
and delivery, by the residuary legatees
named in the will of Lewis Wright, of a
written agreement or a sufficient promise
to bind them, instead of the undersigned,
to the above, then this writing shall be
destroyed, or delivered to the undersigned.
CriAS. G. Teed. In presence of Lewis C.
Pratt. Dated April 14th, 1875. " In con-
sideration of the execution and delivery ol
this agreement by the defendant, said
Thomas Wright withdrew his objections
to the probate of the will, which was im-
mediately admitted to probate; and let-
ters testamentary were issued to the de-
fendant thereon. Neither the plaintiff nor
the defendant had any interest in the es-
tate of said decedent, either through the
will or otherwise, but one ground of ob-
jection to the probate was that the tes-
tator had agreed to leave .fSOO to the
plaintiff. The legatees were relatives ol
the defendant, and on their account he de-
sired that the contest should be aban-
doned. Said instrument was duly deliv-
ered to the plaintiff, and it has ever since
been the lawful ow^ner and holder thereof.
Thomas Wright died September 20, 1882;
and said agreement has never been com-
plied with by the residuary legatees, nor
performed by the defendant. The trial
judge, after finding the foregoing facts, in
substance, found as a conclusion of law
that the complaint should be dismissed
with costs.
William H. Robertson, for appellant.
Walter Edwards, for respondent.
VANN, J. The question presented for de-
cision by this appeal is whether the instru-
ment upon which the action was brought
is supported by a consideration that the
law recognizes as sufficient. "A valuable
consideration, in the sense' of the law, may
consist either in some right, interest,
profit, or benefit accruing to one part^', or
some forbearance, detriment, loss, or re-
sponsibility given, suffered, or undertaken
bv the other." 3 Amer. & Eug. Enc. Law,
831; Currie V. Misa, L. R. 10 Exch. 162;
Chit. Cont. (9th Amer. Ed.) 29; 2 Kent,
Comm. 405. It is not essential that the
person to whom the consideration moves
should be benefited, provided the person
from whom it moves is, in a legal sense,
injured. The injury may consist of a com-
promise of a disputed claim, or forbearance
to exercise a legal right; the alteration in
position being regarded as a detriment
that forms a consideration, independent
of the actual value of the right forborne.
Thomas Wright, as the sole heir at law
and next of kin of the decedent, would
have inherited the entire estate if he had
succeeded in his effort to defeat the pro-
bate of the will. He was, therefore, "par-
ticularly interested in setting aside the
will," within the meaning of that phrase
as used in the case of Seaman v. Seaman,
12 Wend. 3Sl, which we regard as analo-
gous to this, and which has been repeatedly
followed. Palmer v. North, 35 Barb. 293;
Bedell v. Bedell, 3 Hun, 583; Hall v. Rich-
ardson, 22 Hun, 447.
It will be presumed that the testator
left assets of some value, as the evidence
tended to show that there was property,
although not enough to pay the legacies,
and the trial court mentioned "the prop-
erty" and "the estate" of Lewis T. Wright
in the findings. Moreover, as the agree-
ment recites a consideration, the burden of
proof was on the defendant to show that
there was none; and, if that depended up-
on the allegation that the testator left no
property, the burden extended to proof of
that proposition also. The withdrawal
of the objections to tlie probateof tlievvill,
therefore, at the special request of the de-
fendant, was the forbearance of a legal
right, and constituted a consideration
sufficient to support a promise b^' him,
even if he was to receive no benefit what-
ever. " Whether he would have succeeded
in the litigation," as was said in the Sea-
man Case, "is not the test. * * * It is
enough that he yielded to his adversaries
the right he possessed to contest the will.
That he has done, and the compromise it-
self proves prima facie an acknowledg-
ment by the defendants that there was
color for his objections." Page 381. The
FORBEARANCE.
247
/
court will not ask "wliich party would
have succeeded;" for that would involve
the trial of the issue that was conipro-
niisod, and the object of the law in en-
couragin{;:.coniproniis('H would thus be de-
feated. The couKideration did not rest
up(jn any advaiit;ij;e to the defendant, but
upon the abandonnientby Thomas \\rij::ht
of his position as a contestant. By dis-
continuing his effort to overthrow the
will, he relinquished a right secured to
him by law, and lost his chance of inherit-
ing the estate. He did this at the request
of the defendant, who promised to pay for
it. If the form of the pronuse had been to
pay directly to Thomas Wright, no reasou
is perceived why it could not have been en-
forced. As the arrangement was made
with him, and the consideration was fur-
nished by him, the fact that the money
was made payable bj' his direction to the
plaintiff does not render the promise void.
The plaintiff became his appointee, and
upon receiving from him the written agree-
ment, or evidence of the promise, it became
his donee; and thus privity was estab-
lished between the parties to the action.
This is not the case of amerestranger who
attempts to intervene, and claim the ben-
efit of a contract to which he is not a par-
ty, as in many of the authorities relied on
by the appellant, because the promise was
made directly to the plaintiff, and there
was a dear intention on the part of the
person furnishing the consideration to se-
cure a benefit to the plaintiff. If the sum
in question had been made payable to
Thomas Wright, he could have given the
claim to the plaintiff, whose title would
thus have been jjerfect; and why could he
not make the gift by causing tiie iironiise
to be made directly to the plaintiff? The
intention (jf the parties should not be de-
feated l)y releasing the defendant from his
promise, after he had received the consid-
eration therefor, simjily on account of the
form of the transaction, which violates
no statute, nor any rule of jtublic policy.
If A. sells a horse to II. for .$100, and B.
gives in payment therefor a note for that
amount drawn payable to C. at A.'s re-
quest, and A. delivers the note to C, the
latter can enforce it against the maker.
The case supposed differs in no essential
particular from that under consideration.
As recently held by this court, after a care-
ful review of the authorities, a part3' for
whose benefit a promise is made may sue
in assumpsit thereon even if the considera-
tion therefor arose between the promisor
and a third person. Todd v. Weber, 95 N.
Y. 181, 194. Without elaborating our rea-
sons, we think that the order appealed
from should be aflirmed, and that judg-
ment absolute should be rendered against
the defendant, with costs. .Ml comur, ex-
cept PoTTKR, J., dissenting, and ILaigut,
J., absent.
24i
COiJSIDEllATION.
W
7
y
llV;^
Vi
McKINLBY V. WATKINS^
(13 111. 140.)
Supreme Court of Illinois. Dec, 1851.
This action was commenced by Watkius
against McKinley before a justice of the
peace. Watkins failed to recover on the trial
before the justice, and took an appeal to the
circuit court At the April term, ISol, of the
Logan circuit court, the cause was tried be-
fore Davis, J., and a jury, and resulted in a
verdict and judgment for Watkins, and Mc-
Kinley brought the cause to this court by writ
of error.
Watkins and McKinley had traded horses
in lSi5. Afterwards they had some dispute
about the trade, and Watkins threatened to
sue imless McKinley would give him a horse,
or the worth of the horse which McKinley
had got from Watkins, the horse which Wat-
kins had received in exchange having died.
McKinley promised that, if Watkins would
not sue, he would give him fifty dollars, or a
horse worth that sum. Upon this promise
Watkins brought ■ his ^action against McKin-
ley.
W. H. Hemdon, for plaintiff in eiror. T.
L. Harris, for defendant in error.
TRUMBULL, J. This was an action orig-
inally commenced before a justice of the
peace, and taken by appeal to the circuit
court, where the plaintiff had judgment for
fifty dollars and costs.
The evidence showed that the parties had
traded horses; that, a month or two after the
trade, the horse which plaintiff got, died, and
that he was unsound when the trade took
place. There was no evidence of any false
representations, or warranty on the part of
the defendant in making the trade. After
the death of the horse the plaintiff informed
the defendant of the fact, and alleged that
he was diseased at the time of the trade,
whereupon the defendant promised to pay
the plaintiff fifty dollars, or let him have a
fifty-dollar horse, if he would not sue.
This action was brought to recover the fifty
dollars. On the trial the circuit court in-
structed the jury as follows:
"If the jm-y believe from the evidence that
there was a horse trade between Watkins
and McKinley, out of which a difficulty had
grown, and that Watkins was threatening to
sue McKinley, and not deceiving him by any
misrepresentations, and that McKinley, rath-
er than be sued, promised Watkins that he
would pay him fifty dollars, then said prom-
ise is binding; and this regardless of the
question as to whether McKinley would or
would not have been liable in the suit which
Watkins was threatening to bring against
the propriety of this instruction, and in one
point of view it is cleai-ly erroneous. It as-
sumes that the defendant would be bound by
his promise, whether assented to by the
plaintiff or not. Unless the plaintiff were
bound on his part not to do the act which
formed the consideration of the promise of
the defendant, the agreement was void for
want of mutuality. The promise of defend-
ant to pay fifty dollars if plaintiff would not
sue him was incomplete tiU accepted by the
plaintiff. Chit. Cont. 13.
/ A mere offer not assented to constitutes no\
contract, for there must be not only a pro- \
[posal, but an acceptance thereof. Story, J
\Cont. §§ 377, 378. ^
The instruction in other respects is very
nearly, if not quite, correct. It assumes that,
in order to support the promise, there must
have been a horse trade between the parties,
out of which a difficulty had arisen, and that
the plaintiff was threatening to sue the de-
fendant, and not deceiving him by any mis-
representations. If by this is to be under-
stood that the plaintiff must in good faith
have supposed t hat he had a j good ca use of
action against the_f^pff^nnn nt^ ja wing out of
TE5 huistj- L fade, the ir|?}tmct^on is stricOy
prgper. it~ is immaterial whether the plam-
tiff could have recovered in such action or
not If he honestly supposed that he had a
good cause of action, the compromise of such
right was a sufficient consideration to uphold
a contract fairly entered into between the
parties, irrespective of the question as to who
was in the right It has often been decided
that the compromise of a doubtful right is
a sufficient consideration for a promise; and
it is immaterial on whose side the right ulti-
mately turns out to be, as it must always be
on one side or the other, because there can
be but one good right to the same thing. Tay-
lor V. Patrick, 1 Bibb, 168; Russell v. Cook,
3 Hill, 504; Moore v. Fitzwater, 2 Rand. 442;
O'Keson v. Barclay, 2 Penn. R. 531.
If the plaintiff' was threatening to sue on
a claim which he knew was wholly unfound-
ed, and which he was setting l ^j as a mere
pretense to extort money from the defendant,
a contract foimded on a promise not to sue
in such a case would be utterly void. In or-
der to support the promise there must be
such a claim as to lay a reasonable ground
for the defendant's making the promise, and
then it is immaterial on which side the right
may ultimately prove to be. Edwards v.
Baugh, 11 Mees. & W. 641; Perkins v. Gay,
3 Serg. & R. 331.
The judgment of the circuit court is re-
versed, and the cause remanded. Judgment
reversed.
him." The only question in the case is as to TREAT, a J., dissented.
FORBEARANCE.
249
RUE V. MEIRS et al.
aa Atl. 369, 43 N. J. Eq. 377.)
Court of Chancery of New Jersey. Feb. 7,
18S8.
Bill to enforce performance of contract
On hearing on demurrer.
William H. Vredenburgh, for demurrant,
Frank P. McDermott, for complainant.
VAN FLEET, V. C. The complainant sues
In a dual capacity— in her own right, as well
as in that which she holds as the administra-
trix of her deceased brother, Natlianiel S.
Rue, Jr. The foundation of her action is a
contract made by her fathei", Robert C. Rue.
with the defendants, .John G. Meirs and Sa-
rah E. Davis, and which was reduced to
writing and signed by her father and the de-
fendants, and which reads as follows: "This
agreement, made the twenty-seventh of Sep-
tember, 1S75, by and between Sarah E. Da-
vis and John G. Meirs, of Cream Ridge, coun-
ty of Monmouth, state of New Jersey, of the
first part, and Robert C. Rue, of the same
place, as the representative of his children,
L. M. Rue and N. S. Rue, Junior, of the sec-
ond part; witnesseth, in consideration of the
covenants on the part of the, party of the
first part hereinafter contained, doth cove-
nant and agree with the party of the second
part, Robert C. Rue, that we, Sarah E. Da-
vis and John G. Meirs, of the first part, do
agree to pay the sum of $4,0r>C co li. C. Rue,
ns the representative of his children, L. M.
Rue and N. S. Rue, Junior, provided R. C.
Rue makes no objection to the proof of the
will and the settlement of the estate of Lu-
cretia S. Meirs, deceased, so far as said will
has reference to said children." The com-
plainant's bill alleges that this contract grew
out of a threatened contest over a paper pur-
porting to be the will of Lucretia S. Meirs,
deceased. Mrs. Meirs was the motlier of the
defendants, and the grandmother of the com-
plainant and her brother, being the children
of a deceau^ju daughter of Mrs. Meirs. Mrs.
Meirs died on the ninth of September, 1875.
By her will she made an unequal distribution
of her property, giving the defendants much
more than two-thirds. The complainant and
her brother wore both infants at the time of
their grandmother's death. Their father was
present at the reading of her will, and imme-
diately after he knew its contents expressed
his dissatisfaction with its provisions, and
protested against its admission to probate.
The bill says that the defendants, recognizing
the unequal distribution which the testatrix
liad made of her property, and the grounds
which existed for contesting her will, they, to
induce Robert C. Rue to forbear from con-
testing the will on behalf of his children,
made the promise contained in the contract.
The bill further says that the will of Mrs.
Meirs was, three days after the contract was
signed, admitted to probate, without contest.
and that since then her estate has been set-
tled, and her property distributed, in accord-
ance with the terms of her will, witliout ob-
jection on the part of Robert C. Rue or his
children, but with their acquiescence. But
the $4,000 have not been paid, and this ac-
tion is brought to compel payment.
The defendant Meirs demurs. He disputes
the validity of the contract. He says that he
and his sister got nothing for their promise
to pay the $4,000. This contention attempts,
as it seems to me, to deny what is manifestly
undeniable. The right of Robert C. Rue to
file a caveat, as the next friend of his chil-
dren, against the probate of Mrs. Meirs' will,
stands, I think, free from the least doubt.
While an infant is incapable of maintaining
a suit or other legal proceeding in his own
name, for the protection of his rights, there
can be no doubt that he is entitled to the
benefit of every remedy recognized by our
system of jurisprudence, and to which an
adult of full capacity may resort, the only
difference being that an infant must proceed
in the name of an adult, as his next friend,
while an adult may proceed in his own name.
And this is so because an infant, by reason
of the immaturity of his mind, is incapable of
judging when and under what circumstancvs
he should seek judicial protection or re-
dress, and the courts have therefore adopt-
ed, as a rule of practice for the protection of
infants as well as themselves, that no suit or
proceeding in behalf of an infant shall be
entertained, unless instituted by a person
competent to judge whether such step is nf c-
essary or proper for the due protection of
the infant's rights. While any person of full
age and sound mind is competent to become
the next friend of an infant, his nearest rela-
tive is usually preferred. A father, being
the natural guardian of his infant child, has
a vested right, as it has been called, to act
as the next friend of his child in a litigation
involving the child's rights, if the father's in-
terests are not hostile to those of his child,
and he has been guilty of no default or neg-
lect. This right is regarded as so superior
by the English courts that it has been de-
clared that the father has a right, even
where another person has instituted a suit in
behalf of his infant child, and prosecuted it
to decree, to have such other person dis-
placed, after decree pronounced, and himself
substituted as next friend. Woolf v. Pem-
berton, G Ch. Div. 19. It would seem, then,
to be entirely clear that the defendants, l\v
removing the opposition which Robert C. Rue
intended to make on behalf of his children to
the probate of the will, and which he had
an unquestionable riglit to make, reheved
themselves, from the only substantial danger
which existed, and that instead of its being
true that they got nothing for tueir promise
to pay $4,000. it is a fact standing free from
all dispute that they have received every-
thing which the contract stipulated that they
should receive. The thing that the defend-
250
CONSIDERATION.
ants were bargaining for was tbat the paper
which their mother left as the testamentary
disposition of her property should be proved
as her will, without objection, and that their
mother's property should be divided and dis-
tributed as her will directed. The will was
proved without objection, and the property
has been divided and distributed as the will
directed. The contract, therefore, so far as
the defendants were entitled to a nything un-
^oj-JX hns been P -\]]Y pQj-frtrmi^ ''^—
The question whether a promise to forbear
suit to enforce a disputed claim or right,
where the claim or right is honestly assert-
ed, under a behef that it is substantial, al-
though it is in fact wholly unfounded, is suf-
ficient, as a consideration to support a prom-
ise to pay money, has recently been put at
rest in this state by a decision of the su-
preme court. That court said in Grandin v.
Grandin, 49 N. J. Law, 508, 9 Atl. 756: "The
compromise of a disputed claim, made bona
fide, is a good consideration for a. promise,
whether the claim be in suit or litigation has
not been actually commenced, even though it
should ultimately appear that the claim was
wholly unfounded,— the detriment to the par-
ty consenting to a compromise, arising from
the alteration in his position, forms the real
consideration which gives validity to the
promise. The only elements necessary to a
valid agreement of compromise are the real-
ity of. the claim made, and the bona fides of
the compromise." And what I understand is
meant by the phrase, "the reality of the
claim made," is that the claimant shall assert
his claim in good faith, believing that it is
real, or, in the language of Lord Justice Cot-
ton, in Miles v. Estate Co., 32 Ch. Div. 2G6:
"A claim is honest if the claimant does not
know that his claim is unsubstantial, or if
he does not know the facts which show that
his claim is a bad one." The court, in decid-
ing Grandin ,v. Grandin, adopted the princi-
ple estabhshed by the court of queen's bench
in Cook V. Wright, 1 Best & S. 559. That
case was heard by Cockburn, C. J., and
Blackburn and Wightman, JJ. The material
facts, as stated in the opinion of Mr. Justice
Blackburn, were: "The defendant was agent
for a Mrs. Bennett, who was a non-resident
owner of houses in a district subject to a lo-
cal act. Work had been done in the adjoin-
ing street by the commissioners for executing
the act, the expenses for which, under the
provisions of the act, they charged on the
owners of the adjoining houses. Notice had
been given to the defendant, as if he had
himself been the owner of the houses, calling
on him to pay the proportion chargeable in
respect to them. He attended at a board
meeting of the commissioners, afid objected
both to the amount and nature of the charge,
and also stated that he was not the owner of
the houses, and that Mrs. Bennett was. He
was told that if he did not pay he would be
treated as one Goble had been. It appeared
that Goble had refused to pay a sum char-
ged against him as the owner of some hous-
es, and the commissioners had taken legal
proceedings against him, and he had then
submitted and paid with costs. In the re-
sult it was agreed between the commissioners
and the defendant that the amount charged
upon him should be reduced, and that time
should be given to pay it in three install-
ments. The defendant gave three promissory
notes for the three installments; the lirst
was duly honored, the others were not, and
were the subject of the present action. At
the trial it appeared that the defendant was
not the owner of the houses. As agent for
the owner he was not personally liable under
the act. In point of law, therefore, the com-
missioners were not entitled to claim the
money from him, but no case of deceit was
alleged against them. It must be taken that
the commissioners honestly believed that the
defendant was personally liable, and really
intended to take legal proceedings against
him, as they had done against Goble. The
defendant, according to his own evidence,
never believed that he was liable in law, but
signed the notes in order to avoid being sued
as Goble was." The court decided that the
notes sued on were supported by a good con-
sideration, and this ruling was put distinct-
ly on the ground that the defendant, by giv-
ing the notes, had induced the plaintiffs to
alter their position, by refraining from do-
ing what they might have done if the notes
had not been given. The court say: "There
can be no doubt that the practical effect of
the compromise must have been to induce the
commissioners to refrain from taking pro-
ceedings against Mrs. Bennett, the real own-
er of the houses, while the notes given by
the defendant, her agent, were running;
though the compromise might have afforded
no ground of defense had such proceedings
been resorted to. It is this detriment to the
party consenting to a compromise, arising
from the necessary alteration in his posi-
tion, which, in our opinion, forms the real
consideration for the promise, and not the
technical and almost illusory consideration
arising from the extra costs of the litigation.
The real consideration, therefore, depends,
not on the actual commencement of a suit,
but on the reality of the claim made, and the
bona fides of the compromise."
The same doctrine was subsequently de-
clared in Callishcr v. Bischoffheim, L. R. 5 Q.
B. 449. The court, speaking by Cockburn, C.
J., there said: "The authorities clearly estab-
lish that, if an agreement is made to compro-
mise a disputed claim, forbearance to sue in
respect of that claim is a good consideration;
and whether proceedings to enforce the dis-
puted claim have or have not been instituted
makes no difference. * * * Every day a
compromise is effected on the ground that
the party making it has a chance of succeed-
ing in it, (in enforcing his claim or right by
suit;) and if he bona fide believes he has a
I fair chance of success, he has reasonable-
FOKBEARANCE.
251
ground for suing, and his forbearance to sue
will constitute a good consideration. When
such a person forbears to sue, he gives up
what he believes to be a right of action, and
the other party gets an advantage, and in-
stead of being annoyed with an action, he
escapes from the vexation incident to it."
Applying these principles to the contract on
trial, its validity, in point of consideration, is
put beyond dispute. In cases of this class. If
the contract has been fairly made, no inquiry
will be made as to the adequacy of its con-
sideration. CJrandin v. Grandin, supra. By
the terms of this contract, it will be observed
that the advantages were all with the defend-
ants. They were not bound to pay until the
other contracting party had performed his
part of the contract, and they had received
everything under the contract which they
were entitled to receive. Stated in sub-
stance, the contract is this: The defendants
agreed to pay Robert C. Rue $4,000, for his
children, provided he make no objix-tion, on
behalf of his children, to the proof of Mrs.
Meirs' will, and the division and distribution
of her estate according to the terms of her
will. The $4,000 are not payable until the
will has been proved and fully executed,— un-
til the opposing or hostile right, which the
defendants feared, was actually extinguished.
The defendants have now received everything
which they were entitled to receive under the
contract, and for which they agreed to pay
the $4,000, and I think they are, therefore,
bound in law and conscience to abide by their
contract, and nay the $4,000.
The defendant also raises a question of ju-
risdiction. He denies the power of this court
to give the complainant the relief she asks.
This objection raises a question which, in
view of the peculiar condition of facts which
the case presents, seems to me to be one
about which strong diversity of opinion may
exist, and I must confess that the conclusion
which I have reached concerning it is not one
which I express without doubt. The draughts-
man of the bill has attempted to lay a foun-
dation for equity cognizance, by asking for a
reformation of the contract. The contract, it
will be observed, says that "in consideration
of the covenants on the part of the party of
the first part, hereinafter contained, doth cov-
enant and agree with the party of the second
part, Robert C. Rue. that we, Sarah E. Davis
and .Tohn G. ^leirs. do agree to pay the sum
of $4,000 to R. C. R.," etc. The words "par-
t>' of the first part" are used where it is man-
ifest the words "party of the second part"
were intended to be used. And it is also
obvious that the words "party of the first
part" should have been inserted between the
words "hereinafter contained" and the words
"doth covenant," In order to make the con-
tract express, in formal words, the meaning
of the parties. But these mistakes are pal-
pable, and do not create the slightest obscu-
rity as to the meaning of the contract, nor
prevent it from being so constnied as to give
full effect to the real intention of the parties.
It is a rule of construction, of universal ap-
plication, that a contract, notwithstanding
mistakes, shall, if the meaning of the parties
can be clearly discerned, be construed as near
the minds and apparent intents of the parties
as It possibly may be, and the law will per-
mit. Sis.son V. Donnelly, 36 N. J. Law, 482.
The subsequent parts of this contract exprt-ss
the intention of the parties In language so
clear, simple, and explicit that it must, in its
present form, be understood and construed
just exactly as it would be after It was re-
formed. Where that is the case, reformation
can accomplish nothing; Indeed, there is
nothing to reform, for the contract, with tlie
mistake in It, is to be construed and carried
into effect just as if it was entirely free from
mistake. A mistake which is harmless, and
does no injury, needs no correction. This
court cannot take jurisdiction on the ground
that the contract sued on needs reformation.
This suit is brought to enforce a money de-
mand, founded on a simple contract. If that
was all there was of it, there would not be
the least pretense of jurisdiction in this court.
And so, if the contract consisted of a promise
by the defendants to pay money to the com-
plainant and her brother, for a consideration
moving from their father to the defendants,
there can be no doubt that an action at law
might be maintained on it; for it is settled
that, in cases of simple contract, if one person
makes a promise to another for the benefit of
a third, the third may maintain an action at
|..law on it, though the consideration does not
move from him. It is otherwise when the
contract is under seal. Joslin v. Car Spring
Co., 30 N. J. Law, 141. But this contract
was made by a person acting as trustee for
the benefit of his cestuis que trust A fa-
ther, as the natural guardian of }iis two infant
children, agrees to waive his right, as the
person having the first and best right to act
as the next friend of his children, to contest
the validity of a will by legal proceedings, on
condition that, if no contest is made and the
will is admitted to probate, and the testatrix's
property is distributed as the will directs, the
persons taking the largest benefit imder the
will will pay a certain sum of money, not to
the children, but to the father for his chil-
dren. Now, in such a transaction, the father,
from the beginning to the end, is acting in a
capacity of pure tnist. It is true, he is a si'lf-
constituted trustee, but he assumes that char-
acter under circumstances when the common
instinct of our nature made it his duty to do
.so, and when, if he had not done so, he would
have allowed what he believed to be an un-
conscientious advantage to be taken of his
children. The fact that the contract was
made by a person acting as a trustee, for the
benefit of his infant cestuis que trust, may
not be decisive on the question of jurisdic-
tion, but it shows that the contract belongs
to a class of transactions over which this
court exercises a very extensive jurisdiction.
252
CONSIDERATION.
I t>iink there is reason to doubt whether the
children could maintain an action at law on
this contract in their own names. No prom-
ise is made to them; on the contrai-y, the
promise is to their father, the language of the
contract being: *'We do agree to pay the sum
of ?4.000 to R. C. Rue, as the representative
of his two children." But if the children
could have maintained an action at law in
their own names, it would be necessary now,
as one of them is dead, that two actions
should be brought,— one in the name of the
suiTiving child, and the other in the name of
the administratrix of the deceased child.
There may, perhaps, be less doubt about the
right of the father to maintain an action at
law in his name for the use of his children.
I think such action would be maintainable.
The cases at law, however, upon this subject
are at variance. Judge Story, in his com-
mentaries on Equity Jurisprudence, calls at-
tention to the fact that the cases at law on
this subject are not uniform, and that the
law in consequence is somewhat uncertain,
and then adds: "But, be this as it may, it is
certain that a remedy would lie in equity,
under like circumstances, as a matter of trust;
for it is laid down in a work of veiy high
authority. 'If a man gives goods or chattels
to another, upon a trust to deliver them to a
stranger, chancery will oblige him to it.' " 2
Stoi-y, Eq. Jur. § 1041. And I suppose it
would necessarily follow that, where a prom-
ise was made to one as a trustee for another,
upon a sufficient consideration, that chancery
would oblige the promisor to perform his
promise at the suit of the cestui que trust,
especially in a case where the consideration
for his promise consisted in the extinguish-
ment of a right belonging to the cestui que
trust
But another fact and the one which I think
possesses the greatest force, remains to be
mentioned. The bill alleges that, subsequent
to the making of the contract sued on, the
defendants, Meirs and Davis, made an agree-
ment apportioning the $4,000 between them-
selves, by which it was agreed that Meirs
should pay $3,000, and Mrs. Davis the re-
maining $1,000, and that, in pursuance of such
apportionment, Mrs. Davis, on the twenty-
third day of May, 1877, paid Robert C. Rue,
who was then the duly-appointed guardian of
the complainant and her brother, her quota
of the $4,000. There can be no doubt, I
think, that the making of this agreement, and
its subsequent execution by Mrs. Davis,
raised an equity in her favor as against her
co-defendant, and also against the complain-
ant, to be exonerated from all liability for the
$3,000, provided the money could be collected
of Meirs. He is the person who is unques-
tionably primarily liable as between Mrs.
Davis and himself, and should, therefore, in
justice, in the fii'st instance, be compelled to
bear it alone, together with all the legal ex-
penses attending its enforcement. Mrs. Da-
vis' right to exemption from primary liability
was known to the complainant at the time
she brought her suit. I think she was under
a clear equitable obligation to respect that
right, and the only way open to her to ef-
fectually protect Mrs. Davis' right in this re-
gard, was to bring her suit in this court.
Here a decree may be made which will give
]\Irs. Davis the full benefit of any equity aris-
ing to her out of the agreement of apportion-
ment, and at the same time preserve to the
complainant any rights which may exist in
her favor against Mrs. Davis, in the event
that the whole of the sum due cannot be col-
lected of the person who is primarily liable.
If the complainant had sued at law, her suit
would have been an open declaration that she
intended to violate Mrs. Davis' right to be
exempt from primary liability, for, if she re-
covered at all in such suit, her recovery would
have been against both defendants as princi-
pals, each being adjudged liable for the whole
amount of the recovery. An attempt by the
complainant, with full knowledge of Mrs.
Davis' equity, to place Mrs. Davis in the sit-
xiation in which she would stand by a judg-
ment at law against her, under which the
whole of this debt might be made out of her
property, might, under some circumstances,
be so strongly indicative of a fraudulent pur-
pose on the part of the complainant as to
justify this court in interfering by injimction.
Equity will, in cases of this class, take Juris-
diction whenever it is necessary to compel
the person primarily liable to perform an ob-
vious duty, and thus relieve another person
standing in the position of his surety from a
needless burden, and also to prevent circuity
of action. Irich v. Black, 17 N. J. Eq. 189.
For these reasons I think this court should
retain jurisdiction of this cause.
This suit, in its present condition, is defect-
ive in parties. Robert C. Rue, the person
with whom the contract on which the suit is
founded was made, is not a party. His omis-
sion is made a ground of objection by the
demurrant. He is a necessary party, and
this gi'ound of demurrer must be sustained.
The others must be overruled.
h'
b
NATURAL
0"^
AFFECTION.
253
FINK V. COX.
(18 Johns. 145.)
Supreme Court of New York. Aug., 1820.
This was an action of assumpsit bruuglit to
recover the amount of a promissoiy note,
given by the testator, Alexander Fink, to his
son, the plaintiff. The note, which was prov-
ed by the subscribing witness, was as follows:
"New-York, 30lh July, ISIG. Sixty days aft-
er date, I promise to pay John L. Fink, or
order, one thousand dollars, value received.
Alexander X Fink." The testator, at the
mark
time he gave the note to the plaintiff, de-
clared that he gave it to him absolutely, and
observed that the plaintiff was not so wealthy
as his brother; and that the plaintiff and his
brother had had a controversy about a stall,
&c., which were the reasons for his giving thb
note to the plaintiff. There was no actual
consideration for the note; and the wiinoss
understood it to be a gift from the testator
to his son.
The defendant gave in evidence the will
of the testator, by which he devised all his
personal estate to his sons, including the
plaintiff, in equal proportions; and after a de-
vise to his daughter of a house and lot, the
residue of his real estate was given to his
executors in trust, to sell the same, and di-
vide the proceeds equally among his children.
The defendant also gave in evidence the plain-
tiff's answer to a bill in chancery, for a dis-
covery filed by the executor, in which he stated
that the note was freely given to him by
the testator, and was founded ou the consid-
eration of natural love and affection.
The cause was tried at the New-York slt-
Uugs, in June, 1818. when a verdict was found
for the plaintiff, for $1,129 and 30 cents, sub-
ject to the opinion of the court, on a case con-
taining the above facts.
Mr. Van Wyck, for plaintiff. Mr. Slosson,
contra.
SPENCER, C. J. The question in this case
is, whether there is a sufhcient consideration
for the note on which this suit is founded. It
appears from the declaration of the testator
when the note was given, that he intended it
as an absolute gift to his son, the plaintiff;
alleging that the plaintiff was not so wealthy
as his brotlier.'?, that he had met with losses,
and that he and his brothers had had a contro-
versy about a stall. Such were the reasons
assigned for his glvhag the note to the plain-
tiff.
There can be no doubt that a considera-
tion is necessary to uphold the promi.se, and
that it is competent for the defendant to show
that there was no consideration. Schoou-
maker v. Roosa, 17 Johns. 301. The only con-
sideration pretended, is that of natiu-al love
and affection from a father to a child; and
if that is a sufficient consideration, the plain-
tiff is entitled to recover, otherwise not.
It is conceded, that the gift, in this case, is
not a donatio causa mortis, and cannot be
supported on that ground. In Pearson v.
I'earson, 7 Johns. 2G, the question was, wheth-
er the gift of a note signed by the defendant
to the plaintiff was such a vested gift, though
without consideration, as to be valid in law;
we held that it was not, and that a parol
promise to pay money, as a gift, was no more
a ground of action, than a promise to deliver
a chattel as a gift; and we referred to the
case of Noble v. Smith, 2 Johns. 52, where
the question underwent a full discussion and
consideration. The case of Grangiac v. Ar-
den, 10 Johns. 293, was decided on the prin-
ciple, that the gift of the ticket had been com-
pleted by delivery of possession, and is in per-
fect accordance with the former cases.
It has been sti'ongly insisted, that the note
in the present case, although intended as a
gift, can be enforced on the consideration of
blood. It is, undoubtedly, a fair presumption
that the testator's inducement to give the note
sprang from parental regard. The considera-
tion of blood, or natural love and affection,
is sufficient in a deed, against all persons but
creditors and bona fide purchasers; and yet
there is no case where a personal action has
been founded on an exj ^gu tory contract^ where
a considergtion was necessary, in whic h the
consi derati9]a-a£Jjlood, or natural lov g and af^
has beenn?
fejsUo ^ has been "h eld sufficient In such^^
case, the considerattOH filTlSt n"e a valuable
one, for the benefit of the promisor, or to the
trouble, loss, or prejudice of the promisee.
The note here manifested a mere intention to
give the one thousand dollars. It was ex-
ecutory, and the promisor had a locus pceni-
tentice. It was an engagement to give, and
not a gift. None of the cases cited by the
plaintiff's counsel maintain the position, that
because a parent, from love and natural af-
fection, engages to give his son money, or a
chattel, that such a promise can be enforced
at law.
Judgment for the defendant.
254
^
V
MILLS T. WYMAN.
(3 Pick. 207.)
• CONSIDERATION
Supreme Judicial Court of Massachusetts.
Worcester. Oct. Term, 1825.
This was an action of assumpsit brought
to recover a compensation for the board,
nui-sing, &c., of Levi Wyman. son of the de-
fendant, from the 5th to the 20th of Febru-
aiy, 1S21. The plaintiff then lived at Hart-
ford, in Connecticut; the defendant, at
Shrewsbury, in this county. Levi Wyman,
at tlie time when the services were rendered,
was about 25 years of age, and had long
ceased to be a member of his father's fam-
ily. He was on his return from a voyage
at sea. and being suddenly taken sick at Hart-
ford, and being poor and in distress, was re-
lieved by the plaintiff in the manner and to
the extent above stated. On the 24th of
February, after all the expenses had been
incurred, the defendant wrote a letter to the
plaintiff, promising to pay him such expen-
ses. There was no consideration for this
promise, except what grew out of the rela-
tion which subsisted between Levi Wyman
and the defendant, and Howe, J., before
whom the cause was tried in the court of
common pleas, thinking this not sufficient
to support the action, directed a nonsuit.
To this direction the plaintiff filed exceptions.
J. Davis and Mr. Allen, in support of the
exceptions. Mr. Brigham, for defendant
PARIvER, C. J. General rules of law es-
tablished for the protection and security of
honest and fair-minded men, who may in-
considerately make promises without any
equivalent, will sometimes screen men of a
different character from engagements which
they are bound in foro conscientise to per-
form. This is a defect inherent in all human
systems of legislation. The rule that a mere
verbal promise, without any consideration,
cannot be enforced by action, is universal
in its application, and cannot be departed
from to suit particular cases in which a re-
fusal to perform such a promise may be dis-
graceful.
The promise declared on in this case ap-
pears to have been made without any legal
consideration. The kindness and services
towards the sick son of the defendant were
not bestowed at his request. The son was
in no respect under the care of the defend-
ant. He was twenty-five years old, and had
long left his father's family. On his return
from a foreign country, he fell sick among
strangers, and the plaintiff acted the part of
the good Samaritan, giving him shelter and
comfort until he died. The defendant, his
father, on being informed of this event, in-
fluenced by a transient feeling of gratitude,
promises in writing to pay the plaintiff for
the expenses he had incurred. But he has
determined to break this promise, and is will-
ing to have his case appear on record as a
strong example of particular injustice some-
times necessarily resulting from the oi)era-
tion of general nales.
It is said a moral obligation is a sufficient
consideration to support an express promise;
and some authorities lay down the i-ule thus
broadly; but upon examination of the cases
we are satisfied that the universality of the
i-ule cannot be supported, and that there must
have been some preexisting obligation, which
has become inoperative by positive law, to form
a basis for an effective promise. The cases
of debts barred by the statute of limitations,
of debts incurred by infants, of debts of bank-
rupts, are generally put for illustration of
the rule. Express promises founded on such
preexisting equitable obligations may be en-
forced; there is a good consideration for
them; they merely remove an impediment
created by law to the recovery of debts hon-
estly due, but which public policy protects
the debtors from being compelled to pay. In
all these cases there was originally a quid
pro quo; and according to the principles of
natural justice the party receiving ought to
pay; but the legislature has said he shall
not be coerced; then comes the promise to pay
the debt that is barred, the promise of the man
to pay the debt of the infant, of the discharged
banki-upt to restore to his creditor what by
the law he had lost. In all these cases there
is a moral obligation founded upon an ante-
cedent valuable consideration. These prom-
ises therefore have a sound legal basis.
They are not promises to pay something for
nothing; not naked pacts; but the volun-
tary revival or creation of obligation which
before existed in natural law, but which had
been dispensed with, not for the benefit of
the party obliged solely, but pnncipally for
the public convenience. If moral obligation,
in its fullest sense, is a good substratum for
an express promise, it is not easy to perceive
why it is not equally good to support an im-
plied promise. What a man ought to do,
generally he ought to be made to do, whether
he promise or refuse. But the law of soci-
ety has left most of such obligations to the
interior forum, as the tribunal of conscience
has been aptly called. Is there not a moral
obligation upon every son who has become
aflluent by means of the education and advan-
tages bestowed upon him by his father, to
relieve that father from pecuniary embar-
rassment, to promote his comfort and happi-
ness, and even to share with him his riches,
if thereby he will be made happy? And yet
such a son may, with impunity, leave such
a father in any degree of penury above that
which will expose the community in which
he dwells, to the danger of being obliged to
preserve him from absolute want Is not a
wealthy father under strong moral obligation
to advance the interest of an obedient, well
disposed son, to fuinish him with the means
of acquiring and maintaining a becoming rank
MORAL OBLIGATION.
255
In life, to rescue him from the horrors of debt
incurred by misfortune? Yet the law will
uphold him in any degree of parsimony,
short of that which would reduce his son to
the necessity of seeking public charity.
Without doubt there are great interests of
society which justify withholding the coer-
cive arm of the law from those duties of im-
perfect obligation, as they are called; imper-
fect, not because they are less binding upon
the conscience than those which are called
perfect, but because the wisdom of the social
law does not impose sanctions upon them.
A deliberate promise, in writing, made free-
ly and without any mistake, one which may
lead tlie party to whom it is made into con-
tracts and expenses, cannot be broken with-
out a violation of moral duty. But if there
was nothing paid or promised for it, the law,
perhaps wisely, leaves the execution of it to
the conscience of him who makes it. It is
only when the party making the promise
gains something, or he to whom it is made
loses something, that the law gives the prom-
ise validity. And in the case of the promise
of the adult to pay the debt of the infant, of
the debtor discharged by the statute of lim-
itations or bankruptcy, the principle is pre-
sei-ved by looking back to the origin of the
transaction, where an equivalent is to be
found. An exact equivalent is not required
by the law; for there being a consideration,
the parties are left to estimate its value:
though here the courts of equity will step
in to relieve from gross inadequacy between
the consideration and the promise.
These principles are deduced fi*om the gen-
eral current of decided cases upon the sub-
ject, as well as from the known maxims of
the common law. The general position, that
1 moral obligation is a sufficient consideration
for an express promise, is to be limited in its
application, to cases where at some time or
other a good or valuable consideration has
existed.
~ A legal obligation is always a sufficient
consideration to support either an express or
an implied promise; such as an infant's debt
for necessaries, or a father's promise to pay
for the support and education of his minor
children. But when the child shall have at-
tained to manhood, and shall have become
his own agent in the world's business, the
debts he incurs, whatever may be their na-
ture, create no obligation upon the father;
and It seems to follow, that his promise
founded upon such a debt has no legally
binding force.
The cases of instruments under seal and cer-
tain mercantile contracts, In which consider-
ations need not be proved, do not contradict
the principles above suggested. The first
import a consideration in themselves, and the
second belong to a branch of the mercantile
law, which has found it necessary to disre-
gard the point of consideration in respect to
instruments negotiable in their nature and
essential to the interests of commerce.
Insteal of citing a multiplicity of cases to
support the positions I have taken, I will
only refer to a veiT able review of all the
cases in the note In 3 Bos. & P. 249. The
opinions of the judges had been variant for a
long course of years upon this subject, but
there seems to be no case in which it was
nakedly decided, that a promise to pay the
debt of a son of full age, not living with his
father, though the debt were Incurred by
sickness which ended in the death of the son,
without a previous request by the father
proved or presumed, could be enforced by
action.
It has been attempted to show a legal obli-
gation on the part of the defendant by vir-
tue of our statute, which compels lineal kin-
dred in the ascending or descending line to
support such of their poor relations as are
likely to become chargeable to the town
where they have their settlement. But it is
a sufficient answer to this position, that such
legal obligation does not exist except in the
very cases provided for in the statute, and
never until the party charged has been ad-
judged to be of sufficient ability thereto. We
do not know from the report any of the facts
which are necessary to create such an obliga-
tion. Whether the deceased had a legal set-
tlement in this commonwealth at the time
of his death, whether he was likely to be-
come chargeable had he lived, whether the
defendant was of sufficient ability, are essen-
tial facts to be adjudicated by the court to
which is given jurisdiction on this subject
The legal liability does not arise until these
facts have all been ascertained by judgment
after hearing the party intended to be
charged.
For the foregoing reasons we are all of
opinion th.nt the nonsuit directed by the court
of common pleas was right, and that judg-
ment be entered thereon for costs for the
defendant
256,
CONSIDERATION.
STEVENS V. COON,
a Pin. 356.)
Supreme Oourt of Wisconsin.
1843.
July Term,
EiTor to district court, JefEerson county.
Coon brought an action of assumpsit
against Stevens in the Jefferson county dis-
ti-ict court upon a wTitten contract, by which
Stevens bound himself that a certain eighth
of a section of land which Coon was about
to enter should sell by a given day for $200
or more, and Coon agreed to give Stevens
one-half of all the land should sell for over
$200.
On the trial in the court below. Coon, the
plaintiff, proved the entry of the land, and
introduced evidence to prove that the land,
at the time specified in the contract, was
worth about $1.25 per acre.
Upon this testimony, the defendant moved
the court to instruct the jury as in case of
a nonsuit, for the following reasons:
"(1) Because the said supposed contract
was a nudum pactum, by which the defend-
ant received nc bonePt and the plaintiff no
Injury.
"(2) Becausd the supposed contract as-
sumes to bind the defendant to perform an
impossibility.
"(3) Because said writing discloses a gam-
bling contract, if any."
Tlie court overruled the motion and re-
fused the insti-uction asked for, and the jury
returned a verdict in favor of the plaintiff
for $116.50, upon which the court rendered
judgment.
David Brighauv, for plaintiff in error. Ed-
ward V. Whiton, for defendant in error.
DUNN, C. J. Error is brought in this case
to reverse a judgment of the district court
of Jefferson county.
Coon, plaintiff bel-^sv, brought his action
of assumpsit against Stevens, defendant be-
low, to recover damages on a liability grow-
ing out of a contract, which is in the words,
etc., following, viz.:
"Astor, March 23, 1839. In consideration
of C. J. Coon entering the west half of the
north-west quarter of section 35, in town. 13,
range 13, I bind myself that the said eighty
acres of land shall sell, on or before the 1st
October next, for two hundred dollars or
more, and the said Coon agrees to give me
one-half of the amount over *wo hundred
dollars said land may sell for in considera-
tion of my warranty. Hamilton Stevens."
to the above contnict. C. J,
"I agi'ee
Coon."
At the August term of the said Jefferson
county district court, in the year 1840, the
said defendant Stevens pleaded the general
issue, which was joined by the said plaintiff
Coon, and after several continuances the
case was tried at the October term, 1842.
On the trial, the above contract, and the re-
ceiver's receipt to said plaintiff Coon for the
purchase-money for said tract of land de-
scribed in said contract, were read in evi-
dence to the jury; and Abraham Vander-
pool, a witness, testified "that he had visit-
ed that part of the country where the land
lies, specified in said writing, and was upon
the same, as he has no doubt, and estimated
the present value of the same at $1.50 per
acre, and that in October, 1839, it might be
worth $1.25 an acre." Upon this evidence
and testimony the plaintiff rested his case.
Under the construction put on the contract
read in evidence the jui-y found for the plain-
tiff $116.50 in damages, and judgment was
entered thereon. There is manifest error in
this decision of the court. From an inspec-
tion of the contract it is obvious that it is
not such an one as is obligatory on either
party. There is no reciprocity of benefit,
and it binds the defendant below to the per-
formance of a legal impossibility, so palpa-
ble to the contracting parties that it could
not have been seriously intended by the par-
ties as obligatory on either. The undertak-
ing of the defendant below is "that plain-
tiff's tract of land shall sell for a certain
sum by a given day." Is it not legally im-
possible for him to perform this undertak-
ing? Certainly no man can in legal contem-
plation force the sale of another's property
by a given day, or by any day, as of his own
act. The plaintiff was well apprised of the
deficiency of his contract on the trial, as the
testimony of his witness was entirely apart
from the contract sued on, and was directed
in part to a different contract, and such an
one as the law would have recognized. If
tUe contract had been that the tract of land
would be worth $200 by a given day, then it
could have been recovered on, if it did not
rise to that value in the time. 1 Comyn,
Cont. 14, 16, 18; Comyn, Dig. Tit. "Agree-
ment"; 1 Poth. Obi. 71; 6 Pet. Abr. 218; 2
Sand. 137. The district court should not
have entered judgment on the finding of the
jury in this case. The construction of the
contract by the district court was eiToneous.
Judgment reversed, with costs.
DOING WHAT OXE IS BOUND TO DO.
^>'
STILK V. MYRICK.
(2 Comp. 317.)
257
Michaelmas Term. 50 Geo. III.
This was an action tor seaiuau's wages, on
a vojaj^e from London to the Baltic and
back.
By the ship's articles, executed before the
couiniencemont of the voyage, the plaiutifT
was to be paid at the rate of £5 a month;
and the principal question in the cause was,
whether he was entitled to a higher rate of
wages. In the course of the voyage, two of
the seamen deserted, and the captain, having
in vain attempted to supply their places at
Cronstadt, there entered into an agi'eement
with the rest of the crew, that they should
have the wages of the two who had deserted
equally divided among them, if he could not
procure two other hands at Gottenburgh.
This was found impossible; and the ship was
worked back to London by the plaintiff and
eight more of the original crew, with whom
the agreement had been made at Cronstadt.
Mr. Garrow, for defendant. Insisted, that
this agreement was contrary to public policy,
and utterly void. Ln West-India voyages,
crews are often thinned greatly by death and
desertion; and if a promise of advanced wa-
ges were valid, exorbitant claims would be
set up on all such occasions. This ground
was strongly taken by Lord Kenyon, in Har-
ris v. Watson, Peak, 72, where that learned
judge held, that no action would lie at the
suit of a sailor on a promise of the captain
to pay him extra wages, in consideration of
his doing more than the ordinary share of
duty in navigating the ship; and his lordship
said, that If such a promise could be en-
forced, sailors would in many cases suffer a
vessel to sink unless the captain wotild ac-
cede to any extravagant demand they might
■^hink proper to mnke.
The Attorney-General, contra, distinguished
HOPK.SEL.r-AS.CONT.— 17
this case from Harris v. Watson, as the
agreement here was made on shore, when
there was no danger or pres.siug emergency,
and when the captain could not be supposed
to be under any con.'^traint or apprehension.
The mariners were not to be permitted on
any sudden danger to force concessions from
the captain; but why should they be de-
prived of the compon.sation he voluntarily of-
fers them in perfect security for their extra
labour during the remainder of the voyage?
LORD ELLENBOROUGH. I think Har-
ris V. Watson (Peak, 72) was rightly decided;
but I doubt whether the ground of public
policy, upon which Lord Kenyon is stated to
have proceeded, be the true principle on
which the decision is to be supported. Here,
I say, the agreement is void for want of con-
sideration. There was no consideration for
the ulterior pay promised to the mariners who
remained with the ship. Before they sailed
from London they had undertaken to do all
they could under all the emergencies of the
voyage. They had sold all their services till
the voyage should be completed. If they had
been at liberty to quit the vessel at Cronstadt,
the case would have been quite different; or
If the captain had capriciously discharged
the two men who were wanting, the others
might not have been compelled to take the
whole duty upon themselves, and their agree-
ing to do so might have been a sufficient con-
sideration for the promise of an advance of
wages. But the desertion of a part of the
crew is to be considered an emergency of the
voyage as much as their death, and those
who remain are bound by the terms of their
original contract to exert themselves to the
utmost to bring the ship in safety to her des-
tined port Therefore, without looking to the
policy of this agroement, I think it is void for
want of consideration, and that the plaintiff
can only recover at the rate of £5 a month.
Verdict accordingly.
CONSIDERATION.
MUNROE V. PERKINS.
(9 Pick. 298.)
Supreme Judicial Ck)urt of Massachusetts. Suf-
folk and Nantucket March, 1S30.
Indebitatus assumpsit for work done, mate-
rials found, money paid, &c. brought against
the defendant jointly with William Payne,
who died after the action was commenced.
At the trial before the chief justice it ap-
peared, that in 1821 the plaintiff was employ-
ed by Perkins and Payne to build a hotel at
Nahant, which was begun in that year and
finished in 1823.
The general defence was, that there was
a special contract, and that the work had
been paid for according to the terms of that
contract
For the purposes of this case it was admit-
ted, that the amoimt of exi)enditures made
and incun-ed by the plaintiff in and about the
work, exceeded the amount of the payments
made to him.
It appeared that In 1821, a number of per-
sons associated themselves for the purpose
of erecting a hotel at Nahant and subscribed
certain sums of money therefor; that Perkins
and Payne were subscribers and were the
agents of the association, which was to be
incorporated as soon as possible, and which
was incorporated accordingly in February,
1822.
The defendant offered in evidence an agree-
ment imder seal, dated October 24, 1821,
wherein the plaintiff engages to build the ho-
tel according to a certain drawing and de-
scription, and the defendant and Payne, in
behalf of their associates, agree to pay the
plaintiff therefor 14,500 dollars as the work
advances.
T. W. Sumner, a witness called by the de-
fendant, testified that the work was executed
upon the basis of the drawing and description
referred to in the sealed contract; that there
were some deviations, consisting of additional
ffork; that this was considered as extra work,
not included in the contract, and was paid
for separately according to its full cost and
value.
To prove a waiver of the special contract,
the plaintiff introdnced several witnesses. J.
Alley testified, that in 1825 he said to the de-
fendant, it was a pity Munroe had under-
taken to build the hotel; to which the de-
fendant replied, that Munroe would not lose
any thing by it and that they had agreed to
pay him for every minute's work and for all
he had purchased. J. Mudge testified, that
in the spring of 1823 the plaintiff was in-
debted to the Lynn bank on a note for 1100
dollars, which he wished to have renewed,
but that the directors were not satisfied of his
solvency; that in April of that year, the plain-
tiff came to the bank with Payne, who said
he was the agent who attended to the busi-
ness of the Nahant hotel in the absence of
Perkins, who had gone to Europe; that he
wanted to get from the bank some indulgence
towards the plaintiff; that the corporation
would leave the plaintiff as good as they
found him; they would pay Munroe for aU he
should lay out; that Munroe should not stop
for want of funds; that he (Payne) knew Per-
kins's mind upon the subject; that the bills
would be paid, and the plaintiff should not
suffer. W. Johnscn testified, that on the
strength of this representation of Payne, the
bank renewed the plaintiff's paper. W. Babb
testified, that in May, 1822, the defendant
asked the plaintiff how he got on; that the
plaintiff said poorly enough; that the defend-
ant told him he must persevere; the plaintiff
said he could not without means; and the de-
fendant repeated, you must persevere, and add-
ed, you shall not suffer, we shall leave you as
we found you.
The defendant objected to this evidence,
that it was insufficient in law to set aside
the special contract; that it did not amount
to a waiver of the original contract, but so
far as it proved any thing, it was evidence of
a new express promise, which was without
consideration and from which no implied as-
sumpsit could be raised. Also, that the con-
versation with Perkins at one time and with
Payne at another, were not joint promises
and created no joint cause of action, but that
the liability, if there was any, was several.
A verdict was taken by consent, subject to
the opinion of the court
S. Hubbard and F. Dexter, for defendant
Ward, contra.
PER CURIAM. The verdict of the jury has
established the fact, if the evidence was le-
gally sufficient, that the defendant, together
with Payne, made the promise declared on.
The defence set up was, that the work was
done and the materials were furnished on a
special contract under seal, made by the de-
fendant and Payne on behalf of themselves
and other subscribers to the hotel; and such a
contract was produced in evidence. The main
question is, whether, there being this contract
under seal, for a stipulated sum, an action lies
on a general assumpsit for the amount which
the building actually cost; which is more than
the sum specified in the contract It is said
on the part of the plaintiff, that having made
a losing bargain and being unwilling and una-
ble to go on with the work, Perkins and
Payne assured him that he should not suffer;
and that the work was carried on and finish-
ed upon their engagement and promise that
he should have a reasonable compensation,
without regard to the special contract This
engagement is to be considered as proved.
If by law it was admissible to show a waiver
of a special contract
It is objected, that as the evidence was
parol, it is insufficient in law to defeat or
avoid the special contract; and many author-
ities have been cited, to show that a sealed
contract cannot be avoided or waived but by
an instrument of a like nature; or generally,
that a contract under seal cannot be avoided
DOING WHAT ONE IS BOUND TO DO.
259
or altered or explained by parol evidence.
That this is the general doctrine of the law
cannot be disputed. It seems to have emanat-
ed from the common maxim, "Unumquodque
dissolvitur eo ligamine quo ligatur." IJut lilce
other maxims, this has received qualiflcatiuns,
and indeed was never true to the letter, for
at all times, a bond, covenant or other sealed
instrument might be defeated by parol evi-
dence of payment, accord and satisfaction,
&c.
It is a general principle, that where there
is an agreement in writing. It merges all pre-
vious conversations and parol agreements;
but there are many eases in which a new
parol contract has been admitted to be proved.
And though when the suit is upon the writ-
ten contract itself, it has been held that parol
evidence should not be received, yet when the
suit has been brought on the ground of a new
subsequent agreement not in writing, parol
evidence has been adsDitted.
In Ratcliff v. Pemberton, 1 Esp. 35, Lord
Kenyon decided, that to an action of cove-
nant on a charter-party, for the demurrage
which was stipulated In it, the defendant
might plead that the covenantee, who was
the master and owner of the ship, verbally
permitted the delay, and agreed not to exact
any demurrage, but waived all claim to it
He laid down a similar rule in Thresh v.
Rake, Id. 53; where however the contract
does not appear to have been under seal.
In 2 Term R. 483, there were articles of
partnership, containing a covenant to account
at certain times; and upon a balance being
struck, the defendant promised to pay the
amount of the balance; and it was held that
assumpsit would lie upon this promise.
The case of Lattimore v. Hareen, 14 Johns.
330, comes nearer the case at bar. There the
plaintiffs had agreed to perform certain work
for a stipulated sum of money, under a pen-
alty. After they had entered upon the per-
formance of it, they determined to leave off,
and the defendant, by parol, released them
from their covenant, and promised them, if
they would complete the work, that he would
pay them by the day. The court hold, that
if the plaintiffs chose to incur the penalty,
they had a right to do so, and that the new
contract was binding on the defendant
In Dearborn v. Cross, 7 Cow. 48, it is held,
that a bond or other specialty may be dis-
charged or released by a parol agreement be-
tween the parties, especially where the parol
agreement is executed; and the case of Latti-
more V. Harsen is there cited and relied on.
There are other decisions of like nature In
the same court; as Fleming v. Gilbert, 3
Jolms. 358; Keating v. Price, 1 Johns, ("as.
22; Edwin v. .Saund.-rs, 1 Cow. 250. In Bal-
lard V. Walker, 3 Johns. Cas. 64, it was held
that the lap.se of time between the making of
the contract and the attempt to enforce it
was a waiver; which is going further than
is necessary in the case before us, for here
there is an express waiver.
In Le Fevre v. Le Fevre, 4 Serg. & R. 241,
parol evidence was admitted to prove an
alteration of the course of an aqueduct es-
tablished by deed. In regard to the objection,
that this evidence was in direct contradiction
to the deed, Duncan, J. remarks, that "the evi-
dence was not offered for that purpose, but
to show a substitution of another spot If
this had not been carried into effect the evi-
dence would not have been admissible; but
where the situation of the parties is altered,
by acting upon the new agreement the evi-
dence is proper; for a partj' may be admitted
to prove by parol evidence, that after signing
a written agreement the parties made a
verbal agreement, varying the former, pro-
vided their variations have been acted upon,
and the original agreement can no longer be
enforced without a fraud on one party."
The distinction taken in the argument be-
tween contracts in writing merely and con-
tracts under seal, appears by these author-
ities not to be important as it respects the
point under consideration, and justice requir-
ed in the present case, that the parol evidence
should be received.
It was said that the promise of Payne can-
not affect Perkins, and vice versa. But as
they were joint actors, and as when one ar-ted
in the absence of the other, it was always
with a joint view to the same object tliey
cannot be separated, but must be considered
as joint promisors.
The parol promise, it is contended, was
without consideration. This depends entirely
on the question, whether the first contract
was waived. The plaintiff having refused to
perform tliat contract as he might do, sub-
jecting himself to such damages as the other
parties might show they were entitled to re-
cover, he afterward went on upon the faith
of the new promise and finished the work.
This was a suflicient consideration. If Payne
and Perlcins were willing to accept his re-
linquishment of the old contract and proceed
on a new agreement the law, we think, would
not prevent It
Motion for new trial overruled.
260
COiHSIDEKATIOX.
^
iW
{p VANDERBILT v. SCHREYER- xJ
(91 N. Y. 392.)
Court of Appeals of New York. March 6, 1S83.
The material facts are stated in the opin-
ion.
T. M. Tyng, for appellant. John L. Lind-
say, for respondent.
RUGER, C. J. This was an action to fore-
close .1 mortgrage for $5,000 given September
5, 1873. by one James Dunseith and wife to
John Schreyer, and by him assigned to the
plaintiff or. the 5th day of May, 1S74.
Schreyer was made a party defendant, and
it was sought to chai'ge him with the pay-
ment of any deficiency that might arise upon
a sale of the mortgaged premises, upon the
ground that he had guaranteed the payment
of the mortgage debt.
Schreyer answered, and after admitting the
assignment and the guaranty of payment al-
leged by way of defense, that on the 2d day
of February, 1874, the plaintiff entered into
a contract with George Gebhardt and Mat-
thew L. Ritchie for the erection by him of
certain buildings for them upon certain lots
in the city of New York, for which he was
to receive !?S,175. to be paid as follows:
"When the said houses are topped out, a pay-
ment of $5,000 by assignment of a bond and
mortgage held by John Schreyer on the prop-
erty of Anna Maria Schreyer, No. 350 West
Forty-Second street, New York City," and
the balance, amounting to $3,175, when the
houses should be fully completed. Vander-
bilt commenced performance of his contract
and continued until he became entitled to
the assignment of the $5,000 mortgage.
Schreyer thereupon offered to assign it to the
plaintiff, but the latter refused to accept an
assignment unless Schreyer would also guar-
antee payment. The defendant refused to do
this, and Vanderbilt then suspended work
upon the buildings for about two months.
The defendant then under protest, and be-
lieving, as he alleges, that he was acting un-
der compulsion, executed the assignment
with the guaranty in question. The plaintiff
then completed his contract and received the
balance of the consideration. The answer
further states "that it was neither under
said contract or otherwise made a condition
of the plaintiff's accepting the assignment of
said mortgage that this defendant or any
other person should guarantee the payment
thereof," and further "that no consideration
ever passed to him or his principals for such
guaranty and the same was and is null and
void."
Upon the trial of the action at special term
the plaintiff produced and proved the mort-
gage in question, and also an assignment
from defendant to plaintiff in the usual form,
but containing the following clause: "And I
hereby guarantee the payment of said bond
and mortgage for $5,000 and interest from
May 5, 1874, by due foreclosure and sale."
The assignment and guaranty were sealed
and executed in the presence of a subscrib-
ing witness. The plaintiff thereupon rested,
and the defendant offered to prove in sub-
stance the facts alleged in his answer, which
offer was objected to and excluded upon the
ground that such answer did not set up facta
constituting a defense. The defen,'lnnt ex-
cepted to such ruling. The court thereupon
held that said guaranty was absolute and
ordered judgment against Schreyer for the
deficiency which had previously been ascer-
tained by a sale of the premises. An appeal
was taken to the general term, which re-
versed the judgment and directed a dismiss-
al of the complaint upon the ground that
Schreyer was improperlj^ made a defendant,
because the guaranty- in question was in ef-
fect a guaranty of collection only, and that
no right of action arose thereon until after
the amount of the deficiency had been asce;-
tained by a judicial sale of the mortgaged
premises. ^-yv- yw\ ) _^
~ TT'e dfffSr^Tn our~T!onciusion from tnat
reached by both of the courts below.
The guaranty in question is not an abso-
lute guaranty for the payment of the mort-
gage, but a guaranty that it shall be paid in
a particular manner. In construing it we
must give effect not only to the entire in-
strument, but also to all of its language.
This requires us to give some effect to the
words, "by due foreclosure and sale," and
they can perform no other office in the con-
nection in which they are used than to qual-
ify and limit the operation of the preceding
words, "I hereby guai-antee the payment of
said bond and mortgage." We must conclude
that the parties put these words into their
contract for some purpose; and the only pur-
pose they can be made to serve is to make
the guaranty a conditional instead of an abso-
lute one. A covenant quite similar to this
was held in the case of Mabaiwe Bank v.
Culver, 30 N. Y. 313, to be a covenant to pay
any deficiency existing after a foreclosure
and sale.
But we suppose it to be immaterial wheth-
er this guaranty be called a guaranty of pay-
ment or of collection, for in either event the
plaintiff was entitled to make Schreyer a
party defendant in the foreclosure action and
demand and recover a judgment against him
therein for any deficiency which might arise
on a sale of the mortgaged premises.
The principles applicable to the prosecu-
tion of actions against guarantors of the col-
lection of promissoi-y notes and other securi-
ties do not apply to actions for the foreclo-
sure of mortgages. In the latter the persons
who may be made parties therein are point-
ed out by statute, and include all who are
under obligation to pay the mortgage debt,
or any part thereof, whether such obligation
be absolute or conditional.
This action was commenced, and tried, pri-
or to the adoption of section 1627 of the Code
DOING WUAT ONE IS BOUND TO DO.
261
of Civil Procedure. It must therefore be gov-
erned by the provisions of tiie Revised Stat-
utes. The sections applicable are the follow-
ing: 2 Rev. St.(lsl Ed.; lUl, § 154, reads:
"If the mortgage debt be secured by the ob-
ligation or other evidence of debt hereafter
executed, of any other person Ijcside the mort-
gagor, the complainant may make such per-
son a party to the bill, and the court may de-
cree payment of the balance of such debt re-
maining unsai'stied after a sale of the mort-
gaged premises, as well against such other
pei*son as the mortgagor, and may enforce
such decree as in other cases." Section 153,
Id., reads: "After such bill [bill for foreclo-
sure] shall be hied while the same is pend-
ing, and after a decree rendered thereon, no
proceedings whatever shall be had at law for
the recovery of the debt secured by the mort-
gage or any part thereof unless authorized
by the court of chancery."
These provisions of the statute remained
without material changes, so far as the ques-
tion under discussion is concerned, until the
adoption in ISSO of the last portion of the
Code of Civil Procedure. The scheme of
these provisions was stated by this court
in Society v. Stevens, G3 N. Y. 341, to be
to prevent oppressive litigation by the multi-
plication of actions against the several per-
sons who might be liable for the same mort-
gage debt, and to require all of the parties
interested in its payment to be wrought into
the same suit and thus settle their respective
liabilities in one comprehensive action. Pre-
vious to the enactment of section 1627 of
the Code of Civil I'rocedure it was the set-
tled practice of courts of equity to bring
all parties who were in any waj- liable for
the payment of the mortgage debt, or any
part thereof, and whether liable upon an ab-
solute or conditional undertaking, into the
same foreclosure action and decree payment
of any deficiency arising on a sale of the
mortgaged premises, against any of the par-
ties appearing to be liable therefor, accord-
ing to the nature and circumstances of such
liability. The principle that such person,
whether liable conditionally or absolutely,
may be sued and made liable for any defi-
ciency in an action to foreclose the mort-
gage is laid down in the works on chancery
practice and sustained by numerous eases.
See 2 Hoff. Ch, Prac. 14l', 142; 2 Barb. Ch.
Pi"ac. 175, 170; Leonard v. Morris, 9 Paige,
90; Suydam v. Bartle, Id. 294; Curtis v. Ty-
ler. Id. 432; Griffith v. Robertson, 15 Hun,
344; Scofleld v. Doscher, 72 N. Y. 491. Oth-
er actions of a similar nature are provided
for In our stitute, as in the case of proceed-
ings in equity against insolvent corporations
to reach stockholders and trustees who may
be contingently liable for the payment of the
debts of such corporations. These trustees
and stockholders are chargeable with a con-
ditional liability in the action brought to dis-
solve the corporation. Of course, where the
liability of a person to pay a mortgage debt
depends upon some extrinsic event which
cannot be determined in the prosecution of
the foreclosure suit, he could not be made a
party to such an action and charged with a
deficiency, because by the terms of his con-
tract, his liability would not commence until
the happening of the event contracted for,
and that might be wholly disconnected with
the process of foreclosure.
Such was the case of Coal Co. v. Blake, 85
N. Y. 220, where the party guaranteed to
pay the mortgage debt, provided another
party upon demand did not do so. There a
demand was held necessary before suit
brought. The serious consequences of neg-
lecting to include as parties all persons liable
for the payment of the mortgage debt in a
foreclosure thereof are illustrated in the case
of Society v. Stevens, already cited. It was
there held that upon an application for leave
to prosecute an action at law against parties
liable for the payment of the mortgage debt,
the granting of the permission rested in the
discretion of the court, whether the applica-
tion was made during the pendency of the
foreclosure suit or after it had terminated;
and that in the exercise of a wise discretion
the court had the power to deny such per-
mission, even when the claim had not been
prosecuted in the foreclosure suit The order
of the court below granting leave to prose-
cute such an action was reversed, upon the
I ground that it had decUned to exercise its un-
doubted discretionary power.
That an action at law either during the
pendency or after the termination of a fore-
closure suit cannot be maintained by the
holder of a mortgage against a person liable
for the payment or collection of the mort-
gage debt, without leave of the court duly
obtained, has frequently been held in this
state. Pattison v. Powers, 4 Paige, 549;
Comstock V. Drohan, 71 N. Y. 9; Scofield v.
Doscher, supra. It follows from tliese au-
thorities that the plaintiff was not only jus-
tified in making Schreyer a defendant in this
action, and asking judgment for a deficiency
against him, even though his guaranty was
one of collection merely, but that it would
have been hazardous to his security if he had
ofli jtted to do so. ^ -
A more serious question however arises un-
der the exception taken to the rulings of the
special term excluding the evidence offered
by the defendant to prove the facts stated in
his answer, showing that the guaranty was
without consideration.
In considering this question the allegations
in the answer must be assumed to be true,
and that the defendant would have proved
them if he had not been precluded by the
rulings of the court from doing so. The an-
swer, while perhaps inartificially drawn, cer-
tainly alleged all of the facts necessary to
show that neither Gebhardt and Ritchie, nor
the plaintiflf, had received any consideration
for the guaranty in question. This he should
have been allowed to prove. The production
2G2
CONSIDERATION.
of the assignment in evidence, purporting to
be executed "for value received," and being
under seal was prima facie evidence only of
a valuable consideration. It was not conclu-
sive and could be disproved if it was in the
defendant's power to do so. 3 Rev. St. (Gth
Ed.) 672, § 124; Boolistaver v. Jayne, 60 N.
Y. 146; Anthony v. Harrison, 14 Hun, 198,
affirmed in this court, 74 N. Y. 613.
The incorporation of this guaranty into the
assignment for which there was a considera-
tion does not affect the question. It was
not essential to the assignment and was, so
far as its legal effect was concerned, a sepa-
rate instrument, and must be supported upon
a sufficient consideration or treated as nu-
dum pactum.
It is quite clear that the plaintiff had no
right to demand this guaranty by the terms
of his original contract with Gebhardt and
Ritchie. That was satisfied by a mere nail-
ed transfer of his interest in the mortgage.
It was held in Van Eps v. Schenectady, 12
Johns. 436, that an agreement to execute a
deed of lands was satisfied by the execution
of a deed, without warranty or covenants.
So it has been held that a party has no right
to impose any conditions to the performance
of a contract, except those contained in the
contract itself- Furnace Co. v. French, 34
How. rrac. 94. It being clear that Vander-
bilt had no legal right to require, as a condi-
tion to the fulfillment of his contract, the
performance of an act not required by the
contract, it is difficult to see what benefit he
has bestowed or what inconvenience he has
suffered in return for the undertaliing as-
smned by the defendant. He promises to
do only that which he was before legally
bound to perform. Even though it lay in
his power to refuse to perform his contract,
he could do this only upon paying the other
party the damages occasioned by his non-
[jerformance, and that in contemplation of
law would be equivalent to performance. He
liad no legal or moral right to refuse to per-
form the obligation of the contract into
which he had upon a good consideration vol-
untarily entered.
There is no evidence In support of a claim
that this guaranty was given as a compro-
mise of any dispute arising with reference to
the obligations of the plaintiff under his con-
tract with Gebhardt and Ritchie. The case
is not, therefore, brought within the cases in
which a promise has been upheld on the the-
ory that it was made in settlement of a con-
troversy over disputed claims. The authori-
ties seem quite uniformly to show the inade-
quacy of the consideration alleged for the
guaranty in question. In Geer v. Archer, 2
Barb. 420, the defendant visited the plaintiff
to pay her an installment upon a mortgage
given by him a few weeks before on a pur-
chase of land. She complained that she had
not received the fair value of her land upon
such purchase. The defendant offered to
give her his note for $200 to satisfy her com-
plaints. She replied that she would be sat-
isfied with that, whereupon the note in ques-
tion was given. It was held that this note
was void for want of consideration. So,
where land was sold and described in the
deed as containing a certain quantity, and a
deficiency was afterward discovered, it was
held that there was no obligation on the
grantor to compensate the grantee for such
deficiency, and a promise to pay the same
was without consideration. Smith v. Ware,
13 Johns. 257; Ehle v. Judson, 24 Wend. 97.
Pollock states the rule as follows: That
"neither the promise to do a thing, nor the
actual doing of it, will be a good considera-
tion if it is a thing which the party is bound
to do by the general law, or by a subsisting
contract with the other party." Pol. Cont
161; Crosby v. Wood, 6 N. Y. 369; Deacon
V. Gridley, 15 C. B. 295. "Nor is the per-
formance of that which the party was un-
der a previous valid, legal obligation to do a
sufficient consideration for a new contract."
2 Pars. Cont 437. When certain sailors had
signed articles to complete a voyage, but at
an intermediate port refused to go on, and
the captain thereupon promised to pay them
increased wages, it was held that the prom-
ise was without consideration. Bartlett v.
Wyman, 14 Johns. 200. A firm having a con-
tract to build a railroad found the contract
unprofitable, whereupon the railroad compa-
ny promised, if they would go on and com-
plete the contract, they would repay to the
contractors aU of the obligations which they
had or would incur in consequence of their
completion of the work. Held no considera-
tion. Ayres v. Railroad Co., 52 Iowa, 47S, 3
N. W. 522.
When a mortgagor, as a condition to the
payment of his mortgage, exacted from the
mortgagee an obligation that he would pro-
cure the cancellation of a certain outstand-
ing bond executed by the mortgagor, or pay
him the sum of $100, said bond being given
to indemnify against some apparent incum-
brance, it was held, that it not being shown
that there was any incumbrance existing
against the land, the obligation was without
consideration. Conover v. Stillwell, 34 N. J.
Law, 54. When the plaintiff agreed to en-
ter the military service of the United States
to the credit of the town of Tobin for $100,
and on arriving at the place of enlistment,
being offered an advanced price by others,
refused to perform unless they would pay
him $250 additional, held, that an obligation
to pay him the additional amount was void
for want of consideration. Reynolds v. Nu-
gent, 25 Ind. 328. A sailor signed articles for
a voyage to Melbourne and home at three
pounds per month ; several of the crew de-
serted at Melbourne. The captain, to in-
duce plaintiff to remain, signed fresh arti-
cles for six pounds per month; Held, no
consideration for the promise. Harris v.
Carter, 3 El. & Bl. 559; to same effect Stilk
V. Myrick, 2 Camp. 317. When defendants
DOING WHAT ONE IS BOUND TO DO.
263
gave plaiutiff's notes to provide funds to
take up obligation, which plaintiff had pre-
viously contracted to pay, held no considera-
tion. MalUilieu v. Hodgson, IG Adol. & I'J.
(N. S.) CS9. A promist! to pay an attorney
additional compensiition to attend as a wit-
ness, after he has been duly subpoenaed, is
without consideration. The attorney did
nothing except what he was legally bound to
do. Smithett v. Blythe, 1 Barn. & Adol. 51-i,
It would doubtless be competent for par-
ties to cancel an existing contract and nialie
a new one to complete the same work at a
different rate of compensation, but it seems
that it would be esseutial to its validity uiat
there should be a valid cancellation of the
original contract. Such was the case of Lat-
timore v. Harsen, 14 Johns. 330.
It necessarily follows fi'om these authori-
ties that the plaintiff had no right to impose,
as a condition to the performance of his con-
tract, that the payment of said mortgage
should be guaranteed. Although the defond-
niit wns not a part}* to tlio original contract
and the consideration and contract between
him, Gebhardt and Ritchie does not appear.
yet we must assume that he acted at the re-
quest of Gebhardt and Ritchie, and was re-
quired only by such contract to execute such
an assignment as Gebliardt and liitchie had
contracted to give. The answer, at all
events, sets up that he received no consider-
ation from any one for the guaranty sued
upon.
The answer also alleges that the sole con-
sideration received for this guaranty was the
performance by the plaintiff of his contract
with Gebhardt and Ritchie.
We think this answer sets forth a defense
to the action, and inasmuch as the defend-
ant has been erroneously deprived of the op-
portimity of proving it, if in his power to do
so, that a new trial shovdd be ordered.
The judgment therefore of the general term
dismissing the complaint should be reversed,
and its order reversing the judgment ordered
against the defendant at circuit affirmed, and
a new trial ordered, with costs to abide the
event
All concur, except ANDREWS and DAN-
FORTH, JJ., not voting.
Judgment accordingly.
CONSIDERATION.
WHEELER T. WHEELER-
(11 Vt. 60.)
Supreme Court of Vermont Chittenden. Jan.
1839.
This was an action of assump.nt on an insi-
ntrl coniputasset for $557,05. The defendant
filed the following plea, in bar: That before
the 2'Jth daj- of May, 1^33, when the accouut-
ing. on which the plaintiff declared was had,
Bundrv dealinirs had occurred between the
plaiiil'iff and this defendant, the charges of
which, on the part of the said Reuben, came
down to the year ISoO and uo later, and re-
mained unliquidated, and that after that time,
in consequence of certain losses by fire, this de-
fendant became insolvent and was unable to
pav the full amount of his debts, and, by rea-
son thereof, a negotiation was entered into be-
tween this defendant and his creditors, iuclud-
inir the said Reuben, for a partial payment of
their claims, and on the 30th May, 1831, it was
asreed bv and between this defendant and his
said creditors, including said Reuben, that this
defendant should pay them the one half of
their claims, in the following manner: one
fourth on or before the first day of June, 1833,
and one fourth part more on or before the first
day of June, 1835, without interest; and that
thev, the said creditors, would accept the same
in satisfaction of their said claims, and, in con-
sideration that the defendant promised the
plaintiff to pay him in manner and form as
above, the said Reuben promised the defendant
to accept the same, in full satisfaction of hi?
said claims; and the defendant avers, that the
saia accounting on the said 20th May, 1833. was
for the mere purpose of ascertaining the amount
of the claim of said Reuben, on which said ip.
stalments were to be paid, and that in pursu-
ance of said contract, this defendant, on the
same 20th May, 1833, paid the plaintiff the one
fourth port of" his said claim, which said Reuben
then and there accepted, and on the 29th day
of May, 183-5, the defendant paid plaintiff the
other fourth part of said claim, which plaintiff
accepted, and that the same were accept-
ed and received in pursuance of -said *61
oo?.tract, and in full satisfaction and dis-
charge of his said claim, and that said accoant-
ing is the identical claim mentioned in sakl
agreement, all which defendant is ready to veri-
fy—wherefore, &c. To this plea there was a
general demurrer and joinder. Tho county
court rendered judgment for plaintiff, and the
defendant excepted.
Maeck & Smalley, foi- plaintifi. C. Adams,
for defendant.
COLLAMER, J. It Is not every agreement,
however deliberately made, by persons capable
to contract, which the law will enforce; nor is
it true that the courts of common law have
ever taken their suitors under guardianship to
set aside contracts, merely befause imprudently
made. There is one ingredi'jnt always neces-
sary, that is, a legal and sufficient considera-
tion. Without this, contracts, executed or ex-
ecutory, are always disregarded by courts, un-
less thereby innocent third persons would be
injured or" defrauded. The performance of
that, to which a man is already under obliga-
tion, can never constitute a consideration for
any contract by the other party. The promise
by a debtor to pay a debt, which he is then
under legal obligation to pay, creates no new
dutj' and can sustain no action, nor constitute
the consideration of a promise by the other
party. The payment of a debt, by a man then
bound to pay, creates no legal obligation on the
other party, nor constitutes a consideration for
any new promise by him. These prin-
ciples, in various *form8 of practical ap- *67
plication, have always been regarded by
the courts; nor can any adjudged case be found
where they have been violated. It is on this
principle that it was early, and has been uni-
formlv. holden that a payment of part of a
debt, by the debtor, when the whole is due, is
not and cannot, by possibility, be a legal con-
sideniiion for a contract, on the part of the
creditor, to receive it in fuU satisfaction of the
whole debt. The payment of a debt, or any
part of a debt, before it is due, is what the
debtor is not under any legal obligation to do,
and therefore is a legal consideration for aeon-
tract by the creditor, which contract may be to
release or cancel his debt, as well as any other
contract. So, too, the delivery of a collateral
article, for a debt due in money, is what the
debtor is under no obligation to do, and there-
fore maybe a legal consideration foracontract
by the creditor to receive it in full satisfaction,
as well as for any other promise he might make.
This has been so often decided, as appears
even by the authorities cited by the defendant,
that it is entirely unnecessary to repeat them.
It is, however, insisted by the defendant, that
there are decisions, cited by him. that contra-
dict or overrule this principle. This however,
on examination, will be found incorrect. Those
cases which, at first view, seem to favor such
a position, may be arranged under these heads:
First. If a debtor, by agreement, delivers to
his creditors or to a trustee for them, debts, ef-
fects or any collateral property, whether it be
the whole or part of what he has, and it be re-
ceived in satisfaction, it is a good defence.
This is like delivering collateral property to a
single creditor on a sole debt. It is doing what
the debtor is not under legal obligation to do.
and it may be the legal consideration for a con-
tract of dkcharge or any other contract by the
other party. This disposes of several decis-
ions.
Serend. If a debtor contracts with one or all
of his creditors to procure a friend to secure or
pay, out of his own means, part, in satisfaction
of a whole debt, and it is done, such creditor
can never recover more, even of the debtor
himself. It would be a fraud on the third
'68 person who paid for *tlie entire release;
and the debtor did what he was not un-
der a legal obligation to do. in procuring the
act of the third person, which was a legal con-
sideration for the promise on the other part.
This disposes of another class of decisions, re-
lied on by the defendant.
Third. If a composition deed has been en-
tered into by a body of creditors and their
debtor, by which they agree to receive, and do
receive, in money or effects, from the debtor,
or in securities from his friends, a part for the
whole debts, there, no one who agreed to the
composition can collect a balance, because it
would operate a fraud on the other creditors
who stipulate for a mutuality and have released
their debts. The deed being a specialty under
seal, is a technical release. Such are a large
class of the defendant's cases.
Fourth. If any creditor, professes to enter
into a composition deed with others on terms of
mutuality, and so induces them to release,
when he in fact secretly takes security for
more; all such securities, by whomsoever giv-
en, are void, being in bad faith and a fraud up-
on others. This is, however, only so, when
others have actually released their debts. This
DOING WHAT ONE IS BOUND TO DO.
265
disposes of all the remainder of the defendant's
cases, cited in authority.
In the present case, the defendant did not
deliver to the plaintiff or to his creditors, or to
any trustee for them, his debts or ell'ecls, or
any part thereof, lie did not procure any
third ])erson to give security or to pay any
thing. No composition deed has been signed
by any one. Nothing has been paid to any
creditor, nor any release bj' them signed, and
the\' may collect their whole debts. For the
plaintiff to recover his just debt can therefore
operate no fraud on any creditor or any third
person. This plea stands upon the simple ques-
tion, whether the payment, by a debtor, of apart
of adebt.when he is bound to pay the whole, can
be a legal consideration for a promise, on the
part of the creditor, to receive it in full satis-
faction. That such could not be the case an-
ciently is certain, and is fully conceded by the
defendant's counsel. Let us see the language
of the courts in some of the most modern
*6P cases, where the subject has *becn fully
revised and considered. In Fitch v. Sut-
ton, 5 East's Rep. 230, where the defendant had
compounded with his creditors, and paid all,
including the plaintiff, ten shillings in the
pound, and the plaintiff had given therefor his
receipt in full, Lord EUenborough says, "it can-
not be pretended that a receipt of part only,
though expressed to be in full of all demands,
must have the same operation as a release. It
is impossible to contend, that acceptance of
seventeen pounds ten shillings is an extin-
guishment of a debt of tifty pounds. There
must be consideration for the relinquishment
of the residue; something collateral, to show a
possibility of advantage to the party relinquish-
ing his further claim, otherwise the agreement
is niulum pactum. " And, he says, the doctrine
ot Pinnel's case, 5 Coke, 117, has never been
shaken.
In the more modern case of Lewis v, Jones,
4 B. & C. 50(5, where the creditor had agreed to
receive five shillings on the pound for his debt,
upon having the note of the debtor's father
therefor, and which he received, Holroyd, J,
says, "an acceptance of a smaller sum cannot
be pleaded in satisfaction of a larger. In point
of law, something further is nece.-,sary to pro-
duce that effect. But, I think, when the plain-
tiff in this case accepted the father's note, as a
security for the payment of the composition
money, the agreement did operate as a satis-
faction, " Indeed, the distinctions, before men-
tioned, are recognized in all the caics and not
one is found to sustain this plea.
Judgment affirmed.
266
CONSIDERATION.
y
(V^ JAFFRAY et al. v. DAVIS et aL yl |
(26 N. E. 351, 124 N. Y. 164.) \ I
CJourt of Appeals of New York. Second DiTi-
sicn. Jan. 14. 1891.
Appeal from .supreme court, general
term, first department.
John W. Little and O. F. Wisner, for ap-
pellants. Isaac L. Miller, for respondents.
POTIER, J. The facts found by the
trial court In this case were agreed upon.
They are simple, and present a familiar
question of law. The facts are that de-
fendants were owing plaintiffs, on the 8th
day of December, 18sG, for goods sold be-
tween that date and the May previous, at
an agreed i)riee, the sura of $7,714.37, and
that, on the 27th of the same December,
the defendants delivered to the plaintiffs
their three promissory notes, amounting,
in the aggregate, to $3,462.24, secured
by a chattel mortgage on the stock, fixt-
ures, and other property of defendants,
located in East Saginaw, Mich., which
said notes and chattel mortgage were re-
ceived by plaintiffs, under an agreement
to accept same, in full satisfaction and
discharge of said indebtedness; that said
notea have all been paid, and said mort-
gage discharjred of record. The question
of law arising from these facts, and pre-
sented to this court for its determination,
is whether such agreement, with full per-
formance, constitutes a bar to this action,
which was brought after such perform-
ance to recover the balance of such indebt-
edness over the sum so secured and paid.
One of the elements embraced in the
question presented upon this appeal is,
viz., whether the pajnnent of a sum less
than the amount of a liquidated debt,
under an agreement to accept the same in
satisfaction of such debt, forms a bar to
the recovery of the balance of the debt.
This single question was presented to the
English court in 1602, when it was re-
solved, if not decided, in Pinnel's Case, 5
Coke, 117, "that payment of a lesser sura
on the day in satisfaction of a greater
tannot be any satisfaction for the whole, *•
and that this is so, although it was
agreed that such payment should satisfy
the whole. This simple question has
since arisen in the English courts, and
in the courts of this country, in almost
numberless instances, and has received
the same solution, notwithstanding the
courts, while so ruling, have rarely failed
uiion any recurrence of the question to
criticise and condemn its reasonableness,
justice, fairness, or honesty. No respect-
able authority that I have been able to
find has. after such unanimous disapprov-
al by all the courts, held otherwise than
was held in Pinnel Case, supra, and Cum-
ber V. Wane, 1 Strange, 426; Foakes v.
Beer, L. R. 9 App. Cas. 605; Goddard v.
O'Brien. (Q. B. Div.) 21 Amer. Law Reg.
6.37, and notes. The steadfast adhesion
to this doctrine by the courts, in spite of
the current of condemnation by the indi-
vidual judges of the court, and in the face
of the demands and conveniences of a
much greater business, and more exten-
sive mercantile dealings and operations,
demonstrate the force of the doctrine of
sture decisis. But the doctrine of sture
decisis is further illustrated by the course
of judicial decisionsupon this subject; for,
while the courts still hold to the doctrine
of the Pinnel and Cumber- Wane Cases, su-
pra, they have seemed to seize with avidi-
ty upon any consideration to support the
agreement to accept the lesser sum in sat-
isfaction of the larger, or, in other words,
to extract, if possible, from the circum-
stances of each case, a consideration for
the new agreement, and to substitute the
new agreement in place of the old, and
thus to form a defense to the action
brought upon the old agreement. It will
serve the purpose of illustrating the adhe-
sion of the court to settled law, and at the
same time enable us, perhaps more satis-
factorily, to decide whether there was a
good consideration to support the agree-
ment in this case, to refer to (the consider-
ation in) a few of the numerous cases
which the courts have held to be sufficient
to supi)ort the new agreement. Lord
Bl-vckrurn said, in his opinion in Foakes
V. Beer, supra, and while maintaining the
doctrine, "that a lesser sum cannot be a
satisfaction of a greater sum," "but the
gift of a horse, hawk, or robe, etc., in sat-
isfaction, is good," quii.c regardless of the
amount of the debt; and it was further
said by him, in the same opinion, " that
payment and acceptance of a parcel before
the day of payment of a larger sum would
be a good satisfaction in regard to the
circumstance of time;" "and so, if 1 am
bound in twenty pounds to pay you ten
pounds at Westminster and you request
me to pay you five pounds at the day, at
York, and you will accept it in full satis-
faction for the whole ten pounds, is it a
good satisfaction?" It was held in God-
dard V. O'Brien, 9 Q. B. Div. 37: "A., being
indebted to B. in 12.^ pounds 7s. and 9d. for
goods sold and delivered, gave B. a check
(negotiable, I suppose) for 100 pounds,
payable on demand, which B. accepted in
satisfaction, — was a good satisfaction."
HuDDLESTON, B., in Goddard v. O'Brien,
supra, approved the language of the opin^
ion in Sibree v. Tripp, 15 Mees. & W. 26:
"That a negotiable security may operate,
if so given and taken, in satisfaction of a
debt of a greater amount: the circum-
stance of negotiability making it in fact a
different thing, and more advantageous,
than the original debt, which was not ne-
gotiable." It was held in Bull v. Bull, 43
(?onn. 4.55: " And, aUhougii the claim is a
money demajid, liquidated, and not doubt-
ful, and it cannot be satisfied with a
smaller sum of money, yet, if any other
personal property is received in satisfac-
tion, it will be good, no matter what the
value." And it was held, in Cumber v.
Wane, supra, that a creditor can never
bind himself by simple agreement to ac-
cept a smaller sum in lieu of an ascertained
debt of a larger amount, such agreement
being nudum pactum, but, if there be any
benefit, or even any legal po.ssibility of bene-
fit, to the creditor thrown in, that addi-
tional weight will turn the scale, and ren-
der the consideration sufficient to support
the agreement. It was held in Le Page v.
DOING WHAT ONE IS BOUND TO DO.
2G7
McCrea, 1 Wend. 10 1, uiul in Boyd v.
Hitchcock, 20 Johns. 7(J, tliat "Kivinj? fur-
tlior Rocurity for part of a doht, or other
Kpcurity, tlioiish for a loss nam than tlie
debt, and acceptance of it in full of all de-
mands, make a valid accord and satisfac-
ti(jn ; " that, " if a debtor j^ives his creditor
a note indorsed by a third party for a less
Kiun tlian the debt, (no matter how much
less,) but in full satisfaction of the rlebt,
and it is received as such, the transaction
constitutes a good accord and satisfac-
tion." Varney v. Conery, (Me.) 1 Atl. Hep.
6S;3. And so it has been held " vi-here. by
mode or time of part payment, difft-rent
tlian tiiat i)rovided for in the contract, a
uew bfiH'titisorniay bcconfeired, or a bur-
tlen imposed, a new consideration arises
on t of the transaction, and gives validity to
the agreement of the creditor." Rose v.
Hall, L'6 Conn. 392. And so "payment of
less than the whole debt, if made before it
Is due, or at a different place from that
stipulated, if received in full, is a good sat-
isfaction." .lones V. P.ullitt, 2 Litt. (Kv.)
4'); liicketts v. Hall, 2 Bush, 249; Smith v.
Brown, 3 Hawks. ,5S0; Jones v. Perkins,
29 Mi.ss. 139; Schweider v. Lang, 29 Minn.
254, 12 N. W. Rep. 33. In Watson v. P:ili-
ott, 57 N. H. 511-513, it was held: "It is
enough that something substantial which
one party is not bound by law to do is
done by him, or something whicli he has a
right to do ho abstains from doing, at the
request of the other party, is held a good
satisfaction. "
It has been held in a n amber of cases
that, if a note be surrendered by the payee
to the maker, the whole claim is dis-
charged and no action can afterwards be
maintained on such instrument for the un-
paid balance. Ellsworth v. Fogg, 35 Vt.
355; Kent v. Reynolds, S Hun, 559. It has
been held that a partial payment made to
another, though at the creditor's instance
and request, is a good discharge of the
whole debt. Harper v. Graham, 20 Ohio,
106. "The reason of the rule is that the
debtor in such case has done something-
more than he was originally bound to do,
or, at least, something different. It may
be more, or it may be less, as a matter of
fact." It was held by the supreme court
of Pcnnsvlvania in Bank v. Huston. 11
Wkly. Notes Cas. 3S9, (February 13, 1SS2:)
The decided advantage which a creditor
acquires by the receipt of a negotiable
note for a part of his debt, as by the in-
creased facilities of recovering upon it, the
presumption of a consideration for it, the
ease of disposing of it in market, etc., was
held to furnish ample reason why it should
be a valid discharge of a larger account or
open claim unnegotiable. It has been held
that a payment in advance of the time, if
agreed to, is a full satisfaction for a larger
claim not yet due. Brooks v. White, 2
Mete. ( Mass. )2S3; Bowker v. Childs.3 Allen,
434. In some states, notably Maine and
Georgia, the legislature, in order to avoid
the harshness of the rule under consid-
eration, have, by statute, changed the
law upon that subject, by providing: "No
action can be maintained upon a demand
which has been canceled by the receipt of
any sum of money less than the amount
legally due thereon, or for any good and
vaiualjle consideration, however small."
Citing Weymouth v. Babcock, 42 Me. 42.
And so in Gray v. Barton, 55 N. Y. 08,
where a debt of $S20 upon book-account
was satisfied by the payment of one dollar
by calling the balance a "gift, "though the
balance was nrannan,5 Johns. 208-272; or
as it is called in Kellogg v. Richards, 14
Wend. 110, "technical and nejt very well
supported by reason;" or, as maybe more
practically stated, a rule that "a bar of
gold worth $100 will discharge a debt ot
$500, while 400 gold dollars in current coin
will not." SeenotetoGoddard v. O'Brien,
supra, in 21 Airer. Law Reg. 640. 041.
The state of the law upon this subject,
under the modification of later decisions,
both in England and in this ci)uiitry,
would seem to be asoxpressed in Goddard
v. O'Brien, supra: "The doctrine in Cum-
ber v. Wane, is no doubt very much quali-
fied bySibree v. Tripp, and I cannot find it
better stated than in 1 Smith, Lead. Cas.
(7th Ed.).595: 'Thegeneraldoctrinein Cum-
ber V. Wane, and thereason of all theexcep-
tions and distinctions which have been in-
grafted on it, may perhaps be summed up as
follows, viz. : That a creditor cannot bind
himself by a simjjle agreement to accept a
smaller sum in lieu of an ascertained debt
of largeramount.such an agreement being
jindnm pnctuni. But, if there be any bene-
fit, or even any legal possibility of benefit,
to the creditor thrown in, that additional
weight will turn the scale, ami render the
consideration sufficient to support the
agreement.' " Bull v. Bull, 43 (?onn. 455;
Fisher v. May, 2 Bibb, 449; Reed v. Bnrt-
lett,19 Pick. 273; Bank v. Geary, 5 Pet. 99-
114; Le Page v. McCrea, 1 Wend. 164;
Boyd V. Hitchcock. 20 Johns. 70; Brooks
V.White, 2 Mete. (Mass.) 2S3; Jones v. Per-
kins, 29 Miss. 139-141; Hall v. Smith, 15
Iowa, 584; Babcock v. Hawkins, 23 Vt.
501.
In the case at bar. the defendants gave
their promissory notes upon time for one-
half the debt they owed plaintiff, and also
gave plaintiff a chattel mortgage on the
stock, fixtures, and other personal proper-
ty of the defendants, under an agreement
with plaintiff to accept the same in full
satisfaction and discharge of said indebt-
edness. Defendants paid the notes as they
became due. and plaintiff then discharged
the mortgage. Under the cases above
cited, and upon iirincii)le, this new agree-
ment was sujiporttHl l)y a sufficient con-
sideration to make it a valid agreement,
and tliis agreement was, by the parties,
substituted in place of the former. The
consiileration of the uew agreement was
26S
CONSIDE RATION.
that the plaintiff, in place of an open
book-account for goods «old, got the de-
fcTidants' promissory notes, probably ne-
gotiable in form, signed by defendants,
tiius savina: the plaintiff perhaps trouble
or expense of proving their account, and
got security upon all the defendants'
personal property for the payment of
the sum specified in the notes, where be-
fore they had no security. It was some
trouble 'at least, and perhaps some ex-
ipense, to the defendants to execute and
\deliver the security, and they deprived
:hemselves of the legal ownership, or of
Luy exemptions, or the power of dispos-
ing of this property, and gave the plaintiff
such ownership, as against the defend-
ants, and the claims thereto of defend-
ants' creditors, if there were any. It
seems to me, upon principle, and the de-
cisions of this state, (save perhaps Keeler
V. .Salisbury, 33 N. Y. 653, and Platts v.
Walrath, Lalor, Supp. 59, which I will
notice further on,) and of quite all of the
oth<>r states, the transactions between the
plaintiff and tlie defendants constitute a
bar to this action. All that is necessary
to produce satisfaction of the former
agreement is a sufficient consideration to
support the sul)stituted agreement. The
doctrine is fully sustained in the opinion
of J udge Andrews, in Allison v.Abendroth,
lOS N. Y. 470, 15 N. E. Rep. 606, from which
I quote: "But it is held that, where there
is an independent consideration, or the
creditor receives any benefit, or is put in a
better position, or one from which there
may be legal possibility of benefit to
which he was not entitled, except for the
agreement, then the agreement is not
nudum piictum, and the doctrine of the
common law, to which we have adverted,
has no application." Upon this distinc-
tion the cases I'est, which hold that the
acceptance by the creditor in discharge of
the debt of a different thing from that
contracted to be paid, although of much
less pecuniary value or amount, is a good
satisfaction, as. for example, a negotiable
instrument binding the debtor and a third
person for a smaller sum. Curlewis v.
Clark, 3 Exch. 375. Following the same
principle, it is held that, when the debtor
enters into a new contract with the cred-
itor to do something which he was not
bound to do by the original contract, the
new contract is a good accord and sati.s-
faction, if so agreed. The case of accept-
ing the sole liabilitj' of one of two joint
det)tors or copartners, in satisfaction of
the joint or copartnership debt, is an iilu.s-
trati(jn. This is held to be a good satis-
faction, because the sole liability of one of
two debtors "maybe more beneficial than
the joint liability of both, either in respect
of tlie solvency of the parties, or the con-
venience of the remedy." Thompson v.
Percival, 5 Rarn. & Adol. 925. In perfect
accord with this principle is the recent case
in this Court of Luddington v. Bell,77 N. Y.
13S, in which it was held that the accept-
ance by a creditor of the individual note
of one'of the members of a copartnership
after dissolution, for a portion of the co-
pa rtnfrship debt, was a good considera tion
for the creditor's agreement to discharge
the maker from further liability. Pardee
V. Wood, 8 Hun. 584; Douglass v. White, 3
Barb. Ch. 621-624. Notwithstanding these
later and decisive authorities, the plaintiff
contends that the giving of the defend-
ants' notes, with the chattel mortgage se-
curity and the payment, was an insuffi-
cient consideration to support the new or
substituted agreement, and cites, as au-
thority for such contention, the cases of
Platts V. Walrath, Lalor, Supp. .59, and
Keeler v. Salisbury, 33 N. Y. 648. Platts v.
Walrath arose in justice court, and the
debt in controversy was put forth as a
set-off. The remarks of the judge in the
former case were quite obiter, for there
were various subjects in dispute upon the
trial, and from which the justice might
have reached the conclusion that he did.
The judge, in the opinion relied upon,
says: "Looking at the loose and second-
ary character of the evidence as stated
in the return, it was, perhaps, a question
of fact whether any mortgage at all was
given, or at least, whether, if given, it was
not in terms a mere collateral security for
the large note. " " Even the mortgage was
left to parol proof. Did it refer to, and
profess to be a security for, the note of
.11,500, or that sum less the fifty dollars
agreed to be thrown off?" etc.
There is so much confusion and uncer-
tainty in the case that it was not thought
advisable to publish the case in the regu-
lar series of Reports. The case of Keeler
v. Salisbury, supra, is not to be regarded
as an authority upon this question, or as
approving the case of Platts v. Walrath,
supra. In the case of Keeler v. Salisbury,
the debtor's wife had joined in the mort-
gage given by her husband, the debtor, to
effect the compromise, thus releasing her
inchoate right of dower. The court held
that fact constituted a suflicient consider-
ation to support the new agreement,
though the court, in the course of the
opinion, remarked that it had been held
that the debtor's mortgage would not be
sufficient, and referred to Platts v. Wal-
rath. But the court did not otherwise in-
dicate any approval of that case, and
there was no occasion to do so, for, as be-
fore stated, the court put its decision up-
on the fact that the wife had joined in the
mortgage. In view of the peculiar facts
in these two cases, and the numerous de-
cisions of this and other courts hereinbe-
foi-e referred to, I do not regard them as
authorities against the defendants' con-
tention that the plaintiff's action for the
balance of the original debt is barred by
reason of the accord and satisfaction, and
tlie judgment must be reversed, with costs.
All concur.
{,
)>
EIILE V. JUDSON.
(24 Wend. 97.)
Supreme Court of New York. May, 1840.
This was an action of assumpsit, tried at
the Madison circuit in September, 1838, before
the Hon. Philo Gridley, one of the circuit
judges.
The action was by the plaintiff as the hold-
er of a note payable to Elislia Swift, or bear-
er, for the sum of $100, transferred after ma-
turity. The defence set up was want of con-
sideration. The defendant had been in
negotiation with one James Blatherwicli for
tlie purchase of a farm, but not agreeing as
to the price and terms of payment, abandoned
the negotiation. Elisha Swift then treated,
with Blalhorwick for the purchase of the.
farm on his own account, and induced Blath^
erwick to agree to accept from him a less
sum. and also to reduce the amount of the-
cash payment to be made on the conveyance,
of the property. Swift told Blatherwicli that
he thought he should take the farm. The
agreement, however, was by parol. In ^his
state of JJifijaegotiation, Judson, the defendant
To^ve up his
sent to h is becoming t he pu r-
hich Blathorwic k had
The latter assent-
would
PAST CONSIDERATIOX.
269
in this cause;
irgaiuTa
Chaser u
geifto accept from him
"eu ib tne proposal, provided Judson
give him his note for $100, to pay him for his
time and troulile in negotiating the purchase.
Judson accordingly gave the note in question,
and became the purchaser of the farm. Upon
this state of facts, the defendant moved for
a nonsuit, which was denied by the circuit
judge, who held that this was the case of an
(executed consideration, the payee of the note
liad been put to trouble, and had by his ad-
dress induced Blatherwick to reduce his de-
mands for the farm, which was an act bene-
ficial to the defendant, upon which a promise
to pay could be sustained; that no actual re-
(luest from Judson to Swift to render tlie serv-
ices performed was necessary to be shewn —
that the law would imply a request. The
jury, under the direction of the judge, found
a verdict for the plaintiff, which the defend-
ant cow moves to set aside.
J. A. Spencer, for plaintiff. B. Davis Noxon,
for defendant.
BRONSON, J. The note was given on a
past or executed consideration. It was to
compensate Swift for what he had done in
negotiating for the farm, and obtaining the
offer of better terms than Blatherwick had
proposed to accept when the defendant Avas in
treaty for the purchase. I am unable to see
how this makes out a good consideration for
the promise. Swift had not acted for the de-
fendant, but for himself. The defendant had
relinquished all idea of purchasing the farm
before Swift commenced treating for it; and
Swift neither acted at the defendant's request,
nor with any view to his benetit: and beyond
this, Swift had accomplished nothing, in a
legal point of view. If a verbal contract had
been completed, it would have been void under
the statute of frauds. But he had not even
made a void contract, if such an expres.sion
may be tolerated. He had only got an offer
of terms from Blatherwick, and had told liim
he thought he should take the farm. The
owner was under no obligation, not even hon-
orary, to sell upon tho.so term.s, or to give
Swift a preference over any other person, on
whatever terms he might ultimately conclude
to part with his property.
Services voluntarily rendered, though they
may be beneficial to another, impose no legal
obligation upon the party benefited. Bartholo-
mew v. Jackson, 20 Johns. 28. The serv-
ices must be rendered upon request (Dunbar
V. Williams, 10 Johns. 2.7J); and in counting
upon a past consideration, a request must, in
general, be alleged (Comstock v. Smith, 7
Johns. 87; Parker v. Crane, G Wend. 647). It
it not necessary that there should be direct
evidence of a request. This, like most other
facts, may be established by presumptive evi-
dence; and the beneficial nature of the serv-
ices, though not enough when standing alone,
may be very important in a chain of circum-
stances tending to establish the presumption.
1 Saund. 2G4, note 1; Oatfleld v. Waring, 14
Johns. ISS. See, also. Doty v. Wilson, Id.
378. But here the services were not beneficial
to the defendant; and besides, we see that
they were not and could not have been ren-
dered upon request. Swift was not acting for
the defendant in the negotiation with Blath-
erwick, but for himself.
We are referred to cases where it has been
said that a moral obligation is a sufficient
consideration to support an express promise.
Stewart v. Eden, 2 Caines, 150; Doty v. Wil-
son, 14 Johns. 378; Lee v. Muggeridge, 5
Taunt. 37. But this rule must be taken with
some quahfications. The moral obligation to
pay a debt barred by the statute of limita-
tions, or an insolvent's discharge, or to pay a
debt contracted during infancy or coverture,
and the like, will be a good consideration for
an express promise. But a merely moral or
conscientious obligation, unconnected with
any prior legal or equitable claim, is not
enough. 3 Bos. & P. 240, note; Smith v.
Ware, 13 Johns. 257; Lawes' PI. Assump. 54;
10 Johns. 283, note. But here the defendant
was under no obligation of any kind to Swift.
Nothing had been done at his request, or for
his benefit. What Swift had done in negotiat-
ing for the farm was no more beneficial to
the defendant, than it was to every other man
in the state who might wish to buy a farm.
The plaintiff has often failed upon an ex-
press promise, in much stronger cases than
this. I will only refer to two or three. In
Hunt V. Bate, Dyer, 272. the plaintiff had,
witliout request, become bail for the defend-
ant's servant who was imprisoned, to the end
that he might go about his master's business;
and the defendant afterwards promised to in-
demnify the plaintiff. After verdict upon this
270
CONSIDERATION.
promise, the judgment was arrested, because,
as tlie court said, "there is no consideration
wherefore the defendant should be charged
for the debt of liis servant, imless the master
had first promised to discliarge the plaintiff
before the enlargement and mainprize made
of his servant, for the master did never make
request to the plaintiff for his servant to do so
much, but he did it of his own bead." In
Frot>r V. Hardenbergh, 5 Johns. 272, the plain-
tiff had, without request, made valuable Im-
provements upon the defendant's land, ^nd
the defendant afterwards promised to pay
for those improvements; but the promise was
held to be a nudum pactum, and judgment
was rendered for the defendant. The case of
Smith V. Ware, 13 Johns. 257, was also upon
an express promise, and is equally decisive
against maintaining IJiis action.
New trial granted.
PAST CONSIDERATION.
271
*V POOL, T. HORNER et aL 1
i/ ^ (20 Ati. 1036, G4 Md. 131.) '
Court of Appeals of Maryland. Jane 24, 18S5.
Appeal from Baltimore city court.
Assumpsit by Henry Pool asainst Albert
N. Horner and another, executorw of Alex-
ander H. Horner. Tliere was a judgment
for defendants, and plaintiff appeals.
.\rgued before Alvey. C. J., and Stone,
MiLLEU, Robinson, Ritchie, and Bryan,
JJ.
Thomas M. Murray, for appellant. IV.
A. Uummoud and J. J. Wade, for appel-
lees.
BRYAN, J. The statement filed as a bill
of particulars alleges that there was an
agreement between the plaintiff below
and the testator of defendants that, for
certain v aluable ..'onside r^^'""^ V^^ said
testator would buy a house and lot for
plaintiff, and permit him to occupy it, and,
if plaintiff could dhtain a larger price than
the said testatbr paid for it, that he would
pay to the plaintiff what might be ob-
tained for it, over and above the priceorig-
inally paid for it. The consideration on
the part of the plaintiff was that he fjave
a note for $150, because of an old debt for
fl25 which he owed the testator, and that
he agreed to pay him annually the inter-
est on the purchase money of the house
and lot, and all taxes, insurance, and
ground-rent thereon, and agreed to keep
the house in good repair. The plaintiff
paid the note, and all interest due on it,
and performed all the other stipulations
of his agreement. The house and lot cost
$],4G5, and were sold, at the desire and re-
quest of the plaintiff, for the sum of f 1,700
by the testator, who received the purchase
money, and thereupon agreed to pay the
plaintiff the sum of $2o5, and afterwards,
u y va r ious occasions, promised to pay the
same." ine coi>tracf thus alleged was i of
Hie (JUrchase of an interest in land, for the
sale of it under certain circumstances, and
for the paj'ment to the plaintiff of a por-
tion of the price received bj' the owner.
Being b y Pnrnl i '^ ^/^rn^a fnlly « 7itliir. XliB
iouri ji section of the statute of frauds, as
m ucfi so as that set up in White v. Coombs,
27 Md. 4S'J. The plaintiff could not have
maintained an action on this contract
while it was executory, but the testator's
express promise to pay, after it was exe-
cuted, introduced a new feature into the
transaction. It is stated, in the notes to
Osborne v. Rogers, 1 Wms. Saund. l!04c, as
a settled rule, "that a past consider.ition
Is not sullicient to support a subsequent
promise, unless there was a request of the
party, express or implied, at the time of
performing the consideration; but. \\:lm :e
liicrjeL^ssLUij. an exj^ress rcqucst^at .tliejtlme.
\t wonldj^.Jn MnT-ases.lje sufligicut to.bup-
pdrl; a subsequent promise." This doc-
TiTTie seems to have been held uniformly
ever since the case of Lampleigb v. Brath-
wait, decided in the reign of James I., and
reported in 1 Smith, Lead. (as. 222. The \
case is thus stated : The defendant, having \
feloniously slain one Patrick Mahume, re- \
quired the plaintiff to endeavor to ob- \
tain a pardon for him from the king, and |
the plaintiff journeyed and labored, at his j
own charges, and by every means in hi.s |
power, to effect the desired object, and the i
defendant afterwards, and in consideration ,
of the premises, promised to give the plain-
tiff £100. It was held that, although the
consideration was passed and gone before
the promise was made, yet, inasmuch as
the consideration was moved by the pre-
vious suit or reqnest of the party, the
promise was binding, and capable of sus-
taining an action. And, in another case,
the plaintiff brought his action upon a
promise made by the defendant to pay the
plaintiff £20, in con.sideration that the
plaintiff, at the instance of the defendant,
had taken to wife the cousin of the de-
fendant. It was held that the action wag
maiutainable, alth(mgh the marriage was
executed and past before the undertaking
and promise were made, because the
marriage ensued at the request of the de-
fendant. Hunt V. Bate, 3 Dj-er, 272^. So,
it seems to be clear that the payment of
the note for $150 by the plaintiff, at the
request of the testator, and the perform-
ance of the other considerations by him,
are sufficient to support the promise made
by the testator to pay the .5235. Some of
the testimony offered by the plaintiff did
not conform with exactness to the bill of
particulars; but the greater portion of it
tended to prove the facts therein stated.
It was error in the court to exclude the
whole of it. Carroll's Lessee v. Manufact-
uring Co., 11 Md. 399. Judgment re-
versed, and new trial awarded.
272
CONSIDERATION.
1 y BOOTHE V. FITZPATRICK.
V (36 Vt. 6S1.)
Snpreme Court of Vermont. Rutland.
Term, 1864.
1%
\ V
Feb.
Book account. The auditor reported
that some time prior to the last o! Au-
gust, ISGO, the defendant's bull was im-
pounded bj' one Matthew Fox in Chitten-
den ; that said bull by some means es-
caped from the pound and got into the
I)laintiff's pasture in Pittsford, about the
1st of September, 1860, and was kept by
the plaintiff from that time until about
the 20th of May following, when the de-
fendant took him away. Tlie plaintiff did
not know who was owner of the animal,
when it came into his pasture as above
stated, but he mtide frequent inquiries in
order to ascertain its owner. In the lat-
ter pari of November, 1S60, the plaintiff
having ascertained that the defendant
was the owner of said bull, sent word to
the defendant that he, the plaintiff, had
the defendant's bull; butitdid not appear
that the defendant got the word at that
time. Some time after this, but at what
time did not dcfinitelj' appear, the plain-
tiff met the defendant In Pittsford, and
described the bull in his possession to the
defendant, who thereupon said it was his,
and that he would pay him, (the plain-
tiff) for keeping; but also said to the
plaintiff that Fox, who had impounded
the bull, should pay for it. Sometime after
the interview last referred to, the defend-
ant went to the plaintiff in Pittsford and
saw the bull, told the plaintiff that it was
his, and that he would pay the plaintiff
for keeping, but did not drive him away
at that time. The plaintiff kept the bull
through the winter, and at a reasonable
time in the spring turned him out to past-
ure, when becoming troublesome, the
plaintiff went to see the defendant in re-
gard to taking him away. The de-
*682 fendant on this occasion *informed
the plaintiff that he would come and
take him away the next day, and did, and
at the same time offered the plaintiff his
note for the amount charged for keeping.
Tlie plaintiff did not accept the note, but
told the defendant that he might leavethe
amount with one Duncklee for the plain-
tiff, to which the defendant assented; but
the defendant did not leave the amount
with Duncklee, and the plaintiff's claim for
keeping the bull remains unpaid. The
amount charged was reasonable,' and no
more than a fair compensation for the
keeping.
The plaintiff ascertained who the owner
of the animal was, but at what time did
not certainly appear, the plaintiff adver-
tised said bull as an estray by posting up
three notices in the town of Pittsford,
where the bull was taken up; but no no-
tice was published in a newspaper, al-
though three were published in tiie county,
nor was any copy left at the town clci-k's
ofhce. Said bull was worth, when taken
up and advertised as above stated, the
Bum of twelvedollars. The plaintiff made
no entry of his claim on his book of ac-
counts, nor did it appear that the plain-
tiff kept such book.
On the auditor's report,— the court.
March Term, 1863, Kellogg, J., presiding,
rendered a judgment in favor of the plain-
tiff. Exceptions by the defendant.
Edpcrton & Paul, for the plaintiff.
Reuben R. Thrall, for the defendant.
PECK, J. Thedefendant'scounsel, with-
out distinction between the part of the
account that accrued befoi-e the defend-
ant's promise to pay, and that which ac-
crued after, insists that the promise was
made upon a past consideration and not
binding, in as much as there was never
any previously existing legal obligation.
As to all that part of the account that ac-
crued after the defendant made his first
promise to pay for the keeping, the plain-
tiff's right to recover is clear, as the sub-
sequent keeping must be taken to have
been upon the faith of that promise.
When the defendant promised to take the
bull away and jjay for the keeping, the
parties must have understood that
the defendant *was to pay for the *683
keeping till he should take the bull
away. As to the prior portion of the
keeping, the promise was upon a past
consideration, and the question is wheth-
er this is a legal objection to a recovery.
It is urged that without an express prom-
ise there was at most but a moral obliga-
tion, and that a moral obligation is not
sufficient to give a legally binding force to
an express promise, except in cases where
there had once existed a legal obligation,
as in case of a debt barred by the statute
of limitations or by a discharge in bank-
ruptcy. This is so said in some reported
cases, but no case is cited in which the
question involved and decided establishes
this as a general proposition. That it is not
so, is evident from the cases in which it is
decided that a minor making a contract
may bind himself by a promise made after
arriving at the age of majority without
a new consideration. In such case there
is no legal obligation previously existing,
and yet the promise is binding. The same
may be said of another class of cases
where the consideration has enured to the
benefit of the defendant, but without any
request on his part, in which it is held
that a subsequent promise is equivalent
to a previous request, and creates a legal
liability, where none existed before for
want of a request. If the consideration,
even without request, moves directly from
the plaintiff to the defendant and enures
directly to the defendant's benefit, the
promise is binding, though made upon a
past consideration. In this case there
was such consideration. The plaintiff
parted with what was of ralue to him,
and it enured directly to the benefit of the
defendant. A promise upon such past
consideration is binding. This principle
is fundamental and elementary, and is
sustained by abundant authority. But
for the defendant's promise the plaintiff
could not recover for want of a request
on the part of the defendant, as one can
not thus be made debtor without his as-
sent. The promise of the defendant obvi-
ates this objection, it l)eing equivalent to
a previous request. The cases cited by
the defendant's counsel to shoAV tiiat a
moral obligation is not a good consider-
PAST CONSIDERATION.
273
ation for an express promise, except where
there bad been a previous lepal oblij?a-
tion, are not in conflict with tlioso prin-
ciples. It Is true there are some ex-
•684 pressions used *by judges that
taken literally without reference to
the case then under consideration, would
seem to bo irreconcilable with this view.
The language in these cases must be un-
derstood in reference to the cases in which
the language is used. They wore cases
where the defendant had received no con-
elderatiou beneficial to himself; not like
this, where the defendant has received a
valuable pecuniary heuefit at the expense
of the plaintiff.
HOPK. BBL. CAS. CONT.— 18
There would be another objection to a
recovery in this case in the absence of a
promise by the defendant, arising from
the provision of the statute prohibiting a
party who takes up an estray, from re-
covering for keeping in case he neglects to
advertise as the statute requires. But it
was competent for the defendant to waive
this objection, as he has done by an ex-
press promise to pay. There is no reason
why he may not as well waive this de-
fence by a promise to pay, as the defence
of tlie statute of limitations or the de-
fence of infancy. The plaintiff ia entitled
to recover his whole account.
Judgment affirmed.
274 *
CONSIDERATION.
EAR1.E V. OLIVER,!
(2 Exch. 71.)
ourt of Exchequer of Pleas. Feb. 7. 1848.
Mr. Maynard, for plaintiff. Mr. Atherton.
contra,
PARKE, B. This case was very folly and
ably ar!?ued before my Brothers ALDERSON,
ROLFE, PLATT, and myself, at the sittings
after last Micliaelmas term. Two questions
arose.— the first, as to the sufficiency of tbe
first count on general demurrer; the second,
whether the pleadings to the second coimt,
which was money paid, disclosed a sufficient
defence. The first count was, in substance,
on a promise in writing by the defendant to
the plaintiff, in consideration of the defend-
ant's liability, to repay the plaintiff a debt
which he had contracted with a banking com-
pany as surety for the defendant before the
bankruptcy; and the promise was made, be-
fore the certificate, to repay the debt when
the plaintiff should have paid it, and also the
interest on that debt from the time it should
be paid by the plaintiff to the time of repay-
ing by the defendant. There was a plea
stating that the promise was before certifi-
cate, and a special demurrer to the plea, on
the ground that it merely stated what was
admitted before in the declaration. That is
true, and the consequence is, that the question
is simply whether the first count is good on
demurrer.
So far as relates to the objection that the
promise was made before the certificate, the
case of Kirkpatrick v. Tattersall, 13 Mees. &
W. 766, is an answer. It may be worth
whUe to state that a similar point had been
previously decided by Lord Chief Justice
Eyre in the case of Roberts v. Morgan, 2
Esp. 736.
The next objection was that, although an
existing debt which would be barred by a
certificate, and which was due by the bank-
rupt to the plaintiff, was a good consideration
to support a promise to pay it, a mere liabil-
ity to repay the plaintiff when he should
have first paid the debt for the defendant
was not. This goes a step further than the
cases above cited, but seems to us to fall
within the same principle. This liability,
like the debt, would be discharged by the
certificate; and it seems to us as just and
reasonable for the bankrupt, after the fiat,
to waive the benefit of his certificate with
respect to it, as it is to waive it with respect
to a debt; and, if the debt so discharged is a
good consideration for a promise to pay it,
the liability which Is discharged in the same
Tay is a good consideration for a promise to
continue liable.
Two further objections were made, on the
supposition that this liability is to be put on
the same footing as a debt, and is a good
1 Irrelevant parts omitted.
consideration: First, that this debt or linbll-
Ity, in a course of being barred by a certifi-
cate, cannot be treated as the executed con-
sideration for a promise which a debt or lia-
bility, not barred by a certificate, would not
support, and that by the course of moilern
decisions, beginning with the case of Hopkins
V. Logan, 5 Mees. & W. 241, and ending with
Roscorla v. Thomas, 3 Q. B. 234, a debt canuot
be laid as an executed consideration for any
promise which the law would not imply
from it; and that a promise to pay whenever
the party was able was never implied. The
second was that a promise to pay interest
could not be supported by the consideration,
and was as objectionable as if the promise
had been to do any collateral thing. We
think that these objections ought not to pre-
vail.
The strict rule of the common law was no
doubt departed from by Lord Mansfield in
Hawkes v. Sanders, Cowp. 290, and Atkins
V. Hill, Id. 2S8. The principle of the rule
laid down by Lord Mansfield is that where
the consideration was originally beneficial to
the party promising, yet if he be protected
from liability by some provision of the statute
or common-law, meant for his advantage, he
may renounce the benefit of that law; and if
he promises to pay the debt, which is only
what an honest man ought to do, he is then
botmd by the law to perform it. There is a
very able note to the case of "Wennall v. Ab-
ney, 3 Bos. & P. 252, explaining this at
length. The instances given to illustrate the
principle are, amongst others, the case of a
debt barred by certificate and by the statute
of limitations; and the rule in these instances
has been so constantly followed that there
can be no doubt that it is to be considered
• as the established law. Debts so barred are
unquestionably a sufficient consideration for
every promise, absolute or unqualified, quali-
fied or conditional, to pay them. Promises
to pay a debt simply, or by installments, or
when the party is able, are all equally sup-
ported by the past consideration; and, when
the debts have become payable instanter,
may be given in evidence in the ordinary
declaration in indebitatus assumpsit. So.
when the debt is not already barred by the
statute, a promise to pay the creditor will
revive it, and make it a new debt, and a
promise to an executor to pay a debt due to
a testator creates a new debt to him. But
it does not follow that, though a promise re-
vives the debt in such cases, any of those
debts will be sufficient consideration to sup-
port a promise to do a collateral thing, as to
supply goods, or perform work and labour;
and .so indeed it was held in this court in the
case of Reeves v. Hearne, 1 Moes. & W. 323.
In such case it is but an accord unexecuted,
and no action will lie for not executing it.
We think, therefore, that the conditional
promise to pay the debt would be good in
this case, and supported by the original con-
sideration; and a conditional promise, which.
PAST CONSIDERATION.
275
whon nbsolute, wiU be only a renewal of the
original liability, and to the same extent, is
equally good and supported by the original
consideration.
The next objection relau'.s lo the interest.
It seems to us to bt> supported bv the same
consideration as the original promise. The
proral.se is to pay the debt conditionally; and,
It the debt be unpaid, that the defendant wiU
pay Interest for It We are of opinion, there-
fore, that the first count Is good.
CAPACITY OF PARTIES.
/
UNITED STATES v. TINGEY.
(5 Pet. 115.)
Snpreme Court of the United States. Jan.
Term. 1831.
Atty. Gen. Berrien, and Dist. Atty. Swann,
for plaintiffs. Coxe & Jones, contra.
STORY, J. This is a writ of error to the
circuit court of the District of Columbia, sit-
ting at Washington. The original action was
brought by the United States upon a bond
executed by Lewis Deblois, and by Thomas
Tingey and others as his sureties, on the 1st
of May, 1S12, in the penal sum of $10,000,
upon condition that if Deblois should regu-
larly account, when thereto required, for all
public moneys received by him, from time
to time, and for all public property com-
mitted to his care, with such person or per-
sons, officer or officers of the government of
the United States as should be duly author-
ized to settle and adjust his accounts, and
sliould, moreover, pay over, as might be di-
rected, any sum or sums that might be found
due to the United States upon any such settle-
ment or settlements, and should also faith-
fully discharge, in every respect, the trust
reposed in him, then the obligation to be
void, &c. In point of fact, Deblois was at
the time a purser in the navy, though not
so stated in the condition; and there is an
indorsement upon the bond, which is averred
in one of the counts of the declaration to
have been contemporaneous with the execu-
tion of the bond, which recognizes his char-
acter as purser, and limits his responsibility
as such; and the bond was unquestionably
taken, as the pleadings show, to secure his
fidelity in office as purser.
The declaration contains two counts: one
in the common form for the penalty of the
bond; and a second setting forth the bond,
condition, and indorsement, and averring the
character of Deblois, as purser, his receipt
of public moneys, and the refusal to account,
&c., in the usual form.
Several pleas were pleaded, upon some of
which issues In fact were joined. To the
third, fourth, fifth, sixth, and eighth pleas, the
United States demurred, and judgment up-
on the demurrers was given for the defend-
ant in the circuit court; and the object of
the present writ of error Is to revise that
judgment.
There is no statute of the United States
expressly defining the duties of pursers in
the navy. What those duties are, except so
far as they are incidentally disclosed in pub-
lic laws, cannot be judicially known to this
court. If they are regulated by the usages
and customs of the navy, or by the official
orders of the navy department, they proper-
ly constitute matters of averment, and
should be spread upon the pleadings. It
may be gathered, however, from some of the
public acts regulating the departments, that
a purser, or as the real name originally was,
a burser, is a disbursing officer, and liable
to account to the government as such. The
act of the 3d of INlarch, 1809, c. 95, § 3 (2 Stat.
530), provided that, exclusively of the pur-
veyor of public supplies, paymasters of the
army, pursers of the navy, &c., no other per-
manent agents should be appointed either for
the purpose of making contracts, or for the
purchase of supplies, or for the disburse-
ment in any other manner of moneys for the
use of the military establishment, or of the
navy of the United States; but such as
should be appointed by the president of the
United States with the advice and consent
of the senate. And the next section (sec-
tion 4) of the same act provided that every
such agent and every purser of the navy
should give bond, with one or more sureties,
in such sums as the president of the United
States should direct, for the faithful dis-
charge of the trust reposed in him; and that,
whenever practicable, they should keep the
public money in their hands In some incor-
porated bank, to be designated by the presi-
dent, and should make monthly returns tO'
the treasury of the moneys received and ex-
pended during the preceding month, and of
the unexpended balance in their hands.
This act abundantly shows that pursers are
contemplated as disbursing officers and re-
ceivers of public money, liable to account to
the government therefor. The act of the
30th of March, 1812, c. 47 (2 Stat. 699), made
some alterations in the existing law, and
required that the pursers in the navy should
be appointed by the president, by and with
the advice and consent of the senate; and
that from and after the 1st day of May then
next, no person should act in the character
of purser who should not have been so nom-
inated and appointed, except pursers on dis-
tant service, &c.; and that every purser, be-
fore entering upon the duties of his office,
should give bond with two or more sufficient
sureties, in the penalty of $10,000, condition-
ed faithfully to perform all the duties of
purser in the navy of the United States.
This act, so far as respects pursers giving
bond, and the imports of the condition, beings
in pari materia, operates as a virtual repeal
of the former act. The subsequent legisla-
tion of congress is unimportant, as it does
not apply to the present case.
It is obvious that the condition of the
present bond is not in the terms prescribed
by the act of 1812, c. 47, and it is not limited
to the duties or disbursements of Deblois, as
purser, but creates a liability for all moneys
received by him, and for all public property
committed to his care, whether officially as
purser, or otherwise.
Upon this posture of the case a question
has been made and elaborately argued at the
bar, how far a bond voluntarily given to the
United States, and not prescribed by law,
is a valid instrument, binding upon the par-
THE GOVERNMENT.
277
ties In point of law; In other words, wheth-
er the United Slates have, in their political
capacity, a right to enter into a contract, or
to take a bond in cases not previously pro-
vided for by some law. Upon full consider-
ation of this subject, we are of opinion that
the United States have such a capacity to
enter into contracts. It is, in our opinion,
an incident to the general rip:ht of sovereign-
ty; and the United States being a body poli-
tic, may, witliiu the sphere of the constitu-
tional powers confided to it, and through
the instrumentality of the proper department
to which those powers are confided, enter
into contracts not prohibited by law, and
appropriate to the just exercise of those
powers. This principle has been already act-
ed on by this court, in the case of Dugan v.
U. S., 3 Wheat. 172; and it is not perceived
that there lies any solid objection to it. To
adopt a different principle, would be to deny
tlie ordinary rights of sovereignty, not mere-
ly to the genenil government, but even to
the state governments within the proper
sphere of their own powers, unless brought
into operation by express legislation. A doc-
trine, to such an extent, is not known to this
court as ever having been sanctioned by any
judicial tribunal.
We have stated the general principle only,
without attempting to enumerate the limita-
tions and exceptions which may arise from
tlie distribution of powers in our govern-
ment, or from the operation of other pro-
visions in our constitution and laws. We
confine ourselves, in the application of the
principle, to the facts of the present case,
leaving other cases to be disposed of as they
may arise; and we hold that a voluntary
bond, taken by authority of the proper of-
ficers of the treasurj- department, to whom
the disbursement of public moneys is Intrust-
ed, to secure the fidelity in official duties
of a receiver or an agent for disbtirsery of
public moneys, is a binding contract between
him and his sureties and the United States.
although such bond may not be prescribed
or required by any positive law. The right
to take such a bond is, in our view, an in-
cident to the duties belonging to such a de-
partment; and the United States having a
political capacity to take it, we see no objec-
tion to Its validity in a moral or a legal
view.
Having disposed of this question, which
lies at the very threshold of the cause, and
meets us upon the face of the second count
In the declaration, it remains to consider i
whether any one of the pleas demurred, to
constitutes a good bar to the action.
Without adverting to others, which are
open to serious objections on account of the
looseness and generality of their texture, we
are of opinion that the fifth plea is a com-
plete answer to the action. That plea, after
setting forth at large the act of 1812 respect-
ing pursers, proceeds to state that, before
the execution of the bond, the navy depart-
ment di 1 cause the same to be prepared and
transmitted to Deblois, and did require and
demand of him that the same, with the con-
dition, should be executed by him with suf-
ficient sureties, before he should be permit-
ted to remain in the office of purser, or to
receive the pay and emoluments attached
to the office of purser; that the condition of
the bond is variant and wholly different
from the condition required by the said act
of congress, and varies and enlarges the du-
ties and responsibilities of Deblois and his
sureties; and "that the same was under
color and pretence of the said act of con-
gi'ess, and under color of office required and
extorted from the said Deblois, and from the
defendant, as one of his sureties, against
the form, force, and effect of the said stat-
ute, by the then secretary of the navy."
The substance of this plea is that the bond,
with the above condition, variant from that
prescribed by law was under color of office
extorted from Deblois and his sureties, con-
trary to the statute, by the then secretary- of
the navy, as the condition of his remaining
in the office of purser, and receiving its
emoluments. There is no pretence, then, to
say that it was a bond voluntarily given,
or that though different from the form pre-
scribed by the statute, it was received and
executed without objection. It was demand-
ed of the party, upon the peril of losing his
office; it was extorted under color of office
against the requisitions of the statute. It
was plainly, then, an illegal bond; for no of-
ficer of the government has a right, by color
of his office, to require from any subordi-
nate officer, as a condition of holding office,
that he should execute a bond with a con-
dition different from that prescribed by law.
That would be, not to execute, but to super-
sede the requisitions of law. It would be
very different where such a bond was by
mistake or otherwise voluntarily substituted
by the parties for the st.ntute bond, without
any coercion or extortion by color of office.
The judgment of the circuit court Is affirm-
ed.
CAPACITY OF PARTIES.
v.
'^
\
WHITNEY et aL v
(14 Mass.
DUTCH
457.)
Supreme Court of Massachusetts,
March Term, 1817.
et *1. (^ V
SuffolS.\
Assumpsit on a promissory note; made ay
the defendants to the pLiintiEEs, on the ISth
of December, ISll, for 847 dollars 76 cents.
The defendant Dutch was defaxilted. The
defendant Green pleaded 1st. The general
issue: 21y. That he was under age at the
time when the note was made.— The plain-
tiffs replied, that after he came of age, he
agreed to and confirmed the promise; to
which he rejoined, that he did not so agree;
on which also issue was joined.
It appeared at the trial, which was had at
the last November term in this county before
Jackson, J„ that Dutch & Green, while the
latter was under age, had agreed to be part-
ners, and as such, had often dealt with the
plaintiffs. The note in question was signed
by Dutch, using the firm and style of the
house of Dutch & Green, at a time when the
latter was under age.
In March, 1816, after Green arrived at full
age, the plaintiffs applied to him for payment
of the note; when he acknowledged that it
was due, and promised that on his return to
Eastport, where he resided, he would en-
deavour to procure the money and send it to
the plaintiffs: saying at the same time that
it was hard for him to pay it twice; he al-
leging, as it was understood, that the sup-
posed partnerehip had been, a long time be-
fore, dissolved; and that Dutch had taken
the whole stock, and agreed to pay all the
debts of the company.
The counsel for the defendant contended,
that the implied power of one partner to bind
the other, was void in this case; as Green
was a minor at the time of making the note,
and therefore could not empower any agent
or attorney to bind him in any manner; that
the note was therefore void as to him. and
not merely voidable; and so the supposed
promise could not be confirmed or ratified by
the subsequent promise or agreement, which
was proved, as above-mentioned.
The judge, intending to reserve the ques-
tion for the consideration of the whole com't,
directed a verdict for the plaintiffs on both
Issues, which was returned accordingly.
If the court should be of opinion that the
defendant Green was, under these circum-
stances, liable to the plaintiffs for the amount
due on this note, the verdict was to stand,
and judgment entered accordingly; otherwise
the verdict was to be set aside, and a verdict
entered for the defendants.
Mr. Thurston, for plaintiffs. Mr. Leland,
for defendants.
PARKER, C. J. The question presented to
the court in this case, and which has been
argued is, whether the issue on the part of
the plaintiffs is maintained by the evidence
reported.
The first objection taken by the defend-
ants' counsel is, that no express promise is
proved, after the coming of age of the de-
fendant—By the authorities, a mere acknowl-
edgment of the debt, such as would take a
case out of the statute of limitations, is not
a ratification of a contract made during mi-
nority. The distinction is undoubtedly well
taken. The reason is, that a mere acknowl-
edgment avoids the presumption of payment,
which is created by the statute of limitations;
whereas the contract of an infant may al-
ways, except in certain cases sufficiently
known, be voided by him by plea, whether
he acknowledges the debt or not: and some
positive act or declaration on his part, is
necessarj'^ to defeat his power of avoiding it.
But the terms of ratification need not be
such as to import a direct promise to pay.
All that is necessary is, that he expressly
agrees to ratify his contract; not by doubtful
acts, such as payment of a part of the money
due, or the interest; but by words, oral or
in writing, which import a recognition and a
confirmation of his promise.
In thepresent case, the defendant acknowl-
edged that the rnoney" was due, when calle d
upon to pay the demand; and promised that
he wouldljendeavour to procure the money
upon his return home, and senri it tn the
plaintiff. This was sufficient to satisfy the
jury, that he assented to and ratified the
original promise: for it would be a distortion
of language, to suppose that he meant only
to endeavour to persuade Dutch, to pay the
money; and if he succeeded, that he, Green,
would send it to the plaintiff.
But the other point made in the defence is
more difficult, and presents a question new
to us all. This is, that the note, being signed
by Dutch for Green, was void in regard to
Green; because he was not capable of com-
municating authority to Dutch, to contract
for him; and that being void, it is not the
subject of a subsequent ratification.
No such question appears to have occurred
in our courts, nor in those of England, or of
the neighbouring states. Partnerships have
not been uncommon between adults and in-
fants; and simple contracts, signed by one
for both, undoubtedly have often been made.
It is unfavourable to the principle, contend-
ed for by the counsel for Green, that no such
case has been found: for this silence of the
books authorizes a presumption, that no dis-
tinction has been recognized between acts of
this kind done by the infant himself, and
those done for him by another. We must
however examine the principles, by which
the contracts of infants are governed; and
see if, by any analogy to settled cases, the
present defence can be maintained.
It is admitted generally, that a- contract
made by an infant, although not for neces-
saries, Is only voidable: and that an express
infa:nts.
279
adoption of It, after he comes of age, will
make It valid from its date. Nor does the
law require that he shall be sued, as upon
the uew promise; but gives life aud validity
to the old oue, after it is thus assented to. —
But it is urged, that this doctrine apphes only
to those contracts, which are made by the in-
fant personally; and that the delegation of
power by him to another of full age, to act
lor him, is utterly void; and that no contract,
made in virtue of such delegation, can sub-
sist, so as to be made good by subsequent
agreement or ratitication.
If we coniine ourselves to the letter of the
authorities, it would seem that this doctrine
is correct; for we find that, in the distinc-
tions made in the books between the void
and voidable acts of an infant, a power of at-
torney is generally selected, by way of ex-
ample, as an act absolutely void: unless it
be made to enable the attorney to do some
act for the benefit of the infant; such as a
power of attorney to receive seizin, In order
to complete his title to an estate.
The books aie not very clear upon this sub-
ject All of them admit a distinction between
void and voidable acts; and yet disagree with
respect to the acts to be classed vmder either
of those heads. One result however, in which
they all appear to agree, is stated by Lord
Mansfield in the case of Zouch v. Parsons. 3
Burrows, 1794, viz. that whenever the act
done may be for the benefit of the infant, it
shall not be considered void: but that he
shall have his election, when he comes of
age, to aflirm or avoid it; and this Is the only
clear and definite proposition, which can be
extracted from the authorities.
The application of this principle is not how-
ever free from difliculty: for when a note or
other simple contract is made by an infant
himself, it may be made good by his assent,
without any inquiry whether it was for his
benefit, or to his prejudice. For if he had made
a bad bargain in a purchase of goods, and
given his promissory note for the price; and
when he came of age, had agreed to pay the
note, he would be bound by this agreement,
although he might have been ruined by the
purchase. Perhaps it may be assumed as a
principle, that all simple contracts by infants,
which are not founded on an illegxil consid-
eration, are strictly not void, but only voida-
ble; and may be made good by ratification.
They remain a legal substratum for a future
assent, untU avoided by the infant: and if,
instead of avoiding, he confirm them, when
he has a legal capacity to make a contract,
they are. In all respects, like contracts made
by adults.
With respect to contracts under seal also,
they are In legal force as contracts, until they
are avoided by plea. Whether they can, in
all cases, as It is clear they can in some,
such as leases, be ratified, so as to prevent
the operation of a plea of infancy, except by
deed, need not now be decided. A deed of
land, by an infant having the title, would un-
doubtedly convey a seizin; and the grantee
would hold his title under it until the Infant,
or some one under him, should by entry or
action avoid it
Perhaps it cannot be contended, against the
current of authorities, tliat an act done by
another for an infant, which act must neces-
sai-ily be done by letter of attorney under
seal, is not absolutely void: although no sat-
isfactory reason can be assigned for such a
position. But as this is a point of strict law,
somewhat incongruous with the general rules
affecting the contracts of infants; It is not
necessaiy nor reasonable to draw inferences,
which may be repugnant to the principles of
justice, wiiich ought to regulate contracts be-
tween man and man.
The object of the law, in disabling infants
from binding themselves, is to prevent them
being imposed upon and injured by the crafty
and designing. This object is in no degree
fnistrated by giving full operation to their
contracts, If, after having revised them at
mature age, they shall voluntirily and delib-
erately ratify and confirm them. It is enough,
that they may shake off promises and other
contracts, made upon valuable consideration;
If they see fit to do it, when called upon to
perform them. To give them still anotlier
opportunity to retract, after they have been
induced, by love of justice, and a sense of
reputation, to make valid what was before
defective, will be to invite them to break
their word and violate their engagements.
If it be true that all simple contracts, made
by infants, are only voidable, the inquiry, in
this case should be, whether the facts stated
furnish an exception to this general rule; or
whether the contract now sued is in any
sense different from a simple contract
The only ground for the supposed excep-
tion is, tliat the note declared on was not
signed by the infant himself; but by Dutch,
claiming authority to sign his name as a co-
partner. If the authority required a letter of
attorney under seal, the exception would be
supported by the authorities, which have
been alluded to.
B ut it is well known that copartners may ,
ana generally do undertake to bind each otB-
\r, without any express autnonty wnalever.
Ihdeed the authority to do so, results from
the nature and legal qualities of copartner-
ship. And without any such union of inter-
ests, one man may have authority to bind an-
other, by note or bill of exchange, by oral, or
even by implied authority. The case of a
deed therefore Is entirely out of the question:
so that the defendant does not bring himself
within the letter of the authorities; and cer-
tainly not within the reason, on which they
.are founded. Then upon principle, what dif-
I ference can there be, between the ratification
\of a contract made by the Infant himself, and I
pne made by another acting under a parole
authority from him? And why may not the
2S0
CAPACITY OF PARTIES.
ratification apply to the authority, as weU as
to the contract made under it?
It may be said, that minors may be ex-
posed, if they may delegate power over their
property or credit to another. But they will
be as much exposed, by the power to make
such contracts themselves; and more, for the
person delegated will generally have more
experience in business than the minor. And
it is a sufficient security against the danger
from both these sources, that infants cannot
be prejudiced: for the contracts are In neither
case binding, unless, when arrived at legal
competency, they voluntarily and deliberately
give effect to the contract so made. And in
such case justice requires, that they should
be compelled to perform them.
Upon these principles, we are satisfied with
the verdict of the jury; and are confident
that no principles of law or justice are op-
posed by confirming it
Judgment on the verdict.
INFANTS.
281
/,\ BORDENTOWN TP. t. WALLACE et aLi
^ f\j\ (11 Atl. 207, 50 N. J. Law, 13.) ' ''d^'3
JSuijreme Court of New Jersey. Nov. 16, 1887.
On demurrer to defendauts' pleas.
Tills action is brousht on a joint and sev-
eral bond given by the defendants to the
plaintiff, in the penal sum of $2,.jriod of time as the said bastard child
shall or may be chargeable to the said town-
ship, then the said obligation is to be void,
otherwise to be and remain in full force and
virtue."
The declaration Is in the usual form. After
praying oyer, and setting out the bond, the
defendants plead jointly six several pleas:
(1) Non est factum. (2) Infancy of William
Wallace. (3) Duress of imprisonment of Wil-
liam Wallace. (4) Bond given before and
without hearing of two justices, and when
held before one justice of the peace untn the
bond was given. (5) Bond given to comply
with order of filiation when no notice was
given of such order. (6) That no order of
filiation was made by two justices of the
peace, according to law.
The plaintiff joins is.sne on the first plea,
and files a demurrer to each of the five suc-
ceeding pleas.
Hutchinson & Belden, for plaintiffs. Gil-
bert & Atkinson, for defendants.
SCUDDER, J. The defense of the infancy
of one of the defendants contained in the
joint plea of all is informal and bad. Infancy
is a personal privilege of which no one can
take advantage but himself. Voorhees v.
Walt, 15 N. J. Law, 343; Patterson v. Llppin-
cott, 47 N. J. Law, 457, 1 Atl. 506.
It Is also a nile of pleading that personal
defenses, as coverture, infancy, etc., shall be
pleaded separately; that only when the de-
fense is In its nature joint may several de-
fendants join in the same plea; and that
where a plea is bad in part, it is bad in toto;
if, therefore, two or more defendants join in
a plea which is sufficient but for one, and not
for the other, the plea is bad as to both. 1
Chit. PI. 565-507. But It must not be con-
ceded that in a proper case, under our statute
for the maintenance of bastard children, the
father of a bastard child can escape his obli-
gation, or liability to Indemnify the township
or municipal body, for the support of .such
child, if it become chargeable, by a plea of
infancy, however formally it may be pleaded.
Co. Litt. 172d, gives the rule of an infant's
general liability as follows: "An infant may
bind himself to pay for his necessary meat,
drink, apparel, necessary physic, and such
other necessaries, and likewise for his good
teaching or instruction, whereby he may
profit himself afterwards; but if he bind him-
self in an obligation or other writing with a
penalty, for the payment of any of these, that
obligation shall not bind him." He adds:
"And generally whatsoever an infant is
bound to do by law, the same shall bind him,
albeit he doth It without suit at law." Lord
Mansfield quotes and applies this last expre.s-
sion in Zouch v. Parsons, 3 Burrows, 1794,
and adds: "If an infant does a right act,
which he ought to do, which he was com-
pellable to do, it shall bind him." This general
principle has been used in bastardy cases to
bind infants, under statutes passed to pro-
tect the public against the support of bastard
children that may become chargeable. People
V. Moores, 4 Denio, 518; McCall v. Parker,
13 Mete. (Mass.) 372. In this latter case, in
an action on a bond given under the statute,
for appearance, etc., it was decided that the
infancy of the accused is no defense, either
for him or his suretj-. Prof. Parsons, in 1
Pars. Cont 334, says that there is no principle
of law that binds infants when they enter
into contracts which owe their validity, and
the means of their enforcement, to statutes,
because in all statutes containing general
words there is an implied or virtual exception
In favor of persons whose liability the com-
mon law recognizes. He proceeds to Ulus-
trato this position by referring to cases where
Infants have been held exempt from liabilitj-
to pay calls to shares in incorporated compa-
nies, wherein It has been held that there are
implied exceptions, in favor of infants, in
statutes containing general words. But the
wgrda-4a^urbasiaJdy_stjLtiita^ t h n
rppiitpd_fntJTP f of a b ri'i tar d chil d who mnv La
soffle"c ases b e an infant, tn crjyp f\ hnnd f^r
sec un^, are not so ge neraL aa_tQ,p'^niDt -in-
"Ta Sts from its operation. They are fairly
within the words of the act, and its pui-pose
to protect the public against those who would
Impose the support of their illegitimate oCf-
siiring on others. Tyler on Infancy, c. 9, p.
139, cites the above principle of liability in
its application to bastardy cases with ap-
proval.
This second plea Is defective in form, bemg
a joint plea of the infancy of one defendant;
it is also bad In substance, as in proceedings
under the bastardy act the Infancy of the
reputed father Is no defen.se when he Is le-
gally chargeable m exoneration of the public
1 Irrelevant parts omitted.
282
i,
",1
CAPACITY OF PARTIES.
RYDER V. WOMBWELL.
(L. R. 4 Exch. 32.)
Court of Exchequer. Dec. 3, 1S68,
Appeal from the decision of the court of
exchequer malviug absolute so much of a rule
as called on the plaintiff to show cause why
a verdict found for him for £40 lus. should
not be reduced by £15 15s.; and discharging
the residue of it, which called upon him to
show cause why a nonsuit should not be en-
tered; or a new ti'ial had, on the ground of
the improper rejection of evidence. L. R.
3 Exch. 90.
The declaration was for money payable for
goods sold and delivered. Plea, iufaucy; rep-
Ucation, necessaries. Issue thereon.
At the trial before Kelly, C. B., at the Lon-
don sittings after Trinity term, 1SG7, it ap-
peared that the plaintiff sought to recover
for the following (among other) articles of
jewelry supplied by him to the defendant,
a minor: First, a pair of crystal, ruby, and
diamond solitaires, £25; and, secondly, a sil-
ver gilt antique chased goblet, engi'aved with
an inscription, £15 15s.
The defendant was the younger son of a de-
ceased baronet of large property in Yorkshire,
and during his minority had an income of
about £500 per annum, and on attaining his
majority he came into £20,000. He had no
residence of his own, but occasionally stayed
at Limmer's Hotel, Bond street, London.
His home was his mother's house in London,
and Ms brother's in Yorkshire, at each of
which he was boarded and lodged gratuitous-
ly. He pursued no trade or profession, he
moved in the highest society, and was in the
liabit of riding races for his friends, amongst
others for the Marquis of Hastings, at whose
liouse he was a frequent visitor, and for
whom the goblet was intended, as the plain-
tiff knew when he supplied it, as a present.
The solitaires were ornamental studs or but-
tons worn by gentlemen as fastenings for
the wristbands of the shirt. They were
made of crystals set in gold,' and ornamented
with diamonds representing a horse-shoe in
which the nails were represented by rubies.
Evidence was offered on the part of the
defendant that at the time of the purchase
of the solitaires he had purchased similar ar-
ticles of jewelry to a large amount from other
tradesmen, which rendered any further sup-
ply by the plaintiff unnecessary; but, as it
was proved that the plaintiff was not aware
of this fact, the lord chief baron rejected the
evidence.
The jury, in answer to the questions left
to them by the learned judge, found that
the solitaires and the goblet were necessaries
suitable to the estate and condition in life
of the defendant, and a verdict was accord-
ingly entered for the plaintiff for £40 15s.,
being the price of the solitaires and goblet,
with leave to move to enter a nonsuit if the
court should be of opinion that there was no
evidence for the jury that either article was
a necessary; or to reduce the damages by
the price either of the solitaires or the gob-
let if the com-t should be of opinion that there
was evidence for the jury in respect of one
or other of these articles only. A rule nisi
was obtained accordingly, and also for a
new trial, on the ground of the improper re-
jection of the evidence offered on the part of
the defendant, that the defendant was, at
the time he purchased the solitaires of the
plaintiff, supplied already, although not to
the knowledge of the plaintiff, with similar
articles. This rule was afterwards made ab-
solute to reduce the verdict by £15 15s., the
price of the goblet, and discharged as to the
residue; the majority of the court being of
opinion that the verdict of the jury as to the
solitaires ought not to be disturbed, and that
the evidence offered to prove that the defend-
ant, when the solitaires were supplied, was
already sufficiently supplied with articles of
a similar description, was, under the circum-
stances, properly rejected.
June 20, 18G8. Mr. Bulwer, Q. C, (Mr.
Mayd, with him), for defendant, contended:
Fii-st, that a nonsuit ought to be entered, as
there was no evidence proper to be left to the
jury that the solitaires were necessai'ies. In.
addition to the cases referred to in the court
below, he cited Rainsford v. Fenwick, Carter,
215; Greene v. Chester, 2 Rolle, 144; Ive v.
Chester, Cro. Jac. 560; and Wittingham v.
Hill, Cro. Jac. 494;— to show that in former
times, when a more precise and accurate
foi-m of pleading prevailed, the facts relied
upon as showing that the goods supplied were
necessaries were stated upon the record, and
the court were enabled to give judgment
whether in point of law the replication was
sufficient. But when it was established (see
Coke, Ent. "Debt," 8, p. 125, and Huggins v.
Wiseman, Carth. 110) that the plaintiff might
reply in the general form now in use, it be-
came necessary that the facts which used
formerly to be stated on the record should be
found by a jury, and then the court had to
determine, as formerly, whether the facts
found did, in point of law, furnish an answer
to the plea. He contended, secondly, that
the evidence was improperly rejected; and'
on this point referred to the following addi-
tional authorities: Story v. Perry, 4 Car. &
P. 526; Cook v. Deaton, 3 Car. & P. 114;
Ford V. Fothergill, 1 Esp. 211; Steedman
V. Rose, Car & M. 422; Berrolles v. Ramsay,
Holt, N. P. 77; Brayshaw v. Eaton, 7 Scott,
183 J Foster v. Redgrave, Queen's Bench,
Feb. 9, 1867; Chit. Cont. (6th Ed.) pp. 136,
137, 140; Leake, Cont. p. 233.
Popham Pike (Mr Coleridge. Q. C, with
him), for the plaintiff, contended that the
question whether the solitaires were neces-
saries was rightly left to the jury, and that
they had come to a right conclusion. He
cited. In addition to the authorities quoted
INPANTS.
283
In the court below, Hands v. Slaney, 8 Term
R. 578.
With regard to the rejection of evidence,
there was no case similar to the present. In
all of those cited in order to show that tlie
evidence was adniissil)le, though not brought
to the plaiutifrs knowledge, there were pecul-
iarities. Either they were cases of husband
and wife, or else of minors, in respect of
whom there was a presumption that they
were already supplied with all necessaries
by reason or their living In their father's
houses, or of their being in statu pupiliari.
Again, in many of the cases cited tlie trades-
men had peculiar facilities for knowing the
actual position of the minor. Putting aside
particular and exceptional eases, there seem-
ed to bo no difference between a minor being
actually supplied with goods similar to those
for the price of which he was being sued,
and his being in the receipt of an income suf-
(icient to buy them if he chose. Yet the
amount of an infant's Income had been held
immaterial. Brayshaw v. Eaton, 7 Scott,
183. Why should the amount of his income,
when he had turned his money into goods,
be material?
Mr. Bulwer, Q. C, In reply.
Cur. adv. vult
Argued before WILLES, BYLES, BLACK-
BURN, MONTAGUE, SMITH, and LUSH,
JJ.
WILLES, .T. In this case the pLaintiff re-
plied to a plea of infancy that the goods were
necessaries suitable to the degree, estate and
condition of the defendant, and on this issue
was taiven. On the trial before the lord chief
baron it w as pro ve d that the degree, e state
and oondition of the defendant ^va§__^^atEe
was tlii> y(^^\
necessaries? Chit. Cont. 141a, note
2; 1
Bibb,
Pars. Cont 296; Beeler v. Yoimg, 1
.019; 1 Am. Lead. Cas. 248.
The court, In the instruction, merely in-
formed the jury that if the trip was prudent
and proper, and that the money was for her
benefit, then' the jury must determine wheth-
er such advances of money were for neces-
saries. There was not a particle of proof to
enable the jury to determine as to the pro-
priety or impropriety, the prudence or im-
prudence, of the trip, or that the advance-
ment of the money was for the benefit of ap-
pellant
Even If there had been such proof, the in-
struction was wrong. The court should have
defined necessaries in some manner. Black-
stone defines necessaries to be "necessary
meat, drink, apparel, physic," and says that
an infant may bind himself to pay "for his
good teaching and instruction, whereby he
may profit hiinself afterwards." The arti-
cles furnished, or money advanced, must be
actually necessary, in the particular case,
for use, not mere omainent; for substantial
good, not mere pleasure; and must belong
to the class which the law generally pro-
nounces necessary for infants.
The courts have generally excluded from
the term "necessaries" horses, saddles,
bridles, pistols, liquors, fiddles, chronometers,
etc. It has been held, however, that if rid-
ing on horseback was necessaiy to the health
of the infant, the rule was different.
We have been referred to no case, and,
after a thorough examination, have found
none, in which it has been held that mon-
eys advanced for traveling expenses, under
the circumstances of this case, were neces-
saries.
The court should have instructed the j^ry
as to the classes and general description of
articles for which an infant is bound to pay.
Then the jury must determine whether they
fall within any of the classes, and whether
they are actually necessary and suitable to
the estate and condition of the infant
It may be proper to advert to another prin-
ciple. The infant had a guardian, who had
charge and management of her estate, which
consisted entirely of realty. It was the duty
of the guardian to superintend the educa-
tion and nurture of his ward, and apply to
such purpose, first, the rents and profits of
the estate, and next the interest upon the
ward's money. This is the positive com-
mand of the statute, and he was liable upon
his bond for noncompliance. He was the
judge of what were necessaries for his ward,
if he acted in good faith.
A third party had no right to intervene
and usurp the rights and duties of the gnard-
lian. Even if the money paid was, in some
sense, for the infant's benefit, and the trip
was prudent and proper, yet, if the guardian,
in good faith, and in the exercise of a wise
discretion, and with reference to the best
. interests of his ward, supplied her wants and
1 contributed means suitable to her age and
station in life, and in view of her estate,
then the infant would not be liable for the
money as necessaries. Beeler v. Young, sup-
ra; Kline v. L'Amoureux, 2 Paige, 419; Guth-
rie V. Murphy, 4 Watts, 80; Wailing v. Tall,
9 Johns. 141.
We express no opinion as to the weight of
the evidence, for the reason that there must
be a new trial.
The judgment Is reversed for the errors
indicated, and the cause remanded.
Judgment reversed.
p^
JOHNSON T. LINTjg. j-) [^j
(6 Watts & S. SO.) 1^1
Supreme Court of Pennsylvania. Sept., 1843.
Error to cx)urt of common pleas, Washington
county.
Edward L. Lines and William W. Scott,
trading under the firm of Lines & Scott,
against David Ecltert, administrator of John
Johnson.
This was an action of assumpsit. The dec-
laration contained the common money counts,
to which the defendant pleaded that the in-
testate was an infant at the time of the sxip-
posed promises; and the plaintiffs replied
that the goods provided were necessaries.
The intestate, whose infancy was admitted,
contracted a debt with the plaintiffs for goods
sold and monies advanced, as appeared by
their account, between the 9th October, 183G,
and the 30th January, 1S38, to the amount of
$1,003.27. The items consisted in a great
measure of fancy articles, which a wasteful
boy, uncontrolled by his parents or guardian,
would be apt to purchase. The infant had a
guardian; but it did not appear that he exer-
cised any care or control over him, or that he
liad been consulted in relation to his dealings.
The defendant asked the court to charge
"that the plaintiffs had no right to deal with
the minor, even for necessaries, unless the
guardian refused to furnish him with them."
The court charged "that the plaintiffs had no
right to deal with the deceased unless by the
permission, express or implied, of the guard-
ian; or unless the guardian refused to furnish
necessaries to his ward." The defend;int also
prayed direction "that if the plalntiffis were
justified in dealing with him, their bill is so
exorbitant that the plaintiffs themselves could
not have considered them necessaries, and
therefore are not entitled to recover:" to
which the court responded, that ''what are
necessaries is a question of fact mixed with
law. It is to be decided by the jury under
the direction of the court, and depends on the
estate, circumstances and pursuits of the man.
The jury will probably think this bill ex-
travagant, and that the plaintiffs could not
have supposed many of these items necessary.
Some of them, they must have known, were
not necessary. The plaintiffs cannot recover
for what are not necessaries." The defendant
excepted. Verdict and judgment for the
plaintiffs.
Mr. Marsh, for plaintiff In error, cited 2
Serg. & R. 44; 2 E. C. L. GOO.
Mr. M'Keunon, for defendants in error, cited
7 Watts, 344; 3 Day, 37; 1 Bibb, 519; 7
Watts, 237; 8 Term R. 578; 1 Esp. 212; 3 E.
C. L. 33; 5 Esp. 152; 1 Maule & S. 737; 3
Bac. Abr. 593.
GIBSON, a T, The case of the plaintiffs
below is poor in merits. It appears that they
supplied a young spendthrift with goods
IXFAXT.S.
287
which they call npcessarles, but which ill de*
servo the name. Their account mounts up to
more than a thousand dollars, comprising
charges for many articles which might be
ranked with necessaries when supplied in
reason; but not at the rate of twelve coats,
sevcntoon vests, and twenty-three pantaloons,
in the space of fifteen months and twenty-one
days; to say nothing of three Bowie knives,
sixteen penknives, eight whips, ten whip-lash-
es, thirty-nine handkerchiefs, and five canes,
with kid gloves, fur caps, chip hats, and fan-
cy bag. to match. Such a bill makes one
shudder. Yet the jury found for the plaintiffs
almost their whole demand, including sums
advanced for pocket-money, and to pay for
keeping the minor's horses, which no one
would be so hardy as to call necessaries,
ilow they could reconcile such a verdict to
the dictates of conscience, I know not. They
surely could not complacently look upon the
ruin of their own sons, brought on by min-
istering to their appetites, and stimulating
them with the means of gratification. Every
father has a deeper stake in these matters
than the public mind is accustomed to sup-
pose; and it intimately concerns the cause of
morality and virtue, that the rule of the com-
mon law on the subject be strictly enforced.
The minor was at the critical time of life,
when habits are formed which make or mar
the man— which fit him for a useful life, or
send him to an untimely grave; and public
policy demands that they who deal with such
a customer should do so at their peril. This
enormous bill was run up at one store, and
what other debts were contracted for supplies
elsewhere we know not; but let it not be
imagined that the infant's transactions with
other dealers did not concern the plaintiffs.
"With a view to quantity, and quantity only,"
said Baron Alderson, in Burghart v. Anger-
stein, Car. & P. 700, "you may look at the
bills of the other tradesmen by whom the de-
fendant was also supplied; for if another
tradesman had supplied the defendant with
ten coats, he would not then want any more,
and any further supply would be unnecessary.
If a minor is supplied, no matter from what
quarter, with necessaries suitable to his es-
tate and degree, a tradesman cannot recover
for any other supply made to the minor just
after." And the reason for it is a plain one.
The rule of law is that no one may deal with
a minor. The exception to it is that a stran-
ger may supply him with necessaries proper
for him, in default of supply by any one else;
but his Interference with what Is properly
the guardian's business must rest on an actual
necessity, of which he must judge, in a meas-
ure, at his peril. In Ford v. Fothergill. 1
Esp. 211, Peake. N. P. 299, Lord Kenyon
ruled it to be incumbent on the tradesman,
before trusting to an appearance of necessity.
to inquire whether the minor is provided by his
parent or friends. That case may be thought
to have been shaken in Dalton v. Gib, 5
288
CAPACITY OF PARTIES.
r.ing. N. C. 19S. in which it was held that in-
quiiy is not a condition precedent to recov-
ery where the goods seem to be necessary
from the outward appearance of the infant,
though the mother was at hand and might
have been questioned; but in Brayshaw v.
Eaton, Id. 231, this was explained to mean 1
that, as such an Inquiry is the tradesman's i
affair, being a prudential measure for his own I
information, the omission of it is not a ground ,
of non-suit; but that the question is, on the
fact put in issue by the pleadings, whether
the supply was actually necessary. It is the
tradesman's duty to know, therefore, not only
that the supphes are unexceptionable in quan-
tity and sort, but also that they are actually
needed. When he assumes the business of
the guardian for purposes of present relief,
he is bound to execute it as a prudent guard-
ian would, and consequently, to make himself
acquainted with the ward's necessities and
circumstances. The credit which the negli-
gence of the guardian gives to the ward,
ceases as his necessities cease; and, as noth-
ing further is requisite when these are re-
lieved, the exception to the rule is at an end.
In this case, the supply of articles which
were proper in kind, was excessive in quan-
tity. I impute no intentional wrong to the
plaintiffs, for they dealt with the intestate,
as others may have done, evidently supposing
him to be sui juris; but I certainly do blame
the jury for finding nearly the whole demand,
after it had been conceded that he was an in-
fant
That the charge, though not palpably wrong
in the abstract, tended to mislead in its ap-
plication to the facts, is visible in the verdict
it produced. The defendant went to the court
for direction that the plaintiffs could not law-
fully deal with the infant, even for neces-
saries, unless the guardian had refused to
furnish them; and had, for response, a direc-
tion that "the plaintiffs had no right to deal
with the deceased, unless by the permission,
express or implied, of the guardian; or un-
less the guardian had refused to furnish nec-
essaries for his ward." Thi-s very significant
addition to the principle assumed in the pray-
er was meant to indicate a liberty to deal by
permission beyond the bounds of necessaries,
or it meant nothing. It indicated that an au-
thority to deal with a minor in a way to
charge him personally, emanates from his
guardian's permission, which is paramount,
or at least equal, to the authority so to deal
with him, that emanates from his necessities.
The jury would naturally so understand it.
And this was predicated in reference to the
question before them, whether the ward's
estate could be subjected to payment for
luxuries. They might readily understand,
therefore, that the guardian's permission to
run up this bill would charge the ward's es-
tate with it, independently of its propriety.
If that was not the drift of the direction, it is
not easy to see why anj'thing was said about
permission at all. In a case of doubtful pro-
priety, I can readily understand how the
guardian's sanction, or that of a relative,
might justify a supply beyond the limits of
strict necessity, which a dealer might furnish
bona fide on the credit of the ward; but,
though the guardian might subject himself to
payment of a grossly improvident bill, by a
permission amounting to an order, his con-
nivance at an improper supply by a trades-
man, would not subject the ward to payment
of it Indeed, it has been said (3 Wil.s. Bacon,
595, In marg.) to have been several times de-
cided that where credit has been given to the
parent or guardian, the creditor has no re-
course to the infant. The guardian is set over
the ward for the very purpose of preventing
him from making such a bill; and his deser-
tion of his trust would not help the case of
one who had dealt with the ward mala fide.
As, then, the plaintiffs were bound to know
that the guardian abused his trust in allow-
ing the infant to run up this biU, they can
recover no more of it than was proper to re-
lieve the ward's necessities. This notion that
the guardian's permission might legitimate
the demand, may have had a misguiding In-
fluence on the jury; for a passive acquaintance
with the transaction which the law would
presume from his duty to have an eye on
the doings of the ward, would be a construct-
ive permission; or it might be implied from
the fact that he had left the ward to shift
for himself.
Again, the defendant prayed direction, "thsK
it the plaintiffs were justifiable in dealing
with the ward, the bill is so exorbitant that
the plaintiffs themselves could not have con-
sidered them (the goods) necessaries; and that
they are therefore not entitled to recover;"
In answer to which, the court charged that;
"What are necessaries, is a question of fact
mixed with law. It is to be decided by the
jury under the direction of the court, and de-
pends on the estate, circumstances and pm*-
suits of the minor. The jury wiU probably
think this bill extravagant, and that the plain-
tiffs could not have supposed many of the
Items necessary. Some of them, they must
have known, were not necessary. The plain-
tiffs cannot recover for what were not neces-
saries." Not a word in this in response to
the prayer for direction as to the effect of
the plaintiffs' consciousness that the supply
was extravagant, though consciousness would
affect them with mala fides, and deprive them
at once of whatever merit they might other-
wise pretend to have from the guardian's im-
plied sanction. The judge said truly that
what are necessaries is a question mixed of
fact and law; but ho did not say, as he might
and perhaps ought to have done, that an
over-supply of goods otherwise proper ceases
to be a supply of necessaries as to the excess.
The jury were indeed left to say what were
necessaries; but rather as regards the sort
than the quantity, in respect to which the
INFANTS.
289
effect of excess was overlooked throuj^hout.
Had it been properly impressed, the jui-y
could not have found more than a fourth part
of the bill. To them doubtless belonj^s the
question of extravagance; but where the sup-
ply has been so grossly profuse as to shock
liOPK.SEL,CAS.CONT.— 19
the sense, it is the business of the judge to
say so as matter of law, and charge that there
can be no recovery for more than was abso-
lutely necessary.
Judgment reverbed, and a venire facia-s de
novo awarded.
CAPACITY OF PARTIES.
STAFFORD v. ROOF.
(9 Cow. 626.)
'Qating this as a sufficient act of disaffirm-
ance in case they then had the right to dis-
affirm, and it is not material whether it was
or not, for the bringing of the action, which
was sufficient, immediately foUowed, there
elapsed between the execution of the deed
and its disaffirmance tw-entj^-five years and
four months. The disability of infancy on
tne part of the infant grantor ceased April
21, 1863. and as the real estate was owned by
her at tha time of her marriage, her disabil-
ity from coverture, so far as affected her right
to reclaim, hold and control the property
ceased August 1, 1866, when the General Stat-
utes (1866) went into effect; so that for four
years and eight months before she died she
was free of the disabiliry of infancy, and for
one year four and a half months, she was
practically free of the disability of coverture.
During the latter period, at least, she was
capable in law to disaffirm the deed, if she
had the right to do so, and if she was re-
quired to exercise the right witliin a reason-
able time after her disability ceased, the time
was running for that period. The youngest
of the plaintiffs became of age January 29,
1881, so tliat even if the period of minoi'ity
of plaintiffs were to be excluded (and we
doubt if it should be) there is to be added at
least two years and two months to the time
which had elapsed when the grantor died,
making the time three years and over six
months.
The main question in the case is, must one
who, while a minor, has conveyed real estate,
di.saffirm the conveyance within a reasonable
time after minority ceases, or be barred. Of
the decided cases the majority are to the ef-
fect that he need not, (where there are no
circumstances other than lapse of time and
silence,) and that he is not barred by mere
acquiescence for a shorter period than that
prescribed in the statute of limitations. The
following are the principal cases so decided:
Vaughan v. Parr, 20 Ark. 600; Boody v. :Mc-
Kenney, 23 Me. 517; Davis v. Dudley, 70
Me. 236; Praut v. Wiley, 28 Mich. 164; Cause
V. Norcum, 12 Mo. 550; Norcum v. Gaty, 19
Mo. 69; Peterson v. Laik, 24 Md. 541; Baker
V. Kennett, 54 Mo. 82; Huth v. Dock Co., 56
Md. 206; Hale v. Gerrish, 8 N. H. 374; Jack-
son V. Carpenter, 11 Johns. 538; Voorhies y.
Voorhies, 24 Barb. 150; INIc^.Iurray v. Mc-
Murray, 66 N. Y. 175; Lessee of Drake v.
Ramsey, 5 Oliio, 252; Cresinger v. Lessee of
Welsh, 15 Ohio, 156; Irvine v. Irvine, 9 Wall.
617; Ordinary v. Wherry, 1 Bailey, 28.
On the other hand, there are many decisions
to the effect that mere acquiescence beyond a
reasonable time after the minority ceases bars
the right to disaffirm, of which cases the fol-
lowing are the principal ones: Holmes v.
Blogg, 8 Taunt. 35; Railway Co. v. Black, 8
Exch. ISO; Thomasson v. Boyd, 13 Ala. 419;
Delano v. Blake, 11 Wend. 85; Bostwick v.
Atkins, 3 N. Y. 53; Chapin v. Shafer, 49 N.
Y. 407; Jones v. Butler, 30 Barb. 041; Kline
V. Beebe, 6 Conn. 494; Wallace's Lessee v.
Lewis, 4 Har. 80; Hastings v. Dollarhide, 24
Cal. 195; Scott v. Buchannan, 11 Humph.
467; Hartman v. Kendall, 4 Ind. 403; Bige-
low V. Kinney, 3 Vt. 353; Richardson v. Bo-
right, 9 Vt. 308; Harris v. Cannon, 6 Ga. 382;
Cole V. Pennoyer, 14 111. 158; Black v. Hills,
36 III. 376; Robinson v. Weeks, 50 Me. 102;
Little V. Duncan, 9 Rich. Law, 55.
The rule holding certain contracts of an
infant voidable (among them his conveyances
of real estate) and giving him the right to
affirm or disaffirm after he arrives at ma-
jority, is for the protection of minors, and so
that they shall not be prejudiced by acts done
or obligations incurred at a time when they
are not capable of determining what is for
their interest to do. For this purpose of pro-
tection the law gives them an opportunity',
after they have become capable of judging for
themselves, to determine whether such acts
or obligations are beneficial or prejudicial to
them, and whether they will abide by or avoid
them. If the right to affirm or disaffirm ex-
tends beyond an adequate opportunity to so
determine and to act on the result, it ceases
to be a measure of protection, and becomes,
in the language of the court in Wallace's Les-
see V. Lewis, "a dangerous weapon of of-
fen.se, and not a defense." For we cannot
assent to the reason given in Boody v. Mc-
Kenney (the only reason given by any of the
cases for the rule that long acquiescence in
no proof of ratification) "that by his silent
acquiescence he occasions no injury to other
persons and secures no benefits or new rights
to himself. There is nothing to urge him as
a duty to others to act speedily."
The existence of such an infirmity in one's
title as the right of another at his pleasure to
defeat it, is neccs.sarily prejudicial to it. and
INFANTS.
293
tlic longer it may continue the more serious
the injuiy. SiJi^ a ri^ih^JiLa continual^ men-_
ace to the title.
the title is ol
lloldiug such a menace over
course an injury to the owner
of it; one possessing such a right is bound in
justice and fairness towards the owner of the
title to determine without delay whether he
will exercise it. The right of a minor to dis-
aflirm on coming of age, lilie the right to
disaffirm in any other case, should be exer-
cised with some regard to the rights of oth-
ers,— with as nmch regard to those rights as
is fairly consistent with due protection to the
interests of the minor.
In every other case of a right to di.saffirm,l
the party holding it is required, out of regard'
to the rights of those who may be affected by
its exercise, to act upon it within a reasonable
time. There is no reason for allowing great-
er latitude where the right exists because of
infancy at the time of making the contract.
A reasonable time after majority within
which to act is all that is essential to the in-
fant's protection. That 10, 15, or 20 years, or
such other time as the law may give for
bringing an ac'tion. is necessary as a matter
c^ protection to him is absurd. The only
eirect of giving more than a reasonable time
is to enable the mature man, not to correct
what he did amiss in his infancy, but to
speculate on the events of the future— a con-
sequonce entirely foreign to the purpose of the
i-ule which is solely protection to the infant.
Reason, justice to others, public policy, (whirh
is not subserved by cherishing defective ti-
tles,) and convenience, require the right of
disafiinuance to be acted upon within a rea-
sonable time. What is a reasonable time
will depend on the circumstances of each par-
ticular case, and may be either for the court
or for the jury to determine. Where, as in
this case, there is mcro delay, with nothing
to explain or excase it, or show its necessity,
it will be for the court. Cochran v. Toher,
14 Minn. 3S5 (Gil. 2'J3); Derosia v. Ilailroad
Co., IS Minn. 1-3.3 (Gil. 119). ^h'-^ y^.'ira
■■^tu n h nlf. the d elay in this case. _Iexcludin£_
the p eriod of p 'nip<^'<^'8 m'""^'^y, '^f*'^^ *^^
limg within which to act had. coqinienced_to
run J wa^ primafacie_niore_than^a_rfia50liablo
time, and~J>rima faclgllbe_cpnveyance was
ratifie^.^ Order reversed. ~
29i
.^
\
CAPACITY OF PARTIES.
MANSFIELD v. GORDON. , i/
(10 N. E. 773, 144 Mass. 168.)
\>'
Supreme Judicial Court of Massachusetts. Suf-
folk. Feb. 26, 1SS7.
Bill in equity to set aside a mortgage made
by one Bnrrell, an insolvent debtor, while
a minor. Trial in the superior court upon
issues framed for a jurj-, which found that
the mortgagor, Burrell, was a minor, under
21 years of age, when he executed the mort-
gage; that he did not at the time represent
to the defendant that he was 21 years of age;
and that neither he nor plaintiff ratified or
affirmed said mortgage after Burrell became
21 years of age, or waive the objection of his
minority. After further hearing in said
court before Barker, J., the bill was dis-
missed, and the plaintiff appealed. Other
facts appear in the opinion.
A Hemenway and A L. Murray, for plain-
tiff. J. Willard and J. R. Churchill, for de-
fendant
DEVEXS, J. The plaintiff by his bUl seeks
to relieve the realty of BurreU, an insolvent
debtor, of whose estate he is assignee, from
the incumbrance of a mortgage thereon con-
ditioned for the payment of a note of $1,000.
The note and mortgage were executed by
Burrell when under age. He is now of age,
and was so when the plaintiff was appointed
assignee. Since his majority, he has not
ratified the note and mortgage, nor is it al-
leged that he has done any act in disaffirm-
ance thereof. The assignment vests in the
assignee not only all the property of the
debtor, both real and personal, which he
could lawfully have sold, assigned, or con-
veyed, including debts due him and the se-
curities therefor, but also "all his rights of
action for goods or estate, real or personal."
"By the right of action mentioned in the
statute," it Ls said by Chief Justice Shaw,
"the legi.slature intended all valuable rights
actually subsis;ting, whether absolute or con-
ditional, legal or equitable, which were to
be obtained by the aid of any species of ju-
dicial process." Gardner v. Hooper, 3 Gray,
404.
It is the contention of the plaintiff that, by
virtue of this clause, as assignee he is en-
titled to exercise the privilege which the in-
I /solvent might have exercised on reaching
I his majority, and disaffirm this mortgage,
I and thus is entitled to a decree relieving the!
I estate therefrom. That an individual cred^
itor cannot attach property conveyed by a
debtor while a minor, the conveyance of
which such debtor might have disaffirmed,
and thus avail himself of the infant's privi-
lege, is well settled. McCarty v. Murray, 3
Gray, 578; Kendall v. Lawrence, 22 Pick.
540; Kingman v. Perkins, 105 Mass. 111.
While the rights of the assignee are not al-
ways tested by those of the individual cred-
itor, there woulu seem to be no reason why
larger rights in an estate conveyed by a
minor are obtained by an assignee acting on
behalf of all the creditors. The contracts of an
infant are voidable only, and not void, and it
has often been said that the right to avoid
his contracts is a personal privilege of the
infant only, not to be availed of by otliers.
Nightingale v. Withington, 15 Mass. 272;
Chandler v. Simmons, 97 Mass. 508-511; 1
Chit Cont. (11th Ed.) note 6. It is said in
Austin V. Charlestown Fem. Sem., 8 Mete.
196-200, by Judge Wilde: "Voidable acts by
an infant, or matters of record done or suf-
fered by him, can be avoided by none but
himself, or his friends in blood, and not by
privies in estate, and this right of avoidance
is not assignable." Bac. Abr. "Infancy and
Age," 1, 6; Whittingham's Case, S Coke, 43.
It is said that it is for the benefit of the
debtor that the assignee should be allowed to
avoid his mortgage, as the assets of the es-
tate are thus increased. The ground upon
which an infant is allowed to avoid his con-
tracts is for personal benefit, and for pro-
tection against the improvidence which is
the consequence of his youth. He may
therefore avoid his contract without return-
ing the consideration received, but it is not
easy to see why his creditors, or the as-
signee as representing them, should have this
right. It may well be that the estate of the
insolvent has been augmented to that extent
by the very sum of money which the minor
received. The fact that the infant may re-
scind without returning the consideration
indicates that the right is strictly a personal
privilege; and that, as the rule permitting
him to thus avoid his contract is established
solely for his protection, so he alone can
have the benefit of it. Decree affirmed.
r ^\ TUCKER v. MORELAND. ,*)>^
^ (10 Pet. 58.) W /V^j
Supreme Court of the United States. -Jbn'
Term, ISotJ. ^^
The case is stated in tlie opinion of the
court.
Mr. Coxe, for plaintiff. Bradley & Swann,
contra.
STORY, J. This Is a writ of error to the
circuit court for the county of Washington,
and District of Columbia.
The original action was an ejectment
brought by the plaintiff in error against the
defendant in error; and both parties claimed
the title under Richard N. Barry. At the trial
of the cause upon the general issue, it was
admitted that Richard N. Barry, being seised
in fee of the premises sued for, on the 1st
day of December, 1831, executed a deed
thereof to Richard Wallach. The deed, after
reciting that Barry and one Bing were in-
debted to Tucker and Thompson, in the sum
of $3,238, for which they had given their
promissory note, payable in six months after
date, to secure which the convejance was to
be made, conveyed the premises to Wallach,
in trust, to sell the same in case the debt
should remain unpaid ten days after the 1st
day of December then next. The same were
accordingly sold by Wallach, for default of
payment of tlie note, on the 2.3d of February,
1S33, and were bought at the sale by Tucker
and Thompson, who received a deed of the
same on the 7th of March, of the same year.
It was admitted, that after the execution of
the deed of Barry to Wallach, the former
continued in possession of the premises until
the 8th of February, 1S33( when he executed
a deed, including tlie same and other iiarcels
of land, to liis mother, Eliza G. Moreland, the
defendant, in consideration (as recited in the
deed) of the sum of $1,138.61, which he owed
his mother; for the recovery of which she
had instituted a suit against him, and of oth-
er sums advanced him, a particular account
of which had not been kept, and of the fur-
ther sum of §o. At the time of the sale of
Wallach, the defendant gave public notice of
her title to the premises, and she pubhcly
claimed the same as her absolute right. The
defendant further gave evidence at the trial,
to prove tliat at the time of the execution of
the deed by Barry to Wallach, he, Barry,
was an infant under 21 yeare of age; and, at
the time of the execution of the deed to the
defendant, he was of the full age of 21 years.
Upon this state of the evidence, the coun-
sel for the defendant prayed the court to
instruct the jury, that if upon the whole evi-
dence given as aforesaid to the jury, they
should believe the facts to be as stated as
aforesaid, then the deed from the said Wal-
lach to the plaintiffs, did not convey to the
plaintiffs any title which would enable them
lis FA NTS.
295
to sustain the action. This Instruction the
court gave; and this constitutes the exception
now relied on by the plaintiff in error in his
first bill of exceptions.
Some criticism has been made upon the lan-
guage in which this instruction is couched.
But, in substance, it raises the question which
has been so fully argued at the bar, as to the
validity of the plaintiffs' title to recover; if
Barry was an infant at the time of the execu-
tion of his deed to Wallach. If that deed
was originally void, by rea.son of Barry's in-
fancy, then the plaintiff, who must recover
upon the strength of his own title, fails in
that title. If, on the other hand, that deed
was voidable only, and not void, and yet It
has been avoided by the subsequent convey-
ance to the defendant by Barry; then the
same conclusion follows. And these, accord-
ingly, are the considerations which are pre-
sented under the present instruction.
In regard to the point whether the deed of
lands by an infant is void or voi. the
court held that an acquiescence by the gran-
tor in a conveyance made during his infancy,
for eleven years after he came of age, did
not amount to a confirmation of that con-
veyance; that some positive act was neces-
sary, evincing his assent to the conveyance.
In Curtin v. Batton. 11 Sorg. & R. 311. the
court held that, to constitute a confirmation
of a conveyance or contract by an infant,
after he arrives of age, there must be some
distinct act, by whicli he either receives a
benefit from the contract after he arrives at
age, or does some act of express ratification.
There is much good sense in these decisions,
and they are indispensable to a just sup-
port of the rights of infants according to
the common law. Besides, in the present
case, as Barry was In possession of the
premises during the whole period until the
execution of his deed to Mrs. ;Morelaud. there
was no evidence to justify the jury in draw-
ing any inference of any intentional acquies-
cence in the valitlity of the deed to Wallach.
The 3d instruction is, for the reasons al-
ready stated, unmaintainable. The deed to
2Mrs. Moreland contains a convej'ance of the
very land in controversy, with a warranty of
the title against all persons claiming under
liim, (Barrj',) and a covenant, that he had
good right and title to convey the same, and,
therefore, is a positive disaffirmance of the
former deed.
The 4th instruction proceeds upon the sup-
position that if the deed to Mrs. Moreland
was fraudulent between the parties to it. it
was utterly void, and not merely voidable.
But it is clear that, between the parties, it
would be binding and availaltle; however,
as to the persons whom it was intended to
defraud, it might bo voidable. Even if it
was made for the very purpose of defeating
the conveyance to Wallach, and was a mere
contrivance for this purpose, it was still an
act competent to be done by Barry, and
amounted to a disaffirmance of the convey-
ance to Wallach. In many cases, the dis-
affirmance of a deed made during infancy,
is a fraud upon the other party. But this
has never been held sufficient to avoid the
disaffirmance, for it would otherwise take
away the veiy protection which the law in-
tends to throw round him, to guard him
from the effects of his folly, rashness, and
misconduct. In Saunderson v. Marr, 1 H.
Bl. 75, it was held that a warrant of attor-
ney, given by an infant, although there ap-
peared circumstances of fraud on his part,
was utterly void, even though the applica-
tion was made to the equity side of the court,
to set aside a judgment founded on it. So,
in Conroe v. Birdsall, 1 Johns. Cas. 127. a
bond made by an infant, who declared at
the time that he was of age, was held void,
notwitlistanding his fraudulent declaration;
for the court said that a different decision
would endanger all the rights of infants. A
similar doctrine was held by the court in
Curtin v. Patton, 11 Serg. & R. 309, o^o. In-
deed, the same doctrine is to be found af-
firmed more than a century and a half ago.
in Johnson v. Pie. 1 Lev. 100. 1 Sid. 2.">S; 1
Kebb. 905, 913. See Bac. Abr. "Infancy and
Age," H; 2 Kent, Comm. Lect. 31.
But what are the facts on which the in-
struction relies as pr(X)f of the deed to Mrs.
Moreland being fraudulent and void? They
are "the relative positions of the parties to
said deed, at and previous to its execution:"
that is to say. the relation of mother and
son, and the fact tliat she had then insti-
tuted a suit against him, and arrested him,
and held him to bail, as stated In the evi-
dence, and "from the circumstances attend-
ing the execution of it;" that is to say, that
Mrs. Moreland was informed by Barry, be-
fore his deed to her, that he had so convey-
ed the said property to Wallach, and that
subsequently, and with such knowledge, she
prevailed on Bariy to execute to her the
3D0
CAPACITY OF PARTIES.
same conveyance. Now, certainly, these
facts alone could not justly authorize a con-
clusion that the conveyance to Mrs. More-
land was fraudulent and void; for she might
be a bona fide creditor of her son. And the
considei-ation averred in that conveyance
showed her to be a creditor, if it was truly
stated, (and there was no evidence to con-
tradict it;) and if she was a creditor, then
she had a legal right to sue her son, and
there was no fraud in prevailing on him to
give a deed to satisfy that debt. It is prob-
able that the instruction was designed to
cover all the other facts stated in the bill of
exceptions, though in its actual terms it does
not seem to comprehend them. But if it did,
we are of opinion that the jury would not
have been justified in inferring that the deed
was fraudulent and void. In the first place,
the proceedings in the orphans' court may,
for aught that appears, have been in good
faith, and under an innocent mistake of a
year. of the actual age Of Barry. In the next
place, ii not. so, still, the mother and the
son were not estopped in any other proceed-
ing to set up the nonage of BaiTy, whatever
might have heen the case as to the parties
and property involved in that proceeding.
In the next place, there is not the slightest
proof that these proceedings had, at the
time, any reference to, or intended opera-
tion upon, the subsequent deed made to Wal-
lach, or that Mrs. Moreland was party to, or
assisted in, the negotiations or declarations
on which the deed to Wallach was founded
Certainly, without some proofs of this sort,
it would be going too far to assert that the
jury might infer that the deed to Mrs. More-
land was fraudulent. Fraud is not presum-
ed either as u matter of law or fact, unless
under circumstances not faariy susceptible
of any other interpretation.
The rtb instruction was properly refused
by the court, for the plain reason that there
was no evidence in the case of any acts or
declarations by Mrs. Moreland to the effect
therein star/^d. It was. therefore, the com-
mon case uf an ir.'itif ction asked upon a
mere hycjotbotica' statement, ultrj, the evi-
dence.
The third bill of exceptions is as follows:^- I
"The court having refused the 2d, 3d, 4th, ^
and 5th instructions prayed by the plaintiffs,
and the counsel, in opening his case to the
jury, contending that the questions present-
ed by the said instructions wore open to the
consideration of the jury, the counsel for the
defendant thereupon prayed the court to in-
struct the jury that if, from the evidence
so as aforesaid given to the jui-y, and stated
in the prayers for the said instructions, they
should be of opinion that the said Richard
was under the age of twenty-one years at
the time he made his deed as aforesaid to
the said Richard Wallach, under whom the
plaintiffs claim their title in this case, and
that at the time he made his deed as here-
inbefore mentioned to the defendant he was
of full age, that such last-mentioned deed
was a disaffirmance of his preceding deed
to him the said Richard Wallach, and that
in that case the jury ought to find their ver-
dict for the defendant, and that the evidence
upon which the 2d, 3d, 4th, and 5th instruc-
tions were prayed by the plaintiff as afore-
said, which evidence is set forth in the in-
structions so prayed, is not competent in
law to authorize the jury to find a verdict
for the plaintiff upon any of the grounds or
for any of the reasons set forth in the said
prayers, or to authorize them to find a ver-
dict for the plaintiff, if they should be of
opinion that the said Richard Barry was
under the age of twenty-one years at the
time he made his deed as aforesaid to the
said Richard Wallach.
"Which instruction the court gave as pray-
ed, and the counsel for the plaintiff excepted
thereto."
It is unnecessary to do more than to state,
that the bill of exceptiotis is completely dis-
posed of by the considerations already men-
tioned. It contains no more than the con-
verse of the propositions stated in the sec-
ond bill of exceptions, and the reassertion of
the instruction given by the court in the
first bill of exceptions.
Upon the whole, it is the opinion of the
court that the judgment of the circuit court
ought to be affirmed, with costs.
INFANTS.
301
HENRY V. ROOT.
(33 N. Y. o2G.)
Court of Appeals of New York. Sept, 1865.
L. J. Burditt, for appellant. E. M. Harris,
for respondent.
DA\'IES, J. This action was brought to
recover tlie amount of a promissory note for
$000 made at Fort Des Moines, in the state
of Iowa, by the defendant, whereby he prom
ised to pay to the plainti.T, for value received,
the .said sum of .$G00, with interest at the
rate of ten per cent per annum, on or before
the l.jth day of April, 1857.
The defendant set up in his answer two dis-
tinct grounds of defense: First. That the
note was given for part of the consideration
of certain lots, situated in the town of Logan,
in the territory of Nebraska; that the agree-
ment for the purchase of said lots was made
by the defendant with one Campbell, the
agent of the plaintiff, when and whereby the
defendant agreed to purchase said lots at and
for a price of $700; that he paid in cash $100,
and gave said note for the residue of the con-
sideration or purchase-money of said lots;
that said purchase was the only consideration
for the same, and that he relied wholly upon
the statements and representations of said
Campbell as to the situation and value of said
lots. The answer then sets out the represen-
tations made, and that the plaintiff's title was
good, whereas he had no title to the same,
and such repre.sentatious were untrue, and
that he was deceived and defrauded thereby;
that he, the defendant, never had possession
of said lots, and had never sold or conveyed
any or either of them.
For a second defense, the defendant aver-
red that at the time of making and executing
the said note, he was an infant under the
age of twenty-one years. On the trial the
note was produced and read in evidence; and
the plaintiff rested.
The defendant then offered himself as a
witness, and testilied that at the time the
note was executed he was not twenty-one
years of age, and further testimony to the
same effect was offered. The defendant at-
tained the age of twenty -one years on the
J.'.th of February. 1S57. The witness testi-
lied that on the 20th of Januarj', 1857, tlie
day after date of the note, he received a con-
veyance for said lots of land executed by
Campbell as agent of the plaintilT, and that
the same was acknowledged the same day.
'I'lie plaintiff then offered the same in evi-
dence, and the deed was objected to by the
defendant's counsel, on the ground that it was
not properly acknowledged nor authenticated;
that it was not .shown that the person who
executed it had authority from the grantor,
and also that it was not under seal, and there-
fore void. The court sustained the objection,
and the plaintiff excepted. The plaintiff then
offered to show by the witness that defendant
took possession of the land under this deed,
and that on the 19th of May. 1857, defendant
conveyed a portion of the land to one Sand-
ford B. Terry of Chicago by a deed not under
seal, for the consideration of $100. This was
objected to by the defendant, on the ground
that no title was obtained by the defendant
by the paper received by him, and the objec-
tion was sustained by the court, and the
plaintiff excepted. The witness testified that
the consideration of the note was for the con-
veyance of real estate.
The deed was then put in evidence by the
defendant, and by it the plaintiff, for the con-
sideration of $100 paid, the receipt whereof
was acknowledged, and the further consider-
ation of $000, to be paid on the 15th day of
April, 1857, sold, released, and forever quit-
claimed to the defendant all his right, title
and interest to the said real estate, and the
plaintiff did thereby w-arrant and defend the
above property. It was dated June 2f>, 1857,
and signed, "Wm. R. Henry, by his agent, H.
C. Campbell." It was acknowledged on the
same day by the agent before a notarj- public.
The court held and decided the paper in
evidence conveyed no title to the land in ques-
tion to the defendant, not being under seal,
and no power of attorney shown; to which
i-uling and decision the counsel for the plain-
tiff excepted. The court also decided that
the defendant was not bound to tender to the
plaintiff a reconveyance; to which ruling and
decision the counsel for the plaintiff also duly
excepted. The court also held and decided
that the defendant was not liable on the note,
because he was an infant when he executed
it: to which ruling and decision the plaintiff
also duly excepted. And thereupon the court
directed the jurj- to render a verdict for the
defendant; to which ruling and direction the
plaintiff' al.so excepted. Thereupon, the ex-
ceptions were directed to be heard in the first
instance at the general term, where judgment
thereon was given for the defendant. The
plaintiff now appeals to this court.
There is no controversy that the defendant
was an infant at the time this note was ex-
ecuted. If he has done nothing since attain-
ing his majority which makes the contract
obligatory upon him. then the direction of the
court to the jury to find a verdict for the de-
fendant was correct. But if however he
promised to pay the note, after arriving at
full age, or ratified the contract, or affirmed
the purchase for which the note was given,
then the note became obligatory upon him.
The defendant failed to sustain the allega-
tion by his answer that any fraudulent rep-
resentations had been made to him to induce
him to enter into the purchase, or that tliere
was any failure of title in the plaintiff, and
consequently a failure of the consideration of
the note.
There has been much discussion in the
books as to what acts or declarations of a
party will revive a debt barred by the statute
of limitations, or one discharged by an in-
302
CAPACITY OF PARTIES.
solvent or bankrupt discbarge, or render ob-
lisatory and valid the contract of an infant.
There has been a commingling of all these
cases in judicial opinions, and frequently no
clear and marked lines of distinction have
been presented. I shaU make the effort to
eliminate some principles which are applica-
ble to each of these cases, and endeavor to
show wherein they differ and the reasons for
such difference, and wherein they are coinci-
dent and the principles which have been es-
tablished as applicable to these three classes
of cases. A clear imderstanding of the vari-
ous decisions and the principles settled by
them, makes such an examination imperative,
and from it we shall discover the doctrine
settled, and the reasons therefor.
In Sands v. Gelston, 15 Johns. 519, Spencer,
J., lays down what appears to be the correct
rules in reference to debts barred by the stat-
ute of limitations, debts of infants not for
necessaries, and the debts of bankrupts dis-
charged under the bankrupt acts. In all
these cases, although by reason of certain
provisions of law such debts cannot be en-
forced against the debtors, still the debt re-
mains, and the moral obligation to pay con-
tinues in fuU force. Hence it is after a debt
is baiTed by the statute in the one case or
discharged by the operation of the bankrupt
or insolvent laws in the other, or in the case
of the infant who on attaining his majority,
and not before, can make a legal contract,
which can be eo instanti enforced against
him, that in all these cases the moral obliga-
tion has been held a sufficient and legal con-
sideration without any other, for the promise
or undertalving to pay the debt, by acknowl-
edgment, ratification or a new promise. In
other words, the courts have, in truth, re-
garded the old debt as continued or revived,
and no new consideration was required to
.support it. Spencer, J., says, in Sands v.
Gelston: "I never could see the difference as
regards the revival of a debt, between one
barred by the statute of limitations and one
from which the debtor has been discharged
under the bankrupt or insolvent laws. The
remedy is equally gone In both cases. The
statute of limitations requires all actions on
contract to be commenced within six years
next after the cause of such action accrued,
and not after. The remedy being suspended
after six years, there yet exists a moral duty
on the part of the debtor to pay the debt; and
accordingly a promise to pay a debt not ex-
liuguished, but as to which the remedy is
lost, is a valid pi-omise, and may be enforced
on the ground of the pre-existing moral duty.
There is then no substantial difference be-
tween a debt barred by the statute of limi-
tations, and a debt from the payment of
which the debtor is exonerated by a discharge
under bankrupt or insolvent laws. Both of
these rest on the same principle with a debt
contracted by an infant not for necessaries;
yet it is singular that in neither of the latter
ca.ses wiU the bare acknowledgment that the
debt once existed and has not been paid, sup-
port an action— an express promise to pay
being necessary.'" A review of the cases on
the question of what is necessary to revive a
debt barred by the statute of limitations, will
clearly show that a bare or mere acknowledg-
ment of the existence of the debt is sufficient,
as the law will imply or infer from its exist-
ence a promise to pay it; and it is of little
moment whether it be regarded as a new
promise or a revivor and continuation of the
old one.
In Johnson v. Beardslee, 15 Johns. 4, an
acknowledgment of the debt was holden to be
sufficient evidence for the jury to presume a
new promise. In Sluby v. Champlin, 4 Johns.
4G1, the defendant said the debt ought to be
paid, and mentioned eighteen months as the
time he wanted for payment. This was held
a promise sufficient to make him liable. In
Jones V. Moore, 7 Bin. 573, an acknowledg-
ment of a subsisting debt was sufficient to
take the case out of the statute, and it was
held it would authorize the jury to infer a
new promise to pay, or rather that the old
promise was continued, or as some choose to
call it, revived. Mosher v. Hubbard, 1.3
Johms. 510. On the claim being presented to
the defendant, he did not intimate that he
intended to avail himself of the statute; but
the only question to his mind seemed to be
whether the account had not been paid, and
he promised to examine his papers, and if he
found he had paid the order he was to write
the witness, but as the witness testified he
had never written, the court held that this
was sufficient to raise an implied promise to
pay the money, unless on examination it
should be found that the order had been paid,
and there was no evidence whatever of any
payment. Sands v. Gelston, supra. Spencer,
J., says: "I am bound by authority to con-
sider the acknowledgment of the existence of
a debt within six years before the suit was
brought, as evidence of a promise to pay the
debt."
In Clemenstine v. Williamson, 8 Cranch,
72, Marshall, C. J., says: "It has been fre-
quently decided that acknowledgment of a
debt, barred by the statute of limitations.
takes the case out of that statute, and re-
vives the original cause of action. So far as
decisions have gone, principles may be con-
sidered as settled, and the court will not
lightly unsettle them. * * * It is not suf-
ficient to take the case out of the act tliat the
claim should be proved, or be acknowledged
to have been originally just: the acknowl-
edgment must go to the fact that it is still
due."
The same learned judge, in Wetzel v. Buz-
zard, 11 Wheat. 309, remarked: "It is con-
tended on the part of the plaintiff that he
has proved an acknowledgment of the debt,
and that such acknowledgment, according to
a long series of decisions, revived the original
I promise, or it lays the foundation upon which
the law raises a new promise. The English
INFANTS.
ms
and American books are filled with decisions
which support this general proposition. An
iiiKlualified admission that the debt was due
at the time has always been held to remove
the bar created by the statute."
In Bloodgood v. Bruen, 8 X. Y. 302, Gardi-
ner, J., says: "A mere ackuowledj^ment of
an indebtedness is but evidence from which
a promise to pay may be inferred. When it
is unconditional, a court or jury may infer a
willingness to pay, or a promise to that ef-
fect, because it would be ditlicult to assign
any other reason for a voluntary admission of
this sort."
Marcy, J., says in Depuy v. Swart, 3 Wend.
1;'>'J, "that the bare acknowledgment of a debt,
barred by the statute of limitations, is held
to revive it."
In Purdy v. Austin, 3 Wend. 189, the same
jiLstice says, after discussing the reasoning
of the court in Sands v. Gelston, that the un-
qualified and unconditional acknowledgment
of a debt, made by a party within six years
before suit brought, is adjudged at law to
imply a promise to pay.
In Bell V. Morrison, 1 Pet. 3.31, Justice
Story, in delivering the opinion of the court,
oljserves, that "the rule announced in 11
Wheat, was the result of a deliberate exam-
ination by the court of the English and Amer-
ican authorities," and adds: "We adhere to
the doctrine as there stated, and think it the
only exposition of the statute which is con-
sistent with its true object and import." He
then says: "If there be no express promise,
but a promise is to be raised by implication
of law from the acknowledgment of the party,
such acknowledgment ought to contain an un-
qualified and direct admission of the previous
subsisting debt which the party is liable and
willing to pay." At the conclusion of the
opinion, he says that it is to be understood
that it is not miauimous, but that of a ma-
jority of the court, and that it has been prin-
cipally, if not exclusively, infiuenced by the
course of decision in Kentucky on this sub-
ject. I think particular note should be made
of this remark, as Judge Story's observations
in this cause have been disapproved of by two
of the judges of our own state, hereafter al-
luded to. It is to be observed that Judge
Stoiy introduces an element which is not, so
far as my researches extend, contained in any
previous authority, viz.: that the party maJc-
ing the acknowledgment must be "willing to
pay." He does not s:iy that he must express
that willingness, as some judges have sup- >
posed, or whether that willingness may be in- '
ferred from his acknowledgment of the pre-
vious subsisting debt. I think the latter view
nuist be the correct interpretation of this re-
mark, as I am unable to find any dictum of
any judge anterior to this, that in addition
to the acknowledgment it was required that the |
party must also express a willingness to pay.
In Purdy v. Austin, supra, the judgment was
reversed on the ground that the acknowledg-
ment of the defendant did not amount to an ,
unequivocal and positive recognition of tlie
subsisting claim in favor of the plaintiff.
In Stafford v. Bryan, 3 Wend. 53o, Suther-
land, J., in delivering the opinion of the court
of errors, says: "All acknowledgment, which
is to have the effect of taking a demand out
of the effect of the statute of limitations,
ought to be clear and explicit in relation to
the subject of the demand to which it refers.
The acknowledgment or new promise is to be
aflirnuUively establislied by the plaintiff."
He adds: "Although I cannot yield my assent
to aU the points decided in that case (Bell v.
Morrison), nor to all the reasonings and posi-
tions advanced by the learned judge who de-
livered the opinion of the court, the general
views to which I have assented appear to
me to be sound and impressive." In Dean
V. Hewitt, 5 Wend. 2.'37, Marcy, J., remarks,
that "the statute of limitations proceeds upon
the presumption of payment; a recognition of
the existence of the debt, after the statute
has attached, revives the remedy which was
lost, but the cause of action is the same as it
was before the remedy. This court has al-
ways considered the acknowledgment or new
promise as a contiuu,;nce of the old promise.
* * * The acknowledgment rebuts the pre-
sumption of payment; and when made be-
fore the statute attaches, has the same effect
as though made afterward. It keeps alive, if
I may so express it, the remedy. • * * It
cannot be said that the new promise either
revives the cause of action or the remedy';
it only continues the latter." He adds, t li it
he is aware that some of the positions there
stated conflict with the views of Mr. Justice
Stoiy, as expressed in Boll v. Morrison, but
we cannot yield to these views, and give full
effect to them, without unsettling principles
that have been so long established as to en-
title them to be evidence of the laws of this
state.
In Hancock v. Bliss, 7 Wend. 2G7. Chief
Justice Savage said, the acknowledgment
must however be explicit, and without a de-
nial of the equity or legality of the demand,
hence if the defendant denies the justice of
the demand, or ivposes himself upon the stat-
ute, a promise will not be presumed.
In Patterson v. Choate, 7 Wend. 445, the
court by Suth.-rland, J., held that an ac-
knowledgment of an existing indebtedness
was suthcient to raise a new promise. There
the witness first stated what the defendant
said, as follows: That "the balance as ex-
hibited by their books of account was due to
the plaintiff at the time of the dissolution of
the copartnership, and had not been paid to
his knowledge." Upon being internipted by
the plaintiff's counsel, he said the expression
used by Patterson was that the balance was
due at the time of the dissolution, and still
is due, as witness thought; it might have
been, that it was then due and had never
been paid; either version of it amounts to a
clear and explicit admission of a subsisting io-
debtedness.
304
CAPACITY OF PAKTIES.
In Galley v. Crane, 21 Pick. 523, the su-
preme court of Massachusetts says, the doc-
trine laid down in the case of Bangs v. Hall,
2 Pick. oLiS, was well considered, has since
been tested by experience, and is undoubtedly
sound and wise. It has been everywhere ac-
knowledged as sound law (citing a large num-
ber of authorities to sustain this position).
The court further say: "The principles there
laid down are. that to take a debt out of the
statute of limitations there must be either an
express promise to pay, or an imqualitied ac-
knowledgment of present indebtedness. In
the latter ease the law will imply a promise
to pay."
In Allen v. Webster, 15 Wend. 284, Savage.
C. J., after reviewing all the authorities, says:
"Whatever therefore uviy be the true philo-
sophy of the rule, and learned judges have
differed on that subject, yet since the case of
Sands v. Gelston, there has been no dispute
as to what the rule in fact is, to-wit: that to
revive a debt barred by the statute of limita-
tions, whether the statute theoretically oper-
ates upon the debt itself, or upon the remedy
only, there must be an express promise or an
acknowledgment of a present indebtedness,
a subsisting liability, and a willingness to
pay." This last remark about a willingness
1o pay has no foundation, but Judge Story's
ob.->ervation in BeU v. Morrison, and which
liad been disapproved of by two of our
judges; Gardiner, J., states the rule as he is
inclined to think it is in Wakeman v. Sher-
man, 9 N. Y. 91, in these words: "That to
revive a demand thus barred there must be
an express promise to pay, either absolute or
conditional, or an acknowledgment of the
debt as subsisting, made under such circum-
stances, that such a promise may be fairly
implied." And this case also enunciates the
rule laid down in many other cases, that the
acknowledgment of existing indebtedness or
the promise to pay must be made to the party
to whom the debt is due, or to his agent; an
acknowledgment or promise to a stranger will
not answer.
As has been seen from the remarks of Chief
Justice Spencer in Sands v. Gelston, some-
thing more has been required to establish a
debt against a bankrupt, which has been dis-
charged by his certificate, or a discharge from
his debts under an insolvent law. In the
latter case the debt has ceased to exist. It
has been extinguished, and though the moral
obligation notwithstanding remains to pay it,
and is held to be a good consideration for the
promise to pay it, yet there must be a new
promise equivalent to a new contract. In the
case of a debt barred by the statute of limi-
tations, we have seen that the debt is not dis-
charged, but the remedy by action is only
takeu away or suspended until the debt is re-
vived. In the case of Roberts v. Morgan, 2
Exch. 73G, Eyre, C. J., says a debt barred by a
eeitificate, under a commission of bankruptcy,
by a new promise to pay it, becomes a new-
debt. Lord Mansfield also says, when there
has been a new promise after the discharge,
the bankrupt is liable as on a new contract.
Doug. 192. The moral obligation uniting to
the new promise makes what he calls in the
case of Truman v. Fenton, Cowp. 544, "a
new undertaking and agreement."
In Dupuy v. Swart, 3 Wend. 135, Marcy, J.,
says: "The bare acknowledgment of a debt
barred by the statute of limitations is held to
revive it; but an acknowledgment of a debt
from which the defendant has been dis-
charged, be it ever so explicit, gives no chance
of action." After referring to the authorities
also alluded to he says: "The authorities
clearly show that the new promise is the con-
tract upon which the action against the de-
fendant must rest. The old debt has no fur-
ther connection with this suit than what
arises from the circumstance that it is resort-
ed to for the purpose of furnishing a consid-
eration for the promise, by reason of its moral
obligation after its legal obligation is de-
stroyed by the discharge. The liability there-
fore of the defendant is on the new contract."
A protracted struggle has been maintained
in the courts, on the one hand to protect in-
fants or minors from their own improvidence
and folly, and to save them from the depre-
dations and frauds practiced upon them by
the designing and imprincipled, and on the
other to protect the rights of those deaUng
with them in good faith and on the assump-
tion tliat they could lawfully make contracts.
Much discussion has been had in the books,
by eminent and learned judges, whether the
contracts of an infant were void or voidable,
and the earlier decisions were that such con-
tracts were void. And the method adopted
by the courts to protect an infant against the
effects of his own weakness, has been to con-
sider his acts as not binding. Bing. Inf. 5.
Miserable (says Lord INIansfield, in 3 Bur-
rows, ISOl) must the condition of minors be,
excluded from the society and commerce of
the world, deprived of necessaries, education.
enq)loyment and many advantages, if they
could do no binding acts.' Great inconven-
ience must arise to them if they were bound
by no act. The law therefore at the same
time that it protects their inability and in-
discretion from injury, through their own im-
prudence, enables them to do binding acts,
and without prejudice to themsdves, for the
benefit of others. And in that case (Couch
v. Parsons), it was expressly decided that an
infant's conveyance, by lease and release,
was voidable only and not void. This deci-
sion has been considered by many judges and
lawyers as unsound, and particularly by Mr.
Preston, in his work on Conveyancing, in
which he says: "No lawyer of eminence has
thought it safe to follow that decision in prac-
tice. To admit indeed that such a decision is
law, is to confound all distinctions and to
oppose all authorities on this head" (2 Prest.
Conv. 24S); and at page 375 he also says:
"It would be well for every lawyer that such
a decision had never existed." These views
INFANTS.
o05
of this learned author show how firmly iui-
Ijlanted in the loyal muid was the doctrine,
that the acts and conti'acts of an infant wei"e
void and not voidable.
We shall see that the modem doctrine is
fully iu harmony with that laid down in
Couch V. I'arsous, and that such is now the
well and firmly-eslablished rule of law. A
void act never is nor never can be binding,
either on the person with whom it origi-
nates or on others. All who claim through
or under it must fail, and it never can, at
any time or by any means, be confirmed or
rendered valid. A voidable act is binding on
others until disafhrmed by the party with
whom it originated; it is capable, at a prop-
er time and by proper means, of being con-
firmed or rendered valid. Bing. Inf. 7.
I tliink it will be found, on a careful exam-
ination of the cases and the current of de-
cision by learned judges, that the doctrine of
an express promise by an infant, after his
attiiiuiug his majority, being necessary to es-
tablish a contract as binding made by him
during infancy, originated maiuly from two
sources: First, the notion of the English
Judges that it was their peculiar duty to pro-
tect infants from their own acts of impru-
dence and folly; and second, that their con-
tracts being wholly void, something must be
done equivalent to a new contract after com-
ing of age to make that legal and effective
wluch before had no force or existence. And
from this latter consideration I think another
error had its origin into which so many judg-
es have fallen, that to make binding a con-
tract of an infant after he attained his ma-
jority, acts must be done of an equal charac-
ter or degree which a bankrupt discharged
from a debt must peilorm to give new life,
vigor and vitahty to a debt discharged and
canceled by his bankrupt or insolvent dis-
Qharge. The promise to pay a debt dis-
charged under an ins)lvent law, as we have
seen, becomes a new contract. In the case
of Roberts v. :Morgan, 2 Exch. 730, Eyre, C.
,T., says a debt barred by a certificate under
a commission of bankruptcy, by a new prom-
ise to pay it, , becomes a new debt. Lord
Mansfield also says, when there has been a
new promise after the discharge, the bank-
rupt is liable as on a new contract. Doug.
192. The moral obligation, uniting to the
new promise, makes what he calls, in the
case of Truman v. Fenton, Cowpi 544, "a
new undertaking and agreement."
In Lynbuiy v. Weightman, 5 Exch. 198,
Lord Ellenborough said, that in order to bind
a bankrupt by a new promise, he should ex-
pect a positive and precise promise to pay;
and in a note to this case it is said that
bankrupts and infants stand on a dittereut
ground with respect to debts from which
they are discharged.
If the contract of the infant be not void,
but only voidable, can it be justly said that
it has been discharged paid, that is. as if it
had no existence? It seems to me not, and
HOPE. SEI.. CAS. CONT. — 20
that the course of argument of many learned
judges, in assuming that the conti-act of the
infant aud that of a bankrupt discharged by
the act are to be placed on the same foot-
ing, cannot be sustained, either by sound rea-
soning or by authority. I think the founda-
tion of the reas c ases, liable for torts
committed by them, but they are not liable
where the wrong is connected with a con-
tract and the result of the judgment is to
indirectly enforce the contract Judge Cooley
says: "If the wrong grows out of contract
relations, and the real injury consists in the
non-performance of the contract into wliith
the party wronged has entered with an in-
fant the law will not permit the former to
enforce the contract indirectly by counting
on the infant's neglect to perform It, or omis-
sion of duty under it as a tort." Cooley,
Torts, 116. In another place the same au-
thor says: "So, if an infant effects a sale
by means of deception and fraud, his in-
fancy protects him." Cooley. Torts, 107.
Addison, following the English cases, says
an infant is not liable "if the cause of action
is grounded on a matter of contract with
the infant and constitutes a breach of con-
316
CAPACITY OF PARTIES.
tract as well as a tort." Add. Torts, par.
1314.
Upon this principle it has been held In
some of the cases that an infant is not liable
for the value of property obtained by means
of false representations. Hewlett v. Has-
well, 4 Camp. 118; Green v, Greenbank, 2
Mai-sh. 4S5; Vasse v. Smith, 6 Cranch, 226,
1 Am. Lead. Gas. 237; Studwell v. Shapter,
54 N. Y. 249. It is also generally held that
an infant is not estopped by a false repre-
sentation as to his age; but this doctrine
rests upon the principle that one under the
disability of coverture or infancy has no
power to remove the disability by a repre-
sentation. Carpenter v. Carpenter, 45 Ind.
142; Sims v. Everhardt, 102 U. S. 300; Whit-
comb V. Joslyn, 51 Vt. 79; Conrad v. Lane,
26 Minn, 3S9, 4 N. W. 695; Wieland v. Ko-
bick, 110 111. 16; Ward v. Insurance Co., 9
N. E. 361.
It is evident, from this brief reference to
the authorities, that it is not easy to extract
a principle that will supply satisfactory rea-
sons for the solution of the difficulty here
presented. It is to be expected that we
should find, as we do, stubborn conflict in
the authorities as to the question here di-
rectly presented, namely, whether an action
will lie against an infant for falsely repre-
senting himself to be of full age. Johnson
V. Pye, 1 Sid. 25S; Price v. Hewett, 8 Exch.
146; Association v. Fairhurst, 9 Exch. 422;
Brown v. D'jnham, 1 Root, 272; Curtin v.
Patton, 11 Serg. & R. 309; Homer v. Thwing,
3 Pick. 492; Word v. Vance, 1 Nott & M.
197; Fitts v. Hall, 9 N. H. 441; Norris v.
Vance, 3 Rich. 104; Gilson v. Spear, 38 Vt.
311.
Our judgment, however, is that, where the
infant does fraudulently and falsely repre-
sent that he is of f uU age, he is liable in an
action ex delicto for the injury resulting
from his tort. This result does not involve
a violation of the principle that an infant
is not liable where the consequence would
be an indirect enforcement of his contract;
for the recov ery is no t upon the contract ,
"that~lsT;reated a.s of no~efl;ect, nor is he
jfta4ev ^pay tEeTontract price^ of the article
purrhfiBf^d by h'""i, «« Tip ig-nrily hr-lrt-rh gjTT
swer for the a ctual loss c aused by h is fraud .
loItrnr^rTnm responsible for~~EIIe
In holdifljr him responsible for the conse-
quences of his wrong, an equitable conclusion
is reached, and one which strictly harmon-
izes with the general doctrine that an infant
is liable for his torts. Nor does our con-
clusion invalidate the doctrine that an in-
fant has no power to deny his disability;
for it concedes this, but affirms that he must
answer for his positive fraud.
Our conclusion that an infant is liable in
tort for the actual loss resulting from a false
and fraudulent representation of his age is
weU sustained by authority, although, as we
have said, there is a fierce conflict, and it is
strongly entrenched in principle. It has been
sanctioned by this court, although, perhaps,
not in a strictly authoritative way; for it
was said by Worden, J., speaking for the
court, in Carpenter v. Carpenter, supra, that
"the false representation by the plaintiff, as
alleged, does not make the contract valid, nor
does it estop the plaintiff to set up his in-
fancy, although it may furnish ground of an
action against him for tort. See 1 Pars.
Cont. 317; 2 Kent, Comm. (12th Ed.) 241."
The reasoning of the court in the case of
Pittsburgh, etc., Co. v. Adams, 105 Ind. 151,
5 N. E. 187, tends strongly in the same direc-
tion.
In NefC V. Landis (Pa. Sup.) 1 Atl. 177, it
was said: "It cannot be doubted that a mi-
nor who, under such circumstances, obtains
the property of another, by pretending to be
of full age and legally responsible, when in
fact he is not, is guilty of a false pretense,
for which he is answerable under the crim-
inal law. 2 Whart. Or. Law, 2099." If it
be true, as asserted in the case from which
we have quoted, that an infant who falsely
and fraudulently represents himself to be of
full age is amenable to the criminal law, it
must be true that he is responsible in an
action of tort to the person whom he has
wronged.
The earlier English cases were undoubtedly
against our conclusion, but the later cases
seem to take a different view of the question.
Thus, in Ex parte Unity, etc., Ass'n, 3 De
Gex & J. 03, it was held that, in equity, an
infant, who falsely and fraudulently repre-
sented himself to be of full age, was bound
to pay the obligation entered into on the
faith of his representation. In the note to
the case of Humphrey v. Douglass, 33 Am.
Dec. 177, Mr. Freeman says, in speaking of
the decision in Kilgore v. Jordan, 17 Tex.
341, that, "aside from any question of author-
ity, the rule given in the case last cited by
Hemphill, C. J., as the rule of the Spanish,
derived from the civil law, that if a minor
represents himself to be of age, and from his
person he appears to be so, he will be bound
by any contract made with him, seems to be
most consonant with reason and justice."
]\Ir. Pomeroy pushes the doctrine much fur-
ther than we are required to do here, for he
says, "If an infant procures an agreement
to be made through false and fraudulent rep-
resentations that he is of age, a court of equi-
ty will enforce his liability as though he were
an adult, and may cancel a conveyance or ex-
ecuted contract obtained by fraud." 2 Pom.
Eq. 465.
In addition to cases cited which sustain
our view may be cited the following authori-
ties: Fitts V. Hall, 9 N. H. 441; Eckstein
V. Frank, 1 Daly, 384; Schunemann v. Para-
dise, 46 How. Prac. 426; Tyler, Inf. 182; 1
Pars. Cont. 317, note; 1 Story, Eq. 385.
The English cases recognize a distinction
between suits of equitable cognizance and
actions at law, and declare that a representa-
tion as, to age, when falsely and fraudulently
made, will bind an infant in equity. Ex
I
INFANTS.
317
parte Unity, etc., Ass'n, supra, and authori-
ties cited. UndG' our system, we can rec-
ognize no such distinction,— a distinction
which is, as we thinli, a shadowy one under
any system, for, in our system, the rules of
law and equity are merged and mingled.
Under such a system as ours, courts should
pursue such a course as will render justice
to suitors under the rules of equity, wliich,
after all, are but the embodiment of the prin-
ciples of natural justice.
It cannot be the duty of any court of In-
diana to deny substantial justice because the
complaint states a cause of action in a pecu-
liar form; for, under our system, courts must
render such judgments as yield justice to
those who invoke their aid, irre.spective of
mere forms, in all cases where the substan-
tial facts are stated, and are such as entitle
the party to the general relief sought. They
will not inquire whether the proceeding which
asks their aid is at law or in etjuity, but
they will render justice, to those who ask it,
in the method prescribed by our Code of
Civil Procedure. It is laid down as a general
rule by all the text writers that infants are
liable for their torts; but many of these
writers, when they come to consider such a
question as we have here, are sorely per-
plexed by the early English decisions, and,
by subtle refinement, attempt to discriminate
between pure torts and torts connected with
contracts, and to create an artificial class of
actions. Their reasoning is not satisfactory.
Aside from mere personal torts, it is scarce-
ly possible to conceive a tort not in some way
connected with a contract, and yet all the
autliorities agree that the liability of infants
is not confined to mere personal torts. There
is a connection between a contract and a tort
in every case of bailment, of the bargain and
sale of personal property, and of the pur-
chase and sale of real estate; and, if an in-
fant is not responsible for his fraudulent
representation of his age in connection with
such transaction, there is not within the
whole range of business transactions any
case in which he could be made liable for
his fraud. There are many cases, far too
numerous for citation, where there is some
connection between the contract and the tort,
and yet it is unhesitatingly hold that the in-
fant is liable for his tort Cooley, Torts,
112, authorities cited in notes. The cases
certainly do agree — it is, indeed, dillicult, if
not impossible, to perceive how it could be
otherwise — that, although there may be some
connection between the contract and the
wrong, the infant may be liable for his tort.
It seems to us that the only logical and de-
fensible conclusion is that he is liable, to the
extent of the loss actually sustained, for his
tort, where a recovery can be had without
giving effect to his contract. The test, and
the only satisfactory test, is supplied by the
answer to the question- Can the infant be
held liable without directly or indirectly en-
forcing his promise?
There is no enforcement of a promise
where an infant, who has been guilty of a
positive fraud, is made to answer for the
actual loss his wrong has caused to one who
has dealt with him in good faith, and has
exercised due diligence; nor does such a rule
open the way for designing men to take ad-
vantage of an infant, for it holds one who
contracts witli an infant to the exercise of
good faith and rea.sonable diligence, and does
not enable him to make any profit out of the
transaction with the infant, for it allows him
only compensation for the actual loss sus-
tained. It does not permit him to make any
profit out of an executory contract, but it
simply makes good his actual loss.
It is wortliy of observation that, in the cas-
es which hold that an infant's representa-
tion will not estop him to deny his disability,
it is generally declared that he may, never-
theless, be held liable for his tort. It may
often happen that the age and appearance of
the infant will be such as to preclude a recov-
ery for a fraud, because reasonable diligence,
which is exacted in all cases, would warn
the plaintiff of the nonage of the defendant.
On the other hand, the infant may be in
years almost of full age, and in appearance
entirely so, and thus deceive the most dili-
gent by his representations. Suppose a mi-
nor who is really 20 years and 10 months
old, but in appearance a man of fuU age.
should obtain goods by falsely and fraudu-
lently representing that he is 21 years of
age, ought he not, on the plainest principles
of natural justice, to be held liable, not on
his contract, but for the loss occasioned bv
his fraud? The rule which we adopt will
enable courts to protect, in some measiu-e,
the honest and dUigent, but none other, who
are misled by a false and fraudulent repre-
sentation; and it will not open the way to
imposition upon infants, for in no event can
anything more than the actual loss sustained
be recovered, and no person who trusts where
fair dealing and due diligence require him
not to trust can reap any benefit. It will
not apply to an executory contract which an
infant refuses to perform, for, in such a case,
the action would be on the promise, and the
only recovery- that could be had would be
for the breach of contract, and the terms of
our rule forbid such a result; but it will ap-
ply where an infant, on the faith of his false
and fraudulent representation, obtains prop-
erty from another, and then repudiates his
contract
Any other rule would, in many cases, suffer
a person guilty of positive fraud to escape
loss, although his fraud had enabled him to
scK'ure and make way with the property of
one who had trusted in good faith to his rep-
resentation, and had exercised due care and
diligence. We are unwilling to sanction any
rule which will enable an infant who has
obtiined the property of another by falsely
and fraudulently representing himself to be
of full age, to enjoy the fruits of his fraud.
318
CAPACITY OF PARTIES.
either by keeping the property himself, or
selling it to another, and, when asked to pay-
its just and reasonable value, successfully
plead his infancy. Such a rule would make
the defense of Infancy both a shield and a
sword, and this is a result which the princi-
ples of justice forbid, for they require that
it should be merely a shield of defense.
Judgment reversed, with instructions to
overrule the demurrer to the complaint
c^
>
INSANE PERSONS AND IDIOTS.
319
ALLIS V. BILLINGS.
(6 Mete 415.)
1^
r,^
Supreme Judicial Court of Massachusetts.
Sept Term, 1843.
Writ of entry to recover seven acres of land
in Hatfield. At the trial, the tenant gave in
evidence a deed from the demandant, dated
March 25th, 1835, convcyinj; the demanded
premises, and several other parcels of land,
being the farm and outlands belonging to the
demandant, whose previous title, by devise
from his father, was admitted. The consid-
eration of said deed was a note, given to the
demandant by the tenant and a surety, for
$4,G00, payable In six years, with yearly in-
terest. On this note were sundry indorse-
ments, reducing it to about $3,000. Some of
these indorsements were in the hand-writing
of the tenant, and some in that of the de-
mandant. The demandant did not offer to re-
turn the note or the money received.
The tenant sold the said farm, and part of
said outlands for a sum somewhat exceeding
$5,000; and a writ of entry was commenced
against his grantee, by the demandant, to re-
cover the same; which writ was returnable
at a term subsequent to that at which the
present action was tried.
It appeared that the tenant went into pos-
session under said deed, and was In posses-
sion of the demanded premises, when this ac-
tion was commenced, claiming title thereto
under said deed.
The demandant, to avoid the effect of the
said conveyance to the tenant, offered to
prove that he was insane when it was ex-
ecuted by him, and also that it was obtained
by undue influence. The evidence which he
introduced tended to show that he had been
insane and sane, at different times, for a
number of years prior to the making of said
conveyance, and also since.
The tenant requested the Judge who tried
the cause to instruct the jury: "That if the
demandant was subject only to temporary
turns of insanity, and insane when he made
the deed, yet if, after he became sane, and
when sane, he did acts in affirmation of the
contract, as by receiving payments on the
note, and the like, he could not afterwards
maintain an action to avoid the deed on the
ground of insanity; that, as between the pres-
ent parties, this action could not be main-
tained for one of several parcels described in
the deed, and remaining in the possession of
the tenant; and that the demandant, to main-
tain his action, should return the note and
yio money received."
The judge instructed the jurj', that if they
were satisfied that the demandant was not
of sane mind when he made the deed, it was
void absolutely, and not voidable merely, and
that the receipt of money on tlie note would
not bar an action, though the demandant was
sane at the time he received it; that it was
not necessary for him to return the note or
money received, under the circumstances of
this suit; and that the demandant was not
obliged to demand in this action all the par-
cels in the possession of the tenant and un-
sold.
The jury found that the deed was made
when the demandant was Insane, and they
did not consider the allegation of fraud.
New trial to be granted, if the ruling of the
judge was incorrect; otherwise, judgment to
be rendered for the demandant, on the ver-
dict
Mr. Huntington, for the tenant
Forbes, for the demandant
Wells &
DEWEY, J. The quf stion raised In the
present case is whether the deed of one who
is insane at the time of the execution thereof
is void absolutely, or merely voidable.
The term "void," as applicable to convey-
ances or other agreements, has not at all
times been used with technical precision, nor
restricted to its peculiar and limited sense
as contradistinguished from "voidable"; it be-
ing frequently Introduced, even by legal writ-
ers and jurists, where the purpose is nothing
further than to indicate that a contract was
invalid, and not binding in law. But the dis-
tinction between the terms "void" and "void-
able," in their application to contracts, is often
one of great practical importance; and when-
ever entire technical accuracy is required the
term "void" can only be properly applied to
those contracts that are of no effect whatso-
ever; such as are a mere nullity, and incapa-
ble of confirmation or ratification.
This question, then, arises: Is the deed of
a person non compos mentis of such a char-
acter that it is incapable of confirmation?
This point is not now for the first time raised,
but has been the subject of comment both by
elementary writers and in judicial opinions.
Mr. Justice Blackstone, in his Commentaries
(volume 2, p. 291), states the doctrine thus:
"Idiots, and persons of non-sane memory, in-
fants, and persons under duress, are not to-
tally disabled to convey or purchase, but sub
modo only, for their conveyances and pur-
chases are voidable, but not actually void."
Chancellor Kent says, "By the common law,
a deed made by a person non compos is void-
able only, and not void." 2 Kent, Comm.
(4th Ed.) 451. In Wait v. Maxwell. 5 Pick.
217, this court adopted the same principle, and
directly ruled that the deed of a non compos,
not under guardianship, was not void, but
voidable. Such a deed conveys a seizin to the
grantee, and the deed, to that extent is valid,
until, by entry or action the same is avoided.
Mitchell V. Kingman, 5 Pick. 431, is to the
like effect In Seaver v. Phelps, 11 Pick. 305,
the contracts of ins;ine persons are noticed
as contracts not absolutely void, but voidable.
It may seem somewhat absurd to hold that
a deed should have any effect when wanting
in one of the essential elements of a valid
contract, viz. that of parties capable of giv-
ing an assent to such contract But this ob-
320
CAPACITY OF PARTIES.
jection as strongly applies to cases of deeds
executed by infants, who axe aJike wanting
in capacity to make a binding contract Yet
this principle of giving so much effect to the
contract as removes it beyond that of a mere
nullity, and renders it, to some present
purpose, effectual, and susceptible of complete
future ratification, is well settled and under-
stood as to infants who enter into contracts;
and it will be found that there is a common
principle on this subject, alike applicable to
the inability of a contracting party, arising
from lunacy or infancy. The civil and the
common law writers group together idiots,
madmen, and infants, as parties incapable of
contracting for want of a rational and delib-
erate consenting mind. 1 Story, Eq. § 223,
and authorities there cited.
It is true that the rule of the common law,
as held at one time, seemed to sanction, in
one particiilar, a most xinwarrantable distinc-
tion between the cases of deeds made by per-
sons non compos and those made by infants;
holding that the former could not be avoided
by the party, upon the ground that no man of
fiill age should be admitted to stultify him-
self, although it allowed privies in blood, or
privies in representation, after the death of
the non compos, to avoid the deed, on the
ground of incapacity in the grantor. This
•distinction has not been adopted by out
courts. On the contrary, we hold that such
conveyance by one non compos mentis may be
avoided by himself, as in the case of an in-
fant grantor. This principle was directly
recognized in the case of Mitchell v. King-
man, 5 Pick. 431. Indeed, the English rule
has, in modem times, been often questioned
in England; and in the courts of our sister
states it has received little if any sanction.
1 Story, Eq. § 225, and cases there cited.
It was urged by the demandant's counsel
that the doctrine that the deed of a non com-
pos person was voidable only, and not void,
was to be limited to feoffments, or cases
where there is livery of seizin, or what is
equivalent, and would not embrace a convey-
ance by an unrecorded deed. But we do not
think that such a distinction can be main-
tained. As between the grantor and gran-
tee, such unrecorded deed is good and effec-
tual, by force of our statute; and the effect
of such a conveyance would be to vest the
title of the grantor in the grantee immediately
upon the execution of the deed, and before
the same is recorded. Marshall v. Fisk, 6
Mass. 31. A deed made in proper form, and
duly acknowledged and recorded, is, in this
commonwealth, equivalent to a feoffment
with livery of seizin. Somes v. Brewer, 2
Pick. 197. Without the registry, where the
delivery of the deed is accompanied by the
surrender of the possession of the conveyed
premises to the grantee, the effect would be
the same as to the conveyance by a non com-
pos as would result from a feoffment made
by him. A deed of bargain and sale, it is
said, places the grantee upon the footing of a
feoffment, as it passes the estate by the de-
livery of the hand; such grants or deeds as
take effect by delivery of the hand being
voidable only. Somes v. Brewer, 2 Pick. 197;
Zouch v. Parsons, 3 Burrows, 1S04. We
come, therefore, to the result, that the deeds
of infants and insane persons are alike void-
able, but neither are absolutely void.
Upon the trial of the present action the
plaintiff put his case upon two distinct
grounds: 1st. That he was insane at the
time he executed the deed under which the
tenant derives his title: 2d. That the deed
was obtained by vmdue influence and fraud
on the part of the tenant. Upon both these
points the plaintiff introduced evidence.
What was the extent of the evidence upon
the latter ground, and what would have been
the finding of the juiy upon that point, we
have no means of judging. This was a dis-
tinct and independent ground, and one which,
if found hi favor of the demandant, might
have been decisive of the case, but which, in
the final disposition of the cause, was not
considered or passed upon by the jury. AU
the evidence, therefore, bearing upon this
point, is now to be treated as if never of-
fered, and the sole inquiry for our considera-
tion is whether the instructions of the court
were such, in matter of law, that the verdict
may be maintained, taken as it was upon the
first ground solely.
The presidin£_iudge_juled, as a matter of
la w. tEafXdeed of an lns ane_person was ab-
solutely vo id. Under this ruling, all that
'was required of the demandant to entitle
himself to a verdict in his favor was to show
a temporary insanity at the time of the exe-
cution of the deed. No matter what might
have occurred subsequently, or how soon
afterwards the demandant might have been
restored to a sound mind; no matter what
acts of confirmation may have been done by
him, or however fully he may have adopted
and ratified the transaction, by the receipt of
money, or other valuable consideration paid
for the land,— still the legal title in the land
would be in him. This was the necessary
result of the doctiine that the deed of a non
compos was absolutely void, while, if it had
been held only voidable, these subsequent acts
of the party might materially affect the ver-
dict of the jury. But adopting, as we do,
the principle that the deed of an insane per-
son is only voidable, this, while it gives the
insane grantor full power and authority to
avoid his deed, and thus furnishes full pro-
tection to him against all acts injurious to his
interests, done while he was non compos,
also entitles the other party to set up the
deed, if he can show a ratification or adoption
of it by the grantor, after he is restored to
a sound mind. If the grantor when thus
capable of acting, and with full knowledge of
his previous acts, and of the nature and ex-
tent of them, will deliberately adopt and rat-
ify them; if he will knowingly and in the
exercise of his proper faculties, take the bene-
INSANE PERSONS AND IDIOTS.
521
fit of a contmct mado while he was Insane,—
it is competent fur him to do so. But the
consequence will be, to give force, effect, and
legal validity to his contract, which was be-
fore voidable.
In the present case, therefore, upon the
point first relied upon In the defence, viz.
that the demandant was In.sane when he ex-
ecuted the deed, the jury should have been
Instructed that this fact. If established, ren-
dered the deed voidable, and that it was com-
petent for the demandant to avoid it on that
ground If not estopped by his subsequent acts,
done while in his ri^^ht mind; but that a
voidable deed was capable of confirmation;
and that If the grantor, in his lucid Intervals,
HOPK. BEL. 0A8. CONT. — 2 1
or after a general restoration to sanity, then
being of sound mind and well knowing and
imderstanding the nature of the contract, rat-
ified it, adopted it :!- a valid contract, and
participated in the beuffits of it by rtH^e.ving
from the purchaser the purchase money due
on the contract, this would give effect to the
deed, and render the same valid in the hands
of the grantee, and would thus become ef-
fectual to pass the lands, and divest the title
of the grantor. Such Instructioas would have
presented the question in ls.sue in a different
aspect to the jury, and might have led to a
different result upon the only point upon
which they passed.
Verdict set aside, and a new trial granted-
R?2
CAPACITY OF PARTIES.
/y
c
C^"-
HOVEY V. HOBSON. /^ ^
(53 Me. 451.) / S; ^ .
Supreme Judicial Court of Maine.
A. MerriD, for plaintiff. H. P. Deane, for
defendant.
APPLETON, C. J. On July 27, 1835, Ste-
phen Xeal, then owning the land in contro-
versy, conveyed the same to Samuel E, Crock-
er, from whom the tenant by various mesne
conveyances derives his title.
On Dec. 28, 1836, Stephen Neal died, leav-
ing Lydia Dennett, then wife of Oliver Den-
nett, his sole heiress at law. On Dec. 18,
1851, Oliver Dennett died.
On July 15, 1858, Lydia Dennett conveyed
the demanded premises to the plaintiff.
The plaintiff introduced evidence tending
to show that Stephen Neal at the date of
his deed to Crocker was insane, and claimed
to avoid said deed by reason of such insan-
ity.
After the testimony reported had been in-
troduced, the presiding justice ruled "that,
if Samuel E. Crocker without fraud, for an
adequate consideration, purchased the land
of Stephen Neal, and afterwards said Crock-
er and those claiming under him, conveyed
said land in good faith until it came into the
hands of the tenant, for a valuable consider-
ation, without any knowledge on his part of
any defect in the title, or of any right or
claim of any other person therein, then Mrs.
Dennett or those claiming under her could not
avoid her father's deed as against the de-
fendant, on the ground of his unsoundness
of mind; and that the tenant would be en-
titled to a verdict."
If Crocker, "without fraud, for an ade-
quate consideration, purchased the land of
Stephen Neal," Neal being sane, his grantees
would undoubtedly acquire a good title. The
ruling Is that, if insane, the same result
would follow, the grantees of Crocker being
bona fide purchasers, and ignorant of the
Insanity of Neal. The questions therefore
arise, (1) as to the rights of an insane man
when restored to sanity, or of his heirs to
avoid, as against his immediate grantee, his
deed executed and delivered when insane;
and, (2) as to the rights of those deriving
a title in good faith without notice, and for
a valid consideration from such grantee.
1. The deed of an insane man not under
guardianship is not void but voidable, and
may be confirmed by him if afterwards sane,
or by his heirs. If under guardianship, the
deed is absolutely void. Wait v. Maxwell, 5
Pick. 219. The right of avoiding a contract
exists, notwithstanding the person with
whom the insane man contracted was not
apprized of and had no reason to suspect
the existence of such insanity, and did not
overreach him by any fraud or deception.
Seaver v. Phelps, 11 Pick. 304. So an infant
may avoid his contract, though the person
dealing with him supposed him of age (Van
"Winkle v. Ketcham, 3 Caines, 323); or even
when he fraudulently and falsely represent-
ed himself of age (Conroe v. Birdsall, 1
Johns. Cas. 127). The deed of an insane man
being voidable, he may ratify it after he be-
comes sane, or his heirs after his decease.
Allis V. Billings, 6 Mete. Olass.) 415. An in-
sane person or his guardian may bring an
action to recover land of which a deed was
made by him while insane, without first re-
storing the consideration to the grantee, the
deed not having since been ratified nor con-
firmed. Gibson v. Soper, 6 Gray, 279. In
this case, the remark of Shaw, C. J., in Ar-
nold V. Iron Works, 1 Gray, 434, that if "the
unfortunate person of unsound mind, com-
ing to the full possession of his mental facul-
ties, desires to relieve himself from a con-
veyance made during his incapacity, he must
first restore the price. If paid, or surrender
the contract for it, if unpaid," is limited and
restricted by Thomas, J., "to the case of a
grantor having in his possession the notes
which were the consideration of the deed
and restored to the full possession of his
mind." In the deed or other contract of an
insane man the consenting mind is wanting.
"To say that an insane man," observes
Thomas, J., 'Tiefore he can avoid a voidable
deed, must first put the grantee in statu quo,
would be to say, in effect, that, in a large
majority of cases, his deed shall not be
avoided at all. The more insane the grantor
was when the bargain was made, the less
likely will he be to retain the fruits of his
bargain, so as to be able to make restitution.
It would be absurd to annul the bargain for
the mental incompetency of a party, and yet
to require of him to retain and manage the
proceeds of his sale so wisely and discreetly
that they shall be forthcoming, when with
restored intellect he shall seek its annul-
ment" Lunatics and persons non compos
are not bound by their contracts, though no
fraud nor imposition has been practiced on
them. Chew v. Bank, 14 Md. 318.
The ruling presupposes a sale without
fraud and for an adequate consideration.
That a grantor sold his land for a fair price,
that the purchase money was fully secured,
that in the transaction he evinced by his
conduct a knowledge of the value of his
property and capacity in its management,
would go far to negative an utter incompe-
tency to contract, inferable only from a loss
of memory common to old age or from a
disregard of the decencies or courtesies of
life. So the conversion by a feeble old man
past labor, of property unproductive and bur-
dened by taxation, into notes well secured
and bringing an annual income, would hard-
ly be deemed proof of utter imbecility, if the
price was equal to the fair market value of
the property sold.
As the deed of an insane man is voidable
only, it follows that it is capable of subse-
quent ratification by the grantor if he be re-
stored to reason, or by his heirs. The reten-
INSANE PERSONS AND IDIOTS.
323
tion of the notes after such restoration and
the receiving payments on them, would be
evidence of such ratification. In the analo-
gous case of infancy, it scorns that there may
be an acquiescence by the grantor under
such circumstances as would amount to an
eqiiitable estoppel. In Wallace's Lessee v.
Lewis, 4 liar. 75, it was held, that an In-
fant's acquiescence in a conveyance for four
years after age and seeing the property ex-
tensively improvetl, would be a confirmation.
Though mere lapse of time will not amount
to a confirmation, unless continued for twen-
ty years, yet in connection with other cir-
cumstances It maj' amount to a ratification,
Crosinger v. Welch, 15 Ohio, 15G; Wheaton
V. East, 5 Yerg. 41. Whether, in the case be-
fore us, the deed of Stephen Ncal has been
affirmed by the reception, by those author-
ized, of the purchase money for the land, or
the heir at law after the death of her hus-
band or the passage of the laws in relation
to maiTied women is equitably estopped by
her omission to act under circumstances
which required action on her part, are ques-
tions which at this time are not pressing for
consideration.
It Is true the English courts adopt a some-
what different doctrine from that of the
.\merican courts as to the right of an in-
sane man when sane, or of his heirs to
avoid a deed or contract executed when in-
sane. Thus, In Solby v. Jackson, 6 Beav.
200, Lord Langdale refused to set aside a
deed executed in good faith by an insane
man and for an adequate consideration,
when the parties could not be reinstated.
"There are." observes Tuck, J., in Chew v.
Bank, 14 Md. 318, "many cases in England
to show that such persons are held by their
i-ontracts unless fraud and Imposition have
l)oen practiced, but to this we cannot assent.
The doctrine in this country is the other
way, and, as we think. Is sustained by bet-
ter reasoning than the English rule as an-
nounced in some of their decisions. The ef-
fect in many cases would be to place luna-
tics on the same footing with persons of
sound mind, with less effective means to
protect the injured party against the fraud,
for at law, as well as in equity, fraud or
imposition may be relied on, without refer-
ence to the mental capacity of the parties
except so far as such defect may give weight
to other facts, from which the fraud may be
deduced."
The ruling, however, in the case at bar, ia
not in accordance with that of the English
courts, which require that, in addition to good
faith and a full consideration, the person con-
tracting should be apparently of sound mind,
and not known to be otherwise to the party
with whom he contracts. Molton v. Camroux,
2 Exch. 487. These elements are not requir-
ed by the ruling under consideration.
2. It is Insisted, even if the deed of Neal
might have been avoided as between the orig-
inal grantor and grantee, that this right of
avoidance ceases when the title has passed
into the hands of third persons in good faith,
for an adequate consideration, and ignorant
of any facts tending to impeach such title.
It is apparent that the protection of the
insane and the idiotic will be materially di-
minished, If the heirs cannot follow the projicr-
ty conveyed, but are limited in their rigiit
of avoidance to the Immediate grantee of such
Insane or idiotic person.
The acts of lunatics and infants are treated
as analogous, and subject to the same rules.
Key V. Davis, 1 Md. 32; Hume v. Barton, 1
Ridg. PI. 77. "The grants of infants and
persons non compos are parallel both in law
and reason." Thompson v. Leach, 3 Mod. 310.
The law is well settled that a minor when
of age may avoid his deed given when an in-
fant. He may do this not merely against his
grantee, but he may follow the title wherever
it may be found and recover his land. "It
may be objected," observes Marshall, J., in
Myers v. Sanders' heirs, 7 Dana, 524, "that
these restrictions upon the right of an adult
to avoid his deed obtained by fraud are incon-
sistent with the principle which allows an in-
fant to avoid his deed, into whose hands
soever the bill may have passed and without
regard to time, except as a statutory bar run-
ning after he becomes of age. But, waiving
the inquiry how far the mere acquiescence
of an infant grantee after he becomes of age
may determine his right of revoking his title
from the hands of a purchaser for value, who
has acquired it after such acquiescence, we
think the analogy between the cases is too
slight to have any decisive influence upon the
present question. The right of an infant to
avoid his deed is an absolute uncontrollable
privilege, founded upon an incapacity con-
clusively fixed by the law to bind himself ab-
solutely by deed or to pass an indefeasible
title. These principles are irreversibly fixed
by the law, and it enforces them without in-
quiring into particular circumstances, and
without regard to consequences. It must do
so in order to maintain them. The right of
an adult grantor, to avoid his deed for fraud,
stands upon an entirely different basis. It
grows out of the particular circumstances; it
is founded in a regard to justice between man
and man; it is given as a remedy for the
hardship of his case. In its very foundation
and essence, it is limited by the justice which
is due to others, and therefore cannot be ex-
ercised without a regard to their rights and
\nterests."
"But again, infancy is not, like fraud, a
circumstance wholly extraneous from the ti-
tle. The deed shows who the grantee is; the
purchaser knows tl.at an infant grantee can-
not pass an indefeasible title; he is bound to
know the identity of the person, who assumes
to convej- the title; and It Is not an unrea-
sonable requisition that he shall know wheth-
er the grantee, under whom he claims title.
Is under incapacity or not. In this view of
the subject, no purchaser under an infant's
324
CAPACITY OF PARTIES.
deed is innocent In the eye of the law, until
the title has been confirmed by the matured
consent of the grantor." In Bool v. jMix, 17
Wend. 119, the suit was against one claim-
ing by a title derived from the grantee of
the minor, but the ground was not taken
that in consequence thereof the tenant had
an indefeasible title. The principles applica-
ble to deeds voidable for the Infancy of the
grantor are equally applicable where the gran-
tor is insane. When a man is defrauded, he
may, as against his grantee, avoid his deed,
but not against those deriving in good faith
and for an adequate consideration a title from
such grantee. He has the ability to convey
an indefeasible title,— and he does convey
such title to all bona fide purchasers from his
grantee. The insane man has not the power
to convey such indefeasible title. This in-
capacity inheres in all titles derived from
him. The grantee, whose title is thus deriv-
ed, must rely on the covenants of his deed.
He risks the capacity to convey of all through
whom his title has passed. The right of
infants and of the insane alike to avoid their
contracts is an absolute and paramount right,
superior to all equities of other persons, and
may be exercised against bona fide purchasers
from the grantee. 1 Am. Lead. Cas. 259.
Exceptions sustained. The case to stand
for triaL
CUTTING, WALTON, DICKEESON. DAN-
FORTH and TAPLEY, JJ., concurred.
INSANE PEKSONS AND IDIOTS.
325
MUTUAL LIFE INS. CO. t. BDQNT.
(79 N. Y. &41.)
Court of Appeals of New York. 1879.
Robert P. Harlow, for appellanta. Win-
chester Britton, lor respondent.
DANFORTH, J. The action is for the fore-
closure of a bond and mortgage, dated April
23, 1S70, and then executed by the defendant
Hunt for the purpose of securinj,' lu the
plaintiff the payment of $4,000 on the 1st of
September, 1S71. The complaint shows that
interest was paid on the 1st of March, 1871,
but default made in September following;
that in December, 1871, the defendant Hunt
was adjudged a lunatic, and Arnold H. Wag-
ner appointed committee of her person and
estate. He was made co-defendant with
her; and in her behalf, and by way of de-
fense, alleges "that at the time of the exe-
cution of the bond and mortgage she was a
lunatic, and incapable of making or execut-
ing them." The issue thus presented was
tried before a careful and experienced judge
at special term and he found as a fact:
"That at the time of the execution and de-
livery of the bond and mortgage, the said
Camilla Hunt was of sound mind, and was
capable of making and executing said bond
and mortgage," and ordered judgment in ac-
cordance with the prayer of the complaint.
The finding is well warranted by the evi-
dence, and upon this ground alone we should
be required to affirm the judgment
But the learned court at general term went
beyond it and for the purposes of the ap-
peal assumed, without deciding the contrary
of the finding to be the truth, yet held that
as the case presented a contract executed
upon a valuable consideration, of which the
lunatic had the benefit, made by the plain-
tiff "in good faith, without fraud or unfair-
ness, without knowledge of the insanity, and
without notice or information calling for in-
quiry," the plaintiff was entitled to recover.
The correctness of this conclusion is strenu-
ously assailed by the learned counsel for the
appellant, but both upon principle and au-
thority we think it must be sustained. Up-
Dn principle because the plaintiff's money
was had by the defendant, appropriated to
her use, and thus tended to increase the oody
of her estate, and although in some cases a
man ma.v now, notwithstanding the old com-
mon-law maxim to the contrary (Beverly's
Case, 2 C3oke, 508, pt 4, 123b), "be admitted
to stultify himself" yet he cannot do so to
the prejudice of others, for he would thus
make his own misfortune an excuse for
fraud, and against that the doctrine of the
maxim stands unaffected by any exception.
1 Story, Eq. Jur. § 22G. In this case the loan
was made in the ordinary course of business;
it was a fair and reasonable transaction; the
defendant acted for herself, but with the aid
of an attorney; if mental unsoundness ex-
isted it was not known to the plaintiff, and
the parties cannot now be put in statu quo.
The defendant was therefore properly held 11
able.
Very much in point and upon circumstan-
ces similar to those above stated was Mol-
ton V. Camroux, 2 Welsh. H. & G. 487; af-
firmed in error, 4 Welsh. H. & G. 17. Con-
cerning it the chancellor, in Elliott v. luce,
7 De Gex, M. & G. 487, says: "The principle
of that case was very sound, viz.: that an
executed contract, when parties have been
dealing fairly and in ignorance of the lunacy,
shall not afterward be set aside; that was a
decision of necessity, and a contrary doc-
trine would render all ordinary dealings be-
tween man and man unsafe." And so it
has been held, and like contracts enforced
upon the same principle, in repeated instan-
ces, in the courts of this and other states.
Loomis V. Spencer, 2 Paige, 153; Matter of
Beckwith, 3 Hun, 443; Canfield v. Fairbanks.
03 Barb. 401; Banlv v. Moore, 78 Pa. St 407;
Wilder V. Weakley, 34 Ind. 181; Matthiessen
V. McMahon, 38 N. J. Law, 536; Behrens v.
McKenzie, 23 Iowa, 333. These cases stand
on the maxim, "that he who seeks equity
must do equity," and it is applicable to the
case in hand; for the defendant seeks to
deprive the plaintiff of its remedies to en-
force the security while she retains the ben-
efit of the contract This is so plainly in-
equitable and unjust as to render a further
discussion unnecessaiy. Nor does the fact
that the borrower was subsequently, upon
inquisition taken, declared to be insane, al-
ter the result. Such proceeding has no ef-
fect upon a contract made without such no-
tice, and on the faith of the presumption tliat
the person contracted with was of compe-
tent understanding.
The judgment should be affirmed.
All concur.
Judgment affirmed.
326
b
i^
SEAVER V. PHELPS. ^^
(11 Pick. 304.)
Supreme Judicial Court of Massachusetts.
CAPACITY OF PARTIES
3
Hampden- Sept. Term, 1S31.
Trover, to recover the value of a promis-
sory note, pledged by the plaintiff to the de-
fendant. The suit was brought on the ground
that the plaintiff was in a state of insanity
at the time when he made the pledge. At the
trial in the common pleas, before Williams,
J., the counsel for the defendant requested
the judge to instruct the jury, that although
they should believe the plaintiff was insane
and incapable of vrndurstauding at the time of
making the contract, yet that if tlie defendant
was not apprized of that fact, or had no rea-
son, from the conduct of the plaintiff" or from
any other source, to suspect it, and did not
oven-each or impose upon the plaintiff', or
practise any fraud or unfairness, then the
contract was not to be annulled. But the
judge held this not to be law, and instructed
the jury otherwise; and the jurj' returned a
verdict for the plaintiff. To this opinion the
defendant excepted.
Mr. WUlard, in support of the exceptions.
G. Bliss and G. Ashmun, opposed.
WHLiDE, J., delivered the opinion of the
court. The general doctrine that the eon-
tracts, and other acts in pais, of idiots and
insane persons, are not binding in law or
equity, is not denied. Being bereft of reason
and understanding, they are considered in-
capable of consenting to a contract, or of do-
ing any other valid act And although their
contracts are not generally absolutely void,
but only voidable, the law takes care effectu-
ally and fully to protect their interests; and
will allow them to plead their disability in
avoidance of their conveyances, purchases and
contracts, as was settled in Mitchell v. King-
man, 5 Pick. 431. And such is probably the
law in England at the present day, although
the doctrine for a long time prevailed there,
that no one should be allowed to plead his
own incapacity and to stultify himself. These
principles are not controverted by the de-
fendant's counsel; but they maintain, that
if the plaintiff was of unsound mind and in-
capable of understanding, at the time he
pledged the note to the defendant, yet if the
defendant was not apprized of that fact, or
had no rea.son to suspect it from the plain-
tiff's conduct, or from any other source, and
did not overreach him, or practise any fraud
or unfairness, then that the contract of bail-
ment was valid and binding, and could not be
avoided in the present action. And they re-
quested the court of common pleas so to in-
struct the jury. That court, however, were
of opinion that the law was otherwise, and
we all concur in the same opinion. K It had
been only proved that the plaintiff was a per-
son of weak understanding, the instructions
requested would have been appropriate and
proper. For every man after arriving at full
age, whether wise or unwise, If he be compos
mentis, has the capacity and power of con-
tracting and disposing of his property, and
his contracts and conveyances wUl be valid
and binding, provided no undue advantage
be taken of his imbecility.
It is sometimes difficult to determine what
constitutes insanitj% and to distinguish be-
tween that and great weakness of imder-
standing. The boundary between them may
be very narrow, and in fact often is, although
the legal consequences and provisions attach-
ed to the one and the other respectively are
widely different.
In the present case however this point is
settled by the verdict, and no question is
made respecting it. We are to consider the
plaintiff as in a state of insanity at the time
he pledged his note to the defendant; and this
being admitted, we think it cannot avail him,
as a legal defence, to show that he was ig-
norant of the fact, and practised no imposi-
tion. The fairness of the defendant's condjjct
cannot silpply" The plaintin s want of "cap acity
-—- The dufg hdant's counsel rely principally on
a distinction between contracts executed, and
those which are executory. But if this dis-
tinction were material, we do not perceive
how it is made to appear that the contract
of bailment is an executed contract, for if the
note was pledged to secure the performance
of an executory contract, and was part of
the same transaction, it would rather be con-
sidered an executory contract. But we do
not consider the distinction at aU material.
It is well settled that the conveyances of a
uon compos are voidable, and may be avoid-
ed by the writ dum fuit non compos mentis,
or by enti-y.
The case of Bagster v. Earl of Portsmouth,
5 Barn. & C. 172. but more fully reported in 7
Dowl. & R. 614, has been relied on as coimte-
nancing the distinction contended for, and to
show its bearing on the point in question;
and it is true that some of the remarks which
fell from the court in giving their opinion,
may be thought to have some bearing in this
respect. But the point decided, and the
grotmds of the decision, not only fail to sup-
port the defence in this action, but may be
considered as an authority in favor of the
plaintiff. That was an action of assumpsit
for the use of certain carriages hired by the
defendant he being at the time of unsound
mind, and judgment was rendered for the
plaintiff, on the ground that no imposition
had been practised on his part; and particu-
larly because the carriages furnished appear-
ed to be suitable to the condition and degree
of the defendant considering the contracts
of a non compos on the same footing as those
of an infant; and the court say in Thompson
V. Leach, 3 Mod. 310, "that the grants of In-
fants, and of persons non compos, are par-
allel both In law and reason." Now no one
would, we apprehend, undertake to maintain
that the plaintiff would have been bound, if
he had been a minor when he pledged the
INSANE PEliSONS AND IDIOTS.
327
note. It does not appear to have been pledged
for necessaries; and all contracts of infants
are either void or voidable, unless made for
education or necessaries suitable to their
degree and condition. And even If the note
had been pledged as security for the payment
of necessaries, it would not have been bind-
ing if the plaintiff had been an infant For
a pledge is in the nature of a penalty, and
may be forfeited, and can be of no advantage
to the infant, and therefore shall not bind
him.
If then idiots and Insane persons are lia-
ble on their contracts for necessaries, they
are certainly entitled to as much protection
as infants. It matters not, however, how
this may be, since the contract in question
is not one for necessaries.
In the case of Browne v. Joddrell, 1 Moody
& M. 105, Lord Tenterden expressed an
opinion, that in assumpsit for goods sold and
delivered and for work and labor, it would be
no defence that the defendant was of un-
bound mind, unless the plaintiff knew of, or
In any way took advantage of his Incapacity,
to Impose on him. This, however, was an
opinion expressed at nisi prius, and whether
the opinion was followed up to the final de-
cision of the cause or not, does not appear.
But however this may be, the opinion is
founded on the old rule, somewhat qualified,
that no one can be allowed to plead his own
disability or incapacity, in avoidance of his
contracts. This rule having been wholly ex-
ploded in this commonwealth. Lord Tenter-
don's opinion can have no weight here, un-
less some good reason could be shown for
overruling the case of Mitchell v. Kingman;
which we think cannot be done.
We are aware that insanity is sometimes
hard to detect, and that persons dealing with
the insane may be subjected to loss and dif-
ficulty; but so they may be by dealing with
minors. The danger, however, cannot be
great, and seems to furnish no sufficient cause
for modifj-ing the rules of law in relation to
Insane people, if we had any power and au-
thority so to do; which we have not.
Judgment of com*t of common pleas afflrm<
ed.
il
:r
CAPACITY OF PARTIES.
SAWYER V. LUFKIN.
(56 Me. 308.)
Supreme Judicial Court of Maine,
1868.
Hancock.
The following is the official report:
Assumpsit on an account annexed, for "la-
bor in taking care" of the defendant "144
weeks, to March, 1859, at $1.50 per week,"
with certain credits.
On the part of the plaintiff it appeared that
the defendant was insane, and entirely in-
capable of taking care of herself; that her
family consisted of herself and two minor
sons; that in May, 1856, at the request of
one of the sons, who was then about eighteen
years of age, the plaintiff went to the defend-
ant's house, and nursed and took care of her;
that she found her in a very filthy condition
as to clothing, etc.; that the defendant was
violent at times, and needed much care; that
the guardian came to the defendant's house
but two or three times during the whole time
the plaintiff was there, and exercised no con-
trol and furnished nothing; that the plaintiff
continued there during the time mentioned In
the writ; and that the defendant's sons were
absent most of the time.
Thomas S. Puller appeared as guardian of
the defendant, duly appointed prior to the
time the plaintiff's services were rendered,
established his guardianship, contested the
plaintiff's claim, and offered testimony tend-
ing to prove thrit the guardian contracted with
the defendant's sons to take care of and sup-
port their mother, that in consideration there-
of they were tc be paid out of her property,
and that the items of credit were received
from the sons. If the action was maintain-
able, the action was to stand for trla'.
Mr. Eaiowles, for platntifu
C. J. Abbott, for defendant
There Is no conflict between sections 7 and
22, c. 67, Rev. St., the former includes those
under as well as those over twenty-one years
of age.
They have different objects; the former
renders void all contracts and transfers of
property made during the pendency of an ap-
plication for the appointment of a guardian;
the other declares all contracts and- transfers
of property made by persons over twenty -one
years of age and under guardianship to be
imqualifi&dly and absolutely void, notwith-
standing the death, resignation, or removal
of the guardian.
APPLETON, C. J. This, is an action for
necessaries furnished the defendant, an in-
sane person, over twenty-one years of age,
and under guardianship. The guardian ap-
pears and contests the plaintiff's claim,
K necessaries are furnished a person in this
condition in good faith and under circum-
stances justifying their being so furnished,
the person furnishing may recover. If the
law were not so, the insane might perish, if
a guardian, having means, should neglect or
refuse to furnish the supplies needed for their
support They stand in the same position as
minors, and are liable for necessaries. Seaver
V. Phelps, 11 Pick. 304; Leach v. Marsh, 47
Me. 548. Such is the rule of the common
law.
Nor is this limited liability changed by Rev.
St. 1857, c. 67, § 22, which provides that
"when a person over twenty years of age is
under guardianship, he shall be deemed in-
capable of disposing of his property other-
wise than by his last will, or of making any
contract, notwithstanding the death, resigna-
tion or removal of the guardian," etc. This
prohibits all express contracts by the insane.
They cannot be liable on any express prom-
ise. But their estate may be held when
the law implies one. The insane must not
be allowed to starve, though the guardian is
dead, has resigned or been removed. The es-
tate of the insane is legally, as well as eq-
uitably, liable for necessaries furnished in
good faith, and under circumstances justify-
ing their being so furnished. McCrillis v.
Bartiett, 8 N. H. 569; 1 Pars. Cont. 313 et
seq. The case to stand for trial.
KENT, WALTON, BARROWS, and DAN-
FORTH, JJ., concurred-
DRUNKEN PEKSOXS.
329
^^
BARRETT v. BUXTON, l^i
(2 Aik. 167.)
Supreme Court of Vermont.
Jan., 182G.
Rutland.
Assumpsit, on a promissory note, for the sum
of one thousand dollars aud the interest. Plea,
the general issue.
The case was, the plaintiff and defendant
had entered into a written contract for an ex-
change of certain real estate, and the note was
given on that occasion, by the defendant to the
plaintiff, for the diJIcreuce money agreed to be
paid, between the two parcels of real estate.
The plaintiff afterwards executed a deed on
his part, according to the contract, and tend-
ered it to the defendant. The defendant re-
fused to accept the deed, or pay the note.
These facts being proved on the trial of the
issue, the defendant olTered testimon}- tending
to prove, that at the time of e.xeciitiug the said
contract and note, and of making the bargain
therein specitied, he was drunk, and thereby
incapacitated to judge of the nature or conse-
quences of said bargain. But the plaintiff ob-
jecting, the court refused to admit said testi-
mony, unless the same could be accompanied
with testimony, tending to prove that the said
drunkenness was procured by or at the instiga-
tion of the plaintiff. To which decision the
defendant excepted.
The defendant also offered testimony tend-
ing to prove, that the farm which he had
agreed to convey to the plaintiff, at the time of
giving said note, was actually worth as much,
or more than the premises which the plaintiff
had agreed to convey to the defendant in ex-
change This testimony, being objected to, the
court refused to receive; and to this decision
also, the defendant excepted.
A verdict was returned for the plaintiff; and
the defendant now moved that the same be set
aside, and for a new trial, for the reasons ap-
parent in the exceptions aforesaid.
The counsel for the defendant, in support of
the motion, relied on a recent decision of
*l(j8 this court in Addison countv. They*also
cited 1 Chitty's PI. 470, 479.-3 Campb.
33, Pitt vs. Smith.— Bull. N. P. 172.
For the plaintiff', it was contended, that
drunkenness will not relieve a man, for it is a
great offence and aggravates the act done, and
is no excuse for him. unless it was procured by
the contrivance or managonicnt of the man who
received the deed, or made the contract with
him.
To avoid any contract made, or deed given
by the party wlieu drunk, would be taking ad-
vantage of his own wrong; which no man ia
permitted to do. — 2 Co. Kcp. 5(58, Beverley's
case. — 1 Mad. Chancerj', 2;{8. — 1 Fonblanque 60.
.—3 Campb. Rep. 35.-4 Mass. ICl, Churchhill
vs. Suter.
Chauncey Langdon and Chs. K. "Williams,
for plain till.
Wm. Page and R. B. Bates, for defendant.
Tlie opinion of the Court was pronounced by
PRENTISS, J. This is an action upon a prom-
issory note, executed by the defendant to the
plaintiff for the sum of !?I000, being the differ-
ence agreed to be paid the plaintiff on a con-
tract for the exchange of lands. The agree-
ment of exchange was in writing, and the plain-
tiff afterwards tendered to the defendant a
deed, in performance of his part of the agree-
ment, which the defendant refused. The de-
fendant offered evidence to prove, that at the
time of executing the note and agreement, he
was intoxicated, and thereby incapable of judg-
ing of the nature and consequences of the bar-
gain. The court refused to admit the evidence,
without proof that the intoxication was pro-
cured by the plaintiff. The question is, whether
the evidence was admissible as a defence to the
action, or, in other words, whether the defend-
ant could be allowed to set up his intoxication
to avoid the contract.
This question has been already substantially
decided b\' the court on the present circuit;
but the importance of the question, and the
magnitude of the demand in this case, have led
us to give it further consideration. According
to Beverley's case, 4 Co. 123, a party cannot set
up intoxication in avoidance of his contract
under any circumstances. Although Lord Coke
admits, that a drunkard, for the time of his
drunkenness, is Twn ce decreed as against the feme covert or
her hoirs.
By the common law a feme covert could
not by uniting with her husband in any deed
or conveyance, bar herself or her heirs of
any estate of which she was seised in her own
right, or of li^r right of dower in the real es-
tate of her husband. This disability Is sup-
posed to be founded in the principle that the
separate legal existence of the wife is sus-
[)onded during the marriage, and is strength-
ened by the consideration that from the
nature of the connection, there is danger that
the influence of the husband may be im-
properly exerted, for the purpose of forcing
the wife to part with her rights In his favor.
The law therefore considers any such deed
or conveyance as the act of the husband only,
although the wife may have united In it, and
restrained its operation to the husband's in-
terest in the premises, and gives to it the
same effect as though he alone had executed
the conveyance.
The only mode in which a feme covert could
at common law convey her real estate, was by
uniting with her husband In levying a fine. This
Is a solemn proceeding of record. In the face
of the court, and the judges are supposed to
watch over and protect the rights of the wife,
and to ascertain by a private examination
that her participation in the act Is voluntary
and unconstrained. This is the principle up-
on which the efficacy of a fine is put by most
of the authorities. 3 Cruise, Dig. 153, tit
35, c. 10; 2 Inst. 515; 1 Vent. 121a. But
whatever may be the foundation of the doc-
trine, it is now fully established.
Our statute declares that no estate of a
feme covert residing in this state shall pass
by her deed, without a previous aclvnowledg-
raent made by her before a proper officer
apart from her husband, that she executed
such deed freely without fear or compulsion
of her husband. 1 R. L. 3G9. This provision,
it will be observed. Is an enlargement and
not a restraint of the common law powers
of a feme covert It authorizes a less formal
1 Irrelevant parts omitted.
mode of conveyance than was known to the
common law. It gives to her deed, when
duly aclcnowledged, the same power and ef-
fect as a fine; but if not acknowledged ac-
cording to the directions of the statute, it de-
clares that no estate shall pass by it. It
loaves It as It would have stood at the com-
mon law, if the statute had never been pas.**-
cd, absolutely void and inoperative.
It was conceded that such must be the con-
sequence at law; but it was contonded that
a court of equity would consider it as an
agreement to convey, and if it was shown to
have been voluntarily made for a valuable
consideration, would compel the wife or her
heirs specifically to perform It. This doctrine
appears to me to be unsound in principle and
unsupported by any color of authority. A
feme covert, by the principles of the common
law, is not only incapable of conveying her
real estate by deed, but she cannot, as a gen-
oral rule make a valid contract of any de-
scription Ln relation either to real or personal
property. This disability results from the
nature of the matrimonial connection. In
contemplation of law, the wife is hardly con-
sidered as having a separate legal existence.
She and her husband constitute but one per-
.son. She cannot bind either her husband or
herself by any contract. She may execute a
naked power, and as to her separate estate,
that is, such estate, either real or personal,
as is settled on her for her separate use, with-
out any control over it on the part of her
husband, a court of chancery for certain pur-
poses will consider her a feme sole, and her
contracts in relation to It may be binding
(5 Day, 496; 2 Kent, Comm. 137-141; 1
Johns. Gas. 450; 3 Johns. 77; 17 Johns. 548);
but her own lands, or her right of dower In
the lands of her husband are not her separate
estate, within the meaning of this rule. It
certainly will not be contended that the con-
veyance in this case can have any greater
effect than an express covenant on the part
of the hu.sl)and and wife to convey; and I
apprehend that an examination of the cas<">3
will show that such a covenant made during
coverture would be absolutely void against the
wife and her heirs, both at law and in equity.
The greatest extent to which the English
courts liave ever gone, is to hold that an ac-
tion would lie against a wife after the death
of her husband, upon a covenant of war-
ranty contained in a fine, executed by her and
her husband, though she was a feme covert
when it was levied. This was held in the
case of Wotton v. Helo, 2 Saimd. 178, and 1
Mod. 290. It was also held in some of the
earlier cases, that if baron and feme joined
in a lease for years by indenture of the wife':?
land, and she accepted rent after his death,
she was liable to the covenants in the lease.
Greenwood v. Tyber, Cro. Jac. 563, 564; 2
Saund. ISO, note 9. The acceptance of the
rent is a confirmation of the lease, and may
be considered equivalent to a new execution
332
CAPACITY or PARTIES.
and delivery, though the wife was at liberty,
after her husband's death, to avoid or affirm
It if she had chosen.
The doctrine that a wife is bound by her
covenant of warranty, entered into during
coverture, is considered by Chancellor Kent
(2 Kent, Comm. 140) as at war with the es-
tablished principle of the common law; that
she is incapable of binding hei-self by any
cou tract; and a contrary doctrine has been
expressly held, both in this state and in
Massachusetts (Fowler v. Shearer, 7 Mass. 21;
Colcord V. Swan, 7 Mass. 291). In these cases
it was observed, that although the deed of a
married woman is ipso facto void by the com-
mon law of England, j-et by the immemorial
usage of Massachusetts it would pass her es-
tate, and she would be estopped by her coven-
ants, though no action would lie against her
for a breach of them. But the supreme court
of this state, in Jaclison v. A^anderheyden, 17
Johns. 107, went still fiirther, and held that
a feme covert not only was not liable to an
action on the covenants contained in a deed
executed and acli;nowledged according to the
statute, by her and her husband, but that
she was not estopped by her covenant from
setting up any outstanding title to the premis-
es, or any other defence. Chief Justice Spen-
cer, in delivering the opinion of the court,
observed, that it was a settled principle of
the common law, that coverture disqualifies
a feme covert from entering into a contract
or covenant personally binding upon her. She
may at common law pass her real property
by a fine duly levied; and under our own
statute, she may also in conjunction with her
husband, on due examination before a com-
petent officer, convey her real estate; but
such deed cannot operate as an estoppel to
her subsequently acquired interest in the
same land.
There is a class of cases in which, where the
husband had expressly covenanted that his
wife should join in a fine of her real estate,
he has been decreed specifically to perform his
covenant, or to snfFer imprisonment by way
of penalty. Griffin v. Taylor, Toth. lOG; Har-
rington V. Horn, 2 Eq. Cas. Abr. 17, pi. 7;
Hall V. Hardy, 3 P. Wms. 187; Morris v.
Stephenson, 7 Ves. 474; Withers v. Pinchard,
cited in Morris v. Stephenson. In most of
those cases, however, it did not appear that
the wife had refused to unite in the fine; and
the only reason on which the decisions are
put, is, that it is to be presumed she was con-
sulted by her husband before he entered into
the covenant, and gave her assent to it. Lord
Cowper, however, questioned this doctrine in
Outread v. Round, 4 Viner, Abr. 203, pi.
4, cited m 1 Fonbl. 293, note 7, as did the
master of the rolls In Daniels v. Adams,
Ambl. 495. Its soundness was also denied by
Chief Baron Gilbert, in his Lex Prsetoria,
24.5, and most pointedly by Lord Eldon, in
Emery v. Wade, 8 Ves. 514, and in Martin
V. Mitchell, 2 Jac & W. 425. It was conceded
by the counsel and by Sir Thomas Plumer,
the master of the rolls, that such was not
the law at this day. The same opinion had
been previously expressed by the same learn-
ed judge, in Howell v. George, 1 Madd. Ch.
16.
The case of Baker v. Childs, 2 Vern. Gl,
is the only one which I have been able to
find which contains the slightest intimation
that a feme will be decreed specifically to
execute an agreement made by her during
coverture. The whole report of that case is
this: "Where a feme covert, by agreement
made with her husband, is to sun-ender or
levy a fine, though the husband die before
it be done, the court wiU by decree compel
the woman to perform the agreement." No
facts or circumstances are stated. Whether
it was an ante-nuptial agi-eement between the
husband and wife, or an agreement made by
them with some third person, it is difficult to
discover. It is altogether too loose and bald
a case to be entitled to any consideration; and
it is said of that case, in 1 Eq. Cas. Abr.
G2, pi. 2, that upon looking into the register's
minutes, it appeared that the court made no
decree in it; but it was, by consent referred
to Mr. Serjt. Rawlinson for his arbitration.
It is in no point of view, therefore, an au-
thority. The case of Roupe v. Atkinson,
Bumb. 163, cited by the counsel for the ap-
pellants, was this: A lease for a term of
years was assigned to the trustees before
marriage, in trust that they should malie
leases for the benefit of the husband and
wife. After marriage, the husband and wife
assigned the lease to one Sparke for a valu-
able consideration. After the death of the
husband, the widow brought her biU against
Sparke, to be levied against this assignment
made during coverture, on the groimd that
no fine had been levied. It was held that the
assignment by the cestuis que trust was in
the nature of an appointment, and should
bind him in equity as much as if it had been
made by the trustees by their direction. It
bears no analo.^y to this case. The anony-
mous case in Moseley, 248, is equally inap-
plicable. An estate was purchased in trust
for the husband and wife and their heirs, and
the husband and wife joined in a mortgage
to the vendor to secure a part of the purchase
money. The mortgagee brought a bill of fore-
closure, and the husliand and wife put in a
joint answer, in which it is to be inferred
no objection was taken to the mortgage on
account of the coverture of the wife. The
husband died ponding the suit, and the wife
then moved for leave to amend her answer,
in order to set up the defence that no fine
had been levied. The lord chancellor refused
the motion, with the single oljservation, that
though the mortgage was insufficient at law,
he should consider the answer that had been
put in as equal to a fine. Penne v. Peacock,
Cas. t. Talb. 41, was a case of a mortgage
given by the husband to the plaintiff upon the
MARRIED WOMEN.
33a
lands of his wife, which had been conveyed
by her to trustees, with his privity, before
the marriage, in trust to pay the rents and
profits to her separate use for her life. After
the mortgage given, the husband and wife
levied a line of the mortgaged premises, and
both declared the uses of the fine to be to the
plaintiff, for securing the principal and in-
terest of the mortgage. The wife insisted
in her answer that she had joined in the fine
by duress of her husband, and that she had
no estate in the premises upon which a fine
could operate. The suggestions of duress
and fraud were not sustained by the proofs,
and it was held as an established doctrine,
that the operation of a fixie is the same upon
ti-ust as upon legal estates. That case also
is entirely inapplicable to this.
The precise question, however, involved In
this case has arisen in a sister state, and been
very ably discussed both by the counsel and
the court. I allude to the case of Butler v.
Buckingham, 5 Conn. 492. It was there held
that an agreement by a feme covert, with
the assent of her husband, for the sale of her
real estate, was absolutely void at law, and
could not be enforced against her in a court
of equity. The defendant in that case, Mrs.
Buckingham, as the widow of her former
husband Joseph Bryan, had a right of dower
in a particular lot of land of which he died
seised. She subsequently married Gideon
Buckingham, and she and her husband, in
.Tanuary, 1793, agreed to sell all her interest
in the premises to the plaintiffs Butler and
Atwator, and joined in a penal bond to them;
the condition of which was, that if she should
quit-claim all her right of dower in the prem-
ises to the obligees, then the bond should be
void. The petition (which was in the nature
of a bill in chancery) stated that the petition-
ers Immediately entered into the possession of
said land, and from that time to the date of
the petition, a period of more than 20 years,
liad had peaceable and uninterrupted posses-
sion of the same; that they had made valua-
ble improvements thereon, -with the knowl-
edge of the defendant and her husband, in
full confidence that they would perform their
agreement; that Gideon Buckingham, the
luisband of the defendant, died in 1810; and
tliat she, upon regular and repeated applica-
tions, had refu.sed to quit-claim her right of
dower, and had recently commenced an ac-
tion at law to recover the same from the
plaintiffs. The petition prayed for a perpetu-
al injunction, or tJiat the defendant should
be decreed to convey her right of dower in
the premises. Upon a demurrer to this peti-
tion, it was held by the nine judges sitting
as a court of en-ors, that the petitioners were
entitled to no relief. It was observed by the
court that the whole system of the common
law was opposed to the doctrine on which the
petition was founded; that it was a funda-
mental principle of the common law that the
contract of a feme covert is absolutely void,
except where she conveys her estate by fine
duly acknowledged, or by some matter of rec-
ord, when slje is privately examined in order
to ascertain whether such convej-ance is
voluntary on her part; and it is pertinently
said. How absurd then would it be to enforce
such a conti-act to convey, made without such
examination? It would be saying that a feme
covei-t cannot directly convey her real estate,
unless she be privately examined; and yet
she can contract to convey without such ex-
amination, and such contract will be enforc-
ed against her. By this mode, the established
law in relation to a feme covert and her real
estate will be completely subverted.
A feme covert, in relation to her separate
property, that is, property settled to her sepa-
rate use by deed or will, with a power of ap-
pointment, and rendered subject to her ex-
clusive control, and also with respect to prop-
erty which she holds as trustee without any
beneficial interest in her own right, is consid-
ered as a feme sole, and her contracts in re-
lation to those subjects may be valid, and a
court of equity may interfere to enforce them.
As to all other matters, they are absolutely
void, and it is no less a moral than a legal
absurdity, to say that a court of equity will
enforce a void contract; it is a mere nullit>';
there is nothing to be carried into execution.
The deed of a feme covert, not acknowledged
according to the statute, forms no considera-
tion for a promise to pay the purchase money;
a note given under such circumstances is a
nudum pactum and void as between the par-
ties. This was expressly adjudged by the
supreme court of Massachusetts, in Fowler v.
Shearer, 7 Mass. 14, and must be so upon
every principle applicable to contracts. If an
absolute sale consummated by a deed is void,
unless such deed is acknowledged in the mode
prescribed by the statute, it is impossible
that a contract to sell and convey at some
future time should be valid.
The language of the master of the rolls.
Sir Thomas Plumer, in Martin v. Mitchell, 2
Jac. & W. 424, upon the general principle ap-
plicable to the contracts of married women,
is very strong and explicit. He says: "The
acts of a married woman with respect to her
estate are perfectly void. She has no dis-
posing power, though she may have a dis-
posing mind. An agreement signed by her
with her husband cannot affect her estate,
and cannot give the party a right to call upon
her in a court of equity to execute a convey-
ance, to bar her if she survives, and to bind
her inheritance. If an agreement is signed
by a person competent to contract, and is for
a valuable consideration, but defective in
form, there is a remedy in equity; for you
have a valid contract to stand upon. But
with a married woman there can be no bind-
ing contract. The instrument is not good as
an agreement; then how can it be said to
bind her?" The same language substantially
is used by the court in the case of Wright v.
334
CAPACITY OF PARTIES.
Buller, 2 Ves. Jr. 676, and is to' be found
in all the elementary ti'eatises upon the sub-
ject. The cases of Jackson v. Stevens, 16
Johns. 114: Jackson v. Calms, 20 Johns. 303;
and Doe ex dem. Depeyster v. Rowland, 8
C-ow. 277, — show verj' conclusively the opinion
which has always been entertained in our
courts of the absolute nuUity of a conveyance
or contract made by a married woman in re-
lation to her real estate. In the first case
Judge Spencer observed, that the conveyance,
although signed and sealed by the wife, was
not her deed until she had acknowledged it
according to the statute. It could not bind
her as a contract. She was not confirming
an inchoate and imperfect agreement. The
deed took its efficacy from the period of her
acknowledgment. There was nothing prior,
to which it could relate. The other cases are
equally strong to the same point. Vide, also,
7 Johns. 81. The bill is not framed with a
view to the refunding of the purchase money
paid by the appellant for the premises In
question. It seeks distinctly a specific exe-
cution of the agreement, or a perpetual in-
jimction of any suit at law. Whether the
representatives of Abner Dwelly could be
compelled to refund, it is not now necessary
to consider.
I am in favor of affirming the decree, with
costs.
MAElilED WOMEN.
335
tEGORT v. PIERCE.
(4 Mete 478.)
Supreme Judicial Court of Massachusetts.
1842.
Assumpsit on a promissory note, signed by
the defendant in the presence of an attesting
witness, dated October Gth, 1825, and pay-
able to Putnam & Gregory, partners, of whom
the plaintiff is survivor.
The case was submitted to the co^rt of
common pleas, on an agreed statement of
facts, as follows: "The defendant was mar-
ried to Varney Pierce, Jr., In 180G, who, in
ISIG, became insolvent, and left her and went
out of the commonwealth, and did not return
till 1S18, when he came back and remained
with ner about a week. He then left her
and went to Ohio, where he remained till his
death In 1S32. He made no provision for
the support of his wife and family, after he
left her in ISIG; but she supported herself
and family, after he left her, by her own
labor, contracting debts and making contracts
in her own name. Putnam & Gregory em-
ployed her to do work for them, and supplied
her with necessaries for the support of her-
self and family; and the note in suit was
given for the balance of accoimt between the
parties."
The court of common pleas rendered judg-
ment for the plaintiff, and the defendant ap-
pealed to this court.
Wells & Davis, for plaintiff. Mr. Brooks,
for defendant
SHAW, C. J. The principle Is now to be
considered as established in this state, as a
necessary exception to the rule of the com-
mon law, placing a married woman under
disability to contract or maintain a suit, that
where the husband was never within the
commonwealth, or has gone beyond its juris-
diction, has wholly renounced his marital
rights and duties, and deserted his wife, she
may make and take contracts, and sue and be
sued in her own name, as a feme sole. It is
an application of an old rule of the common
law, which took away the disability of cover-
ture when the husband was exiled or had ab-
jured the realm. Gregory v. Paul, 15 Mass.
31; Abbot V. Bayley, 6 Pick. 89. In the lat-
ter case, it was held, that in this respect, the
residence of the husband in another state of
these United States, was equivalent to a res-
idence in any foreign state; he being equally
beyond the operation of the laws of the com-
monwealth, and the jurisdiction of its courts.
But, to accomplish this change in the civil
relations of the wife, the desertion by the
husband, must be absolute and complete; It
must be a voluntary separation from and
abandormaent of the wife, embracing both the
fact and Intent of the husband to renounce
de facto, and as far as he can do it, the mar-
ital relation, and leave his wife to act as a
feme sole. Such is the renunciation, coupled
with a continued absence in a foreign state
or couutry, which is held to operate like an
abjuration of the realm
In the present case, the court are of opin-
ion, that the circumstances stated are not
suflJcieut to enable the court to detcnnine
whether the husband had so deserted his
wife, when the note in question was given.
The only facts stated are, that he was in-
solvent when he went away; that he was
absent, residing seven or eight years in Ohio;
that he made no provision for his wife uiid
her family, after 181G; and that she support-
ed herself and them by her own labor. But
It does not appear that he was of ability to
provide for her; that he was not in corres-
pondence with her; that he declared any in-
tention to desert her. when he left, or mani-
fested any such intention afterwards; or
that he was not necessarily detained by sick-
ness, imprisonment or poverty.
The fact of desertion by a husband may be
proved by a great variety of circumstances
leading with more or less probability to that
conclusion; as, for instance, leaving his wife,
with a declared Intention never to return;
marrying another woman or otherwise living
in adultery, abroad; absence for a long time,
not being necessarily detained by his occupa-
tion or business, or otherwise; making no pro-
vision for his wife, or wife and family, being
of ability to do so; providing no dwelling or
home for her, or prohibiting her from follow-
ing him; and many other circumstances tend-
ing to prove the absolute desertion before
described. The general rule being that a
married woman cannot make a contract or be
sued, the burden of proof is upon the plain-
tiff to show that she Is within the exceptioru
In an agreed statement of facts, such fact of
desertion, using this term in the technical
sense above expressed, as a total renunciation
of the marriage relation, must be agreed to,
or such other facts must be agreed to. as to
render the conclusion inevitable. If the facts
stated are all that can be proved in the case,
the court would consider that the pbiintifif
had not sustained the burden of proof, and
therefore could not have judgment See Wil-
liamson V. Dawes, 9 Bing. 292; Stretton v.
Bushnach, 4 Moore & S. GTS, 1 Bing. 139:
Bean v. Morgan, 4 McCord, 14S. But ap-
prehending that the statement may have been
agreed to, under a misapprehension of the
legal effect of the facts stated, and tliat other
evidence may exist the court are of opinion,
and do order, that the agreed statement of
facts be discharged and a trial had at the
bar of the court of common pleas.
CAPACITY or PARTIES.
WILLARD T. EASTHAM et al.
I ■ ' (15 Gray, 328.)
Snpreme Judicial Court of Massachusetts.
March, 1860
A. G. Burke, for plaintiff. G. H. Preston,
for defendants.
HOAR, J. This case presents a question en-
tirely novel in the jurisprudence of this com-
monwealth, and which could not have come
before us until the grant of the full equity
powers which were conferred upon this court
by a recent statute. St. 1857, c. 214. It is a
bill in equity, by which the plaintiff seeks to
charge the separate estate of a man-led wo-
man with the payment of a promissory note
made by her. The bill avers, In substance,
that the brother of Mrs. Eastham purchased
of the plaintiff his interest in a copartnership;
that, being himself of no sufficient credit or
pecuniary responsibility, he procured the note
of his sister, who was then, and still is, a
married woman, payable to himself, and in-
dorsed it to the plaintiff in payment of the
purchase money; that she made the note for
this purpose, and promised to pay it at mi-i-
tnrlty; that It has not been paid; and thai
Mrs.' Eastham was at the date of the note,
and still 1& possessed of valuable real estate,
which she holds as he.- separate property.
and which ici leased to two persons who art
joined in the bill as defendants, who pay her
rent for the same; and prays that these rents
may be sequestered and appropriated to the
payment of the note. The husband of Mrt.
Eastham is joined as a defendant; and to this
bill all the defendants demur.
The question is, to what extent and imder
what limitations the separate estate of a mar
ried woman is to be applied in equity to the
discharge of her contracts and engagements.
It was held from a very early period in Eng
land, that a married woman, although in-
competent at law to make a valid contract,
would be regarded in equity as a feme sole,
in respect to her separate estate. Grlgby v.
Cox, 1 Ves. Sr. 517; Peacock v. Monk, 2 Ves.
Sr. 190. And the rule seems to have been
universally recognized, where a married
woman made an express contract respecting
such an estate, of which she was entitled to
the beneficial use, that she and the party
with whom she contracted might have the
aid of a court of equity to make the contract
effectual. This doctrine Is the legitimate con-
sequence of the principle that a married
woman may execute a power, and so may
make a valid appointment.
But in Hulme v. Tenant, 1 Brown, C. C. 16,
the doctrine was extended much farther; and
Lord Thurlow there says that "determined
cases seem to go thus far; that the general
engagement of the wife shall operate upon
her personal property, shall apply to the
rents and profits of her real estate, and that
her trustees shall be obliged to apply personal
estate, and rents and profits when they arise,
to the satisfaction of such general engage-
ment." At a subsequent stage of the case he
expresses the principle thus: "I have no
doubt about this principle; that if a court of
equity says a feme covert may have a sepa-
rate estate, the court will bind her to the
whole extent as to making that estate liable
to her own engagements; as, for Instance, for
payment of debts, etc."
The decision In Hulme v. Tenant, although
repeatedly doubted by Lord Eldon, was fol-
lowed and acted upon l:)y him and by all the
chancellors through a long series of cases.
In some of these there was an attempt to re-
strict the application of the doctrine to cases
of written contracts, and to treat these con-
tracts as in the nature of appointments. But
this distinction was subsequently abandoned
as unsound; and a full discussion of the whole
subject, presenting with great clearness the
result of the modem English authorities, is
found in the elaborate judgment of Lord
Brougham, in Murray v. Barlee, 3 Mylne & K.
209, and in that of Lord Cottenham in Owens
V. Dickenson, Craig & P. 58.
"In all these cases," says Lord Brougham,
"I take the foundation of the doctrine to be
this: The wife has a separate estate, subject
to her own control, and exempt from all other
interference or authority. If she cannot af-
fect it, no one can; and the very object of the
settlement which vests it in her exclusively
is to enable her to deal with it as if sLe -.vcr^
discovert. The p'ywer to affect ii being un-
questionable, the only doubt that can sr-ze
is whether or not she has validlj- incumber-
ed it At first, the court seems to havj sup
posed that nothing could touch it but some
real charge, as a mortgage, or an instrument
amounting to an execution of a power, where
that view was supported by the nature of the
settlement. B at afterwards her intention was
more regarded, and the court only required
to be satisfied that she intended to deal witt
her separate property. When she appeared
to have done so, the court held her to have
charged it, and made the trustees answer the
demand thus created against it. A good deal
of the nicety that attends the doctrine of
powers thus came to be imported into this
consideration of the subject. If the wife did
any act directly charging the separate estate,
no doubt could exist; just as an instrument
expressing to be in an execution of a power
was always of course considered as made in
execution of it But so, if by any reference
to the estate it could be gathered that such
was her intent, the same conclusion followed.
Thus, if she only executed a bond, or made
a note, or accepted a bill, because those acts
would have been nugatorj- if done by a feme
covert, without any reference to her separate
estate, it was held, in the cases I have above
cited, that she must be Intended to have de-
signed a charge on that estate, since in no
other way could the instrument thus made
MARRIED WOMEN.
o37
by her have any validity or operation. In the
same manner as an instrument, which can
mean nothing If it means not to execute a
power, has been held to be 'made in execu-
tion of that power, though no direct refer-
ence is made to the power. Such is the prin-
ciple. But doubts have been m one or two
instances expressed as to the effect of any
dealing whereby a general engagement only
is raised; that is, where she become.s indebted
without executing any written instrument at
all. I own I can perceive no reason for draw-
ing any such distinction. If, in respect of her
separate estate, the wife is in equity taken
as a feme sole, and can cliarge it by instru-
ments absolutely void at Liw, can there be
any reason for holding that her liability, or,
more properly, her power of affecting the
separate estate, shall only be exercised by a
written Instrument? Are we entitled to in-
vent a rule, to add a new chapter to the stat-
ute of frauds, and to require writing where
that act requires none? Is there any equity,
reaching written dealings with the property,
which extends not also to dealing in other
ways, as by sale and delivery of goods? Shall
accessary supplies for her maintenance not
touch the estate, and yet money furnished to
squander away at play be a charge on it, if
fortified by a scrap of writing? No such dis-
tinction can bfc taken upon any conceivable
principle."
In Owens v. Dickenson, Lord Cottenham
says of a written agreement: "It would
have been operative upon the feme coverfs
Separate estate, but not by way of the exe-
eutioa of a power, although that has been an
expression sometimes used, and, as I appre-
hend, very Inaccurately used, in cases where
the court has enforced the contracts of mar-
ried women against their separate estate. It
cannot be an execution of the power, be-
caust" it neither refers to the power nor to
the subject-matter of the power; nor, in-
deed, in many of the cases has there been
any power existing at all. Besides, as It
was argued In Murray v. Barlee, if a mar-
ried woman enters into several agreements
of this sort, and all the parties come to have
satisfaction out of her separate estate, they
are paid pari passu; whereas, if the instru-
ments took effect as appointments under a
power, they would rank according to the
priorities of their dates. It Is quite clear
therefore that there is nothing in such a
transaction, which has any resemblance to
the execution of a power. What it is, it is
not easy to define. It has sometimes been
treated pa a disposmg of the particular es-
tate; but the contract is silent as to the
separate estate, for a promissory note is mere-
ly a contract to pay, not saying out of what
It is to be paid, or by what means it is to
be paid; and it is not correct, according to
legal principles, to say that a contract to
pay Is to be construed into a contract to pay
out of a particular property, so as to con-
HOPK.&BUCAS.CONT. — 22
stltute a lien on that property. Equity lays
hold of the separate property, but not by
virtue of any tiling expressed in th<' contract;
and it is not very cons stent with correct nrin-
ciples to add to the contrar-t that whicii the
party has not thought fit to introduce into it.
The view taken of the matter by Lord Thur-
lovv, in Huline v. Tenant, is more correct.
According to that view, the separate prop-
erty of a married woman being a creature of
equity, it follows that if she has a power to
deal with it, she has the other power inci-
dent to property in general, namely, the pow-
er of contracting debts to be paid out of it;
and inasmuch as her creditors have not the
means at law of compelling payment of those
debts, a court of equity takes upon itself to
give effect to them, not as personal liabili-
ties, but by laying hold of the separate prop-
erty, as the only means by which they can be
satisfied."
The result ot the English decisions would
therefore seem to be that the separate es-
tate of a married woman is answerable foi
all her debts and engagements, to the full ex-
tent to which It Is subject to hei ovn dis-
posal.
The rule adopted by most of tht'* coarlc in
the United States has been materially dif-
ferent from that established in England; and
the general current of American authoritioc
supports the principle that a married woman
has no power in relation to her separate es
tate but such as Is expressly conferred in
the creation of the estate; and that her sep-
arate estate is not chargeable with her debts
or obligations, unless where a provision for
that purpose is contained in the instrument
creating the separate estate. These authori-
ties are very fully collected and commented
on in the notes to the case of Hulme v. Ten-
ant, 1 White & T. Lead. Cas. Eq. (Hare &
W. Ed.) 324.
The decisions In the state of New Yort
approximate somewhat more nearly to the
English rule, but with some Important modi-
fications. The courts of chancerj- have thert-
held that a feme r^overt, with respect to he-
separate estate, is so far to be regarded as a
feme sole that she may dispose of it without
the consent of her trustee, unless she le
specially restrained by the instrument under
which she acquires it; that if she enters into
an agreement, and sufficiently indicates her
intention to affect by it her separate estate,
a court of equity will apply it to the satis-
faction of sucJi an engagement; but that her
general personal engagement will not of Itself
affect her separate property; and therefore,
where creditors do not claim under ajiy
charge or appointment made in pursuance of
the instrument of settlement, they must show
that the debt was contracted either for the
benefit of her separate estate, or for her own
benefit upon the credit of the separate es-
tate; and that such estate is not to be char-
ged upon any implied undertalang. Jaqnea
338
CAPACITY or PARTIES.
V. Church, 17 Johns. 548; Dyett v. Coal Co.,
20 Wend. 570; Gardner v. Gardner, 7 Paige,
112; Curtis v. Engel, 2 Sandf. Ch. 2S7;
Knowles v. McKamley, 10 Paige, 343; Cruger
V. Cruger, 5 Barb. 227. In Vanderheyden v.
Mallory, 1 N. Y. 453, it is said that any debt
contracted by a married woman for hereelf
or her husband will generally be regarded as
prima facie evidence of an intention to charge
her separate estate. But in the recent case
of Yale V. Dederer, IS N. Y. 2G5, the ques-
tion arose of the liability of the wife's sep-
arate estate for the payment of a note which
she had signed as a surety with her hus-
band, the whole consideration having been
received by him; and the court of appeals
held that >t was not liable.
The relation of married women to their sep-
arate estates in this commonwealth has been
materially affected by statute, especially so
far as concerns the case at bar, by the stat-
utes of 1845 (chapter 208) and 1855 (chapter
304). By the provisions of these statutes, a
man-led woman may, by a marriage settle-
ment, or by any deed, gift, or devise, made
to her by any person except her husband
after her marriage, take and hold any prop-
erty, real or personal, to her sole and sep-
arate use, free from the intervention or con-
trol of her husband; and may hold in like
manner any property belonging to her at the
time of her marriage; and may contract, sue
and be sued, and have and be subject to the
same remedies in law or equity in relation
to property so held, and to any contracts re-
specting it made by her, as if she were un-
married She may also engage in any trade
or business on her own account, and may sue
and bp sued as if sole in regard to her trade,
business, labor, services and earnings.
It Is obvious from these provisions, that
if the contract which we are considering were
to be regarded, in conformity with the Eng-
lish decisions, as a contract relating to the
separate estate of the wife, merely because
it would be otherwise wholly ineffectual and
•without validity, the plaintiff has made no
case calling for the aid of a court of equity,
because he has a plain, adequate and com-
plete remedy at law. A married woman may
now be sued upon any contract relating to
her separate estate, and a judgment may be
recovered against her upon it, and her sep-
arate estate may be attached In the suit nnd
afterwards taken on execution, in liKe man-
ner as if she were sole.
But aside from this objection to the plain-
tiff's suit, we cannot assent to the correct-
ness of the principle upon which it is found-
ed. We can see no sufficient reason for hold-
ing a contract which is whoUy void at law,
from which neither the married woman nor
her estate receives any benefit, and which
does not in any manner refer to hor separate
property or undertake to make any charge
upon it, to be a contract relating to such
property.
If the giving of a note or a bond could be
considered as equivalent to an appointment
or charge upon her separate estate, and the
source of the equity against her be foimd in
such a charge or appointment, there would
seem to be no well founded distinction be-
tween a contract by her as a surety and a
contract as principal. But against this the
reasoning in Murray v. Barlee and Owens v.
Dickenson, before cited, is quite conclusive.
And we think, upon mature and full con-
sideration, that the whole doctrine of the
liability of he.' separate estate to discharge
her general engagements rests upon grounds
which are artificial, and which depend upon
implications too subtle and refined. The true
limitations upon the authority of a court of
equity in relation to the subject are stated
with great clearness and precision In the
elaborate and weU reasoned opinions of the
court of appeals in New York in the case of
Yale V. Dederer. And our conclusion is that
when by the contract the debt is made ex-
pressly a charge upon the separate estate, or
is expi-essly contracted upon its credit, or
when the consideration goes to the benefit of
such estate, or to enhance its value, then
equity will decree that it shall be paid for
such estate or its income, to the extent to
which the power of disposal by the married
woman may go. But where she is a mere
surety, or makes the contract for the accom-
modation of another, without consideration
received by her, the contract being void at
law, equity will not enforce it against her
estate, unless an express instrument makes
the debt a charge upon It.
Demurrer sustained, and bill dismissed,
with costs.
MARRIED WOMEN.
339
OWEN V. CAWLEY.i
(3G N. Y. 600.)
Court of Appeals of New York. 1SG7.
Appeal from liie supreme court.
The action was for jjrofessioual sen'icea
rendered to a married woman for the benetit
of her separate estate, and the relief sought
was that the same be declared an equitable
lien on such separate estate, and that so much
thereof as might be necessary be appropriated
to the satisfaction of the claim.
On the first hearing, before Judge Mitchell,
the referee, judgment was rendered for the
plaintiffs for a greater amount than on the
last trial. That judgment was reversed at
the general term, for the reasons appearing
in the report of the case. 3G Barb. 52.
The order of reversal procured on that oc-
casion provided that the evidence taken on
the first trial should stand as evidence on
the new trial, and that either party should
be at liberty to add such further evidence
as they might be advised. Neither party
appealed from this order, and, so far as ap-
pears, it was mutually acquiesced in and
acted upon by both.
On the last hearing, before the same ref-
eree, judgment was recovered by the plain-
tiffs, pursuant to the prayer of the complaint;
the amount of the lien, charged on the de-
fendant's estate, being adjudged to be $61.25,
with interest from the 30th of May, 1859,
and costs.
The defendant appealed to the general term
of the supreme court in the First district,
and the judgment was unanimously affirmed,
the opinion of the court being delivered by
Mr. Justice Sutherland.
The following facts were admitted in the
verified pleadings, as amended:
(1) That the plaintiffs were attorneys and
counselore, in partnership, in the city of New
York.
(2) That the appellant, Jane F. Cawley, was
the wife of the defendant, Samuel B. Cawley.
(3) That she was possessed, in her own
right, separate from her hnsband, of a large
amount of real and personal property in this
state, including a house and lot in Queens
county, and a store of goods in New York,
In which she had conducted the ship chandlery
business from a period before the 1st of Jan-
uary, 1858, down to the commencement of
the suit; and that, in the course thereof, In
the years 1S58 and 18.59, and prior to the
commencement of this action, she had vari-
ous sums due and owing to her by various
individuals, ships and vessels.
(4) That during these periods, and previous
thereto, her husband carried on the business,
as her agent, and, as such, managed and
conducted the same in all its details.
The complaint also alleged the professional
services and disbursements of the plaintiffs.
at her request and that of her agent; the
1 ConCTirring opinioa of Parker, J., omitted.
amount due therefor, and the fact that such
services were rendered and such disburse-
ments made, on the credit and for the ben-
efit of her separate estate. These allegations
were put in issue by the answer.
The referee found, among other things, as
a matter of fact, that all the services alleged
were rendered, and that all the facts staled
in the complaint were true, with certain ex-
ceptions as to amounts, etc., not material to
be stated. lie found, as matter of fact, that
all the sen-ices embraced in the amount he
allowed were rendered for the benefit of Mrs.
Cawley and of her separate estate; that she
employed the plaintiffs to render them,
through the agency of her husband, to whom
she had intrusted the whole management of
the business of her separate estate, having
fuU confidence in his ability to act for her,
and not restricting his authority in any way,
but requesting him "to let law alone, if pos-
sible, and to do a cash business." This re-
quest was not made known to the plaintiffs.
The prosecution of each of the actions and
proceedings was expedient, and there was no
prospect that the demands would be collect-
ed without suit.
The defendant attempted to establish a
special agreement that no compensation
should be made for services which did not
result in collecting the money; but the ref-
eree found, as matter of fact, that no such
agreement was made.
A question was raised whether some of the
proceedings which were taken in the names
of nominal assignees of the appellant, for
particular reasons disclosed by the evidence,
were not really for the benefit of such as-
signees; but the referee found, as matter of
fact, that they were so taken for the benefit
of Mrs. Cawley, and of her separate estate,
and by the direction of the husband as her
agent.
He also found, that each of the claims pre-
sented by the plaintiff, arose out of sales by
her husband as her agent, of goods belnng-
ing to her separate estate, except in a single
instance. In that case the claim was for
goods sold by J. C. Sleight & Co.. the previ-
ous proprietors of the store, and which, with
other goods and demands, had been absolute-
ly assigned to her, in payment of a debt for
advances from her separate estate.
The defendant attempted to prove a subse-
quent agreement between Sleight and his
creditors, for the purpose of showing that
the transfer to her was only colorable: but
the referee found that such agreement was
not satisfactorily proved.
In the course of the trial several questions
arose as to the admission of evidence; and
exceptions were also taken to the refusal of
the referee to dismiss the complaint, and to
his ultimate conclusions of law upon the facts
as found.
D. McMahon, for the appellant Thomas
G. Shearman, for the respondent
340
CAPACITY OF PARTIES.
PORTER, J. The principal question in tills
case arises under tlie statutes of 1S4S and
lSi9, in relation to the property of married
women. The primary purpose of these acts
was to enable every feme covert to hold prop-
erty in her own right, without the intei-ven-
tion of trusts or marriage settlements. It
was neither their design nor effect to place
such property beyond the reach of all reme-
dial process, nor to secure to the wife a mere
doi-mant and barren title, with none of the
usual incidents of the jus disponendi. Under
their operation she succeeded to the right
which a trustee could have exercised under
the old law, to protect the interests thus
vested by all the usual agencies, and to en-
force and defend her claims in the tribunals
of law and equity. While her antecedent
disabilities arising from the conjugal rela-
tion were not wholly removed, they were
necessarily so far modified as to secure her
in the beneficial enjoyment of the new in-
terests she was permitted by law to acquire.
Yale V. Dederer, IS N. Y. 272, 278, 22 N. Y.
451; Bucliley v. WeUs, 33 N. Y. 522. She
was still left without capacity to bind herself
personally by a naked promise, note or bond;
but she could exercise the right of an owner
by subjecting her separate estate to charges
in equity, for services rendered at her request
for the benefit of such estate; or she could
dedicate it to other purposes if she chose to
evince her intention by a formal and de-
liberate pledge. The mere fact however that
she was the owner of a separate estate, did
not affix to it, under these acts, a liability in
equity in respect to her engagements at large.
Such a lien could only be deduced from an
express or implied agreement to that effect
on her part, or from some equivalent obliga-
tion resulting from her acts by operation of
law. Where services are rendered for a mar-
ried woman by her procurement, on the credit
And for the benefit of her separate estate,
there Is an implied agreement and obligation
springing from the nature of the considera-
tion, which the courts will enforce by char-
ging the amount on her property as an equi-
table lien. Yale v. Dederer, 18 N. Y. 276,
282. 284. 22 N. Y. 4G0. Where a charge Is
created by her own express agreement, for a
good consideration, though for a purpose not
beneficial to her separate estate, or even for
the sole benefit of her husband, she is bound
in equity by the obligation which she thus
deliberately chooses to assume. Yale v. De-
derer, 28 N. Y. 276, 283, 22 N. Y. 451.
It was at one time a mooted question in the
courts, whether under the statutes above re-
ferred to, and prior to the act of 1800, the
common-law disabilities of the wife were so
far modified as to permit her to manage her
estate through the inteiTention of agents and
employees; but it is now entirely settled that
she acquired in this respect, the usual rights
Incident to absolute ownership, and that she
could avail herself of any agency, even that
of her husband, with the same effect as If
they were not united in marriage. Knapp y,
Smith, 27 N. Y. 277. 280; Buckley v. Wells,
33 N, Y. 518, 522; Smith v. Sweeney, 35 N.
Y. 294, 295; Draper v. Stouvenel, Id. 513;
Abbey v. Deyo, 44 Barb. 382.
In this case the referee finds as matter of
fact, that the plaintiffs were employed by
the appellant through her authorized agent,
to whom she had intrusted the entire man-
agement of her business and estate. She
was as effectually bound by the act done in
her name, as if she had personally engaged
the professional services of the respondents.
She accredited her husband to the public, as
her general agent in all that pertained to her
business; and as the plaintiffs had no notice
of any private restrictions upon his authority,
the fact that any such were given would have
been unavailing, even if she had succeeded
in proving it. Bank v. Astor, 11 Wend. 87;
Johnson v. Jones, 4 Barb. 369, 373.
It Is also found as matter of fact that all
the sei^ices In question were rendered for
Mrs. Cawley, and for the benefit of her sepa-
rate estate. Her coim^el Insists that such
of them as appertained to suits in which
there was a failure to collect the amount of
the claims, should not be deemed beneficial
in their character. No such distinction can
be maintained. The rule of equity under
which the estate of a married woman is sub-
ject to a charge in respect to services ren-
dered for its benefit, has reference to the sub-
ject-matter and nature of such services, and
not to the contingent and ultimate gain or
loss of the parties procuring them. A build-
er, who at the request of a feme covert,
erects a dwelling on her land, performs a ser-
vice for the benefit of her estate within the
meaning of the rule; and its nature would
not be changed, though the edifice should
afterward be destroyed by fire. An employee
who tills her land for hire, has an equitable
claim to compensation; and if he discharges
his duty faithfully, he has a remedy for his
wages, though her fields should prove un-
productive. In this case the claims in ques-
tion formed a part of the separate estate, and
the services were for its direct and immediate
benefit. Dillaye v. Parks, 31 Barb. 132. The
appellant preferred not to prosecute the suits
in person; and the attorneys who conducted
them in her behalf, having served her with
suitable skill and fidelity, are not responsible
for any defects in her proof, or for the in-
ability of her debtors to respond to their ob-
ligations. It follows from those views, that
on the principal questions involved in the
case, the referee was right in his conclusions.
The plaintiffs were properly allowed to-
prove the admissions of the appellant on the
previous hearing. They constituted a por-
tion of the evidence, which under the order
entered at the general term, either party was
entitled to read, and this right was exer-
cised on the second trial by both. Where an
absolute and unqualified admission is made
in a pending cause, whether by written s-tipu-
MARRIED WOMEN.
841
latlon of t±ie attomoy or as matter of proof
on the hearing, it cannot be retracted on a
subsequent triai, unless by leave of the court
No cause for granting such leave was shown,
and there was ao allegation of mistalce, im-
position or surprise. People v. Ilathbun, 21
Wend. 543, 544; Elton v. Laikins, 24 E. C.
L. 372; Doe v. Bird. 32 N. Y. 41G; Langley
V. Earl of Oxford, 1 Mees. & W. 508.
It is claimed in behalf of the appellant
that the referee should not have pennitted
the reading, on the new trial, of the evidence
on the former hearing, as provided in the or-
der of reversal. We see no reason why the
parties are not concluded by that order, in
which both of them seem to have acquiesced.
No appeal from It has ever been taken, no
motion was made to modify it, and both par-
ties have acted under It Vail v. Remsen, 7
Paige, 207. It was read In evidence without
objection, and no qiiestion In regard to it was
raised before the referee. Portions of the
proof, introduced under It were objected to
on other and specific grounds; but the posi-
tion now taken, that the whole was inadmis-
sible, was not even suggested on the trial.
Upon the facts disclosed by the case, we do
not think the objection tenable; but if it had
been well founded, It would be too late to
raise It on appeaL Newton v. Harris, G N.
Y. 34.^; Judd v. O'Brien, 21 N. Y. 100.
In the course of the trial, objections were
taken to proof of the acts and declarations
of the defendant's agent in relation to the
legal proceedings conducted by the plaintiffs.
They constituted a part of the res gestie, and
as his agency was conceded, they were ad-
missible as acts and declarations of his prin-
cipal. McCotter v. Hooker, 8 N. Y. 503;
Fleming v. Smith, 44 Barb. 554. Other
grounds of error are alleged, but they seem
to us plainly untenable.
The judgment should be affirmed, with
costs.
PARKER, J., concurs.
342
CAPACITY OF PARTIES.
DO\>/nING t. MX. WASHINGTON KOAD
*- ^. CO.
(40 N H. 230.)
Supreme Court of New Hampshire. Merri-
mack June Term, 18G0.
Assumpsit, brought by Lewis Downing &
Sous, to recover the price of eight omnibxises,
and a model for the same, one light wagon,
and one baggage wagon, made for the de-
fendants, under a contract entered into by
D. O. Macomber, president of the defendant
corporation in their behalf.
The light wagon was made and sent to one
Cavis, the agent for building the road, and
was used by him in making it. The omni-
buses and baggage wagon were intended to
be used in conveying passengers up and
down the mountain, after the road was com-
pleted. The omnibuses were constructed in
a peculiar way, and are not fit for use on
ordinary roads.
By their act of incorporation, passed July
1, 1853, the corporation was empowered to
lay out, make, and keep in repair, a road
from such point in the vicinity of Mt. Wash-
ington as they may deem most favorable, to
the top of said mountain, etc., and thence
to some point on the northwesterly side of
said mountain, etc., to take tolls of pas-
sengers and for carriages, to build and own
toll-houses, and to take land for their road.
The coi-poration was duly organized, and
at a meeting of the directors on the 31st of
August, 18o3, before said contract was made,
it was "voted that the president be the legal
agent and commissioner of the company;"
and his compensation as such was fixed.
"The president" was "directed to proceed
with the letting of the work for the con-
struction of the road, * * * the obtaining
the right of way," and "what other action
he shall deem proper for the interests of the
company," etc.
A committee was appointed "to settle in
relation to the right of way, etc., and in re-
lation to land on \ Inch to build stables and
other buildings, for the use of the road, and
also for building all such stables and houses
as may be necessary for the operations of the
company."
It appeared that by an additional act,
passed July 12, 18.50, the corporation were
authorized "to erect and maintain, lease and
dispose of any building or buildings, which
may be found convenient for the accommo-
dation of their business, and of the horses
and carriages and travellers passing over
said road."
The defendants denied the authority of
Macomber to make such a contract in behalf
of the corporation, and the power of the
corporation tmder its charter either to au-
thorize or to enter into such a contract.
BELL, C. J. Corporations are creatures of
the legislature, having no other powers than
such as are given to them by their charters.
or such as are incidental, or necessary to
caxi-y into effect the pui-poses for which
they were established. Trustees v. Peas-
lee, 15 N. H. 330; l^erriue v. Chesapeake
Canal Co., 9 How. 172. In giving a construc-
tion to the powei-s of a corporation, the lan-
guage of the charter should in general nei-
ther be construed strictly nor liberally, but
according to the fair and natural import of
it, with reference to the purposes and ob-
jects of the corporation. Enfield Bridge v.
Hartford R. R., 17 Conn. 454; Strauss v.
Eagle Co., 5 Ohio St. 39.
If the powers conferred are against com-
mon right, and trench in any way upon the
privileges of other citizens, they are, in
cases of doubt, to be construed strictly, but
not so as to impair or defeat the objects of
the incorporation.
In the present case the power to take the
lands of others, and to take tolls of trav-
ellers, must be strictly construed, if doubts
should arise on those points; but it is not
seen that the other grants to the defendant
corporation should not receive a fair natural
construction.
The charter of the Mt. Washington Road
empowers them to lay out, make and keep
in repair, a road from Peabody River Valley
to the top of Mount Washington, and thence
to some point on the northwest side of the
mountain. It grants tolls on passengers and
can-iages, and authorizes them to take lands
of others for their road, and to build and
own toll-houses, and erect gates, and appoint
toll-gatherers to collect their tolls. The re-
maining provisions contain the ordinary pow-
ers of corporations relating to directors,
stock, dividends, meetings, etc. Laws 1853,
c. 1486.
This chapter confers the usual powers
heretofore granted to turnpike corporations,
and no others. The most natural and satis-
factory mode of ascertaining what are the
powers incidentally granted to such compa-
nies, is to inquire what powers have been
usually exercised under them, without ques-
tion by the public or by the corporators. It
may be safely assumed that the powera
which have not heretofore been found neces-
sarj', and have not been claimed or exer-
cised under such charters, are not to be con-
sidered generally as incidentally granted.
Such charters have in former years been
vei-y common in this and other states, and
they have not, so far as we are aware, been
understood as authorizing the C9rporations
to erect hotels, or to establish stage or trans-
portation lines, to purchase horses or car-
riages, or to employ drivers in transporting
passengers or freight over their roads; and
no such powers have anywhere been claimed
or exercised under them. We are, therefore,
of opinion that the power to establish stage
and transportation lines to and from the
mountain, to purchase carriages and horses
for the purpose of carrying on such a busi-
ness, was not incidentally granted to the de-
CORPORATIOXS.
843
fendant corporatiou by their charter. State
V. Commissioners of Mansfield, 23 N. J. Law,
510.
But it is contended that the power to malce
this contract is conferred by the act in
amendment of the charter, passed July 12,
1S56. By this act the corporation may "erect
and maintain, lease and dispose jf any
building or buildings which may be found
convenient for the accommodation of their
business, and of the horses and carriages
and travellers passing over their said road."
By their business, which the buildings to be
erected were designed to accommodate, it is
said tlie legislature must have intended some
permanent and continuing business beyond
that of merely building and maintaining a
road; and that it could be no other th;m that
of erecting a hotel on the mountain, and es-
tablishing lines of carriages, for the pur-
pose of carrying visitors up and down the
mountain.
But the foundation of this Implication is
very slight. The express grant is of an au-
thority to erect, etc., buildings, not of all
kinds, but such as may be found convenient
for the accommodation of their business,
and of travellers, etc. The business here re-
ferred to must be understood to be such as
they are by their charter authorized to en-
gage in. If nothing had been said of horses
and travellers, there could hardly be any
foimdation for the idea that a hotel could
have been contemplated by the legislature.
Buildings suitable for the accommodation of
their toll-gatherers and workmen employ-
ed on their road, would probably be thought
evei-ything the legislature intended to au-
thorize by this additional act. Connected
as this authority now is with travellers,
horses, and carriages, there is scarce a pre-
tence for argument that this additional act
goes any further than the original act, to
authorize a stage and transportation com-
pany. It is not unlikely that some of the
projectors of this enterprise intended to se-
cure much more extensive rights than those
of a turnpike and hotel company, but it
seems certain they have not exhibited this
feature of their case to the legislature so dis-
tinctly as to secure their sanction, and the
charter and its amendment as yet justifies
them In no such claim.
The power of buying and selling real and
personal property for the legitimate pur-
poses of the corporation, and the power of
contracting generally for the same purposes,
within the limits prescribed by the charter,
being granted, we understand the principle
to be, that their purchases, sales, and con-
tracts generally, will be presumed to be
made within the legitimate scope and pur-
pose of the corporation, until the contrary
appears, and that the burden of showing
that any contract of a corporation is beyond
its legitimate powers, rests on the party
who objects to it. Indiana v. Woram, 6 Hill,
37; Ex parte Peiu Iron Co., 7 Cow. 540;
Farmers' Loan & Trust Co. v. Clowes, 3
N. Y. 470; Farmers' Loan & Trust 'Co. V.
Curtis, 7 N. Y. 400; Beers v. Pha?nix Glass
Co., 14 Barb. 3.j8.
If a corporation attempt to enforce a con-
tract made with them in a case beyond the
legitimate limits of their corporate power,
that fact, being shown, will ordinarily con-
stitute a perfect defence. Green v. Seymour,
3 Sandf. Ch. L'S.1; Bangor Boom v. Whiting,
29 Me. 123; Life & Fire Ins. Co. v. Mechan-
ic Fire Ins. Co., 7 Wend. 31; New York, etc.,
Ins. Co. v. Ely, 5 Conn. 500.
And if a suit is brought upon a contract
alleged to be made by the corporation, but
which is shown to be beyond its coiporate
power to enter into, the contract will bo re-
garded as void, and the coi-poration may
avail themselves of that defence. Beach v.
Fulton Bank, 3 Wend. 573; Albert v. .Sav-
ings Bank, 1 Md. Ch. Dec. 407; Abbot v.
Baltimore, etc., Co., Id. 542; Strauss v.
Eagle Ins. Co., 5 Ohio St. 59; Baron v. Mis-
sissippi Ins. Co., 31 Miss. 110; Bank of Gen-
esee V. Patchin Bank. 13 N. Y. 315; Gage v.
Newmarket, 18 Q. B. 457.
The contract set up in this case, was made
not by the corporation itself, by a vote,
nor by an agent expressly authorized to sign
a contract already drawn, but it was made
by the president of the corporation, acting
under an appointment as their general agent;
and it is argued that he was fully author-
ized by votes of the corporation to bind them
by such a contract as the present; but it is
not necessary to consider this question, as
we think it settled that the powers of the
agents of corporations to enter into contracts
in their behalf are limited, by the nature
of things, to such contracts as the corpora-
tions are by their charters authorized to
make. This principle is distinctly recognized
in McCullough v. Moss, 5 Denio, 567, over-
ruling the case of Moss v. Rossie Lead Co.,
5 Hill, 137, and in Central Bank v. Em-
pire Stone-Dressing Co., 2t3 Barb. 23; Bank
of Genesee v. Patchin Bank, 13 N. Y. 315.
The same want of power to give authority
to an agent to contract, and thereby bind
the corporation in matters beyond the scope
of their corporate objects, must be equally
conclusive against any attempt to ratify such
contract. What they cannot do directly they
cannot do indirectly. They cannot bind
themselves by the ratification of a contract
which they had no authority to make. 5
E>enio, 567, above cited. The power of the
agent must be restricted to the business
which the company was authorized to do.
Within the scope of the business which they
had power to transact, he, as its agent, may
be authorized to act for it, but beyond that
he could not be authorized, for its powers
extend no further.
This view seems to us entirely conclusive
against the claim made for the omnibuses
and model, and probably for the baggage
wagon.
344
CAPACITY OF PARTIES.
As to the light wagon, that may stand on
a different ground. Such a wagon might be
useful and necessai-y for the use of the
agent of the company, in conducting the un-
doubted business of the corporation,— the
building and maintaining the road.
We are unable to a;ssent to the position
taken in the argument, that a ratification of
part is a ratification of the whole contract.
While the corporation may be restricted from
ratifying a contract beyond the scope of the
objects of the corporation, there could be no
such objection as to any matter clearly with-
in their power. The other contracting party
might have a right to reject such ratification,
claiming that the contract is entire, and if not
ratified as such, it should not be made good
for a part only. But if they claim the bene-
fit of the partial ratification, the corporation
can hardly object.
CORPORATION'S.
845
THOMAS v. RAILROAD COMPANY.
(101 U. S. 7L)
Supreme Court of United Suites. Oct Term,
187'J.
Error to the circuit court of the United
States for the Eastern district of Peuusyl-
vania.
This was an action of covenant, by George
W. Thomas, Alfred S. Porter, and Nathaniel
F. Chew, against the West Jersey Railroad
Company, and they, to maintain the issue on
their part, offered to prove the following
facts:
On the eighth day of October, 18G3, the
Millville and Glassboro Railroad Company,
a coi-poration incorporated by the legisla-
ture of New Jersey, March 9, 1859, entered
Into an agreement with them, whereby It
was stipulated that the company should, and
did thereby, lease its road, buildings, and
rolling-stock to them for twenty years from
the first of August, 18<>3, for the consid-
eration of one-half of the gross sum col-
lected from the operation of the road by
the plaintiffs during that period; that the
company might at any time terminate the
contract and retalie possession of the rail-
road, and that in such case, if the plaintiffs
so desired, the company would appoint an
arbitrator, who, with one appointed by them,
should decide upon the value of the contract
to them, and the loss and damage incurred
by, and justlj ana eqaitably due to them,
by reason of such termination thereof; that
In event of a difference of opinion between
the arbitrators, they were to choose a third,
and the decision of a majority was to be
final, conclusive, and binding upon the par-
ties.
On the 10th of April, 1867, the legislature
of New Jei-sey passed an act entitled "A
supplement to the act entitled 'An act to
incorporate the Millville and Glassboro Rail-
road Company.' " It was therein enacted
that it should be unlawful for the direct-
ors, lessees, or agents of said railroad to
charge more than the sums therein named
for passengers and freight respectively.
The plaintiffs claim that at the date of the
passage of this act, It was well linown that
they were acting under the said agreement
of Sth October, 1SG3.
On the 12th of October, 1SG7, articles of
agreement were entered into between the
Millville and Glassboro Railroad Company
and the West Jersey Railroad Company, the
defendant, whereby It was agreed that the
former should be merged Into and consol-
idated with the latter.
In November, lSt)7, a written notice was
served by the Millville and Glassboro Rail-
road Company upon the plaintiff's, putting
an end to the contract and to all the rights
thereby granted, and notifying them that
the company would retake possession of the
railroad on the flrst day of April, 1868.
On the ISth of March, 1863, the legislature
of New Jersey passed an act whereby it was
enacted that, upon the fullillincnt of certain
preliminaries, the Millville and Glassboro
Railroad Companj should be consolidated
with the West Jersey Railroad Company,
"subject to all the debts, liabilities, and ob-
ligations of both of said companies." The
conditions required by that act were ful-
filled, and the railroad was duly deUvered by
the plaintiffs to the West Jersey Railroad
Company on the first of April, 1808.
On April 13 18G8, and again on May 22
of the same year, notices to arbitrate ac-
cording to the teims of the agreement were
served by the plaintiffs upon the Millville and
Glassboro Railroad Company, and immediate-
ly thereafter upon the West Jersey Railroad
Company. The latter company refused to com-
ply with the terms of either notice; but sub-
sequently, on the 21st of December, 1808,
an agreement of submission was entered in-
to between the plaintiffs and the latter com-
pany, whereby H. F. Kenney and Matthew
Baird were appointed arbitrators, with power
to choose a third, to settle the controversy
between the parties. These arbitrators, dis-
agreeing, called in a third, who joined with
said Baird in an award, by which the value
of the unexpired term of the lease, and the
loss sustained by reason of the termination
thereof, to and by the plaintiffs, was ad-
judged to be the sum of $159,437.07; and
the West Jersey Railroad Company was or-
dered to pay that sum to the plaintiffs. This
award was subsequently set aside in a suit
in equity brought in New Jersey.
The plaintiffs further offered to prove their
compliance In all respects with the terms of
the lease. Its value, and the loss and damage
they had sustained by reason of its termina-
tion as aforesaid. The court excluded the
offered testimony on the ground that the
lease by the Millville and Glassboro Railroad
Company to the plaintiffs was ultra vires, and
directed the jury to return a verdict for the
defendant The plaintiffs duly excepted, and
sued out this writ
They assign for error that the court below
erred,—
1. In excluding from the consideration of
the jury the offered evidence of the said
agreement between the MillviUe and Glass-
boro Railroad Company and the plaintiffs;
of the acts of assembly of New Jersey, one
an act to incorporate the Millville and Glass-
boro Railroad Company, approved the 9th of
March, 1859, and another an act entitled "A
supplement to the act entitled 'An act to
incorporate the MillviUe and Glassboro Rail-
road Company,' passed the tenth day of April,
1SG7," and the acts referred to therein; of the
fact that it was well known at the date of the
last-named act that the plaintiffs were lessees
acting imder the said contract and agree-
ment: and of all the ether acts of the leg-
islature of the state of New Jersey relating
346
CAPACITY OF PARTIES.
to the West Jersey Railroad Company, and
to the Millville and Glassboro Raih-oad Com-
pany.
2. In directing the jury that their verdict
must be for the defendant.
3. In entering judgment upon the verdict
for the defendant.
Mr. Justice MILLER, after stating the
case, delivered the opinion of the court.
The ground on which the court held the
contract to be void, and on which the ruling
is supported in argument here, is that the
contract amounted to a lease, by which the
railroad, rollmg-stock, and franchises of the
corporation were transfeiTed to plaintiffs,
and tliat such a contract was ultra vires of
the company.
It is denied by the plaintiffs that the con-
tract can be fairly called a lease.
But we know of no element of a lease which
is wanting in this instnament. "A lease for
years is a contract between lessor and lessee,
for possession of lands, etc., on the one side,
and a recompense by rent or other considera-
tion on the other." 4 Bac. Abr. 632.
"Any thing corporeal or incorpoi'eal lying in
livery or in grant may be the subject-matter
of a lease, and, therefore, not only lands and
houses, but commons, ways, fisheries, fran-
chises, estovere, annuities, rent-charges, and
all other incorporeal hereditaments are in-
cluded in the common-law rule." Bouv. Law
Diet. "Lease"; 1 Washb. Real. Prop. 310.
The railroad and all its appurtenances
and franchises, including the right to do thfi
business of a railroad and collect the proper
tolls, are for a period of twenty years leased
by the company to the plaintiffs, from whom
In return it receives as rent one-half of all the
gross earnings of the road. The usual provi-
sion for a right of re-entry on the failure to
perform covenants in addition to the special
right to terminate the lease on notice, and the
usual covenant for repairs and proper running
of the road, equivalent to good husbandry on
a farm, are inserted in the instrument.
The provision for the complete possession,
control, and use of the property of the com-
pany and its franchises by the lessees is per-
fect. Nothing is left in the lessor but the
right to receive rent. No power of control in
the management of the road and in the exer-
cise of the franchises of the company is re-
served. A solitary exception to this state-
ment, of no value in the actual control of af-
fairs, is found in the sixth clause of the lease,
which covenants that the lessees will dis-
charge any one in their service on the request
of the corporation, evidenced by a resolution
of the board of directors.
But while we are satisfied that the contract
Is both technically and in its essential charac-
ter a lease, we do not see that the decision
of that point either way affects the question
on which we are to pass. That question is,
whether the railroad company exceeded its
powers in making the contract, by whatever
name it may be called, so that it is void.
It is, perhaps, as well to consider this ques-
tion in the order of its presentation by the
learned counsel for plaintiffs, upon whom the
burden of showing the error of the circuit
court devolved as well as the duty of proving
one of the following propositions:
1. The contract was within the powers
granted to the railroad company by the act of
the New Jersey legislature under which it
was organized.
2. That if this be not established, the lease
was afterwards ratified and approved by an-
other act of that legislature.
3. That if both these propositions are found
to be untenable, the contract became an ex-
ecuted agreement under which the rights ac-
quired by plaintiffs should be legally respect-
ed.
The authority to make this lease is placed
by counsel primarily in the following lan-
guage of the thirteenth section of the com-
pany's charter:
"That it shall be lawful for the said com-
pany, at any time during the continuance of
its charter, to make contracts and engage-
ments with any other corporation, or with in-
dividuals, for the transporting or conveying
any kinds of goods, produce, merchandise,
freight, or passengers, and to enforce the ful-
fillment of such contracts."
This is no more than saying: "You may do
the business of carrying goods and passen-
gers, and may make contracts for doing that
business. Such contracts you may make with
any other corporation or with individuals."
No doubt a contract by which the goods re-
ceived from railroad or other carrying com-
panies should be carried over the road of this
company, or by which goods or passengers
from this road should be carried by other
railroads, whether connecting immediately
with them or not, are within this power, and
are probably the main object of the clause.
But it is impossible, under any sound rule of
construction, to find in the language used a
permission to sell, lease, or transfer to others
the entire road and the rights and franchises
of the corporation. To do so is to deprive the
company of the power of making those con-
tracts which this clause confers, and of per-
forming the duties which it implies.
In Ashbury Railway Carriage & Iron Co. v.
Riche (decided in the house of lords in 1875>
L. R. 7 H. L. 6.53, the memorandum of asso-
ciation, which, as Lord Cairns said, stands
under the act of 1862 in place of a legislative
charter, thus described the business which
the company was authorized to conduct: "The
objects for which this company is established
are to make, sell, or lend on hire railway-
carriages and engines, and all kinds of rail-
way plant, fittings, machinery, and rolling-
stock; and to carrj' on the business of me-
chanical engineers and general contractors; to
purchase and sell as merchants timber, coal.
CORPORATIONS.
847
metals, or other materials; and to buy and
sell any such materials on commission or as
agents." This company purchased a conces-
sion for a railroad in Belgium, and entered
into a contract for its construction, on which
it paid large sums of money. The company
was sued afterwards on its agreement with
Riche, the contractor, and the contract was
held valid in the exchequer chamber by a
majority of the judges, on the ground that
while it was in excess of the power conferred
on the directors by the memorandum, it had
been made valid by ratification of the share-
holders, to whom it had been submitted.
The house of lords reversed this judgment,
holding unanimously that the contract was
beyond tlie powers conferred by the memo-
randum above recited, and being beyond the
powers of the association, no vote of the
shareholders whatever could make it valid.
The case is otherwise important in its rela-
tion to the one before us, but it is cited here
for its parallelism in the construction of the
clause defining the powers of the company.
If a memoi-audum which describes the par-
ties as engaging in furnishing nearly all the
materials, machinery, and rolling-stock which
enter into the construction of a railroad and
its equipments, and then empowers them to
carry on the business of mechanical engineers
and general contractors, cannot autliorize a
contract to build a railroad, surely the author-
ity to build a railroad and to contract for car-
rying passengers and goods over it and other
roads is no authority to lease it, and with the
lease to part with all its powers to another
company or to individuals. We do not think
there is anything in the language of the char-
ter which authorized the making of this
agreement.
It is next insisted, in the language of coun-
sel, that though this may be so, "a corporate
body may (as at common law) do any act
which is not either expressly or impliedly pro-
hibited by its charter; although where the
act is unauthorized by the charter a share-
holder may enjoin its execution, and the state
may, by proper process, forfeit the charter."
We do aot concur in this proposition. We
take the general doctrine to be in this country,
though there may be exceptional cases and
some authorities to the contrary, that the
powers of corporations organized under legis-
lative statutes are such and such only as
those statutes confer. Conceding the rule ap-
plicable to all statutes, that what is fairly im-
plied is as much granted as what is expressed,
it remains that the charter of a corporation Is
the measure of its powers, and that the enu-
meration of these powers implies the exclu-
sion of all others.
This class of subjects has received much
consideration of late years in the English
courts, and counsel have relied largely on the
decisions of those courts. Among the eases
cited by both sides is East Anglian Ry. Co. v.
Eastern Counties Ky. Co., 11 C. B. 775.
In that case the Eastern Counties Railway
Company had made a contract In which,
among other things, It covenanted to take a
lea.se of seveial other railroads whose compa-
nies had Introduced into parliament a bill for
consolidation under the name of East Anglian
Railways Company, and to assume the pay-
ment of the parliamentary expenses of this
act of consolidation.
This covenant was held void as beyond
the power conferred by the charter. "They
cannot," said the court, "engage in a new
trade, because they are incorporated only
for the purpose of making and maintaining
the Eastern Counties Railway. What addi-
tional power do they acquire from the fact
that the undertaking may in some way bene-
fit their line? Whatever be their object or
prospect of success, they are still but a
corporation for the purpose only of making
and maintaining the Eastern Counties Rail-
way; and if they cannot embark in new
trades because they have only a limited au-
thority, for the same reason they can do
nothing not authorized by their act and not
within the scope of their authority." This
case, decided in 1851, was afterwards cited
with approval by the lord chancellor in ls.57
in delivering the opinion of the house of
lords in Eastern Counties Ry. Co. v. Hawkes,
5 H. L. Cas. 331; and it is there stated that
it was also acted on and recognized in the
exchequer chamber in McGregor v. Deal &
Dover Ry. Co., 22 Law J. Q. B. 69. IS Q.
B. G18. Both these cases are cited approv-
ingly in the opinion of Lord Cairns in the
Ashbury Case on appeal in the house of
lords.
This latter case, as decided in the excheq-
uer chamber (L. R. 9 Exch. 224). is much
relied on by counsel for plaintiffs here as
showing that, though the contract may be
ultra vires when made by the directors, it
may be enforced if afterwards ratified by
the shareholders or if partly executed.
But In the house of lords, where the case
came on appeal, this principle was over-
ruled unanimously in opinions delivered by
Lord Chancellor Cairns, Lords Selbome,
Chelmsford, Hatherly, and O'Hagan, and the
broad doctrine established that a contract
not within the scope of the powers con-
feiTod on the corporation cannot be made
valid by the assent of every one of the
shareholders, nor can It by any partial per-
formance become the foundation of a right
of action.
It would be a waste of time to attempt
to examine the American cases on the sub-
ject, which are more or less conflicting, but
we think we are warranted in saying that
this latest decision of the house of lords
represents the decided preponderance of au-
thority, both in this country and in England,
and is based upon sound principle.
There is another principle of equal impor-
tance .and equally conclusive against the va-
348
CAPACITY OF PARTIES.
Udity of this contract, which, if not coming
exactly within the doctrine of ultra vires
as we have just discussed it, shows very
clearly that the railroad company was with-
out the power to make such a contract.
That principle Is that where a corporation,
like a railroad company, has granted to it
by charter a franchise intended in large
measure to be exorcised for the public good,
the due performance of those functions being
the consideration of the public grant, any
contract which disables the corporation from
performing those functions, which under-
takes, without the consent of the state, to
transfer to others the rights and powers
conferred by the charter, and to relieve the
grantees of the burden which it imposes,
is a violation of the contract with the state,
and is void as against public policy. This
doctrine is asserted with remarkable clear-
ness in the opinion of this court, delivered by
Mr. Justice Campbell, in New York & M. L.
R. Co. V. Winans, 17 How. 30. The cor-
poration in that case was chartered to build
and maintain a railroad in Pennsylvania by
the legislature of that state. The stock in
it was taken by a Maryland corporation,
called the Baltimore and Susquehanna Rail-
road Company, and the entire management
of the road was committed to the Maryland
company, which appointed all the officers
and agents upon it, and furnished the roll-
ing stock. In reference to this state of
things, and its effect upon the liability of
the Pennsylvania corporation for infringing
a patent of the defendant in error, Winans,
this court said: "This conclusion [argument]
implies that the duties imposed upon the
plaintiff by the charter are fulfilled by the
construction of the road, and that by alienat-
ing its right to use, and its powers of con-
trol and supervision, it may avoid further
responsibility. But those acts involve an
overturn of the relations which the charter
has arranged between the corporation and
the community. Important franchises were
conferred upon the corporation to enable it
to provide facilities for communication and
intercourse, required for the public conven-
ience. Corporate management and control
over these were prescribed, and corporate
responsibility for tlieir insufficiency provided
as a remuneration to the community for
their grant. The corporation cannot absolve
itself from the performance of its obliga-
tions without the consent of the legislature.
Beman v. Rufford, 1 Sim. (N. S.) 550; Winch
v. Birkenhead, L. & C. J. Ry. Co., 13 Eng.
Law & Eq. 506."
And in the case of Black v. Delaware & R.
Canal Co., 22 N. J. Eq. 130, Chancellor Zab-
riskie says: "It may be considered as set-
tled that a corporation cannot lease or alien
any franchise, or any property necessary
to perform its obligations and duties to the
state, without legislative authority." Id. 399.
For this he cites some ten or twelve de-
cided cases in England and in this country.
This brings us to the proposition that the
legislatiu-e of New Jersey has given its
consent by an act which amounts to a rati-
fication of this lease.
That act is entitled "A supplement to the
act entitled 'An act to incorporate the Mill-
ville and Glassboro Railroad Company," ap-
proved April 10, 1867; and its only purpose
was to regulate the rates at which freight
and passengers should be carried. It reads
as follows:
"That it shall be unlawful for the direct-
ors, lessees, or agents of said railroad to
charge more than three and a half cents
per mile for the carrying of passengers, and
six cents per ton per mile for the carrying
of freight or merchandise of any descrip-
tion, unless a single package, weighing less
than one hundred pounds; nor shall more
than one-half of the above rate be charged
for carrying any fertilizing materials, either
in their own cars or cars of other companies
running over said railroad: provided, that
nothing contained in this act shall deprive
the said railroad company, or its lessees, of
the benefits of the provisions of an act en-
titled 'An act relative to freights and fares
on railways in the state,' approved March
4, 1858, and applicable to all other railroads
in this state."
It may be fairly inferred that the legisla-
ture knew at the time the statute was passed
that plaintiffs were running the road, and
claiming to do so as lessees of the corpora-
tion. It was not important for the purpose
of the act to decide whether this was done
under a lawful contract or not No inquiry
was probably made as to the terms of that
lease, as no information on that subject
was needed.
The legislature was determined that who-
ever did run the road and exercise the
franchises conferred on the company, and
under whatever claim of right this was done,
should be bound by the rates of fare es-
tablished by the act Hence, without under-
taking to decide in whom was the rigLit to
the control of the road, language was used
which included the directors, lessees, and
agents of the railroad.
The mention of the lessees no more im-
plies a ratification of the contract of lease
than the word "directors" would imply a
disapproval of the contract. It is not by
such an incidental use of the word "lessees"
in an effort to make sure that all who col-
lected fares should be bound by the law,
that a contract unauthorized by the charter,
and forbidden by public policy, is to be made
valid and ratified by the state.
It remains to consider the suggestion that
the contract, having been executed, the doc-
trine of ultra vires is inapplicable to the
case. There can be no question that, in
many instances, where an invalid contract
which the party to it might have avoided
CORPORATIONS.
84"J
or refused to perform, has been fully per-
formed on both sides, whereby money has
been paid or property chanj^ed hands, the
courts have refused to sustain an action
for the recovery of the property or the mon-
ey so transferred.
In regard to corporations the rule has
been well laid down by Comstock, C. J., in
Parish v. Wheeler, 22 N. Y. 4»4, that the
executed dealings of corporations must be
allowed to stand for and against both par-
ties when the plainest rules of good faith
require it.
But what is sought In the case before us
Is the enforcement of the unexecuted part
of this agreement So far as it has been
executed, namely, the four or five years of
action under it, the accounts have been
adjusted, and each party has received what
he was entitled to by its terms. There re-
mains unperformed the covenant to arbitrate
with regard to the value of the contract.
It is the damages provided for in that clause
of the contract that are sued for in this
action. Damages for a material part of the
contract never performed; damages for the
value of a contract which was void. It is
not a case of a contract fully executed. The
very nature of the suit Is to recover dam-
ages for its non-performance. As to this it
Is not an executed contract.
Not only so, but It Is a contract forbidden
by public policy and beyond the power of
the defendants to make. Having entered In-
to the agreement, it was the duty of the
company to rescind or abandon it at the
earliest moment. This duty was independ-
ent of the clause in the contract which gave
them the right to do it Though they de-
layed its performance for several years, it
was nevertheless a rightful act when it was
done. Can this performance of a legal duty,
a duty both to stockholders of the company
and to the public, give to the plaintiffs a
right of action? Can they found such a
right on an agreement void for want of cor-
porate authority and forbidden by the policy
of the law? To hold that they can is, in
our opinion, to hold that any act performed
in executing a void contract makes all its
parts valid, and that the more that is done
under a contract forbidden by law, the
stronger is the claim to Its enforcement by
the courts.
We cannot see that the present case comes
within the principle that requires that con-
tracts, which, though invalid for want of
corporate power, have been fully executed,
shall remain as the foundation of rights
acquired by the transaction.
We have given this case our best consid-
eration on account of the importance of the
principles involved In its decision, and after
a full examination of the authorities we can
see no error in the action of the circuit
court Judgment affirmed.
a/-
CAPACITY OF PAllTIES.
u
BRADLEY v. BALLARD.
(55 III. 413.)
Supreme Court of Illinois. Sept. Term, 1870.
Appeal from circuit court. Cook county.
LAWRENCE, C. J. This was a bill in
chanceiT brought bj' Bradley against Bal-
lard and others, for the purpose of enjoining
the prosecution of a suit pending in the cir-
cuit court of Cook county, against a coi-pora-
tioa called "The North Star Gold and Silver
Mining Company," in which complainant
was a stockholder, upon certain promissory
notes given by said company, and also to can-
cel certain other notes not yet in suit. The
court sustained a demurrer to the bill, and
the complainant not asking to amend, a de-
cree of dismissal was entered.
It appears by the averments in the bill that
«arious persons associated themselves to-
gether in the city of Chicago in the year
18GG, and filed their articles of organization
in the circuit court of Cook county, under the
general incorporation law, whereby they be-
came incoi-porated under the title above stat-
ed. The statute requires the certificate to
state the town and county in which the opera-
tions of a company thus Incoi-porated are to
be carried on, and the certificate of this com-
pany stated that their operations were to
be carried on in the city of Chicago, in the
county of Cook and state of Illinois. It fur-
ther appears from the bill that the company
thus organized engaged in mining in the ter
ritory of Colorado, and in the prosecution of
that work borrowed large sums of money,
for which the notes described in the bill were
given, except some that are alleged to have
been given for official salaries. It is not
claimed that they were not given for a full
and fair consideration, but their cancellation
Is sought upon the gi-ound that they were
given for money borrowed to enable the com-
pany to prosecute a business which it had no
IKiwer to prosecute, and that this purpose
was known to the lenders of the money. It
Is insisted that, although the business of the
corporation was mining, yet, by the terms of
its certificate, it had no power to prosecute
that business beyond the limits of the city
of Chicago, or certainly not beyond the limits
of this state.
Whether this is the proper construction of
the statute is a question we do not find it
necessary to decide. Conceding that it is,
and that this corporation had no power to
engage in mining in Colorado, we are still of
opinion the complainant has not, by his bill,
entitled himself to relief. He became a stock-
holder to the extent of $25,000, and from the
name and character of the company he must
have known it was organized for the purpose
of mining beyond the limits of this state.
He subsequently became one of the directors
of said company, and it is a legitimate infer-
ence from the bill that at least a part of
these debts were created while he was thus
participating in the control of the company.
There is no pretence in the bill that he ever,
in any mode, objected to the mining opera-
tions of the company, in Colorado, or to the
borrowing of money therefor, and the fair,
and, indeed unavoidable inference, from the
nature of the company, the connection of
complainant with it, and the silence of the
bill in this regard, is that he did not object.
On what ground, then, can he ask a court of
equity to enjoin the collection of these notes?
It is said by counsel for complainant, that
a corporation is not estopped to say, in its
defence, that it had not the power to make
a contract sought to be enforced against it,
for the reason, that if thus estopped, its pow-
ers might be indefinitely enlarged. While
the contract remains unexecuted on both
sides, this is undoubtedly true; when, under
cover of this principle, a corporation seeks to
evade the payment of borrowed money, on
the ground that, although it had power to
borrow money, it expended the money bor-
rowed in prosecuting a business which it was
not authorized to prosecute, it is pressing the
doctrine of ultra vires to an extent that can
never be tolerated, even though the lender
of the money knew that the corporation was
transacting a business beyond its chartered
powers, and that his money would be used in
such business, provided the business itself
was free from any intrinsic immorality or il-
legality.
Neither is it correct to say that the applica-
tion to corporations of the doctrine of equi-
table estoppel, where justice requires it to
be applied, as when, imder a claim of cor-
porate power, they have received benefits for
which they refuse to pay, from a sudden dis-
covery that they had not the powers they
had claimed, can be made the means of en-
abling them indefinitely to extend their pow-
ers. If that were true. It would be an in-
superable objection to the application of the
doctrine, even for the purpose of preventing
injustice in individual cases. But it is not
true. This doctrine is applied only for the
purpose of compelling corporations to be hon-
est, in the simplest and commonest sense of
honesty, and after whatever mischief may
belong to the performance of an act ultra
vires has been accomplished. But while a
contract remains executory, it is perfectly
true that the powers of corporations cannot
be extended beyond their proper limits, for
the purpose of enforcing a contract. Not
only so, but on the application of a stock-
holder, or of any other person authorized to
make the application, a court of chancery
would interfere and forbid the execution of
a contract ultra vires. So too, if a contract
ultra vires is made between a corporation and
another person, and, while it Is yet wholly
unexecuted, the corporation recedes, the oth-
er contracting party would probably have no
claim for damages. But if such other party
proceeds in the performance of the contract.
COHPORATIONS.
851
expending his money and his labor In the
production of values which the coi-poration
appropriates, we can never hold the cuiijora-
tiou excused from payment, on the plea that
the contract was beyond its power.
Talie, for example, the case of a corpora-
tion chartered to build a railway from Chi-
cago to llock Island. Under such a charter,
the company would have no power to build
steamboats for the pui-pose of running a line
of such vessels between llock Island and St
Louis. But suppose the company, notwith-
standing the want of power, should make a
contract for the building of a vessel, and it
is built by the contractor, and accepted and
used by the railway. Could any court per-
mit the corporation, when sued for the value
of the vessel, to excuse itself from payment,
on the ground that, although it has and uses
the steamer, it had no authority to do so by
its charter? Or, suppose that instead of hav-
ing a vessel built by a contractor it employs a
superintendent to build it, and hires me-
chanics by the day. Could it escape the pay-
ment of their wages, on the ground that it
had employed them in a work ultra vires V
In cases of such character, courts simply
Bay to corporations: You cannot in this case
raise the question of your power to make the
contract. It is sufficient that you have made
it, and by so doing have placed in your cor-
porate treasury the fruits of others' labor,
and everj' principle of justice forbids tliat
you be permitted to evade payment by an
appeal to the limitations of your charter.
We are aware that cases may be cited in
apparent conflict with the principles here an-
nounced, but the tendency of recent decisions
is in harmony with them. While courts are
incUned to maintain with vigor the limita-
tions of corporate action, whenever it is a
question of restraining the corporation in ad-
vance from passing beyond the boundaries
of their charters, they are equally inclined,
on tl)e other hand, to enforce against them
contracts, though ultra vires, of which they
have received the benefit. This is demand-
ed by the plainest principles of justice. 2
Kent, Comm. (11th Ed.) p. 3S1, note; Zabris-
kie V. Railroad Co., 23 How. 3S1: Bissell v.
Raflroad Co., 22 N. Y. 25S; Cary v. Railroad
Co., 29 Barb. 35; Parish v. Wheeler, 22 N.
Y. 494; De Groff v. Thread Co., 21 N. Y.
124; Argentl v. San Francisco, 16 Cal. 255;
McClner v. Railroad, 13 Gray, 124; Chap-
man V. Railroad Co., 6 Ohio, 137; Hall v.
In.surance Co., 32 X. H. 297; Railroad Co.
V. Howard. 7 Wall. 413.
If tlie complainant in this case had, as a
stockholder, asked a court of chanceiy to
enjoin this corporation from mining in Col-
orado, it would have examined the charter,
and if it had arrived at the conclusion that
such mining was beyond the powers derived
from filing the certificate in question, under
our statute, would have Issned the Injunc-
tion. But this he did not do. On the con-
trary, he has participated in the work, and
so long as there was hope of gain, he was
willing the money should be borrowed by
which the work was to be carried forward.
The borrowing of the money was not, in
itself, an act ultra vires, nor was the giving
of the notes. The money was not bon-owed
to be used for an illegal or immoral puiT'Ose.
The lenders have been guilty of no violation
of law, nor wrong of any kind. The corpora-
tion has received their money and used it
for a purpose, which, whether ultra vires or
not, was unquestionably the sole ijurpose for
which the corporators associated themselves
together, and for which this complainant be-
came a stockholder. Justice requires the
coi-poration to repay the money it has thus
borrowed and expended.
What we have said appUes only to private
corporations, organized for pecuniary gain.
If, to increase their profits they embark in
enterprises not authorized by their charter,
still, as to third persons, and when neces-
sary for the advancement of justice, the
stockholders will be presumed to have as-
sented, since it is in their power to restrain
their officers when they transgress the lim-
its of their chartered authority. But munic-
ipal corporations stand upon a different
ground. They are not organized for gain,
but for the purpose of government, and debts
illegally contracted by their officers -annot
be made binding upon the taxpayers, from
the presumed assent of the latter.
There are some vague charges in the bill
of conspiracy between the holders of the
notes upon which suit has been brought and
some of the directors, but no facts are al-
leged showing, or tending to show, any
wrongful or fraudulent intent. The alleged
conspiracy seems merely to be an under-
standing between the holders of the notes
and the majority of the dirt-ctors, by which
the latter will allow the former to obtain
judgment on their notes, and we do not per-
ceive why they should not. If the complain-
ant lias had the misfortune to associate him-
self \\ith p'^rsons of less pectmiary responsi-
bility than himself for the purpose of carry-
ing on a hazardous business, in which heavy
debts have been incurred, it is a misfortune
of which the courts cannot relieve him. mere-
ly on a vague and general charge of con-
spiracy against his feUow stockholders or
directors. No facts are alleged in this bill
which can be made the foundation of relief.
As before remarked, the counsel of appel-
lant has presented his case simply on the
question of corporate power. We are of
opinion the demurrer was properly sustained
to the bill. Decree affirmed.
Mr. Justice SCOTT dissents.
CAPACITY OF PARTIES.
//T UNION BANK v. JACOBS.
(6 Humph. 515.)
Supreme Court of Tennessee. Sept Term, 1845.
On the 28th day of September, 1841, Ja-
cobs, as president of the Hiwassee Railroad
Company, executed a note, binding that com-
pany to pay to said Jacobs the sum of $5,641,
negotiable and payable at the branch of the
Union Bank at Knoxville, foiu- mouths after
date. The note was indorsed by Jacobs to
Trautwine, and by Trautwine to the Union
Bank, and delivei-ed to the president and di-
rectors of the bank, and discounted by the
bank for the benelit of the Hiwassee Com-
pany. At maturity, the note was protested,
and suit brought by the bank against Jacobs,
as indorser, in the circuit court of Knox coun-
ty.
It was tried by Judge Lucky and a jury at
the February term, 1845. He charged the
jui-y that the Hiwassee Company had no
power to borrow money, and that the note
given in execution of a void contract was null
and void also.
The jury returned a verdict for the defend-
ant, and plaintiff appealed.
TURLEY, J. At the session of the legis-
lature of the state of Tennessee, in the year
1835-183G, tlae Hiwassee Railroad Company
was created a body coi-porate, with perpetual
succession, with power to sue and be sued,
plead and be impleaded, and to possess and
enjoy all the rights, privileges, and immuni-
ties, with power to make such by-laws, ordi-
nances, rules, and regulations, not inconsist-
ent with the laws of this state and the Unit-
ed States, as shall be necessary to the well
ordering and conducting the affairs of said
company; and be capable in law of pur-
chasing, acceptmg, selling, and conveying es-
tates, real, personal, and mixed, to the end,
and for the purpose of facilitating the inter-
course and transportation from Knoxville,
East Tennessee, through the Hiwassee dis-
trict, to a point on the southern boundary of
Tennessee, to be designated by commissioners
as the most practicable route to intersect the
contemplated raUroad from Augusta to Mem-
phis.
By the 2d section of the act of incorporation
the capital stock ot the company is limited to
six hundred thousand dollars, in shares of one
hundred doUars each; and it is provided, that,
so soon as four thousand shares are subscrib-
ed, the corporate power of said company shall
commence, and have as fuU operation as if
the whole of the shares comprising the capi-
tal stock were subscribed.
By the 4th section it is provided, that there
shall be paid on each share subscribed, but
not till after four thousand shares shall have
been subscribed, such sum as the president
and directors, or a majority of them, may di-
rect, and in such instalments, not exceeding
one fourth of the subscription in any one
year: Provided, no payment shall be demand-
ed until at least thirty days' notice shall have
been given by the said president and directors
in the newspapers printed in the towns of
Knoxville and Athens, of the time and place
of payment; and if any subscriber shall fail
or neglect to pay any instalment or part of
said subscription thus demanded, for thirty
days next after the time it fell due, the stock
on which it was demanded, together with the
amount paid in, may, by the president and
directors, or a majority' of them, be declared
forfeited, and, after due notice, shall be sold
at auction for the benefit of the company, or
they may waive the forfeiture after thu-ty
days default, and sue the stockholders, at
their discretion, for the instalments due.
By the 13th section, the president and di-
rectors of said company are invested with all
the powers and rights necessary for the build-
ing, constructing, and keepmg in repair of a
raihoad from Knoxville, East Tennessee,
through the Hiwassee disti-ict, to a point on
the southern boundary of Tennessee, on the
nearest, best, and most practicable route,—
the road to have as many tracks as may be
deemed necessary by the board of directors,
but not to be more than one hundred feet
wide, which the company may purchase, or
cause tlie same to be condemned for the use
of the road, or any less breadth, at the dis-
cretion of the directors; and they may cause
to be made, or contract with others for mak-
ing of said road or any part thereof; ajud
they, or their agents, or those with whom
they may contract for making any part of
said road, may enter upon, use, and exca-
vate any land which may be laid out for the
site of said road, for the erection of ware-
houses, engine arbors, reservoirs, booths, sta-
bles, offices, and mechanics' shops, or other
works necessary or useftil in the construction
and repair thereof; and may fix scales and
weights, build bridges, lay rails, make em-
bankments and excavations; may use any
earth, ground, rock, timber, or other material
which may be wanted for the construction
and repair of any part of said road; and may
construct and acquire all necessary steam-
engines, cars, wagons, and carriages for
transportation on said road by horses or
steam power, and all necessary apparatus
for the same.
Sections 15 and 16 make provision for con-
pensation and payment by the comijany to
individuals for land or other property appro-
priated under the provisions of the charter to
the making of said road, and incidental in-
juries done by reason of its construction.
These are all the provisions of the charter
that need be adverted to, for the purpose of
investigating the questions of law arising in
the case. Under the provisions of this char-
ter, the company was legally organized and
proceeded to construct the road; much work
was done in excavations, embankments,
building bridges, etc., and much money ex-
pended therefor, and in the payment of the
! salaries of the different officers necessary for
CORPORATIONS.
353
the snperlntondenre thereof. In the con-
sti-uction, the couipany became indebted to
one Kennedy Lonergin, a contractor for yrad-
inff the road, in the sum of five thousand
dollars; for the payment of which, It execut-
ed, by its president, its promissory note to S.
D. Jacobs, negotiable and payable at the of-
fice of discount and deposit of the Union
Bank of the state of Tennessee at Knoxville;
this note was negotiated by S. D. Jacobs to
.loiin C. Trautwine, and by him to the Union
Hank, and the proceeds passed by the bank
to the credit of Kennedy Lonergin. When
the note fell due, it was protested for non-
payment, and due notice thereof given to the
indorsers, Jacobs and Trautwine. They fail-
ing to pay, suit was instituted thereon against
S. D. Jacobs, the first indorser, in the circuit
ccjurt of Knox county, and the same was
brought to trial before a jury, at the Febru-
ary term thereof, 1845, when the circuit judge
charged the jury, "that the note was drawn
by the Hiwassee Railroad Company, in viola-
tion of Its coi-porate powers; that it was,
therefore, null and void; and that the plain-
tiffs were not entitled to recover." Under
this charge, a verdict was retimied in favor
of the defendant, and judgment rendered
thereon against the plaintiffs, to reverse
which, a writ of error is prosecuted to this
court.
It is contended against the plaintiff's right
to recover that there is no power given,
either expressly or by necessary implication,
by the charter to the Hiwassee Railroad
Company, to borrow money or to execute
promissory notes; and that, therefore, the
note executed and indorsed to the bank is
void, both as against the maker and indors-
ers, and that no action can be maintained
against them thereon.
The construction of the powers of corpora-
tions has been a fruitful source of litiga-
tion, both in the courts of Great Britain and
the United States. In the earlier cases they
were construcora-
tion. 3 P. Wms. 419. And courts of equity,
HOPK. SEL. CAS. COXT. —23
in this respect, seeming to follow the law
have decreed a specific performance of au
agreement made by a major pan of a cor-
poration, and eut<'r<(l in the corporation
books, although not under the corporate
seal. 1 Fonbl. Eq. 305. This technical doc-
trine has in more modem times been en-
tirely broken down." The same judge, Id
continuation in the same case, observes:
"The doctrine that a corporation could not
contract except under its seal, or, in other
words, could not make a promise, if it had
ever been fully settled, m\i>:t have been pro-
ductive of great mischief. Indeed, as soon
as the doctrine was established, that its
regularly appointed agents could contract ia
their name without seal, it was impossible
to support it; for, otherwise, the party who
trusted such contract would be without
remedy against the corporation. Accord-
ingly, it would seem to be a sound rule of
law, that whenever a corporation is acting
within the scope of the legitimate purposes
of its institution, all parol contracts, made
by its authorized agents, are express prom-
ises of the corfwration; and all duties im-
posed upon them by law, and all benefits
conferred at their request, raise implied
promises, for the enforcement of which an
action may well lie. 3 Brown Ch. 2G2;
Doug. 524; 3 Mass. 3G4; 5 Mass. 89, 491; 6
Mass. 50." Whatever of strictness may have
existed in the earlier cases, in restricting
their power of contracting to the express
grant of authority, has been also greatly re-
laxed, and the doctrine upon the subject
been made more conformable to reason and
necessity, the powers granted to corpora-
tions being now construed like all other
grants of power, not according to the letter,
but the spirit and meaning. In Ang. & A-
Corp. p. 192, § 12, it is said, "A corporation
having been created for a specific purpose,
can not only make no contracts forbidden
by its charter, which is, as it were, the law
of its nature, but in general can make no
contract which is not necessary, either di-
rectly or incidentally, to enable it to an-
swer that purpose. In deciding, therefore,
whether a corporation can make a particu-
lar contract, we 'are to consider, in the first
place, whether its chatter, or some statute
binding upon it, forbids or permits it to
make such a contract; and if the charter
and valid statutory law are silent upon the
subject, in the second place, whether the
power to make such a contract may not be
implied on the part of the corporation, as
directly or incidentally necessary to enable
it to fulfil the purpose of its existence, or
whether the contract is entirely foreign to
that purpose. In genei-al, an express au-
thority is not indispensable to confer upon
a corpora tioq the right to become drawer,
Indorser, or acceptor of a bill of exchange,
or to become a party to any other negoti-
able paper. It is sufficient, if it be implied
as the usual and proper means to accom-
354
CAPACITY OF PARTIES.
plish the purposes of the charter. Chit.
BiUs (5th Ed.) 17-21; Baily, BiUs (5th Ed.)
p. 69. c. 2, § 7; Story. Bills Exch. p. 94,
§ 79. In the case of Mum v. Commission
Co., 15 Johns. 52, Spencer, J., who delivered
the opinion of the court, says: 'It has been
strongly urged, that, under the act of in-
corporating this company, they could neith-
er draw nor accept bills of exchange. Their
power is undoubtedly limited; they are re-
quired to employ their stock solely in ad-
vancing money, when required, on goods
and articles manufactured in the United
States, and the sale of such goods and ar-
ticles on commission. The acceptance of a
bill is an engagement to pay money; and
the company may agree to pay or advance
money at a future day, and they may en-
gage to do this by the acceptance of a bill.
When a charter or act of incorporation and
valid statutory law are silent as to what
contracts a corporation may make, as a gen-
eral rule it has power to make all such con-
tracts as are necessary and usual in the
course of business, as means to enable it to
attain the object for which it was created,
and none other. The creation of a corpora-
tion for a specific purpose implies a power
to use the necessai-y and usual means to
effectuate that purpose.' " Ang. & A. Corp.
p. 200. § 3.
Mr. Story, in his treatise on Bills of Ex-
change (page 95), speaking of the power of
corporations to draw, indorse, and accept bills
of exchange, says: "It is sufficient if it be
implied as a usual and appropriate means to
accomplish the objects and purposes of the
charter. But when the drawing, indorsing,
or accepting such bills is obviously foreign
to the purposes of the charter, or repugnant
thereto, then the act becomes a nullity, and
uot binding on the corporation."
In the case of People v. Utica Ins. Co., 15
Johns., Thompson, C. J., who delivered the
opinion of the court, says, at page 383, "An
Incorporated company has no rights but such
as are specially granted, and those that are
necessary to carry Into effect the powers so
granted."
In the case of Mott v. Hicks, a quantity
of wood was purchased for the president
and directors of the Woodstock Glass Com-
pany by Whitehead Hicks, the president
thereof, for which he executed the promis-
sory note of the company at six months.
It appears, from a reference in argument
to the charter of the company, that there
was no' clause authorizing it to issue bills
or notes, or making such, if issued, binding
and obligatory upon the company; yet it
was held by the court, that an action would
lie against the corporation upon the note, it
having been executed by its legally author-
ized agent, acting within the scope of the
legitimate purposes of such corporation. 1
Cow. 513.
In the case of Hayward v. Pilgrim Soc,
21 Pick. 270, it was held that the tx-ustees
of a society incorporated for the purposo of
building a monument, in virtue of their au-
thority to manage the finances and property
of the society, were held competent to bind
the society by a promissory note through
the agency of their treasurer.
These authorities fully establish the pro-
position, that, in the construction of char-
ters of corporations, the power to contract,
and the mode of contracting, is not limited
to the express grant, but may be extended
by implication to all necessary and proper
means for the accomplishment of the pur-
poses of the charter. Now, what are neces-
sary and proper means? Mr. Story, as we
have seen, says, if the means are usual and
appropriate, the implication of power arises.
Story, Bills, 95.
Chief Justice Marshall, in the case of Mc-
Cullock V. State of Maryland, 4 Wheat. 413,
says: "But the argument on which most
reliance is placed, is drawn from the peculi-
ar language of this clause of the constitu-
tion. Congress is not empowered by it to
make all laws which may have relation to
the powers conferred on the government,
but such only as may be necessary and
proper for carrying them into execution.
The word 'necessary' is considered as con-
trolling the whole sentence, and as limiting
the right to pass laws for the execution of
the granted powers, to such as are indis-
pensable, and without which the power
would be nugatory. That it excludes the
choice of means, and leaves congress, in
each case, that only which is most direct
and simple. Is it true, that this is the sense
in which the word 'necessary' is always
used? Does it always import "an absolute
physical necessity, so strong that one thing
to which another may be termed necessary
cannot exist without that other? We think
it does not. If reference be had to its use
in the common affairs of the world, or in
approved authors, we find that it frequently
imports no more than that one thing is con-
venient or useful or essential to another.
To employ the means necessary to an end,
is generally understood as employing any
means calculated to produce the end, and
not as being confined to those single means,
without which the end would be entirely
unattainable. Such is the character of the
human mind, that no word conveys to it,
in all situations, one single definite idea,
and nothing is more common than to use
words in a figurative sense. Almost all com-
positions contain words which, taken in
their rigorous sense, would convey a mean-
ing different from that which is obviously
intended. It is essential to just construc-
tion, that many words, which import some-
thing excessive, should be understood in a
more mitigated sense,— in that sense which
common usage justifies. The word 'neces-
sary' is of this description. It has no fixed
character peculiar to itself. It admits of
all degrees of comparison, and is often con-
CORPORATIONS.
855
nected with other words, which Increase or
diminish the impression the mind rocoives
of the urf^ency it imports. A thing may be
nocossary, very necessary, absolutely or in-
dispensably necessary. To no mind would
the same idea be conveyed by these several
phrases." In conclusion upon this subject,
he says, page 421, same case: "We admit,
as all must admit, that the powers of the
government are limited, and that its limits
are not to be transcended. But we think
the sound construction of the constitution
must allow to the national legislature that
discretion with respect to the means by
which the powers it confers are to be car-
ried into execution, Avhich will enable that
body to perform the high duties assigned to
it in the manner most beneficial to the
people. Let the end be legitimate, let it
be within the scope of the constitution, and
all means which are appropriate, which are
plainly adapted to that end, which are not
prohibited, but consist with the letter and
spirit of the constitution, are constitu-
tional."
Now, if this be true doctrine In relation
to the constitution of the United States,
surely it will not be contended that a more
stringent rule will be applied in the con-
struction of the powers of a corporation,
than is applied in the construction of the
powers of congress under the constitution
of the United States.
To apply these principles, as established
by the authorities cited, to the case un-
der consideration. The Hiwassee Railroad
Company is chartered to construct a rail-
road, a thing of itself necessarily involving
a heavy expenditure of money; but in ad-
dition thereto, it is empowered to sue and
be sued, to acquire and hold, sell, lease, and
convey estates, real, personal, and mixed,
which necessarily involves the power of
making contracts for the same. How shall
these contracts be made, both for the con-
struction of the road and the purchase of
the property? It is argued, that the capi-
tal stock of the company is the only means
provided for the payment, and that no other
can be resorted to for that purpose; or, in
ether words, that it must pay cash for
eveiT contract, for that no power is given,
by which it may contract upon time; for if
it may create a debt, of necessary conse-
quence it may create written evidences of
that debt, and these may be either promis-
sory notes or bills of exchange. It is true,
that the capital stock of the company is
the source from whence an ultimate pay-
ment of the debts of the company must be
made, but to hold that a sufficient amount
of this stock must always be on hand, to
pay immediately for every contract made,
would be destructive of the operations of
the company. By the provisions of the
charter, not more than one-fourth of the
stock shall be called for in any one year,
and this upon thirty days" notice; and if,
within thirty days after such notice, the
amount called for be not paid, the company
is authorized to take steps against the de-
llnciuent stockholders, to enforce payment.
Now, it is obvious that it never was intend-
ed that all the stock should be paid in be-
fore the company commenced operations.
The early completion of the road was a de-
sirable object for commercial purposes, and
can it be pretended that the expenditures
of the company were to be limited and re-
stricted to the amount of capital actually
paid in by the stockholders, and that under
no circumstances was the company to ex-
ceed them? If, upon failure of the means
on hand, the stockiiolders should neglect to
pay upon a proper call, are the works to be
suspended until such time as payments
could be enforced? Are the persons who
may have done work for it, and for which
they have not been paid, to wait the slow
process of the law before they can receive
satisfaction? And shall the company not
be permitted to use its credit in such emer-
gency? It is so argued for the defendant
This construction of the charter would be
ruinous in its consequences. The company
might be compelled to suspend all opera-
tions at a time when great loss would result
from deterioration to unfinished work, and
be greatly injured also in its credit.
The restriction contended for is too refin-
ed and technical. It might have suited the
days of the Year Books, when it was held
that a corporation could contract for noth-
ing except under its corporate seal; but it
is strange that it should be urged at this
.day of enlightened jurisprudence, when the
substance of things is looked to rather than
forms. A corporation is, in the estimation
of law, a body created for special purposes,
and there is no good reason why it should
not, in the execution of these purposes, re-
sort to any means that would be necessary
and proper for an individual in executing
the same, unless it be prohibited by the
terms of its charter, or some public law,
from so doing.
There is no principle which prevents a cor-
poration from contracting debts within the
scope of its action; and, as has been ob-
served, if it may contract a debt, it neces-
sarily may make provision for its payment,
by drawing, or indorsing, or accepting notes
or bills. It is not pretended that this power
extends to the drawing, indorsing, or accept-
ing of bills or notes generally, and discon-
nected from the purposes for which the cor-
poration was created.
The corporation, in the present case, was
indebted to one of its conti-actors for work
done upon the road, for the payment of
which the note in question was drawn. This,
upon principle and authority, was a usual
and appropriate means for accomplishing the
object and purposes of the charter, viz., tl:e
construction of the road. Not only do aU
the elementary writers sustain this view
356
CAPACITY OF PARTIES.
of the subject, but, as we have seen, there
are three adjudicated cases in courts of high
authority dii-ectly in its favor,— the case of
^lum V. Commission Co., 16 Johns. 52, the
case of Mott v. Hiclis, 1 Cow. 513, and the
case of Hayward v. Pilgi'im Soc., 21 Pick.
270.
There has not been produced a single case
to the contrary. The cases cited relied upon
are decided upon different grounds entirely.
The case of Broughton v. Manchester & Sal-
ford Waterworks, 3 Barn. & Aid. 1, decides
nothing more than that a corporation, not
established for trading purposes, cannot be
acceptoi"s of a bill of exchange, payable at
a less period than six months from the date,
because such a case falls within the provi-
sions of the several acts passed for the pro-
tection of the Bank of P^ngland, by which
it is enacted, that it shall not be lawful for
any bcdy corporate to borrow, owe, or take
up any money upon their bills or notes pay-
able at demand, or at any less time than six
months from the borrowing thereof. It is
true, that Baily, J., in his opinion, says:
"There being no power expressly given to the
corporation to make promissory notes or
become parties to bills of exchange, I should
doubt very much (even if the bank acts
were entirely out of the question) whether
such corporation would have any power to
bind itself for purposes foreign to those for
which it was originally established;" and
Best, J., in his opinion, says, "I am also
of opinion, that this action is not maintain-
able, because this case comes within that
rule of law by which corporations are pre-
vented from binding themselves by contract,
not under seal. When a company, like the
Bank of England, or East India Company,
are incorporated for the purposes of trade,
it seems to result from the very object of
their being so incorporated, that they should
have power to accept bills or issue promis-
sory notes; it would be impossible for either
of these companies to go on without accept-
ing bills. In the case of Stark v. Highgate
Arch- Way Co., 5 Taunt. 792, the court of
common pleas seemed to think that, unless
express authority was given by the act es-
tablishing the company to make promissory
notes eo nomine, a corporation could not
bind itself except by deed. Now, there is
nothing in the act of parliament establishing
this company, which authorizes them to
bind themselves except by deed." So, the
authority of this case for the defendant rests
Bolely upon the dubitatur of Baily and the
opinion of Best, that the company could
only bind itself by deed. How much, under
these circumstances, it is worth, need not
be said.
The case of People v. Utica Ins. Co., 15
Johns, 358, decides, that, since the act to
restrain unincorporated banking associations
(April 11, 1804, re-enacted April 6, 1813), the
right or privilege of carrying on banking
operations by an association or company, is
a franchise which can only be exercised un-
der a legislative grant; that a corporation
has no other powers than such as are specif-
ically granted by the act of incorporation, or
are necessary for the purposes of caiTying
into effect the powers expressly granted;
and that the act to incorporate the Utica In-
surance Company does not authorize the
company to institute a bank, issue bills,
discount notes, and receive deposits, such
powers not being expressly granted by the
legislature, and not being within their in-
tention, as collected from the act of incor-
poration; and that the company having as-
sumed and exercised these powers, they were
held to have usui-ped a franchise.
It is scarcely necessary to enter into an
investigation, to show the ground upon which
this decision rests. Banking privileges, by
an association or company, in New York,
rest upon express grant. There was no such
grant to the Utica Insm-ance Company, and
an exercise of the power was not necessary
and proper to the performance of the pur-
poses for which it is created, but wholly
foreign thereto.
In the case of New York Firemen Ins. Co.
V. Ely, 2 Cow. 678, it is held, that a com-
pany incorporated for the purpose of insur-
ance, and forbidden to carry on any other
trade or business, also forbidden to exer-
cise banking powers, with a clatise in the
act incorporating them enumerating the kind
of securities upon which they may loan
money, but not including promissory notes
in such enumeration, have no power to loan
moneys upon promissory notes or any se-
curities other than those especially enumerat-
ed. This company being incorporated for
the purpose of insurance only, the discount-
ing of promissory notes would have been
foreign to the purpose of its creation; but,
in addition thereto, it is expressly prohibited
from carrying on any other trade or busi-
ness, or exercising banking powers, and the
kind of securities upon which it may loan
money are especially enumerated, promis-
sory notes being excluded, it is a well-set-
tled maxim of the law, the "expressio unius
exclusio est alterius";— then, for many rea-
sons, this company had no power under its
charter to discount notes. It is not only not
given expressly or by implication, but upon
every principle of legal construction is with-
held.
In the case of Life Ins. & Fire Ins. Co.
V. Mechanics' Fire Ins. Co. of New York,
7 Wend. 31, it is held, that "a corporation au-
thorized to lend money only on bond and
mortgage cannot recover money lent by the
corporation, except a bond and mortgage be
taken for its re-payment; every other se-
curity, as well as the contract itself, is void,
and not the basis of action." The reason
for this decision is obvious; bond and mort-
gage being specified as the securities upon
which the company might lend money, all
others were considered as excluded, upon
CORPORATIONS.
857
the principle mentioned above, "Expressio
unlus excluslo est alterius."
These are all the cases relied upon by the
defendant for the support of the position as-
sumed by him; we are satisfied that they
have no applicability to the question, and
are not authority in this case.
We are then of opinion (to use the words
of Chief Justice Marshall, in the case of
McCullock V. State of Maryland) that the
end proposed by the Hiwassee Railroad Com-
pany, in executing the note In question, was
legitimate, and within the scope of its char-
ter; that as a means It was appropriate, and
plainly adapted to that end, which is not
prohibited, but consistent with the letter
and spirit of the charter, and therefore, not
void, but binding and effectual upon the
company and the Indorsers.
Let the Judgment of the circuit court be
reversed, and the case be remanded for a
new trlaL
358
REALITY OF CONSENT.
3?
FOSTER V. MACKINNON, j^o
CL. R, 4 C. P. 704.)
Court of Common Pleas. July 5, 1869.
BYLES, J. This was an action by the
plaintiff as indorsee of a bill of exchange for
£3.000 against the defendant, as indorser.
The defendant by one of his pleas traversed
the mdorsement, and by another alleged that
the defendant's indorsement was obtained
from him by fraud. The plaintiff was a hold-
er for value before maturity, and without
notice of any fraud.
There was contradictory evidence as to
whether the indorsement was the defend-
ant's signature at all; but, according to the
evidence of one Callow, the acceptor of the
bill, who was called as a witness for the
plaintiff, he, Callow, produced the bill to the
defendant, a gentleman advanced in life, for
him to put his signature on the back, after
that of one Cooper, who was payee of the
bill and first indorser. Callow not saying that
it was a bill, and teUing the defendant that
the instrument was a guarantee. The de-
fendant did not see the face of the bill at
all. But the bill was of the usual shape, and
bore a stamp, the impress of which stamp
was visible at the back of the bill. The de-
fendant signed his name after Cooper's, he,
the defendant (as the witness stated), believ-
ing the document to be a guarantee only.
The lord chief justice told the jury that,
if the indorsement was not the defendant's
signature, or If, being his signature, it was
obtained upon a fraudulent representation
that it was a guarantee, and the defendant
signed it without knowing that it was a bill,
and under the belief that it was a guarantee,
and if the defendant was not guilty of any
negligence in so signing the paper, the de-
fendant was entitled to the verdict. The jury
found for the defendant.
A rule nisi was obtained for a new trial,
first, on the ground of misdirection in the
latter part of the summing-up, and, secondly,
on the ground that the verdict was against
the evidence.
As to the first branch of the rule. It seems
to us that the question arises on the traverse
of the indorsement. The case presented by
the defendant is that he never made the con-
tract declared on; that he never saw the face
of the bill; that the purport of the contract
was fraudulently misdescribed to him; that,
when he signed one thing, he was told and
believed that he was signing another and an
entirely different thing; and that his mind
never went with his act.
It seems plain, on principle and on author-
ity, that, if a blind man, or a man who can-
not read, or who for some reason (not imply-
ing negligence) forbears to read, has a writ-
ten contract falsely read over to him, the
reader misreading to such a degree that the
written contract is of a nature altogether dif-
ferent from the contract pretended to be read
from the paper which the blind or illiterate
man afterwards signs; then, at least if there
be no negligence, the signature so obtained is
of no force. And it is invalid not merely on
the groimd of fraud, where fraud exists, but
on tlie ground that the mind of the signer
did not accompany the signature; in other
words, that he never intended to sign, and
therefore, in contemplation of law, never did
sign, the contract to which his name is ap-
pended.
The authorities appear to us to support this
view of the law. In Thoroughgood's Case, 2
Coke. 9b, it was held -that, if an illiterate
man have a deed falsely read over to him,
and he then seals and delivers the parch-
ment, that parchment is nevertheless not his
deed. In a note to Thoroughgood's Case, 2
Coke, 9b, In Eraser's edition of Coke's Re-
ports, it is suggested that the doctrine is not
confined to the condition of an illiterate gran-
tor; and a ease in Keilwey's Reports (70 pi. 6),
Is cited in support of this observation. On
reference to that case, it appears that one of
the judges did there observe that it made no
difference whether the grantor were lettered
or unlettered. That, however, was a case
where the grantee himself was the defraud-
ing party. But the position that if a grantor
or covenantor be deceived or misled as to the
actual contents of the deed, the deed does
not bind him, is supported by many authori-
ties. See Com. Dig. "Fait" (B, 2); and is
recognized by Bayley, B., and the court of
exchequer, in the case of Edwards v. Brown,
1 Cromp. & J. 312. Accordingly, it has re-
cently been decided in the exchequer chamber
that if a deed be delivered, and a blank left
therein be afterwards improperly filled up (at
least, if that be done without the grantor's
negligence), it is not the deed of the grantor.
Swan V. North British Australasian Land Co.,
2 Hurl. «& C. 175.
These cases apply to deeds, but the prin-
ciple is equally applicable to other written
contracts. Nevertheless, this principle, when
applied to negotiable instruments, must be
and is limited in its application. These in-
struments are not only assignable, but they
form part of the currency of the country. A
qualification of the general rule is necessary
to protect innocent transferees for value.
If, therefore, a man writes his name aci'oss
the back of a blank bill-stamp, and part with
it, and the paper is afterwards improperly
filled up, he is liable as indorser. If he write
it across the face of the bill, he is liable as
acceptor, when the instrument has once
passed into the hands of an innocent indorsee
for value before maturity, and liable to the
pxtent of any sum which the stamp wiU cov-
er.
In these cases, however, the party signing
knows what he is doing. The indorser in-
tended to indorse, and the acceptor intended
to accept, a bill of exchange to be thereafter
filled up, leaving the amount, the date, the
maturity, and the other parties to the bill
undetermined.
MISTAKE.
359
But in the case now under consideration
the defendant, accordinfj to the evidence, if
believed, and the findin;,' of the jury, never
intended to indorse a bill of exchauj^e at all,
but intended to sij,'n a contract of an entirely
different nature. It was not his design, and,
If he were guilty of no negligence, it was
not even his fault that the instrument he
signed turned out to be a bill of exchange.
It was as if he had written his name on a
sheet of paper for the purpose of franking a
letter, or in a lady's album, or on an order
for admission to the Temple church, or on
the tly-leaf of a book, and there had already
been, without his knowledge, a bill of ex-
change or a promissory note payable to order
inscribed on the other side of the paper. To
make the case clearer, suppose the bill or
note on the other side of the paper in each
of these cases to be written at a time subse-
quent to the signature, then the fraudulent
misapplication of that signature to a ditlerent
purpose would have been a counterfeit altera-
tion of a writing with intent to defraud, and
would therefore have amounted to a forgery.
In that case the signer would not have been
bound by his signature, for two reasons:
First, that he never in fact signed the writing
declared on; and, secondly, that he never in-
tended to sign any such contract.
In the present case the first reason does not
apply, but the second reason does apply. The
defendant never intended to sign that con-
tract, or any such contract He never intend-
ed to put his name to any instrument that
then was or thereafter might become nego-
tiable. He was deceived, not merely as to the
legal effect, but as to the actual contents of
the InstrumenL
We are not aware of any case in which the
preci.se question now before us has arisen on
bills of exchange or promis.sory notes, or
been judicially discus.sed. In the case of Ing-
ham V. I'rimrose, 7 C. B. (N. S.) 83; 28 L. J.
(C. P.) 294, and iu the case of Nance v. Lary,
5 Ala. 370, cited 1 Tars. Bills, 114, note,— both
cited by the plaintiff, — the facts were very dif-
ferent from those of the case before us, and
have but a remote bearing on the question.
But in Putnam v. Sullivan, an American case,
reported in 4 Mass. 45, and cited in 1 Pars.
Bills, p. Ill, note, a distinction is taken by
Chief Justice Parsons between a case where
an indorser intended to indorse such a note
as he actually indorsed, being induced by
fraud to indorse it, and a case where he in-
tended to indorse a different note, and for a
different purpose. And th^ court intimated
an opinion that, even in such a ca.se as that,
a distinction might prevail, and protect the
indorsee.
The distinction in the ca.se now under con-
sideration is a much plainer one, for on this
branch of the inile we are to assume that the
indorser never intended to indorse at all, but
to sign a contract of an entirely different na-
ture.
For these reasons we think the direction of
the lord chief justice was right
With respect, however, to the second
branch of the rule, we are of opinion that the
case should imdergo further investigation.
We abstain from giving oiu* reasons for this
part of our decision only lest they should
prejudice either party on a second inquiry.
The vule, therefore, will be made absolute
for a new trial.
Rule absolute.
SCO
KEALITY OF CONSENT.
:?3
CTNDY et al
(3 App. Gas. 459.)
House of Lords. March 4, 1878
LINDSAY et al.i ,,
Appeal from court of appeal.
In 1S73, one Alfred Blenkarn hired a room
at a corner house in Wood street, Chcapside.
It had two side windows opening into Wood
sti'eet, but, though the entrance was from
Little Love Lane, it was by him constantly
described as 37 Wood street, Cheapside. His
agreement for tliis room was signed "Alfred
Blenkarn." The now respondents, Messrs.
Lindsay & Co., were linen manufacturers,
carrying on business at Belfast. In the lat-
ter part of 1S73, Blenkarn wrote to the plain-
tiffs on the subject of a purchase from them
of goods of their manufacture — chiefly cam-
bric handkerchiefs. His letters were written
as from ••37 Wood street. Cheapside," where
he pretended to have a warehouse, but in
fact occupied only a room on the top floor,
and that room, though looking into Wood
street on one side, could only be reached from
the entrance in 5 Little Love Lane. The
name signed to these letters was always
signed without any initial as representing a
Christian name, and was, besides, so written
as to appear "Blenkiron & Co." There was
a highly respectable firm of W. Blenkiron &
Son, carrying on business in Wood street, but
at number 123 Wood street, and not at 37.
Messrs. Lindsay, who knew the respectability
of Blenkiron tS: Son, though not the number of
the house where they carried on business,
answered the letters, and sent the goods ad-
dressed to '•Messrs. Blenkiron & Co., 37 Wood
Street, Cheapside," where they were taken iu
at once. The invoices sent with the goods
were always addressed In the same way.
Blenkarn sold the goods thus fraudulently ob-
tained from Messrs. Lindsay to different per-
sons, and among the rest he sold 250 dozen of
cambric handkerchiefs to the Messrs. Cundy,
who were bona fide purchasers, and who re-
sold them in the ordina:-y way of their trade.
Payment not being made, an action was com-
menced in the mayor's com't of London by
Messrs. Lindsay, the junior partner of which
firm, Mr. Thompson, made the ordinary affi-
davit of debt, as against Alfred Blenkarn,
and therein named Alfred Blenkarn as the
debtor. Blenkarn's fraud was soon discov-
ered, and he was prosecuted at the Central
criminal court, and convicted and sentenced.
Messrs. Lindsay then brought an action
against Messrs. Cundy as for unlawful con-
version of the handkerchiefs. The cause was
tried before Mr. Justice Blackburn, who left
it to the jury to consider whether Alfred
Blenkarn, with a fraudulent intent to induce
the plaintiffs to give him the credit belonging
to the good character of Blenkiron »& Co.,
wrote the letters, and by fraud induced the
plaintiffs to send the goods to 37 Wood street
1 Irrelevant parts omitted.
—were they the same goods as those bought
by the defendants— and did the plaintiffs by
the affidavit of debt intend, as a matter of
fact, to adopt Alfred Blenkarn as their debtor.
The firet and second questions were answered
in the affirmative, and the third iu the nega-
tive. A verdict was taken for the defend-
ants, with leave reserved to move to enter the
verdict for the plaintiffs. On motion accord-
ingly, the court, after argument, ordered the
rule for entering judgment for the plaintiffs
to be discharged, and directed judgment to be
entered for the defendants. 1 Q. B. Div. M8.
On appeal this decision was reversed, and
judgment ordered to be entered for the plain-
tiffs, Messrs. Lindsay. 2 Q. B. Div. 96.
This appeal was then brought.
Sir H. S. Giffard, Sol. Gen., Mr. Benjamin,
Q. C, and B. Francis Williams, for appellants.
The question here is whether the property
Ln the goods passed from the respondents to
Blenkarn. It is submitted that it did.
A title to goods may be acquired even
where they are obtained upon false pretences.
Though it will not be an indefeasible title,
and may be voidable, it wiU, as to third per-
sons at least, be good till it has been avoided.
It must in some sense pass the property, for
if it did not it may be doubtful whether a
conviction for obtaining the goods could be
sustained. Here it is clear that there was in
the first instance an intention on the part of
the original owner that the property should
pass. [LORD PENZANCE: But was it not
the intention that it should pass to Blenkiron.
but not to Blenkarn?] As to some person in
Wood street the intention plainly did exist
that it should pass. [LORD PENZANCE:
Is there no distinction between the case of a
man who, being deceived, enters into a con-
tract, and that of a man who, being also de-
ceived, does not enter into a contract?] The
latter was the case of Hardman v. Booth, 1
Hurl. & C. 803, so much relied on in the court
below. But that case is distinguishable from
the present, for there the facts shewed dis-
tinctly that the intention was to contract with
Thomas Gandell & Co., and with them alone;
and the firm of Edward Gandell <& Todd was
a different firm, and carried on business at a
different place, and was wholly unknown to
the plaintiffs; and Edward Gandell, having
by fraud got hold of the goods sent to the
warehouse of Thomas Gandell, carried them
off to his own place, and so disposed of them.
Here the plaintiffs themselves sent the goods
to the person who had corresponded with
them, and who did carry on business at 37
Wood street The goods reached that desti-
nation, and were delivered there according to
the address which the plaintiffs had put upon
them. The facts of the two cases were un-
like, and, without in the least doubting the
decision in that case, it may well be contend-
ed not to be applicable here. Here the orig-
inal owner allowed tlie goods to remain in tho
MISTAKE.
361
hands of the person to whom he had sent
them, and while there they were sold to the
defendants, who were bona tide purchasers
for value. After that the vendor could no
longer follow them as his own. His inten-
tion had been to transfer them, and the traus-
fer was complete. In no way whatever could
the case be compared to one in which money
or a bill of exchange was delivered to a per-
son for a particular purpose, and he used It
for another, and so could give no title what-
ever to a third person to whom he passed it.
Neither was this a delivery to B., who stated
hlu\self to be the agent of some one else,
when he was not so. It was a delivery to B.
himself. Credit was therefore given to him.
It was given to Blenkani & Co., of 37 Wood
street. Then again, in the first Instance, Mr.
Thompson, one of the partners in ^Messrs.
Lindsay's house, made an affidavit of debt
against Alfred Bleukarn, which shewed that
the house recognized Blenkarn as the debtor,
and the transaction as one of a sale. That,
though not conclusive on the subject, was at
least strong evidence of previous intention.
It may be admitted that where the authority
to pai't with the property is limited, and the
property is parted with in disregard of that
limited authority, the title to it would not pass.
Keg. V. Middleton, L. R. 2 Cr. Cas. 3S. But
that cannot affect this case, for here the
goods were transmitted by the owners them-
selves to a person and a place described by
themselves. The title to the goods was for
the time perfect in law, and, being so, the
transfer to the defendants made during that
time, being made bona fide, could not be im-
peached. Pease v. Gloahec, L. R. 1 P. C.
L'l9. Till the title of Blenkarn was disaf-
(irmed it was good, and the property dis-
posed of in the meantime could not after-
wards be followed in the hands of a third
person who had honestly purchased it.
Mr. Wills, Q. C, and Mr. Fullarton, for re-
spondents.
Where the circumstances are such that no
contract has ever arisen, mere delay in de-
claring a disaffirmance cannot affect the case.
Kingsford v. Merry, 1 HurL & N. 503; Boul-
ton V. Jones, 2 Hurl. & N. 5G4. See In re
Reed, 3 Ch. Dlv. 123; Hardman v. Booth, 1
Hurl. & C. 803. Here there was no contract
The plaintiffs did not know of the existence
of two firms of names similar to each other
carrying on business In Wood street. They
knew only of Blenkii-on & Co., and thouglit
they were dealing with Blenkiron & Co., and
sent their goods to that firm. But Blenkiron
& Co. knew nothing whatever of the matter.
There was, therefore, no contract with them.
"NW^as there any with Blenkarn. for by al
fraud in using the name of other persons ha
obtained possession of goods intended for
those other pei'sons, and not for him. There,
was. therefore, no contract with him. If so,
no moment existed dming which a title to the
goods could be given to the defendants.
Their conversion of the goods was conse-
quently unlawful.
CAIRXS, L. Ch. My lords, you have in
this case to discharge a dutj- which is always
a disagreeable one for any court, namely, to
determine as between two parties, both of
whom are perfectly innocent, upon which of
the two the consequences of a fraud prac-
tised upon both of them must fall. My lords,
in discharging that duty your lordshix)s can do
no more than apply rigorously the settled and
well-known rules of law. Now, with regard
to the title to personal property, the settled
and well-known rules of law may, I take it,
be thus expressed: By the law oL cur coun-
try the purchaser of a chattel takes the chat-
tel, as a general rule, subject to what may
turn out to be certain infirmities In the title.
If he purchases the chattel in market overt,
he obtains a title which is good against ail
-the world; but if he does not purchase the
chattel in market overt, and if it turns out
that the chattel has been found by the person
who professed to sell it, the purchaser will
not obtain a title good as against the real
owner. If it turns out that the chattel has
been stolen by the person who has professed to
sell it, the purchaser will not obtain a title.
If it turns out that the chattel has come into
the hands of the person who professed to sell
it, by a de facto contract, that is to say, a
contract which has purported to pass the
property to him from the owner of the prop-
erty, there the purchaser will obtain a good
title, even although afterwards it should ap-
pear that there were circumstances connected
with that contract which would enable the
original owner of the goods to reduce it, and
to set it aside, because these circumstances
so enabling the original owner of the goods
or of the chattel to reduce the contract and to
set it aside, will not be allowed to interfere
with a title for valuable consideration obtain-
ed by some third party during the interval
while the contract remained unreduced.
My lords, the question, therefore, in the
present case, as your lordships will observe,
really becomes the very short and simple one
which I am about to state. Was there any
contract which, with regard to the goods in
question in this case, had passed the prop-
erty in the goods from the Messrs. Lindsay
to Alfred Blenliarn? If there was any con-
tract passing that property, even although,
as I have said, that contract might afterwards
be open to a process of reduction, upon the
ground of fraud, still, in the meantime, Blenk-
arn might have conveyed a good title for
valuable consideration to the present appel-
lants.
Now, my lords, there are two observations
bearing upon the solution of that question
which I desire to make. In the first place, if (
the property in the goods in question passed,
it could only pass by way of contract There
362
KEALTTY OF CONSENT.
is nothing else wliicli could liave passed the
property. The second observation is this:
Your lordships are not here embarrassed by
any conflict of evidence, or any evidence
whatever as to conversations or as to acts
done; the whole history of the whole trans-
action lies upon paper. The principal par-
ties concerned, the respondents and Blenk-
arn, never came in contact persouaUy; ev-
erything that was done was done by writing.
What has to be judged of, and what the jury
in the present case had to judge of was mere-
ly the conclusion to be derived from that
writing, as applied to the admitted facts of
the case.
Now, my lords, discharging that duty and
answering that inquiry, what the jurors have
found is, in substance, this: It is not neces-
sary to spell out the words, because the sub-
stance of it is beyond all doubt. They have
found that by the form of the signatures to
the lettei-s which were written by Blenkarn,
by the mode m which his letters and his ap-
plications to the respondents were made out,
and by the way in Avhich he left uncorrected
the mode and form in which, in turn, he was
addressed by the respondents; that by all
those means he led, and intended to lead, the
respondents to believe, and they did believe,
that the person with whom they were com-
municating was not Blenkarn, the dishonest
and irresponsible man, but was a well known
and solvent house of Blenkiron & Co., doing
business in the sam-^ street. My lords, those
things are found as matters of fact, and they
are placed beyond the range of dispute and
controver.sy in the case.
If that is so, what is the consequence? It
is that Blenkarn— the dishonest man, as I call
him— was acting here just in the same way
as if he had forged the signature of Blenk-
iron & Co., the respectable firm, to the appli-
cations for goods, and as if when, in return,
the goods we^e forwarded and letters were
sent, accompanying them, he had intercepted
the goods and intercepted the letters, and
had taken possession of the goods, and of the
letters which were addressed to and intended
for, not himself, but the firm of Blenkiron &
Co. Now, my lords, stating the matter short-
ly in that way, I ask the question, how is it
possible to imagine that in that state of
things any contract could have arisen be-
tween the respondents and Blenkarn, the dis-
honest man? Of him they knew nothing, and
of him they never thought. With him they
never intended to deal. Their minds never,
even for an instant of time rested upon him,
and as between him and them there was no
consensus of mind which could lead to any
agreement or any contract whatever. As be-
tween him and them there was merely the
bne side to a contract, where, in order to pro-
'duce a contract, two sides would be required.
With the firm of Blenkiron & Co. of course
there was no contract, for as to them the
matter was entirely unknown, and therefore
the pretence of a contract was a failure.
The result, therefore, my lords, is this:
that your lordships have not here to deal with
one of those cases in which there is de facto
a contract made which may afterwards be
impeached and set aside on the ground of
fraud; but you have to deal with a case
which ranges itself under a completely dif-
ferent chapter of law, the case, namely, in
which the contract never comes into exist-
ence. My lords, that being so, it is idle to
talk of the property passing. The property
remained, as it originally had been, the prop-
erty of the respondents, and the title which
was attempted to be given to the appellants
was a title which could not be given to them.
My lords, I therefore move your lordships
that this appeal be dismissed with costs, and
the judgment of the court of appeal affirmed.
Judgment appealed from affirmed, and ap-
peal dismissed, with costs.
MISTAKE.
o63
OUTURIEIi et al. v. HASTIE et aL
(G II. L. Cas. (J73.)
House of Lords. June 27. 1856.
The plaintiffs were mercliauts at Smyrna;
the defendants were corn factors in London;
and this action was brought to recover from
them the price of a cargo of Indian corn,
which had been shipped at Salouica, on
board a vessel chartered by the plaintiffs for
a voyage to England, and had been sold in
London by the defendants in error, upon a
del credere commission. The purchasei", un-
der the circumstances hereafter stated, had
repudiated the contract.
In January, 1848, the plaintiffs chartered a
vessel at ISaluulca, to bring a cargo of 1180
quarters of corn to England. On the 8th of
February a policy of insurance was effected
on "corn, warranted free from average, un-
less general, or the ship be stranded." On
the 22d of that uumth, the master signed a
bill of lading, makiug the corn deliverable to
the plaintiffs, or their assigns, "he or they
paying freight, as per charter-party, with
primage and average accustomed." On the
L'od February the ship sailed on the home-
ward voyage. On the 1st May, 1848, Messrs.
Bernouilli, the London agents of the plain-
tiffs, and the persons to whom the bill of
lading had been indorsed, employed the de-
fendants to seU the cargo, and sent them the
bill of lading, the charter-party, and the pol-
icy of insurance, asliing and receiving there-
on an advance of £G00.
On the 15th May the defendants sold the
cargo to A. B. Callander, who signed a bought
note, in the following terms: "Bought of
Hastie & Hutchinson, a cargo of about 1,180
(say eleven hundred and eighty) quarters of
Salonica Indian corn, of fair average qual-
ity when shipped per the Kezia Pago. Cap-
tain Page, from Salonica; bill of lading dat-
ed twenty-second February, at 27s. (say
twenty-seven shillings) per quarter, free on
board, and including freight and insurance,
to a safe port in the United Kingdom, the
vessel calling at Cork or Falmouth for or-
ders; measure to be calculated as custom-
aiy; payment at two months fi'om this date,
or in cash, less discount, at the rate of five
per cent, per annum for the unexpired time,
upon handing sliippiug documents."
In the early part of the homeward voyage,
the cargo became so heated that the vessel
was obliged to put into Tunis, where, after
a survey and other proceedings, regularly
and bona fide talcen, the cargo was, on the
22d April, unloaded and sold. It did not ap-
pear that either party knew of these circum-
stances at the time of the sale. The con-
ti-act having been made on the 15th of May,
Mr. Callander, on the 23d of ^lay. wrote to
Hastie & Hutchinson: "I repudiate the con-
tract of the cargo of Indian corn, per the
Kezia Page, on the ground that the cargo
did not exist at the date of the contract, it
appearing that the news of the condemnation
and sale of this cargo at Tunis, on the 22d
April, was published at Lloyds, and other pa-
pers, on the 12th instant, being three to four
days prior to its being offered for sale to me."
The plaintiffs afterwards brought this ac-
tion. The declaration was in the usual form.
The defendants pleaded several pleas, of
which the first four are not now material to
be considered. The fifth plea was that be-
fore the sale to Callander, and whilst the
vessel was on the voyage, the plaintiffs sold
and delivered the corn to other persons, and
that since such sale the plaintiffs never had
any property in the corn or any right to sell
or dispose thereof, and that Callander on
that account repudiated the sale, and refused
to perform his contract, or to pay the price
of the corn. Sixthly, that before the defend-
ants were employed by the plaintiffs, the
corn had become heated and greatly dam-
aged in the vessel, and had been unloaded by
reason thereof, and sold and disposed of by
the captain of the said vessel on account of
the plaintiffs at Tunis, and that Callander,
for that reason, repudiated the sale, &c.
The cause was tried before Mr. Baron Mar-
tin, when his lordship ruled that the contract
imported that at the time of the sale the
corn was in existence as such, and capable
of delivery, and that, as it had been sold and
delivered by the captain before this contract
\\as made, the plaintiffs could not recover in
the action. He therefore directed a verdict
for the defendants. The case was after-
wards argued in the court of exchequer be-
fore the Lord Chief Baron, Mr. Baron Parke,
and Mr. Baron Alderson, when the learned
judges differed in opinion, and a rule was
drawn up directing that the verdict found
for the defendants should be set aside on all
the pleas, except the sixth, and that on that
plea judgment should be entered for the
plaintiffs, nou obstante veredicto. That the
defendants should be at liberty to treat the
decision of the court as the ruling at ni'^'
prius, and to put it on the record and bring a
bill of exceptions. 8 Exch.40. This was done,
and the lord chief baron sealed the bill of ex-
ceptions, adding, however, a memorandum
to the effect that he did so as the ruling of
the court, but that his own opinion was in
opposition to such ruling.
The case was argued on the bill of excep-
tions in the exchequer chamber, before Jus-
tices Coleridge, Maule, Cresswell, Wlghtman,
Wilhams, Talfourd, and Crompton, who were
unanimously of opinion that the judgment of
the court of exchequer ought to be reversed.
9 Exch. 102. The present writ of error was
then brought
The judges were summoned, and Mr. Baron
Aldei-son, Mr. Justice Wightman, Mr. Justice
Cresswell, Mr. Justice Erie, Mr. Justice Wil-
liams, Mr. Baron Martin, Mr. Justice Cromp-
ton, Mr. Justice Willes, and Mr. Baron Bram-
well attended.
o64
REALITY or CONSENT.
Sir F. Thesiger and Mr. James Wilde, for
plaintiEfs in error.
The purchase here was not of the cargo
absolutely as a thing assumed to be in ex-
istence, but merely of the benefit of the ex-
pectation of its arrival, and of the securi-
ties against the contingency of its loss. The
purchaser bought in fact the shipping docu-
ments, the rights and interests of the vendor.
A contract of such a kind is valid. Paine v.
Meller, G Ves. 349; Cass v. Ruddle, 2 Vern.
2S0. The language of the contract implies
ail this. The representation that the corn
was shipped free on board at Salonica means
that the cargo was the property of, and at
the risk of the shipper. Cowasjee v. Thomp-
son, 5 Moore, P. C. 165. The court of ex-
chequer proceeded on the words of this con-
tract, and gave the correct meaning to them.
Mr. Baron Parke, 8 Exch. 54, said: "There
is an express engagement that the cargo was
of average quality when shipped, so that it
is clear that the purchaser was to run the
risk of all subsequent deterioration by sea
damage or otherwise, for which he was to be
Indemnified by having the cargo fuUy insur-
ed; for the 27s. per quarter were to cover,
not merely the price, but all expenses of
shipment, freight, and of insurance." In a
contract for the sale of goods afloat there
are two periods which are important to be
regarded, the time of sale and the time of
arrival. If at the time of the sale there is
any thing on which the contract can attach,
it is valid, and the vendee bound. Barr v.
Gibson, 3 Mees. & W. 390. The goods are
either shipped, as here, "free on board," when
it is clear that they are thenceforward at the
risk of the vendee; or they are shipped "to
arrive," which saves the vendee from all risk
till they are safely brought to port. John-
son V. Macdonald, 9 Mees. & W. GOO. The
intention of the parties is understood to be
declared by different terms of expression, and
the judgment of the exchequer chamber here
really violates that intention. The case of
Strickland v. Turner, 7 Exch. 208, which
was referred to by the lord chief baron (8
Exch. 49), is not in point, for there the an-
nuity, which was the subject of the sale,
had actually ceased to exist when the sale
took place. There was nothing whatever
on which the contract could attach; and
the principles therefore on which all con-
tracts of sale must proceed, as explained and
illusti-ated by Pothier (Poth. Cont. pt. 1, § 2,
art. 1), whose definitions of a sale are liter-
ally adopted by Mr. Chancellor Kent (2
Kent, Comm. 468), applied there, but they
do not apply here, for here the parties were
dealing with an expectation, namely, the ex-
pectation of the arrival of the cargo. As
Lord Chief Baron Richards said, in Hitch-
cock v. Giddings, 4 Price, 135, "If a man
will make a purchase of a chance, he must
abide by the consequences." Here, how-
ever, the chance was only that of the ar-
rival of the cargo, and that chance was cov-
ered by the policy, for the cargo itself, as
stated in the contract, had been actually
shipped. Had the cargo been damaged at
the time of this contract, the loss thereby
arising must have been borne by the pur-
chaser. Suppose the corn had been landed
at Tunis, and had remained in the ware-
house there, it would have ceased to be a
cargo in the strict and literal meaning of
the word, but the purchaser would still have
been bound by his contract.
The court of exchequer chamber, admit-
ting that the vendee might have recovered
an average loss under the policy on this
cargo, said that he could not have recovered
if a total loss had occurred, and referred to
an admission to that effect supposed to have
been made by the present Baron Martin
when arguing Sutherland v. Pratt, 11 Mees.
& W. 296. That admission does not mean
what is thus supposed; and after the case
of Roux V. Salvador, 3 Bing. N. C. 2G6,
where there was a total loss, and the plain-
tiff recovered on the policy, it is difficult to
understand how such an opinion could be
entertained. A technical objection arising
on the form of the policy would not affect
this question. The purchaser's right on this
policy woiild have been complete. 1 Phil.
Ins. 438; 1 Marsh. Ins. 333; and March v.
Pigott, 5 Burrows, 2802.
By what has happened here, the purchaser
has been saved the payment of freight Olier-
boom V. Chapman, 13 Mees. & W, 230); and
Owens V. Dunbar, 12 Ir. Law, 304, shows
that he would have been bound to accept
the cargo. The contract here was that the
cargo was shipped "free on board." To that
extent the vendor was bound, but he was
not bound by any further and implied war-
ranty. Dickson v. Zizinia, 10 C. B. 602.
Mr. Butt and Mr. Bovill, for defendants iu
error, were not called on.
CRANWORTH, Ch. My lords, this case
has been very fully and ably argued on the
part of the plaintiffs in error, but I under-
stand from an intimation which I have re-
ceived that all the learned judges who are
present, including the learned judge who
was of a different opinion in the court of
exchoquec, before the case came to the ex-
chequer chamber, are of opinion that the
judgment of the court of exchequer cham-
ber sought to be reversed by this writ of
error was a correct judgment, and they
come to that opinion without the necessity
of hearing the counsel for the defendants
in error. If I am correct in this belief, 1
will not trouble the learned counsel for the
defendants in error to address your lord-
ships, because I confess, though I should en-
deavor to keep my mind suspended till the
case had been fuUy argued, that my strong
impression in the course of the argument
has been, that the judgment of the court of
exchequer chamber is right. I should there-
MISTAKE.
365
fore simply propose to ask the learned judges
whether they u^ree in thinking that that
judgment was right. [The judges consulted
together for a few minutes, at the end of
which time]
Mr. Baron ALDERSON said: My lords,
her majesty's judges are unanimously of
opinion that the judgment of the exchequer
chamber was right, and that the judgiucut
of the court of exchequer was wroug; and I
am also of that opinion myself now, hav-
ing been one of the judges before whom the
case came to be heard in the court of ex-
chequer.
THE LORD CHANCELLOR. My lords,
that being so, I have no hesitation in advis-
ing your lordships, and at once moving that
the judgment of the court below should be
affirmed. It is hardly necessary, and it has
not ordinarily been usual, for your lordships
to go much into the merits of a judgment
which is thus unanimously affirmed by the
judges who are called in to consider it, and
to assist the house in forming its judgment.
But I may state shortly that the whole ques-
tion turns upon the construction of the con-
tract which was entered into between the
pnrtics. I do not mean to deny that many
plausible and ingenious arguments have been
pressed by both the learned counsel who
have addressed your lordships, showing that
there might have been a meaning attached
to that contract different from that which
the words themselves import. If this had
depended not merely upon construction of
the contract but upon evidence, which, if I
recollect riglitly, was rejected at the trial,
of what morc-antile usage had been, I should
not have been prepared to say that a long-
continued mercantile usage interpreting such
contracts might not have been sufficient to
warrant, or even to compel, your lordships to
adopt a different construction. But, iu the
absence of any such evidence, looking to the
contract itself alone. It appears to me clearly
that what the parties contemplated— those
who bought and those who sold— was that
there was an existing something to be sold
and bought, and if sold and bought then the
benefit of insurance should go with it I do
not feel pressed by the latter argument,
which has been brought forward very ably
by Mr. Wilde, derived from the subject of
insurance. I think the full benefit of the
insurance was meant to go as well to losses
and damage that occurred previously to the
15th of May as to losses and damage that
occurred subsequently, always assuming
that something passed by the contract of the
l.jth of May. If the contract of the IGth of
May had been an operating contract, and
there had been a valid sale of a cargo at
that time existing, I think the purchaser
would have had the benefit of insurance iu
respect of all damage previously occurring.
The contract plainly imports that there was
something which was to be sold at the time
of the contract, and something to be pur-
chased. No such thing existing, I think the
court of exchequer chamber has come to the
only reasonable conclusion upon it, and con-
sequently that there must be judgment giv-
en by your lordships for the defendants in
error.
.Judgment for the defendants in error, with
costs.
366
c^^
REALITY OF
3
IRWIN V. WILSON. J-^
(15 N. E. 209, 45 Ohio St. 426.)
Supreme Court of Ohio. Nov. 22, 1887.
Error to circuit court, Hardin county.
The original suit was begun in the common
pleas to obtain the rescission of an exchange
of lands that had been made between the
parties, on the ground that the defendant had
made fraudulent representations as to the lo-
cation, character and value of the lands giv-
en by him in exchange for those of the plain-
tiff. Judgment was rendered in favor of the
defendant on the issue as to fraud, and the
plaintiff appealed to the district court, then in
existence. The plaintiff, by leave of court,
then amended his petition, so as to aver that
there was a mutual mistake as to the loca-
tion, chai-acter, and value of the lands ex-
changed by the defendant for those of the
plaintiff. On the issues made as to this, the
case was subsequently heard and determined
by the circuit court, as the successor of the
district court. It made, at the request of the
plaintiff, a special finding of facts, and ren-
dered judgment thereon in favor of the de-
fendant, dismissing the action of the plaintiff.
The plaintiff moved the court to set aside its
finding and judgment as not supported by the
evidence; and, also, as not supported by law.
The motion was overruled, and the rulings
of the court in this regard are assigned for
error here. The facts as found by the court
are as follows: "(1) That on the fourteenth
day of December, 1881, the plaintiff, William
S. Invin, was the owner of the house and lot
in Kenton, Ohio, in the petition described,
wliich was worth $1,700. (2) That the de-
fendant, Joseph H Wilson, was at said date
the owner of the land described in the peti-
tion, being 80 acres of land situate in the
county of Monona, in the state of Iowa. (3)
That on the said date one Isaac H. Wilson,
who was the father and agent of defendant,
proposed to sell and exchange said 80 acres
of land in Iowa, to and with plaintiff, for
said house and lot of plaintiff, which said 80
acres of land said Isaac H. Wilson then stat-
ed had been taken by defendant in a trade of
lands at $1,200; that he had never been in
Iowa, and had not seen the land, and knew
nothing of it, but that one Henry Pugh, he
was informed, had been to see the laud, and
Pugh, he was informed, said it was good,
dry land, and within three to four miles of
the county-seat of said county of Monona, in
the state of Iowa, and that said Henry Pugh
lived near Ada, in said Hardin county; that
on the seventeenth day of December, 1881,
said agent proposed to said plaintiff to go
and see and inquire of said Henry Pugh as
to the location and quality of said land in
Monona county, Iowa, and said Isaac H.
Wilson, did, on the nineteenth day of Decem-
ber, 1881. furnish a conveyance for that pur-
pose, and he and plaintiff did go to the house
of said Henry Pugh, and said plaintiff did
CONSENT.
then, in the presence of said Isaac H. Wil-
son, make inquiries r tlio contract, as evidenced by
these writings, the title did not pass until
the cow was weighed and her price there-
by determined; and that, if the defendants
only agreed to sell a cow that would not
breed, then the barrenness of the cow was
a condition precedent to passing title, and
plaintiff cannot recover. The court also
charged the jury that U was immaterial
whether the cow was with calf or not. It
will therefore be seen that the defendants
claim that, as a matter of law, the title to
this cow did not pass, and that the circuit
judge erred in submitting the case to the
jury, to be determined by them, upon the
intent of the parties as to whether or not
the title passed with the sending of the let-
ter and order by the defendants to the plain-
tiff.
This question as to the passing of title Is
fraught with difficulties, and not always
easy of solution. An examination of the
multitude of cases bearing upon this subject,
with their infinite variety of facts, and at
least apparent conflict of law. ofttimes tends
to confuse rather than to enlighten the mind
of the inquirer. It is best, therefore, to con-
sider always, in cases of this kind, the gen-
eral principles of the law, and then apply
them as best we may to the facts of the
case in hand.
The cow being worth over $."0, the con-
tract of sale, in jjrder to be valid, must be
one where the purchaser has received or ac-
cepted a part of the goods, or given some
thing in earnest, or in part payment, or
where the seller has signed some note or
memorandum in writing. How. St. § GISO.
Here there was no actual delivery, nor any-
thing given in payment or in earnest, but
there was a sufficient memorandum signed
by the defendants to take the case out of
the statute, if the matter contained in such
memorandum is sufficient to constitute a
completed sale. It is evident from the let-
ter that the payment of the purchase price
was not intended as a condition precedent
to the passing of the title. Mr. Sherwood
Is given his choice to pay the money to
Graham at King's cattle-yards, or to send
check by mail.
Nor can there be any trouble about the
delivery. The order instructed Graham to
deliver the cow, upon presentation of the
order, at such cattle-yards. But the price
of the cow was not determined upon to a
certainty. Before this could be ascertained,
from the terms of the contract, the cow had
to be weighed; and. by the order inclosed
with the letter, Graham was instructed to
have her weighed. If the cow had been
weighed, and this letter had stated, upon
such weight, the express and exact price
of the animal, there can be no doubt but
the cow would have passed with the sending
and receipt of the letter and order by the
plaintiff. Payment was not to be a concur-
rent act with the delivery, and therein this
case differs from Case v. Dewey, ,55 Mich.
IIG, 20 N. W. 817, and 21 N. W. 911. Also.
in that case, there was no written memo-
randum of the sale, and a delivery was nec-
essary to pass the title of the sheep; and
it was held that such delivery could only
be made by a surrender of the possession to
the vendee, and an acceptance by him. De-
livery by an actual transfer of the property
from the vendor to the vendee, in a case like
the present, where the article can easily be
so transferred by a manual act, is usually
the most significant fact in the transaction
to show the intent of the parties to pass the
title, but it never has been held conclusive.
Neither the actual delivery, nor the absence
of such delivery, will control the case, where
the intent of the parties is clear and mani-
fest that the matter of delivery was not a
condition precedent to the passing of the
title, or that the delivery did not carry with
It the absolute title. The title may pass, If
the parties so agree, where the statute of
frauds does not interpose without delivery,
and property may be delivered with the un-
derstanding that the title shall not pass
until some condition is performed.
And whether the parties intended the ti-
tle should pass before delivery or not Is
generally a question of fact to be deter-
mined by the jury. In the case at bar the
question of the intent of the parties was
submitted to the jury. This submission was
right, unless from the reading of the letter
372
REALITY OF CONSENT.
and the order, and all the facts of the oral
bargaining of the parties, it is perfectly
clear, as a matter of law, that the intent of
the parties was that the cow should be
weighed, and the price thereby accurately
determined, before she should become the
property of the plaintiff. I do not think
that the intent of the parties in this case is
a matter of law, but one of fact. The
weighing of the cow was not a matter that
needed the presence or any act of the de-
fendants, or any agent of theirs, to be well
or accurately done. It could make no dif-
ference where or when she was weighed, if
the same was done upon correct scales, and
by a competent person. There is no pre-
tense but what her weight was fairly ascer-
tained by the plaintiff. The cow was spe-
cifically designated by this writing, and her
delivery ordered, and it cannot be said, iu my
opinion, that the defendants intended that
the weighing of the animal should be done
before the delivery even, or the passing of
the title. The order to Graham is to deliver
her, and then follows the instruction, not
that he shall weigh her himself, or weigh
her, or even have her weighed, before de-
livery, but simply, "Send halter with the
cow, and have her weighed."
I It is evident to my mind that they had
perfect confidence in the integrity and re-
pponsibility of the plaintiff, and that they
jconsidered the sale perfected and completed
when they mailed the letter and order to
plaintiff. They did not intend to place any
conditions precedent in the way, either of
payment of the price, or the weighing of
the cow. before the passing of the title.
They cared not whether the money was paid
to Graham, or sent to them afterwards, or
whether the cow was weighed before or
after she passed into the actual manual
grasp of the plaintiff. The refusal to deliver
the cow grew entirely out of the fact that,
before the plaintiff called upon Graham for
her, they discovered she was not ban-en, and
therefore of greater value than they had
sold her for.
The following cases in this court support
the instruction of the court below as to the
intent of the parties governing and con-
trolling the question of a completed sale,
and the passing of title: Lingham v. Eg-
gleston, 27 Mich. 324; Wilkinson v. Holiday,
3.3 Mich. 3SG; Grant v. Merchants' & Manu-
facturers' Bank, 3.5 Mich. 527; Carpenter v.
Graham, 42 Mich. 194, 3 N. W. 974; Brewer
V. Salt Ass'n, 47 Mich. 534, 11 N. W, 370;
Whitcomb v. Whitney, 24 Mich. 486; Byles
V. Colier, 54 Mich. 1, 19 N. W. 505; Scottcn
V, Sutter, 37 Mich. 527, 532; Ducey Lumber
Co. V. Lane, 58 Mich. 520, 525, 25 N. W.
568; Jenkinson v. Monroe, 61 Mich. 454, 28
N. W. 663.
It appears from the record that both par-
ties supposed this cow was barren and
would not breed, and she was sold by the
pound for an insignificant sum as compared
with her real value if a breeder. She was
evidently sold and purchased on the relation
of her value for beef, unless the plaintiff
had learned of her true condition, and con-
cealed such knowledge from the defendants.
Before the plaintiff secured possession of
the animal, the defendants learned that she
was with calf, and therefore of great value,
and undertook to rescind the sale by re-
fusing to deliver her. The question arises
whether they had a right to do so. The
circuit judge ruled that this fact did not
avoid the sale and it made no difference
whether she was barren or not. I am of the
opinion that the coui-t erred in this holding.
I know that this is a close question, and
the dividing line between the adjudicated
cases is not easily discerned. But it must
be considered as well settled that a party
who has given an apparent consent to a con-
tract of sale may refuse to execute it, or he
may avoid it after it has been completed,
if the assent was founded, or the contract ,
tuade, upon the mistake of a material fact, '
—such as the subject-matter of the sale, the
price, or some collateral fact materially in-
ducing the agreement; and this can be done
when the mistake is mutual. 1 Benj. Sales,
§§ 605. 606; Leake, Cont. 339; Story, Sales,
(4th Ed.) §§ 377, 148. See, also. Cutis v.
Guild, 57 N. Y, 229; Harvey v. Harris, 112
Mass. 32; Gardner v. Lane, 9 Allen, 492, 12
Allen, 44; Huthmacher v. Harris' Adm'rs,
38 Pa. St. 491; Byers v. Chapin, 28 Ohio St.
300; Gibson v. Telkie, 37 Mich. 380, and
cases cited; Allen v. Hammond, 11 Pet. 63-
71.
If there is a difference or misapprehension
as to the substance of the thing bargained
for; if the thing actually delivered or re-
ceived is different in substance from the
thing bargained for, and intended to be sold,
—then there is no contract; but if it be only
a difference in some quality or accident,
even though the mistake may have been the
actuating motive to the purchaser or seller,
or both of them, yet the contract remains
binding. "The difficulty in every case is to
determine whether tlie mistake or misap-
prehension is as to the substance of the
whole contract, going, as it were, to the root
of the matter, or only to some point, even
though a material point, an error as to
which does not affect the substance of the
whole consideration." Kennedy v. Panama,
etc.. Mail Co., L. R. 2 Q. B. 580, 587. It has
been held, in accordance with the principles
above stated, that where a horse is bought
under the belief that he is sound, and both
vendor and vendee honestly believe him to
be sound, the purchaser must stand by his
bargain, and pay the full price, unless there
was a warranty.
It seems to me, however, in the case made
by this record, that the mistake or misap-
prehension of the parties went to the whole
substance of the agreement. If the cow
was a breeder, she was worth at least $750;
MISTAKE.
If barren, she was worth not over $80. The
parties would not have ni:ule the contract of
sale except upon the underslandinf; and be-
lief that she was incapable of breeding, and
of no use as a cow. It is true she Is now
the identical animal that they thought her
to be when the contract was made; tliere is
no mistalie as to the identity of the creature.
Yet the mistake was not of the mere quality
of the animal, but went to the vei-y nature
of the thing. A barren cow is substantially
a different creature than a breeding one.
There is as much difference between them
for all purposes of use as thore^ is between
an ox and a cow that is capable of breeding
and giving milk. If the mutual mistake had
simply related to the fact whether she was
with calf or not for one season, then it might
have been a good sale, but the mistake af-
fected the character of the animal for all
time, and for her present and ultimate use.
She was not in fact the animal, or the kind
of animal the defendants intended to sell or
the plaintiff to buy. She was not a barren
cow, and, if this fact had been known, there
would have been no contract The mistake
affected the substance of the whole consid-
eration, and It must be considered that
there was no contract to sell or sale of the
cow as she actually was. The thing sold
and bought had in fact no existence. She
was sold^as^ beef creature would be soIdT"
she is in fact a breeding cow, and avalua-
ble_ojQe. The cOTirt should have instructed
the jury that if they found that the cow
was sold, or contracted to be sold, upon tlie
understanding of both parties that she was
bairen, and useless for the purpose of
breeding, and that in fact she was not bar-
ren, but capable of breeding, then the de-
fendants had a right to rescind, and to re-
fuse to deliver, and the verdict should be in
their favor.
The judgment of the court below must be
reversed, and a new trial granted, with costs
of this court to defendants.
CAMPBELL, C. J., and CHAMPLIN, J.,
concurred-
SHERWOOD, J., delivered a dissenting
opinion.
REALITY OF CONSENT.
OSBURN et al. v. THROCKMORTON.
(18 S. E. 285, 90 Va. 311.)
Supreme Court of Appeals of Virginia. Nov.,
1893.
Appeal from circuit court, Loudoun coun-
ty; James Keith, Judge.
Bill by James B. Throckmorton to enjoin
one Osbum, trustee, and others from seUing
certain property under a deed of trust.
From a decree for complainant, defendants
appeaL AffiLnned.
John M. Orr, for appellants. Ed. Nichols
and Alexander & Tibbs, for appeUee.
LACY, J. This is an appeal from two de-
crees of the circuit court of Loudoun coun-
ty, rendered respectively at the January
term, 1S91, and the October term, 1891. The
bill was filed in this case in December. 1890,
to enjoin Osbiuni, trustee, from selling a
tract of land in Loudoun coimty, conveyed
to him as trustee by deed dated March 8,
1876, executed by James B. Throckmorton
and EUza J. Throckmorton, his wife, to se-
cure the paymi^nt to Joseph Lodge of the
debt therein mentioned of $2,000, due by note
executed by the said James B. Throckmorton,
dated March 8, 1876. The gi-oimd stated in
the bill \ipon which the injunction Is sought
is as follows: The said Joseph Lodge died
in the year 1877, after having made his will,
by which said Osbum, trustee, was appoint-
ed the executor of the same. That during
the first year of said executor's administra-
tion of said estate the said $2,000 was fully
settled, and was charged in his executorial
account as settled and collected, and the ac-
count confirmed more than 10 years before,
and the said bond evidencing said debt was
surrendered to the debtor as paid. But the
trust deed executed to secure the same by
inadvertence was not released, though dis-
charged in fact, and no trust remained to be
executed by said trustee. That, nevertheless,
the said Osbum, trustee, had advertised the
said land for sale, as was shown by copy
of advertisement exhibited with the bill,
reciting in the said advertisement that the
said debt secured by the said dee. was not we think, a
representation that it was business paper,
drawn against funds or credits of the drawer,
in the hands of the drawees, or in the ordi-
nary course of business transactions between
them. The paper had all the essential requi-
sites of accepted bills of exchange. The draw-
er and drawees were different parties, and
upon the transfer of the paper by Duncan,
Sherman & Co., both became liable to the
FRAUD.
377
bolder upou distinct and independent con-
tracts. Prima facie, every accepuiuce affords
a presuuipLion of funds of the drawer in tlie
liands of tlie acceptor, and of an approprlallon
of these funds for the use of the drawer (lia-
borg V. Peyton, 2 Wheat 3S5). and upon this
presumption remedies are administered. The
acceptance is evidence of money had, received
by the acceptor foi the use of the holder, and
an action for money had and received will lie
in his favor against the acceptor, and he can-
not defeat the actiou by proof tliat he acceptr
od without funds. Story, J., in the case cited,
referring to the presumption that the bili is
drawn against funds, says: "The case may
indeed be otherwise, and then the acceptor
pays the debt of the drawer, but as between
liimself and the payee, it is not a collateral
but an original and direct undertalcing." Ac-
ceptances without fmlds, or accommodation
acceptances, are certainly not unusual com-
mercial transactions, and this must be well
understood among commercial men. In Re
Hammond, G De Gex, M. & G. G99, the Lord
.Tustice Knight Bruce says: "Now I do not
think that the mere circumstance of a man
parting with a bill, without saying this is an
accommodation bill amounts to an implied
representation that it is not an accommoda-
tion bill; I am not aware of any sufficient
reason or authority for so extensive a prop-
osition." The law on the sale of commercial
paper implies a warranty on the part of the
vendor of title and that the instrument is
genuine (Littauer v. Goldman, 72 N. Y. 506.
See, also, Lobdell v. Baker, 1 Mete. [Mass.]
193); and also as stated by Judge Story, that
the vendor "has no knowledge of any facts
which prove the instrument if originally valid
to be worthless eitlier by failure of the maker,
or by its being already paid, or otherwise to
have become void or defunct." Story, Prom.
Notes, § 118. But no case has been cited sup-
porting the proposition that there is any im-
plied warranty or representation on the part
of the vendor of a bill valid in the hands of
the indorsee, that it was drawn against funds,
or that it was not accommodation paper. The
bills in question were acceptances, and In law
and fact instruments of the description of
these offered for sale by the defendants, and
purchased by the phiintiff.
In the absence then of any representation
by the defendants in respect to the origin or
consideration of the bills, the remaining ques-
tion is, whether the defendants were under a
legal duty to inform the plaintiff at the time
of sale, of the circumstances under which they
were made. The general proposition is as-
serted by the learned counsel for the plaintiff,
that the holder of negotiable paper who knows
a material fact affecting its market value, and
who sells it for fiill value without disclosing
such fact, is liable to the purchaser for the
amount paid for the paper, if after the discov-
ery of the suppression, the purchaser elects to
rescind the sale. But the proposition asserted
is broader than the recent authorities war*
rant The law requires disclosure to be made
only when there is a duty to make it, aucf
this duty is not raised by the mere circum-
stance that the undisclosed fact is material,
and is known to the one party and not to the
other, or by the additional cireum.stance that
the party to whom it is known knows that the
other party is acting in ignorance of it. It
must be assumed on this appeal, that if at
the time of the purchase of the paper it had
been known in the community that Duncan,
Sherman & Ck>. wtre selling their own ac-
ceptances in the market it would have created
suspicion and affected their credit, and that
the plaintiff would not have pur hased it But
the fact that Duncun. Sherman &: Co. were
borrowing under disguise would at most be
ground of suspicion of pecuniary embarrass-
ment. The borrowing of money by men en-
gaged in large transactions, as Duncan, Sher-
man & Co. were, as bankers and dealers in
cotton on their own account, and on commis-
sion, is certainly not unusual, and this al-
though the borrowers may be persons of large
means, and the fact that they borrowed by
methods which would not disclose that they
were borrowers would not necessarily be In-
consistent with good faith or solvency. It
might be inconsistent with both, and it may
have been in this case. But the question is,
were the defendants under a duty to com-
municate the discrediting facts within their
knowledge, in the absence of tiny inquiry Id
resi>ect to the origin of the paper, and when
the means of information were accessible to
the purchaser, and was their omission to do
this an actionable fraud, they having done
nothing to mislead or divert inquiry, and aU
that they did being to offer the paper for sale?
We are of opinion that the law did not cast
upon them the duty of such disclosure. The
defendants were in the attitude of vendors of
paper purchased and owned by them. The
plaintiff was seeking investment for its fimd.
that it does not allege intent to defraud.
It is not necessary, in order to constitute
a fraud, that the party who makes a false
representation should know it to be false.
He who makes a representation as of his
own knowledge, not knowing whether it be
true or false, and it is in fact untrue, is
guilty of fraud as much as if he knew it to
be untrue. In such a case he acts to his
own knowledge falsely, and the law imputes
a fraudulent intent. Kerr, Fraud & M. 54 et
seq., and cases cited; Bigelow, Fraud, 63»
84, 453; 3 Wait, Act & Def. 438 et seq.; 2
Estee, Pr. 394 et seq. "Fraud" is a term
which the law applies to certain facts, and
w^here, upon the facts, the law adjudges
fraud, it is not essential that the complaint
should, in terms, allege it. It is sufficient if
the facts stated amount to a case of fraud.
Kerr, Fraud & M. 366 et seq., and cases
cited; 2 Estee, PI. 423. The complaint in
this case states a substantial cause of ac-
tion, and is fully supported by the evidence.
The action of the county com-t in refusing
to allow the appellant to appeal to the dis-
trict court after he had given notice of an ap-
peal to this court, and time had been given in
which to perfect it, cannot be assigned as
error on this record. If it was an error, it
was error not before, but after, the final
judgment from which this appeal is taken.
The judgment of the court below is af-
firmed.
[Note from 10 Pac. Rep. 292.]
A contract seciirod by false and fraudulent
rcDFOsentations cannot be enforced. Mills v.
Collins, 67 Iowa, 164, 25 N. W. Hep. 109.
A court of equity will decree a rescission of
a conlract obtained by the fraudulent represen-
tations or conduct of one of the parties thereto,
on the complaint of the other, when it satis-
factorily appears tliat the party seeking tJtie
rescission has been uiisled in regard to a ma-
FRAUD.
^85
terial matter by such representation or conduct,
to his injury or projmlice. But wlicn tlie facts
are known to both parties, and each acts on his
own judfjraent, the court will not rescind the
contract because it may or does turn out that
the}', or cither of tlieiu, were mistaken as to
the lepal effect of the facts, or the rrziits or ob-
ligations of tlie parties tliereunder, and particu-
larly when such mistake can in no way injuri-
ously aH'cct the right of the jjarly complaining
under the contract, or prevent him from obtain-
ing and receiving all the benefit contemplated
by it, and to which he is entitled under it. See-
ley V. Keed, 25 Fed. Kep. 3G1.
When, by false representations or misrep-
resentations, a fraud has been committed, and
by it «he complainant has been injured, the gen-
eral principles of equity jurisprudence afford a
remedy. Singer Manuf'g Co. v. Yarger, 12
Fed. Rep. 437. See Chandler v. Childs, 42
Mich. 128, 3 N. W. Rep. 297; Cavender v.
Robenson, 33 Kan. G2G, 7 Pac. Rep. 152.
When no damage, present or prospective, can
result from a fraud practiceil, or false repre-
sentations or misrepresentation made, a court
of equity will not entertain a petition for relief.
Dunn V. Remington, 9 Neb. 82, 2 N. W, Rep.
230.
A person is not at liberty to make positive
assertions about facts material to a transaction
unless he knows them to be true: and if a
statement so made is in fact false, the as-
sertor cannot relieve himself from the imputa-
tion of fraud by pleading ignorance, but must
resiwnd in damages to any one who has sus-
tained loss by acting in reasonable reliance upon
such assertion. Lynch v. Mercantile Trust Co.,
18 Fed. Rep. 48G.
Equity will not relieve a,gainst a misrepre-
sentation, unless it be of some material matter
constituting some motive to the contract, some-
thing in regard to which reliance is placed by
one party on the other, and by w-hich he was
actually misK^l, and not merely a matter of
opinion, open to the inquiry and exauiiuatiou
of both parties. Buckner v. Street, 15 Fed.
Rep. 365.
False representations may be a ground for
relief, though the person making them believes
them true, if the person to whom they were
made relied upon them, and was induced there-
by to enter into the contract. Seeberger v. Ho-
bcrt, 55 Iowa, 75G, 8 N. W. Rep. 482.
Fraudulent representations or misrepresenta-
tions are not ground for relief, where they are
immaterial, even thou'.vh thev be relied upon.
Hall v. Johnson. 41 Mich. 286. 2 N. W. Rep.
55. See, to same effect, Lvnch v. Mercantile
Trust Co., 18 Fed. Rep. 48G; Seeberger v. IIo-
hert, 55 Iowa, 7.5G, S X. W. Rep. 482.
In fraudulent representation or misrepresenta-
tion the injured parties may obtain relief, even
though they did not suppose every statement
made to them literallv true. Heineman v. Stei-
ger, 54 Mich. 232, 19" N. W. Rep. 9G5.
Where the vendor honestly expresses an in-
HOPK. SEL. CAS. COUT. —25
correct opinion us to the amount, quality, an-
n-scntations will lie. Collins v. Jackson, 54
Mir-h. ISG. in N. W. Rep. 947.
.Mere "dealing talk" in the sale of g ods, ir -
less accomiiaiiicd by some arlilice to deceive
the purchaser or throw him off his guard, or
some concealment of intrinsic defects not easily
detected by ordinary care and diligence, does
not amount to misrepresentation. Revnolds v.
Palmer, 21 Fed. Rep. 433.
False statements made at the time of the
sale by the vendor of chattels, with the fraud-
ulent intent to induce the purchaser to accept
an inferior article as a superior one, or to give
an exorbitant and unjust i)rice therefor, will
n-nder such purchase voidable; but such false
statement must be of some matter affecting the
character, quantity, quality, value, or title of
such chattel. Bank v. Yocum, 11 Neb. 328, 9
N. W. Rep. 84.
A statement recklessly made, without knowl-
edge of its truth, is a false statement knowing-
ly made, within the settled rule. Cooper v.
Schlcsinger, 111 U. S. 148, 4 Sup. Ct. Rep. 3G0.
Whether or not omission to communicate
known facts will amount to fraudulent repre-
sentation depends upon the circumstances of
the particular case, and the relations of the
parties. Britton v. Brewster, 2 Fed. Rep. IGO.
Where a vendor conceals a material fact,
which is substantially the consideration of the
contract, and which is peculiarly within his
knowledge, it is fraudub^nt misrepresentation.
Dowling V. Lawrence, 58 W^is. 282, IG N. W.
Rep. 5.52.
Evidence of fraudulent representations must
be clear and convincing. Wickham v. More-
house, 16 Fed. Rep. 324.
Where a man sells a business, and the con-
tract of sale contained a clause including all
right to business done by certain agents, evi-
dence that the seller was willing to engage in
the same business with such agents is not proof
of fraud in making the contract. Tavlor v.
Saurman, 110 Pa. St. 3, 1 Atl. Rep. 40.
It was recently held by the supreme court of
Indiana, in the case of Cook v. Churchman, 104
Ind. 141, 3 N. E. Rep. 759, that where money
is obtained under a contract, any fraudulent
representations employed by a party thereto as
a means of inducing the loan to be made, if
otherwise proper, are not to be excluded be-
cause of the statute of frauds; also that where
parol representations are made regarding the
credit and ability of a third person, with the in-
tent that such third person shall obtain money
or credit thereon, the statute of fraud applies,
and no action thereon (?au be maintained, al-
though the party making the representations
may have entered into a conspiracy with such
person with the expectation of obtaining some
incidental benefit for himself.
386
REALITY OF COXsEXT.
COBB T. HATFIELD.
l/y (46 N. Y. 533.)
^/ Conrt of Appeals of New York. 1S71.
Action for the recovery of $1,000 and in-
terest paid by the plaintiff to the defendants,
upon the purchase of an interest in an oil
property in Penn.sylvania, upon the ground
that the purchase had been induced by the
false and fraudulent representations of the
defendants as to the character, yield, and
value of the property. Judgment for plain-
tiff reversed.
John H. Reynolds, for appellant WiUiam
C. Ruger, for respondents.
ALLEN, J. Under the complaint the plain-
tiff might have treated the action as in case
for the recovery of damages for the alleged
fraud; and in such action no return of prop-
erty received from the defendants, or other
act restoring the defendants to the condition
they occupied before making the contract,
would have been necessary as a condition
precedent to maintiiining the action. But
upon the trial the plaintiff expressly re-
pudiated the contract, and claimed to recov-
er the money advanced and paid, as upon
a rescission of the contract, and at the close
of the evidence on his part, tendered to
the defendants, and offered to cancel the as-
signment and transfer, and claimed to re-
cover in the action the consideration paid
and interest, "solely upon the groimd of a
resci-ssion of the contract" for the alleged
fraudulent representations of the defend-
ants. The recovery was had for the money
paid and interest thereon. The judge char-
ged the jury that what had been done was
Kufficient to entitle the plaintiff to maintain
the action, that It was a sufficient rescission
of the contract. It is somewhat questionable
whether the point upon which the supreme
court reversed the judgment and granted a
new trial was properly taken. No question
was made at the trial as to the necessity of
an immediate rescission of the contract upon a
discovery of the fraud; and the judge at circuit
did not rule and was not called upon to rule
in respect to the time at which the plaintiff
should have rescinded the contract, and re-
stored or tendered to the defendants what
he had received. His attention was not called
to that question, and non constat, that had
the question been directly raised, the plaintiff
might not have shown an earlier revocation
than 'was shown at the trial. The judge
only passed upon the character and quality
of the acts relied upon as a rescission, and
not as to their timely and seasonable perform-
ance.
But passing this, a fatal error was commit-
ted on the trial in the exclusion of evidence
offered by the defendants. The assignment
and transfer to the plaintiff was of an undi-
vided share or interest in certain property,
and entitled him to a proportionate number
of shares of the capital stock in the "Collins
Oil Company," an incorporated association,
when the corporation should be fuUy organ-
ized and prepared to issue stock certificates.
The capital stock of the corporation repre-
sented the interests of the proprietors of the
property, of whom the plaintiff became one
by his purchase of the defendants; and when
he should receive his stock certificate, that,
rather than the assignment and transfer from
the defendants, would represent and evidence
his ownership of the property and interests
purchased. The corporation was organized
and stock certificates were issued to the own-
ers in October, 1865. The defendants of-
fered to show that the plaintiff applied at the
office of the company for his stock, and that it
was delivered to him in fulfillment of the
contract of purchase from the defendants,
and that he had accepted it and kept it, and
had Aever returned it or canceled it, or of-
fered so to do. The evidence was excluded
upon objection by the plaintiff.
It was said by both counsel, and such would
seem to be the fact from the evidence, that
the plaintiff received his stock certificate aft-
er the commencement of this action. If so.
It was necessarily after he had knowledge of
the fraud of which he complains; arid the
act was a ratification and affirmance of the
contract. He could not wfth knowledge of
the fraud which had been practiced upon
him, take any benefit under the contract, or
change the condition of the property, the
subject-matter of the contract, and then re-
pudiate the contract. The taking of a benefit
Is an election to ratify it, and concludes him.
He cannot be allowed to deal with the sub-
ject-matter of the contract and afterward
disaffirm it. The election is with the party
defrauded to afllrm or disaffirm the contract;
but he cannot do both. Masson v. Bovet, 1
Denio, 69. By accepting the stock certificate
he elected to abide the purchase. But If the
certificate of stock was received before the
commencement of the action, and before the
plaintiff had knowledge of the fraud, he was
bound, upon a rescission of the contract, to
restore to the defendants all that he had re-
ceived from them, and all that he had acquir-
ed imder it; to place the defendants in statu
quo as near as practicable. The law not only
requires a disaffirmance of the contract at the
earliest practicable moment after discovery of
the cheat, but a return of all that has been
received under it, and a restoration of the
other party to the condition in which he
stood before the contract was made.
To retain any part of that which has been
received upon the contract, is incompatible
with its rescission. Masson v. Bovet, supra;
Voorhees v. Earl, 2 Hill, 288; Hogan r.
Weyer, 5 Hill, 389.
The contract although fraudulent was not
Ipso facto void, but only void at the election
of the plaintiff, and a return of what he
had received under it. Where a party had
parted with goods for the note of a third per*
FRAUD.
387
son upon the fraudulent representations of the
purchaser as to the solvency of the maker,
and had recovered a judjj;ment upon the note,
the court held that he could not rescind the
sale without tendering an assignment of the
judgment. Baker v Robbins, 2 Denio, loO.
The evidence offered was material upon
the question of aflinnance of the contract,
as well as in respect to the acts uecessarj' on
the part of the plaintilT to a rescission of It,
and upon the right of the plaintiff to recover
the money paid, and should have been ad-
mitted. If the fact had been proved, as of-
fered, that the plaintiff had received and
kept his certificates of stock, a transfer or
deliverj' of these certificates, or a tender to
the defendants, was necessary to a complete
rescission of the contract, and the evidence
offered was competent and material. It fol-
lows that the order granting a new trial
must be affirmed and judgment absolute giv-
en for the defendants.
This is a fit ease to aUude to the hazardous
practice which is becoming so general of risk-
ing an appeal to this court from an order
granting a new trial, with a stipulation made
necessary by statute, tliat in case the order
is affirmed, judgment absolute shall be given
against the party appealing. There is but
n single class of cases, and the individual
cases coming witliin it are rare, in which
this course can prudently be adopted. It is
only proper and admissible, when the sole
question that can be presented upon the rec-
ord relates to and will determine the merits
of the controversy imembarrassed by inci-
dental questions affecting the trial, but not
necessarily decisive of the true merits of the
litigation. If every fact that can affect 't^c
result has been upon the trial adjudged fa^
vorably to the party against whom the new
trial has been granted, and no exceptions
have been taken to the admission or rejection
of evidence, or to the rulings upon minor or
Incidental questions In the progress of the
trial, which, if well taken, will entitle the
exceptant to a new trial; in other words, if
the objections and exceptions taken at the
trial and to the recovery cannot be obviated
upon a second trial, but the verdict and judg-
ment must nece.s.sarily be adverse to the par-
ty against whom the new trial has been grant-
ed, if the order and decision stand, an appi-al
from the order, with the stipulation for judg-
ment absolute in case the order is sustained,
may be advisable. But ordinarily, as in this
case, there are exceptions, which, if well tak-
en, will entitle the unsuccessful party to a
new trial, but the decision of which will not
finally or necessarily determine the merits
of the action or the rights of the parties; and
in such cases the exceptions must be clearly
frivolous to justify the hazard of an appeal
from the order granting a new trial, with the
consent to a judgment absolute upon an af-
firmance of the order. The decisions of the
questions presented by the re(;ord in this case
were not necessarily fatal to the plaintiff, but
they are made so by the appeal from tbe or-
der and the giving of the ordinary statutory
stipulation, and the plaintiff loses the benefit
of a second trial.
The order must be affirmed, and judgment
absolute for the defendants.
AH concur.
Order affirmed.
358 n EEALITY OF COXSEXT.
ROWLEY et al. v. BIGELOW et al.i
(12 Pick. 307.)
Supreme Judicial Court of Massachusetts. Suf-
folk and Nantucket. March 19, 1832.
Trover for 627 bushels of yellow corn, val-
ued at 55 cents a bushel.
At the trial, before Wilde, J., it was proved
by the plaintiffs, that on the 24 tb of May,
1S30, the corn belonged to them and was in
their possession, in the city of New York, on
board the sloop [Milan, of which S. Dunning,
one of the plaintiffs, was master, and that it
was measured and delivered on board the
schooner Lion. Tney alleged that one William
X. Martin, a merchant there, fraudulently
obtained possession of it by pretending to
purchase it for cash; and it was proved that
on the 25th of May he shipped it on board the
Lion, consigned to the defendants at Boston,
and tliat the vessel sailed in the afternoon of
that day for Boston. On the 26tb, Dunning,
having ineffectually demanded payment for
the corn, at Martin's counting-house, proceed-
ed to Boston to reclaim it He reached Bos-
ton before the arrival of the Lion, and on the
20th gave notice to the defendants, to whom
by Martin's orders the corn was to be deliver-
ed, that Martin had fraudulently obtained it
from the plaintiffs, and that they intended to
repossess themselves of it On the 30th,
when the Lion had arrived in Boston harbour,
Dunning boarded her and demanded of the
master possession of the corn, giving him no-
tice that Martin had obtained it fraudulently
from the plaintiffs. The master notwithstand-
ing delivered it to the defendants; after which
Dunning demanded it of them and tendered
them any freight or charges which they had
paid. They refused to deliver the corn, and
thereupon the suit was commenced.
In order to establish the fraud on tne part
of Martin, tbe plaintiffs relied on the deposi-
tions of C. A. Jackson and others, merchants
in Xew York, who testified tii;it Martin had
made similar purchases of thorn about the
same time, and under circumstances tending
to show that he was insolvent, and that he
knew it and had no reasonable expectation of
paying for the merchandise according to his
contract The defendants objected to the ad-
mission of these depositions, but the judge
permitted them to be read to the jury.
The defendants, to establish their right to
hold the corn against the plaintiffs, offered
in evidence a bill of lading, dated May 17th,
1S30, signed by the master of the Lion, pur-
porting to be for 2000 bushels of yellow corn
shipped by Martin and consigned to the de-
fendants; also an invoice corresponding to
the bill of lading and purporting to be for
2000 bushels of corn consigned to the de-
fendants for sale on the shipper's account,
and signed by Martin; also a letter from
Martin to the defendants dated" May 17th
(to which the bill of lading and invoice were
1 Irrelevant parts omitted.
annexed) advising that he valued on them
in favor of Heniy Bennett for .$1000, at ten
days' sight, and directing them, if he had
valued too much on this shipment, to charge
it to some previous one, there being an ex-
isting account between Martin and the de-
fendants. And it was proved that a bill
drawn accordingly by Martin, was accepted
by the defendants on the 20th of May and
paid by them at maturity.
There was no evidence that the defendants
had any knowledge of the fraudulent con-
duct of Martin, but it appeared that they
received the biU of lading and invoice and
accepted the draft in the usual course of
business.
Upon this evidence the judge ruled, that
the defendants had a good title to the prop-
erty notwithstanding the fraudulent conduct
of Martin, and notwithstanding the bill of
lading had been signed before the corn was
shipped; to which the plaintiffs excepted.
A verdict was taken for the defendants
by consent; and if the whole court should
be of opinion that they had a valid title to
the corn, under the invoice and bill of lad-
ing, judgment was to be rendered upon the
verdict; but if the court should be of opinion
that the ruling was wrong, the verdict was
to be set aside and the defendants defaulted,
unless the court should also be of opinion
that the depositions above mentioned were
improperly admitted; in which case a new
trial was to be granted.
Fletcher and W. J. Hubbard, for plaintiffs.
Curtis, for defendants.
SHAW, C. J. The first question arising in
this cause is, whether the depositions of
Jackson and others, under the circumstan-
ces, ought to have been admitted as compe-
tent. These were generally persons, of
whom Martin had made similar purchases,
of like articles, about the same time, and
under circumstances tending to show that
he was insolvent and had no reasonable ex-
pectation of paying for the merchandise ac-
cording to his contract
The objection to this evidence is placed
on two grounds, first, that these persons
having similar claims of their own, some
of which are pending here, they have an
interest in establishing the fraud which
they are called to prove; and secondly, that
the transactions being res inter alios, have
no tendency to prove the fact in issue in this
particular case.
But in our opinion, the objection cannot
be sustained upon eitlier ground. As to the
first, it is quite clear, that the verdict and
judgment in this case would not be evidence
in either of theirs; that their interest is in
the question and subject matter and not in
the event of the suit, and therefore that the
objection, such as it is, goes to the credit and
not to the competency of the witnesses. As
to the other objection, we think this evidence-
FRAUD.
889
has a direct and material boarins upon the
fact in issue. It tends to show, th.it at the
time this ostensible purchase was ni:ide, Mar-
tin was insolvent, that he knew he was in-
solvent, that he had no reasonable ground
to believe that he could pay the cash and did
not expect or intend to pay tlie casli for the
merchandise which ho purchased, and so that
he obtained the goods, by false pretenses.
The fact of insolvency, of his knowledge of
his insolvency, and that he had no expecta-
tion or Intenlion of paying for the corn iu
question, is a material fact and the principal
fact In controversy on which tbis case rests,
and Is material to tbe issue. The evidence
Ijears upon the question quo animo, the in-
tent, the fraudulent purpose.
2. It is ne.xt contended ou the part of the
plaintiffs, that no property passed by the
fraudulent purchase of Martin, from tbe plain-
tiffs to him, so as to enable him to make a
title to tlie defendants.
The evidence clearly shows that there was
a contract of sale and an actual deliveiy of
the goods, by their being placed on board a
vessel, pursuant to his order; and this deliv-
ery was unconditional, unless there was an
implied condition arising from the usage of
the trade that tbe delivery was to be consid-
ered revocable, unless the corn should be paid
for, pursuant to the contract and to such
usage. This contract and delivery were sutli-
oient in law to vest the propertj' in Martin,
and make a good title, if not tainted by fraud.
But being tainted by fraud, as between the
immediate parties, tbe sale was voidable, and
the vendors might avoid it and reclaim tbeir
property. But it depended upon them to
avoid it or not. at their election. They might
treat the sale as a nullity and reclaim their
!::;>od.s; or affirm it and claim the price. And
»:i;-:".s m?^ be imagined, where the vendor.
notwithstanding such fraud, practised on him,
might, in cou.sequence of obtaining security,
by attachment or otherwise, prefer to affirm
the sale. The consequence therefore is, that
such sale is voidable, but not absolutely void.
The consent of the vendor is given to the
transfer, but that consent being induced by
false and fraudulent representations, it is cou-
traiy to justice and right, that the vendor
should suffer by It, or that the fraudulent pur-
chaser should avail himself of it; and upon
this ground, and for tbe benefit of the vendor
alone, the law allows him to avoid it.
The difference between the case of property
thus obtained, and property obtained by
felony, is obvious. In tbe latter case, no
right either of property or possession is ac-
quired and the felon can convey none.
We take the rule to be well settled, that
where there is a contract of sale, and an ac-
tual delivery pursuant to It, a title to the prop-
erty passes, but voidable and defeasible as be-
tween tbe vendor and vendee, if obtained by
false and fraudulent representations. The
vendor tberefore can reclaim bis property- a.s
against tbe vendee, or any other person claim-
ing under him and standing upon his title,
but not against a bona fide purchaser without
notice of the fraud. The ground of exception
in favor of tbe latter is, tbat he purchased of
one having a possession under a contract of
sale, and with a title to tbe property, tbough
defeasible and voidable on the ground of
fraud; but as tbe second purcha.ser takes
without fraud and without notice of the fraud
of the first purchaser, he takes a title freed
from the taint of fraud. Parker v. Patrick,
5 Term R. 175. The same rule holds in re-
gard to real estate. Somes v. Brewer. 2 Pick.
1S4.
• ••••••
Judgment on tbe verdict
,so ^^
V^
EEAUTY OF CONSENT
MALLORT V. LEACH.
(35 Vt. 156.)
Supreme Court of Vermont. Rutland. Feb.
Term, 1862.
Case. The declaration set forth that the
plaintiff was the owner of fifty shares of
the capital stock of the Franklin
♦Minino; Company, of the true value 'IS?
and situation whereof she was ig-
norant, and had no means of accurA.te in-
formation, and that the defendant under-
took, at her request, to ascertain and com-
municate to her the value of such stock;
that said stock was worth thirteen hun-
dred dollars, which the defendant ascer-
tained, but that he, contriving and intend-
ing to defraud the plaintiff, and to obtain
said stock from her at much less than its
just value, did not communicate to the
plaintiff or inform her of its true value or
the facts in relation thereto, but fraud-
ulentlyconcealcd and suppressed thesame,
and fraudulently induced the plaintiff to
believe that the said stock was of much
less value than it really was, and also
falsely represented that the same was oi
much less value than it really was; and
also falsely represented that the same was
about to be subject to a large assessment,
when in fact, and as the defendant well
knew, said assessment was only tw"o dol-
lars upon a share; that by means thereof
the defendant then and there induced the
plaintiff to transfer to him (and for his
benefit, )the said stock for the sum of two
hundred and seventy-five dollars paid her
therefor by him, being much less than its
real value as aforesaid; that the plaintiff
believed and relied upon said representa-
tions, and was wholly ignorant of the
facts so concealed and suppressed by the
defendant as aforesaid, and of the true
value of said stock, and supposed that the
defendant had fully communicated to her
his knowledge on the subject: and that
she therefore did transfer said stock to the
defendant, and for his benefit, for said last
mentioned sum and no more; and that
the defendant received and converted the
same to his own use, and immediately sold
the same for the sum of thirteen hundred
dollars ; and that thereby the plaintiff took
the whole value of said stock over and
above the sum of two hundred and seven-
ty-five dollai's, to wit: ten hundred and
twenty-five dollars.
Linsley & Prout and E. J. Phelps, for
plaintiff' I). Roberts, E.N. P>riggs, and D.
E. Jsichdison, for defendant.
ALDIfS.J. I. As to the alleged variance,
it may be observed that it consists in
averring the injury occasioned by the
plaintiff's fraud to be greater than it was
proved to be. But in the averment of
damages it is not necessary to be exact;
and the proof need not sustain the allega-
tions in this respect.
II. The parol evidence was admissible
aa tending to show the fraud — not as
qualifying the written contract. It tend-
ed to show a special confidence and rela-
tion between the parties, in regard to this
business, and, if proved, to the satisfac-
tion of the jury, to have existed in the
outeet, and to have continued to the time
of the re-purchase b^- the defendant, must
materially have given character to both
the defendant's words and silence, as in-
tended to induce the plaintiff to act under
a delusion. This leads us to the main
point, viz.: the testimony on the part of
the plaintiff, and the charge of the court
in regard to it.
The testimony of the plaintiff tended to
show, that the defendant, in advising her
to buy the fifty shares of mining stock,
professed to act as her friend, from a de-
sire to invest her money so as to make her
inde])endent, and in a mode that was to
be kept secret from all but her father and
mother, and with his own guarantee that
she should get back her money and at
least twenty per cent, interest. He told
her that as he was interested in the stock
he would keep her informed as to its situ-
ation and value, and that he should go to
the mines in June, IbifiO. This declaration
of the defendant is to be considered in con-
nection with the fact that by the written
contract she was to decide on the 1st
July, 1S59, to keep or to sell her stock.
That such language would strongly tend
to beget confidence and trust in the de-
fendant, and lead the plaintiff to rely
•166 upon his advice, and to be *guided
by it on his expected return from
the mines in June, 1850, is obvious. This
must have been the purpose for which he
thus advised her; and we think he must
have been aware of the effect that it pro-
duced on her mind at that time. Now if
this relation of trust and confidence con
tinned from December, 1857, when she
bought the stock, to July, 1S59, when she
sold it to the defendant, and he at the time
of his purchase knew that she thus trust-
ed in and relied upon his friendship and ad-
vice in this matter, it was clearly his duty
to tell her of its real value, and it was a
fraud to take advantage of her ignorance
and buy it at about a quarter of its mar-
ket price. But if during this period of time
this relation of confidence ceased to exist,
and alienation and distrust had taken its
place, then it is obvious that he could not
have supposed she was relying upon his
friendship and advice in this business, and
was not under obligation to give her in-
formation in regard to the value of her
stock.
There was testimony on the part of the
defendant tending to establish this state
of facts. The fraud of the defendant (if
any) consisted in taking advantage of the
confidence which he knew the plaintiff put
in him, and which he had sought to win;
but if she had lost her confidence in him,
he could no longer take advantage of it.
The court distinctly stated to the jury
that no obligation rested upon the defend-
ant by virtue of the contract to inform
her of the real value of the stock. To
have required that would have been to
add a new clause to the contract. The
court then proceeded to refer to those cir-
cumstances which gave rise to a relation
of trust and confidence betv.ecnthe parties
In this matter, and made it the duty of the
defendant to inform her of what he knew
as to the value of the stock, and then said
to the jury, "because he had placed him-
FllAUD.
391
self iu such a relation it would be a fraud
In liim to receive back tlie stock without
giviiip: her the knowie(l;;e he possesKcd."
Tliis put the case cle.-irly on the ground of
fraud in takinj? advaiitnfj^e of a confidence
he had souf^ht, and which he knew was
placed in him.
The doubt we have felt, In rej^ard to the
correctness of the charjj^e in this respect,
is whether tlie court siiirR-iently called the
attention of tlie jury to the fact tliat
this relation of confidence *iniist ex- *167
ist between the parties at the time of
the re-purchase by the defendant, and to
tliose circumstances shown on the part of
the defendant tending? to prove that the
relation had ceased to exist. AVe have
carefully examined the exceptions on this
point, and can not but regret that the
statement in this respect is not more sat-
isfactory. It does not appear that tlie de-
fendant in his requests to the court called
their attention to this part of the defence,
or made any request in regard to it. The
defendant's evidence was admitted. The
court treated the promise of tlie defend-
antto inform hurof thesituation and value
of thestock from limetotimeas aeontinn-
ing promise, and seem to carry theidea that
the plaintiff must havecontinued torely on
it. Asthereis no direct request to charge in
regard to this part of the defence, and as
no exception was taken on the ground of
an omission in this respect; and as It
would have been the duty of the defendant
to have called the attention of the court
to tins point, if not sufliciently referred to
in the ch^irge, and as the general tenor of
the charge seems to require that the con-
fidence should have existed at the time of
the re-sale, we think we should not be jus-
tified in opening the case on this ground.
The defendant further claims that the
charge of the court in regard to the rep-
resentation made by the defendant, that
there was about to be a large assessment
made upon tlie stock, was incorrect. The
substance of the charge is, — if the defend-
ant said this with a view to mislead the
I»laintiff as to the value of the stock — if
the fact was calculated to depreciate its
value and to induce her to sell at a price
less than the value, and she was thereby
deceived and induced to sell, he would be
liable unless he disclosed his knowledge of
facts tending to enhance its value.
1. This does not assume as matter of
law. that the fact would depreciate its
value and induce her to sell. That ques-
tion is left to the jury. It is obvious that
ordinarily an assessment of •2.") per cent, up-
on stock, unexi)lained, would lead the
holder to suspect something migiit be
wrong; especially if it was not expected
by stockholders that such an additional
payment was to be made. So if the hold-
er of the stock was a poor person, and un-
able without trouble and incon ven-
ules icnce to raise the sum assessed, it
*would tend to induce such person
to sell the stock. We think the evidence
admissible as tending to show that the
defendant made declarations which he
must have been aware would embarrass
the plaintiff and lead her to wish to part
with her stock.
It was telling the truth, but not the
whole truth. It was telling it in a man-
ner to produce the effect of a falsehood.
The defendant must have felt that what
he said would depress the plaintiff's esti-
mate of herstock — would lead hertotiiink
its value much less than it was; and he
knew she was ignorant of its true value.
Now he migiit be silent — migiit say noth-
ing; but he had no right t54; and the
court say: '"riiere is no principle or au-
thority showiiifj: that where a person has
been defrauded by another in iiiakin;jj an
executory contract, a subsequent perform-
ance of it on his part, even with iinowl-
edge of the fraud, acquired subsequent to
the inakinc: and ijrcvious to the perform-
ance, bars iiiiii of any remedy for liis dam-
a^es for the fraud. The party defrauded,
by performing his part of the contract
with knowledf^e of the fraud, i.s deemed to
have ratified it, and is precluded thereby
from subsequently disatlirminj? it. That
Is the extent of the rule. His ri^ht of ac-
tion for the fraud remains unaffected by
Buch performance. I'.ut having gone on
after discovering the fraud, he cannot aft-
erwards disaflirm the bargain, or sue for
the consideration." The priuciule and its
reason apply to this case. Upon this sub-
ject see Long on Sales, 219. 240; 2 Kent's
Com.4sO; ?, Frost. (N.H.) .-j2U: 10 Ind. 4.30;
the remarks of Siikrma.n, J., in 14 Conn.
424-425; .". .McLean, 170, Fed.Cas. .No. 6.;i4S;
9Cush. 200.
Judgment afflrmed.
894
^
REALITY OF CONSENT
(^0
BROWN V. PIERCE.i ^^J-/
(7 Wall. 205.) Jf^
Supreme Court of th(> United States. Dec,
1S6S.
Error to the supreme court, Nebraska tern- 1
tory.
Brown filed his bill in September, 1860, In
the court below agaiust three persons, Pierce,
Morton, and Weston, alleging that In the
spring of 1S5T, he settled upon and improved
a tract of land near Omaha; that he erected
a house on the tract and continued to occupy
it until August 10th, 1S57, when he entered
the tract under the pre-emption laws of the
United States; that Pierce clai m ed the land
by virtue of the laws of an organization
known as the Omaha Claim Club; that this
organization, consisting of very numerous
armed men, sought to, and did to a great ex-
tent, control the disposition of the public
lands in the vicinity of Omaha in 1857, in
defiance of the laws of the United States;
that it frequently resorted to personal vio-
lence in enforcing its decrees; that the fact
was notorious in Omaha, and that he. Brown,
was fully advised in the premises; that as
soon as he had acquired title to the land,
Pierce, together with several other members
of the club, came to his house and demanded
of him a deecTof 'tB6 land, threatening to take
^ life by hanging him, or putting him in
the Missouri river, if he did not coiiiply with
tleTIemanUrtKat the club had posted hand-
bills calling the members together to take ac-
tion against him; and that knowing all this,
and in great fear of his life, he did, on the
10th of August, 1S57, convey the land by deed
to Pierce; that he. Brown, received no con-
sideration whatever, for the ccmveyance; that
fi-om the date of his settlement upon said land,
until the time of filing the bill, he had contin-
ued to keep possession either actually or con-
structively; that Morton claimed an interest
in the premises by virtue of a judgment lien,
and that Weston also made some claim.
The prayer was, that the deed might be de-
clared void, and Pierce be decreed to recon-
vey, and for general relief.
The bill was taken pro confesso as to all
the defendants, except Morton, who answered.
This answer, stating that he, Morton, was
not a resident of the territory, and had no
knowledge or information about the facts al-
leged in the bill, but on the contrary was an
utter stranger to them, and therefore could not
answer as to any belief concerning them, —
set forth that on the 28th August, 1857, Pierce
was "the owner and in posses.sion of, and oth-
erwise, well seized and entitled to, as of a
good and indefeasible estate of inheritance in
fee simple," the tract in controversy; that
being so, and representing himself to be so,
and having need of money in business, he
applied to him, Morton, to borrow the same,
> Irrelevant parts omitted.
and that he, Morton, being Induced by rea-
son of the representation, and also by the-
possession, and believing that he. Pierce,
was the owner, he was thereby induced to
lend, and did lend to him $6,000, on the per-
sonal security of him. Pierce; that before the
fiUng of this bill by Brown, he, Morton, had
obtained judgment against Pierce for $3400,
part of the loan yet impaid; that this judg-
ment was a lien on the lands; and that as
he, Morton, was informed and believed, if he
could not obtain his money from this land,
he would be whoUy defrauded out of it.
The answer further stated that the defend-
ant was informed and believed that Brown,
the complainant, entered upon the lands as
the tenant of Pierce, and that the suit by the
complainant was being prosecuted in viola-
tion of the just rights of Pierce, as well as of
him, Morton.
There was no replication. Proofs were tak-
en by the complainant, and they showed to
the entire satisfaction of the court that all
the matters alleged in the bill and not denied
by the answers, were true. There thus seem-
ed no doubt as to the truth of all the facts
set out in the bill.
The court below declared Brown's deed
void, and decreed a reconveyance from Pierce
to him, and that neither Morton nor Weston
had any lien on the premises. Morton now
brought the case here for review.
Carlisle & Woolworth, for appellant
ick & Briggs, contra.
Red-
Mr. Justice CLIFFORD delivered the opin-
ion of the court
Representations of the complainant were,
that on the tenth of August, 1857, he ac-
quired a complete title to the premises de-
scribed in the bill of complaint, imder the
pre-emption laws of the United States, and
that thereafter, on the same day, he was com-
pelled, through threats of personal violence
and fear of his life, to convey the same,
without any consideration, to the principal
respondent Framed on that theory, the bill
of complaint alleged that the first-named re-
spondent was at that time a member of an
unlawful association in that territory, called
the Omaha Claim Club, and that he, accom-
panied by three or four other persons belong-
ing to that association, came to 'his house a
few days before he perfected t^is right of pre-
emption to the land in question, and told the
complainant that if he entered the land under
his pre-emption claim, he must agree to deed
the same to him, and added, that unless he
did so, he, the said respondent and his asso-
ciates, would take his life; and the complain-
ant further alleged, that the same respondent,
accompanied, as before, by certain other
members of that association, came again to
his house on the day he perfected his pre-
emption claim, and repeated those threats of
personal violence, and did other acts to lOr
DURESS.
395
tlmlflato him, and Induce him to believe that '
thc3' would cavvy out their throats if he re-
fused to execute tlie deed as required.
Based upon those allejcation.s, the charge is
that the complainant was put in duress by
those threats and acts of intimidation, and
that he sigrned and executed the deed, and
conveyed the land by means of those threats
and certain acts of intimidation, and through
fear of hLs life, and without any considera-
tion; and he prayed the court that the con-
veyance might be decreed to be inoperative
and vtiid, and that the grantee might be re-
quired to reconvey the same to the complain-
ant.
* • • * • • •
Argument to show that a deed or other
written obligation or contract, procured by
means of duress, is inoperative and void, Is
hardly required, as the proposition is not de-
nied by the respondent Actual violence is
not necessary to constitute duress, even at
common law, as understood in the parent
countx'y, because consent is the very essence
of a contract, and, if there be compulsion,
there is no actual consent, and moral compul-
sion, such as that produced by threats to take
life or to inflict great bodily harm, as well as
that produced by imprisonment, is everywhere
regarded as sufficient, in law, to destroy free
agency, without which there can be no con-
tract, because, in that state of the case, there
is no consent
Duress, in its more extended sense, means
that degree of constraint or danger, either
, actually inflicted or threatened and impond-
. ing, which is sufficient, in severity or in ap- j
\ prehension, to overcome the mind and will of/
\a person of ordinary firmness.
Text-writers usually divide the subject into
two classes, namely, duress per minas and
duress of imprisonment and that classiflca-
tion was uniformly adopted in the early his-
tory of the common law, and is generally pre-
served in the decisions of the English courts
to the present time, 2 Inst 482; 2 Rolle,
Abr. 124.
Where there is an arrest for an improi)er
purpose, without just cause, or where there
is an arrest for a just cause, but without law-
ful authority, or for a just cavise, but for an
unlawful purjiose, even though under proper
process, it may be construed as duress of im-
prisonment; and if the person arrested exe-
cute a contract or pay money for his release,
he may avoid the contract as one procured by
duro,ss, or may recover back the money in an
action for money had and received. Richard-
son V. Duncan, 3 N. H. 508; Watkins v.
IJaird, G ^Lass. 511; Strong v. Graunis, 20
Barb. 124.
Second class, duress per minas, as defined
at common law, is where the party enters
into a contract (1) for fear of loss of life; (2)
for fear of loss of limb; (3) for fear of may-
hem; (4) for fear of imprisonment; and many
modern decisions of the courts of that coun-
try still restrict the operations of the rule
within those limits. 3 Bac, Abr. tit "Du-
ress," 252.
They deny that contracts procured by men-
ace of a mere battery to the person, or of
trespass to lauds, or loss of goods, can be
avoided on that account, and the reason as-
signed for this qualification of the rule is,
that such threats are held not to be of a na-
ture to overcome the mind and will of a firm
and prudent man, because it is said that if
such an injury is inflicted, sufficient and ade-
quate redress may be obtained in a suit at
law.
Cases to the same effect may be found also
in the reports of decisions in this country,
and some of our text-writers have adopted
the rule, tliat it is only where the threats ut-
tered excite fear of death, or of great bodily
harm, or unlawful imprisonment, that a con-
tract, so procured, can be avoided, because,
as such courts and authors say, the persou
threatened with slight injurj- to the penson.
or with loss of property, ought to have suffi-
cient resolution to resist such a threat, and tu
rely upon the law for his remedy.
On the other hand, there are many Amer-
ican decisions, of high authority, which adopt
a more liberal nile, and hold that contracts
procured by threats of battery to the persou,
or the destruction of property, may be avoid-
ed on the ground of duress, because in such
a case there is nothing but the form of a con-
tract, without the substance.
But the case under consideration presents
no question for decision which requires the
court to determine which class of those cases
is correct, as they all agree in the rule that a
contract procured through fea r of loss of life ,
produced by the threats of the other party to
the contract, wants the essential element of
consent, and that it may be avoided for du-
ress, which is sufficient to dispose of the pres-
ent controversy.
896
REALITY OF CONSENT.
SFAIDS V. BARRETT et aL»
(57 111. 2S9.) ^
■z^'^
Supreme Court of Illinois. September Term,
1870.
Appeal from t±ie superior court. Cook coun-
ty; Joseph E. Gary, Judge.
Sleeper & Wbiton, for appellant Henry S.
Monroe, for appeUees.
THORNTON, J. The question presented
in this case, as to the sufficiency of the dec-
lai-ation, will be considered as on motion 'xs.
ai-rest of judgment.
The demurrer was properly sustained to
the second count It is nothing more than a
count in slander, based upon an alleged libel-
lous affidavit filed in a legal proceeding.
Whatever is said or written in such proceed-
ing, pertinent and material to the matter in
controversy, is privileged, and no action can
be maintained upon it 1 HiL Torts. 344;
Warner v. Paine, 2 Sandf. 195; Garr v. Sel-
den, 4 N. Y. 91.
The first count alleges that the plaintiff was
a dealer in oysters, and doing a large and
lucrative business, and was indebted to ap-
pellees for transportation, &c, in the sum of
§1,000, which he was able and willing to
pay; and that they, maliciously intending to
injure him and deprive him of his business,
procured Barrett, one of appellees, to make
an affidavit and that he did make an affida-
vit that plaintiff was indebted to the express
company in the sum of 5;2,996.30, for trans-
portation, &c., and that he had fraudtilently
conveyed and assigned his property, and was
about fraudulently to conceal, assign, or
otherwise dispose of his property, so as to
hinder and delay his creditors; and that ap-
pellees then filed said affidavit with the clerk
of the circuit court of Cook coimty, and ob-
tained a writ of attachment, and procured
the levy thereof upon .^5,000 worth of oysters,
and deprived the plaintiff of possession, and
neglected to take care of them, by reason
whereof they became of no value.
The declaration further alleges that it was
not true that the plaintiff had fraudulently
conveyed or assigned, or intended to conceal
and assign, his property, so as to hinder and
delay his creditors; that he was not indebt-
ed in the amount mentioned In the affidavit;
and that the same was false and fraudulent,
and well known to be so by appellees; and
that they, wickedly and maliciously intend-
ing to injure, and extort a large sum of
money from, him (nearly $2,000 more than
was due upon a fair accounting), refused to
permit the oysters to be delivered to him, ex-
cept on the payment of the sum in the affi-
davit mentioned; and that he, under protest
and to save his property from utter ruin, paid
the same, not knowing that the oysters had
1 Irrelevant parts omitted.
sustained serious injury, by reason of the
carelessness of appellees.
To this count, the geneial issue and a spe-
cial plea of release were liled.
To the special plea the plaintiff replied non
est factum, and that the release was ob-
tained by duress of property. A demurrer
was interposed to the special replication,
which was sustained, and the plaintiff abided.
Three questions are raised by the record,
and in the argument: First. Is the special
replication a good defense? Second. Is not
the plaintiff restricted to his remedy on the
attachment bond? Third. Is the count bad,
on motion in arrest, for omitting to aver the
termination of the suit and the want of
probable cause?
Upon the first question the authorities dif-
fer. All promises made and contracts en-
tered into, where there is duress of the per-
son, may be avoided. The reason is, that
the person is induced to do the act by re-
straint of his liberty, or menace of bodily
harm. But it has been held that an agree-
ment, made under duress of goods. Is not
void, and that the person thus circumstanced
must exeit himself and resist the compul-
sory influence, when his property is in dan-
ger. We cannot appreciate the difference.
Liberty and life are justly dear to all men,
and so is the exclusive right to possess, dis-
pose of, and protect from destruction, our
property. We cannot .fOi£gLet_.t±La-iactJ;hat
the, desire for property is a stro.og.^afi (13 N. E. 596, 145 Mass. 153.) ^ ^
Supreme Judicial Court of Massachusetts.
Worcester. October 20, 1887.
W. S. B. Hopkins and StiUman Haynes, for
plaintiflf. Norcross, Haxtwell & Baker, for
defendant,
HOLiMES, J. This is an action upon a prom-
issory note made by the defendant and her
husband to the order of the plaintiff. The de-
fendant alleges that her signature was obtain-
ed by duress and threats on the part of her
husband. The judge below found for the plain-
tiff, it would rather seem on the ground that,
whether there was duress or not, the defend-
ant had ratified the note,, which there seems to
have been evidence tending to show that she
did. See Morse v. Wheeler, 4 Allen, 570; Rau
V Yon Zedlitz, 132 Mass. 164. But, as this
may not be quite clear, we proceed to consider
the only exception taken by the defendant, —
the judge's refusal to rule that, if the defend -
ant signed the note under dtu^lfe, it was_ 150-
material whether the plaintiff knew when he
received the note that It was so signed. The
exception is to this refusal. No doubt, if the
defendant's hand had been forcibly taken
and compelled to hold the pen and write her
name, the signature would not have been
her act, and if the signature had not been her
act, for whatever reason, no contract would
have been made, whether the plaintiff knew
the facts or not. There still Is sometimes
shown an inclination to put all cases of du-
ress upon this ground. Barry v. Society, 59
X. Y. 5§7, 591. But duress, like fraud, only
becomes material, as such, on the footing that
a contract or conveyance has been made which
the party wishes to avoid. It is well settled
that when, as usual, the so-called "duress"
consists only of threats, and does not go to
the height of such bodily compulsion as turns
the ostensible party into a mere machine, the
contract Ls only voidable. Foss v. Hildreth,
10 Allen, 26, 80; Vinton v. King, 4 Allen. 561,
565; Lewis v. Bannister, 16 Gray, 500; Fish-
er V. Shattuck, 17 Pick. 252; Worcester v.
Eaton, 13 Mass. 371, 375; Dimcan v. Scott,
1 Camp. 100; Whelpdale's Case, 3 Coke, 241;
1 Bl. Coram. 130; Clark v. Pease, 41 N. H.
414. This rule neces-sarily excludes from
the common law the often recurring notion,
just referred to, and much debated by the
civilians, that an act done under compulsion
is not an act, in a legal sense. Tamen Coactus
Volui, D 4, 2, 25, § 5. See 1 Windscbeid, Pan-
dextien, § 80.
Again, the ground upon which a contract is
voidable for duress is the same as in the
case of fraud, and Is that, whether It springs
from a fear or a belief, the party has been
subjected to an Improper motive for action.
See Rodliff v. Dallinger, 141 Mass. 1, 4 N.
E. 805; Stiff v. Keith, 143 Mass. 224, 9 N.
E. 577. But, if duress and fraud are so far
alike, there seems to be no sufficient reason
why the limits of their operation should be
different. A party to a contract has no con-
cern with the motives of the other party for
making it. If he neither knows them nor is
responsible for their existence. It is plain
that the unknown fraud of a stranger would
not prevent the plaintiff from holding the
defendant. Master v. MiUer, 4 Term R. 320,
338; Masters v. Ibberson, 8 C. B. 100;
Sturge V. Starr, 2 Mylne & K. 195; Pulsford
V, Richards, 17 Beav. 87, 95.
The authorities with regard to duress, how-
ever, are not quite so clear. It is said in
Thoroughgood's Case, 5 Coke, 241, that, "if a
stranger menace A. to make a deed to B., A.
shall avoid the deed which he made by such
threats, as well as if B. himself had threaten-
ed him, as it is adjudged, 45, B 3, 6a." Shep.
Touch. 61, is to like effect. See, also, Fowler
V. Butterly, 78 N. Y. 68. But in 43 Y. B. E
3, 6 pi. 15, which we suppose to be the case
referred to. It was alleged that the imprison-
ment was by the procurement of the plain-
tiff; and we know of no distinct adjudication
of binding authority that threats by a stran-
ger, made without knowledge or^riyKy'af the
partjj__are._good ground for avoiding a con-
tract induced_by them. In Keilway, 154a. pi.
3,~"'The~^efendant in debt pleaded that he
made the obligation to the plaintiff by dinress
of imprisonment (on the part) of a stranger,
and the opinion of Rede and others was that
this is not a plea without making the obligee
party to this duress." In Taylor v. Jaques,
106 Mass. 291, 294, It was said that the de-
fendant bad to prove that he signed the note
"under .a reasonable and well-grounded belief,
derived from the conduct and declarations of
the plaintiffs, that if he did not sign It he
would be arrested." See, also, Green v. Scran-
age, 19 Iowa, 461, 460; Talley v. Robinson's
Assignee, 22 Grat. 888; Bazemore v. Freeman,
58 Ga. 276. Loomis v. Ruck, 56 N. Y. 462,
was decided on the ground that, if the non-
negotiable note in suit was in the first in-
stance a contract between the plaintiff and
the defendant, it was obtained through the
agency of tiie defendant's husband in such a
way as to make the plaintiff answerable for
his conduct. Moreover, the older writers liken-
ed duress to infamcy, and took a distinction
between feoffments, etc., by the party's own
hand, and acts done by letter of attorney, re-
garding the latter as wholly void. 2 Co. Inst
483; Finch, Law, 102. It has been held in
New York and some other states, as well as
in England, that a power of attorney given by
an infant Ls void. Fonda v. Van Home, 15
Wend. 631; Knox v. Flack, 22 Pa. St. 337;
Saunderson v. Marr, 1 H. Bl. 75. And If this
analogy were followed the contracts in all
the New York cases which we have cited
would be void by the law of that state for
want of a personal delivery by the defendant
to the plaintiff. There may be still other
explanations of the decisions.
In the present case it does not appear who
delivered the note, and does not clearly ap-
DURESS.
401
pear that the defendant did not deliver It
herself. If anj- question of authority were
open, it would have to be noticed that in
Massachusetts the distinction as to power of
attorney has been so limited, if not whoily
done away with, with regard to infants, that
It would be doubtful, at least. If it could have
H0PK.8ELuCA8.C0NT. — 28
any application to the rnse at bar. Whitney
V. Dutch, 14 Mass. -iiiT, -VjS; Welch v. Wolcli,
103 Mass. 5G2; Moley v. Brine. 120 Mass. 324.
Ilowever the law m.iy stand olsewherf. we
are of opinion that the rulin;; rt.tiuc'.-;''^d waa
wrong upon principle and authority. Exf p-
tion overrulid.
REALITY OF CONSENT.
COWEE V. CORNELL.
(75 N. Y. 9L)
Court of Appeals of New York. Nov. 12. 1S78.
Appeal from order of the general term of
the supreme comt in the Third judicial de-
partment, reversing a judgment entered upon
the report of a referee.
Plaintiff made a claim against the estate of
Latham Cornell, of whose will defendants
were the executore, for interest upon a prom-
issory note executed by the deceased. This
claim \j-as rejected, and was referred by stip-
ulation.
The facts, as stated by the referee, are in
substance as follows:
Latham Cornell, the deceased, was the
grandfather of Latham C. Strong. He was
possessed of large property, consisting of real
estate and of personal property invested in
stocks, bonds and other securities. He died
in 1S7G at the age of ninety-five. For four
years prior to his death he was partially
blind. From July, 1871, until the time of
his death, his grandson at his request at-
tended to his affairs, writing his letters, look-
ing after his banking business and liis rents,
making out his bills, cutting off his coupons,
readiug to him, and on occasions going away
from home to transact other business. In
July, 1S71, Cornell gave to Strong a deed of
two adjoining houses in the city of Ti-oy,
valued at about $o2,000, in one of which
houses the grandfather lived until the time
of his death. The grandson moved into the
adjoining house in the spring of 1872, and
resided there until after his grandfather's
death. During the time that the two thus
lived in adjoining residences, they were in
daily conference upon business matters of the
old gentleman, in the house occupied by the
grandson. The grandson with his family
consisting of live persons, during all this time
lived at the sole expense of the grandfather,
and claims to have received, in addition to
the note in suit, as gifts from his grand-
father, .$30,000 in government bonds and the
assignment of a mortgage for about $1,700.
At what particular time it is claimed these
gifts were made is not in evidence. Mr. Cor-
nell made his will in 1871, providing a legacy
of $15,000 for Mr. Strong. In the fall of
1872, Mr. Strong expressed a desire to go in-
to business for himself and to be independent
of his grandfather, and actually was in ne-
gotiation with different persons in Troy and
New York with a view of forming business
associations. Mr. Cornell became uneasy at
the prospect of losing the services of his
grandson and caused him to be written for
to come home. Mr. Strong came back to
Troy, and his grandfather said to him then,
as he had previously said, that he wanted
him to give up his ideas of leaving and to
devote his whole time to the business of his
grandfather, ilr. Cornell further said that
he had no one else to look after his business,
and frequently said that there was money
enough for all of them. :Mr. Strong innne-
diately abandoned his business projects and
devoted his whole time and attention to his
grandfather's business, until the death of the
latter. After this Mr. Cornell sent for his
legal advisers and proposed to alter his will
so as to make provision to compensate his
grandson for having devoted himself to his
business. What provision was intended is
not disclosed by the evidence. The lawyers
advised that his will be left unaltered, and
that he take some other way of compen-
sating his grandson. Mr. Cornell gave to Mr.
Strong the note in question. It is as follows;
"$20,000. Troy, April 1, 1873. Five yeaif
after date I promise to pay Latham L. C.
Strong, or order, $20,000, for value received,
with interest yearly. L. Cornell."
The note was on a printed form, the name
of the payee being printed "Latham Cornell."
The note was filled up in the handwriting of
the maker, but in stilking out with his pen
the name of the payee he left the word
"Latham" and afterwards interlined the full
name, "L. C. Strong." Annexed to the note
was a stub with some printed forms, on
which Mr. Cornell wrote: "Troy, April 1st,
1873, L. C. Strong, $20,000 at five years, to
make the amount the same as Chas. W.
Cornell." The stub was on the note when it
was delivered to the payee, but was torn off
by him before it was transferred to the plain-
tiff; and there is no evidence that the plain-
tiff ever knew of the existence of the stub.
The stub and note were taken from a blank
book which belonged to decedent. No pay-
ment of interest was made upon the note .
during the lifetime of the maker-. The ref-
eree found that the note was given for a
valuable consideration. INIr. Strong sold the
note to the plaintiff for $19,000, taking his
note, pajable in one year after date. What
that date was has not been disclosed. Mr.
Strong testified at the trial that he still held
the note. Mr. Strong was one of the execu-
tors.
Further facts are stated in the opinion.
Irving Browne, for appellant John Thomp-
son, for respondents.
HAND, J. The counsel for respondents
suggested at the close of his argument be-
fore us that there was no evidence of a de-
livery of the note to Strong, the payee, and
the finding of delivery by the referee was
entirely unsupported. He does not however
make this a point in his printed brief, and
did not present it strenuously or with any
emphasis in his oral remarks.
It is true that the evidence in this respect
was not very satisfactory. Ordinarily the
possession and production of the note by the
payee will raise a presumption of delivery
to him. But this presumption must be very
much weakened when the possession is
shown not to precede the possession of all
the maker's papers and effects by the payee
UNDUE INFLUENCE.
403
as executor, when tlie note appears to liave
been all in the handwritinj,' of the maker
and to have been talcen with a stub attached,
also in his handwriting', from a bank book
belonj^inj? to him, and when installments of
interest falling due in the maker's life-time
were not paid and although years elapsed
after they so became due bef;;re his death
there is no proof of any demand of ...i m by
the paj'ee or recognition of liability by the
deceased. I am not prepared to say however
that these circumstances absolutely destroy
the presumption from possession and produc-
tion of the instrument. While some evidence
on the part of the plaintiff, showing that the
note had been delivered to Strong in his
grandfather's life-time, or at least negativ-
ing the idea that Strong found it in the bank-
l)Ook or among the papers of the deceased
when he took possession of them as executor,
could probably have been easily produced if
consistent with the fact, yet we cannot hold
Its absence conclusive against the plaintiff
upon this point, upon the record as it stands.
No motion for judgment or to dismiss was
made on this ground by the respondents al-
though the trial was in other respects treated
by the counsel on both sides as one before a
referee appointed in the ordinary way to
hear and determine and direct judgment as
in an action, and we cannot say but that if
the plaintiff had been notified of such an ob-
jection, the evidence would have been sup-
plied. The finding of the delivery by the
referee was not even excepted to. although
there were exceptions to the finding of con-
sideration. Under these circumstances we
must, I think, assume an acquiescence in the
truth of the finding by the respondents for
reasons known to them, and which if dis-
closed would probably be entirely satisfac-
tory.
The majority of the general term put their
reversal of the judgment upon the ground
that it conclusively appeared from the stub
attached that the note was intended as a
gift and was without consideration. In this
I am unable to concur.
The referee's finding that the note was de-
livered not as a gift but for a valuable con-
sideration has some evidence to support it, in
the proof of the services rendered by Strong
to the deceased, and his abandonment of a
profession at the request of the deceased, in
the intention expressed by the latter to make
some compensation for those services, and
the conversation had with his counsel not
very long before the date of this note, in
which he was dissuaded from making this
compensation by will and advised to do it
while alive, to which he assented. What ap-
pears upon the stub is not in my opinion
conclusive against this result.
There Is perhaps difficulty in giving any
entirely satisfactory construction to this
memorandum made by the deceased; but the
interpretation of the general term seems to
my mind inconsistent with the known facts
- of the case. Strong certainly had had and
I the deceased knew that be had had property
of the value of $32,0(jr
the minority has ceased, and the relation
thereby actually ended, if the intermediate
period be short, unless the circumstances
demonstrate, in the highest sense of the term,
the fullest deliberation on the part of the
ward, and the most abundant good faith on
the part of the guardian; for. in all such
cases, the relation is still considered as hav-
ing an undue influence upon the mind of the
ward, and as virtually subsisting, especially
if all the duties attaching to the situation
have not ceased; as if the accounts between
the parties have not been fully settled, or if
the estate still remains, in some sort, undi^r
the control of the guardian.' "
Here the ward was a female, barely past
the age of 18 years, practically without
knowledge or experience in business affairs.
The peculiar interests of the guardian were
opposed to her own. His wife then owned
tlie other two-thirds of the realty in question,
and by this deed was acquiring the third be-
longing to the ward. The ward was induced
to execute a deed, prepared by the guardian
for her signature, for an inadequate consid-
eration, greatly less than the real value of her
interest, unless there be taken into considera-
tion her prior support and maintenance in
her sister's family. True, the presumption
of undue influence of the guardian is attempt-
ed to be overthrown by proof. But as said
in the case just quoted from: "The presump-
tion of influence on the part of the guardian,
and tlie dependence of the ward, continues
after the legal condition of guardianship has
ended; and transactions between them dur-
ing the continuance of the presumed influence
of the guardian will be .set aside, unless
shown to liave been the deliberate act of the
ward, after full knowledge of her rights. In
all such cases the burden rests heavily upon
the guardian to prove the circumstances of
knowledge, and free consent on the part of
407
\
the ward, good faith, and absence of in-
fluence, which alone can overcome the pre-
sumption." It is not necessary in such cases
that actual and Intentional fraud be estab-
lished. It is suirifiout when the parties sus-
tained the relation of guardian and ward,
that the former has gained some advantage
by the transaction with his ward, to throw
the burden of proving good faith and ab-
sence of influence, and of knowledge and free
consent of the ward, upon the guardian.
This we are not prcp:ired, att/yr the most
careful consideration of the evidence, to say
has boon done, and the decree of the chancel-
lor setting aside the deed mu.st be afllrmed.
Nor can It make the slightest difference that
the conveyance was made to the wife of the
guardian, under whom he sub.sequontly ac-
quired title. As already seen, both the hus-
band and wife stood in the relation of parents
to complainant, while the husljand was
guardian. The relations precluded their de-
riving advantage from the ward, and it was
his duty to protect her estate from spoliation
from whatever source.
It is next insisted that in respect of the !?S60,
which constituted the consideration for the
deed, the court should, by its decree, have re-
quired return by the ward of the amoimt, or
a sale of the ward's interest in the premise;*
to pay it, as a condition upon which the dee^
should be canceled. This contention is with-
out merit It is true that in case of sale and
conveyance of land by the ward to the guard-
ian, where the ward afterwards elects to re-
pudiate the transaction, and seeks in equity
to have the deed set aside, he must do equi-
ty, and pay back to the guardian the amount
received, or else suffer a decree charging his
land with sale to satisfy the same. Wick-
iser v. Cook. 85 111. 68. But such is not the
case here. By the findings of tlie master, ap-
proved by the court, large sums of money
were found due tlie ward from the guardian,
and in the settlement of which the court by
its decree, credited the guai'dian with the
above amount, which was equivalent to a
payment in money. It would be useless for
the court to make the consideration paid a
charge on the ward's land when, by an ad-
justment of the amounts duo between them,
it could, and in fact should, be deductod-
There was no occasion for such an order
when the guardian could be paid by simply
deducting it from the amount owing to the
ward.
It is further insisted that appellee should
take her interest in the property as it was at
the date of the deed; that all improvement
made thereon belonged to the appellants, sub-
ject to the right of appellee to obtain title
thereto by contribution of her share of the
cost or present value thereof; and the doc-
trine in respect of tenants in common — that,
where one tenant makes improvements on the
premises held by tlicm In common, the court,
in making partition, should require due com-
pensation therefor, from the other tenants to
be made — is invoked in support of this view.
408
REALITY OF COXSEXT.
The court found that Mary Ann McParland,
grantee in the deed, "was not an innocent
purchaser of said real estate, but was charged
with and had full knowledge of the fiduciary
relation existing, at the time of said contiact
and sale of said real estate, between the com-
plainant and the guardian, her husband."
This finding Is unquestionably sustained by
the proof. The grantee was bound to know
that her husband, the guardian, had no au-
thority, except by order of the probate court,
to do otherwise than protect, care for, and
preserve the estate for the benefit of his
ward, until the latter attained majority or he
was legally discharged from his office. She
was bound to know the fallibility of her ti-
tle, and that, under the circumstances, it was
defeasible on attainment of the ward's ma-
jority, at the latter's election, and to know,
as above shown, that the ti-ansactions be-
tween the guardian and ward culminatiug in
the making of said deed by the latter to her
were liable to be declared fraudulent and
void. She was bound to know that it was
the guardian's duty to keep the premises in
good repair, and render them available as a
means of revenue for tlie benefit of the ward,
and to this end, with the sanction of the
court, to use the ward's cash in his hands
for that purpose within reasonable limits.
These principles are familiar. But she was
a:iso bound to know that he could not, by
vu-tue of guardianship, and without any or-
der from any competent tribunal, erect build-
ings upon the land or make expensive per-
manent improvements thereon. And it has
been held that where the guardian makes
advancement of money for such purpose,
without any order of court, he is remediless.
Schoiiler, Dom. Rel. § 351; Hassard v. Rowe,
11 Barb. 22; Bellinger v. Shafer, 2 Sandf. Ch.
293. Such, however, has not been as yet tlie
holding of this court in such case. But by
section 24. c. 64, Rev. St., it is provided:
"The guardian may, by leave of the county
court, mortgage the real estate of the ward
for a term of years not exceeding the minori-
ty of the ward, or in fee; but the time of the
maturity of the indebtedness secured by such
mortgage shall not be extended beyond the
time of minority of the ward." In passing
upon this section (then section 134 of the
statute of wills), this court, in Merritt v.
Simpson, 41 HI. 391, where the guardian had
mortgaged land of his ward in fee, beyond
the period of minority, for money which was
used in erecting a brick store on the prem-
ises, which brought a large rental, held that
such mortgage was nugatory and void as far
as the interests of the ward were involved.
A.nd it seems to be generally held that the
guardian cannot ordinarily execute a mort-
gage which will be operative as a lien on
the ward's land beyond the term of minority,
and the ward, on reaching majority, elects to
disaffirm it, and that the only safe course
for the guardian to pursue is to first secure
the order of court authorizing the mortgage.
If there be some statutory provision permit-
ting It 1 Jones, Mortg. 102b; Schouler,
Dom. ReL § 352; and cases in notes.
It would therefore necessarily foUow that
Mary Ann McParland, not being an innocent
purchaser, but having taken her deed with
full knowledge of the guardianship and in-
firmity of her title, was bound to know that
the mortgaging of said property for the pur-
pose of making improvements thereon was,
as to the interest of the ward, wholly un-
authorized, and done at her peril. She is
entitled to no more protection m equity than
the guardian himself would be had he taken
the deed in his own name instead of his wife's.
The legal and logical effects are the same.
With such knowledge, she cannot be permitted
to take advantage of that which, in legal
contemplation, is her own wrong, to bm-den
the estate of the ward. And no good reason
exists why the ward, might not, after attain-
ing majority, demandL, as in case where the
guardian himself has placed unauthorized
burdens and improvements upon the estate,
to be placed in statu quo. Schouler, Dom. Rel.
§ 348. But the court may, in the exercise of
its equity powers, protect indebtedness in-
curred for improvements upon the ward's es-
tate, upon the theory that the estate has been
benefited and the ward received an advantage
thereby. Id. § 351; Hood v. Bridport, 11
Eng. Law & Eq. 271; Jackson v. Jackson, 1
Grat. 143; 1 Atk. 489. And this the court did
by finding the appellee to be entitled to a one-
third interest in the premises, subject to the
lien of the trust deeds thereon, which had
been given to make said improvements, after
the execution of the deed.
As to the improvements made upon the old
house during appellee's minority, and without
any authority from the probate court, appel-
lee electing to repudiate all liabiirty therefor,
the court held rightfully, we think, that the
interest of the ward should not be inaam-
■ bered or chargeable therewith, but that appel-
lant and his wife, having placed such improve-
ments in violation of the trust, were not, in
equity, entitled to recompense for the same.
The court, however, decreed that appellants
should be allowed to remove the old cottage,
which had been remodeled and improved,
from the premises within four months, and,
in default thereof, that the same should be-
come part thereof. Of this ruling we think
appellants have no right to complain. These
Improvements were placed upon said prem-
ises, and the interest of appellee wrongfully
burdened to pay for the same. Appellants
took the risk, and made such improvements
with knowledge that they wei'e doing so
wrongfully, and without the shadow of au-
thority from any competent source.
Numerous objections are made to the mas-
ter's report and the decree of the court, as to
various amounts charged to appellant as
guardian, etc An extended review and discus-
sion here of the account as made out by tho
master, and the items thereof, would be a use-
less task. The principal objection seems to
be that the court erred in charging the de-
UNDUE INFLUENCE.
409
fondant Jamos McParland with the rental
value of that part of the premises upon which
the old house was situated and occupied by
said Mary Ann McParland, as a hoinostcad
for herself and family. And the doctrine of
compensation botwoon tenants in common is
aj^ain Invoked, and the claim made tliat, for
use and occupation of the premises, one ten-
ant in common is not liable to account to his
cotenants. As we have just seen, counsel
contended that one cotenant should be recom-
pensed, by proper conti'ibution from the oth-
ers, for improvements made upon the estate.
And yet the contention is in effect made that,
thouffh such tenant may have compensation
for improvements, he will not be chargeable
by his cotenant with the rents or rental value
of the premises occujiied by him, to the exclu-
sion of' the others. The Engli-sh rule is that
the tenant shall be liable to account to his
cotenants in common only for what he re-
ceives, not what he takes, more than comes
to his just share. In the leadinj? case on this
subject, of Henderson v. Eason, 17 Adol. &
E. (N. S.) 701, 718, Lord Cottonham held
that he was not liable to account for issues
and profits derived by such exclusive occu-
pancy. Such, however, is not the law of this
state. By section 1, c 2, Rev. St, it is pro-
vided that, where a tenant "shall take and
use the profits or benefits" of the estate in
greater proportion than his or her interest,
such tenant shall account therefor to his co-
tenants, eta And this court, in Woolley v.
Schrader, 116 111. 39, 4 N. E. G58, in passing
upon this question and construing the statute,
after commenting upon the English case above
cited, admitted the doctrine of that case to
be the prevailing rule of decision in this coun-
try, but said: "Yet, by the express terms of
our own act, the tenant is required to account
to his cotenants for benefits, as well as profits;
and we fail to perceive any difficulty in giv-
ing effect to this provision of the statute that
may not arise in any case whei'e the value of
anji;hing is to be ascertained from opinions
of witnesses or extrinsic circumstances, par-
ticularly in a case like the one before us. The
farm in question belonged to four children,
'share and share alike.' It would, as shown
by the proofs, have readily rented to others at
$ol5 per annum. * ♦ * Appellant, instead
of letting the place to others, and collecting
annually that amount of money as rental, and
paying over to his brothers and sisters their
respective shares, appropriated tlie entire
farm to himself. To the extent of their inter-
est, it was, in effect, appropriating to his
own use that amount of money belonging to
them; and the question is, shall he account
for it? We have no hesitancy in saying he
shall." So, here, appellant and his wife, from
the date of making his final account as gu;ird-
ian, have been in the exclusive possession
and control of said homestead premises, as a
family home, until tlie death of said Mary
Ann McParland and her daughter Catharine,
after which the husband and father, appellant
James McParland, continued In such posses-
sion and control; and there can be no ques»-
tion that the court held correctly in charging
appellant with what was found to be the
reasonable rental value tliereof.
It is also insisted that the report of the
master and finding of the court as to tlie
value of the premises, of the Improvemont-s,
rents, etc., were contrarj' to the clear prepon-
derance of the evidence. After a careful ex-
amination of this testimony, and a consider-
ation of the business, experience, character,
and means of knowledge of witnesses, we are
unable to concur with this view. The wit-
nesses produced on each side were numerous,
and very many of them upon the part of the
defendants were experts, real-estate agents,
some of them knowing nothing personally of
the particular location, surroundings, and ai>-
pearance of the premises, and who based their
opinions on transfers and sales of property
theretofore made along the street or in the
neighborhood of the premises in question.
Complainant's witnesses were mainly real-
estate agents having their places of business
not far distant from the premises, and owners
of property in the neighborhood, whose trans-
actions in the sales and exchange of realty
had made them familiar with the market
value of land in that vicinity. And, as is
not unusual in such cases, there axe, in some
particulars, considerable contradictory esti-
mates and opinions; but upon the whole we
are not prepared to say that the court was
not, upon the whole of the evidence, fully war-
ranted in finding as it did. Indeed, as against
the testimony of those witnesses produced on
behalf of defendants who were merely ex-
perts, having no personal knowledge or obser-
vation respecting the locus in quo, but basing
their value solely on the records as to sales
made along the street, the court would be
amply justified in relying upon the testimony
of witnesses for the complainant who wore
aU, it seems, not without some personal knowl-
edge of the premises, and many of them
familiar with them for many years; and this
upon the cleai-est principles of expediency and
sound policy.
Other objections were made, a discussion of
which would not be profitable here. They
have aU been practically disposed of in what
has been said. TMiile the accounting before
the master is somewhat complicated, and the
findings by him and the court thereon no/
as clear as might be, yet a careful and stu-
dious examination of the record has convinced
us that substantial justice has been done;
and while we are not entirely satisfied that
the court was warranted in entering the de-
cree against complainant for .595.25, and mak-
ing the same a charge against the complain-
ant's interest In the premises, yet such error,
If error it was, we do not feel justified in esti-
mating of sufficient magnitude of itself, in a
case of this importance, to command a re-
versal. The decree of the circuit com't will
be allii'med. Affir med.
KEALITT OF CONSENT.
WOOLEY V. DREW ct al.
(13 N. W. 594, 49 Mich. 290.)
Supreme Court of Michigan. Oct 18, 1882.
Appeal from Jackson.
Grove H. Walcott for complainant and ap-
pellant Gibson. Parkinson & Ashley, for de- ,
fendants. |
MARSTON, J. Complainant comes into
court to compel the defendant Elizabeth P.
Drew to convey a certain 80 acres of land,
which complainant conveyed to her in 1879
under an alleged promise to reconvey in two
years thereafter.
The complainant's theory is that a certain
slander suit was pending against her hus-
band; that he had previously conveyed the
farm to her; that defendant John F. Drew
"excited complainant into the belief that she
would lose her homestead, unless she made
a conveyance of it to Mr. Drew;" and that
in consequence thereof the conveyance was
made. The defendants deny all this and
claim that the sale made was in good faith
for a valuable consideration, and made at the
earnest solicitation of complainant and her
husband. The case was heard upon tbe
pleadings, and proofs taken in open court,
and the bill dismissed. The complainant ap-
pealed.
If the complainant's theory is sustained,
the case comes within Bams v. Brown, 32
Mich. 146, and she is entitled to relief.
Where the witnesses have been examined in
open court, and the case is one that must
be governed by the credibility of the witness-
es for the respective parties and the weight
to be given their testimony, the conclusion
arrived at by +he court below should not,
upon what might seem to the court a mere
preponderance of testimony, be overturned.
Tliis case does not however come within that
class, where the appearances of the witnesses
upon the stand can be given any decisive ef-
fect, as the transaction, when reviewed upon
the defendants' testimony, shows that it was
one so fraudulent and barefaced that it could
not be permitted to stand. The complain-
ant and her husband jvere uneducated, and
they seemed to have had a good deal of
trouble with their neighbors, while the de-
fendant John F. Drew seems to have had, or
claimed to have, considerable knowledge per-
taining to legal matters. The complainant
and her husband at the time the conveyance
was made, evidently were afraid, that be-
cause of the slander suit they were in some
danger of losing this farm, and that the plain-
tiff in that suit and other parties were con-
spiring against them to cheat them out of
their property. Whether these ideas were
suggested to them for the first lime by John
F. Drew as complainant claims or not we
do not deem it necessary to determine. It
Is certain that defendants did not make any
effort to allay these, fears, or to assure com-
plainants that their proi)erty could not be at-
tached in the slander suit, or they be enjoined
from transferring their farm because of the
pendency thereof. On the contrary these im-
pressions were strengthened and the trade
consummated within a very short time, a few
days after being first mentioned or thought
of between the parties.
The complainant's farm contained 80 acres,
with suitable bxiildings and improvements
•thereon of the value of $3,200, upon which
there was an incumbrance of $100, and it
had also been leased for one year, from April,
1879, the rent to be paid in a share of the
crops.
Vfhen the complainant and her husband at
the house of defendants talked of selling, the
defendant John F. offered to give them for
their farm a mortgage held by his wife upon
a certain house and lot in the city of Jackson,
which defendants say the complainant and
her husband were ready and willing to ac-
cept, and wished to have the necessary pa-
pers executed at once, but which defendants
put off for a couple of days to enable them
to make an examination of complainant's
title to the farm. On making this examina-
tion the next day, they for the first time
ascertained that there was an outstanding
mortgage thereon for $100, and they also,
before the trade was consummated, learned
that the farm had been leased for one year
with the privilege of an additional year.
The parties met the following day, and
defendants say they did not then wish to
make the exchange, yet the defendant John
F. had procured the necessary blank form of
conveyance, and after some little talk de-
fendants then agreed to assign the mortgage
referred to, and accept a conveyance of the
farm subject to the mortgage thereon and
give complainant a two years' lease of the
same, although no such favorable terms were
asked for by complainant, and the trade wns
so made, defendant John F. drawing all the
papers and taking all the acknowledgements,
his wife assigning the mortgage and acknowl-
edging the execution thereof before him.
This mortgage bore date March 1, 1872, was
given by Julia A. Knowles to Sylvester Mc-
Michael to secure the payment of $951.49 in
three years from the date thereof, with 10
per cent, interest payable semi-annually, ac-
cording to a certain bond bearing even date
therewith. Defendant John F. Drew had a
second mortgage upon this same property
: which he foreclosed and bid in at the sale,
and afterwards his wife, at his request, took
an assignment of the Knowles-McMichael
mortgage, the assignment bearing date De-
cember 17, 1873.
At the time of the assignment to Mrs. Drew,
nothing had been paid upon tJiis mortgage,
and no payment of either principal or inter-
est was made thereafter up to the time of
the assignment to complainant. John F.
Drew was the owner under his foreclosure
proceedings of the mortgaged premises, re-
UXDUR INFLUENCE.
411
ceiving the rents and profits thereof. At
the time of the assignment thereof to com-
plainant, defendants represented the amount
due thereon at about ?1,'J00. We suppose the
computation was made under the act of
1SG9, which allows interest on Installments
after due. Whatever the fact may have
l)oen however as to the amount claimed to be
due and collectiljle thereon, the mortgaged
premises were not considered by the defend-
ants as suflicicnt to pay the mortgage; they
were not indeed wortli more tlian ijil.GOO, and
would not bring near tliat at a public sale.
It was the assignment of this mortgage that
complainant received for her farm, with a
two j^ears' lease thereof.
Tliore are some other peculiarities worth
noting. Complainant's farm was about
seven miles from the residence of defendants.
Some 10 or 12 years previous to this trade,
defendant John F. Drew "went down liunt-
iug on the marsh across that farm," and at
this time he did not know who was living
on it. He had not been to the farm after
that, until a few days before the trade, when
he went down to complainant's house to see
about hiring a girl, and did not then looli
over the farm, as he then had no thought
of purchasing it. At the time he examined
the title he inquired of the register of deeds
what kind of land this was, and says "I
thought that his recommend and my memory
corresponded." This was the extent of de-
fendant's knowledge as to the kind or quality
of the soil, or the improvements thereon or
salue thereof.
The mortgage which he assigned to com-
plainant had been acquired by his wife after
he became the owner of the mortgaged prem-
ises, and another peculiarity, altliongh ac-
cording to the recitals in the mortgage, a
l)ond purported to have accompanied it, and
to have been assigned to complainant ac-
cording to the written assignment, yet nei-
ther complainant nor Mrs. Drew seems to
liave ever seen or possessed this bond. True
it is, that complainant did not receive or have
any personal obligation for the amount repre-
sented by the mortgage assigned her or any
part thereof. And it the transaction was an
lionest one, why the defendants should not
have conveyed the premises to complainant,
they being of far less value than the mort-
gage, instead of the latter. It is difficult to
conjecture, thus putting her to the trouble
and expense of foreclosing the same before
she could realize a dollar thereon, unless it
was to enable .Tohn F. Drew, as owner of the
mortgaged premises, to receive the rents and
profits thereof to his own use. This he did,
but was not generous enough to pay any
part thereof to complainant, as she did not
receive anj'thlng, either principal or intorost.
upon the mortg-ige. The a.ssumption tliat
this course was taken to prevent the collec-
tion of any judgment that might have been
received In the slander suit, is not satisfac-
tory, as the mortgage could have been reach-
ed just as easily as could the premises had
they been conveyed to the complainant.
It is indeed much more probable that this
mortgage was transferretl to Elizabeth P.
• Drew at the request, and for the use and
benefit, of her liusliand, the owner of the
premises, and that it was not at any time
thereafter considered as an existing incum-
brance, or the bond accompanying tlie same,
if assigned, an existing obligation against
the mortgagor, as no effort seems to have
at any time been made to collect principal
or interest thereon although long past due.
The defendants claimed and took tlie crop
j of wheat growing on complainant's land at
I the time the exchange was made, although It
I was far from clear what right they had there-
i to, under the lease given by them to com-
I plainant. Indeed the whole case shows that
I however fair the transaction may have seem-
1 ed to be on the part of defendants, yet It
I was fair upon the surface only, and would
not bear investigation; It was much like a
; subsequent agreement made between com-
plainant and Elizabeth P. Drew, in reference
I to the latter not taking any further steps to
J obtain possession, which as given by one
of defendants' witnesses is worth quoting.
When asked to state a conversation he heard
between the parties after this difficulty arose,
the witness testified:
"I think about the first that was said after
Mr. and Mrs. Wooley came in, Mrs. Drew
says, I promised you this morning I would
do nothing further in this matter In relation
to the farm until I saw you again; I have
seen you now, she says; that cancels the
agreement; or. something like that"
A careful examination of the entire record
leaves no doubt in our minds as to the sub-
stantial correctness of the complainant's ver-
sion, and the transaction on the part of de-
fendiints has been so clearly unconscionable,
and their coui-se in endeavoring to talce ad-
vantage of the ccmplainant's fears to obtain
a conveyance of a valuable farm, for a verj-
questionable security of doubtful value, was
so clearly fraudulent that a court of equity
cannot sanction the same by permitting them
to enjoy fniits thereof.
The parties must therefore be restored' to
their original positions. The decree below
will be reversed with 'costs of both courts
and the complainant will have a decree in
this court in accordance herewith.
The other justices concurred.
412
ILLEGALITY OF OBJECT.
>
ATKINS V. JOHNSON
(43 Vt. 78.)
■■^^f
^^
Supreme Court of Vermont. Washington.
Aug. Term, 1870.
As-^nnipsit us per declaration, which is
set out in tlie opinion of tiie court. Trial
on general demurrer to the declaration, at
the .March term, 1S70, Peck, J., prertidint?.
Tlie court, pro forma, adjuili^ed the decla-
ration iiiKiifficient, and rendered judgment
for the defendant to recover liiH crjstH. Ex-
ceptions by the i)laintiff.
C. J. Gleason, for plaintiff. Mr. Carpen-
ter, for defendant.
PIERPOINT, C. J. The case comes into
this court upon a general demurrer to the
plaintiff's declaraticjn.
The declaration alleges that "on the 22d
day of July, 18G7, the defendant, by his
agreement in writing of that date, under-
tuf)U and promised the plaintiff that, in
consideration that the plaintiff would
print and publish an article in the
Argus & Patiuot, a ^weekly news- *80
paper published in Montpclier by the
plaintiff, entitled 'A Jack at all Trades
•E.xposed,' that said article was all true,
that there was enough to back it up, &c.,
and that he, the said defendant, would de-
fend and save harmless the plaintiff from
all damage and harm that might accrue
to the plaintiff in consequence of publishing
said article. That said article, if untrue,
was a libel upon the charactcrof one John
Gregfjry ; that relying upon thosaid prom-
ises of the defendant lie published the ar-
ticle; that after said publication the said
Gregory called upon the plaintiff for the
name of the writer of the article; that
thereupon the defendant requested the
plaintiff not to give the said Gregory the
name of the writer, and, in consideration
thereof, promised thi; plaintiff that he
would save him from all harm; that if said
Gregory sued the plaintiff, that he, the
defendant, would defend the suit, prove
the charges, and save the plaintiff from
all trouble and expense in the premises.
The plaintiff, relying thereon, withheld the
name of the defendant as the author of
said article; that the said Gregory sued
the plaintiff; that the defendant failed to
defend the said suit, and the said Gregory
recovered a judgment against the plain-
tiff, which he has been comiielled to pay,
and the defendant refuses to indemnify
him."
The plaintiff is here seeking to compel
the defendant to indemnify him for the
damage which he has sustained, in conse-
quence of publishing a libel, at the request
of the defendant, and from the conse-
quences of which the defendant agreed to
save him harmless.
The question is, whether such an agree-
T.ent as the plaintiff sets out in his decla-
ration can be legally enforced.
The general principle, that there can be
jio contribution or indemnity, as between
joint wrong-doers, is too well settled to
require either argument or authority.
To this rule there are many exceptions,
and prominent among them is the class of
cases where questions arise between dif-
ferent parties as to the ownership of prtjp-
crty, and a third person, supposing one
party to be in the right, uijon the request
and under the authority of such party,
■Joes acts that are legal in themselves, but
which i)rove in the end to be in viola-
tion of therightsof the*otlier party, "81
and he, in consequence thereof, is
made liable in damages. If in such case
there was a promise of indemnity, the law
will enforce it, and if there was not, if the
circumstances will warrant it, the law will
implj' a promise of indemnity, and enforce
that. Of tliis class are most of the cases
cited and relied upon by tlie counsel for the
plaintiff, such as, Betts v. Gibbins; Adam-
son V. Jarvis; Woolcy v. Batte; Avery v.
Ilalsey, &c. But we apprehend that no
exception has ever been recognized broad
enough to embrace a case like the present;
indeed such an exception would be a virt-
ual abrogation of the rule.
In this case, these parties in the outset
conspired to do a wrong to one of their
neighbors, by publishing a libel upon liis
character. The publication of a libel is an
illegal act upon its face. This, both par-
ties are presumed 1o have known. The
publication not only subjects the party
publishing to a prosecution by the person
injured for damages, but also to a public
prcjsecution by indictment. In either case,
all that would be required of the prosecu-
tor would be to prove the publication by
the party charged. The law in such case
presumes malice and damage, and the
prosecutor would be entitled to a judg-
ment, unless the party charged could in-
troduce something l)y way of defense that
would have the effect to discharge him
from legal liability; failing in that, the
party would be made liable upon a simple
state of facts, all of which he pej-fectly un-
derstood at the timehe commenced his un-
justifiable attack.
In this case, both these parties knew
that they were arranging for and consum-
mating an illegal act, one that subjects
them to legal liability, h(jping, to be sure,
that they might defend it; but the plain
tiff, fearing they might not be able to do
so, sought to protect himself from the con-
sequences, by taking a contract of indem-
nity from the defendant. To say under
such circumstances that these parties were
not joint wrong-doers, within the full
spirit and meaning of the general I'ule,
would be an entire perversion of the plain-
est and simplest proposition. This being
so, the law will not interfere in aid of
either. It will not Int^uire which of t he
two are most .in the wrongT witn arrl^w
of adjusting the equities between them,
but n garding both as having been
*82 understandingly "'engaged in a vio-
lation of the law, it will leave tliera
as it finds them, to adjust their differences
between themselves, as they best may.
But it is said in argument, that to ap-
ply this rule in a case like the present is an
encroachment upon the "freedom of the
press. " We do not so regard It. The freer,
doni^f the press does not consistjnjaw-
lessness, or in freedom 'rronr''wTioresojne
legal restraint. The publisher of a news-
paper has no more right to publish a libel
COMMISSION OF CRIME Oli CIVIL WRONG.
413
Tiprjn .111 iiulividual, tliat he or any other
man has to make a BlanderouH prcjclauia-
tion by word of month.
It Is also naid tliat tl)o publisher of a
no\vspa[)('r, iu his desire to fnrniHh the
pnhlic with information of wJiat ik trans-
pirinji" In the comnumity, Ih liable to be
misled and deci'i^ed in fe>romise. "It
W(nild be productive of great evil, if the
courts wert? to encfMirago such an engage-
ment as this, and thereby hoh! out induce-
ment to the propagation of illegal and un-
founded charges; " and then quotes from
Lord Lyndlnirst as foUoww: "I know of
no case in which a person, who has com-
mitte(i an act, declai-ed by the law t<-i be
criminal, has been permitted to recover
comi)ensation against a person wIkj has
acted jointlj' with him in the commission
of the offense. " VArGM.\N,J.,Bays: "Inthis
case the court itself would become acces-
sory to the publication of libels. If it was
to enforce such a contract as the present."
Bosanqi;kt, J., says; "I am of opinion
that the promise and considei-ation both
ap[)ear on the record to be illegal. The
I)romise is to save harmless and indemnify
the plaintiff, &c. It api)ears that the pub-
lication was made at the solicitation of
the defendant, a publication marnfestly
illegal, and open to indictment; at once
the subject of an action at the suit of the
party offended, and an offense against the
public. The case does not therefore fall
within the principle laid down by Lord
Kenj'on, in Merrj-weather v.Nixan, as the
act done bj'the plaintiff here was unlaw-
ful within his own knowledge." The prin-
ciples recognized and promulgated in this
decision cover substantially the whole
case now before us.
The position, in which the facts con-
fessed upon the record place the defend-
ant, is not an enviable one. He seems to
have originated the mischief — to have in-
duced the plaintiff to aid him in carrying
it into effect, by assurance of the truth of
the statements, and a promise of indemni-
ty', and after standing by and seeing
*S4 the *plaintiff amerced in damages,
takes advantage of a strictly legal
defense, and throws the whole respcmsibil-
itj' opon the plaintiff. Personally, it
would have given me satisfaction to have
decided the case for the plaintii'f, if it could
have been done without violating well-
established and salutary rules of law.
Judgment of the county court is atlirmed.
414
ILLEGALITY OF OBJECT.
)^
JEWETT PUB. CO. v. BUTLER. .
r34 i\. E. 10S7, 159 Mass. 517.) ^ ^
Saprenie Judicial Court of Massachusetts.
Suffolk. Oct. 19. 1S93.
/
Report from supreme judicial court, Suf-
folk county; Oliver W. Holmes, Jr., Judge.
Action by C. F. Jewett Publishing Com-
pany against Benjamin F. Butler for breach
of contract. The court reported the case to
the supreme judicial court. Judgment for
plaintiff.
The contract between the parties recited
that the defendant "is minded and intending
to write and have published two volumes in
the nature of autobiography or reminiscences
of his life, and the acts and doings of other
pubUc men, so far as they may seem to him
to elucidate the history of the country or pub-
lic affairs," and it was stipulated that the
plaintiff should do the publishing. The dec-
laration alleged that, after defendant had writ-
ten the work, he permitted it to be pub-
lished by other parties, and that plaintiff had
suffered damages in having prepared for the
publication, and in the loss of profits which it
wouid have made from the sale.
E. C. Bumpus. Samuel J. Elder, and Wil-
liam Cushing Wait, for plaintiff. John Low-
ell and E. M. Jolmsor for defend^nL
MORTON, J. The first question is v.hath-
er the contract is, as the defendant contends,
Illegal on its face. The words relied on to
ehow that it is are as follows: "The party
of the first part agrees to accep'' full respon-
sibility of all matter contained in said work,
and to defend at his own cost any suits which
may be brought against the party of the sec-
ond part for publishing any statements con-
tained in said work, and to pay all costs and
damages arising from said suit." The pre-
siding justice found that "the contract was
made without illegal intent, unless and ex-
cept so far as the words used import one as
matter of law." Do the words used, as
quoted above, import one as matter of law?
We think not. The parties were contract-
ing respecting a book which was not in ex-
Lstence, but was to be written. There was
nothing in the character of the proposed work
which naturally or necessarily involved the
publication of scandalous or libelous matter,
as was the case, for instance, in Shackell v.
Rosier, 2 Bing. N. C. 634, referred to by the
defendant. At the same time it was not im-
possible that, in spite of due care and good
faith on the part of the author and publisher,
the proposed book might contain matter which
others perhaps would deem libelous. In such
a case it would be no more unlawful for the
parties to provide that the author should
save the publisher harmless from all costs
and damages to which he might be subjected
by reason of the publication of the book than
it would be for a patentee to agree with his
licensee that he would protect him against
all costs and damages to which he might be
sul-jected in consequence of using the patent
to which the license applied. The case stands
on grounds entirely different from those on
which it would stand if it appeared that the
parties intended to publish or contemplated
the publication of libelous matter. There is
nothing in the agreement fairly to show that
such was their purpose. The most that can
be said is that, though there was no inten-
tion to write or publish, nor any contempla-
tion of writing or publishing, libelous matter
on the part of the author or publisher, it
might turn out, after the book was published,
that it did contain libelous matter. But that
Is very far from saying that the parties had
in view an illegal purijose in publishing the
book. We see nothing unlawful in a contract
which provides, without anything more, that
the author shall indemnify the publisher for
costs and damages to which he may be sub-
jected by reason of the publication of a book
to be written by the author. Moreover, it
was possible in this case that the book might
not contain libelous matter, although libel
suits against the publisher might gTow out of
It. It would be hard to say, in such event,
khat the publisher, who might have published j
the book without any libelous purpose, and'
in the full belief that it contained nothing;
libelous, could not recover of the author un-j
&er this clause in the contract the costs and|
namages to which he had been put by such;
suits. In order, we think, to render the con-
tract unlawful, it should appear that there
was an intention on the part of the authop
and publisher to write and publish libelous
matter, or that the author proposed, with the\
knowledge and acquiescence of the publisher, I
to write libelous matter, or that the contracti
on its face provided for or promoted an ille/
gal act. We do not think the clause in ques-
tion is fairly susceptible of either construc-
tion. Fletcher v. Harcot, Hut. 55; Batter-
gey's Case, Winch, 49; Betts v. Gibbins, 2
Adol. «& B. 57; Adamson v. Jarvis, 4 Bing.
66; Waugh v. Morris, L. R. 8 Q. B. 202;
Pearce v. Brooks, L. R. 1 Exch. 213; Cannan
v. Bryce, 3 Barn. & Aid. 179; Graves v.
Johnson, 156 Mass. 211, 30 N. E. Rep. 818.
The defendant contends, in the next place,
that he was justified in his refusal to go on
with the contract because of his doubts as
to the solvency of the plaintiff corporation,
and because of the disgrace attaching to its
name in consequence of the conduct of Jew-
ett. The first ground thus taken would seem
to be disposed of by the recent case of Hobbs
V. Brick Co. (Mass.) 31 N. B. Rep. 756, and
need not, therefore, be further considered.
As to the second ground, it is to be observed
that the contract was not made with Jewett
personally, but with the corporation which
bore his name. Moreover, Jewett has fled,
and it fairly may be presumed that his place
as president and manager has been filled by
the election of another person, so that tlie
defendant cannot and will not be obliged to
come into further association with him. It
COMMISSION OF CRIME Oil CIYIL WRONG.
415
Is wen known that corporations are frequent-
ly organized which bear as part of tht-ir cor-
porate name the name of sonae iudividuah
The contention of the defendant would re-
quire us to liold that in all such cases a party
making a contract witli such a corporat)(-n
would be justified in refusing to go on with
It if the person whose name the corporation
bore committed an act rendering him liable
to punishment as a criminal, or bringing him
Into disgrace and rendering further associa-
tion with him unprofitable and injurious to
the oth^ party to the contract. But a cor-
poration does not in such a case impliedly
guaranty as an element of the contract en-
tered into with it that the person whose name
it bears shall continue to be a reputable mem-
ber of society. The corporation is distinct
from the person whose name it bears. Its
interests and those of its stockholders in con-
tracts made by ft with other parties are not
to be affected by tJie disgraceful or criminal
conduct of the person whose name it bears,
and for which it is in no way responsible. A
majority of the court think the entry should
be, judgment for plaintiff for $2,500 and in-
terest from June 9, 1890, and it is so ordered-
LATHROP, J. (dissenting). I au unable
to concur in the opinion of the majority of
the court that the contract sought to be en-
forced is a valid contract. The contract pro-
vides for the publication of a work to contain
the author's autobiogi-aphy "or reminiscences
of his life, and the acts and doings of other
public men, so far as they may seem to him
to elucidate the history of the country or pub-
lic affairs." It is in reference to a work of
this character that the defendant agrees to
do three things: First, "to accept full re-
sponsibility of all matters contained In said
work;" secondly, "to defend at his own cost
any suits which may be brought against the
party of the second part for publishing any
statements contained in said work;" thirdly,
"to pay all costs and damages arising from
such suits." The obligation of the defend-
ant is not limited to paying legal expenses,
but includes costs and damages recovered
against the publisher "for publishing any
statements contained in said work." While
It is found that the parties artr-d witliout ille-
gal intent, yet If the legal effect of the lan-
guage used is to make the contract against
the policy of the law, this court ought not
to enforce it. It seems to me to be impossi-
ble to say that the language used applies
only to groundless suits, and that It should
so be construed. What the parties contem-
plated, and what they intended to provide for,
was that actions might be brought against
the publisher for libelous matter contained In
the work; that these actions might be suc-
cessfully maintained against the publisher,
who would then be compelled to pay dam-
ages and costs. In this event the writer
agreed to Indemnify the publisher. Could
such an agreement have been enforced? In
my opinion, it could not, and this view Is sus-
tained by the authorities. Shackell v. Rosier,
2 Bing. N. C. 034; Colburn v. Patmore, 1
Cromp. M. & R. 73; Gale v. Leckie, 2 Starkie,
107; Clay v. Yates, 1 HurL & N. 73; Arnold
V. Clifford, 2 Sum. 238; i Odgers, Sland. &
L. (2d Ed.) 8. See, also, Bradlaugh v. Newde-
gate, 11 Q. B. Div. 1, 12; Babcock v. Terry.
97 Mass. 482. It follows tliat the whole con-
tract was tainted with illegality, and neither
party was bound to go on with it Robinson
V. Green, 3 Mete. (Ma.ss.) 159, IGl; Perkins
V. Cummings, 2 Gray, 258; Woodruff v. Went-
worth, 133 Mass. 309; Bishop v. Palmer, 146
Mass. 409, 16 N. E. Rep. 1^99; Lound v. Grim-
wade, 39 Ch. Div. 605, 613.
1 Fed. Cas. No. 555.
3^
416 ILLEGALITY OF OBJECT.
GRIFFITH T. WELLS. ^ ^ /
(3 Denio, 226.)
Supreme Court of New York. July, lSi6.
Error to Oneida C. P. Griffith sued Wells
before a justice of the peace in December.
1S43, and declared in assumpsit for two half
fe'allons of whiskey and two glasses of beer,
sold and delivered to the defendant, of the
value of three shillings and six pence. The
plaintiff, who was a grocer, proved his declara-
tion. The defence was, that the plaintiff
sold the liquor without having a license to sell
spirituous liquors. The justice ga.ve judgment
for the plaintiff for 44 cents damages, besides
costs. On certiorari, the C. P. reversed the
judgment, on the ground that the plaintiff did
not show a license to seU spirituous liquors.
The plaintiff brings error.
J. Benedict, for plaintiff in error. S. H.
Stafford, for defendant in error.
BRONSON, C. J. Our excise law does not,
in terms, prohibit the sale of strong or spii-it-
uous liqnors without a license, nor declare the
act illegal; but only inflicts a penalty upon
the offender. 2 Rev. St. 680, §§ 15, 16. From
this It is argued, that although the seller
without a license incurs a penalty, the con-
tract of sale is valid, and may be enforced
by action. But it was laid down long ago,
that "where a statute inflicts a penalty for
doing an act, though the act be not prohibited,
yet the thing is unlawful; for it cannot be in-
tended that a statute would inflict a penalty
for a lawful act" Bartlett v. Viner, Skin.
322. In the report of the same case in Car-
thew (page 252), Holt, C. J., said: "A pen-
alty implies a prohibition, though there are
no prohibitory words In the statute." Al-
though this was but a dictum, the doctrine
has been fully approved. De Begnis v. Armi-
stead, 10 Bing. 107; Foster v. Taylor, 3 Nev.
& M. 244, 5 Bam. & Adol. 887; Cope v. Row-
lands, 2 Mees. & \V. 149: Mitchell v. Smith,
1 Bin. 110, 4 Dall. 209: Loidenbender v.
Charles, 4 Serg. & R. 159, per Tilghmna, a
J.; Bank v. Merrick, 14 Mass. 322. --When i
license to carry on a particular trade is re-
quired for the sole purpose of raising revenue,
and the statute only inflicts a penalty by way
of securing payment of the license money, it
may be that a sale without a license would
be valid. Johnson v. Hudson, 11 East, ISO;
Brown v. Duncan, 10 Bam. & C. 93; Chit.
Cent (Ed. 1842) 419, 697. But if the statute
looks beyond the question of revenue, and has
in view the protection of the public health or
moi-als, or the prevention of frauds by the
seller, then, though there be nothing but a
penalty, a contract which infringes the stat-
ute cannot be supported. Law v. Hodgson,
2 Camp. 147; Brown v. Duncan, 10 Bam. &
C. 93; Foster v. Taylor, 3 Nev. & M. 244, 5
Bam. & Adol. 887; Little v. Poole, 9 Bam. &
C. 192; Tyson v. Thomas, McClel. & Y. 119;
Wheeler v. RusseU, 17 Mass. 258; Bensley v.
Bignold, 5 Bam. & Aid. 335; Drury v. Defon-
taine, 1 Taunt 136, per Mansfield, C. J.; Cope
V. Rowlands, 2 Mees. & W. 149; Houston v.
Mills, 1 Moody & R. 325. Now I think it
quite clear, that in the enactment of our ex-
cise law the legislature looked beyond the
mere question of revenue, and intended to
prevent some of the evils which are so likely
to flow from the traffic in spirituous liquors.
If revenue alone had been the object, licenses
would have been allowed indiscriminately to
all. But the statute forbids a license to any
one, whether tavern-keeper or grocer, who is
not of good moral character; and he must
moreover give bond, with sureties, that his
house or grocery shall not become disorderly.
Sections 6, 7, 13. These regulations were evi-
dently intended to protect the public, in some
degree, against the consequences which might
be expected to follow from allowing all per-
sons, at their pleasure, to deal in strong liq-
uors. And although the statute only inflicts
a penalty for selling without a license, the
contract is illegal, and no action will lie to
enforce it The justice was wrong; and his
Judgment has been properly reversed by the
common pleas.
Judgment fiffixmed.
VIOLATION OP STATUTES-^T ^JA^ LAWS
417
^^
LYON
Suprome Court of
V. STRONG.
Vt. 219.)
Vormont. Rutland
1834.
^^^
Hr
Jan.,
This was an action oi a^Kvmpsit hvonghX on
the warranty of a mare. Plea, non-axnuinpsit.
On trial the plaintiff olTered evidence to prove
the contract of sale and warranty. It appeared
chat the sale was made on the — day of (Jctoher,
.8:W, on the Sabbath. Evidence was jriven by the
plaintiff to prove the sale and warrant}', by which
it appeared that the plain till and defendant were
making their bargain and trading during the
course of the day, conversing about the terras
of the trade, and had rode and tried the mare;
— that defendant said he would warrant her
sound every way, except gravel; and that at or
towards evening they finished their trade, by
which the plaintiff gave an ox and a cow and
three dollars in money for the mare: — that
plaintiff then urged, as a reason why he wanted
a warranty, that it was so dark that he could
not determine whether she had been gravelled
or not. After the evidence of the plaintiff in
relation to the sale and warranty was linished,
the defendant contended that such a contract
made on the Sabbath, was void. The court de
cided that a sale or exchange of horses, and t
contract or warranty thereon, made on the Sab-
oath, was void, and that no action could be
maintained thereon. Thereupon the plaintiff
became nonsuit, with liberty to move to set it
aside if the decision of the court was wrong.
The court refused to set aside the nonsuit. The
case comes here upon exceptions taken by the
plaintiff' to this decision.
Mr. Thrall, for plaintiff. Mr. Royce, for de-
fendant.
WILLIA:MS, C. J.— From the case it is evi-
dent that several questions might have arisen
in the course of the trial. 1. The
*220 *one decided by the county court, wheth-
er a coutract for the sale and exchange
of horses, and a warranty thereon, made on
the Sabbath, in the usual way, and attended with
all the circumstances which ordinarily attend
those exchanges, is so far void that it cannot
be enforced in a court of justice. 2. Whether
a contract of this kind, made after the setting
of the sun on the Sabbath is against the stat-
ute. 3. Whether such a contract, commenced
and carried on as this was, though not tinally
closed until after the setting of the sun, can be
enforced.
Our attention is necessarily confined to the
first of these questions as being the onlv one
decided by the county court. After the evi-
dence for the plaintiff was finished, the defend-
ant contended and submitted to the court, that
such a contract, made on the Sabbath, was
void. Aft<;r the decision on this question was
pronounced, the plaintiff, without introducing
any further testimony, or recjuiring the defend-
ant to introduce any testimony to determine
whether the case would be subject to the decis-
ion which might be made on the second and
third questions above mentioned, submitted to
a nonsuit and excepted to the opinion of the
court. Whether the evidence did or would
have presented a case to be determined by the
opinion which the court might have formed on
either of those questions, cannot now be ascer-
tained, as the plaintiff elected to become non-
suit on the decision of the first; probablj' con-
sidering that his chance with a jury on the
whole evidence, as to bringing his catse out of
the rule of law laid down by the court, was not
HOPK. SEL. CAS. COXT. —27
3uch af ^^'^'ind (uslify him in proceeding fur-
ther wo,, 'awcidence. j '
81 ,^
Ihcr wb/Z'-'awcidence. As it is presented, we
can on*/.'^'^ainlX'r the question which the county
court Oyj '',on led; and if thcT decision is erro-
neous>/'y, ''(of Pjuil will besetuside— ifolherv. ise,
it mui/^ fjh wriued.
Th^.-^ie « chend is purely a question of law.
to b(/^^' v aed by the constitution and statute
' " ilnec. and bv the application of those
'' GX^^f law which have been known, ac-
atc'd.and nevercontroverted.and I think
the', ^. up which have been decided will be
fouL*'()r be so very similar and like to the one
un(I;,^^ceousideration. that the decisidn on them
mui"^.cOvern this; and further, that the ques-
tioc^'iiow presented has received so many de-
terr*'. nations, that we must have departed not
onl"'^/from the known and familiar principles
of i.'.'w, but from determinations made under a
law precisely similar to the statute of this
*221 state, so far as applicable to this *case. if
we had come to a different result than the
one we have made.
We are aware, however, that the subject
under consideration is one which, is liable to be
viewed too much on either side through the
medium of feeling; and any judicial investiga-
tion of it may be regarded as treading upon for-
bidden ground. A decision one way may be
regarded as promoting irreligion, licentiousness
and immorality; and a decision the other way
be considered as encroaching upon religious
freedom. We shall endeavor, however, to in-
quire what the legislature have done, and give
effect to their doings so far as we understand
their requirements. The constitution of this
state, (and herein it is a transcript from the lirst
constitution of government established in this
state) while it carefully protects and guards re
ligious freedom, and asserts that the conscience
of no one can be controlled, declares, "that
every sect or denomination of christians ought
to observe the Sabbath or Lord's day, and keep
up some sort of religious worship, which to
them shall seem most agreeable to the rev:. iled
will of God. " To carry into effect the sjiirit of
this constitution, to enable each religious sect
to keep up religious worship on the Sabbath,
and to enable all to enjoy the benefits to be de-
rived from a day of religious retirement and
rest, the legislature, among their first laws,
made provision for the prohibition of secular
labor on that day; and in the statute which
they passed in 1771>, and which has in substance
been continued to this time, embraced ;.II the
provisions which are contained in the English
statutes of the first and second Charles. Aware
of the benefits to be derived from stated periods
of rest from manual labor, of the importance
of having the same day observed by all. and
recognizing that every denomination of chris-
tians among them regarded the Sabbath as a
day set apart for moral and religious duties,
they determined that every one should be pro-
tected in the enjoyment of his religious privi-
leges and in the performance of liis reli^MOus
duties, and have made provision that those who
are thus disposed may on that day perform
those great and necessary duties which they be-
lieve are required of them, without disturbance
from the secular h.hor of others; and further,
that all, whether high or low, prisoner or free,
master or servant, shall be permitted to rest,
and that none shall compel them to labor on
that day; and lest through avarice or cupidity,
any one should be disposed so to do, they have
enacted that the day shall be observed as a day
of rest from secidar labor and employ-
ment, except such as *neccss:ty and acrs *222
of charity shall rcijuire. btiitulc, p. tJuJ.
418
ir.LEGAUTY OF OBJECT.
\
It mav here be remarked, that LLSrevera stat-
ute inflicts a. penalty for doing thing, the
penalty implies a prohibition, th. ^ there are
no prohibitory words in the jnj'te. This
BUtute not only inflicts a penalty > ^"lose who
violate it, by labor or recreation, I g^gxpressly
prohibits all secular labor or emp j-^^Tient, so
that there is both an implied and e. >ss pro-
hibition. The question will then ar^ '^^ wheth-
er the employment of these parties, -3 detailed
in the bill of exceptions, the sale, d, hange,
and contract of warranty, is a secular ce.bor or
employment, within the meaning of the^^atute,
subjecting them to a penalty; and seco , ly, if
it is, wheTher courts of justice are to lei their
aid to carry into effect a contract made ^^ vio-
lation of a positive statute, and for the mricing
of which they would inflict a penalty or fiLiy? on
the parties thereto?
On the first question there can be no doubt.
All will readily answer in the affirmative. It
was not only a secular labor or employment,
but one directly calculated, from the nature of
the business, to disturb the devotion of others,
and to interrupt the rest and quietness which
all have a right to enjoy on that day. On the
second question, it is apprehended that the law,
as established in analogous cases, and under
statutes similar in their provisions, furnishes
as ready an answer in the negative. It is an
acknowledged principle of law, that a court
will not lend its aid to carry into effect a con-
tract made in contravention of a positive stat-
ute, particularly if the statute was made for
the purpose of protecting the public, for pro-
moting peace, good order, or good morals.
The reason for this is sufliciently obvious with-
out recurrence to authorities. There would be
a great inconsistency in a court of justice, to
inflict a punishment on persons for makings
contract, which disturbed the public peace and
contravened a statute, and in the next cause
settle the terms of that contract between the
same parties, inquiring whether it had been
fultilled, and giving damages to the one or the
other for not fulflUing it. It would be alto-
gether more consonant to propriety to tell the
parties to such an illegal transaction, that they
are not to come into a court of justice on any
question in relation to such a transaction, ex-
cept to receive judgment for the penalty they;
'have incurred by disregarding , together
with all arrears of rent, and a ratable divi-
dend of the rent for the time which shall
have elapse0. the double rent
claimed in the cognizance.
The plaintiff here prays a reversnl of this
judgment.
1. Because the deed which forms a part of
the cognizance, on its face, shows an usuri-
ous contract.
2. Because the pleas set forth, with suf-
ficient cei-titinty, an usurious contract
The statute of Virginia against usury was
passed In 1703, and provides that no person
shall take, directly or indirectly, more than
six dollars for the forbearance of one hun-
dred dollars per annum; and it declares that
all bonds and other instruments for a greater
amount of interest shall be utterly void.
In support of the demurrer, it is argued
that the pleas are defective, as they do not
contain any allegation of facts which amount
to usury, and that the decision must turn
on the construction of the contract between
422
ILLEGALITY OF OBJECT.
Scholfield and Moore. And it is contended
that, although usury appears upon the face
of a deed, yet advantage can only be taken
of it by plea; that the obligee may explain
the contract by showing a mistake in the
scrivener, or a miscalculation of the parties.
In Comyn on Usury (page 201) it is laid
down that, in an action on a specialty, though
it appear on the face of the declaration that
the bond, &c., is usurious, still, no advantage
can be taken of this, unless the statute be
specially pleaded. 3 Salk. 291; 5 Coke, 119;
Chit. Cont. 240; 1 Sid. 2S5; 1 Saund. 295a.
The decision of this point is not necessarily
Involved in the case.
The requisites to form an usurious trans-
action are three: —
1. A loan, either express or implied.
2. An understanding that the money lent
shall or may be returned.
3. That a greater rate of interest than is
allowed by the statute shall be paid.
The intent with which the act is done is
an important ingredient to constitute this of-
fence. An ignorance of the law will not pro-
tect a party from the penalties of usury,
where it is committed; but where there was
no intention to evade the law, and the facts
which amount to usury, whether they appear
upon the face of the contract or by other
proof, can be shown to have been the result
of mistake or accident, no penalty attaches.
At an early period in the histoiy of Eng-
lish jurisprudence, usury, or, as it was then
called, the loaning of money at interest, was
deemed a very high offence. But since the
days of Henry VIII. the taking of interest
has been sanctioned by statute?
In this country, some of the states have
no laws against tal-cing any amount of inter-
est which may be fixed by the contract.
The act of usury has long since lost that
deep moral stain which was formerly at-
tached to it, and is now generally considered
only as an illegal or immoral act because it
Is prohibited by law. Assuming the posi-
tion that the pleas contain no averments
which extend beyond the terms of the con-
tract, the counsel in support of the demur-
rers have contended that no fair construc-
tion of the deed will authorize the inference
that it was given on an usurious considera-
tion.
It was the purchase of an annuity, it is
contended; and though the annuity may pro-
duce a higher rate of interest than six pei
cent upon the consideration paid for it, yet
this does not taint the transaction with
usury.
If the court were limited by the pleas to
the words of the contract, and it purported to
be a purchase of an annuity, and no evidence
were adduced giving a different character
to the transaction, this argument would be
unanswerable. An annuity may be purchas-
ed like a tract of land or other property, and
the Inequality of price will not, of itself,
make the contract usurious. If the inade-
quacy of consideration be great, in any pur-
chase, it may lead to suspicion; and, con-
nected with other circumstances, may induce
a court of chancery to relieve against the
contract.
In the case under consideration, ?5,000
were paid for a ground-rent of !?500 per an-
num. This circumstance, although ten per
cent, be received on the money paid, does
not make the contract unlawful. If it were
a bona fide purchase of an annuity, there
is an end to the question; and the condition
which gives the option to the vendor to re-
purchase the rent, by paying the $5,000 after
the lapse of five years, would not invalidate
the contract 1 Brown, Ch. 7, 93. The right
to repurchase, as also the inadequacy of
price, would be circumstances for the con-
sideration of a jury.
The case reported In 2 Coke, 252, Is strong-
ly relied on by the counsel for the defendant.
In that case, an action of debt was brought
upon an obligation of £300, conditioned for the
payment of £20 per annum, during the lives
of the plaintiff's wife and son. The defendant
pleaded the statute of usury, and that he ap-
plied to the defendant to borrow of him
£120, at the lawful rate of interest; but that
he corruptly offered to deliver £120 to him,
if he would be obliged to pay £20 per annum.
The court considered this as an absolute con-
tract for the payment of £20 per annum dur-
ing two lives; and no agreement being made
for the return of the principal, it was not
considered usury. But, they stated, if there
had been any provision for the repayment of
the principal, although not expressed in the
bond, the contract would have been usurious.
This is a leading case, and the principle on
which it rests has not been controverted by
modem decisions.
Scholfield, it appears, was under no obliga-
tion to repurchase the aimuity, but he had the
option of doing so after the lapse of five years,
which is a strong circumstance to show the
nature of the transaction.
The purchase of an annuity, or any other
device used to cover an usurious transaction,
will be unavailing. If the contract be hifect-
ed with usury, it cannot be enforced.
Where an annuity is raised with the design
of covering a loan, the lender will not be
exempted by It from the penalties of usury.
3 Bos. & P. 150. On this point there is no con-
tradiction in the authorities.
If a party agree to pay a specific sum ex-
ceeding the lawful interest, provided he do not
pay the principal by a day certain, it is not
usury. By a punctual payment of the prin-
cipal he may avoid the payment of the sum
stated, which is considered as a penalty.
Where a loan is made to be returned at a
fixed day with more than the legal rate of
interest, depending upon a casualty which
hazards both principal and interest, the con-
tract is not usurious; but where the interest
only is hazarded, it is usury.
Does the decision in this case, as has been
VIOLATION OF STATUTES— USURY.
42a
contondod, depend upon a construction of the
contract? Are there no averments in the pleas
which place before the court material facts to
constitute u.suiy, that do not appear on the
face of the deed?
Lf the court were limited to a mere con-
struction of the contract, they would have no
difficulty in deciding that the ease was not
strictly embraced by the statute.
In the second plea, the plaintiff below prays
oyer of the deed of Indenture, and among oth-
er statements alleges, "that it was corruptly
agreed between the said Scholfiold and the
said Moore, that the said Moore should lend
to him the sum of $5,000, and in consideration
thereof, that he should execute the said deed,
&c." And in another part of the same plea,
it Is stated "that the said Moore did cor-
niptly agree, tliat he would in the said In-
denture covenant, &c., that if the said Schol-
field, his heirs and assigns, should, at any
time after the expiration of five years from
the date of said indenture, pay to the said
Moore, his heirs and assigns, the sum of
$0,000, together with all arrears of rent he,
the said Moore, would release to him the
said annuity."
And it is further alleged, "that the said
Moore, in pursuance and in prosecution of
the said corrupt agreement, did advance to the
said Scholfleld the said sum of $5,000." And
again, "that the said deed of indenture was
made, in consideration of money lent upon
and for usury; and that, by the said indent-
ure, there has been reserved and taken above
the rate of $6 per annum In the hundred, for
the forbearance of the said sum of $5,000 so
lent as aforesaid."
The fourth plea contains, substantially, the
allegations as to the lending, &c., that are
found in the second plea
The facts stated in the pleas are admitted
by the demurrers, and the question of usury
arises on these facts, connected as they are
with the contract
Although the second and fourth pleas may
not contain every proper averment with tech-
nical accuracy, yet they are substantially good.
All the material facts to constitute usury are
found In the second plea.
It states a corrupt agreement to loan the
money, at a higher rate of interest than the
law allows. That the money was advanced
and the contract executed, In pursuance of
such agreement. That on the return of the
principal, with a full payment of the rent
after the lapse of five years, the annuity was
to be released. The amount agreed to be paid
above the legal Interest, for the forbearance,
is not expressly averred, but the facts are so
stited in the plea as to show the amount with
certainty. $500, under cover of the annuity,
were to bo paid, annually, for the forbearance
of the $5,000, making an annual interest of
ten per cent Do not these facts, imcontradict-
ed as they are, amount to usury? Is it not evi-
dent from this statement of the case, that the
annuity was created as a means for paying
the interest until the principal should be re-
turned, and as a disguise to the transaction?
Such is the legitimate inference which arises
from the facts stated in the plea.
At this point in the case an important ques-
tion is raised, whether Lloyd, the plaintiff in
the replevin, being the a.->signee of .Sf-holfield,
can set up this plea of usury in his defence-
It is strongly contended that he cannot He
purchased tliis property, it is alleged, sub-
ject to the annuity, and paid for it a pro-
portionably less consideration. That know-
ing of the charge before he made the pur.ha;>e,
it would be unjust for him now to evade the
payment And the inquiry is made, whether
Lloyd could plead u.«urj' In this contract, if
the annuity had been purchased by Schol-
field. lie would be estopped from doing so,
it is urged, by the obligations of his own con-
tract, as he Is now estopped from resisting
the claim of iloore.
As to the injustice of the defence, It may
be remarked that the objection would apply
with still greater force against Scholfleld, if
he were to attempt, by a similar defence, to
evade the payment of the annuity. He re-
ceived the money after assenting to the con-
tract; but he is at liberty to evade the pay-
ment of the annuity by the plea of usury. Is
the position correctly taken, that no person
can avail himself of this plea, but a party to
the original contract?
The principle seems to bt settled, that usuri-
ous securities are not only void, as between
the original parties, but the illegality of their
inception affects them even in the hands of
third persons who are entire strangers to the
transaction. Comyn, Usury, 160. A stninger
must "take heed to his assurance, at his per-
il;" and cannot insist on his ignorance of the
contract in support of his claim to recover
upon a security which originated In U5ury.
In the case of Lowe v. Waller, Doug. ~:\~i.
the plaintiff was the indorser of a bill origi-
nally made upon an usurious contract: though
he had received it for a valuable consider-
ation, and was entirely ignorant of its vice,
the court of king's bench, after great consid-
eration, determined that the words of tlie
statute were too strong; and that after what
had been held in a case on the statute against
gaming, the plaintiff could not recover.
K a bill of exchange be drawn In conse-
quence of an usurious agreement for discount-
ing It although the drawer to whose order it
was payable was not privy to this agreement
stUl, it is void in the hands of a bona fide in-
dorser. 2 Camp. 500. In Holt. N. P. 256,
Ix>rd EUenborough lays down the law that a
bona fide holder cannot recover upon a bin
founded In usury; so neither can he recover
upon a note where the payee's indorsement
through which he must daim, has been made
by an usurious agreement But if the first
indorsement be valid, a subsequent usurious
indorsement will not affect him; because such
424
ILLEGALITY OF OBJECT.
intermediate indorsement Is not necessary to
his title to sue the original parties to the
note.
If a note be usurious in its inception, and it
pass into the hanas of a bona fide holder who
has no notice of the usury, and the drawer
give to the holder a bond for the amount of
the note, the bond would not be affected by
the usury. 8 Term R. 390.
In the case of Jackson v. Henry, reported in
10 Johns. 1S5, a plea of usury was set up to
invalidate the title of a purchaser at a sale
of mortgaged premises. This sale, under the
statute of New York, is equivalent to a fore-
closure by a decree in chancery; and the
court decided that the title of the purchaser
was not affected by usury in the debt for
which the mortgage was given. The stitute
of New York declares all bonds, bills, con-
tracts, and assurances, infected with usury,
'"utterly void." And so say the court on the
adjudged cases, when the suit at law is be-
tween the original parties, or upon the very
instrument infected.
The case of D'WoLf v. Johnson, reported In
10 "Wall. 367, is relied on by the counsel for
the defendant, as a decision in point.
In that case, it will be observed that the
drst mortgage being executed in Rhode Island
in 1S15, was not usurious by the laws of that
state; and the second one, executed in Ken-
tucky, in 1S17, being a new contract, was not
tainted with usury. The question, therefore,
whether the purchaser of an equity of redemp-
tion can show usury in the mortgage to defeat
a foreclosure, was not involved ia that case.
The Virginia statute makes void every usu-
rious contract; and the second plea contains
allegations which, uncontradicted, show that
the contract between Moore and Scholfleld
was usurious in Its origin.
Thia contract, thus declsjed to be void, is
sought to be enforced against Lloyd, the pur-
chaser of the property charged with the an-
nuity. Between Scholfield and Lloyd there Is
a privity; and if the contract for the annuity
be infected with usury, is it not void as
against Lloyd?
In this contract, a summary remedy is given
to enter on the premises, and levy by distress
and sale of the goods and chattels there
found, for the rent in arrear; and if the dis-
tress should be insufficient to satisfy the rent,
and it should remain unpaid for thirty days,
Moore is authorized to enter upon the prem-
ises, and to expel Scholfield, his heirs and as-
signs, and hold the estate. Lloyd, as the as-
signee of Scholfield, comes within the terms
of the contract, and is liable, being in pos-
session of the premises, to have his property
distrained for the rent, and, if it be not paid,
himself expelled from the possession. Under
such circumstances, may he not avail himself
of the plea of usury, and show that the con-
tract which so materially affects his rights is
Invalid? Moore seeks his remedy under this
contract, and if it be usurious and consequent-
ly void, can it be enforced?
If usury may be shown in the inception of a
bUl to defeat a recovery by an indorsee, who
paid for it a valuable consideration without
notice of the usury, may not the same offence
be set up where, in a case like the present, the
party to the usurious contract claims by virtue
of its provisions, a summary mode of redress?
The court entertain no doubt on this subject
They think a case of usury is made out by
the facts stated in the second plea, and that
Lloyd may avail himself of such a defence.
The judgment of the circuit court must be
reversed, and the cause remanded, with in-
Rtructions to overrule the demurrers to the
second and fourth pleas. an(? permit the de-
fendant to plead.
PUBLIC POLICY— INJUllY TO PUBLIC SERVICE.
425
P
2^ BLISS V. LAWRENCE. c-
SAME V. GARDNEE. 2.^
(58 N. Y. 442.)
Court of Appeals of New York. 1874.
Appeals from judgments dismissing the com-
plaint. Defendant was a cleric in the United
States treasury department, In New York
City, and sold and assijrned to plaintiff a
month's salary In advance at a discount of ten
per cent, and when the salary became due, he
collected and converted it to his own use.
James Emott and Samuel Hand, for appel-
lant L L Lansing and Moses Ely, for re-
spondent
JOHNSON, J. The controlling question In
these cases is that of the lawfulness of an
assignment, by way of anticipation, of the
salary to become due to a public officer. The
particular cases presented are of assignments
of a month's salary in advance. But if these
can be sustained in law, then such assign-
ments may cover the whole period of possible
service. In the particular cases before us the
claims to a month's salary seem to have been
-"gold'^at a discount of about ten per cent.
While tliis pi-csonls no question of usiil-y
(since it was a sale and not a loan for which
the parties were dealing), it does present a
quite glaring instance and example of the con-
sequences likely to follow the establishment
of the validity of such transfers, and thus
iUustnites one at least of the grounds on which
the alleged rule of public policy rests, by
which such transfers are forbidden. The pub-
lic^_secEi£e_Js^rotocted by protecting those
engaged in pcrfonning public duliis; and
this not upon The groimd ol" ibeir private in-
terest, but upon that of the necessity of se-
curing the efficiency of the public service
/ by seeing to it that the funds provided for,
1 its maintenance should be received by those'
\ who are to perform the work at such periods
1 as the law has appointed for their payment.
It is argned that a public officer may bet-
ter submit to a loss in order to get his pay
into his hands in advance, than deal on
credit for his necessary expenses. This may I
be true in fact, in individual instances, and |
yet may in genenil not be in accordance with
the fact. Salaries are by law payable after
work is performed and not before, and while
this remains the law, it must be presumed
to be a wise regulation, and necessary in the
view of the law-makers to the efficiency of
the public service. The contrary rule would
perm it the public servi ce to be und ermined
bythe_assigiiment"to strangers of all tlie
f unds a p;irotiri:itoi'l tci sahii'ifs. It is true
that in respect to officers removable at will,
this evil could in some measure be limited
by their removal when they were found as-
signing their salaries; but this Is only a
partial remedy, for there would stiU be no
means of preventing the continued recur-
rence of the same difficulty. If such assign-
ments are allowed, then the assignees by no
tice to the government, would on ordinary
principles be entitled to receive pay directly
and to take the place of their assignors in
respect to the emoluments, leaving the du-
ties as a barren charge to be borne by the
assignors. It does not need much reflection
or observation to understand that such a con-
dition of things could not fail to produce re-
sults disastrous to the efficiency of the pub-
lic service.
Some mi-sapprehension as to the doctrine
involved seems to have arLsen from the fact
that the modern adjudged cases have often
related to the pay of half-pay army officers,
which In part is given as a compensation
for past services and in part with a view to
future services. Upon a review of the Eng-
lish cases, it will appear that the general
proposition is upon authority unquestionable,
that salary for continuing services could not
be assigned; while a pension or compensa-
tion for past services might be assigned.
The doubt, and the only doubt in the case of
half-pay officers was to which class they
were to be taken to belong. It was decided
that inasmuch as their pay was in part in
view of future service, it was unassignable.
Similar questions have arisen in respect to
persons not strictly public officers, but the
principle before stated has In the courts of
England been adhered to firmly. Flarty v.
Odium, 3 Term R. 681; Stone v. Lidderdale,
2 Anst. 533; Davis v. Marlboro, 1 SwansL
79; Lidderdale v. Duke of Montrose, 4 Tenn
R. 248; Barwick v. Read, 1 H. Bl. 627; Ar-
buckle V. Co whan, 3 Bos. & P. 328; Wells
V. Foster, 8 Mees. & W. 149; Story, Eq. Jur.
§ 1040d; 1 Pars. Cont. 194. These cases and
writers sustain the proposition above set
forth and show the settled state of the Eng-
lish law upon the subject. Some other cases
are so pertinent to the general discussion as
to deserve to be stated more at length, espe-
cially as they are not so accessible as those
before referred to. Among them the judg-
ment of Lord Brougham, in the house of
lords, in Hunter v. Gardner, 6 Wils. & S.
618, decided in 1831, gives an admirable sum-
mary of thfe state of the English law upon
the subject. The case was a Scotch appeal,
in which the Scotch court had approved, un-
der the law of that country, a partial trans-
fer of the salary of a public officer. The par-
ticular judgment was aflirmed without decid-
ing what thQ law of Scotland was upon the
subject. In his judgment Lord Brougham
said: "The court seem not to have scruti-
nized very nicely whether from the nature
of the subject-matter, namely, the half-pay
or the full pay of an officer or a minister's
stipend, or in the present case, the salary of
an ofiicer employed under government and in
the execution of an imjiortant public trust,
an assignment can validly operate upon and
affect those particular rights; but they have
nevertheless assumed to deal with them and
have directed that a certain proportion of
426
ILLEGALITY OF OBJECT.
them shall be assigned on the condition of
panting the benefit of the cessio bouorum.
Those cases undoubtedly could not have oc-
curred in this country. I may refer to the
well-known case of Flarty v. Odium, 3 Term
R. GSl. which from its importsjice was the
subject of mucL discussion, it being the first
case in which it was held that the half-pay
of an officer was not the subject of assign-
ment; and it was followed in Lidderdale v.
Duke of Montrose, in 4 Term R., where the
doctrine laid down was made the subject of
further discussion, and the court adhered to
their former view, that the half-pay was free
from attachment; so that neither is a man
bound to put it into the schedule of his as-
sets, nor does the general assignment to the
provisional assignee transfer it, nor would a
bargain and sale to the assignees vmder a
commission of bankruptcy pass it out of the
bankrupt; it is unassignable and incapable
of being affected by any of those modes of
proceeding. The same doctrine was laid
down with respect to the profits of a living
in the case of Arbuckle v. Cowhan, the judg-
ment in which has been very much consid-
ered in Westminster Hall, and like most of
the judgments of that most able and learned
lawyer. Lord Alvanley, has given great sat-
isfaction to the courts and the profession.
In the report of that case, your lordships will
find laid down the general principle, though,
perhaps, not worked out in these words, that
all such profits as a man receives in respect
to the performance of a public duty are,
from their very nature, exempt from attach-
ment and incapable of assignment, inasmucn
as it would be inconsistent with the nature
of those profits that he who had not been
trusted, or he who had not been employed to
do the duty, should nevertheless receive the
emolument and reward. Lord Alvanley
quotes Flarty v. Odium and Lidderdale v.
Duke of Montrose, and in illustrating the
principle on which a parson's emoluments
are not* assignable, he does not confine his
observations to the particular case of half-
pay officers or the case of a parson's emolu-
ments, but he makes the observation in all
its generality, as applicable to every case of
a public office and the emoluments of that
office. The first case (1 H. Bl. 627), decided
by the court of common pleas (the case of
Barwick v. Read), clearly recognizes the
principle. • • • In this case as well as
the other case of Arbuckle v. Cqwhan, it was
perfectly clearly held by the court that in
all such cases, one man could not claim to
receive, by assignment or attachment, emol-
uments which belonged to another deemed to
be capable of performing the duties append-
ed to those emoluments, but which duties
could not be performed by the assignee; and
there was an old case referred to in Banvick
V. Read, and a curious case in Dyer, in
which so long ago as the reign of Elizabeth,
the question appears to have been disposed
of by a decision now undisputed, and now
referred to in Westminster Hall. » ♦ •
All these cases laid down this principle,
which is perfectly undeniable, that neither
attachment nor assignment is applicable to
such a case."
Other cases to the same effect, of later
date, are likewise noteworthy.
In Hill V. Paul, 8 Clark & F. 307, decided
in 1842, Lord Chancellor Lyndhurst, speaking
of the legality of assigning the future emol-
uments of an office in Scotland, says: "That
such an assignment would be illegal in Eng-
land there can be no doubt. Palmer v. Bate,
2 Brod. & B. 673, is directly applicable to this
case. And in Davis v. Marlboro, 1 Swanst.
79, there is the observation of Lord Eldon
already cited, which seems to me quite in
point and which lays down the true rule and
the distinction to be observed in these cases,
and to which for that reason I refer as show-
ing what is the law of England on this sub-
ject." What Lord Eldon said in the case
referred to was: "A pension for past serv-
ices may be aliened; but a pension for sup-
porting the grantee in the performance of fu-
ture duties is inalienable." And in Flarty v.
Odium, 4 Term R. 248, the court say: "It
might as well be contended that the salaries
of the judges which are granted to support
the dignity of the state and the administra-
tion of justice may be assigned."
In Arbuthnot v. Norton (1846) 5 Moore, P.
C. 230, the question was whether an Indian
judge could assign a contingent sum to which
on his death within six months after his ar-
rival in India his representative would be
entitled by law, and it was held that such
an assignment was not against public policy
and would in equity transfer the right to
the fund. In the course of the judgment
given by Dr. Lushington, he says: "We do
not in the slightest degree controvert any of
the doctrines whereupon the decisions have
been founded against the assignment of sal-
aries by persons filling public offices: on the
contrary, we acknowledge the soundness of
the pi*inciples which govern those cases but
we think that this case does not fall within
any of these principles; and we think so be-
cause this is not a sum of money which at
any time during the life of Sir John Norton
could possibly have been appropriated to his
use or for his benefit, for the purpose of sus-
taining with decorum and propriety the high
rank in life in which he was placed in India.
We do not see how any of the evils which
are generally supposed would result from the
assignment of salary, could in the slightest
degree have resulted from the assignment of
this sum, inasmuch as during his life-time his
personal means would in no respect whatever
have been diminished, but remain exactly in
the same state as they were."
In Liverpool v. Wright, 28 L. J. (N. S.) Ch.
871, A. D. 1859, in which the question re-
lated to the alienability of the fees of the
office of a clerk of the peace. Wood, V. C,
after disposing of another question, says:
PUBLIC POLICY— INJURY TO PUBLIC SERVICE.
427
"Then there Is a second ground of public
policy, for which the case of Palmer v.
Vaughn, 3 Swaust. 173, is the leading author-
ity, which is this: That Independently of
any corrupt bargain with the appointor, no-
body can deal with the fees of a person who
holds an office of this description, because
the law presumes, with reference to an of-
fice of trust, thut he requires the payment
which the law has assigned to him for the
purpose of upholding the dignity and per-
forming properly the duties of that otlice, and
therefore it will not allow him to part with
any portion of those fees either to the ap-
pointor or to anybody else. He Is not al-
lowed to charge or incumber them. That
was the case of Parsons v. Thompson, 1 H.
Bl. 322. Any attempt to assign any portion
of the fees of hi« office is illegal on the
ground of public policy, and held therefore to
be void."
In respect to American authority we have
been referred to Brackett v. Blake, 7 Mete.
(Mass.) 335, Mulhall v. Quinn, 1 Gray, 105,
and Macomber v. Doane, 2 Allen, 541, as con-
flicting with the views we have expressed.
An examination of these cases shows that
the point of public policy was not considered
by the court in either of them, but that the
question was regarded as entirely relating to
the sufficiency of the interest of the assignor
in the future salary to distinguish the cases
from those of attempted assignments of mere
expectation, such as those of an expectant
heir. The court held that in the cases cited,
the expectation of future salary being found-
ed on existing engagements, was capable of
assignment and that the existing Interest
sutliced to support the transfer of the future
expectation. The only other case to which
we have been referred Is a decision of the
supreme court of Wisconsin.
In State Bank v. Hastings, 15 Wis. 78, the
question being as to the assignability of a
judge's salary, the court say: "We were re-
ferred to some English cases which hold that
the assignment of the pay of officers in tlie
public service, judges' salaries, pen.sion.s,
etc., was void as being against public policy,
but it was not contended that the doctrine
of those cases was applicable to the condi-
tion of society or to the principles of law or
of public policy in this country. For cer-
tainly we can see no possible objection to
permitting a judge to assign his salary be-
fore it becomes due, if he can find any per-
son willing to take the risk of his living and
being entitled to It when it becomes pay-
able."
We do not understajid that the English de-
cisions really rest on any grounds peculiar to
that country, although sometimes expressed
In terms which we might not select to ex-
press our views of the true foundation of the
doctrine In question. The substance of it all
is the necessity of maintaining the efficiency
of the public service by seeing to it that pub-
lic salaries really go to those who perform
the public service. To this extent we think
the public policy of every country must go to
secure the end in view.
The judgments must be affirmed.
All concur.
Judgments afHrmed.
428
ILLEGALITY OF OBJECT.
2^ PROVIDEXCE TOOL CO. v.
(2 Wall. 45.)
NORRIS.
Dec^
tSupreme Court of the United States.
1S64.
In July, 1S61, the Providence Tool Company,
a corporation created under the laws of Rhode
Island, entered into a contract with the gov-
ernment, through the secretaiy of war, to de-
liver to officers of the United States, within
certain stated periods, trwenty-five thousand
muskets, of a specified pattern, at the rate of
twenty dollars a musket This contract was
procured through the exertions of Norris, the
plaintiff in the court below, and the defendant
in error in this court, upon a previous agree-
ment with the corporation, through its man-
aging agent, that in case he obtained a con-
tract of this kind he should receive comi)en-
sation for his services proportionate to its ex-
tent
Norris himself. It appeared, — though not
having any imputation on his moral character,
—was a person who had led a somewhat mis-
cellaneous sort of a life, in Europe and Amer-
ica. Soon after the rebellion broke out, he
found himself in Washington. He was there
without any special purpose, but, as he stated,
with a view of "making business— anything
generally;'* "soliciting acquaintances;" "get-
ting letters;" "getting an office," &c. Finding
that the government was in need of arms to
suppress the rebellion, which had now become
organized, he applied to the Providence Tool
Company, already mentioned, to see if they
wanted a job. and made the contingent sort of
contract with them just referred to. He then
set himself to work at what he called, "con-
centrating influence at the war department;"
that is to say, to getting letters from people
who might be supposed to have influence with
Mr. Cameron, at that time secretary of war,
recommending him and his objects. Among
other means, he applied to the Rhode Island
senators, Messrs. Anthony and Simmons,
with whom he had got acquainted, to go with
him to the war office. Mr. Anthony declined
to go; stating that since he had been senator
he had been applied to some hundred times,
in like manner, and had invariably declined;
thinking it discreditable to any senator to in-
termeddle with the business of the depart-
ments. "You will certainly not decline to go
with me, and introduce me to the secretary,
and to state that the Providence Tool Com-
pany is a responsible corporation." "I will
give you a note," said Mr. Anthony. "I do
not want a note," was the reply; "I want the
weight of your presence with me. I want
the influence of a senator." "Well," said Mr.
Anthony, "go to Simmons." By one means
and another, Norris got influential introduc-
tion to Mr. Secretary Cameron, and got the
gnse to the fr oyemment . Considera-
tions as to the most efficient and economical
mode of meeting the public wants should
alone control, in this respect, tlie action of
every department of the government. No oth-
er considomtion can lawfully enter into the
transaction, so far as the government is con-
cerned. Such is the rule of public policy;
and whatever tends to Introduce any other
elements into the transaction, is against pub-
lic policy. That agreements, like the one un-
der considerat^n, have this tendency, is mani-
fest. They /ot\6 to introduce personal solici-
tation, and personal influence, as elements in
tile procurement of contracts; and thus di-
rectly lead to inefficiency in the public ser-
vice, and to unneces.sary expenditures of the
public funds.
The prinfiple which determines the invalid-
ity of tlie agreement in question has been as-
serted in a great variety of cases. It has
been asserted in cases relating to agreements
for compensation to procure legislation.
These have been uniformly declared invalid.
and the decisions have not turned upon the
question, whether improper influences were
contemplated or used, but upon the corrupting
tendency of the ag.-eements. Legislation
should be prompted solely from consideraiions
of the public good, and the best means of
advancing it. Whatever tends to divert the
attention of legislators from their high duties,
to mislead their judgments, or to substitute
other motives for their conduct than the ad-
vancement of the public iniere.sLs, must neces-
sarily and direcUy tend to impair the integ-
rity of our political institutions. Agreements
for compensation contmgent upon success,
suggest the use of sinister and corrupt mejins
for the accomplishment of the end desired-
The law meets the suggestion of evil, and
strikes down the contract from its inception.
There Is no real difference in principle be-
tween agreements to procure favors from leg-
islative bodies, and agreements to procure fa-
vors in the shape of contracts from the heads
of departments. The introduction of improp-
er elements to control the action of both, is
the direct and inevitable result of all such
arrangements. Marshal v. Railroad Co.. 16
How. 314; Harris \ Roof's Ex'rs, 10 Barb.
4S9; Fuller v. Dame, 18 Pick. 472.
The same principle has also been applied,
in numerous instances, to agreements for com-
pensation to procure appointments to public
offices. Tlaose offices are trusts, held solely
for the public good, and should be conferred
from considerations of the ability, integrity,
fidelity, and fitness for the position of the
appointee. No other considerations can prop-
erly be regarded by the appointing power.
Whatever introduces other elements to con-
trol this power, must necessarily lower the
character of the appointments, to the great
detriment of the public. Agreements for com-
pensation to procure these appointments tend
directly and necessarily to introduce such ele-
ments. The law, therefore, from this tend-
ency alone, adjudges these agreements iuon-
templated or used in their execution. The
law looks to the general tendency of such
agreements; and \i closes the door to temp-
tation, by refusing them recognition in any of
the courts of tlie country.
It follows that the .nidgment of the court be-
low must be reversed, and the cause remand-
ed for a new trial; and it is so ordered.
}
430
2-
ILLEGAiXTY OF OBJECT.
TRIST V. CHILD, j^^^
(21 Wall. 441.) 3^^
iSupreme Court of the United States. 1874.
Appeal from the supreme court of the Dis-
trict of Columbia; the case being thus:
N. P. Trist having a claim against the
United States for his services, rendered in
1S4S, touching the treaty of Guadalupe Hi-
dalgo—a claim which the government had not
recognized— resolved, in 1SG&-7 to submit it
to congress and to ask payment of it And
he made an agreement with Linus Child, of
Boston, that Child should take charge of
the claim and prosecute It before congress
as bis agent and attorney. As a compensa-
tion for his services it was agreed that ChUd
should receive 25 per cent, of whatever sum
congress might allow in payment of the
claim. If nothing was allowed, Child was
to receive nothing. His compensation de-
pended wholly upon the contingency of suc-
cess. Child prepared a petition and pre-
sented the claim to congress. Before final
action was taken upon it by that body Child
died. His son and personal representative,
L. M. Child, who was his partner when the
agreement between him and Trist was en-
tered into, and down to the time of his death,
continued the prosecution of the claim. By
an act of the 20th of April, 1871, congress ap-
propriated the sum of 514,559 to pay it. The
son thereupon applied to Trist for payment
of the 25 per cent stipulated for In the agree-
ment between Trist and his father. Trist
declined to pay. Hereupon Child applied to
the treasury department to snspend the pay-
ment of the money to Trist Payment was
suspended accordingly, and the money was
still in the treasury.
Child, the son, now filed his bill against
Trist, praying that Trist might be enjoined
from withdrawing the ?14,559 from the treas-
ury until he had complied with his agree-
ment about the compensation, and that a de-
cree might pass commanding him to pay to
the complainant .?.5000, and for general relief.
The defendant answered the bill, assert-
ing, with other defences going to the merits,
that all the services as set forth in their bill
were "of such a natm-e as to give no cause of
action In any court either of common law or
equity."
The case was heard upon the pleadings and
much evidence. A part of the evidence con-
sisted of correspondence between the par-
ties. It tended to prove that the (3hilds,
father and son, had been to see various mem-
bers of congress, soliciting their influence in
behalf of a bill introduced for the benefit of
Mr. Trist, and In several instances obtaining
a promise of It There was no attempt to
prove that any kind of bribe had been of-
fered or ever contemplated; but the follow-
ing letter, one in the correspondence put in
evidence, was referred to as showing the ef-
fects of contracts such as the one in this case:
"From Child, Jr., to Trist House of Rep-
resentatives, Washington, D. C, Feb. 20th,
1871. Mr. Trist: Everything looks very fa-
vorable. I found that my father has spoken
to C and B , and other members of the
House. Mr. B says he will try hard to
get it before the House. He has two more
chances, or rather 'morning hours,' before
Congress adjourns. A will go in for It.
D promises to go for it. 1 have sent your
letter and report to Mr. W , of Pennsyl-
vania. It may not be reached till next week.
Please write to your friends to write imme-
diately to any memljer of Congress. Every
vote tells; and a simple request to a member
may secure his vote, he not caring anything
about It. Set every man you know at work,
even if he knows a page, for a page often
gets a vote. The most I fear is indiflierence.
Yours, &c., L. M. Child."
The court below decreed:
1st. That Trist should pay to the complain-
ant .$3G39, with Interest from April 20th, 1871.
2d. That until he did so, he should be en-
joined from receiving at the treasury "any of
the moneys appropriated to him" by the
above act of congress, of April 20th, 1871.
From this decree the case was brought here.
The good character of the Messrs. Child,
father and son, was not denied.
Durant & Homer, for appellants, upon the
main point of the case (the validity of the
contract between Child and Trist), relied upon
Marshall v. Railroad, IG How. 314, in this
court and upon the principles there enunci-
ated in behalf of the court by Grier, J. They
relied also on Tool Co. v. Norris, 2 Wall. 54.
B. F. Butler and R. D. Mussey, contra.
The case relied on by opposing counsel Is
widely different from this one.
There, Marshall entered— as the report of
the case shows— into a contract with the Bal-
timore and Ohio Railroad Company, to ob-
tain certain favorable legislation in Virginia
for the contingent compensation of fifty thou-
sand dollars by the use of personal, secret,
and sinister influences upon the legislators.
He expressly stated that his plan required
"absolute secrecy," and "that he could al-
lege 'an ostensible reason' for his presence in
Richmond and his active interference with-
out disclosing his real character and object."
He spoke of using "outdoor influence" to af-
fect the legislators through their "kind and
social dispositions," and pictured them as
"careless and good-natured," "engaged in idle
pleasures," c-apable of being "moulded lik'e
wax" by the most "pressing influences." The
company authorized him to use these means.
The question in that case, therefore, was,
whether a contract for contingent compensa-
tion for obtaining legislation by the use of
secret, sinister and personal influences upon
legislators was or was not contrary to the
policy of the law. And the decision of that
question was the decision of the case.
In Marshall's Case, the plaintiff and defend-
ant combined together to perpetrate a fraud
PUBLIC POLICY— INJURY TO PUBLIC SERVICE.
431
upon the servants of tlie public engaged In
legislating for the public good, and it was
this fact which made the contract infanaous
and disgraceful and incapable of enforcement
In the courts; not that the action sought was
that of a legislature.
The case at bar differs from that of Mar-
shall, toto ca-lo. Here both father and son
were opi'nly and avowedly attorneys for their
client, Trist. They never presented them-
selves to anybody in any different or other
respect. Every act of theirs was open, fair,
and honorable.
Will it be denied tliat any man having a
claim on the government, may appear in per-
son before a committee of congress, If they
allow him, or speak to members of congress,
If they incline to hear him; point out to them
the justice of his claim, and put before them
any and all honorable considerations which
may make them see that the case ought to be
decided in his favor? This, we assume, will
not be denied. But suppose tliat he Is an
old man. ^r a man infirm and sick; one,
withal, living away from the seat of govern-
ment; a case, it may be stated, in passing,
the exact case of Mr. Trist; for he was old,
infirm, sick, and lived at Alexandria. Now,
If Mr. Trist being well had the right to call
upon committees or members of congress, and
(if they invited him or were willing to listen
to him) to show to them that he negotiated,
as he asserted that he did, the treaty of
Guadalupe Hidalgo, and should be paid for
doing so, what principle of either morals or
policy, public or private, was there to prevent
him (being thus old, infirm, sick, and away
from Washington) from employing an honor-
able member of the Mas;sachusetts bar to do
the same thing for him? What principle to
prevent him from doing by attorney that
which he had himself the right, but from the
visitation of God, had not himself, and at
that time, the physical ability to do?
We are not here asking the court to open
the door to corrupt influenoGs upon congress,
or to give aid to that which is popularly
known as "lobbying," and is properly de-
nounced as dishonoi-ahlG. But we are ask-
Insr that by giving the sanction of the law to
an ouen and honorable advocacy by counse'
r>f nrivate rights before legislative bodies, the
court shall aid in doing away with tlie em-
ployment of agencies which work secretly and
dishonorably.
The records of congress show that with
honorable motives and dishonorable stimu-
lants both combined and acting upon the two
classes of persons— upright and avowed, the
Childs; or dishonest and secret, the Mar-
shalls — who urge claims upon congress, out
of fifteen tJiousand private claims put before
It since the government was organized, not
more than one-half have been acted upon in
any way. Are all private claims — claims In
which the public has no Interest— to be left
absolutely to the action of congress itself,
moving only sua sponto? If so, they will
never be acted upon. They can come before
the body only through the action of private
p;;!ties.
There will, therefore, always be solicitation
before legislatures so long as legislatures
have the power and exercise it of passing
private laws. For the gift, or the art, of
statement and persuasion is not the common
proi>erty of mankind.
And if solicitation of some sort there mu.st
be, shall It come from the mouths of such
men as Linus Child and his son— lawyers
both, of unquestioned integrity — and be an
open and upright solicitation of the intellect
and the reason of the legislator; or shall It
be made, by outlawry, a secret, sinister and
personal solicitation of his passions, his preju
dices, and his vices?
If you shall decide that the pledged word
of his client as to compensation avails the
congressional practitioner nothing; that a
man who in his poverty makes a contract may
repudiate It when the fruit of the contract
is attained; then will you remit all work be-
fore such bodies to men devoid of honor, ir-
responsible both In character and property;
preying alike upon the misfortunes of claim-
ants and the weaknesses of legislators.
[A good deal was said in the argument on
both sides about contingent fees, but in view
of the grounds on which the court based its
judgment, a report of that part of the argu-
ment would be of no pertinence.]
Mr. Justice SWAYNE, delivered the opin-
ion of the court.
The court below decreed to the appellee
the amount of his claim, and enjoined Trist
from receiving from the treasury "any of the
money appropriated to him" by congress, un-
til he should have paid the demand of the
appellee.
This decree, as regards that portion of the
fund not claimed by the appellee, is an anom-
aly. Why the claim should affect that part
of the fund to which it had no relation,
is not easy to be imagined. This feature of
the decree was doubtless the result of over-
sight and inadvertence. The bill proceeds
upon the grounds of the validity of the origi-
nal contract, and a consequent lien in favor
of the complainant upon the fund appropri-
ated. We shall examine the latter ground
first. Was tliere, in any view of the case, a
lien?
It is well settled that an order to pay a
debt out of a particular fund belonging to
the debtor gives to the creditor a specific
equitable lien upon the fund, and binds it
in the hands of the drawee. Yeates v.
Groves, 1 Ves. Jr. 2S0; Lett v. Morris, 4
Sim. 607; Bradley v. Root, 5 Paige, 632; 2
Story. Eq. Jur. § 1047. A part of the par-
ticular fund may be assigned by an order,
and the payee may enforce payment of the
amount against the drawee. Field v. Mayor,
6 N. Y. 179. But a mere agreement to pay
out of such fund is not sufficient. Something
more Is necessary. There must be an ap-
432
ILLEGALITY OF OBJECT.
propriation of the fund pro tanto, either by
giving an order or by transferring it other-
wise in snch a manner that the holder is
authorized to pay the amount directly to the
creditor without the further intervention of
the debtor. Wright v. Ellison, 1 Wall. 16;
Hoyt V. Story, 3 Barb. 2G4; Malcolm v. Scott,
3 Hare, 39; Rogers v. Hosack, IS Wend. 319.
Viewing the subject in the light of these
authorities, we are brought to the conclusion
that the appellee had no lien upon the fund
here in question. The understanding be-
tween the elder Child and Trist was a per-
sonal agreement. It could in nowise produce
the e£f!ect insisted upon. For a breach of
the agreement, the remedy was at law, not
in equity, and the defendant had a constitu-
tional right to a trial by jury. Wright v. El-
lison, 1 Wall. 16. If there was no lien, there
was no jurisdiction in equity.
There is another consideration fatally ad-
verse to the claim of a lien. The first sec-
tion of the act of congress of February 2Gth,
ISoo, declares that all transfers of any part
of any claim against the United States, "or
of any interest therein, whether absolute or
conditional, shall be absolutely null and void,
unless executed in the presence of at least
two attesting witnesses after the allowance
of such claim, the ascertainment of the
amount due, and the issuing of a warrant
therefor." That the claim set up in the bill
to a specific part of the money appropriated
is within this statute is too clear to admit of
doubt. It would be a waste of time to dis-
cuss the subject.
But there is an objection of stiU greater
gravity to the appellee's case.
Was the contract a valid one? It was, on
the part of Child, to procure by lobby serv-
ice, if possible, the passage of a bill providing
for the payment of the claim. The aid asked
by the younger Child of Trist, which indi-
cated what he considered needful, and doubt-
less proposed to do and did do himself, is
thus vividly pictured in his letter to Trist of
the 20th February, 1871. After giving the
names of several members of congress, from
whom he had received favorable assurances,
he proceeds: "Please write to your friends
to write to any member of congress. Every
vote tells, and a simple request may secure
a vote, he not caring anything about it. Set
every man you know at work. Even if he
knows a page, for a page often gets a vote."
In the Roman law it was declared that "a
promise made to effect a base purpose, as to
commit homicide or sacrilege, is not binding."
Just. Inst. lib. 3, tit. 19, par. 24. In our ju-
risprudence a contract may be illegal and void
because it is contrary to a constitution or
statute, or inconsistent with sound policy and
good morals. Lord Mansfield said (Jones v.
Randall, 1 Covpp. 39): "Many contracts
which are not against morality, are still void
as being against the maxims of sound policy."
It is a rule of the common law of univer-
sal application, that where a contract express
or implied is tainted with either of the vice&
last named, as to the consideration or the
thing to be done, no alleged right founded
upon it can be enforced in a court of justice.
Before considering the contract here in
question, it may be weU, by way of illustra-
tion, to advert to some of the cases present-
ing the subject in other phases, in which the
principle has been adversely applied.
Within the condemned category are: An
agreement to pay for supporting for election
a candidate for sheriff, Swayze v. HuU, 8 N.
J. Law, 54; to pay for resigning a public po-
sition to make room for another, Eddy v.
Capron, 4 R. I. 395; Parsons v. Thompson,
1 H. Bl. 322; to pay for not bidding at a
sheriff's sale of real property, Jones v. Cas-
well, 3 Johns. Cas. 29; to pay for not bidding
for articles to be sold by the goveniment at
auction, Doolin v. Ward, 6 Johns, 194; to
pay for not bidding for a contract to carry the
mail on a specified route, Gulick v. Bailey, lO
N. J. Law, 87; to pay a person for his aid
and influence in procuring an office, and for
not being a candidate himself, Gray v. Hook,
4 N. Y. 449; to pay for procuring a contract
from the government, Tool Co. v. Norris, 2
W^aU. 45; to pay for procuring signatures to
a petition to the governor for a pardon, Hatz-
field V. Gulden, 7 Watts, 152; to sell land ta
a particular person when the surrogate's or-
der to sell should have been obtained. Over-
seers of Bridgewater v. Overseers of Brook-
field, 3 Cow. 299; to pay for suppressing evi-
dence and compounding a felony, CoUins v.
Blantern, 2 Wils. 347; to convey and assign
a part of what should come from an ancestor
by descent, devise, or distribution, Boynton
v. Hubbard, 7 Mass. 112; to pay for promot-
ing a marriage, Scribblehill v. Brett, 4 Brown
Pari. Cas. 144; Anindel v. Trevillian, 1 Ch.
Rep. 47; to influence the disposition of prop-
erty by will in a particular way, Debenham
V. Ox, 1 Ves. 276. See, also, Add. Cont. 91;
1 Story, Eq. c 7; Collins v. Blantern, 1 Smith
Lead. Cas. 676. Am. note.
The question now before us has been de-
cided in four American cases. They were all
ably considered, and in all of them the con-
tract was held to be against public policy, and
void. Clippiuger v. Hepbaugh, 5 Watts & S.
315; Harris v. Roofs Ex'r, 10 Barb. 489; Rose
& Hawley v. Truax, 21 Barb. 361; Marshall v.
Railroad Co., 16 Hoav. 314. We entertain no
doubt that in such cases, as under all other
circumstances, an agreement express or im-
plied for purely professional services is valid.
Within this category are included, drafting the
petition to set forth the claim, attending to the
taking of testimony, collecting facts, preparing
arguments, and submitting them orally or in
writing, to a committee or other proper au-
thority, and other services of like character.
All these things are intended to reach oulj' the
reason of those sought to be influenced. They
rest on the same piinciple of ethics as pro-
fessional services rendered in a court of jus-
tice, and are no more exceptionable. But
PUBLIC POLICY— INJURY TO PUBLIC SEllYICE.
433
such sorricos are sciiarated by a broad line
of demarcation from personal solicitation, and
the other means and apphances which the
correspondence shows were resorted to in
this case. There Is no reason to believe that
they involved anything corrupt or dilferont
from what is usually practiced by all paid
lobbyists in the prosecution of their business.
The foundation of a republic Is the virtue
of its citizens. They are at once sovereij,'us
and subjects. As the foundation is under-
mined, the structure is weakened. When it
Is destroyed, the fabric must fall. Such is
the voice of universal history. 1 Montes(l.
Spirit of Laws, 17. The theory of our gov-
ernment is, that all public stations are trusts,
and that those clothed with them are to be
animated in the discharge of their duties
solely by considerations of right, justice, and
the public good. They are never to descend to
a lower plane. But there is a correlative duty
resting upon the citizen. In his intercourse
with those in authority, whether executive or
legislative, touching the performance of their
functions, he is bound to exhibit truth, frank-
ness, and integrity. Any departure from the
line, of rectitude In such cases, is not only
bad In morals, but Involves a public wrong.
No people can have any higher public inter-
est, except the preservation of their liberties,
than integrity in the administration of their
government in all its departments.
/ The agreement in the present case was for
the sale of the influence and exertions of the
/lobby agent to bring about the passage of a
/law for the payment of a private claim, with-
out reference to its merits, by means which,
If not corrupt, were illegitimate, and consid-
ered in connection with the pecuniary inter-
lest of the agent at stake, contrary to the
mlainest principles of public policy. No one
lias a right, in such circumstances, to put
himself in a position of temptation to do what
is regarded as so pernicious In its character.
The law forbids the inchoate step, and puts
the seal of its reprobation upon the undertak-
ing.
If any of the great corporations of the
country were to hire adventurers who make
market of themselves in this way, to procure
the passage of a general law with a view to
the promotion of their private interests, tlie
moral sense of every right-minded man would
instinctively denounce the employer and em-
ployed as steeped in corruption, and the em-
ployment as infamous.
If the instances were numerous, open, and
tolerated, they would be regarded as meas-
uring tlie decay of the public morals and the
degeneracy of the times. No prophetic spirit
would be needed to foretell the consequences
.near at hand. The same thing in lesser leg-
islation, if not so prolific of alarming evils, is
not less vicious in itself, nor less to be con-
demned. The vital principle of both is the
same. The evils of the latter are of sutli-
cient magnitude to invite the most serious
consideration. The prohibition of the law
UOPK.SEr...CAS.CONT. — 28
rests upon a solid foundation. A private bill
is apt to attract little attention. It involves
no great public Interest, and usually failij to
excite much dis, and
provides that appellees or said Tenney should
endeavor to get control of all of the claims
against said Smith, with power to compro-
mise the same as follows: "The claim of .1. V.
FarwcU & Co. and A. S. Gage & Co. at par;
the claims of the Omaha banks at 50 cents on
the dollar; claims of other attaching credit-
ors, up to the amount of $78,000, at thirty
cents on the dollar, and all other claims at
twenty cents on the dollar." And appellant
undertook and agreed on his part, as alleged,
"to furnish the affidavits of L. L. Smith, Fred
W. Fuller, alias Pullen, and Frank C. Moies,
of the facts of the sale by Smith to Lowey,
showing clearly that no consideration was
paid by Lowey, and that he knew of Smith's
insolvency, to be used on motion for new
trial in the case of Cole v. Miller; and that
the testimony of said witnesses, either In
person or by depositions, should be given, of
like tenor, to be used upon the next trial, or
any other legal proceedings instituted by said
Tenney against said Lowey." And "that for
such consideration it was agreed that your
orator [said Goodrich] should have one quar-
ter of all money realized upon their said
claims out of the property transferred by said
Smith to said Lowey, or in any litigation with
said Lowey or Cole, in respect to the same,
and the same should be paid to said Good-
rich [appellant] as fast as the money should
be collected; two thousand dollars thereof to
be retained by said Tenney on account of
costs and expenses; Smith to be released by
the consenting creditors from any right they
might have to arrest him, and from their
claims entirely, when such evidence should
be procured and given," etc. The bill al-
leges that appellant obtained the affidavits of
said Fuller and Moies, and the further affi-
davit of Smith, and delivered them to said
Tenney, "and which were accepted and ap-
proved by said Tenney, as in all respects ac-
cording to the wishes and purposes of said
defendants, [appellees,] and a satisfactory
compliance with the terms and conditions of
said agreement." And that appellees, by
means of a circular letter addressed to
Smith's creditors, etc., had by the 17th day
of May, ISSB, obtained control of claims to
the amount of $125,000; that Smith, under
an arrangement procured by appellant with
certain of his creditors, that they would pro-
cure persons to go bail for him if he should
be arrested by other creditors, had returned
to Chicago, and on said day executed and de«
livered to said D. K. Tenney, as trustee for
creditors, his judgment note for the sum of
$125,500, the sum of $.500 being added as an
attorney's fee; that judgment was entered
up thereon, and, an execution being returned
nulla bona, a creditor's bill was filed against
said Smith, Lowey, and others to subject
said property transferred by Smith to Lowey,
rUBLIC POLICY— OBSTRUCTION OF JUSTICE.
435
and the avails thereof, to the payment of said
judgment, upon the ground that said trans-
fer was without consideration, and fraudu-
lent as against creditors. It is further al-
leged that appellant "gave diligent attention
to the securing of the testimony of the said
Smith and said Fuller, alias Pullen, and the
said Moies, to be used on the hearing of said
cause, and in the progi'ess thereof, and all
such affidavits as were called for or required
by said defendants [appellees] during the
progress "of said cause, and did and perform-
ed, to the satisfaction of said defendants, all
that was required by them • ♦ • under
and pursuant to the terms of • • • said
agreement." It Is alleged that Smith, Ful-
ler, and Moies each attended, and gave testi-
mony and affidavits In said cause, when re-
quired to do so, etc. Tlio result is alleged
to have been a decree on the 28th of May,
1SS8, two years after filing the bill. In favor
of Tenney, etc., and against Lowey, for the
sum of $117,416.06, and which was, on the
0th day of December, 1S88, received by said
Tenney, amounting at that date, principal
and interest, to $120,500, "or thereabout."
Thirty thousand dollars, or one fourth of the
sum collected, less $500. presumably the at-
torney fee Included In the note. Is alleged to
have become immediately due and payable
to appellant under said contract; and It Is
to enforce an accounting and payment of
this sum, under said contract alone, that
this bill Is filed. There Is no pretense In the
bill of any other or different agreement by
which said money, or any part of It, would
become payable to appellant, or any consid-
eration, other than performing said agree-
ment on his part, moving to appellant for
its payment. Other parts of the bill are suffi-
ciently noticed In the opinion of the court.
A demurrer was interposed and sustained,
and decree entered dismissing the bill. On
appeal to the appellate court this decree was
affirmed, and the complainant prosecutes this
further appeal.
H. T. & L. Helm, for appellant. Tenny,
Church & Coffeen, (William E. Church, of
counsel,) for appellees.
SHOPE, J., (after stating the facts.) It Is
probable that the demurrer was properly
sustained upon the ground that, if the com-
plainant had a right of recovery, his remedy
was compU'te at law, and possibly, also, upon
the ground of laches; but we will consider
the single question ot the validity of the con-
tract sought to be enforced. No good pur-
pose can be served by a considenition of
the allegations of this bill setting up the
confederacy and fraud by which appellant
was induced to •=i0 of which was de-
livered to an agent of the defendant A bill
was filed by the annuitant for the purpose of
procuring a decree declaring the value of the
annuity, and enforcing its payment out of
the allowance to the defendant. The master
of the roils found the agreement for the pay-
ment of the annuity to be illegal, and, ad-
mitting tiiere existed an equity against the
fund, if it could be reached through a legal
agreement, said: "You have no claim to this
money, except through the medium of an
illegal agreement, which, according to tlift
determinations, you cannot support. I should
have no difficulty in following the fund, pro-
vided you could recover against the party
himself." And after citing Tenant v. Elliott,
supra, as authority for the position that, if
the company had paid the money into tlie
hands of a third person for the use of the
plaintiff, he might have recovered, further
observed: "But in this instance it is paid to
the party, for there can be no difference as
to the payment to his agent. Then how are
you to get at it, except through this agi*ee-
ment? There is nothing collateral, in respect
of which, the agreement being out of the
question, a collateral demand arises. Here
you cannot stir a step but through the illegal
agreement, and it is impossible for the court
to enforce it." So here the right of appel-
lant to recover of appellees depends solely
upon the contract, the provisions of which
cannot be enforced in a court of justice.
The unfortimate delay of appellant in dis-
closing the facts alleged, for more than three
years after the facts occurred, will probably
prevent their investigation where they could
receive that attention their merit demands;
and the bill, not being verified, forms no
basis for further investigation in this court.
The bill was properly dismissed, and the
judgment of the appellate court will be af-
firmed-
PUBLIC POLICY— OBSTRUCT [ON OF JUSTICE
^3^
JONES V. RICE.
(18 Pick. 440.)'
/t^
439
Supreme Jndicial Court of Massachusett*.
Middlesex. Jan. 21, 1837.
Assumpsit on a pruuiis-soi-j' uole, dated Jan-
uary 1st, 1835, made by tlie defendant to the
plainUCf, for $147.
At the ti'ial, before Shaw, G. J., It appear-
ed tliat on the ni^ht of December 31st, 18;i4,
a ball was given at the house of Joel Jones,
In Sudbury; that an attempt was made by
the defendant and Ufliers, to interrupt the
balLby vioTence; that a riot ensued, in which
some injury was done to J. Jones and oth-
ers, assembled at the ball; that a complaint
was filed before a justice of the peace and a
warrant issued by him against some of the
rioters; that the persona assembled at the
ball ctiose a ccuiiinitt" e to irporton the terms
which should N- proposed to the accused, for
a settlciiioiit of tlio difficulty; that the com-
mittee reported that the accused should pay
the sum of $184; that of this amount the
sum of $40 was for damages sustained by
three individuals, $10 for the services of the
officer, and $2 for the services of the magis-
trate, and that the balance was for the pur-
pose of stopping that anWLER V. CALLAN.
'ly (T N. E. 169. 102 N. Y. 395.)
Court of Appeals of New York. June 1, 1SS6.
Appeal from general term, New York com-
mon pleas.
Scott Lord, for appellant J. A. Kamping,
for respondent.
FINCn, J. It does not affect the validity
of the contract between the attorney and his
client that, measured by the old rules relat-
ing to champerty and maintenance, it would
have fallen under their condemnation; for
neither doctrine now prevails except so far as
preserved by our statutes. Sedgwick v. Stan-
ton, 14 N. Y. 2S9. The attorney may agree
upon his compensation; and it may be con-
tingent upon his success, and payable out of
the proceeds of the litigation. Such contracts
are of common occurrence, and, while their
propriety has been vehemently debated, they
are not illegal, and, when fairly made, are
steadily enforced. In substance, that was the
contract here made, and there would be no
question about It had it not contained a pro-
vision by the terms of which the attorney not
only agreed to rely upon success for his com-
pensation, but also to assume all costs and
expenses of the litigation, and indemnify his
client against them. It is this feature of the
contract which raises the question necessary
to be determined.
The facts of the case are not very fully
developed, but appear to be that the defend-
ant as devisee under a will, was entitled to
certain real estate; his right dependent upon
the validity of the will, and in some manner
threatened by proceedings before the surro-
gate, which put his interest in -peril, and made
a defense essential to its protection. In this
emergency he sought the aid and professional
Bervice of the plaintiff, and retained him as
attorney. The latter neither sought the re-
tainer, nor did anything to Induce it So far
as appears, it was not occasioned by any offer
or solicitation of his, but originated in the free
and unbribed choice of the client. The evi-
dence does not show whether the latter had
gained possession of the land devised, or was
out of possession, but he gave to the attorney
a deed of the one undivided half part of the
property, taking back his covenant to conduct
the defense to its close, paying all costs and
expenses of the litigation, and indemnifying
the devisee against all such liability.
The agreement appears to have been purely
one for compensation. If the client had given
to the attorney money Instead of land, the
contract would have differed In no respect ex-
cept the contingent character of the compen-
sation. The arrangement contemplated suc-
cess in the litigation, in which event the land
would pay the cosrs and expenses and the at-
torney's reward, and both would be discharged
out of the property of the client placed in the
hands of the attorney for tliat precise pur-
pose. The contract in no respect induced the
litigation. That was already begun, and ex-
isted independently of the agi'eement, and
originated in other causes. It did not tend to-
prolong the litigation. It made it to the in-
terest of the attorney to close it as briefly and
promptly as possible, and at as little cost and
expense as prudence would permit. The
plaintiff, therefore, stirred up no strife, in-
duced no litigation, but merely agreed to take
for his compensation so much of the value of
the land conveyed to him as might remain aft-
er, out of that value, the costs and expenses
had been paid.
We do not think the statute condemns such
an agreement 3 Rev. St (6th Ed.i p. 449,
§§ .59, 60; Code, §§ 73. 74. The Code revi-
sion changed somewhat the language of the
prohibition, but nevertheless must be deemed
a substantial re-enactment of the earlier sec-
tions. Browning v. Marvin, 100 N. Y. 148,
2 N. E. 03.5. They forbid— First the pm--
chase of obligations named by an attorney
for the purpose and with the intent of bring-
ing a suit thereon; and, second, any loan or
advance, or agreement to loan or advance, "as
an inducement to the placing, or in considera-
tion of having placed, in the hands of such at-
torney" any demand for collection. The stat-
ute presupposes the existence of some right of
action, valueless unless prosecuted to judg-
ment, which the owner might or might not
prosecute on his own behalf, but which he is
induced to place in the hands of a particular
attorney by reason of his agreement to loan
or advance money to the client. It contem-
plates a case in which tlie action might never
have been brought but for the inducement of
a loan or advance offered by the attorney;
and in which the latter, by officious interfer-
ence, procures the suit to be brought, and ob-
tains a retainer in it The statute speaks of
a "demand" which, by enforcement, will end
In a "collection;" phrases which have no apt-
ness to the situation of one simply defending
a good title to land against the efforts of oth-
ers seeking to destroy the devise under which
he claims. The plaintiff made no "loan or ad-
vance," in any proper sense of those words.
They imply a liability on the part of the
client to repay what was thus lent or ad-
vanced. The attorney loaned nothing, and he
advanced nothing to the client which the lat-
ter was bound to reimburse. Simply, he was
paid in advance an agreed price, taken in
land instead of money, and out of which he
was first to pay costs and expenses.
The facts before us are not within the terms
of the statutes, as it respects a "demand"
which is the subject of "collection;" but our
conclusion rests more strongly upon the con-
viction that the agreement made was one for
compensation merely, and had in it no vicious
element of inducing litigation or holding out
bribes for a retainer.
The judgment should be reversed, and a
new trial granted; costs to abide the event
AH concur.
PUBLIC POLICY— CHAMPERTY AND MAINTENANCE.
443
"^ (13 Fed. 317.) ^
Circuit Court, W. D. Missouri, W. D. Nov.,
1881.
Tlie case was tried before tlie court by
agreement of parties, a jurj' being waived.
Botsford & Williams and G. W. De Camp,
for plaintiff. Willard P. Hall, Silas Wood-
son, Benj. F. Stringfellow, and L. H. Waters,
for defendant.
McCRARY, C. J. The answer alleges that
this suit is being prosecuted by one of the
attorneys for plaintiff upon a champertous
contract by which he is to pay the expenses
xi£_t hc litiga tion anrT receive as his compen-
satl on 40 per c ent, of tlio sum realized, and
tfae^ efendant moves to dismiss the" suit for
that reason. The proof sustains the allega^
tion or cnamperty, the testimony of the de-
fendant himself being quite conclusive upon
that point. This makes it necessary for the
court to decide the Important question wheth-
er the plaintiff can be defeated in his action
upon the note by the proof that he has made
a champertous contract with his attorney.
In other words, can the defendant, the mak-
er of a promissory note, avoid payment there-
of or prevent a recovery thereon upon the
ground that the holder of the note has made
a void and unlawful agreement with an at-
torney for the prosecution of a suit upon it.
The authorities upon this question are In
conflict. Some courts have ruled that if the
fact that a suit is being prosecuted upon a
champertous contract comes totbe knowledge
of the court in any proper manner It should
refuse longer to entertain the proceedings.
Barker v. Barker, 14 Wis. 142; Webb v. Arm-
strong, 5 Humph. 379; Morrison v. Deader-
ick, 10 Humph. 342; Greenman v. Cohee, 61
Ind. 201.
I Other courts have held that the fact that]
jthere is an Illegal and champertous contract I
/for the prosecution of a cause of action is
I no ground of defense thereto, and can only
be set up by the client against the attorney
' when the champertous agreement itself is
sought to be enforced. Hilton v. Woods, L.
-ftr 4 Eq. Cas. 432; Elborough v. Ayres, L. R.
10 Eq. Cas. 367; Whitney v. KirUand. 27 N.
J. Eq. 333; Robinson v. Beall, 26 Ga. 17;
Allison V. Railroad Co. 42 Iqwa, 274; Small
V. Railroad Co. 8 N. W. 437.
This latter view is In my judgment support-
ed by the better reason. It Is not aecessary
for the full protection of the client to go so
far as to dismiss the suit for he Is In no
» Irrelevant parts omitted.
manner bound by the champertous agree-
ment; nor are there any reasons founded on
public^ policy that should require such dls^
miss al. If all champertous agreements shalF
be hcTd'void, and the courts firmly refuse to
enforce them, they will thereby be discour-
aged and discountenanced to the same extent
and in the same manner as are all other un-
lawful, fraudulent, or void contracts. If, on
the other hand, the defendant in an action
upon a valid and binding contract may avoid
liability or prevent a recovery by proving a
champertous agreement for the prosecution
of the suit between the plaintiff and his at-
torney, an effect would thus be given to the
champertous agreement reaching very far
beyond that which attaches to any other il-
legal contract The defendant in such case?
is no party to the champerty; he is not in-
terested In it nor in anywise Injured by it
If the contract upon which he is sued is a
"bona fide contract upon which a sum ol
money is due from him to the plaintiff, and
he has no defense upon that contract I can
see no good reason for holding that he may
be released by showing that the plaintiff has
made a void and unlawful agreement with
his attorney concerning the fee and expenses
of the suit
The tendency In the courts of this coun-
try is stronger in the direction of relaxing
the common-law doctrine concerning cham-
perty and maintenance, so as to permit great-
er libertj'^ of contracting between attorney
and client than was formerly allowed, and
this for the reason that the peculiar condi-
tion of society which gave rise to the doc-
trine has in a great measure passed away.
In some of the states the common-law rule
is altogether repudiated, and it is held tbat
no such contract is now Invalid unless it con-
travenes some existing statute of the state.
Sedgwick v. Stanton. 14 N. Y. 2S9; Voorhees
V. Darr, 51 Barb. 5S0; Richardson v. Row-
land, 40 Conn. 572; Mathewson v. Fitch, 22
Cal. 86; Hoffman v. Vallejo, 45 Cal. 564;
Lytle V. State, 17 Ark. 609.
The common-law doctrine, however, pre-
vails in Missouri, according to the decision
of the supreme court of the state in Duke v.
Harper, 66 Mo. 55. While following that rul-
ing. I am disposed. In view of the general
tendency of American courts, to relax some-
what the rigor of the English rule, to apply
It only to the champertous contract Itself,
and not to allow debtors to make use of it
to avoid the payment of their honest obliga-
tions.
It follows that the defense of champerty
In this case cannot be maintained, and that
the motion to dismiss must be overruled-
444
ILLEGALITY OF OBJECT.
.^
SAXON V. WOOD. At
(30 .N. K. 797, 4 Ind. App. 242.)
Appellate Court of Indiana. March 16, 1892,
Appeal from circuit court, Fayette county;
N. S. Gavin, Special Judge.
Action by Addie Wood against Walter Sax-
on for the breach of a promise of marriage.
Judgment for plaintiff. Defendant appeals.
Reversed.
J. I. Little and D. W. McKee, for appellant.
Reuben Conner and H. L. Frost, for appellee.
BLACK, J. The appellee, a minor, by her
next friend, sued the appellant. Upon the
appellant's motion, the next friend was re-
moved. The appellee was permitted to prose-
cute her suit as a poor person. She recovered
judgment for $250. A demurrer to the com-
plaint for want of sufficient facts was ovemil-
ed. This ruling alone is assigned as error.
The complaint, filed in September, 1&89, omit-
ting the title of the cause, was as follows:
"Addie Wood, plaintiff, by Emma L. Disbor-
ough, her next friend, complains of Walter
Saxon, defendant, and says that plaintiff was
a minor of the age of twenty years on the
day of May, 1889; that, for a period
of one year prior to the time of the prom-
i.se hereinafter alleged, the defendant kept
company with, and paid his attentions to,
plaintiff as her suitor; that on the day
of September, 1SS8, while so keeping company
and paying his attentions, defendant solicited
plaintiff to have sexual intercourse with him,
which she refused to do; that thereu;pQiLjie-
fendant_agreed with and promised her that if
she _WQUld have sexual intercourse with him,
and she should become pregnant from such
intercourse, he would at once marry her; that
in consideration of such promise and agree-
ment so to marry in case of pregnancy, to
which promise and agreement she assented,
plaintiff yielded to defendant's solicitations,
and did, on four or five occasions, then and on
days following, have sexual intercourse with
defendant, from which pregnancy resulted,
and from which a child was bom to plaintiff;
that plaintiff was at the time of such promise
and intercourse, and still is, unmarried; that,
immediately upon the discovery of such preg-
nancy, plaintiff, who was then wiUing to mar-
ry defendant, requested defendant to fulfill his
said promise of marriage, which defendant re-
fused, and still refuses, to do, to plaintiff's
damage in the sum of five thousand dollars.
Wherefore," eta
In an action for a breach of a promise to
marry, a consideration for the promise must
be shown. There must have been mutual
promises to marry. Unless there has been a
promise on the part of the plaintiff, the prom-
ise of the defendant is void for want of con-
sideration. Adams v. Byerly, 123 Ind. 368, 24
N. E. 130. In the case before us the agree-
ment of the parties did not consist merely of
mutual promises to marry. The promise and
agn^ement to which it was alleged the ap-
pellee assented was to marry in case of preg-
nancy resulting from her future intercourse
with the appellant. It is alleged that he so-
licited her, not to marry him, but to have
sexual intercourse with him, and oft'ered mar-
riage as a consideration for such intercourse
and consequent pregnancy. Iler acceptance of
his offer implied her agreement to marry if
their intercourse should result in her pregnan-
cy. The consideration of his promise to mar-
ry was'^alTe'ged to be that she should have sex-
ual intercourse with him, and should thereby
become pregnant. The marriage which they
agreed about was not to take place until she
should have so paid for it. A woman cannot
maintain an action for her own seduction,
when the yielding of her person has been in-
duced by the promise of a pecuniary reward,
(Wilson V. Ensworth, 85 Ind. 399;) but she
may maintain such an action where she has
been prevailed upon to surrender her chastity
under the promise of the seducer to marry
her, (Lee v. Hefley, 21 Ind. 98; Shewalter v.
Bergman, 123 Ind. 155, 23 N. E. GS6, and
cases cited.) Her action for seduction is an
action of tort provided by statute, whereby
she obtains damages for the defendant's
wrong, notwithstanding her consent to the
act which injures her. An action for a breach
of promise to marry is a common-law action
founded upon a contract. An action will noj;
lie for the breach of a contract based upon .^n
illegal or immoral consideration. In 2 Kent,
Comm. 466, it Is said: "The consideration
must not only be valuable, but it must be
a lawful consideration, and not repugnant to
law or sound policy or good morals, ex turpi
contractu actio non oritur, and no person, even
so far back as the feudal ages, was permit-
ted by law to stipulate for iniquity. * • •
If the contract grows immediately out of, or
is connected with, an illegal or immoral act,
a court of justice will not enforce it." See.^
also, 2 Chit. Cent. (11th Am. Ed.) 979; 1 Pars.'
Cent. 4.56: Bish. Cont. § 494; 1 Whart Cont.
§§ 370-373. The validity of a man's prom-
ise to marry a woman is dependent upon the
consideration existing for such promise. Fel-
ger V. Etzell, 75 Ind. 417-419. In Hanks v.
Naglee, 54 Cal. 51, which was an action for a
breach of promise to marry, the plaintiff tes-
tified, in substt^>nce, that the agreement be-
tween the parties was that the plaintiff should
then presently surrender her person to the de-
fendant, and that in consideration of such sm--
render the defendant would afterwards mar-
ry her. It was held that, upon well-settled
principles, the plaintiff could not recover upon
such a contract; that, being a contract for illic-
it cohabitation, it was tainted with immorali-
ty. See, also, Boigneros v. Boulon, 54 Cal.
146; Baldy v. Stratton. 11 Pa. St. 316; Goodal
V. Thurman, 1 Head, 208; Steinfield v. Levy,
16 Abb. Prac. (N. S.) 26. If it be said that the
complaint showed by implication a promise of
the appellee to marry the appellant, yet she
is not shown to have made any promise which
PUBLIC POLICY— IMMORAL AGREEMENTS.
445
rould serve as a consideration for bis prom-
ise. Her implied, promise was so united wiih
thcjmmora j part of the corisid erat[uii. aniLso
d ependent upon th e consetiuonces of tbe_ijjj-
mnf;\]___pnjjdnf;f- _Qrf)pns7vT7~thn t it cannot be
separated and m ade to scr\;e_'as a valid con-
^BideratioD ^ Steinfield v. Levy, supra; James
v."Jellison, 94 Ind. 292; Lodge v. Crary, 93
Ind. 238; Riclvctts v. Harvey. 100 lud. oi'A, G
N, E. 325. The appellee relics in argument
upon Kurtz v. Frank, 7G Ind. ij94; Wilson v.
Ensworth, 85 Ind. 399; and Kenyon v. Peo-
ple, 2G N. Y. 203. Kurtz v. Franlc, supra,
was an action for breach of man-iage con-
tract. The questions presented on appeal
arose upon a motion for a new trial. It is
said in the opinion of the court: "The plain-
tiff testified that the defendant promised to
marry her in September or October, (1878;)
that he said he would marry her in the fall,
if they could agree and get along and be true
to each other; but, If she became pregnant
from their intercourse, he would marry her
immediately. She did become pregmmt about
the middle of July, 1878, and informed the
defendant of the fact as soon as aware of
it Upon this evidence it Is insisted that the
agreement to marry immediately, in case of
the plaintiff's pregnancy, is void, because im-
moral, and that, aside from this part of the
agreement, the defendant had until the 1st
of December within which to fulfill his en-
gagement, and consequently that the suit, be-
gun as it was before that date, was prema-
turely brought. It does not appear that the
illicit intercourse entered into the considera-
tion of the marriage contract, but the appel-
lant, having agreed to marry the appellee at a
time then in the future, obtained the inter-
course upon an assurance that, if pregnancy
resulted, the contract already made should
be performed at once. This did not supersede
the original agreement, but fixed the time of
its performance. Clark v. Pendleton, 20 Conn.
495. We are not prepared to lend judicial
sanction and protection to the seducer by de-
claring that he may escape the obligation of
his contract, so made, on the plea that it is
immoral. But if this were otherwise, and if,
by its terms, the contract was not to be per-
formed until at a time subsequent to the
commencement of the suit, yet if, before the
suit was brought, the appellant had renounced
the contract, and declared his purpo.se not to
keep it, that coastituted a breach for which
the appellee had an immediate right of ac-
tion."
The appellee relies upon the sentence, "We
are not prepared," etc. This sentence, and
the portion of the opinion following it, as
above quoted, had reference to the question
whether the action was prematurely brought.
The case lends no aid to the contention of the
appellee. The court, in effect, held that if the
time of performance fixed by the contract, in-
to wltich no immorality entered, could not
be changed and fixed by the assurance on the
part of the defendant that, if pregnancy
should result, the contract already made
should he performed at once, then his renun -
ciation of t he i-ynt roi-t to marry const ituted
^ breacli of that coliTTacipand'gave^tlie^plajii-
tiff an iramediaterjiiht of actiu-t oa tlui cy£-
tractj_and t h£re£ace_U was not necessary that
tlie commencement of the action should hcita
been delayed until the time fixed for the
marriage in the original contract. Wilson v.
Ensworth, supra, was an action for the plain-
tiff's own .seduction. It was said in the opin-
ion of the court: "In this ease the promi.se
was pecuniarj' aid. Reliance upon such a
promise did not make the act seduction. A
promise to marrj' would be different, and con-
stitute a sullicient Inducement. The yielding
of the woman to the solicitations of the man,
under such a promise, would imply a prom-
ise on the part of the woman to marry the
man. The contract would be legal, and for its
breach the law would give the injured party
a remedy. Kenyon v. People, 2G N. Y. 203;
Kurtz V. Frank, 7G Ind. 594." The injured
party in such case might have a remedy by ac-
tion for seduction, but illicit intercourse could
not form a valid consideration for the con-
tract to marry. The statements that the con-
tract would be legal, and tliat an action would
Lie for its breach, were not necessary to the
decision of the case. Kenyon v. People, su-
pra, was a criminal prosecution for seduc-
tion. The judge of the trial court charged
the jury that, "if they were fully satisfied
from the evidence that the defendant promised
to marry the prosecutrix if she would have
carnal connection with him, and she, believ-
ing and confiding in such promise, and In-
tending on her part to accept such offer of
marriage, did have such carnal connection, it
is a suilicient promise of marriage under the
statute." The statute thus referred to was:
"Any man who shall, under promise of mar-
riage, seduce and have illicit intercourse with
any unmarried female of previous chaste char-
acter, shall be guilty of a misdemeanor," etc.
In the opinion of Wright. J., it was said of
this instruction: "This seems to me unob-
jectionable. It is not necessary that the pri>m-
ise should be a valid and binding one between
the parties. The offense consists in seducing
and having illicit connection witli an unmar-
ried female under promise of marriage. It Is
enough that a promi.se is made which is a
consideration for or inducement to the in-
tercourse." Having thus given a sutficient
reason for upholding the instruction, the judge
proceeded: "But if the statute required the
promise to be a valid one, the charge was
correct. A mutual promise on the part of the
female seduced is implied if she yields to th«
solicitations of the seducer, madp under his
promise to marry." This suggestion that .such
implied promise, together with the st^ducer's
express promise, made in consideration of or
dependent upon solicited carnal intercourse,
could constitute a valid contract to marry. Is
contrary to principle and authority. It ap-
pears from the report of the case that Bal-
446
ILLEGALITY OF OBJECT.
com, J., "concurred with Judge Wright in the ;
conclusion that it was unnecessary for the
district attorney to prove there was a valid
contract of marriage between the prosecutrix |
and prisoner prior to the illicit connection, j
and said, among other things, that, before the
statute could be construed as contended for by 1
the prisoner's counsel, it should read that any
man who shall, under 'contract' of marriage,
seduce, etc., and not any man who shaU, un-
der 'promise' of marriage, seduce, etc., as it
now is." The judgment is reversed, and the
cause is remanded, with instruction to sus-
tain the demurrer to the complaint
PUBLIC POLICY— GAMING AND WAGERS.
447
^^/^
^ 3 ^ COLI.AMER V. DAT.
(2 Vt. 144.)
finprcme Court of Vermont. Windsor. Feb.,
1829.
This was an action of trover. brouc:ht up
from the County Court for the re%isi<)n of their
decision presented in the following case,
agreed to by the parties, to wit:
"In this action, plaintiff offered to prove, at
the trial, that, on the day mentioned in the dec-
laration, the plaintiff and defendant were to-
gether in the ollice of Jacob Collamer, at
*145 Itoyalton— that *while there, a gentle-
man passed in a chaise: when> defendant
asked, whose chaise is that? Plaintiff answered.
Dr. Denison's. Defendant said no, it is not
Denison's chaise: I will bet my watch against
yours that it is not Denison's chaise — That to
this proposal plaintiff agreed — That each of the
parties then took out his watch, and laid it
upon the table: and it was then mutually agreed
by the parties, that they would go together,
and ascertain whether the said chaise was the
said Denison's chaise; and that, if it was, plain-
tiff should take both w^atches; and, if not, de-
fendant should take both, as and for his own —
That they did proceed and examine, and found
it to be said Denison's chaise — That the parties
then returned to the said office, and the defend-
ant immediately took up his watch, and carried
it away — That, on the same day, plaintiff" de-
manded said watch of defendant, who refused
to deliver it, but converted it to his own use.
This evidence was objected to by the defend-
ant's counsel, and excluded by the Court. To
which decision the plaintiff excepted, and the
exception was allowed, and the cause ordered
to pass to the Supreme Court.
Mr. Marsh, for plaintiff, contended. That by
the common law, a wager in general, is legal, if
it be not an excitement to a breach of the peace,
or to immorality; or if it do not affect the feel-
ings or interests of a third person, or expose
him to ndicule, or libel him; or if it be not
against sound policy; — and that the wager in
question could not lead" to any of those conse-
quences. He cited, among other authorities,
2 T. Rep. 693.— Cowp. 37. The counsel, also,
contended, that actual delivery of the property,
in this case, was not necessary in order to vest
the property in the plaintiff, and to enable him
to maintain trover; and cited Loft, 219.— Cro.
ElJz. 866.— 1 T. Rep. 56—7 id. 9.— 1 Salk. 113.
—1 Strange, 165. Atkin vs. Barwick.
The Court declined hearing Mr. Everett, for
the defendant
The opinion of the Court was delivered by
nUTCIIINSON, J.— Nothing appears in this
case, but that the action would be maintainable
by the common law of England, "^rhe common
law is adopted by our statute, so far, and so
far only, as the same is applicable to our local
situation and circumsiances, and is not repug-
nant to the constitution, or to any act of the
legislature, of this state. Whether applicable,
or not, must necessarily be a question of judi-
cial decision: and this is. probably, the lirst
action, that has ever called upon a court in this
state to sanction such a contract of bet-
ting. The .Judges of the L'tjurls in *Kng- ♦146
land have expressed their regret, of late
years, that such transactions ever received the
sanction of a court of justice: but, they yield
to the force of the law, which they consider
settled by a train of decisions, extending down
from remote antiquity. We feel no such em-
barrassment, nor are we willing to transmit any
such embarrassment to our successors: nor dif-
fuse into society the influence of a rule so de-
moralizing, as would be the sanction of such a
contract. It is honorable to this state, that the
industrious and moral habits of our citizens
have furnished no occasion to litigate questions
of this nature. It is honorable to the legislature,
that they have interposed checks to such games
and sports as they supposed were creeping into
use. By the Statute ot 1821, page 268, penalties
are affixed to the winning or losing, or betting,
in money, goods or chattels, on any game, or
on any horse-race, or other sport, within this
state. And said statute makes void anj' con-
tracts and securities made and given for money
won on such games. The species of betting
now in question may not come within that
statute, giving it the strict construction of a
penal statute: ^tthe good morals of society
require, that no encouragement should be af-
forded to the acquisition of property, otherwise
than by honest industry. Time might be occu-
pied in seeking occasions to take advantage of
the unwary, and acquiring a skill to take such
advantage, which ought to be devoted to better
purposes.
In this case, according to the terms of the
Det, the plaintiff had acquired a right to the
possession of the watch, which the "defendant
had laid down in the bet, but the plaintiff had
not acquired the actual possession, when the
defendant resumed his possession. The plain-
tiff, therefore, had no complete right to the
watch, without the sanction of such a contract
of betting. That sanction is now withheld, and
The judgment of the County Court is allirmed.
448
ILLEGALITY OF OBJECT.
BEADLES et al. v. McELRATH et aL^
SAME V. LEET et al. '^^i)
(3 S. W. 152, 85 Ky. 230.) J^
Court of Appeals of Kentucky. February 19,
1887-
W. W. Tice and Wm. Lindsay, for appel-
lant. Robertson & Robbins, Hargis «& East-
In, and C. L. Baudle, for appellees.
PRYOR, C. J. These two cases were ar-
gued and will be considered as one case.
The appellants, Beadles, Wood «& Co., were
cotton brokers, engaged in buying and sell-
ing cotton on commission, as they allege, in
the city of New Orleans. They instituted
these actions in the court below against the
appellees for large sums of money said to
have been advanced by them for the appel-
lees in the purchase and sale of cotton on the
cotton exchange in the city of New Orleans.
The appellees, by way of defense, allege, in
substance, that the claim set up by the ap-
pellants originated by reason of certain trans-
actions between them and appellants in the
purchase and sale of cotton on speculation,
and under contracts that were not to be per-
formed for the delivery of the cotton, and
the payment therefor, at the maturity of the
contracts; that they were dedling in futures,
by which they were to pay in money the dif-
ference by reason of wagering bargains by
which no cotton was sold or delivered, and
none intended to be delivered, when the con-
tracts were executed. They also allege that
Beadles, Wood & Co. were dealing largely
in cotton on their own account or for others,
and that, having made contracts in which
the appellees had no interest, similar to those
made with the appellees, they were unable
to meet their obligations with members of
the cotton exchange, with whom they con-
tracted, and, under the rules of the exchange,
those contracts were all declared_foj*feited,
including the contracts said to have been
made for the appellees; that the forfeiture
took place before their contracts matured,
and in that manner they were deprived of
any right to recover, without fault on the
part of either the appellants, or of those with
whom they contracted for their benefit. A
jury, by special fijidings, determined the is-
sue in the case of McElrath & Co., and the
judge, on a submission of the law and facts
to him, determined the case of Leet & Mead-
ows.
The one case, that against McElrath & Co.,
was decided for the defendants because of
its vicious consideration, it being a gambling
transaction; and the other, that of Leet &
Meadows, on the ground that the forfeiture
of the contracts was caused by the insolvency
of the appellants, who were unable to com-
ply with their contracts, and caused the loss
to the defendants,— the judge further hold-
ing that the contract was not a wagering con-
tract, or against public policy. The cases
were determined in different jurisdictions^
but were heard together in this court. The
judgment in each case was rendered for the
appellees. The appellants, having denied
that the contracts were invalid, relied on cer-
ta in rides of the cotton exchange, from which
it appears that such contracts can be enforced
for the delivery of the cotton, and further
established by the testimony that the con-
tracts were made subject to the rules of the
cotton exchange, and should not, therefore,
be regarded as wagering contracts. The con-
tracts being in writing, it is further main-
tained that parol proof is inadmissible to
vary their terms. By the rules of the cotton
exchange, the delivery of the cotton may be
exacted, and the testimony conduces to show
that the appellees entered into the contracts
with the knowledge that by its terms those
rules were to determine its legal effect. In
fact, the jury 'trying this case, in response to
special interrogatories, have so said by their
verdict.
In this case it, then, plainly appears that
contracts legitimate on their face, containing
stipulations plain and easily onderstood, by
which the cotton purchased Is required to be
delivered, have been declared vicious, in the
one case at least, upon parol testimony show-
ing that such was not the real purpose and
intention of either party to the contract; the
real purpose being, in fact, to speculate only
on the rise and fall of prices, as has been
determined by the special findings of the jury
in the particular case. If the written con-
tract and the rules of the cotton exchange
are to conti'ol the decision of this case, then
the facts and circumstances by which the
real nature of the various transactions were
brought to light should have been excluded
from the jury, and a judgment rendered for
the appellants, the plaintiffs below. The
question simply is whether a contract, legal
and proper in form, can be avoided by a
proper pleading, and shown to be in fact a
contract vicious in its character, and con-
traiy to public policy; a contract legal on
its face, but when explained by the facts
and circumstances connected with its per-
formance, only a gambling transaction. The
rule is well established that parol evidence
is not admissible to restrict, enlarge, or con-
tradict the terms of a written contract where
there is no ambiguity in its meaning; but
when facts are alleged showing the existence
of fraud, or that the contract was entered
into as a device to avoid what would other-
wise be a vicious consideration, as is in sub-
stance alleged in this case, this rule has no
application.
The rule, says Mr. Gre^nleaf, *is not in-
fringed by the admission of parol evidence
showing that the instrument is altogether
void, or that it never had any legal existence,
either by reason of fraud, or for want of
due execution and delivery, or for the illegal-
ity of the subject-matter." Again: "I'arol
evidence may be offered to show that the
PUBLIC POLICY— FUTURES.
449
contract was ma do for the furtherance of
objects forbiddou by law, whether it be by
statute, or by an express rule of the common
law, or by tlie gouenil polici' of the law," etc.
1 Greenl. Ev. U-tth Ed.) 3G(>, liCA. So. in this
case, although by the rules of the cotton ex-
change the cotton was to be delivered, and
the contract made with the appellees express-
ly stipulated the delivery at a particular day
in the future, still, if _this was a merejde;
vice to avoid th^ effect of a contract that thg
pa rTIcs really madr, and if expressed in terms
would have been \: mis, and without con-
sideration, we perceive no reason why such
facts may not be pleaded and proven, and
the recovery on that account denied. That a
contract of sale may be made for the future
dylrfery of produce, or any article of per-
sonal property, will not be contru 'rted; and
that such a contract, by the agreement of
parties, or by the regulations connected with
the boards of trade in the country, may be
transferable from one to the other, will be
conceded; but when entered into for the
sole purpose of speculating in futures, and
with no intention to deliver the cotton pur-
chased, but to pay the difference between
the contract price of the cotton and its mar-
ket price on the day. If a contract in good
faith, the cotton was to be delivered, then
the contract becomes a mere wager, and nei-
ther party to it can recover. If a contract in
good faith, it is binding; but when assailed
as havTugTSeon ontorod Into to cover up the
real intention of tlic [lartics, by making that
appear legitimate which is really a gaming
transaction, the defendant will be permitted
to introduce parol proof to establish his de-
fense.
Such a contract will be presumed to be
valid when unexplained, because it shows by
its tenns an actual purchase and sale, and
the burden is on the defense to show the il-
legal intention of the parties. As said by
Agnew, J., in the case of Kirkpatrick v. Bon-
sall, "the law does not condemn such trans-
actions, providing the intention really is that
the commodity shall be actually delivered
and received when the time for delivery ar-
rives." 72 Pa. St. 155. In Barnard v. Back-
haus, 52 Wis. 593, 6 N. W. 252, and 9 N. W.
595, that court went further, and held "that,
for the sale and delivery at a future day of
grain for a fixed price, it must affirmatively
and satisfactorily appear that it was made
with an actual view to the delivery of the
grain, and not as a cover for a gambling
transaction."
It seems to us that the terms of the writ-
ten contract imply good faith, and the bur-
den should rest on the defense to show the
illegal purpose. It becomes necessary, there-
fore, to examine the nature of the transac-
tions between these parties, in the light of
the .testimony before lis, with a view of de-
termining the validity of those contracts.
By the rules of the cotton exchange, no one
but a member can make contracts for the
HOPK-SEL. CAS. CONT. — 29
purchase and future delivery of cottoir.
Therefore the broker, being a member whei>
purchasing, must necessarily purchase of a
member of the exchange; and in this man-
ner they make large contracts bj' either pur-
hasing or selling cotton for future deliv« : y,
and assign so much of the contract to eacU
customer as the broker may have received
orders to purchase or sell. He receives or-
ders to purchase from A., B., C, and D., liv-
ing in Kentucky, to purchase 2,(Xt(i bii.es for
each, and a like number of onh i> from A.,
B., C, and D., living in Tennessee. The
broker enters the exchange, and purchases
of one or more members lG,fK)0 bales of cot-
ton in his (the broker's) < wn name, and then
on his books assigns, or by contract passes,
to each one of his eight customers, 2,(X>0
bales of cotton, at the price for which he
purchased; the purchasers depositing such
a margin as is required by the rules of the
exchange. If the broker should receive a
telegram from one of the parties in Ken-
tucky to sell his 2,000 bales before tin- time
of delivery, and one of his custom' s from
Tennessee should want to purchase an ad-
ditional 2,000 bales, he then transfers on his
books the cotton of the Kentucky customer
as sold to the Tennessee customer, at th: i
day's prices. All dealers are to keep up their
margins as the fluctuations in prices de-
mand, as this is determined by the rules of
the exchange. The speculator in futures
from this mode of dealing, whether for ac-
tual delivery or not, has in fact made a pur-
chase of cotton, but can never ascertain with
whom the contract was made. The broker
maj' inform the exchange for whom he is
purchasing, but this gives no right of action
against any one but the broker. The broker
is insisting that he is the mere agent of the
purchaser, and entitled to his commission,
and, when told by the purchaser that the
2.000 bales of cotton must be delivered at
the maturity of his contract. It Is then as-
certained that the broker has purchased IG,-
000 bales of cotton of one or more members
of the exchange in his own name, and, the
margin not being kept up, the entire con-
tract is forfeited, and the moneys already
advanced on the margin gone to the vendor
of the cotton.
In February, 18S2, the appellants, being^
purchasers of near GO.OOO bales of cotton, no-
tified the exchange that they were unalile to
comply with their contracts. The forfeiture
took place, and this was before the maturity
of the contracts with the appellees; but it is
now insisted that, if the margins had been
kept up, the contracts would have remained
in force. Suppose the margins had been for-
warded to the appellants: from the testi-
mony in this case, the appellants have pur-
chased cotton exceeding in value more thai*
?200.000. and the margin being called for^
and not deposited, the whole contract went
with the insolvency of the firm that took
place in February, 1S62. These appellants
450
ILLEGALITY OF OBJECT. '
were in fact selling to the appellees, and
were not their agents. They purchased large
quantities of cotton in the exchange on their
Individual account, and afterward distributed
those purchases between their customers,
leaving them without any remedy except
against the broker for the delivery of the cot-
ton, if such had in good faith been the con-
tract between them. With the prices of cot-
ton favoring the appellees, their claim as pur-
chasers might have been enforced through
their broker, in his name; but with an in-
solvent commission merchant, whose credit
alone enabled him in the first place to enter
the exchange, and make these large pur-
chases, the remedy was necessarily worth-
less, because the party In fact liable had be-
come insolvent.
It is shown that within less than a year
prior to these contracts with the appellees,
that appellants contracted for 300,000 bales
of cotton, and on the eighth of Febniary,
1S82, the day they failed, the contracts they
had on hand compelled them to receive and
pay for near 60,000 bales of cotton, a portion
of which, they say, was the cotton of these
appellees. The appellants were not worth
exceeding $75,000, if that much, and yet it
is argued that such contracts were valid
business transactions, and the parties ex-
pected to comply with the terms of each con-
tract; or, if not, that the prime object was
not to speculate merely on the rise and fall
of cotton, but to receive or deliver the cotton
purchased or sold. It is evident that if the
margin had been forwarded by the appellees,
that all would have gone in the financial
wreck that followed the reckless ventm'es of
men who were doubtless enterprising mer-
chants, but who had speculated to such an
extent, either for themselves or others, as to
Involve all in financial ruin. This would con-
etftute a complete defense to each action, re-
gardless of the other questions raised, and
the judgment in the case of Leet & Meadows
was therefore proper. It is claimed that Mc-
Elrath, one of the firm, was in New Orleans,
and on the exchange, when some of this cot-
ton was purchased. He was not a member
of the exchange, and therefore made no pur-
chases, but the cotton was purchased in the
manner and as all other cotton was pur-
chased for their customers by these appel-
lants. They were simply paying the appel-
lants a bonus for the privilege of trading
with them, and were, in fact, the vendors,
and the appellees the vendees, of the cotton.
These appellees were men of limited means,
living in this state, and contracting by tele-
grams and letters for futures in cotton, with
no intention or expectation of receiving a
single bale, either from the appellants or any
one else, and this was the intention and pur-
pose of the contracts,— a fact known to the
appellants as well as the appellees. The tes-
timony of the appellants leaves no doubt on
this subject, and neither the rules of the cot-
ton exchange, nor the letter of the contract.
will be allowed to give validity to such agree-
ments.
The opinion in the case of Sawyer v. Tag-
gart, repoitwl in 14 Bush, 727, was based on
the idea that no evidence was offered by the
defense showing that the contracts were to
be settled by the payment of differences;
but, on the contrary, the plaintiffs had as-
sumed the burden, or rather established, that
the contracts were to be executed in good
faith, with no evidence conflicting with such
a conclusion. Here the character of the busi-
ness transactions conducted by the appel-
lants, from their own statements, both with
the appellees and others, conduce to show
that there was a tacit, if not an express,
agreement that no cotton was to be deliver-
ed, and, with the testimony for the defense,
there can be no doubt on the subject.
But it is argued that a mere tacit agree-
ment, or one necessarily inferred from the cir-
cumstances surrounding the various transac-
tions connected with the positive statements
of the defendants, cannot supplant that
which the parties have reduced to writing,
and the contracts must be enforced because
they purport to be valid contracts, and the
rules of the cotton exchange have so de-
termined. In discussing a similar question,
the supreme court, through Mr. Justice Mat-
thews, said: "We do not doubt that the
question whether the transaction came with-
in the definition of wagers is one that may
be determined upon the circumstances, the
jury drawing all proper inferences as to the
real intent and meaning of the parties; for,
as was properly said in the charge, 'it maker;
no difference that a bet or wager is made to
assume the form of a contract.' Gambling
is none the less such because it is carried on
i n the form or guise of legitimate trade. It
might therefore be the case that a series of
transactions might present a succession of
contracts perfectly valid in form, but which
on the face of the whole, taken together, in
connection with all the attendant circum-
stances, might disclose indubitable evident'
that they were mere wagers." Irwin v. Wil-
liar, 110 U. S. 511, 4 Sup. Ct. 160.
The bulk of the transactions in the ex-
change by the appellants were in the depart-
ment known as the "margin," as distinguish-
ed from the other departments. The amount
of cotton delivered in all the sales and pur-
chases did not exceed 4,000 bales, and the
proof conduces to show that the cotton was
on consignment; but, whether so or not, it is
unreasonable to suppose that the appellees,
with their limited means, had undertaken to
receive and pay for cotton exceeding in value
greatly more than they were worth, and that
appellants induced them to speculate through
him as their agent with such an understand-
ing or agreement. There are so many facts
and circumstances leading to the opposite
.conclusion as to the intention of both par-
ties when these trades were made as leave
no doubt as to the correctness of the judg-
PUBLIC POLICY— FUTURES.
451
mcnt below. We are aware that the business
of the cotton exchange Involves the greater
part of the trade in the country's greatest
staple, and that leading merchants and busi-
ness men engage in such transactions; but
this in no manner relieves the case from the
vicious features of this class of contracts.
Men, no doubt, of both personal and com-
mercial integrity enter into such contracts.
They are nevorthele.ss piratt'S upon the legiti-
mate trade, and consumers of the country.
Fictitious values, created by a speculation
that causes the fluctuation in prices from day
to day of all the leading products of the coun-
try, based upon a species of gambling more
ruinous to the people than any other, re-
sult from such contracts as w made in this
case. They will not be euiorced by the
courts of this state.
There are many question-s raiscil a» to the
pleadings and evidence not necessaiy to be
cousidiTod. SLS from the testimony of the
plaintiffs alone these judgments were proper.
Judgment atJirmed.
452
ILLEGALITY
SriXKS V. DAVIS.
(.32 Miss. 152.)
Court of Errors aud Appeals of Mississippi.
Oct. Term, 1856.
Error from cii-cuit court, Tallaliatcliie coun-
ty; W. L. HaiTis, Judge.
'This was a suit brouglat by W. P. Spiiiks
against A. W. Davis, upon an agreement en-
tered into between Spinlis and Davis, where-
by Davis, for a consideration, undertakes, as
attorney, to assume the administration of a
certain estate, and collect a debt due to
Spiuks. The defendant demurs and sets forth
several causes, the principal of which is that
the agreement is illegal, contrary to public
policy, and therefore void, in support of which
pr>sition a number of cases are cited, none of
which I think are in point. The case cited
from 4 Wash. C. C. R. 279, differs very widely
f:om the one at bar. In that case absolute
fraud aud corniption was charged; the others
are of similar character. I cannot see how
the agreement is contrary to public policy. It
is clear that a person, when he is immediately
interested, or a creditor, can take out letters
of administration, but it is equally clear, that
what he is authorized to do himself, he may
authorize another to do for him. "Qui facit
per alium, facit per se."
The position of the attorney is not more in-
consistent than would be the position of tlie
principal; they are Identically the same. See
Hutch. Code, G65, § 54.
W. B. Helm, for plaintiff in error. Daniel
Mayes, for defendant in error.
HANDY, J. The declaration in this case
states, in substance, that the plaintiff con-
tracted with and retained the defendant as
an attomey-at-law, to collect certain claims to
a large amount, due him from the estate of
one John Carson, deceased, who resided in
Alabama, and died insolvent, but was en-
titled to a distributive share of the estate of
his father WiUiam Carson, who had previous-
ly died in Tallahatchie county, in this state;
that the said estate having been fully admin-
istered and distribution made, and no dis-
tributive share set apart or allowed to John
Carson, and the plaintiff being advised, that
in oixler to reach John's interest in his father's
estate, it would be necessary to take out let-
ters of administration of John's estate, and
proceed against the administrators of the
father's estate, contracted with and retained
the defendant as an attorney, to take out let-
ters of administration upon John's estate, and
to collect his debt, for certain reasonable fees
and reward to be paid to him; that the de-
fendant accordingly took out letters of ad-
ministration in the Tallahatchie probate court,
at June term, 185G, and, in conjunction with
other counsel retained with the defendant, the
defendant, as such administrator, filed a bill
in chancery against the distributees of Wil-
liam Carson's estiite, and obtained a decree
in his favor at October term, 1850, from
or OBJECT.
which an appeal was taken by the adverse
parties, to this court; that pending that ap-
peal, the defendant, without notice to the
plaintiff or his associate attorney, fraudulent-
ly stated to this court, that the suit was com-
menced and prosecuted without his knowl-
edge or consent, whereupon this com't, con-
sidciii.g that admission as a confession of er-
rors, and without examining tbe merits of the
case, reversed the decree; and the same state-
ment being afterwards niade to the chancery
court, the bill was finally dismissed by that
court, at April term, 1853. The declaration
avers, that the plaintiff's debt could have
been collected, but that it was prevented by
the fraudulent conduct of the defendant;
wherefore, he prays judgment against the de-
fendant In his individual capacity for his
debt, &c.
The defendant demurred to this declaration
upon many grounds, and judgment was ren-
dered thereupon for the defendant; and for
this alleged error, the case is brought here.
We will proceed to consider the correctness
of the judgment upon the most essential point
of the demurrer.
The first objection to the declaration is, that
the contract set up is contrary to public policy,
and, therefore, illegal and void.
This agreement as stated is, in substance,
that the defendant who was thus retained as
the attorney of the plaintiff, to collect his
debt, for compensation, should also become
administrator of the debtor's estate, and there-
by accomplish the object of his original en-
gagement and collect the debt. The question
is, do not these respective duties involve in-
compatible obligations, or, does not the faith-
ful performance of one of them tend neces-
sarily to the violation of the other?
It was the duty of the attorney diligently
to prosecute the claim according to law, and
to collect it if it could be done by legal means.
It was the duty of the administrator to scru-
tinize the claim rigidly, and to refuse pay-
ment if there was any doubt about its just-
ness in fact, or its validity according to strict
legal rules; to defend, upon the ground of the
statute of limitations, the illegality or want
of consideration of the claim, or any other bar
which was a sufficient defence to it in law.
And all such defences It was the plain duty
of the attorney to resist. In short, the at-
torney was bouud to protect the interest of
his client, and the administrator was prima-
rily bound to protect the legal interests of the
estate. Under such circumstances, the attor-
ney c-ould not have performed his duty tO'
prosecute the claim, if its validity had been
doubtful, consistently with his duty to defend
the estate against its collection. Hence, a
strong temptation would necessarily arise to
violate his duty in the latter capacity, and to
pay the claim; because the attorney would
thereby make a profit by his retainer in addi-
tion to the commission which he would at all
events receive as administrator; and instead
of acting as a faithful and impartial adminis-
PUBLIC POLICY— FKAUD AND BUEACU OF TRUST.
453
trator, he stands iiiidci a str< ii;; tfiiiiitaLion
to abuse his trust to his owu priv/itu ^'aiu.
It cJie claim should be of such doubtful valid-
ity as to malie it the duty of the administra-
tor to resist its payment and to render a suit
necessary, what is his attitude? IIo must
either become the plaintiff's attorney in the suit
against himself as administrator, or he must
procure some one else to bring the suit against
him. In this, there would be an almost irre-
sistible iudufcnient to malpractice and collu-
sion; for, cun^idcring the infirmities of hu-
man nature, it is scarcely to be supposed,
that he would make a very vigorous defence
to a suit in which he was directly interested
that tlie plaintiff should recover.
But in this case, the main object of the ar-
rangement was the colle^--tion of the plaintiffs
claim, and to tliat the defendant was primari-
ly boimd by his agreement. The admiBis-
tration was to be undertaken merely as a
means to that end How, then, could the at-
torney properly perform liis contract to coUect
the plaintiff's claini, when it might become
his duty as administrator to resist it? Either
by the force of his contract, and in further-
ance of the object of the undertaking, or by
the temptation to do wrong which his situa-
tion would render almost irresistible, he must
act as administrator, so as to facilitate the
end for which the whole arrangement was
entered into, and thereby violate his duty in
that capacity.
The obligations are, therefore, manifestly
inconsistent, and are calculated to induce a
violation of one of two high public duties;
and the agreement must therefore be con-
demned as illegal and against public policy,
so far as it charged the attorney, upon his
individual undertaking, to collect the claim
by means of the administration.
It is no answer to this view of the case to
say, that the defendant might properly have
performed his duty generally, as adminis-
trator, as well to others interested as to the
plaintiff, and yet have properly paid the
claim of the plaintiff; and that it is to be
presumed that the arrangement was intended
to be carried out by legal meajis, and not by
those which were illegal. It is a sufficient
objection to a contract, on the ground of
public policy, that it has a direct tendency
to induce fraud and malpractice upon the
rights of others, or the violation or neglect of
high public duties. Upon this principle, cou-
tracts to procure the making of a will in favor
of a particular party, or to bring about a mar-
riage between certain parties.and the like, are
held to be illegal as being against public policy.
For although the act contracted to be done may
be just and beneficial as between the parties
immediately concerned in it, and though it be
accomplished in good faith and without undue
means, yet the contract to procure it to be
done is held to be against public policy, be-
cause its natural effect is to cause the party
to abuse the confidence placed in him by
those upon whom the infiuence Is to be exert-
ed, and thereby prejudicially to affect the
rights of others. Fuller v. Dame, IS Pick.
47li; Collins v. Blantern, 2 Wils. 347; 1 Slur. .
Eq. Jut. §§ 2G5, 2GG; Chit Cont 525, 52G; 1
Lead. Cas. Eq. loO-lGO, and cases tliere cited.
It is urged, In support of this action, that
by our laws a creditor has the right to take
out letters of administration upon his debtor's
esta.te, if parties having the prior right fail
to do so; and that there can be no impropri-
ety In the attorney's doing that which his
client, wIkj had the same temptation to do
wrong as the attorney, is allowed to do.
But the question is, not whether the attor-
ney had the right to administer, but whether
a contract by which he was either bound, or
under a strong and direct temptation, to use
his trust for the purpose of paying the claim
of the plaintiff, is proper and legal. The
creditor-administrator is under no contmct to
induc-e him to abuse his trust; ami being
known as a creditor, his acts will, in all jirob-
ability, be closely examined by those inter-
ested in the estate. But the attorney appears
as a disinterested person, In whom the par-
ties may confide for the faithful perf.irmance
of all his duties, and especially for the protec-
tion of the rights and interests of the estaie.
He Is supposed not to be acting in his own
right, but for the benefit of others, and im-
partially; and from the confidence that may
weU be presumed to be reposed in him, he
will have much greater power to make under-
hand arrangements than would the creditor
himself, who was known to be acting mainly
for his personal interest. The policy of the
statute allowing a creditor to administer
upon his debtor's estate, proceeds on the
ground of enabling the creditor to collect his
debt, and that from necessity, because no one
else will administer. But it Is not to be ex-
tended to justify agreements made by third
persons who may become administrators, the
performance of which will have a direct tend-
ency to cause malpractice and fraud in the
administration.
Nor is this agreement of the same charac-
ter as a contract to indemnify a party for be-
coming administrator of an estate. In such
a case, the administrator is bound to do noth-
ing which at all conflicts with his duly as
such. He undertaiies the trust for no ulte-
rior collateral puii^ose, and the object is mere-
ly to have the estate administered in due
course of law. The indemnity or compensa-
tion is only to induce him to take upon him-
self the trust to be performed according to
law, and there is no continuing inducement
to malpractice after the trust is imdertaken.
If these views of the case be correct, it fol-
lows that however the conduct of the defend-
ant, as stated in the declaration, may be con-
demned in point of morals, or whether he be
liable or not for his fraudulent conduct as ad-
ministrator, no action against him individual-
ly can be maint:Uned upon the agreement
made by him; and the judgment sustaining
the demurrer must be affirmed.
454
ILLEGALITY OF OBJECT.
^•^
r
LOWE V. PEERS.
(4 Burrows, 2225.)
King's Bench. 1768.
363
This was an acLiou of covenaut, upon a mar-
riage contiact; being a promise under the de-
fendant's hand and seal, and in his own hand-
writing, to the effect following— "I do hereby
promise Mrs. Catherine Lowe, that I will not
marry with any person besides herself: If I
do, I agree to pay to the said Catherine Lowe
£1,000 within three months next after I shall
marry any body else. Witness my hand
Newsham Peers and seal «Stc." This deed was
executed in 1757. And in 1767, Peers mar-
ried another woman. Whereupon this action
was brought
The plaintiff avers in her declaration, "that
she had remained single, and was always
willing and ready to marry him, whilst he
continued single: but he married Elizabeth
Gardiner." The breach was assigned in non-
payment of the fl.OOO, though demanded.
The defendant pleaded "non est factum."
The question turned upon the second count
only: for, it was admitted, that no sufficient
evidence was given to support the first count.
The cause was tried before Lord MANS-
FIELD. It appeared in evidence, by letters
that were read, that there had been a long
courtship; and that this obligation was fairly
and voluntarily given by the defendant to the
plaintiff: the defendant pulled the stampt
paper out of his own pocket; and wrote,
signed, sealed, and executed it In the presence
of one witness. And a witness who saw it
executed, attested it, after the defendant was
gone. There was no intercourse between the
plaintiff and defendant afterwards. The wit-
ness to prove this deed swore that the de-
fendant sealed it before he wrote his name
"Xewsham Peers." Evidence was called, on
the other side, to prove the contrary.
His lordship directed the jury to find for the
plaintiff, with damages £1,000 if they thought
the deed to be a good deed. If this direction
was wrong, he gave the defendant leave to
move for a new trial, without costs.
Accordingly, on Thursday, 21st April last,
Mr. Dunning, solicitor general, moved for a
new trial, with liberty also to move after-
wards in arrest of judgment
Rule to shew cause.
Upon shewing cause on Monday last (the
9th instant.) a question was proposed to be
debated, "Whether the jury could give any
more or less damages than the £1,000, the
specific sum mentioned in the deed;" as well
as "whether this instrument is good enough in
law, to support any action whatsoever?"
It was then agreed that both motions, (viz.
for a new trial, and in arrest of judgment,)
should come on to be argued together.
Pursuant to which agreement, the case was,
yesterday and to-day, argued by Sir Fletcher
Norton, Mr. Cust and Mr. Wallace for the
plaintiff; and by Mr. Dunning, solicitor gen-
eral, and Mr. Mansfield for the defendant:
but the court, in giving their opinions upon
the two motions, entered so fully into the
groimds and reasons upon which they founded
their determination, and discussed the objec-
tions and cases cited so particularly, as may
render the arguments of the counsel unneces-
sary to be given here at all; or at least more
than a slight sketch of them. The general
tendency of them was shortly this:
The motion for a new trial was founded up-
on an objection to the direction given to the
jury, "to find the whole sum of £1,000 in
damages, in case they should find for the
plaintiff:" the counsel for the defendant in-
sisting that the jury ought to have been left
at liberty to give a less sum, if they had
thought proper; the jury being judges of the
damages, as well in covenant as in assumpsit.
They cited James v. Morgan, 1 Lev. Ill,
where the juiT were directed to give only the
value of the horse in damages, upon an as-
sumpsit "to pay a barley-corn a nail, doubling
it every naU." They also cited and much re-
lied upon Sir Baptist Hixt's Case, in 1 Rolle,
Abr. p. 703, tit. "Trial," pi. 9, where a find-
ing of less was holden to be good; and the
jury are said to be chancellors, and may give
such damages as the ease requires in equity.
It was answered, that where a particular
sum is liquidated and fixed by the agreement
of the parties, and the breach of covenant as-
signed in non-payment of that money, that
fixed sum alone is the measure of the dam-
ages.
The motion in arrest of judgment was
founded upon the following reasons— That all
engagements in restraint of marriage are void.
—That this engagement is of that sort- That
there is no consideration for this contract It
is not reciprocal: here is no mutuality; which
is essential to the validity of a contract
It was answered, that this whole transac-
tion amounts to a mutual promise "to marry
each other." The plaintiff's acceptance of this
deed is sufficient evidence of her making such
a promise. So that there were mutual prom-
ises; and both were bound to perform them.
Therefore there was u consideration for the
defendant's promise. However, this promise
is by a deed: ',nd a deed carries its own
consideration.
And this is not an engagement in restraint
of marriage generally: it is only a restraint
from marrying any body else but each other.
Therefore it is not like the case of Baker v.
White, 2 Vem. 215, or that of Woodhouse and
Shepley. in 2 Atk. 535.
Lord Mansfield stated the deed particularly,
and the declaration upon it. The words are —
"I do hereby promise Mrs. Catherine Lowe
that I will not marry with any person besides
herself: if I do. I agree to pay the said Cath-
erine I/)we £1,000 within three months &c."
The defendant was single, at the time; and so
was the plaintiff.
The second count avers that the plaintiff
PUBLIC POLICY— DEIIOGATION OF MAllUIAGE RELATION.
455
was ready to marry liiin; and that after the
makin;; the deed, he did marry another wo-
inau, namely, one Elizabeth Gardiner: yet he,
the defendant, did not, when requested by the
plaintiff, pay the £1,000 which he had agreed
to pay; and so (thout^h often reiiuosted) hath
not kept the covenant made between them as
aforesaid. So that the breach Is assigned in
the not paying the £1,000.
To this declaration "non est factum" was
pleaded, by the defendant: but the jury found
"that it was his deed;" and have given £1,000
damages. And by law and in jusUce, he
ought to pay the £1,000. Money is the meas-
ure of value. Therefore what else could the
jury find but this £1,000 (unless they had also
given interest after the three months?)
This is not an action brought against him
for not marrying her, or for hi«5 marrying any
one else: the non-payment of the £l,fXK) is the
ground of this action- -"That he did not, when
requested, pay the £1,000."
The money was payable upon a contingency:
and the contingency has happened. Therefore
it ought to be paid.
There is a difference between covenants in
general, and covenants secured by a penalty
or forfeiture. In the latter case, the obligee
has his election. Pie may either bring an ac-
tion of debt for the penalty, and recover the
penalty; (after which recovery of the penalty,
he can not resort to the covenant; because
the penalty is to be a satisfaction for the
whole:) or, if he does not choose to go for the
penalty, he may proceed upon the covenant,
and recover more or less than the penalty,
toties quoties.
And upon this distinction they proceed in
courts of equity. They wUl relieve against a
penalty, upon a compensation: but where the
covenant is "to pay a particular liquidated
sum," a court of equity can not make a new
covenant for a man; nor is tliere any room
for compensation or relief. As in leases con-
taining a covenant against plowing up a mead-
ow; if the covenant be "not to plow;" and
there be a penalty; a court of equity will re-
lieve against the penalty, or will even go fur-
ther than that (to preserve the substance of
the agreement:) but If it is worded— "to pay
£5 an acre for evei-y acre plowed up;" there
is no alternative, no room for any relief
against it; no oompensation; it is the sub-
stance of the agi'eement. Here, the specified
sum of £1,000 is found in damages: it is
the particular liquidated sum fixed and agreed
upon between the parties, and is therefore the
proper quantum of the damages.
The same reason answers to the motion for
a new trial in the present case.
As to the case mentioned by Mr. Mansfield,
from 2 Rolle, Abr. 703.— It is impossible to
support it: for it can not be, that a man
should be obliged to take less than the liqui-
dated sum. And the writ of error in that
ease was plainly brought by the (Cro. Jac.
390) defendant. Besides, the damages could
never be taken advantage of up-n a writ of
error. How could the quantum of damages
found by the jury be the subject of a writ
of error?
'Tis therefore clear, that where the precise
sum is not the es.sence of the agreement, the
quantum of the damages may be assessed by
the jury: but, where the precise sum is fixed
and agreed upon betv.een the parties, that
very sum is the ascertained damage, and the
jury are confined to it.
This brings the matter to the validity of the
deed.
Whatever grounds existed at that time, that
could avail the defendant to avoid the deed,
should have come on his part, by a proper
plea, if it would in reality have been a good
defence for him. And therefore if any such
ground had existed in this case, as did exist
in Shepley's Case (2 Atk. 535); or any other
ground not appearing upon the face of the
deed; it ought to have been avoided by a
proper plea. Here, wj are upon the face of
the deed; the plea is "non est factum.''
It is objected, that tliis is an engagement in
restraint of marriage.
It is answered, that this construction is di-
rectly contrary to the words and intention of
the deed; which amounts to a mutual agree-
ment between these two persons "to marry
each other;" and that the plaintifTs acceptance
of the deed proves that; and that what the
jury have found, is a sufficient reason to have
it supposed that there was such a mutual
agreement "to marry each other:" that, how-
ever, this is, at the utmost, only a contract
"that he would not marry any other woman;
and that if he should marry any other woman,
he would pay the plaintiff £1,000 within three
months after he should so marry any other
woman;" but it is very far from restraining
his marrying at all.
This is a point of very considerable impor-
tance.
All these contracts ought to be looked upon
(as Lord Hardwicke said in the case of Wood-
house V. Shepley) with a jealous eye; even
supposing them clear of any direct fraud. In
that case. Lord Hardwicke did not proceed on
any circumstiinces of particular actual fraud;
but on public and general considerations: and
therefore he gave no costs.
These engagements are liable to many mis-
chiefs; to many dangerous consequences.
When persons of different sexes, attached to
each other, and thus contracting to marry each
other, do not marry immediately, there is al-
ways some reason or other against it; as dis-
approbation of friends and relations, inequal-
ity of circumstances, or the like. Both sides
ought to continue free; otherwise, such con-
tracts may be greatly abused; as, by putting
women's virtue in danger, by too much con-
fidence in men; or, by young men living with
women without being married. Therefore
these contracts are not to be extended by im-
plication.
456
ILLEGALITY OF OBJECT.
But here is not the least ground to saj- that
this man has "engaged to marry this woman."
Much less does any thing appear, of her en-
gagixig to marry him.
There is a great difference between promis-
ing to maiTy a particular person; and prom-
ising not to marry any one else. There is no
colour for either of these constructions that
have been offered by the plaintiff's counsel.
This is only a restraint upon him against
marrying any one else, besides the plaintiff:
not a reciprocal engagement "to marry each
• other;" or any thing like it.
This penalty is set up against the defend-
ant, after ten years have passed without any
Intercourse between the plaintiff and him.
Another reason why we should not strain in
favour of this contract, is because if there
was really any mutual contract under fair and
equal circumstances, the plaintiff will still be
at liberty to bring her action: for, a void bond
can never stand in her way.
Therefore I think, that what passed at the
trial was perfectly right; that the measure
of damages was the £1,000 and that this was
such a contract as ought not to be carried in-
to execution.
The case of Baker v. White, 2 Vern. 215.
"was not near so strong as the present case.
That was in restraint of Elizabeth Baker's
marrying again. There is a difference be-
tween a restraint of a first marriage, and a
restraint of a second marriage: the plaintiff
there was a widow, when she gave the bond.
And the transaction was. In effect, a mere
wager, and nothing at all unfair in it: and
yet, in that case, the bond was decreed to be
delivered up to be cancelled.
Mr. Justice Yates was of the same opinion,
on both points.
In actions of debt, it is fatal to the plaintiff,
if he mistakes his demand; because the de-
mand is not divisible. In covenant, it is di-
visible.
This deed was the only evidence upon which
damages could be given. It is a covenant "to
pay a stipulated sum upon a particular event"
The event has happened: the action is brought
upon it. On a writ of inquiry, the inquisi-
tion would have been set aside, if less than
the sum specified had been found.
As to Sir Baptist Hixt's Case, 2 Rolle, Abr.
'703. — What Lord Mansfield has said, is an
answer to it. The jury ought to have allowed
the stipulated sum for every acre that was
wanting. For, according to that rate the pur-
-chase-money was paid, or agreed to be paid;
and according to that rate it ought to have
been allowed or refunded: part of the money
might have been actually paid. And on a
writ of error, (as Lord Mansfield has observ-
•ed,) the finding of damages by the jury could
not come in question.
So far, I am of opinion for the plaintiff: for,
I think the £1,000 is the proper quantum of
damages which the jury were bound to find.
But on the motion in arrest of judgment.
upon the invalidity of the deed— I am of opin-
ion for the defendant.
For, this agreement is in restraint of mar-
riage. It is not a covenant to "marry the
plaintiff;" but "not to marry any one else:"
and yet she was under no obligation to marry
him. So that it rvistrained him from man-y-
ing at all, in case she had chosen not to per-
'iuit him to marry her.
An action of covenant must be founded on
the covenant, and the breach assigned within
the words of it.
Now if she had requested him to marry her,
and been refused by him; how must she
have assigned the breach ?— Why— "That he
being requested by her to marry her, he had
refused to do so."
But what obligation was he under, "to mar-
ry her?" Or where was the breach of his
covenant? This covenant says no such thing,
as "that he would marry her." Tender and
refusal must apply to the thing stipulated:
but he has not stipulated "that he would mar-
ry her."
. As to mutuality of contract— The deed does
not import that she shall marry him: neither
doth her acceptance of it import any such
thing. It does not follow from her accepti
ance of the deed, that she either understood
he meant to bind himself to marry her; ot
that she engaged to marry him.
Possibly, he might not at all mean to mar-
ry her, though he bound himself not to marry
any one else. They are two quite different
things: one does not follow from the other.
This covenant is illegal, and will support no
action: and therefore the plaintiff ought to
recover nothing upon it.
Mr. Justice ASTON concurred, upon both
points.
As to the quantum of damages — That is ex-
pressly stipulated and agreed. He took no-
tice of what is said in the case of Edgcomb v.
Dee, Vaughan, 101, and applied it to the pres-
ent case.
As to the great point— he said, he had had
doubt: but now he clearly concurred.
If this had been a covenant "to marry her,"
all the consequences which have been men-
tioned would have followed.
But it is not a covenant "to marry her."
The words import no such thing: and the
court can not suppose fraud. It is only a
covenant to pay a sum of money, in case he
shall marry any one else, "any person besides
herself."
This is in restraint of marriage, and is ille-
gal and void.
The ease of Baker v. White. 2 Vern. 215.
was a bond given by a widow, conditioned to
pay the defendant White £100 if she should
afterwards marry again: and White, at the
same time, gave her a like bond, conditioned
to pay the like sum to her executors, if she
should not marry asain before she died. She
married again, to Baker: and he and she
brought their bill, to have her bond deliveired
PUBLIC POLICY— DEIiOGATION OF MARRIAGE RELATION.
457
up. And the bond was decreed to be de-
livered up, to be cancelled. He observed, that
there is a difference between a first and a sec-
ond marriage. The restraint of a first mar-
riage is contrary to the general policy of the
law, the public good, and the interests of
society: but the frequent customs of copy-
holds intimate that the restraint of a second is
not so. Yet there the bond was decreed to
be delivered up.
We can not make a covenant for the man:
and he himself has only covenanted "not to
marry any other person, besides tlie plaintiff."
Mr. Justice WILLES also concurred.
1st No new trial ought to be had. The di-
rection of my Lord Chief Justice was right
For here the deed Itself liquidated the certain
sum: it was a.scertained and fixed, between
the parties themselves; and was therefore the
true and proper quantum of the damages.
2d. As to the motion In arrest of Judgment
—I should not think it a proper motion, if this
was a covenant "to marry her." But this Is
only, "not to marry another."
The words are plain and manifest: and the
intention seems to have been agreeable to
then.. The deed was executed in 1757: and
the defendant did not marry till 17G7. The
plaintiff lay by, and never made a requi.sition
to hiui "to luarry her;" but when he married
another, she brought her action of covenant.
It seems to me, to have been understood be-
tween the parties themselves, and even by
the plaintiff herself, in the same sense as we
understand it now.
If so, 'tis a restraint ujyin matrimony, and
is illegal, and stronger tlian the case of Wood-
house V. Shepley.
Lord MANSFIELD— I^t the rule for a new
trial be discharged: but the Judgment must be
arrested.
This rule was drawn up, for the plaintiff to
shew cause why the verdict should not be set
aside, and a new trial had between the par-
ties: and in case the court, upon hearing coun-
sel on both sides, should be of opinion to dis-
charge the rule, that then the defendant should
be at liberty to move In arrest of Judgment
Memorandnm— This judgment was alErmed la
the ejcheqaer-chamber, on 26th May, 1770.
458
ILLEGALITY OF OBJECT.
,?^
HERRESHOFF v. BOUTINEAU.
Supreme Court of Rhode Island. April 14,
1S90.
(19 Atl. 712, 17 R. I. 3.) ^^ ^f
On demurrer to bill.
Bill for injunction by Julian L. Herreshoff
against A. I3outineau. Defendant demurs
to the bill.
Amaaa JI. Eaton, for complainant. Al-
bert A. Baker, for respondent.
STINESS, J. The complainant, director of
a school of languages in Providence, era-
ployed the respondent to teach French from
January 7, 1889, to July 1, 1889. The con-
tract, in writing, provided that the respon-
dent would nut, during th e year after the end
of his service, "teach the"FrencTi or German
language, or any part thereof, nor aid to
teacii them, nor advertise to teach them, nor
be in any way connected with any person or
persons or institutions that teach them, in
the said state of Rhode Island." The re-
spondent's service ended July 1, 1889. after
which time he gave lessons in French, in
Providence. This suit js brought to restrain
him from so doing wilhin the time covered
by this contract. The respondent demurs to
Trie" bill, contending— i^trs^, that the con-
tract is void on the ground of public policy,
because it imposed a ge^ieraL, restraint
throughout the state; and, secondly, because
it is unreasonable. Is the contract void?
For a long time, beginning with the Year
Book-^, contracts limiting the exercise of one's
ordinary trade or calling met with much dis-
favor in the courts. Any limitation what-
ever was considered, in the first repoi'ted
case. (Y. B. fol. 5, 2 Hen. V. p. 26,) so far
contrary to law that a plaintilf suing thereon
was sworn at by the judge, and threatened
with a fine. But it was soon found that, to
some extent at least, such contracts help,
rather than harm, both public interests and
private welfaie; that they are necessary to
trade itself, in order to secure the sale, at
fair value, of an established business, by pro-
tecting it against the immediate competition
of the seller; also to enable one to learn a
trade or to get employment from another,
free from the risk of having the knowledge
and infiuence thus gained used to the em-
ployer's damage; to^ encourage investment in
business enterprises, under reasonable safe-
guards; and for other equally evident rea-
sons. Accordingly, exceptions to the early
doctrine were recognized from time to time,
until the leading case of Mitchel v. lleynolds,
1 P. Wras. 181, when the court established
the rule that a contract in restraint of trade,
upon consideration which shows it was rea-
sonable for the parties to enter into it, is
good, "that wherever a sufficient considera-
tion appears to mike it a proper and an use-
ful contract, and such as cannot be set aside
without injury to a fair contractor, it ought
to be maintained; but with this constant di-
ver-^ity, viz., where the restraint is general
not to exercise a trade throughout the king-
dom, and where it is limited to a particular
place; for the former of these must be void,
being of no benefit to either party, and only
oppressive." It is to be observed tliat tlie
contract in this case was limited in time to
five years, the term of the lease of a bake-
house, which the plaintiff had bought of the
defendant, and also limited in space to the
parish of St. Andrew's, Holborn. The case,
therefore, did not call for decision upon a
contract running throughout the kingdom.
Nevertheless it has since been commonly as-
sumed, as the settled rule of law, that such
a restraint is contrary to public policy, and
void. The principle upon which this rule is
put is that the public, have the right to de-
mand that every person should carry on his
trade freelj, both for the prevention of mon-
opoTy'and of unprofitable idleness. Theargu-
ni^nt is.Tf the restraint is general through-
out the realm, the public interest is interfered
with, since the party restrained can only re-
sort to his trade for a livelihood by expatria-
tion. I^it, if the restraint be local and par-
tial, the party and the public may still have
theLenelit ot his services in his own land, in
some other place. While this distinction has"
frequently been recognized, the cases in
which it has had the sanction of a decision
have been few. In Rousillon v. Rousillon,
14 Ch. Div. 351, Fry, J., mentions only two,
and these, he says, seem to have been de-
cided upon the ground of unreasonableness,
rather than upon the ground of universality.
In other words, the universality was held to
be unreasonable. This case, following Whit-
aker v. Howe, 3 Beav. 383; Jones v. Lees, 1
Hurl. & N. 189; and Leather Cloth Co. v.
Lorsont, L. R. 9 Eq. 345, — expressly holds
that there is no absolute rule that a covenant
in restraint of trade is void, if it is unlimited
in regard to space.
The respondent urges that Rousillon v.
Rousillon has been overruled by the recent
case of Davies v. Davies, 36 Ch. Div. 359;
but we do not think this is so. While Cot-
ton, L. J., showing great willingness, if not
anxiety, to overrule it, based his opinion upon
the ground that the restriction was void, be-
cause unlimited in space, Bowen, L. J., did
not put his decision on that ground, and
Fry, L. J., adhered to his opinion in Rousil-
lon V. Rousillon. That Davies v. Davies was
not rieceived in England as overruling the
last-named case, see note to this case in Law
Quarterly Review, vol. 4, p. 240. In view
of these cases, we do not think it is now the
rule in England that restraint throughout
the kingdom is absolutely void.
In this country the cases have been quite
similar to those in England. In the recent
case of Match Co. v. Itocber, 106 N. Y. 473,
13 N. E. Rep. 419, Andrews, J., says: "It
is worthy of notice that most, if not all, the
English cases which assert the doctrine that
all contracts in general restraint of trade are
void, were cases where the contract before
PUBLIC POLICY— RESTRAINT OF TRADE
459
thft f oiirt wiiH liini teJ ur PfiiLi al. Tlie same
is generally true of the American cases." In
tliat case tlie defeiidanL covenanted, for the
period of 99 ^ears, not to engapfc in the man-
ufacture or sale of friction matchee, wiihin
any of the slates or territories of the United
States, except Nevada and Montana. Tlie
com[)Ia;iiant soui^ht to restrain a breach of
Wiat covenant in New York, the respondent
clainiing that tlie covenant, being general as
to New Yoik, was void. But the court de-
clared it to be valid, in a strong and thorough
opinion, showing tlie history of litigation,
and the tendency of recent judicial decisions
upon this subject. Taking this case in connec-
tion witli Navigation Co. v.Winsor, 20 Wall.
64, we think it cannot be said here, any more
than in England, tiiat a restraint is absolutely
void, upon grounds of public policy, because
it extends througliout a state. Public policy
is a variable test. In the days of the early
Englisii cases, one who could not work at his
trade could hardly work at all. The avenues
to occupation were not as open nor as nu-
merous as now, and one rarely got out of the
path he started in. Contracting not to follow
one's trade was about the same as contract-
ing to be idle, or to go abroad for employ-
ment. But this is not so now. It is an
every-day occurrence to see men busy and
prosperous in other pursuits than those to
which they were trained in youth, as well as
to see them change places and occupations
without depriving themselves of the means
of livelihood, or the state of the benelit of
tlieir industry. It would therefore be absurd,
in the light of this common experience now,
to say that a man shuts himself up to idle-
ness or to expatriation, and thus injures the
public, when he agrees, for a sufficient con-
sideration, not to follow some one calling
within the limits of a particular state. There
is no expatriation in moving from one state
to another, and from such removals a state
would be likely to gain as many as it would
lose. We_jlQ__ not think p ublic poUcy-de-
ma nds aJTagree ment" of the kind in question
to be declared voicT,' aTT^'we do not think such
a rule is eslabllslicd upon authority. Wo
therefore hold that the agreement set out in
the bill is not void simply because it runs
throughout the state.
Is the contract unreasonable? Courts
should be slow to set aside as unreasonable a
restriction which has formed a part of the
consideration of a contract; yet, when it is a
restriction upon individual and common
rights, \\:iu&ti^auiy_ ojipresses one party >vjtli-
out lii-noilting the other, all courts agree that
it sliould nut be enforced. In determining
the rcasoiKibleuess of a contract, regard must
be hail to the uature_aud_citcumstance3 of
the transaction. For example, if one has
soKTllie good-will of a mercantile enterprise,
receiving pay for it, upon an agreement not
to engage in the same business in the same
state, for a certain time, such a stipulation
would stand upon quite a different footing
from the similar stipulation of a mere servant
in ;jn ordinary local business.. In many un-
dertakings, with modern methods of adver-
tising and facilities for ordering by t legraph
or mail, and sending goods i^y railroad or ex-
press, it would matter little whether one was
located at Providence or Boston or some other
place. In such cases a restriction embracing
the state, or even a larger territory, coiiM
not be said on that a-count to be unreason-
aide; for without it the seller might imme-
diately destroy the value of wliat he sold and
was paid for. B ut it is unreasonable to ask
courts to en forcelTgreat er restri ction than Is
needed ! So Tt lias been uniformly held that
restrictions which go too far are void. As
was said in tlie note of the Law Quarterly
Review, above cited: "Covenantees desiring
the maximum of jirotection have, no doubt,
a diflicult task. When they fail, it is com-
monly because, like the dog in the fable, they
grasp at too much, and so lose all."
Besides the matter of protection, the hard-
ship of the restriction _upon_tlie_paxl#_iiiiiLLliR
public should also be con sider ed. In the
present case, we think the restriction is un-
reasonable. Not as a rule of l aw b ecause i t
extends throughout the state, but because it
extends beyond any apparently necessary
jjrotection which the complainant migljt r^-.
sonably require, and thus, without benefiting^
liiin, it oppresses the respondent, and de-
prives people in other places oFtlie chance
which miglit be offered them to learn the
French and German languages of the respond-
ent. The complainant urges that he has
established a school in Providence, at great
expense, to teach languages by a new method,
where scholars come from all parts of the
state, and that by reason of the small extent
of the state, and the ease of passing to and
fro within it, such a restriction is reasonable
and necessary to keep teachers from setting
up similar schools, and enticing away his
scholars. All this may be true with refer-
ence to Providence and its vicinity. But
while, as is averred, many pupils from all
parts of the state may come to Providence, as
a center, for the same reason few would goto
other places. For exam[)le, a school in West-
erly or Newport would not be likely to draw
scholars from Providence, or places from
which Providence is more easily reached. In-
deed, the complainant says he otTered. after the
contract was made, and now olTers, to allow
the respondent to teach in Newport; thereby
admitting that the restriction is greater than
the necessity. The people of Newport, Wes-
terly, and other places have the right to pro-
vide for education in languages without
coming to Prt)viilence. It is hard to believe,
and the bill does not aver, that losing the tew,
if any, from some such place who might leave
the complainant, if the respondent were to
teach there, would seriously atTect the com-
plainant's school. Teaching in Providence,
or in any place from which the complainant
receives a considerable number of pupils,
might affect it. and a re-striction limited ac-
cordingly might be reasonable; but we think
461
ILLEGALITY OF OBJECT.
it is unreasonable to go further. The com-
plainant bought nothing of the respondent
whose value he now seeks to destroy. He
liired the latter as a teacher at no more than
fair wages. He needs and has the right only
to be secured against injury to his school,
from teachers who may entice away Ids
scholars, after leaving his employ. The con-
tract clearly goes beyond this. The demur-
rer must be sustained.
PUBLIC rOLICY— RESTRAINT OF TRADE.
461
DIAMOND MATCH CO. ▼. ROEBEH.1
4j? ^< (13 N. E. 419, 106 N. Y. 473.) ^^^
^ >, ^jDourt of Appeals of New York. October 4,
^/-Tj 1887.
^ L<
/'^''Kobt. Sowoll, for appellant Noah Davis,
for respondent.
ANDREWS, J. Two questions are pre-
sented—First, whether the covenaut of the
defendant contained in the bill of sale exe-
cuted by him to the Swift & Courtney &
Beecher Company on the twenty-seventh day
of August, 1880, that lie shall and will not at
any time or times within D'J years, directly
or indirectly engage in the manufacture or
sale of friction matches (excepting in the ca-
pacity of agent or employe of the said Swift
& Courtney «& Beecher (Company) within any
of the several states of the United States of
America, or In the territories thereof, or
within the District of Columbia, excepting
and reserving, however, the right to manu-
facture and sell friction matches in the state
of Nevad a, and in the territoi-y of ^I on tana,
is- void as being a covenant in i:e&tralnt~bf
trade; and, second, as to the right of the
|)laintig. under the s pecia l circumstances, to
tlie efj nital ;)le remedy bv injunction to^ en-
force the pej fo''"^""'^'^ pf tho covenant.
There is no real controversy as to the es-
sential facts, llie consideration of the cove-
nant was the purchase by the Swift «& Court-
ney & Beecher Company, a Connecticut cor-
poration, of the manufactory No. 528 West
Fiftieth street, in the city of New Yorli, be-
longing to the defendant, in which he had,
for several years prior to entering into the
covenant, carried on the business of manu-
facturing friction matches, and of the stock
and materials on hand, together with the
trade, trade-marks, and good-will of the busi-
. uess, for the aggregate stun (excluding a
mortgage of $5,000 on the property assumed
by the company) of $46,724.05, of which $13,-
000 was the price of the real estate. By the
preliminary agreement of July 27, 1880, $28,-
000 of the purchase price was to be paid in
the stock of the Swnft & Courtney & Beecher
Company. This was modified when the prop-
erty was transferred, August 27, 1880, by giv-
ing to the defendant the option to receive the
$28,000 in the notes of the company or in its
stock, the option to be exercised on or before
January 1, 18S1. The remainder of the pur-
chase price, $18,724.05, was paid down In
cash, and subsequently, March 1, ISSl, the
defendant accepted from the plaintiff, the
Diamond Match Company, in full payment of
the $28,000, the sum of $8,000 In cash and
notes, and $20,000 in the stock of the plain-
tiff; the plaintiff company having prior to
said payment purchased the property of the
Swift & Courtney & Beecher Company, and
become the assignee of the defendant's cove-
» Irrelevant parts omitted.
nant. It is admitted by the pleadings that In
August, 1880, (when the covenant In question
was made,) the Swift & Courtney & Beecher
Company' carried on the business of manu
facturiug friction matches in the states of
(Donnecticut Delaware, and Illinois, and of
selling the matches which it manufactured
"in the several stales and territories of the
United States, and in the District of Colum-
bia;" and the complaint alleges and the de-
fendant in his answer admits that he was at
the same time also engaged In the manufac-
ture of friction matches in the city of New
York, and in selling tliem in the same terri-
tory. Tlie proof tends to support the admis-
sion In the pleadings. It was shown that
the defendant employed traveling salesmen,
and that his matches were found in the
hands of dealers In 10 states. The Swift &
Courtney & Beecher Company also sent their
matches throu£hout_jLke_ country wherever
they could find a market. When the bargain
was consummated, on tlie twenty-seventh of
August, 1880, the defendant entered into the
employment of the Swift & Courtney &
Beecher Company, and remained in its em-
ployment until January, 1881, at a salary of
$1,500 a year. He then entered into the em-
ployment of the plaintiff, and remained with
it during the year 1881, at a salary of $2..jOO
a year, and from January 1, 1882, at a sal-
ary of $3,(}00 a year, when, a disagreement
arising as to the salary he should thereafter
receive, the plaintiff declining to pay a sal-
ary of more than $2,500 a year, the defend-
ant voluntarily left its service. Subsequent-
ly he became superintendent of a rival
match manufacturing company In New Jer-
sey, at a salary of $5,(X)0, and he also opened
a store in New York for the sale of matches
other than those manufactured by the plain-
tiff. --^
The contention by the defendant that the
plaintiff has no equitable remedy to enforce
the covenant, rests mainly on the fact that
contemporaneously with the executios of the
covenant of August 27, 18S0, the defendant
also executed to the Swift & Courtney &
Beecher Company a bond In the penalty of
$15,000, conditioned to pay that sum to the
company as liquidated damages in ca.se of a
breach of his covenant.
The defendant for his main defense relies
upon the ancient doctrine of the common law,
first definitely declared, so far as I can dis-
cover, by Chief Justice Parker (Lord Mac-
clesfield) in the leading case of Mitchel v.
Reynolds, 1 P. Wms. ISl, and which has been
repeated many times by judges In England
and America, that a bond in general restraint
of trade is void. There are several decisions
In the English courts of an earlier date, in
which the question of the validity of con-
tracts restraining the obligor from pursuing
his occupation within a particular locality was
considered. The cases are chronologically ar-
ranged and stated by Mr. Parsons in his work
on Contracts (volume 2, p. 748, note.) The ear-
462
ILLEGALITY OF OBJECT.
liest reported case, decided in tlie time of
Henry Y., was a suit on a bond given by the
defendant, a dyer, not to use bis craft within
a certain city for the space of half a year. The
judge before whom the case came indignantly
denounced the plaintiff for procuring such a
contract, and tm-ned him out of court. This
was followed by cases arising on contracts
of a similar character, restraining the obli-
gors from pursuing their trade within a cer-
tain place for a certain time, which appar-
ently presented the same question which had
been decided in the dyer's case, but the
courts sustained the contracts, and gave
judgment for the plaintiffs; and before the
case of Mitchel v. ReyBolds it had become
settled that an obligation of this character,
limited as to time and space, if reasonable
under the circumstance, and supported by a
good consideration, was valid. The case in
the Year Books went against aU contracts in
restraint of trade, whether limited or gen-
eral. The other cases prior to Mitchel v.
Reynolds sustained contracts for a particular
restraint, ujpon special grounds, and by in-
ference decided against the validity of gen-
eral restraints. The case of Mitchel v.
Reynolds was a case of partial restraint, and
the contract was sustained. It is worthy cf
notice that most, if not all, the English cases
which assert the doctrine that all contracts
in general restraint of trade are void, were
cases whe re the contract before the court
was limi'Eed' or paftlaT The same is general-
ly^tni^or'nierSmeflcan cases. The principal
cases in this state are of that character, and
in all of them the particular contract before
the court was sustained. Nobles v. Bates, 7
Cow. 307; Chappel v. Brockway, 21 Wend.
157; Dunlop v. Gregory, 10 N. Y. 241. In
Alger V. Thacher, 19 Pick. 51, the case was
one of general restraint, and the court, con-
struing the rule as inflexible that all con-
tracts in general restraint of trade are void,
gave judgment for the defendant. In Mit-
chel V. Reynolds the court, in assigning the
reason for the distinction between a contract
for the general restraint of trade and one
limited to a particular place, says: "for the
former of these must be void, being of no
benefit to either partj% and only oppressive;"
and later on, "because in a great many in-
stances they can be of no use to the obligee,
which holds in all cases of general restraint
throughout England; for what does it signify
to a tradesman in London what another does
in Newcastle, and surely it would be unrea-
sonable to fix a certain loss on one side
without any benefit to the other." He refers
to other reasons, viz., the mischief which
may arise (1) to the party by the loss by the
obligor of his livelihood and the substance
of his family, and (2) to the public by de-
priving it of a useful member, and by en-
abling corporations to gain control of the
trade of the kingdom. It is quite obvious
that some of these reasons are much less
forcible now than when Mitchel v. Reynolds
was decided. Steam and electricity have for
the purposes of trade and commerce almost
aniiihilated distance, and the whole world is
now a mart for the distribution of the prod-
ucts of industry. The great diffusion of
wealth, and the restless activity of mankind
striving to better their condition, have great-
ly enlarged the field of human enterprise, and
created a vast number of new industries,
which gives scope to ingenuity and employ-
ment for capital and labor. The laws no
longer favor the granting of exclusive priv-
ileges, and to a great extent business corpo-
rations are practically partnerships, and may
be organized by any persons who desire to
unite their capital or skill in business, leav-
ing a free field to all others who desire for
the same or similar purposes to clothe them-
selves with a corporate character. The ten-
dency of recent adjudications is marked in
the direction of relaxing the rigor of the doc-
trine that all contracts in general restraint
of trade are void, irrespective of special cir-
cumstances. Indeed, it has of late been de-
nied that a hard and fast rule of that kind
has ever been the law of England. Rousil-
lon V. Rousillon, 14 Ch. Div. 351. The law
has for centuries permitted contracts in par-
tial restraint of trade, when reasonable; and
in Horner v. Graves, 7 Bing. 735, Chief Jus-
tice Tindal considered a true test to be
"whether the restraint is such only as to
afford a fair protection to the interests of the
party in favor of whom it is given, and not
so large as to interfere with the interests of
the public." When the restraint is general,
but at the same time is co-extensive only j
I with the interest to be protected, and with
1 the benefit meant to be conferred, there
\ seems to be no good reason why, as betweei*
|the parties, the contract is not as reasonable 1
jas when the mterest is partial, and there is ^
la corresponding partial restraint. And is
there any real public interest which neces-
sarily condemns the one, and not the other?
It is an encouragement to industry and to
enterprise in building up a trade, that a man
shall be allowed to sell the good-will of the
business and the fruits of his industry up-
on the best terms he can obtain. If his busi-
ness extends over a continent, does public
policy forbid his accompanying the sale with
a stipulation for restraint co-extensive with
the business which he sells? If such a con-
tract is permitted, is the seller any more
likely to become a burden on the public than
a man who, having built up a local trade
only sells it, binding himself not to can-y it
on in the locality? Are the opportunities for
employment and for the exercise of useful
talents so shut up and hemmed in that the
public is likely to lose a useful member of
society in the one case, and not in the other?
Indeed, what public policy requires is often
a vague and ditticult inquiry. It is clear that
public policy and the interests of society
favor the utmost freedom of contract, with-
in the law, and require that business trans-
PUBLIC POLICY— RESTRAINT OF TRADE.
463
actions should not be trammeled by unnec-
essaiy restrictions. "If," said Sir George
Jessell in Prinliug Co. v. Sampson, L. K. 19
Eq. 402, "thero Is one thin;? more than any
other which public policy requires, it is that
men of full age and competent understand-
ing shall have the utmust liberty of con-
tracting, and that contracts, when entered in-
to freely and ^oluntarily, shall be held good,
and shall be enforced by courts of justice."
It has sometimes been suggested that the
doctrine that contracts In general restraint
of trade are void, is founded Ln part upon the
policy of preventing monopolies, which are op-
posed to the liberty of the subject, and the
granting of which by the king under claim of
roj'al prerogative led to conflicts memorable
in English history. But covenants of the
cliaracter of the one now In question operate
simply to provont tho pnvcnnntor from en-
,L;:iL;iii.L,' in the liiisiiuss which lie soils,. SO as
to^pruliH't IIk' iiiircti.'isir in the enjoyment of
what lio h;is iHiivii.i-, ,1. To the extent that
the contruct piwunts the vendor from carry-
ing on the particular trade, it deprives the
community of any benefit it might derive
from his entering into competition. But the
business is open to all others, and there is
little danger that the public will suffer harm
from lack of persons to engage in a profitable
industry. Such contracts do not create mo-
nopolies. T ixe^- coufer no special or exclu-
sive privileg e. If contracts in general restraint
of trade, where the trade is general, are void
as tending to monopolies, contracts In partial
restraint, where the trade is local, are sub-^
ject to the same objection, because they de-
prive the local community of the services of
the covenantor in the particular trade or call-
ing, and prevent his becoming a competitor
with the covenantee. We are not aware of
any rule of law which makes the motive of
the covenantee the test of the validity of such
a contract. On the contrarj', we suppose a
party may legally purchase the trade and busi-
ness of another for the very purpose of pre-
venting competition, and the validity of the
contract, if supported by a consideration, will
depend upon its reasonableness as between
the parties. Combinations between producers
to limit production, and to enhance prices,
are or may be unlawful, but they stand on a
different footing.
We cite some of the cases showing the ten-
dency of recent judicial opinion on the gener-
al subject: Whittaker v. Howe, 3 Beav. 3S3;
Jones v. Lees, 1 Hurl. & N. ISO; Rousillon v.
Rousillon, supra; Leather Co. v. Lorsont, L.
R. 9 Eq. 345; Collins v. Locke, 4 App. Cas.
G74; Steam Go. v. Winsor, 20 Wall. 04;
Morse, etc., Co. v. Morse. 103 Mass. 73. In
Whittaker v. Howe, a contract made by a
solicitor not to practice as a solicitor "in any
part of Great Britain," was held valid. In
Rousillon V. Rousillon a genenil contract not
to engage in the sale of champagne, without
limit as to space, was enforced as being under
tlie circumstances a reasonable contract In
Jones V. Lees, a covenant by the defendant,
a licensee under a patent, that he would not
during the license make or sell any slubbing
machines without the Invention of the plain-
tiff applied to them, was held valid. Bram-
well, J., said: "It is objected that the re-
straint extends to all England, but so does
the privilege." In Steam Co. v. Win.sor the
court enforced a covenant by the defendant
made on the purchase of a steam-ship, that
it should not be run or employed in the freight
or pas.seuger business upon any waters in the
state of California for the period of 10 years.
In the prescLt state of the authorities, we
think it cannot be .said that the early doctrine
that contracts in general restraint of trade are
void, without regard to circumstances, has
been abrogated. But It Is manifest that it
has been much weakened, and that the foun-
dation upon which it was originally placed
has, to a considerable extent at l&ast, by
the change of circumstances, been removed.
The covenant In the present_case Is paxtiai,
antf^not general. It is practically unlimit-
ed as to time, but this under the authorities
is not an objection, if the contract is oth-
erwise good. Ward v. Byrne, 5 Mees. & W.
548; Mumford v. Gething, 7 C. B. «N. S.) 317.
It Is limited as to space since it excepts the
state of Nevada and the territory of Montanii
from its operation, and therefore is a partial,
and not a general, restraint, unless, as claim-
ed by the defendant, the fact that the cove-
nant applies to the whole of the state of New
York constitutes a general restraint within
the authorities. In Chappel v. Brockway, su-
pra, Bronson, J., in stating the general doc-
trine as to contracts in restraint of trade, re-
marked that "contracts which go to the total
restraint of trade, as that a man wiU not pur-
sue his occupation anywhere in the state, are
void." The contract under consideration in
that case was one by which the defendant
agreed not to run or be interested in a line
of packet-boats on the canal between Roches-
ter and Buffalo. The attention of the court
was not called to the pomt whether a contract
was partial, which related to a business ex-
tending over the whole country, and which re-
strained the carrying on of business Ln the
state of New Yorlc. but excepted other states
from its operation. The remark rdied upon
was obiter, and in reason cannot be consid-
ered a decision upon the point suggested.
We are of the opinion that the contention of
the defendant is not sound in principle, and
should not be sustained. The boundaries of
the states are not those of trade and com-
merce, and business is restrained within no
such limit. The country as a whole is that
of which we are citizens, and our duty and
allegiance are due both to the state and na-
tion. Nor is it true as a general rule that a
business e.'^tablished here cannot extend be-
yond the state, or that it may not be succes.s-
fully established outside of the state. There
are trades and employments which from their
nature are localized, but this Is not true of
464
ILLEGALITY OF OBJECT.
manufaclTiring industries in general. We are
unwilling to say tliat the doctrine as to what
is a general restraint of trade depends upon
state lines, and we cannot say that the ex-
ception of Nevada and Montana was colorable
merely. The rule itself is arbitrary, and we
are not disposed to put such construction up-
on this contract as will make it a contract in
general restraint of trade, when upon its fact
it is only partial. The case of Steam Co. v.
"Winsor, supra, supports the view that a re-
straint is not necessarily general which em-
braces an entire state. In this case the de-
fendant entered Into the covenant as a con-
sideration in part of the purchase of his prop-
ertj- by the Swift «& Courtney & Beecher Com-
pany, presumably because he considered it for
his advantage to make the sale. He realized
a large sum in money, and on the completion
of the transaction became interested as a
stocliholder in the very business which he had
sold. We are of opinion that the covenant,
.being supported by a good considev.itiun, and
\constituting a partial and not a geueral i-e-
ktraint. and being, in view of the circumstan-
Ices disclosed, reasonable, la valid and not
void.
• •••«••
PUBLIC POLICY— RESTRAINT OF TRADE
Ik
CARLL Y. SNYDER et aL A^
465
^ t'^^ (-0 Atl 977.)
Court of Chancery of New Jeracf. July 13,
1893.
Suit by Charles W. Carll against John F.
Snyder and others for injunction.
Barton & Dawes, for complainant. Wil-
liam 'SI. Lanniujj, for defendants.
BIRD, V. C. On the filing of this bill, an
order was advised, directing the defendants
to show cause why an injunction should not
be granted restraining them from engaging
in and carrying on, within the limits of the
city of Trenton, a certain business called
the "galvanized iron cornice, tin, and sheet-
iron business." This application rests upon
an agreement, in writing, entered into be-
tween the complainant and the defendants,
in the month of January, 1S92, in and by
which, for th e consideration of $6^27 5. paid
to them^by tlTe complainant, the defendants
agreed to sell to him all their interest in the
business in which the complainant and the
defendants were then engaged as partners.
They als o agreed not to engage in or carr y
o'n su gE^usiness witnin the l iinits_^f jaid
cTEy! Such business included ~th e~said gal-
vafiized iron cornice, tin, and sheet-iron busi-
ness. The granting of the injunction is re-
sisted by the defendants upon two grounds:
First, because the proofs contained in the
affidavit annexedt o the bill are_sufficient;
and, second. ~that thenrestral^t exprcsied^in
the stipulation is unlawful, becaifse unrea-
sonabfeT'siffgejtjrs'ihaefl'nlte' as to ti,me._^
I am salisfiod thaf tlie'proof is sufficiently
clear and definite to justify the court in
awarding a perpetual injunction upon final
hearing, in case It should stand, as it now
does, unimpeached. I am equally well satis-
fied that the insistmcMit that the restraint is.
indefinite as to time, and therefore unrea-
sonable, ought not to prevail. I think a care-
ful study of the case of Mitchel v. Reynolds,
reported in 1 Smith. Load. Cas. (9th Ed.) GO-i
et seq., with the various annotations both
by the English and American editors, will
satisfy the mind as to the principle upon
which contracts of this nature, not only may
well be, but really ought to be, supported,
when indefinite as to time. ..^ he pu rchaser
of such good wjH m ay fairly be"s upiJO!Jt'd to
nm; chaser"nQt o' niY ^»^ ^'^ "^" "immediate
use or benefit, but for the iia^ of hi s r^(i^rsonaI
represents ti VPS. I n the same sense that he
purchases personal property or real estate.
I can see no just reason for his not being
able in the law to make such an investment
which shall pass to his assigns, executors, or
administrators. It cannot be said, when it
is limited to a particular district, that this
in any manner interferes with sound public
policy. It would not be a violation of the
rule which required such contracts to be in
harmony with the interests of the conimunl-
HOPK. 8BU CAS. CONT. — 30
ty at large in case the stipulation were to be
that the covenantee should not carry on the
trade in qutstion for 20 or DO years; and, if
not for t! at perioil of time, then certaijily it
would not be If the covenant extended to
a lifetime. With this in mind, when the ob-
ject of the prohibition put upon such con-
tracts, in view of a sound public policy, is
considered, it will be still more apparent
that this contract ought to be upheld. Sound
public policy requires that every individual
shall be employed. The coninnmily is en-
titled to his honest toil, whether manual,
mechanical, or purely intellectual. This be-
ing so, and such policy upholding contracts
for a definite period of time. It is not to be
presumed that the covenantee, in Any such
case, will spend the time, which the law re-
gards, (supposing that there must be a period
limited in the contract,) In idleness, or in in-
difference to the demands of such public
policy, waiting the time when the period fix-
ed by the contract shall have expired, in or-
der that he may engage once more in the
employment which he had agreed to aban-
don. In such matters the public welfare,
which the law regards, is an essential ele-
ment of consideration; but the interest of
the individual in his own welfare is infinitely
more efficacious and potential in securing
the public good, although that may not be
in his mind. He who has energy and in-
tegrity enough to establish a business which
is worthy of the name, and for which others
will bid a fair price, will not wait for the
protection of the paternal hand to make his
footprints in other quarters. In the follow-
ing eases there was no limit as to time, and
it will be observed that in many of them
resistance was made to their enforcement on
this account, but without success: Richard-
son V. Peacock, 26 N. J. Eq. 40, 2S N. J. Eq.
151, and 33 N. J. Eq. 597; Hitchcock v. Coker,
G Adol. & E. 439; Hastings v. WhiUey. 2
Exch. Gil; MaUan v. May, 11 Mees. & W.
653; Bowser v. Bliss, 7 Blackf. 344; Pierce
V. Fuller, 8 ISIass. 223; Palmer v. Stebbins,
3 Pick. 18'^; Match Co. v. Roeber, lOG N. Y.
473, 13 N. E. 419, 423.
Counsel for defendants urged that this was
not a case for a preliminary injunction, since
the right of the complainant had not been
established at law. I have given this branch
of the case not a little attention. It scorns
to me that. ij^a4)lain_brcac]j^nf rnntrniit-wmi
o ver jnstifv _,iL-p]:i.^li minar>' injunction, this is
such. The rights of the parties are thorough^
ly well defined by their agreement While
they might be more securely fixed by a judg-
ment at law, they could not be more certain-
ly defined,— more securely fixed by a judg-
ment at law because that is final, but that
could only rest upon the undisputed evidence
upon which this court is called upon to pro-
nounce its judgment preliminarily. A pre-
liminary injunction was awardeil In the case
of Richardson v. Peacock, supra, and, al-
466
ILLEGALITY OF OBJECT.
though that case went to the court of errors
and appeals, the action of this court in that
behalf was not questioned. 33 N. J. Eq.,
supra; Match Co. v. Roeber, supra. I think
the order to show cavise shoiild be made ab-
solute.
PUBLIC POLICY— RESTRAINT OF TRADE.
467
(Jh*^ TODE ot al. V. GKOSS. 3 / ^
(28 N. E. Ai\'.K IL'T X. V. -ISO.)
CJourt of Appeals of New York, Second Divi-
sion. Oct. 6, 1891.
Appeal by dek'iidant from a judgment
of tlie K^neral term of tlio HUpivnie lourt
In the second judicial dejjartiiieut, aflinii-
ing a judgment entered ui)on the decisi(ju
of the court after a trial without a jury.
Allinned.
Action for breach of covenant to recov-
er the sum of :jpr),000 aw Ktipnlated dani-
agos. On the 15th of October, 1SN4, the de-
fendant owned a clieetjo factory KJtiiate in
the town of Monroe, Orange county, com-
prising two parcels of land, witli the
buildings thereon, and a quantity of fixt-
ures, machinery, and tools connected
therewith. I'or some time prior, with
the assistance of her husltand, Conrad
Gross, her brother-in-law, August Gross,
and her father. John Hoffman, she had
been engaged in the business of manufnct-
uring cheeses at said factory ls." The use of the word
"penalty " under tlie circumstances is not
controlling. Baglev v Peddle, 16 N. Y.
4G9; Dakin v. Williams, 17 Wend. 44S,
affirmed 22 W'end. 201 ; Wooster v. Kisch,
2G Hun, 61. As there is no other question
that requires discussion, the judgment
should be athrmed. with costs. All con-
cur, except Ruowx J., not silting.
J
PUBLIC rOLlCY— UNLAWFUL COMBINATIONS— MONOPOLIES, ETC. 469
' MOEEIS RUN COAL CO. v. BARCLAY
/ COAL CO.
(G8 Pa. St. 173.)
Supreme Court of Pt'iinsylvania. March 15,
18 7 L
Error to court of couiiuou pleas, Bradford
county.
U. Mercur and E. Overton, Jr., for plaintiff
in error. J. Ui- Witt, for defendant in error.
AGNEW, J. This was an action on a bill
drawn upon one party in favor of another
party to a conti-act between five coal com-
panies, for a sum found due in the equaliza-
tion of prices under the contract. It raises a
question of great importance to the citizens
of this state and the state of New York,
where the contract was made, and was in
part to be executed, to wit, whether the con-
tract was illegal, as being contrary to the
statute of New York, or at common law, or
against public policy. The instrument bears
date the 15th day of February, 18GU. The
parties are five coal companies, incorporated
under the laws of Pennsylvania, to wit, the
Fall Brook Coal Company and Morris Run
Coal Company, of the Blossburg coal region;
and the Barclay Coal Company, Fall Creek
Bituminous Coal Company, and Towauda Coal
Company, of the Bai'clay coal region. By
the agreement, the market for the bituminous
coal from these two regions is divided among
these parties in certain proportions. A com-
mittee of three is appointed to take charge
and control of the business of all these com-
panies, to decide all questions by a certain
vote, and to appoint a general sales agent to
be stationed at Watkins, New York. Provi-
sion is made for the mining and delivery of
coal, their kinds, and for its sale through the
agent, subject, however, to this important re-
striction, that each party shall, at its own
costs and expense, deliver its proportion of
the different kinds of coal in the different
markets at such times and to such parties as
the committee shall from time to time direct.
The committee is authorized to adjust the
prices of coal In the diffeVeut markets and
the rates of freight, and also to enter into
such an agreement with the anthracite coal
companies as will promote the interest of
these parties. Then comes an important pro-
vi.siou that the companies may sell their coal
themselves, but only to the extent of their
proportion, and only at the prices adjusted by
the committee. It is also provided that the
general sales agent shall direct a suspojision
of shipment or deliveries of coal by any party
making sales or deliveries beyond its propor-
tion, and thereupon such party shall suspend
shipments until the committee shall direct a
resumption. Detailed reports of the business
are to be made by the companies to the gen-
eral sales agent at fixed and short Intervals,
and settlements are to be made by the com-
mittee monthly, prices averaged, and pay-
ments made by the companies in excess to
those in arrear; and finally, each partj- binds
itself not to cause or permit any coal to be
shipped or sold otherwise than as the same
has been agreed upon, and that all ruh.'.s and
regulations by the executive committee in
relation to the business shall be faithfully car-
ried out.
In regard to the relation these companies
hold to the public, the field of their uiinlug
operations, the markets they supply, the ex-
tent of their coal-fields, and the general sup-
ply of coal, the distinguished referee, Judge
Elwell, finds as follows: "The Barclay and
Blossburg coal-mines are the only coal mines
furnishing the kind of coal mined and ship-
ped by these companies, except the Cumljer-
land coal, which latter, in order to reach the
same markets, north, would have to be ship-
ped by tidewater. There was some of the
same kind of coal mined in McKean and Elk
counties, in this state, but In quantities so
small that it was not considered by these
companies as coming into competition with
them. The coal of the Blossburg and Bar-
clay regions is adapted to mechanical pur-
poses and for generating steam. Wherever
sold, it comes into competition with anthra-
cite coal, and also with the Cumberland coal
sent by tidewater to Troy, New York, to
which point both kinds of bituminous coal
are shipped."
During the season of ISGG these companies
made sales of coal at Oswego and Buffalo, to
parties who shipped to Chicago, Milwaukee,
and other Western cities. It there came into
competition to some extent with Pittsburgh
coal. The latter is used for making gas, but
the coal of these companies cannot be used
for that purpose.
The referee found that the statute of New
York is, "if two or more persons shall con-
spire," first, "to commit any offence;" sec-
ond, "to commit any act injurious to the pub-
lic health, to public morals, or to ti-ade or
commerce, they shall be deemed guilty of a
misdemeanor."
The referee found, as his conclusion upon
the whole case, that the contract was void
by the statute, and void at common law, as
against public policy. The restraint of the
contract upon trade and its injury to the pub-
lic is thus clearly set forth by the referee:
"These corporations [he says] represented al-
most the entire body of bituminous coal In
the northern part of the state. By combina-
tion between themselves, they had the power
to control the entire market in that district
And they did control it by a contract not to
ship and sell coal otherwise than as therein
providoil. And in order to destroy competi-
tion, they provided for an an-angomout with
dealers and shippers of anthracite coal. They
were thereby prohibited from selling under
prices to be fixed by a committee representing
each company. And they were obliged to
suspend shipments upon notice from an agent
that their allotted share of the market had
470
ILLEGALITY OP OBJECT.
been forwarded or sold. Instead of regulat-
ing the business by the natural laws of ti-ade,
to wit, those of demand and supply, these
companies entered into a league, by which
they could limit the supply below the demand
in order to enhance the price. Or if the sup-
ply was greater than the demand, they could
nevertheless compel the payment of the price
arbitrarily fixed by the joint committee. The
restraint on the trade in bituminous coal was
by this contract as wide and extensive as the
market for the article. It already embraced
the state of New York, and was intended and
no doubt did affect the market in the West-
em states. It is expressly stipulated that
the parties to this contract shall not be con-
sidered as partners. The agreement was
not entered into for the purpose of aggregat-
ing the capital of the several companies,
nor for greater facilities for the transaction
of their business, nor for the protection of
themselves by a reasonable restraint, as to a
limited time and space upon others who
might interfere with their business."
The plaintiff in error's reply to this vigor-
ous statement of the purpose of the contract
and its effect upon the public interest, al-
leges that its true object was to lessen ex-
penses, to advance the quality of the coal,
and to deliver it in the markets it was to
supply, in the best order, to the consumer.
This is denied by the defendant; but it
seems to us it is immaterial whether these
positions are sustained or not. Admitting
their correctness, it does not follow that these
advantages redeem the contract from the ob-
noxious effects so strikingly presented by the
referee. The important fact is that these
companies control this immense coal-field;
that it is the great source of supply of bitu-
minous coal to the state of New York and
large territories westward; that by this con-
tract they control the price of coal in this ex-
tensive market, and make it bring sums it
would not command if left to the natural
laws of trade; that it concerns an article of
prime necessity for many uses; that its oper-
ation is general in this large region, and af-
fects all who use coal as a fuel; and this is
accomplished by a combination of all the
companies engaged in this branch of business
In the large region where they operate. The
combination is wide in scope, general in its
Influence, and injurious in effects. These
being its features, the contract is against pub-
lic policy, illegal, and therefore void.
The illegality of contracts affecting public
trade appears in the books under many forms.
The most frequent Is that of contracts be-
tween individuals to restrain one of them
from performing a business or employment.
The subject was elaborately discussed in the
leading case of Mitchel v. Reynolds, 1 P.
Wms. 181, to be found also In 1 Smith, Lead.
Cas. 172. The distinction is there taken
which now marks the current of judicial de-
cision everywhere; that a restraint upon a
trade or employment which is general, is
void, being contrary to public interest, really
beneficial to neither party, and oppressive at
least to one. "General restraints (says Park-
er, J.) are all void, whether by bond, cove-
nant or promise, with or without considera-
tion, and whether it be of the party's own
trade or not;" citing Cro. Jac. ij'JG; 2 Bulst.
130; Allen, G7. To obtain, he says, the sole
exercise of any known ti-ade throughout Eng-
land, is a complete monopoly, and against the
policy of the law. A reason given is "the
great abuses these voluntary restraints are
liable to, as, for instance, from corporations,
who were perpetually laboring for exclusive
advantages in trade, and to reduce it into
as few hands as possible." In reference to
a contract not to trade in any part of Eng-
land, it is said, there is something more than
a presumption against it, because it never can
be useful to any man to restrain another
from trading in all places, though it may be
to restrain him from trading in some, unless
he intends a monopoly, which is a crime.
These principles have been sustained in many
cases which need not be cited, as most of
them will be found in Mr. Smith's note 1o
the leading case. The result of those in
which particular restraints upon trade have
been held to be valid between individuals is,
that the restraint must be partial only, the
consideration adequate and not colorable, and
the restriction reasonable. Upon the last req-
uisite, Tindal, C. J., remarks, in Horner v.
Graves, 7 Bing. 743: "We do not see how
a better test can be applied to the question
whether reasonable or not than by consider-
ing whether the restraint is such only as to
afford a fair protection as to the interests of
the party in favor of whom it is given, and
not so large as to interfere with the interests
of the public. Whatsoever restraint is larger
than the necessary protection of the party
can be of no benefit to either; it can only be
oppressive, and if oppressive, it is in the
eye of the law unreasonable. What is inju-
rious to the public interest is void on the
ground of public policy."
Many cases have been decided as to what
is a reasonable restriction and what is not,
and is thei*efore void, but two only may be
referred to as illustrations. In Mallan v.
May, 11 Mees. & W. G.53, a covenant not to
practice as a dentist in London, or in any of
the places in England or Scotland, where the
I)laintiff might have been practicing before
the expiration of the term of service with
them was held to be reasonable as to the lim-
it of London, but unreasonable and void as
to the remainder of the restriction. So, In
Green v. Price. 13 Mees. & W. 69.5, a cove-
nant not to follow the perfumery business in
the cities of London and Westminster, or
within the distance of GOO miles therefrom,
was good as to the cities, and void as to the
limit of 600 miles. See, also, Pierce v. Ful-
ler, 8 Mass. 223, and Chappel v. Brockway,
21 Wend. 158. An important principle stated
In these cases Is that, as to contracts for a
rUBLIC I'ULICY— UNLAWFUL CUMBINATIONS— MONOPOLIES, ETC. 471
limited restraint, the courts start witli a pre-
Bumptioa that they are Illegal unless shown to
have been made upon adequate consideration,
and upon cireuinsiaucos both reasonable and
useful. This presumption is a necessary con-
sequence of the general principle, that the
public Interest Is superior to private, and that
all restraints on trade are injurious to the
public in some degree. The general rule (said
Woodward, C. J.) Is that all restraints of
trade, If nothing more appear, are bad.
Keeler v. Taylor, 3 P. F. Smith, 4aS. That
case may be instanced as a strong illustra-
tion of the rule as to what is not a reastjna-
ble restriction; and the principles I have been
stating are recognized in the opinion. Keeler
agreed to instruct Taylor in the art of making
platform scales, and to employ him in that
business at $1.75 per day. Taylor engaged
to pay Keeler or his legal representatives $50
for each and every scale he should thereafter
make for any other person than Keeler, or
which should bo made by imparting liis in-
formation to others. This was held to be an
unreasonable restriction upon Taylor's labor,
and tlierefore void, as in restraint of ti-ade.
Testing the present contracts by these prin-
ciples, the restrictions laid upon the produc-
tion and price of coal cannot be sanctioned
as reasonable, in view of their intimate rela-
tion to the public interests. I'hc field of oper-
ation is too wide, and the influence too gen-
eral.
The effects produced on the public intei-ests
lead to the consideration of another feature
of great weight in determining the illegality
of the contract, to wit, the combination re-
sorted to by these five companies. Singly
each might have suspended deliveries and
sales of coal to suit its own interests, and
might have raised the price, even though this
might have been detrimental to the public in-
terest. There is a certain fi-oedom which
must be allowed to every one in the manage-
ment of his own affairs. When competition
is left free, individual error or foUy will gen-
erally find a correction in the conduct of
others. But here is a combination of all the
companies operating in the Blossburg and
Barclay mining regions, and controlhng their
entire productions. They have combined to
gether to govern the supply and the price or
coal in all the markets from the Hudson to
the Mississippi rivers, and from I\^uusyl-
vania to the lakes. This combination has a
power in its confederated form which no in-
dividual action can confer. The public inter-
est must succumb to it, for It has left no
competition free to correct its baleful in-
fluence. When the supply of coal is suspend-
ed, the demand for it becomes importunate,
and prices must rise. Or if the supply goes
forward, the price fixed by the confederates
must accompany it. The domestic hearth,
the furnaces of the iron master, and the tires
of the manufacturer, all feel the restraint,
while many dependent hands are paralyzed,
and himgry mouths are stinted. The influ-
ence of a lack of supply or a rise in the price
of an article of such prime necessity cannot
be measured. It permeates the entire mass
of the community, and leaves few of its mem-
bers untouched by its withering blight Such
a combination is more than a contract; it is
an offence. "I take it," said Gib.son, J., "a
combination Is criminal whenever the act to
be done has a necessary tendency to prejudice
tlie pul)lic or oppress individuals, by unjustly
subjecting them to the power of the confed-
erates, and giving effect to the purpose of the
latter, whether of extortion or of mischief."
Com. V. Carlisle, Brightly, N. P. 40. In all
such combinations, where the purpose is inju-
rious or unlawful, the gist of the offence ia
the conspiracy. Men can often do by the
combination of many what severally no one
could accomplish, and even what when done
by one would be innocent It was held In
Com. V. Eberle, 3 Sorg. & R. 9, that it was an
indictable conspiracy for a portion of a Ger-
man Lutheran congregation to combine and
agree together to prevent another portion of
the congregation, by force of arms, from us-
ing the English language in the worship of
God among the congregation. So a confed-
eracy to assist a female infant to escape from
her father's control, with a view to marry
her against his will, is Indictable as a con-
spiracy at common law, while it would have
been no criminal offence if one alone had in-
duced her to elope with and marry him.
Mifflin V. Commonwealth, 5 Watts & S. 4tJl.
One man or many may hiss an actor; but if
they conspire to do it, they may be punished.
Per Gibson, C. J., Hood v. Palm, 8 Pa. St
238; 2 Russ. Crimes, 5G6. And an action for
conspiracy to defame will be supported
though the words be not actionable if six)ken
by one. Hood v. Palm, supra. "Defama-
tion by the outcry of numbers," says Gibson,
C. J., "is as resistless as defamation by the
written act of an individual." And says
Coulter, J.: "The concentrated energj- of sev-
eral combined wills, operating simultaneou.sly
and by concert upon one individual, is dan-
gerous even to the cautious and circumspect
but when brought to bear upon the unwary
and unsa«;pecting, it is fatal." Twitchell v.
Com., 9 Pa. St. 211. There is a potency in
numbers when combined which the law can-
not overlook, where injury Is the consequenca
If the conspiracy be to commit a crime or un-
lawful act it is easy to determine its indict-
able character. It Is more difficult when the
act to be done or purpKise to be accomplished
Is innocent in Itself. Then the offence takes
Its hue from the motives, the means or the
consequences. If the motives of the confed-
erates be to oppress, the means they use un-
lawful, or the consequences to others injuri-
ous, their confederation will become a con-
spiracy. Instances are given In Com. v. Car-
lisle, Brightly, N. P. 40. Among those men-
tioned as criminal is a combination of em-
ployers to depress the wages of journeymen
below what they would be if there were no
47;
ILLEGALITY OF OBJECT.
resort to axtificial moans; and a combination
of the bakers of a town to hold up the article
of bread, and by means of the scarcity thus
produced to extort an exorbitant price for it
The latter instance is precisely parallel with
the present case. It is the effect of the act
upon the public which gives that case and
this its evil aspect as the result of confedera-
tion; for any baker might choose to hold up
his own bread, or coal operator his coal,
rather than to sell at ruling prices; but when
he destroys competition by a combination
with others, the public can buy of no one.
In Rex V. De Berenquetal, 3 Maule &: S. G7,
it was held to be a conspiracy to combine to
raise the public funds ou a particular day by
false rumors. "The purpose itself," said Lord
EUenborough, "is mischievous; it strikes at
the prices of a valuable commodity in the
market, and if it gives a fictitious price by
means of false rumors, it is a fraud levelled
against the public, for it is against all such
as may possibly have anything to do with
the funds on that particular day." Every
"comer," In the language of the day, whether
it be to affect the price of articles of com-
merce, such as breadstuffs, or the price of
vendible stocks,, when accomplished by con-
federation to raise or depress the price and
operate on the markets, is a conspiracy. The
ruin often spread abroad by these heartless
conspiracies is indescribable, frequently filling
the land with stp^rvation, poverty and woe.
Every association is criminal whose object is
to raise or depress the price of labor beyond
what it woul'l bring if it were left without
artificial aid or stimulus. Rex v. Byerdike,
1 :Maule & S. 179. In the case of such asso-
ciations the illegality consists most frequent-
ly in the means employed to carry out the ob-
ject. To fix a standai-d of pric^^s among men
in the same employment, as a fee bill, is not
In itself criminal, but may become so when
the parties resort to coercion, restraint or pen-
alties upon the employed or employers, or,
what is worse, to force of arms. If the
means be unlawful the combination is indict-
able. Cora. V. Hunt, 4 Mete. (Mass.) 111. A
conspiracy of journeymen of any trade or
handicraft to raise the wages by entering into
combination to coerce journeymen and master
workmen employed in the same branch of
industry to conform to rules adopted by such
combination for the purpose of regulating the
price of labor, and carrying such rules into
effect by overt acts, is indictable as a misde-
meanor. 3 Whart. Cr. Law, § 13G6, citing
People V. Fisher, 14 Wend. 9. Without multi-
plying examples, those are sufficient to illus-
trate the true aspect of the case before us,
and to show that a combination such as these
companies entered into to control the supply
and price of the Blossbm'g and Barclay re-
gions is illegal, and the contract therefore
void.
A second question is, whether the bill
drawn in this case by the general sales agent
on the Barclay Coal Company in favor of the
Morris Coal Company to equalize prices up-
on a settlement under the contract, is such an
independent cause of action as will support
the suit When a biU, note or bond is but an
instrument to execute an illegal contract, it
is tainted by the illegality, and cannot be re-
covered. The illegal consideration enters di-
rectly into the insti'ument, and is followed up
because the law will not permit Itself to be
violated by mere indirection. This is the
principle mentioned in the cases of Stears v.
Lashley, 6 Term R. 61; Swan v. Scott H
Serg. & R. 164; Stanton v. Allen, 5 Denio, 434;
Fisher v. Bridges, 3 El. & BL 642; Lestapies
V. Ingraham, 5 Pa. St 82. In the last case.
Gibson, C. J., says: "The solemnity of the
security would not preclude an inquiry into
the consideration of it had it been illegal;"
and in Swan v. Scott, Duncan, J., said of a
bond, the consideration of which grew out of
an illegal transaction, "there the illegal con-
sideration is the sole basis of the bond, and
there can be no recovery." In the present
case the bill itself refers directly to the equal-
ization account, and was given in immediate
execution of the contract This being the
case, it is distinguishable from Fackney v.
Reynous, 4 Burrows, 2065; Petrie v. Hannay,
3 Term R. 418; Warner v. Russell, 1 Bos. &
P. 295; Lestapies v. Ingraham, supra; Thom-
as V. Bracey, 10 Pa. St 1&4,— cases where the
action was not upon the illegal contract, or
upon an instrument in execution of it, but
was founded upon a new consideration. The
distinction is well stated by Judge Washing-
ton, in Toler v. Annstrong, 3 Wash. C. C. 297,
Fed. Cas. No. 14,078, affirmed in the United
States supreme court, 11 Wheat. 258. The
present case is free of difficulty, the money
represented by the bill arising directly upon
the contract to be paid by one party to an-
other party to the contract in execution of its
terms. The bill itself Ls therefore tainted by
the illegality, and no recovery can be had up-
on it
The judgment is therefore affirmed.
"public policy— unlawful combinations— monopolies, etc. 473
CENTRAL SHADE-ROLLER CO. v. CDSH-
MAN.
(9 N. E. 629, 143 Mass. 353.)
Supreme Judicial Court of MassachuBetts,
Sullolk. Jan. 11, 1887.
Bill in equity for au accouut, and for an
injunction to restrain the defendant from
violatinj^ an agreement made by him with
the plaintiff. Hearing in the supreme court
on the demurrer of the defendant, before
Devens, J., who sustained the demurrer, and
the plaintiff appealed. The facts are stated
in the opinion.
J. B. Warner, for plaintiff. Moorfield
Storey, for respondent.
ALLEN, J. The contract which Is sought
to be enforced by this bill (and the validity
of which is the only question presented by
the demurrer and argued by the parties) was
made between the plaintiff, of the first part,
and three manufacturers, under several pat-
ents of certain curtain fixtures linown as
"Wood Balance Shade-rollers," of the sec-
ond part, in pursuance of an arrangement
between the persons forming the party of
the second part that the plaintiff corporation
should be created for the purpose of becom-
ing a party to the combination, was to pre-
vent, or rather to regulate, competition be-
tween the parties to it in the sale of the par-
ticular commodity which they made. This is
a lawful purpose, but it is argued that the
means employed to carry it out— the creation
of the plaintiff corporation and the terms of
the contract with it— are against public poli-
cy and invalid. The fact that the parties to
the combination formed themselves into a
corporation of which they were the stock-
holders, that they might contract with it,
instead of witli each other, and carry out
their scheme through its agency, instead of
that of a pre-existing person, is obviously im-
material, and the only ground upon which it
can be argued that the contract is invalid
is the restraint it puts upon the parties to it
Does the contract impose a restraint as
to the manufacture on the sale of balance
and shade-rollers wliich is void as against
public policy? The contract certainly puts no
restraint upon the production of the com-
modity to which it relates. It puts no obli-
gation upon and offers no inducement to any
person to produce less than to the full extent
of his capacity. On the contrary, its appar-
ent purpose is, by mailing prices more uni-
form and regular, to stimulate and increase
production. The contract does not restrict
the sale of the commodity. It does not look
towards withholding a supply from the mar-
ket in order to enhance the price, as in Craft
V. McConoughy, 79 III. 346, and other cases
-cited by the defendant. On the contrary, the
contract intends that the parties shall make
sales, and gives them full power to do so;
the only restrictions being that sales not at
retail or for export shall be in the name of
the plaintitr, and reported to it, and the ac-
counts of them kept by it; and the provision
that, when any party shall establish an agen-
cy in any city or town for the sale of a roller
made exclusively foi» that purpose, no other
party shall take orders for the same roller
in the same place. To these restrictions,
clearly valid, there is added the one which
affords an argument for the invalidity of
the contract,— the restriction as to price.
That restriction is, in substance, that the
prices for rollers of the same grade, made
by different parties, shall be the same, and
shall be, according to a schedule contained
in the contract, subject to changes whick
may be made by the plaintiff upon recom-
mendation of three-fourths of its stockhold-
ers. In effect. It is an agreement between
three makers of a commodity that for three
years they will sell it at a uniform price
fixed at the outset, and to be changed only
by consent of a majority of them. The
agreement does not refer to an article of
prime necessity, nor to a staple of commerce,
nor to merchandise to be bought and sold in
the market, but to a particular curtain fix-
ture of the parties' own manufacture. It
does not loolc to affecting competition from
outside, — the parties have a monopoly by
their patents,— but only to restrict competi-
tion in price between themselves. Even if
such an agreement tends to raise the price
of the commodity, it is one which the parties
have a right to make. To hold otherwise
would be to impair the right of persons to
make contracts, and to put a price on the
products of their own industry'.
But we cannot assume that the purpose
and effect of the combination Is to unduly
raise the price of the commodity. A natural
purpose and a natural effect is to maintain
a fair and uniform price, and to prevent the
Injurious effects, both to producers and con-
sumers, of fluctuating prices caused by un-
due competitition. When it appears that the
combination is used to the public detriment,
a different question will be presented from
that now before us. The contract is appar-
ently beneficial to the parties to the cuiu-
bination, and not necessarily injurious to the
public, and we know of no authority or reason
for holding it to be invalid as in restraint
of ti-ade or against public policy. We have
not overlooked other provisions of the con-
tract, which were adverted to in the argu-
ment, but we do not find anything which ren-
ders it invalid, or calls for special consider-
ation.
In the opinion of a majority of the court,
the entry must be, demurrer overruled.
ILLEGALITY OF OBJECT.
GOOD V. DALAXD.
(24 N. E. 15, 121 N. Y. 1.)
■^ Court of Appeals of New York- April 15,
1890.
Appeal from supreme court, general term,
second department.
The case came befure the court on ap-
peal from the decision of the general term,
(6 N. Y. Supp. 204 J sustaining the trial
court in overruling the defendants' demur-
rer to the complaint. The demurrer was
based upon two grounds: (1) That there
was a misjoinder of causes of action; and
(21 that the complaint did not state facta
sutlicient to constitute a cause of action.
The complaint alleged, in substance, that
the Tucker & Carter Cordage Company,
being a member of the United States Cord-
age Manufacturing Association of the City
and County of New York, together with
other members of said association, autho-
rized William S. Daland, as trustee of said
association, to make a certain contract
with the plaintiff, John Good, which he
did. Said contract, which is set out in
full, recites that "the members "of said as-
sociation, in consideration of Good's
agreement to allow them the exclusive use
and sale on the western continent of cer-
.tain inventions patented by him, and to
warrant and protect them therein, agree
to pay him one-eighth of one cent per
pound on all manilla and sisal fibers
worked by them into cords, twine, and
rope, and sold by them in the United States,
during the time they shall have the exclu-
sive use and sale of said inventions; and,
further, that "the members of said asso-
ciation shall respectively submit to said
Good monthly sworn statements of the
quantities of such flbers so worked and
sold " by them during the preceding
month. Daland is then empowered by
Good to bring suit in his name, and at
his expense, for infringements of said pat-
ents; and agrees, on his part, that if said
association, (jr any of its n}embers, make
default in submitting a monthly sworn
statement, or in paying the amount due
as provided, he will bring suit against such
defaulting member for the collection there-
of, and, if he fail to do so, that Good may
bring suit in his name, and at his expense.
The complaint then alleges that the plain-
tiff has performed his agreements; but
that the defendant company made and
sold large quantities of such goods during
the months of March, April, May, June,
and July, 1887, of which it neglected to
make him any statement ; and that the de-
fendant Daland, though requested, neglect-
ed to bring suit against said company.
Plaintiff asks judgmentthatthe rights and
liabilities under the agreement may be de-
clared ; that an accounting maybe had
against the defendant company of fibers
so worked and sold; and for damages
against Daland for the amount of the
agreed percentage thereon, or for such
pc>rtion thereof as he could by due diligence
have collected.
Calvin Frost, for appellants. Albert C.
McDonald, for respondent.
PECKHAM.J. Although, perhaps, Da-
land was not a necessary party defendant
to this action upon the agreement stated
in tlie complaint, yet we think he was a
proper party. As trustee for the varioua
companies represented in the agreement,
it was by that instnjment made his duty
to bring an action against any defaul'Ling
member, and to use all diligence in prose-
cuting it. The plaintiff claims that the
corporation defendant was a defaulting
member, and that it was the duty of Da-
land to prosecute it, but that he, upon re-
quest to bring an action for that purpose,
refused so to do. If the corporation de-
fendant were in fact as described in the
agreement, a defaulting member, it was
the duty of Daland to bring suit against
it; and his refusal was a breach of that
duty and of his agreement. It is true the
agreement provided that, in case Daland
failed to bring such suit, the plaintiff
might, at his election, bring it in Daland's
name, and at his expense. But the plain-
tiff was notconfined to bringingan action
in Daland's name. He could bring it in
his own name, and join Daland as defend-
ant, and charge him with costs, because
of this breach of duty. In this light, there
is no misjoinder of causes of action. No
cause of action is stated against Daland
for daniagTS in consequence of his failure
to bring suit to collect the percentage due
from the corporation defendant, when re-
quested by the plaintiff. The damages
which the plaintiff had sustained by such
failure cannot be ascertained from any al-
legation in the complaint; nor can it b6
said, as matter of mw arising from tne
facts stated, that plaintiff sustained any
damage. As there are not facts enough
alleged upon which a good cause of action
against Daland could be predicated on
the ground of his failure to prosecute, it
cannot be ui-ged that the two causes of
action have been iinproiwrly united.
As other grounds for sustaining the de-
murrer, the defendants say that the unin-
corporated association of which the cor-
poration defendant is alleged to be a mem-
ber is a partnership, and theagreement al-
leged is ultra vires the corporation. It is
also stated that the agreement is void as
in restraint of trade, and as tending to cre-
ate a monopoly. The complaint gives no
information as to the character of the asso-
ciation known as the "United States Cord-
age Manufacturing Association of the City
of New York. " There is nothing in that
pleading which shows that the associa-
tion is a partnership, and no inference to
that effect can be drawn from the allega-
tions which are therein set forth. All that
can be learned from the complaint is that
certain corporations have, for some pur-
pose which is undiscovered, associated
them-selves in some way together under a
certain name. This is no allegation either
of partnarship, or, indeed, of any illegal
action whatever. The agreement which
is there set up is one which each member
of the association authorized theindividu-
al defendant to make, as trustee for the
association, with the plaintiff. That agree-
ment shows no partnership, but is an
agreement that each meml)erof the associ-
ation will pay the plaintiff a certain price
PUBLIC POLICY— UNLAWFUL COMBINATIONS— MONOPOLIES, ETC.
47:
on each pcMind of man ilia and sisal fibers
worked by such member and offered for
sale. No member is responsible for any-
tliinf? but its own worlc; and its liai)ility
is based entirely upon the amount wcjrked
and offered for sale by itself. There is no
community of profits orof losses [)rovided
for in the agreement; and no one member
has any rif;ht to speak for or to bind any
other memberin regard to thesubject-mat-
ter of the agreement. We can see nothing
of a partnership nature set forth in the
complaint.
The last objection urged, viz., that the
contract set forth in the complaint is in re-
straint of trade, cannot be supijcn^led. It
appears from thecomplaint that thei)lain-
tiff had in vented and patented certain ma-
chinery, and parts thereof, for dressing
fibers, spinning yarns, and making twines
and cordage from manilla and sisal fibers,
for wliich he had obtained letters patent
from the Uniteil States. He agreed with
the defendant Daland, as trustee for and
representing the association already re-
ferred to, that he would, in North and
South America, confine the sale and use of
all his methods and macliinery, then or
thereafter to be invented and patented, to
the members of the association ; who, on
tlieir part, covenanted through Daland to
pay plaintiff a certain sum on all manilla
and sisal fibers worked by them intocords,
twine, or rope, and offered forsale and use
in theUnited States, and sold or delivered,
during the time they should have the sole
and exclusive use of the machinery above
mentioned, provided they were fully pro-
tected in such use by the plaintiff. It is
true the members of tlie association do not
agree to themselves use this machinery at
all ; nor do they agree as to any speciaJ
amount of twine or rope which shall by
each or all of them be offered forsale; and
the practical result is to take the machin-
ery out of use, unless these memlDers them-
selves use or permit others to use it. This
is a peculiarity of a patented article. The
owner does not possess his patent upon
the condition that he shall make or vend
the article patented, or allow others t(j do
so for a fair and reasonable compensation.
When he has once secured his patent, he
may, if he choose, remain absolutely quiet,
and not only neglect and refuse to make
the patented article, but he may likewise
refuse to permit any one else to do so on
any terms. If the patent he a valuable
one, self-interest may be relied upon as a
strong enough motiveto induce the owner
either to take himself, or to permit others
to take, some steps towards introducing
his invention into use. ilow fur it will go
depends upon the (jwner; and his right to
decide that question is not in the least cir-
cumscribed f)y tlie interests of tin,' public
in obtaining such machinery or invention,
or a right to its use. He may keep such
right himself, or make the machint-ry or
manufacture the patented article alone, or
ho may permit others to share such right
with him, or he may allow them an ex-
clusive right, and retain none himself. It
all follows and is founded ujjon the abso-
lute and exclusive right which theownerof
the patent has in the article patented.
Having such right, he must ijlainiy be per-
mitted to sell to another the right itself,
or to agree with him that he; will permit
none other than such person to use it.
That person need not agree to make the
patented article, orto sell it. It is a ques-
tion solely for the parties interested. This
right is necessary, in order that the owner
of the patent shall have the largest mea.s-
ure of prcjtection under it. Considerations
which might obtain if the agreement were
In i-egard to other articles cannot be of
any weight in the decision of a question
arising upon an agreement as to patented
articles. If an owner of a patent should
choose to refuse to manufacture the article
covered by his patent, could any one else
claim such right? His simple neglect or
refusal to manufacture would stand as a
conclusive reason why it was not manu-
factured. An owner might sometimes
make more money by not manufacturing
than by doing so; but of that question he
is the sole and absolute judge.
There is nothing in this agreement
which can be regarded as illegal, within
the principles above stated, which are not
in the least new or unknown. The plain-
tiff probably thought his inventions would
prove sufficiently remunerative to him if
he sold the exclusive right to use them to
the members of this association even
though they did not themselves agree to
use the same in the process of the manu-
facture of cord or twine. His compensa-
tion was measured b\' the amount of cord
and twine worked, sold, and delivered by
these members ; and whether they should
use his inventions, or keep them uueni-
pl03-ed, was not thereafter a question of
interest to him, so long as the agreement
remained in force. We think the demur-
rers were not well taken. The judgment
overruling them should be alTirmed. with
.costs, with leave to answer on payment
of costs. All concur.
i76 4
ILLEGALITY OF OBJECT.
i/v<-
'^..
-y
MORE et al. v. BENNETT et al.
(29 N. E. SS8. 140 111. 69.)
Supreme Court of Illinois. Jan. IS, 1892.
Appeal from appellate court, first dis-
trict.
Action by R. Wilson More and others
against J. L. Bennett and others for dam-
ajies for violation of rules of an associa-
tion of wliich both parties were members.
Judgment sustaining a demurrer to the
complaint was atlirmed by the appellate
court. Plaintiff appeals. Affirmed.
The other facts fully uppear in the fol-
lowing statement by BAILEY, J. :
This was a suit in assumpsit, brought by
R. Wilson More and others, composing the
firm of More & Dundas, against J. L. Ben-
nett and others, composing th'« firm of
Bennett. Edwards &, Pettit, to recover
damages resulting from an alleged bi'each
of certain rules and by-laws of the Chica-
go Law Stenographers' Association, of
which both the plaintiffs and defendants
are members. To the declaration, which
consists of two special counts, a demurrer
was sustained, and, the plaintiffs electing
to abide bj' their declaration, judgment
was rendered in favor of the defendants
for costs. Said judgment has been af-
firmed bj' the appellate court on appenl,
and the present appeal is from said judg-
m?nt of affirmance.
The first count of the declaration alleges
In substance, that the plaintiffs and de-
fendants are all stenographers by profes-
sion, and have, from the time of its organ-
ization, been members of said association,
an association formed to promote the
interest of its m?mbersby all proper meth-
ods, and to establish and maintain rea-
sonable, proper, and uniform rates for
stenographic work done by the members
of said association, and to secure to
judges, lawyers, and citizens of Chicago
efficient, competent, and reliable law re-
porting, at reasonable, proper, and uni-
form rates, and to furnish them with the
means of obtaining efficient and compe-
tent reporters, and to increase the effi-
ciency of law reporting in the county of
Cook. That, in accordance with its con-
stitution and by-laws, said association
had adopted a schedule of rates which
were and are fair and reasonable, and had
for more than 15 years prior to the organ-
ization of said association been the estab-
lished rates among law stenographers,
and had been and are still recognized as
reasonable and established rates by judges
and members of the legal fraternity, and
by law stenographers of the city of Chi-
cago, there having been during said time
no material variation from said rates
among law stenographers, said rates be-
ing less than those established in certain
other large cities of the United States for
the same class of work. Said count fur-
ther alleges that, in consideration of like
promises and agreements on the part of
the plaintiffs, and like payment of the
membership fee of $.5 by each of the plain-
tiffs to become members of said associa-
tion, the defendants promised and agreed
with the plaintiffs that they would be
bound in their charges for work by the
schedule of rates adopted by said associa-
tion. That the defendants might cut rates
against pei-sons not members of said asso-
ciation, provided such cutting was in good
faith and the rights of the plaintiffs were
respected. That in no case where the de-
fendants had anV knowledge of the exist-
ence of a contract or reporting arrange-
ment between the plaintiffs and any law-
yer, corporation, or any other person
would they attempt, by underbidding the
rate established by said association or
other unfair means, to secure such report-
ing. That the rates established by said
association were as follows: Not less
than 20 cents per folio for single copy ; not
less tlian 25 cents per folio for two copies;
not less than 28 cents per folio for three
copies; and the rate of .$10 per day for
attendance, with the qualification that,
if a reporter was engaged by one of the
I)arties to a suit, he or any other reporter,
knowing of such engagement, might take
the other side of the case for $5 per day;
but in no case should the reporter make
any offer to any attorney after being
informed by such attorney that he had en-
gaged a reporter. That while said asso-
ciation was in existence, and the plaintiffs
and defendants were members thereof, the
plaintiffs entered into a contract or re-
porting arrangement with the county of
Cook, by which said county employed the
plaintiffs to report the proceedings and
furnish transcripts thereof, as said county
should require, in a certain celebrated
murder case then pending in the criminal
court of Cook county, to-wit, the case of
People V. O'SuUivan and others, known
as the"Cronin Trial," said employment
by said county being on the following
terms, to-wit, .flO per day for attendance,
and the regular rates for transcripts as
established by said association, the plain-
tiffs agreeing with said connty to do said
work, if the county should demand it, at as
low a rateasany reputableand established
stenographer or firm of stenographers
should in good faith bid for said work.
That the plaintiffs entered upon the per-
formance of said contract, and were en-
gaged in reporting theproceedings at said
trial at said regular rates, yet the defend-
ants, well knowing the premises, and the
aforesaid contract or reporting arrange-
ment between the plaintiffs and said coun-
ty, and after the plaintiffs had been en-
gaged on said case for, to-wit, seven
weeks, and ata time when defendants well
knew that the plaintiff had performed the
most unprofitable part of said contract,
and not regarding their said promise so
made to the plaintiffs, did not respect the
rights of the plaintiffs and the schedule
rates so adopted by said association, and
the fact that they knew that there was a
reporting arrangement or contract be-
tween the plaintiffs and said county, but
solicited said county, and endeavored to
secure from said county, by underbidding
and other unfair means, employment as
law stenographers to report and fnrnish
transcripts of the proceedings at said trial,
and made a certain t>id to said county, by
which thrty to indulge in the contrary, he
1 Davirlson v. Graham, 2 Ohio St. LSI; Gra-
ham V. Davis, 4 Ohio St. 362: Swindler v. Hil-
liard, 2 Ilich. 286; Baker v. Brinson, 9 Rich.
201; Steele v. Townsend, 37 Ala. 247.
rUBLIC rOLICY— LIMITING LIAIULITY FOIl NEGLIGENCE.
4S7
socks to put off the essential duties of his em-
ployment. And to assert that he may do so
seems almost a contradiction in tenns.
Now, to what avail does the law attach
these essential duties to the employment of
the common carrier, if they may be waived
in respect to his agents and servants, espe-
ciaJly where the carrier Ls an artiUeial being.
Incapable of acting except by agont.s and serv-
ants? It Is carefulness and diligence in per-
forming the service which the law demands,
not an abstract carefulness and diligence in
proprietors and stockholders who take no ac-
tive part In the business. To admit such a
distinction in the law of common carriers, as
the business is now carried on, would be sub-
versive of the very object of the law.
It is a favorite argument in the cases which
favor the extension of the carrier's right to
contract for exemption from liability, that
men must be permitted to make their own
agreements, and that it is no concern of the
public on what terms an individual chooses to
have his goods carried. Thus, In Dorr v.
New Jersey Steam Nav. Co., 11 N. Y. 485, the
^•ourt sums up its judgment thus: "To say the
parties have not a right to make their own
contract, and to limit the precise extent of
rlieir own respective risks and liabilities, in a
matter no way affecting the public morals, or
conflicting with the public interests, would, in
my judgment, be an unwarrantable restric-
tion upon trade and commerce, and a most
palpable invasion of personal right."
Is it true that the public interest Is not af-
fected by individual contracts of the kind re-
ferred to? Is not the whole business com-
mimity affected by holding such contracts
valid? If held valid, the advantageous posi-
tion of the companies exercising the business
of common carriers is such that it places it
in their power to change the law of common
carriers in effect, by introducing new rules of
obligation.
The carrier and his customer do not stand
on a footing of equality. The latter is only
one individual of a million. He cannot at-
ford to higgle or stand out and seek redress
in the courts. His business will not admit
such a course. He prefers, rather, to accept
any bill of lading, or sign any paper the car-
rier presents; often, indeed, without knowing
what the one or the other contains. In most
cases, he has no alternative but to do this, or
Ml)audon hLs business. In the present case,
for example, the freight agent of the company
testified that though they made forty or fifty
contracts every week like that under consid-
eration, and had carried on the business for
years, no other arrangement than this was
ever made with any drover. And the reason
is obvious enough. — if they did not accept thi.s,
they must pay tariff, rates. These rates were
70 cents a hundred pounds for cai-rylug from
Buffalo to Albany, and each horned animal
was rated at 2000 pounds, making a charge of
J14 for every animal carried, instead of the
usual charge of $70 for a car-load; being a
difference of three to one. Of course no drov-
er could afford to pay such tariff rates. This
fact is adverted to for the purpose of illus-
trating how completely in the power of the
railroad companies parties are; and how nec-
essary it is to stand firmly by those principles
of law by which the public interests are pro-
tected.
If the customer had any real freedom of
choice, if he had a reasonable and practica-
ble alternative, and if the employment of the
carrier were not a public one, charging him
with the duty of accommodating the public In
the line of his employment; then, if the cus-
tomer chose to assume the risk of negligence,
it could with more reason be said to be his
private affair, and no concern of the pub-
lic. But the condition of things is entirely
different, and especially so under the mudified
arrangements which the carrying trade has
assumed. The business is mostly concentrat-
ed in a few powerful corporations, whoso po-
sition in the body politic enables them to con-
trol it They do, in fact, control it, and impose
such conditions upon travel and transporta-
tion as they see fit, which the public is com-
pelled to accept. These circumstances fur-
nish an additional argument, if any were
needed, to show tliat the conditions imposed
by common carriers ought not to be adverse
(to say the least) to the dictates of public pol-
icy and morality. The status and relative po-
sition of the parties render any such condi-
tions void. Contracts of common carriers,
like those of persons occupying a fiduciary
character, giving them a position In which
they can take undue advantage of the per-
sons with whom they contract, must rest up-
on their fairness and reasonableness. It was
for the reason that the limitations of liability
first introduced by common carriers into their
notices and bills of lading were just and rea-
sonable, that the courts sustained them. It
was just and reasonable that they should not
be re.«5ponsibIe for losses happening by ;heer
accident, or dangers of navigation that no
human skill or vigilance could guard against;
it was just and reasonable that they should
not be chargeable for money or other valua-
ble articles liable to be stolen or damaged, un-
less apprised of their character or value; it
was just and reasonable that they should not
be responsible for articles liable to rapid de-
cay, or for live animals liable to get unruly
from fright and to injure themselves in that
state, when such articles or live animals be-
came injured without their fault or negli-
gence. And when any of these just and rea-
sonable excuses were incorporated into notices
or special contracts assented to by their cus-
tomers, the law might well give effect to them
without the violation of any important prin-
ciple, altliough modifying the strict rules of
responsibilitj' imposed by the common law.
The improved state of society and the better
administration of the laws, had diminished
the opportunities of collusion and bad faith
on the part of the carriei", and rendered less
48S
ILLEGALITY OF OBJECT.
Imperative the application of the iron rule,
that he must be responsible at all events.
Hence, the exemptions refen-ed to were deem-
ed reasonable and proper to be allowed. But
the proposition to allow a public carrier to
abandon altogether his obligations to the pub-
lic, and to stipulate for exemptions that are
unreasonable and improper, amounting to an
abdication of the essential duties of his em-
ployment, would never have been entertained
by the sages of the law.
Hence, as before remarked, we regard the
English statute called the railway and canal
trafliic act, passed in 1S54, which declared
Toid all notices and conditions made by com-
mon carriers except such as the judge, at
the trial, or the courts should hold just and
reasonable, as substantially a return to the
ndes of the common law. It would have
been more strictly so, perhaps, had the rea-
sonableness of the contract been referred to
the law instead of the individual judges. The
decisions made for more than half a centui-y
before the courts commenced the abnormal
•course which led to the necessity of that stat-
ute, giving effect to certain classes of ex-
emptions stipulated for by the carrier, may be
regarded as authorities on the question as to
what exemptions are just and reasonable. So
the decisions of our own courts are entitled to
Uke effect when not made under the falla-
cious notion that every special contract im-
posed by the common carrier on his customers
must be carried into effect, for the simple rea-
son that it was entered into, without regard
to the character of the contract and the rela-
tive situation of the parties.
Conceding, therefore, that special contracts,
made by common carriers with their custom-
ers, limiting their liability, are good and valid
BO far as they are just and reasonable; to the
extent, for example, of excusing them for all
losses happening by accident, without any
negligence or fraud on their part; when they
ask to go still further, and to be excused for
negligence — an excuse so repugnant to the law
of their foundation and to the public good —
they have no longer any plea of justice or rea-
son to snpport such a stipulation, but the
contrary. And then, the inequality of the par-
ties, the compulsion under which the custom-
er is placed, and the obligations of the carrier
to the public, operate with full force to divest
the transaction of validity.
On this subject the remarks of Chief Justice
Redfield, in his recent collection of American
Railway Cases, seem to us eminently just.
"It being clearly established, then," saj's he,
■"that common carriers have public duties
which they are bound to discharge with im-
partiality, we must conclude that they cannot,
either by notices or special contracts, release
themselves from the perfonnance of these
public duties, even by the consent of those
who employ them; for all extortion is done
by the apparent consent of the victim. A
public officer or servant, who has a monopoly
in his department, has no j ust right to impose
onerous and unreasonable conditions upon
those who are compelled to employ him."
And his conclusion is, that notwithstanding
some exceptional decisions, the law of to-day
stands substantially as follows: "L That the
exemption claimed by carriers must be rea-
sonable and just, otherwise it will be regarded
as extorted from the owners of the goods by
duress of circumstances, and therefore not
binding. 2. That every attempt of carriers,
by general notices or special contract, to ex-
cuse themselves from responsibility for losses
or damages resulting in any degree from their
own want of care and faithfulness, is against
that good faith which the law requires as the
basis of all contracts or employnienta, and,
therefore, based upon principles aiid a policy
which the law will not uphold."
The defendants endeavor to make a distinc-
tion between gross and ordinary negligence,
and insist that the judge ought to have char-
ged that the contract was at least effective
for excusing the latter.
We have already adverted to the tendency
of judicial opinion adverse to the distinction
between gross and ordinary neghgence.
Strictly speaking, these expressions are indic-
ative rather of the degree of care and dili-
gence which is due from a party and- which
he fails to perform, than of the amount of in-
attention, carelessness, or stupidity which he
exhibits. If very little care is due from him,
and he fails to bestow that little, it is called
gross negligence. If very great care is due,
and he fails to come up to the mark required,
it is called slight negligence. And if ordinary
care is due, such as a prudent man would ex-
ercise in his own affairs, failure to bestow
that amount of care is called ordinaiy neg-
ligence. In each case, the negligence, what-
ever epithet we give it, is failure to bestow
the care and skill which the situation de-
mands; and hence it is more strictly accurate
perhaps to call it simply "negligence." And
this seems to be the tendency of modem au-
thorities. If they mean more than this, and
seek to abolish the distinction of degrees of
care, skill, and diligence required in the per-
formance of various duties and the fullilment
of various contracts, we think they go too
far; since the requirement of different de-
grees of care in different situations is too firm-
ly settled and fixed in the law to be ignored
or changed. The compilers of the Frencli
Civil Code imdertook to abolish these distinc-
tions by enacting that "every act whatever of
man that causes damage to another, obliges
him by whose fault it happened to repair it."
(Article 1382.) Toullier, in his commentary en
the Code, regards tliis as a happy thought,
and a return to the law of nature. Volume 6,
p. 243. But such an iron rule is too regardless
of the foundation principles of human duty,
and must often operate with great severity
and injustice.
In the case before us, the law, in the ab-
sence of special contract, fixes the degree of
care and diligence due from the railroad com-
PUBLIC POLICY— LIMITING LIABILITY FUR XEGLICEXCE.
489
pany to the persons carried on Its trains. A
failure to exercise such care and diligence is
negligence. It needs uo epithet properly and
legally to describe it If it is against the pol-
icy of the law to allow stipulations wliich
wiU relieve the company from the exercise of
that care and diligence, or which, in other
words, will excuse them for negligence in the
performance of that duty, tlien the company
remains liable for such negligence. The ques-
tion whether the company was guilty of negli-
gence in this case, which caused the injury
sustained by the plaintiff, was fairly left to
the jury. It was unnecessary to tell them
whether, In the language of law writers, sucli
negligence would be called gross or ordinary.
The conclusions to which we have come
are-
First. That a common carrier cannot law-
fully stipulate for exemption from responsi-
bility when such exemption is not just and
reasonable In the eye of the law.
Secondly. That It Is not just and reasonable
in the eye of the law for a common carrier to
stipulate for exemption from responsibility
for the negligence of himself or his servants.
Thirdly. That these rules apply both to car-
riers of goods and carriers of passengers for
hire, and with special force to the latter.
Fourthly. That a drover travelling on a
pass, such as was given in this case, for the
purpose of taking care of lils stock on the
train, is a passenger for hire.
These conclusions decide the present case,
and require a judgment of afTirniMnr-e. We
purposely abstain from expressing any opinion
as to what would have been the result of our
judgment had we considered the plaintiff a
free passenger instead of a passenger for hire.
Judgment affirmed-
3
490 ILLEGALITY OF OBJECT.
^ SULLTTAN v. HERGAN. ' -^ ^
(20 AU. 232. 17 R. I. 109.)
b^
Supreme Court of Rhode Island- July 12,
1S90.
On petition for a new trial.
Patrick ,7. Galvin, for plaintiff. Francis
B. Peckham and William P. SbeSeld, Jr.,
for defendant.
MATTESON, J. This is an action of as-
sumpsit to recover moneys c\aimed. to be
due to the plaintiff from the defendant un-
der a contract of hiring. It appears from
the evidence reported that the plaintiff
was emplo.yod by the defendant in h[&
Busmess of a dealer in groceries and liq-
uors, as bar-tender and clerk, from No-
vember 27,' ISSG, until April 19, 1SS8, and
was to receive as wages $1S per month un-
til May 1, 1SS7, and $25 per month there-
after. At the trial the defendant set up as
a defense the illegality of the contract, the
sale of liquors being prohibited by law
when the contract of hiring was made,
and during the period of the plaintiff's em-
ployment. The jury returned a verdict for
the plaintiff for $187.84. The defendant
moves for a new trial, on the ground that
the verdict is against the law and the evi-
dence.
The principle that if a contract or prom-
ise be founded on a legal and an illegal
consideration, and the illegal considera-
tion cannot be separated from the legal,
and rejected, the illegality of part vitiates
the whole, so that no action can be main-
tained upon it as a contract, is conceded;
but it is suggested that, inasmuch as the
contract is illegal and void, and is there-
fore, as it is contended, a nullity, the plain-
tiff is entitled to recover for that portion
of his services performed as clerk in the
grocery part of the business, upon a quan-
tum meruit, what such services were rea-
sonably worth, and therefore that the ver-
dict may be supported. We do not, how-
ever, agree with the suggestion. Although
a contract thus infected with illegality is
regarded in law as a nullity, in so farthat
tlie law will not lend its aid to enforce it,
it is nevertheless not treated as if it had
no existence in fact. The illegality ex-
tends to every part of the transaction, and
it cannot, therefore, be made the founda-
tion of an assumpsit. Both parties are in
pari delicto, and the law will, for that rea-
son, not aid either party to enforce the
contract, but leaves them where it finds
them. It may sometimes happen, in con-
sefjuence, that a defendant may gain a pe-
cuniary benefit by reason of his wrong-do-
ing, or of that in which he has equally
participated ; but it is not for the sake of
the defendant that his objection to Ids
owu illegal contract is sustained. In Hol-
man v. Johnson, Cowp. 341, 343, Lord
Mansfield remarks: "The objection that
a contract is immoral or illegal as between
plaintiff and defendant sounds at all
times very ill in the mouth of the defend-
ant. It is not for his sake, however, that
the objection is ever allowed, but it is
founded in general principles of policy,
whicli thedcfendant has theadvantage of,
contrarj" to the real justice, as betweea
him and the plaintiff, by accident, if I may
BO say. The principle of public policy- is
this: ex dolo malo nan oritur actio. No
court will^lend its aid to a man who founds
his cause of aclion upon an immoraror an
illegal act. If, from the plaintiff's own
BtatrTrg'^t"5thcrwise, the cause of action
appears to arise ex turpi causa, or from
tlie transgression of a positive law of this
country, there the court says he has no
right to be assisted. It is upon that
ground the court goes, not for the sake of
the defendant, but because it will not
lend its aid to such a plaintiff. So if the
plaintiff and defendant were to change
sides, and the defendant was to bring his
action against the plaintiff, the latter
would then have the advantage of it, for
where both are equally in fault, potior
est conditio defendentis. " Bixby v. Moor,
51 N. H. 402, is a case strongly in point.
In that case it appears that the defendant
kept a billiard saloon and a bar for the
sale of liquor. The liquor traffic was ille-
gal, 'i'he plaintiff was employed by the
defendants to work generally in and about
the saloon. There was no special agree-
ment that he should or should not sell
liquor, or what particular duty he should
do. But he was accustomed to work gen-
erally in and about the saloon, taking care
of the room, building fires, taking care of
the billiard tables, tending bar, and wait-
ing upon customers, and, in the absence of
the defendant, ho had the whole charge of
the business. In assumpsit, upon a quan-
tum meruit, it was held that he could not
recover compensation for any portion of
his services. The court say: "In the pres-
ent case, however, there is room for but
one conclusion, namely, that the agree-
ment was that the plaintiff at the defend-
ant's request should perform all the serv-
ices which he did in fact pei-form,and that
the defendants, in consideration of the
promise to perform (and the performance
of) all those services, the illegal as well as
the legal, should pay the plaintiff the rea-
sonable worth of the entire services. In
other words, the plaintiff made an entire
promise to perform both classes of serv-
ices. This entire promise (and the per-
formance thereof) formed an entire con-
sideration for the defendant's promise to
pay, and a part of this indi\isible consid-
eration was illegal." In the present case
the sums which the defendant promised
to pay formed one entire consideration
for all the services to be rendered by the
plaintiff, both those in tending the bar,
which were illegal, and those as clerk in
the grocery store, which wei-e legal. Had
one price been agreed upon for the
services as bar-keeper, and another as
clerk in the grocery business, so that it
would have been possible to separate the
legal from the illegal part of the transac-
tion, an action could have been maintained
for the services which were legal ; but, as
it is, the defendant's promise being entire,
and the consideration for it being partly
legal and partly illegal and indivisible,
both parties are to be regarded as equally
in fault, and the law will lend its aid to
neither. Petition granted.
(y SHAW V. carpe:
EFFECT OF ILLKGALITY.
491
PEXTER et aL
(54 Vt. 155.)
Supremo Court of Vcrniont. Montpclier. Oct,
1881.
ROYCE.CIi.J. riiiscauHe was hearrl iij).
fill the roptirt of a spfcial tDastcr .ipiioin t-
6(3 to ascertain and report tlie amount
due on the niortgajje described iu the
petition.
It ajjpears from the report that on the
24tii day of July. 1S72. one Benj. D. Peter-
son, who was then enf;aKedin the business
of bottling cider, soda, and mineral wa-
ters, at the city of I>uiiiniL;ton, sold the
good will of the business and all his stock,
—tools, bottles, machinery, and fixtures,
then in u.se by him in said business, as
specified in certain inventories, which were
signed by the said Peterson, to the defend-
ant Carpenter.
Upon said inventories the varions arti-
cles sold were separately carried out, with
a separate price fon the^i'^imd that
the [)ortion of the [)i-opei'Ly above enunjer-
ated was illegally sold. It has somewhere
been said, that tiic dcclarinw such a secu-
rity void was to be reyar8, $6.72, and .f J.lV), being for th(^ ale,
l)orter, and alcohol illegally sold, — as of
the date of the note. If the amount due
cannot be ascertained from the computa-
tions made by the master, it is to be as-
certained in such manner as the court may
direct.
Dissenting opinion was delivered by
IIOS8, J. I am unable to concur in the
decision of the court in this case. On the
facts found by the master, it may be
question*able whether the sale of the *1G6
cider was illogal, within the exact
terms and language of the statute. How-
ever, when a man establishes a busine.sis
ft)r the bottling and sale of cider and oth-
er fermented drinks, in a city, like I'.urling-
ton, has a wareliouse for storing, nianu-
lacturing, bottling, and vending the same,
and keeps an ottice, he so far makes the
placeof liisbusiness a placeof publicresort
for the sale of cider, although the vending
is carried on by solicitation of orders at
the hoiisi's and [)laces of business of his
customers, and the delivery of the bottled
cider is at the latter places, that in my
opinion, it comes within the spirit and
seop" of the statute, and without any
forced consti-uctiut I do not i-egard this jxjint very mate-
rial ; and should not on tliis gi(jund have
placed my dissent upon ree(jril. A i)art of
the consideration of tiie note being idegal,
the note is void and no action can be
maintained thereon to enforce its collec-
tion. To the cases cited by the court, in
the main of)inion, may be added CobI) v.
Cowdery et al., 40 Vt. L'.j; I'cjwen v. I'lick,
2S Vt. ;JU8. In Cobb v. Cowdery, supra,
the distinction is tjiken between a consid-
eration, in part voiij, and a consideration
in part illegal. The note failing, what is
there left for the mortgage to stand ui)on ?
The moi'tgage is but an incident to the
debt it secures. On the autlujrities cited
by the court in support of its decision, at
well as all the reasoning, partial illegality
of consideration avoids all securities. The
note was a security, or evidence of the
ilebt, of a higher nature than the original
contract. Ttie latter was merged in the
note. The n(Jte in suit, and all the notes
secured by the mortgage, were tainted by
illegal consideration entering into them.
Each note being an entire contract of it-
self, no division of the legal from the ille-
gal, part of the consideration could be
effected. Courts established for the en-
forcement of law, will not give aid, or
countena!ice to anything illegal; nor,
where the illegal is commingled with the
legal, will they aid in separating, or purg-
ing the former from the latter. Their
proper function is to establish and enforce
the legal a!ul to condemn and i)unish the
illegal. Where a part, however email — of
the consideration of an entire contract is
illegal, the whole cfintract is tainted, and
courts will not compel its performance
Collins V. r.lantern. 2 Wils. :!41, is a
*167 leading case on *lhis suliject. iu
which, the Lord Chief Justice Wil-
MOT uses the (juaint but foi'cible, and often
quoted language: "You shall not stii)U-
late for iniquity ; all writers upon our law
agree in this,n«j polluted hand shall touch
the pure fountains of justice: whoever is a
party to an unlawful contract, if he hath
onc3 paid the money stipulated to be paid
in pursuance thereof, he shall not have the
hell) of a court to fetch it back again; you
shall not have a right of action when you
come into a court of justice in this unclean
manner to recover it back. Frocul! O
prociil estf, profuui. " The mortgage is an
entire contract. Its consideration was
the notes, the payment of which was
therein secured; every one of which was
tainted with an illegal consideration in
part. It was not given to secure the per-
formance by Carjienter of his contract
with Peterson, of .Inly 24, 1S72. by which
he purchased his business and stock in
trade, but was given solely to secure the
payment of the notes which were executed
in jiayment of that purchase. If the ac-
tion were upon the notes, it is conceded
that no recovery could be had; because
every one of them is tainted with illegal
494
ILLEGALITY OF OBJECT.
coDsideration. The illegal could not be
separated from the le«al portion of the
consideration; and an enforcement of the
collection of the notes would be the en-
forcement of an illegal contract. How
does it differ when the mortgage, which is
but an incident to the notes, is allowed
to be foreclosed? Is it not an enforce-
ment of an illegal contract? To foreclose
the mortgage for the legal part of the con-
sidenition must not the illegal portion oe
ascertained and rejected; which the mu-
joritj' hold could not be done, if the action
were upon the notes? What is the fore-
closure but an action upon the notes de-
scribed in its condition? and to ascertain
the legal part of the consideration of the
mortgage must not the notes be treated
as divisible? I can see no other means of
separating the legal from the illegal part
of its consideration. In Vinton v. King,
4 Alien, odi.'. Metcalf, J., says: "In an ac-
tion brought by a mortgagee against his
mortgagor, on a mortgage given to secure
payment of a note, the defendant may
show the same matters in defence (the
Statute of Limitations excepted, 19 Pick.
o3"i,) which he raigb.t show in defence of an
action on the note." I am not aware
of any exception to the rule *thus *168
stated, nor of any case to the con-
trary. I am not unaware, that Mr. Jones
1 his work on mortgages, s. G20, says:
"The mortgage maybe upheld for such
part of the consideration as was free from
the taint of illegality when the considera-
tion is made up of several distinct transac-
tions, some of which are legal, and others
are not, and the one can be separated with
certainty from the other." The cases he
cites support this doctrine. Feldman v.
Gambel, 26 N. J. Eq.494; Williams v. Fitz-
hugh, 37 N. Y. 444; McCraney v. Alden, 46
Barb. (N. Y.) '272; Cook v. Barnes, 36 N.
Y. 520.
It may well be admitted that a mort-
gage, given to secure the payment of sev-
eral notes, or debts, a part of which arose
out of wholly legal transactions, and a
part of which were tainted with illegali-
ty, could be enforced to compel the pay-
ment of the former alone. In such a case
the orator would not have to show in
evidence, norrely upon anything illegal, in
maintaining his suit. In the laniruage of
GiBBS, Ch. J., in Simpson v. Bloss, 7
Taunt. 246, in speaking of Faikney v. liey
nous, 4 Burr. 206!), and Petrie v. Hannay,
3 Term Kep. 418: "The ground of their de-
cision was, that the plaintiffs required no
aid from the illegal transaction to estab-
lish their case. " This, as I understand, is
the test most frequently applied in this
class of cases. If the plaintiff can show a
good cause of action, independent of, and
without bringing into the case anything
illegal, either by way of proof or other-
wise, he may maintain his action therufor.
If, on the other hand, he derives any aid
from the illegal part of the transaction,
by being obliged to show it to make out
the legal part, or otherwise, he must fail.
The court will not allow the unclean
thing within the temple of justice. In the
foreclosure of his mortgage the orator
was bound to show in proof his notes,
every one of which was tainted with ille-
gality; and for that reason the notes all
fall, and the mortgage given to secure
them alone, falls with them. This point
my brethren have not deemed worthy of
their attention, nor alluded to. But if I
am in error on this point, 1 cannot concur
with my associates in holding that the
original contract is divisible. It is in writ-
ing, and amenable to the rules of evidence
which forbid varying, lessening or enlarg-
ing such contracts by parol tes-
*169 "timony. It is in the following lan-
guage: "In consideration of three
thousand three hundred thirty-seven dol-
lars and eighty -one cents received of John
W. Carpenter, I, Benjamin D. Peterson do
hereby sell, transfer and assign unto said
Carpenter the good will of a certain busi-
ness for bottling cider, soda and mineral
waters, now carried on by me in Burling-
ton, together with all the stock, tools,
bottles, machinery and fixtures, now in
use in said business, as specified in certain
inventories hereto attached, and I agree
to deliver to said Carpenter the gross
amount of property described in said in-
ventories, which said inventories are
signed with my name." Qlie inventories
are referred to and madea part of the con-
tract toshow what personal property was
to pass with the good will of the business.
They ai-e not referred to for the price of
the several articles included. The master
has found that the aggregate of the prices
there carried out, did not amount to the
sum named in the contract, and for which
the notes were given, into .«116. Hence, if
the prices carried out on the inventories
are to be regarded as a part of the ccm-
tract, they do not show that the articles
were severally sold for the price set against
them, but the reverse. The contract is to
be construed as a whole. Thus construed,
it is an entire, indivisible contract. It was
a sale of a business, as a going concern,
including the good will, stock in trade,
machinery and fixtures. It is not to be in-
ferred, or intended, that Peterson would
have sold the good will of the businass,
without selling the stock in trade, ma-
chinery and fixtures, nor that Carpenter
would have purchased the latter without
the former. It was not the sale of the
good will as one separate transaction, of
each bottle, barrel, and fixture as another
separate transaction, and so divisible.
But one consideration is named or paid ;
and but one thing is sold— the business,
including the stock, &c., and good will as
a going concern. As said by Dkvens, J.,
in Young & Conant Mfg. Co. v. Wakefield,
121 Mass. 91: "If but one consideration is
paid for all the articles sold, so that it is
not possible to determine the amount of
consideration paid for each, the contract
is entire. Miner v. Bradley, 22 Pick, 457.
So if the purchase is of goods as a partic-
ular lot, even if the price is to be ascer-
tained by the number of pounds in
♦170 the lot, or num*ber of barrels in
which the goods are packed, the con-
tract is also held entire, Clark v. Baker,
5 Met. 452; Morse v. Brackett, 98 Mass.
205; Mansfield v. Trigg, 113 Mass. 350,
While in the cases last referred to, it could
be ascertained what was the amount of
consideration paid foreach pound, or bar-
EFFECT OF ILLEGALITY.
495
rcl, yet the articles having been sold as
one lot,- it wan to lie inforred that one
pound or barrel would not have been sold
nnh'KS all were sold." On these principles,
if tiio mortgage can be upheld as as(;curity
■tov the payment of the consideration of
the original c(jntract, as well as the notes
given in payment therefor, the considera-
tion of tlie contract is ontiri?, indivisible,
and tainted with illegality, and for that
reason void, and shoulJ not bo enforced.
To my mind, tiie cases principally relied
UF)on by my associates are not authority
for their decision. In Kohinsonv. IMand, 2
Uurr. 1077, tiie transactions were separate
and distinct. One was horrowing three
hundred pounds; the other losing three
huudi'cd sev(nit3'-t\vo j^ounds in gaming.
While the bill of exchangi; given for the
two was held to be void because tainted
Avith in part illegal consideration, the
plaintiff was allowed to recover on the
count for money loaned, for the three hun-
dred i)ound8 borrowed by the intestate.
The plaintiff could establish this part of
his claim without the aid of the other, in
anj' manner. The remark of Justice Deni-
eoN, made in that case: "There is a dis-
tinction between the contract and the se-
curity'. If part of thecontract arises ui)on
ag(Jod consideration, and partnponabad
one, it is divisible. But it is otherwise as
to thesccurity ; thatbeingentire, is badfor
the whole, " is not to be pressed beyond the
case in hand, and given universal applica-
tion. His language, as to its being "divis-
ible," was true as applied to the facts of
that case. The law vs^as more accurately
expressed by Mr. Justice Wilmot: "Here
are two sums demanded, which are blend-
ed togetherin oncbill of exchange; but are
divisible in their nature, as to the money
lent. The cases that have been cited are
In point, that it is recoverable." Carleton
V. Woods, 28 N. H. 290, comes nearer to
supporting the decision of the majority of
the court, but in my judgment, is distin-
guishable from thecase at bar. It is there
distinctly held that if the contra'jt is en-
tire, and part of the consideration is
illegjil, *the contract is void; but •171
that where an entire stock of goods
is sold, at one and the same time, but
each article for a separate and distinct
agreed value, the contract is not t(j be re-
garded as entire and indivisible. The sale
was for cost and freight, and Woons, J.,
says: "We are unalde to see how this case
differs frf)rn the case of a sale by a mer-
chant of varioii.s goods to his customers,
at one and the same time, for soiiarate
values, stated at the time, wliicli, when
computed, would, of course, auKjunt to a
certain sum in the aggregate." It was on
this theory tliat the court held, that, al-
though the notes could not be main-
tained, because a part of the considera-
tion was for spirituous liquors illegally
Kold.j'et.on the general cf)unts in assump-
sit, for goodssold aJid delivered, the plain-
tiff might recover for the goods sold, as
the court held, independentl3' of, and as
transactions separate from, the purchase
of the liquors. To say the least, this wa.s
pressing the doctrine of divisibility of a
contract to the extreme verge, and I ara
unwilling to go further. There may have
been more in the case than appears in the
report, justifying the holding of the court.
On the facte stated, I think the authority
is clearly against that contract being di-
visible. That case, however, lacks the ele-
ment of being the sale of a going business,
including the good will, and does not
appear to have been reduced to writing.
In my judgment, the decree of the Court
of Chancery should be reversed, and the
cause remanded, with a mandate to enter
a decree dismissing the bill with costs.
TAFT, J., desires me to say that he con-
curs in the views I have expressed, except
in regard to the sale of the cider being ille-
gal, on which point he concurs in the
views of the majority of the court.
496
ILLEGALITY OF OBJECT.
h
^
EOYS V. JOHNSON et al.
(7 Gray, 162.)
^
Snpreme Judicial Court of Massachusetts.
Middlesex. October Term, 1856.
L. J. Fletcher, for plaintiff. W. S. Gard-
ner, for defendants.
METCALF, J. It is agreed by the parties
that the plaintiff performed for the defend-
ants the services for which he now seeks
to recover payment and that they have not
paid him. It is for them, therefore, to show
that he is not entitled to recover. This, in
our opinion, Is not shown by the statement
of facts submitted to us. It appears, indeed,
from that statement, that the defendants,
without a license, set up theatrical exhibi-
tions, in which they employed the plaintiff
as an actor; and it follows, of course, that
they thereby violated the law, and subject-
ed themselves to punishment But it does
not appear that the plaintiff knew that they
had no license. Unless he knew that tact,
Ee Ts in ho legal fault; and where a defend-,
ant is the only person who has violated the!
law, he cannot be allowed to take advantage
of his own wrong, to defeat the rights of aj
plaintiff who is innocent.
In the cases cited by the defendants' coun-
sel, where defences were sustained because
the claims were void for illegality, the par-
ties suing knew, or were bound to know, that
they or the parties sued were violating or
undertaking to violate the law. And this
distinguishes all those cases, as well in law
as in common justice, from the case at bar;
as was held in Bloxsome v. Williams, 3 Barn.
& C. 232. In that case, a suit was brought
to recover damages for breach of a warranty
of a horse sold to the plaintiff on Sunday.
The defence was, that the contract was void
within St. 29 Car. 2, which prohibits worldly
labor, business or work, in the exercise of
one's ordinary calling. It appeared that the
defendant's ordinary calling was that of a
dealer in. horses, and therefore, that ho had
violated the statute by selling and warrant-
ing the horse; but that dealing m horses
was not the plaintiff's ordinary calling, and
therefore, that he had^-not violated the stat-
ute by purchasing the horse and taking a
warranty. But, as the case states, there was
no evidence that the plaintiff knew that the
defendant was by trade a horsedealer at the
time the bargain was entered into. The
court held that the defendant wns answer-
able for the breach of his contract. Bayley,
J., said. "The deftn lant was the person of-
fending, within the meaning of the statute,
by exercising his ordinary calling on the
Sunday. He might be thereby deprived of
any right to sue upon a contract so illegally
made; and upon the same principle any oth-
er person knowingly aiding him in a breach
of the law, by becoming a party to such a
contract, with the knowledge that it was il-
legal, could not sue upon it. But in this
case, the fact that the defendant was a deal-
er in horses was not known to the plaintiff.
He, therefore, has not knowingly concurred
in aiding the defendant to offend the law;
and that being so, it is not competent to the
defendant to set up his own breach of the
law as an answer to this action." See re-
port of the same case in 5 DowL & R. 82,
and a recognition of the doctrine of that case
in Fennell v. Ridler, 8 Dowl. & R. 207, 208,
and 5 Barn. & C. 409, and also in Bcgbie v.
Levy, 1 Tyrw. 131, and 1 Cromp. & J. 183.
It is to be noticed that in the case of Blox-
some V. Williams, it was said that it was
not known to the plaintiff that the defend-
ant was a dealer in horses, because there was
no evidence that he knew it. In the present
case, we treat the plaintiff as not knowing
that the defendant had no license, because
the statement of facts does not show that
he knew it.
It is ignQEapce of a fact, an d not -oi the
law, that saves the plaintiff's case. He un-
doubtedly knew, or was bound to know, that
unlicensed theatrical exhibitions were im-
lawful; but he was not bound to know that
the defendants had no license and were do-
ing unlawful acts.
.Tndgiiif>nt for the plaintiff.
/ '2-7
TRACT r. TALMAGE
EFFECT OF ILLEGALITY.
3^K
497
rf.3^
^ -STATE OF INDIANA v. LEAVI
<^^^ (14 n; Y. lOli.) J y^-d[ future day, which was spfciliod; each cer
Court of Apponls of Now York. IS.jO,
The North Aiuericau Trust and Banking
Company was, in July, 18^8, or;;anizcd iu
the city of New York as a corporaiiou, under
and by virtue of the act "to authorize the
business of baiUuuf,'." Laws 1838, p. 245.
By the articles of association the capital was
$2,0uu,0U0, with power to increase the same
to $r)0,(JlaintifT"s condition or situation, then the
plaintiff shall fffcover; and ijt is astonishing
that the reports do not distinguish between
violations of .tlie_ime-soi-t AQd.ihe, o.ther."
Two things are to be noted in this extract:
That a distinction is taken between contracts
lualum prohibitum merely, and such as are
immoral or contrary to general principles of
policy; and also that stress is laid upon the
fact that the law contravened in this case
was intended to protect one party from op-
50 i
ILLEGALITY OF OBJECT.
pression by ibe other. Tlie tirst is a valid
distinction, wliicli runs through all the sub-
sequent cases— the last was merely incidental
to the particular case, and not essential to
the principle. The first cases in which the
principle was applied, were naturally those
where the statute violated was intended for
the special protection of the pai-ty seeking
relief from some undue advantage taken by
the other, because those were the cases in
which the injustice of applying the same
rule to both parties would be the most glar-
ing. But it soon came to be seen tliat the
principle was equally applicable to cases
where the law infringed was intended for
the protection of the public in general.
The case of Jaques v. Golightly, 2 W. Bl.
1073, was an action brought to recover back
money paid for insuring lottery tickets. The
defendant kept an office for insurance con-
trary to the statute 14 Geo. III. c. 76. It
was urged that the plaintiff being particeps
criminis, and having knowingly transgressed
a public law, was not entitled to relief; but
the action was sustained by the unanimous
opinion of the court. Blackstone, J., said:
"These lottery acts differ from the stock-
jobbing act of 7 Geo. II. e. 8, because there
both parties are made criminal and subject
to penalties." The rule here suggested for
determining whether the parties are in pari
delicto, seems reasonable and just. There
are, undoubtedly, other cases in which the
parties are not equally guilty; but it is safe
to assume^ that whenever the statute imposes
a penalty upon one party and none upon the
QUier^ they are not to be regarded, as par
delictum. In Browning v. Morris. 2 Cowp.
T^OTLord Mansfield, after referring with ap-
probation to the case of Jaques v. Golightly,
reiterates the argument of Blackstone, J., in
that case. He sqys: "And it is very ma-
terial that the statute itself, by the distinc-
tion it makes, has marked the criminal, for
the penalties are all on one side,— upon the
officekeeper."
The question next arose in the case of
Jaques V. Withy (1 H. Bl. G5), which is iden-
tical with the case of Jaques v. Golightly, de-
cided by the same com-t fifteen years before.
The action was brought to recover back
money paid for insurance to the keeper of a
lottery insurance office, and it was held to
lie. ' It will be seen that these two cases are
not Uke tliat of Smith v. Bromley, where an
undue advantage was taken, of the peculiar
situation of the plaintiff; and that although
some effort is made in .Taques v. Golightly,
and by Lord Mansfield in Browning v. Mor-
ris, supra, to bring them within the reason-
ing of that case, they are really placed upon
the broad ground that the parties are not in
pari delicto, and, as evidence of this, the
court rely upon the fact that the penalty was
Imposed upon the defendant alone. A simi-
lar question came before the court of king's
bench in the case of ■\Yilliams v. Hedley, 8
East, 378, where the previous cases were
ably and elaborately reviewed by Lord Ellen-
borough. The action was brought to recover
back money which had been paid by the
plaintiff to compromise a qui tam action
pending against him for usury. The princi-
ple of the decision cannot be better stated
than by ti'anscribing the head note of the
reporter, which is this: "Money paid by A.
to B., in order to compromise a qui tam ac-
tion of usurj' brought by B. against A. on
the ground of a usurious ti-ansaction between
the latter and one E., may be recovered back
in an action by A. for money had and re-
ceived; for the proliibition and penalties of
the statute of 18 Eliz. c. 5, attach only on the
informer or plaintiff or other person suing
out process in the penal action making com-
positicn, &c., contrai-y to the statute, and not
upon the party paying the composition; and,
therefore, the latter does not stand, in this
respect, in pari delicto, nor is he particeps
criminis with such compounding informer or
plaintiff'."
These are the leading English cases on this
subject; and it is plain that they do not res t
solely upon the ground that the statute jn-
f ringed Avas intended to protect' "one pait^'
from acts of oppression or extortion by Jhe
other; and equally plain that relief is grant-
ed in this class of cases entirely irrespective
of the question whether the coutraci-..l^e
executed or executorj\ It was, in fact, exe-
cuted in all these cases.
The series of cases here referred to have
never been overruled. On the contrary, they
have been expressly sanctioned and ap-
proved in several American cases. In In-
habitants V. Eaton, 11 Mass. 3G8, Chief Jus-
tice Parker, after referring to the cases of
Smith V. Bromley and Browning v. Morris,
supra, and to the distinction there taken,
saj's: "This distinction seems to have been
ever afterwards observed in the English
courts; and being founded in sound prin-
ciple, is worthy of adoption as a principle
of common law in this comitry." The case
of White V. Bank, 22 Pick. 181, proceeds up-
on the same distinction. It is impossible,
as it seems to me, to distinguish this case
in principle from that now before the court.
The Revised Statutes of Massachusetts
(chapter 36, § 57) pi:ohibited banks from .mak-
ing any contract "for the payment..of money
at a future day certain," under a penalty of
a forfeitm-e of their charter. The plaintiff
had deposited money with the defendant in
February, to remain imtil the 10th day ot
August; and the action was brought to re-
cover this money. It was objected that the
contract was illegal and the parties particeps
criminis, but the defence was overruled.
This is by no means an anomalous case, as
the counsel for the receiver upon the argu-
ment of this case seemed to suppose. On the
contrary, it belongs clearly to the same class
with the English cases just reviewed. Wilde,
J., who delivei-ed the opinion of the conrt,
after referring to those cases, and quoting
EFFECT OF ILLEGALITY.
505
tlie ronuirks of Chu-f Justk-o raikcr in In-
habitants of Worcester v. Eaton, given abuve,
says: "The principle is in eveiy respect ap-
plicable to the present case, and is decisive.
The_prolirbiUon is particularly l eveled-against
thebajaiv, and nut at'aiiist any person jjeaj-
lng__wilh the bunjc. In the words of Lord
'~5lausfield, 'the statute itself, by the distinc-
tion it makes, has marked the criminal.'
The plaintiff is subject to no penalty, but
the defendants are liable for the violation of
the statute to a forfeiture of their charter."
Again, in the case of Lowell v. Railroad
Co., 23 Pick. 24, where the objection was
raised that the parties were partlceps crim-
inis. the same justice says: "In respect to of-
fences in which is involved any moral de-
linquency or turpitude, all parties are deemed
equally f::uilty, and courts will not inquire
into their relative guilt. But where the of-
fens e is merely malum prohibitum, nTirriS'Tn
no respect immoral, it "is not against the.
policy of the law to inquire into the relatjve
dellhqueiicy of the parlies, and to administer
jiistrce between them, although both parties
are wTo ng-doer s." The same doctrine was
reiteraTed in Atlas Bank v. Nahant Bank, 3
Mete. nsi. The principle of these cases was
also adopted bj' our own supreme court in the
case Mount v. Waite, 7 Johns. 434. The ac-
tion was to recover back money which the
plaintiffs had paid to the defendants for in-
sm'ing lottery tickets contraiy to the policy
of a statute passed in 1S07. Kent, C. J.,
says: "The plaintiffs here committed no
crime in making the contract. They violat-
ed no statute, nor was the contract malum
in se. I think, therefore, the maxim as to
parties in pai'i delicto does not apply, for
the plaintiffs were not in delicto."
This case is the last of the class to which I
shall refer; and I think it would be diflicult to
find a series of cases, running through almost
a century, more uniform and consistent in
tone and principle and in the distinctions upon
which they are based. They have never, so
far as I am aware, been overmled; and I
know of no principle which would justify
this court in disregarding them. The doc-
trine seems to me eminently reasonable and
just, and I discover no principle of pul)lic
policy to which it stands opposed. On the
contrary, I concur in the sentiment which
Judge Wilde, in White v. Bank, expresses,
thus: "To decide that this action cannot be
maintained, would be to secure to the de-
fendants the fruits of an illegal transaction,
and would operate as a temptation to all
banks to violate the statute by taking ad-
vantage of the unwary and of those who may
have no actual knowledge of the existence of
the prohibition, and who may deal with a
bank without any suspicion of the illegality
of the ti-ansaetiou on the part of the bank."
This language is as applicable to the case
before us as to that in which it was used.
It is said that all persons dealing with banks
and other corporations are presumed to know
the extent of their powers. This is no doubt
technically true, and yet we cannot shut our
eyes to tlie fact, that in veiy many cases
it is a mere legal fiction. If we take the
present ca.se as an example, it is plain that
it would not have been easy for the Morris
Canal and Banking Company, with the char-
ter of the Trust and Banking Company and
the restraining act both before them, to de-
termine whether the issue of these certifi-
cates in payment for state stocks would vio-
late either; and yet, upon the doctrine here
contended for, an honest mistake in this
respect would visit upon the former com-
pany a forfeiture of the entire amount of
stocks transferred, which the latter com-
pany, if disposed, might pocket. Such a
principle would afford the strongest possible
inducement for banks to transgress the law.
All that they could get into their hands, by
persuading others to take their unauthorized
paper, would be theirs. Under such a rule,
arguments to make it appear that they have
power to do what they reallj- have not, might
be made to constitute the most available por-
tion of their capital; and unauthorized deal-
ing in large amounts, with foreign states or
corporations not familiar with our laws, the
most profitable branch of their business.
These considerations go, in my judgment, to
strengthen and confirm the doctrine of the
gases referred to, which hold that relief may
be gi'anted to the more innocent, when the
parties are not in pari delicto.
The rule laid down in those cases for de-
termining which is the more guilty part}- is
directly apphcable to the present case so far
as the ti'ansaction is held to fall within the
provisions of the restraining act. It has
been conceded, as was contended by the
counsel for the receiver upon the argimient
that the issuing of the certificates in this
case was a violation of sections 3, and 7
of the act concerning unauthorized banking.
1 Rev. St. 712. It will be seen, by re-
feiTiug to those sections, that the penalties
are nnposed exclusively upon the conxiration
violating the provisions of the act, and upon
its otficei-s and members. So far, then-t'oru.
as the defence is based upon a violation of
the restraining act, there is that sUitutory
designation of the guilty party upon which
most of the cases to which I have refeiTed
are made to rest. But it is obvious that the
general principle for which I contend applies
equally to that branch of the defence which
rests upon the ground that the act of the
banking company in issuing the notes, was
ultra vires and against public pohcy. The
imposition of the penalties for a violation of
the restriiining law upon the corporation
alone, does not make it the guilty party, but
it is simply evidence that the legislature so
regarded it; and the reasons are equally
sti'ong for fixing the principal guilt upon the
same party where its acts merely violate the
principle of public policy. Although persons
dealing with corporations are. for certain
506
ILLEGALITY OF OBJECT.
purposes, presumed to know the extent of
their corporate powers, yet this is by no
means a safe rule by which to measure the
moral delinquency of the respective parties.
To me, therefore, it seems plain, that wheth-
er we reirard the act of the Trust and Bank-
ing Company in issuing the certiticates in
question as a violation of the I'estraining
law. or as simply ultra vii-es, or as against
public policy, the corporation is to be regard-
ed as comparatively the guilty party.
I wish here briefly to refer to another class
of cases decided in this state, and known as
the "Utica Insurance Cases," not as avithor-
ity for my conclusion, but by way of illus-
trating the distinctions to which I have ad-
verted. The first of these is Insurance Co.
V. Scott, 19 .lohns. 1. The action was vipon
a promissory note discounted by the insur-
ance company in the ordinary way of dis-
counting by a bank. It was held that the
insurance company had no power to discount
notes; and that in so doing it had violated
the restraining act. But the court say: "In
analogy to the statute against gaming, the
notes" and securities are absolutely void, in-
to whatever hands they may pass, but there
is a material distinction between the security
and the contract of lending. The lending of
money is not declared to be void, and, there-
fore, whenever money has been lent, it may
be recovered although the secunty itself is
void." Judgment was, however, given for
the defendant in that case, because the ac-
tion was brought upon the note alone. The
next case was that of Insurance Co. v. Kip,
8 Cow. 20. This, also, was an action upon a
note discounted by the insurance company;
but the declaration also contained a count
for money lent. The plaintiff recovered: and
the court say: "The illegal contract, if any,
was not the loan, for the plaintiffs had a
right to loan the money to the defendants;
but it was the agi*eement to secure the loan
by a note discounted. Avoiding what was
illegal, does not avoid what was lawful.
The action for money lent, is rather a disaf-
firmance of the illegal contract." Similar de-
cisions were made in three subsequent cases,
viz.: Insurance Co. v. Cad well, 3 Wend. 29G;
Insurance Co. v. Kip, Id. 369; and Insui~ance
Co. V. Bloodgood, 4 AVend. G."j2.
These cases have never been overruled; and
yet, I think I rhay say, they have generally
been regarded with some suspicion as to
their soundness. In New Hope Delaware
Bridge Co. v. Poughkeepsie Silk Co., 25
Wend. G4S, Nelson, J., in speaking of them,
says: "Whether the doctrine of these cases
is well founded and may be upheld upon es-
tablished principles or not, or whether the
result was not ultimately influenced by the
peculiar phraseology and powers of the char-
ter of the Utica Insurance Company, in re-
spect to which they arose, it is not necessai*y
at present to examine. I am free to say, in
either aspect, I should have great difficulty
in assenting to them." There is, undoubted-
ly, "great difficulty" in reconciling these
cases with the settled rules in regard to il-
legal contracts; and the dilficulty consists
precisely in this, that the court, in the Utica
insurance cases, have given to the guilty
party the benefit of a principle which is
only applicable to the more innocent. In the
first case in which the insurance company
recovered, viz., Insurance Co. v. Kip, the
court cite and rely upon the following pass-
age from Comyn: "Where the action is in
affirmance of an illegal contract, the object
of which is to enforce the performance of an
engagement proliibited by law, such an ac-
tion can in no case be maintained; but where
the action proceeds in disaffirmance of such
a contract, and instead of endeavoring to en-
force it, presumes it to be void and seeks ta
prevent the defendant from retaining the
benefit which he derived from an unlawful
act, there it is consonant to the spirit and
policy of the law that he should recover."
2 Comyn, Cont. p. 2, c. 4, art. 20. Comyn
cites, as authority for this passage, the case
of Jaques v. Withy, 1 JI. Bl. 05, which is
one of the cases to which I have referred, In
which the plaintiff recovered on the ground
that he was not in pari delicto with the de-
fendant; and on turning to that case it will
be seen that the passage is copied verbatim
from the argument of Sergeant Adair, coun-
sel for the plaintiff. It is thus made appar-
ent that the doctrine of the Utica insurance
cases is built, in part, at least, upon the
principles and arguments which lie at the
foundation of the class of cases just passed
in review. More can scarcely be needed to
justify the doubt which has been cast upon
these insurance cases. How principles, ap-
propriately used to sustain a recovery against
a party, upon the express ground that he is
the party upon whom tl?e prohibition and
penalties of the law attach, can be made
available to justify a recovery by a party so
situated, is certainly difficult to comprehend.
But, notwithstanding the misapplication to
these cases of the principles for which I con-
tend, the cases themselves afford strong evi-
dence of the appreciation, by the court, of
the soundness of those principles. Indeed,
few, as it seems to me, will be found to deny
either the justice or policy of the rule which
refuses to permit the guilty party to retain
the fruits of an illegal transaction at the ex-
pense of the more innocent. But were it
otherwise, the iiile, as I have showu, is in-
disputably established; and that the present
case falls within that rule is entirely clear.
We have next, then, to ascertain the relief
to which the Morris Canal and Banking Com-
pany would, if the claimant upon the records
be entitled
The illegal conti'act itself is of course void,
and no part of it can be enforced. It is impos-
sible, I think, to sustain the reasoning adopt-
ed in the Utica insurance cases, by which
that part of the conti'act which embraces
tlie loan (in this case, the sale) is separated
EFFECT OF ILLEGALITY.
807
from tlie portion relating to the security,
and uphold as a distinct and valid couti-act.
The conti-act there, as here, was entire; and
it is contrary to all the i-ules which have
been appUed to illegal contracts to discrimin-
ate between tln'ir dillereut parts, and hold
one portion valid and tlie other void. Re-
coveries are not had in such cases upon the
basis of tlie express contract, which is taint-
ed with illegality; but upon an implied con-
tract founded upon the moral obli^'alion
resting upon the defendant to account for
the money or property received. The claim
presented by the state of Indiana to the
referees was in general terms, and broad
enough to embrace a demand arising upon
an implied conti-act to pay for the bonds
ti'ansf erred ; and it has been repeatedly held
that a corporation may become liable upon
such a contract founded upon a moral obliga-
tion, like that existing in this case. Bank
V. Patterson. 7 Cranch. 299; Danforth v.
Tiu-npiko Koad, 12 Johns. 227; Bank v. Dan-
dridge, 12 Wheat 64.
It follows from tliese principles, that if the
Morris Canal and Banking Company was the
claimant upon the record, it would be en-
titled to recover, not the specific balance due
upon the certificates, nor the price agi'eed to
be paid for the stocks, but so much as the
stocks transferred were reasonably worth at
the time of such transfer, with interest, de-
ducting thei'efrom whatever has been actual-
ly paid in any form by the North American
Tinist and Banking Company for the same,
and leaving, however, the contract of sale,
so far as it has been executed by payment,
or its equivalent undistiu'bed.
The only remaining question is, whether
the state of Indiana has succeeded to the
rights of the Morris Canal and Banking Com-
pany in this respect. If, as it seems to have
been held by the supreme com't both at
special and general terras, the Canal and
Banking Company acted in the sale of the
stocks as the agent of the state of Indiana,
then, of com*se, the latter, as the principal,
is the proper party here. But, aside from
this, I cannot doubt that a court of equity
would hold, upon the face of the transac-
tion, that it was the intention of the MoiTis
Canal and Banking Company to transfer to
the state its entire claim against the Trust
and Banking Company, growing out of the
sale of the stocks, and would, if necessary,
compel any formal defects In such ti'ansfcr
to be supplied; and as the proceeding here
is of an equitable nature, the court, upon
well settled principles, will regard what
ought to be done as having been done. The
judgment of the supreme court should be
modified in accordance with tliese principles,
and the proceedings remitted.
MITCHELL, J., delivered an opinion in
favor of afhrming the judgment of the su-
preme com-t at general term. He was of
the opinion that the evidence did not estab-
lish that the Morris Canal and Banking Com-
pany, or the state of Indiana, had knowledge
when the bonds were sold that the Trust and
Baulking Company purchased them for an il-
legal purpose, or with intent to make an il-
legal use of them, and that tlie last named
company, at the time of the purchase, in
1S39, had authority to make and issue notes
or certificates payable at a future day. He
held, that associations organized under the
general banking law were not subject to the
provision contained in the safety fund act
(Laws 1S29, p. 173. § 35), prohibiting mon-
eyed corporations subject to the provisions of
that act from issuing bills or notes, payable
on time; and that such associations might
lawfully issue such notes for a legitimatf
purpose, until prohibited by the act of 1840
(Iia^^■s 1S40, p. 306, § 4).
DENIO, C. J., was also in favor of affirm-
ing the judgment, on substantially the same
grounds as those stated bv Judge MITCH-
ELL.
COMSTOCK, HUBBARD, T. A. JOHN-
SON, and WRIGHT, JJ.. concm-red in tlie
foregoing opinion delivered by Judge SEL-
DEX, and were in favor of modifying the
judgment in accordance with the principles
stated in that opinion,
A. S. JOHNSON, J., dissented. He was in
favor of reversing the judgment rendered at
general term and atiirming that rendered at
special term.
Judgment modified.
G?
508
TYLER V. CARLISLE.
(9 Atl. 356. 79 Me. 210.)
ILLEGALITY
March 1,
Snureme Judicial Court of Maine
1S87.
On exceptions from supreme judicial court,
Knox county.
Assumpsit to recover money loaned. Thv?
verdict was for the defendant, and the plain-
tiff alleged exceptions.
C. E. Littlefield, for plaintifC. J. E. Han-
ley, for defendant.
PETERS, C. J. The plaintifC claims to re-
cover a sum of money loaned by him while
the defendant was engaged in playing at
cards. The ruling at the trial was that, if
the plaintiff lent the money with an expres^
understanding, intention, and jpurpose that it
1 was" Wbe used to gamble with, and it was so
I used, the debt so created cannot be recovered;
MDUt otherwise if the plaintiff had merelv
knowledge that the money was to be so used.
Upon authority and principle the ruling was
correct. Any different doctrine would, in most
instances, be impracticable and unjust. It
does not follow that a lender has a guilty pur-
pose merely because he knows or believes that
the borrower has. There may be a visible
line between the motives of the two. If it
were not so, men would have great responsi-
bilities for the motives and acts of others. A
person may loan money to his friend,— to the
man,— and not to his purpose. He may at the
"same time disapprove his purpose. He may
not be willing to deny his friend, however
much disapproving his acts. In order to find
the lender in fault, he must liimself have an
"intention that the money shall be illegally
used- There must be a combination of inten-
tion between lender and borrower.— a union of
purposes. The lender must in some manner
be a confederate or participator in the borrow-
OF OBJECT.
er's act,— be himself implicated in it. He
must loan his money for the express purpose
of promoting the illegal design of the bon-nw-
er, not intend merely to serve or accomuio-
date the man. In support of this view many
cases might be adduced A few prominent
ones will suffice. Green v. Collins, 3 Cliff.
494, Fed. Cas. No. 5,755; Gaylord v. Soragen,
32 Vt. 110; Hill V. Spear, 50 N. H. 253; Peck
V. Briggs, 3 Denio, 107; Mclntyre v. Parks, 3
Mete. (Mass.) 207; Banchor v. Mansel, 47
Me. 58. See Franklin Co. v. Lewiston Sav.
Bank, 68 Me. 47.
Nor was the branch of the ruling wrong that
plaintiff, even though a participator, could re-
cover his money back if it had not been ac-
tually used for illegal purposes. In minor of-
fenses, the locus penitentise continues \mtil
the money has been actually converted to the
illegal use. The law encourages a repudia-
tion of the illegal contract, even by a guilty
participator, as long as it remams an execu-
tory contract, or the Ulegal purpose has not
been put in operation. The lender can cease
his own criminal design, and leclaim his mon-
ey. "The reason is," says Wharton, "the
plaintiff's claim is not to enforce, but to re-
pudiate, an illegal contract." Whart. Cont. §
354, and cases there cited. The object of the
law is to protect the public,— not the parties.
"It best compoi-ts with public policy J j> arrp . st
the illegal transaction, before it is consaom-
roated/^^^ays the court in Stacy v. Foss, 19
■lrrerS35. see White v. Bank, 22 Pick. 181.
The rule allowing a recovery back does not
apply where the lender knows that some in-
famous crime is to be committed with the
means which he furnishes. It applies only
where the minor offenses are involved. Ex-
ceptions overruled.
DANFORTH, VIRGIN, LIBBEY, FOS-
TER, and HASKELL, JJ., concurred.
EFFECT OF ILLEGALITY.
50»
FROST V. GAGE.
(3 Allen, 560.)
Supreme Judicial Court of Mas-sachusotta.
Middlesex. Jan. Term, 1862.
Contract. At the second trial of this case,
aftor the facts roportod in 1 Allen, 1202, had
been proved, the plaintiff offered in evidence
a release of their several claims by the cred-
itors of Richard Frost, and Richard testified
that, after the release had been signed by
the plaintiff and defendant, the latter pro-
cured the signatures of other creditors to the
same and delivered It to him, and he there-
upon executed the assignment to the defend-
ant. The defendant then offered to prove
that he was Richard's largest creditor; that
the plaintiff, who was Richard's son, request-
ed him to aid in obtaining a settlement with
Richard's creditors, and promised to make
no claim upon him for any part of the pro-
ceeds of Richard's estate which might come
into his hands as assignee, but to allow him
to retain the plaintiflf's share for his services,
and also to execute to him a promissory note
for a further sum, if he would sign the re-
lease and procure the signatures of other
creditors to the same; and that he, being
induced by said promise, did sign the re-
lease and procure the signatures of other
creditors to the same. Morton, J., rejected
this evidence, and the jury returned a ver-
dict for the plaintiff. The defendant alleged
exceptions.
A. F. L. Norris, for plaintiff. W. P. Web-
ster, for defendant.
BIGELOW, C. J. The right of the plain-
tiff to maintain his action on the second
count, on proof of the facts therein set forth,
was determined at the former hearing of
this case. 1 Allen, 2G2. The only point now
raised which was not then considered by
the court arises on the evidence offered by
the defendant to show that there was an
agreement between him and the plaintiff, by
which the former agreed to sign the com-
position deed and procure the release of the
other creditors of Richard Frost on a prom-
ise by the latter to pay a portion of the debt
duo from said Richard to the defendant, in
addition to the dividend which he might re-
ceive under the assignment, in common with
the other creditors. That such an agreement
would be a fraud on the other creditors, and
that the defendant could maintain no action
upon it against the plaintiff', is too clear to
admit of any doubt. It was a secret and
imderhand contract by which the defendant
secured to himself an advantage over other
creditors of the Insolvent, while at the same
time he was holding out to the same cred-
itors that he was to share in the assets equal-
ly with them, and thereby inducing them to
sign the composition deed and release the
debtor from their claims. Story, Eq. § 378;
Cockshott V. Bennett, 2 Term R. 763. 766;
Lewis V. Jones, 4 Barn. & C. 511; Case v.
Gerr>3h, 15 Pick. 49. The question then pre-
sents itself, whether such a fraudulent
agreement can be set up by the defen lant,
who was a party to It, as a defense to an
action by the plaintiff to recover the same
share or dividend of the assets of the debtor
as has been paid to the other creditors by
the defendant. This is in some respects a
novel question; but it seems to us to come
within principles recognized in the adjudged
cases, by the application of which it can be
readily solved. Assuming that the defend-
ant could establish all the facts containel
in his offer of proof, It is clear that the
plaintiff was a party to the fraudulent agree-
ment by which the signatures of the other
creditors to the release of the debtor were
obtained. It was by his procurement, and
on a promise by him to pay the defendant a
portion of his debt beyond theamount which
he would receive from the estate of the
debtor, and the latter was induced to sign
the release and to become the agent in pro-
curing the signatures of the other creditors.
It was through the procurement and instru-
mentality of the plaintiff, and by means of
an agreement which operated as a fraud on
the other creditors, to which he was a party,
and for which he furnished the considera-
tion, that the composition and release were
obtained. He was therefore a participator
in the fraud. Holding the relation of a
creditor, and bound to act witli good faith
towards the other creditors, in entering into
an agi'eement with them to compound with
their debtor and to release him from their
debts, he became a party to an agreement by
which a secret advantage was attempted to
be secured to the defendant, by which he
was induced to become a party to the assign-
ment and release, and thereby to hold out
false colors to the other creditors, and lead
them to believe that all were acting on equal
terms, and to grant a discharge to their
debtor on the faith that all were to receive
a like portion of their respective debts. To
adopt the significant figure which has been
used to describe the effect of a transaction
of this nature, in Story, Eq. § 378, the plain-
tiff did not himself act as a decoy duck to
mislead the other creditors, but he did that
which was quite as effectual in accomplish-
ing the fraud on them; he procured the
duck, and placed him in a position in which
he was enabled to practice a deception, and
to draw the creditors into an arrangement
with their debtor to which otherwise they
might not have assented. In this aspect of
the case, we do not see that the plaintiff
stnuds in any better situation, or is entitled
to any greater favor in a court of law than
the defendant. As participators in the fraud,
they both stand on an equal footing. Nei-
ther can claim to recover anything in an ac-
tion which can be maintained only by proof
of a transaction into any part of which his
fraud has entered as an essential element,
affecting the rights of any parties interested
510
ILLEGALITY OF OBJECT.
therein. It is on this ground tliat it has been
belli thjit a creditor cannot recover his share
or dindeud under a composition deed to
whicii he became a party, if he had previ-
ously taJien a private agreement for the pay-
ment of the residue of the debt. His right
to recover the amount to which the fraudu-
lent agreement did not extend is forfeited
by his participation in a fraud connected
with another part of the same transaction.
The whole is regarded as an entire agree-
ment, which is vitiated by the fraudulent act
of the party, as to him, so that he can claim
no benefit under any of its provisions. Hig-
gins V. Pitt, 4 Exch. 323; Knight v. Hunt,
5 Bing. 432; Howden v. Haigh, 11 Adol. &
E. 1033; Fors. Comp. Cr, 152. It Is quite im-
material, that the funds to be distributed
among other creditors are not diminished or
rendered less available in consequence of
the secret agreement. The fraud consists,
not in causing any injury to the assets of the
debtor, or in reducing the share or interest
to which the creditors are entitled under the
composition, but in the attempt to induce
them to enter into an agreement for an equal
dividend on their debts in ignorance of a
private bargain, whereby a creditor is to re-
ceive an additional sum to that to which he
may be entitled in common with all the cred-
itors. Such an agreement vitiates the whole
transaction, so that the party can claim no
benefit under a composition into which he
entered in consequence of such corrupt or
fraudulent contract. It is quite clear, there-
fore, that the defendant, if he did not stand
in the position of assignee having possession
of the assets, and were compelled to bring
au action for the share or dividend on his
debt which might be coming to him In com-
mon with the other creditors, could not re-
cover. The agreement into which he enter-
ed with the plaintiff would be a bar to hi3
right to recover even that sum to which the
fraudulent agreement did not extend. For
a like reason, the plaintiff in this suit ought
not to be allowed to recover. The fraud in
which he participated, and by which he aid-
ed in inducing creditors to become parties to
the release of their debtor, taints the whole
transaction as to him, and deprives him of
the right of maintaining an action to enforce
in a court of law that part of the agreement
of composition to which the secret agreement
did not immediately relate.
It may be suggested that the application of
this rule leads in the present case to the re-
sult of leaving in the hands of the defendant,
who was equally guilty with the plaintiff, the
fruits of the fraud. But this is often the con-
sequence of allowing a party to plead in de-
fense the illegality of a transaction on which
a cause of action is founded. Such defenses
are allowed, not out of favor to defendants,
or to protect them from the effects of their
imlawful contracts, but on the ground of pub-
lic policy, which does not permit courts of
justice to be used to aid either party in en-
forcing contracts which are unlawful or
tainted with fraud, but leaves them in the
condition in which their illegal or immoral
acts have placed them.
We axe therefore of opinion that the evi-
dence offered at the trial was competent, and
that it should have been admitted and sub-
mitted to the jury, with instructions in con-
formity to the principles above stated.
Exceptions sustained.
&
6 ^ WOODWOIITH
EFFKCT OF ILLEGALITY.
511
BENNETT. J "^^
(43 N. Y. 273.J /{^
Ck)nrt of Appeals of New York. 1870.
Action for goods sold. The opinion states
the case.
G. F. Bicknell, for appellant. Charles Ma-
son, for respondent.
CHURCH, C. J. The point hi this case Is,
whether the court below erred in allowing
to the defendant the sum of ^100 as an offset.
The facts are substantially as follows: The
plaintiff, defendant, Stephens and Truesdell,
made an n greomont in the natu re .of_jL-£0:
partne rship, to pro pose or bid for public work
on _thg Seneca^ river im provement . The bid
was to be put in the name of the plaintiff
alone, the defendant and Stephens to become
sureties. Truesdell was at the time an engi-
neer in the employ of the state on the canals.
The bid was made in the name of the plain-
tiff, in accordance with the arrangement. Be-
f oi;ethe__workwas ^^varded_the_sa i d_par^s
madeanagreemenf
with one Haroun, to wrth-
d j^ \v tlJ{n t3ZlII llH~tD-th^5~\v6f K7ang^ell jheir bid
to him for j400^ he bfiiiig a h igher bidder for
tbe^ sam e work,jwhich_was^;onsujnmated,, and
he^^ve~EIs'ndte for_the_amoimt. It was then
arranged tHal'thelQote should be left with the
plaintiff for collection, and that when collect-
ed each of said persons should be entitled to
$100. The plaintiff collected the note, paid to
Stephens and Truesdell each $100, and prom-
ised to pay the defendant, and apply it on
their deal, but never did. It is claimed that
It cannot be allowed, on account of the ille-
gality of the transaction out of which it arose.
To enable the court to apply correct legal
principles, it is necessary to analyze the trans-
action and ascertain its true nature and char-
acter.
The original arrangement for a joint in-
terest or copartnership .saa,Jllegal, and con-
trary to a positive statute in two respects.
The I^aws of 1S54. chapter 329, in sub:stance
requires that every proposal for. work shall
contain the names of all persons -who are
interested, and prohibits any stecret agree-
ment or understanding that any person not
named shall become interested in any con-
tract that may be made, and engineers, and
all odier persons in the employ O'f the state
on the canals, are also prohibited from be-
coming interested in any contract or job on
the public works.
In th e next place, the transaction _ with
I laroun was " contrar y^ to public policy, and
Tuogal. It is manifest that the object and
purpose" of the purchase of the bid was to
have it withdra\vn so as to enable Haroun
to take the contract upon a higher bid. This
was directly against the interests of the state,
and tended to destroy that honest competition
which public bidding is designed to secure;
and when as in this case, it was done partly
for the benefit of an officer of the state whose
duty it was to protect its interests, it was not
only contrary to public policy but was grossly
corrupt.
The supreme court placed its decision in
favor of the defendant, upon the ground that
as between the.se parties _J be illegal contrac t
had been fu lly executed when Haroun paid
tEe mon('yj _aj^iXjhoXXh e plaint i ff then became
amere depd.sitary. an3" held the l money for ^
fbe use"^ the other parti_es .
It Is undoubtedly true that if the contract
or obligation does not depend upon nor re-
quire the enforcement of the unexecuted pro-
visions of the illegal contract. It will be car-
ried out. It has been laid down as a test, that
whether a demand connected with an illegal
transaction is capable of being enforced at
law depends upon w hethe r the party requires
any aid^ from _the ill egal transaction tg estnl^
lish the case . Chit. Cont. G.j7. So it has
been settled" that a party who pays money to
a third person for the use of another, which,
on account of the illegality of the transaction,
he was not obliged to pay, .such third person
cannot interpose the defense of illegality.
Tenant v. Elliott, 1 Bos. & P. 3; Merritt v.
Millard, *43 N. Y. 208; 3 Abb. Dec. 291. This^
principle is based upon the undoubted right of
la person to waive the illegality, and pay the
money; and that when once paid, either to
|the other party directly or to a third person
^or his use, it cannot be recalled; and that
/the third person, who was in no way con-
[nected with the original transaction, cannot
!avail himself of a defense which his principal
Wiw fit to wnive.
If the only illegal transaction was the con-
tract with Haroun for the sale of the bid,
these principles might be applicable, and
would probably constitute a good answer to
the objection to this counter-claim. The pay-
ment of the money by Haroim completed that
contract, and nothing remained unexecuted.
But here the ori ginal partnersh ip w'^s '^fg-T^;
not b ecause oTits purposes and. jebific'^-'^i *^"t
its composjtion was prohibited_by_law. If a
lawTul firm should receive funds from an
illegal traffic or business, it may be that the
illegality would be regarded at an end, and a
division of the money enforced by virtue of
the rights of the members under the contract
of partnership. This is the utmost limit to
which the riile can be carried. 2 ^Yall. 70.
In such a case the obligation to divide would
not arise out of the illegal purposes of the
firm, nor would the division carry out any of
those purposes, but the. obligation would arise
out of the contract of partnership itself. Here
this contract was illegal. The object of the
statute was to enable the state officers to
know with whom they contracted, and also to
see that the statute, prohibiting engineers
and other canal officers from becoming inter-
ested, was not violated, and to prevent all
secret combinations in relation to olit^ning
work. The money obtained by this bid be-
longs to the firm; and the plaintiff could
have been compelled to divide, if the firm had
been lawful, by force of the contract organlz-
512
ILLEGALITY OF OBJECT.
ing iL In thl53 case he also agreed to pay the
money, and defendant asks the court to com-
pel him to perform this obligation. The an-
swer to it is obvious. There is no obligatiop,
because it was inc urred contr ary to laWr It
r'e?T5' npOTr"n]e ^_con tm.ct of partnersh ip. jagd
t hat Ls void for 'll^prJ^Jj^y
In law there was no partnership, and none
of the parties obtained any rights under the
contract creating it. Armstrong v. Lewis, 3
Mylne & K. 45.
The sentiment of "honor among, thieves"
cannot be enforced in courts of justice. Sup-
pose the engineer had sued for his share after
an express promise, would any court have
tolerated his claim for a moment in the face
of a statute prohibiting him from being inter-
ested? If not, in what respect does the de-
fendant occupy any better position? The first
step in his case Is to prove that he was a
secret partner and entitled to a share of this
money. The law prohibits secret partners,
and he is therefore not a partner.
The express promise does not aid the de-
fendant, because the promise was only to car-
ry out the unexecuted provision of the con-
tract of partnership to divide the money. The
two cases cited by the counsel for the defend-
ant, if they are to be regarded as good law,
are distinguishable from this. In the case of
Faikney v. Renois, 4 Burr, 2069, one of two
partners had paid £3,000 to settle differences
in illegal stock-jobbing operations, and the
defendant executed his bond to secure the
share of the other partner. The court over-
ruled the defense recognizing the exploded dis-
tinction between acts malum prohibitum and
malum in se, and held that as between those
parties the bond was to secure the plainitff
for money paid, and the purposes of the pay-
ment would not be inquired into. A similar
decision was made upon the authority of this
case in Petrie v. Hannay, 3 Term R. 418,
Lord Kenyon dissenting. The distinction be-
tween the above cases and this is in the cir-
cumstance that there the illegal transactions
had been closed up and settled, and the obli-
gations sought to be enforced were for the
money advanced for that purpose. Here it is
sought to consummate the illegal contract by
a new agreement that it shall be performed.
No case has gone this length, and the two
cases above cited have been very much
shaken by subsequent decisions, and are, to
say the least, questionable authority, espe-
cially the latter. Aubert v. Maze, 2 Bos. &
P. .370; Mitchell v. Qockburne, 2 H. Bl. 380;
Ex parte Daniels, 14 Ves. 190; Lowry v.
Bourdieu, Doug. 4G7; Brown v. Turner, T
Term R. 626; Belding v. Pitkin, 2 Caines,
147, note a.
The general rule on this subject, is laid
down in this court, in Gray v. Hook, 4 N. Y.
449, by Mullott, J., as follows: "The distinc-
tion between a void and valid new conti-act
in relation to the subject-matter of a former
illegal one depends upon the fact whether
the new contract seeks to carry out or en-
force any of the unrxccuted provisions of the
former contract, or whether it is based upon
a moral obligation growing out of the execu-
tion of an agreement which could not bo en-
forced by law, and upon the performance of
which the law will raise no implied promise.
In the first class of cases, no change in the
form of a contract will avoid the illegality
of the fii-st consideration while express prom-
ises based upon the last class of considera-
tions may be sustained."
It is sometimes difficult to apply general
rules to particular cases, but this case comes
clearly within the first class mentioned in
the above rule. It is not from any regard to
the rights of the party setting up this de-
fense that courts refuse to enforce illegal
contracts, but it is for the protection of the
public. The plaintiff in this case is entitled
to no sympathy or favorable consideration.
He must have made an affidavit that no other
person was interested with him in the pro-
posal, and when he received this money, as
between him and the defendant, the latter
was entitled to it; and while we have no dis-
position to justify his conduct, his position
enables him to secure the advantage of a
decision which we are compelled to make in
obedience to a principle of public policy which
is indispensable for the protection of the com-
tQunity against the corrupting influences of
illegal transactions.
The observation of Lord Mansfield in Hol-
man v. Johnson, 1 Cowp. 343, is applicable
here. He said: "The objection that a contract
is immoral or illegal as between pLaintiff and
defendant sounds at all times very ill In the
mouth of the defendant [in this case the
plaintiff]. It is not for his sake however that
the objection is ever allowed, but it is found-
ed in general principles of policy which the
defendant has the advantage of, contrary to
the real justice, as between him and the
plaintiff, by accident. If I may so say."
Judgment must be reversed and a new trial
ordered, costs to abide the event.
All concur.
Judgment reversed and a new trial ordered.
EFFECT OF ILLEGALITY.
/ 37
(^ SPRING CO. V. KNOWLTON. , ,
(103. U. S. 4y.) ^
>13
Supreme Court of the United States. Oct.,
1S80.
Error to the circuit court of the United
States for the Northern district of New York.
This suit was brought in 1SG9 by Dexter
A. Kuowlton, a citizen of Illinois, against
the Congress and Empire Spring Companj-,
in the supreme court of the state of New
Yorlc, to recover the sum of $13,980, with
interest from Feb. 20, 1806. In 187G he died,
and the suit was revived and continued by
the administrators of his estate. They are
citizens of Illinois, and on their application
the suit was, March 20, 1877, removed to
the circuit court of the United States. The
parties, by written stipulation, waived a
jury. The court tried the case, and found the
facts to be substantially as follows:—
The Congress and Empire Spring Company
is a corporation organized under the statute
of the state of New York of Feb. 17, 1848,
airthorlzing the formation of corporations for
manufacturing, mining, mechanical, or chemi-
cal purposes, and subsequent acts amenda-
tory thereof. Its capital stock was $1,000,-
000, divided into ten thousand shares of $100
each, issued in payment of property purchas-
ed by the trustees of the corporation for its
use.
The mode by which such a corporation
might Increase its capital stock is prescribed
by sections 21 and 22 of chapter 40 of the
laws of 1848.
Section 21 prescribes how the notice of a
meeting of the stockholders to consider the
proposition to increase the capital stock shall
be given, and what vote of the stocldiolders
shall be necessary to carry the proposition.
Section 22 prescribes how the meeting of
the stockholders, called under section 21,
shall be organized, and declares that If a
sufficient number of votes has been given in
favor of increasing the amount of capital
stock, "a certificate of the proceedings, show-
ing a compliance with the provisions of this
act, the amount of capital actually paid In,
. . . the whole amount of debts and lia-
bilities of the company, and the amount to
which the capital shall be increased, . . .
shall be made out, signed, and verified by the
affidavit of the chairman and countersigned
by the secretary, and such certificate shall
be acknowledged by the chairman and filed,
as required by the first section of this act;
and when so filed the capital stock of such
corporation shall be increased ... to the
amount specified in such certificate, . . .
and the company shall be entitled to the
privileges and provisions, and subject to the
liabilities, of this act, as the case may be."
The corporation passed a resolution, Jan.
11, 1866, to increase its capital stock by the
addition thereto of $200,000. for the purpose
of building a glass factory for the manufac-
HOPK.SEL..CAS.CONT. — '6'i
ture of bottles and providing a working
capital. It also resolved that the books of
the company should be optned for subscrip-
tions to the additional stock, and that each
stockholder should be allowed to take one
share of the new for every five shares he
held of tlie original stock, and that when he
had paid .?S0 on each share the company
should issue to him a certificate as for full-
paid stock.
At a meeting of the board of trustees of
the corporation, held Feb. 8, ISGfJ, a divi-
dend of four per cent on the original stuck
was declared, payable Feb. 20, and it was
resolved that a call of twenty per cent on
the new stock should be made, payable on
the latter date; that the books of the com-
pany should be at once opened for sub-
scriptions to the new stock; that each stock-
holder should have the privilege of taking
one share of the new for every five shares
of the old stock held by him, and that on
failure of any stockholder to pay, on or be-
fore that date, $20 on each share of the new
stock taken by him, all his claim to such
new stock should be forfeited and the same
divided ratably among the stockholders who
had paid the instalment of $20 per share.
In pursuance of the resolutions the trus-
tees immediately issued a stock subscription
agreement, by which the subscribers stipulat-
ed to take the number of shares set opposite
their names and to pay for each share $80,
in instalments, as called for by the directors;
and upon failure to pay the instalments with-
in sixty days after call, that the money al-
ready paid on the stock should be forfeited to
the company. By the same agreement the
company bound itself to pay interest up to
Feb. 1, 1SG7, on all sums paid on the new
stock, and on Feb. 8, 1867, to issue for every
share of said new stock on which $80 had
been paid a certificate to the holder as for
full-paid stock; and it was provided that the
holders of such stock should be entitled to
vote thereon, and the same should draw divi-
dends and be treated In all respects as full-
paid stock.
This agreement was signed by one C. Shee-
lian, who subscribed for six hundred and
ninety shares of the new stock, he being the
holder of thirty-four hundred and ninety
shares of the old stock.
Thereupon a contract was made between
Sheehan and Knowlton, whereby the former
agreed to lend the dividend on his old stock
to the latter, who agreed to assume the new
stock subscribed for by Shoenan, and pay all
future calls thereon. Sheehan's dividend on
his old stock amounted to $13,9SS. Knowl-
ton, In consideration of the transfer to him
of this dividend, delivered his note to Shee-
han for $13,980. dated Feb. 20. 1866, payable
in one year, and secured the same by a pledge
of one hundred and fifty shares of the stock
of the company. He paid the residue, to
wit, $S. in cash.
Knowlton paid to the company, March 8^
514
ILLEGALITY OF OBJECT.
1866, the can of twenty per cent on the new
stock, subscribed by and sold to Sheehan as
aforesaid, by the application thereto of Shee-
han's dividend on the old stock, amounting
to §;io,9S0. for which the company gave
Knowlton a receipt.
About December, 1868, Knowlton paid in
full his note to Sheehan for ?13,9S0.
Calls and personal demands were made both
upon Sheehan and Knowlton more than sixty
days before Jan. 25, 1S67, for the payment of
subsequent instalments on the stock subscrib-
ed by Sheehan, and both of them neglected
and refused to pay the instalments called for;
whereupon the trustees of the company pass-
ed a resolution by which they declared that
the new stock subscribed by Sheehan and
assumed by Knowlton should be and was for-
feited.
From August, 1865, to August, 1S6G, Knowl-
ton was a trustee and vice-president of the
company; he advised the increase of the cap-
ital stock above mentioned, proposed the reso-
lutions in relation thereto, moved their adop-
tion, drew up and signed the stock subscrip-
tion agreement, and advised others to sign it.
At a meeting of the stockholders of the
company, held Aug. 7, 1867, it was resolved
that the capital stock of the company should
be reduced to the original sum of §1,000,000,
and that the trustees be authorized to ar-
range with the holders of the new stock for
retiring the same on such terms and condi-
tions as they should deem for the interest of
the c ompany. ■ . _ —
On the same day the beared of trustees met
and passed a resolution, whereby the execu-
tive committee of the board was authorized
to adjust, on the best terms for the company,
the claims of all persons holding receipts for
payments on the new stock ordered to be re-
tired.
The executive committee passed a resolu-
tion, March 27, 1868, that the company issue
five-year coupon bonds sufficient to refund the
payments made on the new stock of the com-
pany which had been retired.
No tender of these bonds was ever made to
Knowlton, nor was any demand made for
them by him; but he demanded repayment
of the amount paid by him on his new stocK,
and the company refused to repay it or any
part of it.
The majority of the holders of the original
stock became subscribers for the new stock,
and all of them except Sheehan, Knowlton,
and one or two subscribers for small amounts,
paid the calls made on them in respect to the
new stock. The first call of twenty per cent
on the new stock was paid mainly by the
dividend on the old stock above mentioned,
but about .?3,000 were paid in cash. All the
stockholders who did not subscribe for now
stock were paid their part of the dividend in
cash. About ?80,500 of said five per cent
bonds were issued by the company to retire
the new stock.
As a conclusion of law from these facts, the
court held that the plaintiffs, as such adminis-
trators, were entitled to judgment against the
Congress and Empire Spring Company for the
sum of ?13,9S0, with interest from Feb. 20,
1866, and rendered judgment accordingly.
The company sued out this writ of error.
It appears by a bill of exceptions that the
defendant's counsel requested the court be-
low to decide that the proceedings of the de-
fendant in increasing its capital stock, and
forfeiting the araoimt paid by the plaintiffs'
intestate, were in all respects legal and valid.
The court refused so to find, and ruled that
the plan devised by him and the other ti'us-
tees of the company was contrary to the pro-
visions of the statute, against public policy,
and a fraud upon stockholders not consenting
thereto, and the public.
It further appears that the defendant's coun-
sel requested the court to decide that, inas-
much as the intestate devised, counselled, and
assisted in passing and adopting all the acts
and resolutions for an increase of stock by
the company, the plaintiffs were not entitled
to recover. The comt refused so to decide,
and ruled that the intestate had a right to
abandon the illegal transaction to which he
was a party, and that by declining to pay
further calls, and demanding repayment of
the payments made before the consummation
of the illegal scheme, he did abandon it, and
his representatives were entitled to recover.
To these refusals and rulings the defendant's
counsel excepted.
The errors assigned here are that the court
below erred in each of its refusals and rulings,
and in deciding that the plaintiffs were enti-
tled to recover.
Francis Kernan and Charles S. Lester, for
plaintiff in error. H. M. Ruggles, contra.
Mr.ijJusI
rustice WOODS, after stating the case,
delivered the opinion of the court.
The plaintiff in error claims that the plan
adopted by it tojncrease its capital stock, by_
which certificatcs _as jor'f u ll-paid_ stock were
to""Be-issueg^n the'pa^ TnePt of eighty per
cent thereof, w as_ a gainst the law an d pub-
lic policy of the^tate of New York, "and wa s,
therefore, void ; that Knowlton, having been
an active party in devising this scheme, and
having paid his money in part execution of
it, his legal representatives cannot recover the
sum so paid.
It is conceded by the defendants in error
that the plan adopted by the company to in-
crease its stock was in violation of the law of
New York, and therefore void. It has been
so held, in effect, by the court of appeals of
the state of New York, in the case of Knowl-
ton V. Spring Co., 57 N. Y. 518.
We are, then, to consider whether, upon
the hypothesis that the plan for the increase
of the stock was illegal, there can be a re-
covery upon the facts of the case as found
by the circuit court.
We think it clear that there was tjuly a pa*'
EFFECT or ILLEGALlii
515
Ijerformanceof the iLle{,'al contract-bfitmien
th£ f-nrnt^-rriy''irng3 ;itno\ vItoii JD reference to
the new stuck, fur whic-E Sheeban subscribed
and which he aj^reed to' transfer to Knowlton.
The compauy, i^ fact, created no_ne w stock .
It only pro posed to do so. To increase the
stock~of the company it was not only neces-
sary that the meeting of the stockholders
sliuuld be called, as prescribed by the law, and
a vote of two-tliirds of all tlie shares of stock
shuuld be cast at the meeting; in favor of the
increase, but that there should be a certiti-
cate of the proceedings, showing, among other
things, a complijince with the provisions of
the law, and the amount of the increase of
the stock, signed and verified by the affida-
vit of the chairman of the meeting at which
the increase was voted, and countersigned
by the secretary, and such certificate should
be acknowledged by the chairman and filed,
as required by the first section of the act.
And the law declared that "when so filed the
capital stock of such corporation shall be in-
creased to the amount si)ecified in such cer-
tificate."
It does not appear from the findings of the
circuit court that any such certificate was
ever made or filed. Consequently it does not
appear that the steps necessary, under the
law, to an increase of the stock were ever
taken. Neither does It appear that _ anj
scrip or c erti fi fi'^tps were pver issnpd tn th e
s ubscribers to the new s t ock. So that all
that was done amounted only to a proposi-
tion by the company, on the one hand, to in-
crease its stock, and an agreement by Knowl-|
f ton to take certain shares of the new stoc]
I when issued, and the payment by him of
instalment of twenty per cent thereon. Then
1 was no performance of the contract whatevei
\ by the company, and only a part perform-
ance by Knowlton.
^ It is to be observed that the m aklng^ f the
illegal contract w as malum prohib itum am i
not" malum in seT There Ts~no moral turpi-
tude in such a contract, nor is it of 'itself
fraudulent however much it may afford fa-
cilities for fraud.
The question presented is, therefore,
•whether, conceding the contract to be illegal,
money paid by one of the parties to it in_pajt
pot-formance can be recovcrea. I5e~ other
party not having performed the contract qx
any p.arTbf it and both parties having abo a-
d oned the illegal agreement before it was
c on^HTOh i'atcd.
We tnmk the authorities sustain the af-
firmative of this proposition.
Their result is fairly stated In 2 Comyn,
Cont 3G1, as follows: "Where money has
been paid upon an illegal contract, it is a
general rule that If the contract be exe-
cuted and both parties are in pari delicto,
neither of them can recover from the other
the money so paid, but if the ^con tract con -
tiniiao pvi-^ynfnrv nnd tbp pnrtv paying_t^e
money be desirous of rescincTT ng it he ma v
do ^o and~ recover back by "action of_ In-
debLt^ ''^^"" flftfjiirnp"'' for money had and re-
ceived. And this distinction is taken in the
books that where the action is in afliriuance
of an illegal contract, the object of which Is
to enfuree the performance of an engage-
ment prohibited by law, clearly such an ac-
tion can in no case be maintained, but where
the action proceeds in disaffirmance of such
a contract, and instead of endeavoring to en-
force it presumes it to be void and seeks
to prevent the defendant from retaining the
benefit which he derived from an unlawful
act, then it is consonant to the spirit and
policy of the law that the plaintiff should
recover."
Mr. Parsons, in his work on Contracts (vol-
ume 2, p. 74G), says: "All contracts which
vprovide that anything shall be done which
is distinctly prohibited by law, or morality,
lor public policy, are void, so he who advan-
jces money in consideration of a promise orj
lundeilaking to do sueh a thing, may at any
time before it is done rescind, the contract
and prevent the thing froln being done and
Recover back his money."
To the same effect see 2 Add. Cont § 1412;
Chit Cont 944; 2 Story, Cont § 617; 2
GreenL Ev. § 111.
The views of the text-writers are sustained
by a vast array of authorities, both English
and American.
A few will be cited. Taylor v. Bowers, 1
Q. B. Div. 201, was an action to recover
property assigned for the purpose of de-
frauding creditors. A verdict was rendered
for the plaintiff, with leave to move to enter
a verdict for the defendant A rule was
obt'iined on the ground that the plaintiff
could not by the allegation of his own fraud
get back the goods from the defendant. The
queen's bench sustained the verdict the
chief justice, Cockburn, delivering the opin-
ion. The defendant then appealed to the
court of appeals, where the judgment was
aflirmed. Both courts agreed that an illegal
contract partially performed might be re-
pudiated and the money paid upon it recov-
ered.
Lord Justice Mellish, in the court of ap-
peals, said: "If the illegal transaction had
been carried out the plaintiff himself, in
my judgment could not afterwards have re-
covered the goods. But the illegal transac-
tion was not carried out; it came wholly to
an end. To hold that the plaintiff is enti-
tled to recover does not carrj- out the illeg;U
transaction, but the effect is to put every-
body in the same situation as they were be-
fore the illegal transaction was determined
upon, and before the parties took any stepa
to can-y it out That I apprehend, is the
true distinction In point of law. If money
is paid or goods delivered for an illegal pur-
pose, the person who had so paid the money
or delivered the goods may recover them
back before the illegal purpose is carried
out; but if he waits till the illegal purpose
is carried out, or if he seeks to enforce the
516
ILLEGALITY OF OBJECT.
illegal transaction, in neitlier can he main-
tain an action; the law wiU not allow that
to be done."
The same rule substantially is laid down
in the following English cases: Lowry v.
Bourdieu, 2 Doug. 452; Tappenden v. Ran-
dall, 2 Bos. & P. 467; Hastelow v. Jackson,
S Barn. & C. 221; Bone v. Ekless, 5 Hurl. &
X. 925; Lacaussade v. White, 7 Term R.
531; Cotton v, Thurland, 5 Term R. 405;
Mount T, Stokes, 4 Term R. 5G1; Smith v.
Bickmore, 4 Taunt. 474.
In Morgan v. Groff, 4 Barb. 524, it was
held that money paid on an illegal contract,
which remains executory, can be recovered
back in an action founded on a disaffirmance,
and on the ground that it is void.
To the same effect are the following cases:
Insurance Co. v. Kip, 8 Cow. (N. Y.) 20; Mer-
ritt V. Millard, *43 N. Y. 20S; White v. Bank,
22 Pick, ISl; LoweU v. Railroad Corp., 23
Pick. 24.
In Thomas v. City of Richmond, 12 Wall.
349, this court cites with approval the note
of Mr. Frere to the case of Smith v. Brom-
ley, 2 Doug. G96, to the effect that a recov-
ery can be had as for money had and re-
ceived when the illegality consists in the
contract itself, and that contract is not exe-
cuted; in such case_ th£r^ ''^ a locus D£ni-
Jentiae; the dgllctu mTsi ncomplete; the con-
tract may be rescinrted by either party.
The rule is applied in the great majority
of the cases, even when the parties to the
illegal contract are in pari delicto, the ques-
tion which of the two parties is the more
blamable being often difficult of solution and
quite immaterial. We think, therefore, that
the facts of this case present no obstacle to
a recovery by Knowlton's administrators of
the stun paid by him on the stock which had
been subscribed for by Sheehan.
The law of New York does not in express
terms forbid a corporation from issuing cer-
tificates for full-paid stock when the stock
has not been fully paid. The illegality of such
an issue is deduced from several sections of
the law under which the Congress and Em-
pire Spring Company was organized, namely,
sections 38, 40, 41, and 49. We think it is
fairly inferable from the record that the
trustees of the company, one of whom was
Knowlton, did not know that the plan adopt-
ed by them for the increase of the stock
was illegal, and that when they discovered
that it was forbidden by the law, and before
any harm was done or could have been done,
the scheme was abandoned. Under such
circumstances, the rule which would pre-
vent the recovery of the money paid to carry
on the illegal plan would be a very harsh
one, not founded on any law or public policy.
It is suggested by counsel for the plaintiff
In error that the court of appeals of the
state of New York has in this identical suit,
upon the same state of facts, adjudicated
the rights of the parties, and that this court
ought to consider the questions raised in this
case as res judicata.
The reply to this suggestion is that it no-
where appears in the record that this case
was ever before the court of appeals, or that
it was ever decided by any court except the
United States circuit court for the Northern
district of New York, from which it has been
brought to this court on error. We cannot
consider facts not brought to our notice by
the record.
Judgment affirmed-
.fc
Mr. Justice HARLAN dissenting.
This action was commenced in the su-
preme court of the state of New York. The
present transcript is imperfect in that it does
not contain all the proceedings in the courts
of the state up to the removal of the case
into the circuit court of the ' United States.
It is, however, conceded, in the briefs of
cotinsel, that Knowlton recovered in the su-
preme court a judgment which, upon a writ
of error from the commission of appeals,
was reversed upon the grounds stated in
Knowlton v. Spring Co., 57 N. Y. 518. The
learned district judge who tried the case
commences his opinion, which is incorporat-
ed in the transcript, with the statement that
"this case comes here by removal from the
state court, after a decision adverse to the
plaintiff by the commission of appeals, re-
versing the judgment of the supreme court
in favor of plaintiff, and ordering a new
trial. 57 N. Y. 518." He then proceeds to
determine it upon principles of law different
from those announced in that decision. Had
it been again tried in the supreme couil,
judgment must have been rendered against
these defendants in error, because the re-
versal was upon such grounds as precluded
any recovery whatever by them. That deci-
sion should, in my opinion, have been ac-
cepted as the law of this case, although the
proceedings in the commission of appeals
are not set forth in the transcript. The re-
ported case shows, beyond question, that it
is the identical case now before us; at any
rate, that it was between these parties and
involved the same issues. We know that
the adjudication of that court was long pri-
f or to the removal of this case, and that the
questions arising upon this record have been
once determined by a court of competent
jurisdiction in a suit between the same par-
ties touching the subject-matter now in con-
troversy. All this plainly appears by that
decision, the legal effect of which, the de-
fendants in error should not be permitted to
escape by removing the case into the circuit
court.
Upon these grounds, and without express-
ing my own views upon the propositions of
law discussed in the opinion of the court, I
dissent from the judgment just rendered.
Ir
^^
EFFECT OF ILLEGALITY.
517
FORD V. HARRINGTON.
■j>^
(16 N. Y. 285.)
Court of Appeals of New York. ISjT.
This action was brought by the plaintiff a3
heir at law of James Conway to compel the
defendant to convey to her lifty acres of land.
The defendant was an attorney and coun-
selor of the supreme court. As such he had
advised Conway to assign his contract for th e
purcha se of the land Jn question to him, the
defoiKlan t, t o preN- ent ^Uon way^ crc-ditor frcon
reaching j t Z Tt wn.^ understood between them
tliat after Conway'had settled with the cred-
[t pr t ; hp c^nnt rncFjhnuldJffi reassigned to him.
.The defendant gave his note foi $44, and suB-j
vkequently paid the balance due on the conj
cract and took a conveyance to himself.
About a year afterward Conway died. The
plaintiff, as heir at law of Conway, tendered
to the defendant what he had paid in the mat-
ter, and presented to him a quit-claim deed
and demanded that he execute it Upon his
refusal this action was brought. Conway
was an alien. The plaintiff was. also an alien
when the action was brought. The case hav-
ing been referred, the referee found in favor
of the plaintiff. Judgment was entered ac-
cordingly, and affirmed at the? general term of
the supreme court. The defendant appealed
to this court.
M. Bumell, for appellant A. G. Rice, for
respondent
BOWEN, J. The judgment appealed from
cannot be sustained upon the facts found by
the referee, unless the relation of attorney
and client, existing between the plaintiff's an-
cestor and the defendant at the time of tli^
assignment of the contract in question by the
former to the latter, distinguishes this case
from the ordinary one of the transfer of prop-
erty by a debtor, with the intent and for the
purpose of defrauding creditors. The referee
has found that James Conway, under whom,
as his heir at law, the plaintiff claims title
to the land in dispute, assigned the contract
for the purchase of the land to the defendant,
for the express purpose of placing it and his
interest in the land under the contract, be-
yond the reach of his creditors. At least such
is the necessary inference from the facts
found.
f The general rule, that courts will, under
such eircumstiinces. extend no remedy to a
grantor or vendor of property to recover back
/ from the grantee or vendee the property thus
transferred, although the transfer is without
consideration. Is too well settled to be now
^called in question.
But the referee has further found that, at
the time of the transaction, the defendant was
a practicing attorney and counselor of the su-
preme court, and was acting as the attorney
and counsel of Conway, and that it was in ac-
cordance with and pursuant to his advice as
such counsel, that the contract was assigned
to him by Conway; and the referee states, as
a conclusion of law, "t hat, as agaln.st an at-
torney and counsel or, the law will set a side an
a greement mad e, with his clicnT, by~wh !f^i
property is place d 'm his hand sjokeen it out
■ Of the r each pf_the creditors of ~ine client."
Courts scrutinize closely transactions betweim
attorney and clieni; and conveyances and
transfers of property to the former by the
latter, while that relation exists, are fre(iuent-
ly set aside in cases where, but for that rela-
tion, they would be upheld. In such cases the
law presumes that undue advantage has been
taken of the confidential relation existing be-
tween attorney and client; and attorneys. In
order to sustain such transfers to them, have
been required to show affirmatively, either
that they paid an adequate consideration, or
that a gratuity was intended by the client,
and that to obtain it no advantage was taken
of the confidential relation existing between
them, and that every thing was honest and
fair on their part
In this case no gratuity to the attorney was
intended. In fact the client intended to make
no transfer of property, for although all the
forms necessary to constitute an assignment
of the contract were complied with, yet the
assignor intended that the whole transaction
should be merely formal, and at the time sup-
posed that such was the fact. He did not
intend to part with any bancficial interest in
the__property. On the contrary, the assign-
ment was made as a means of preventing his
interest in the contract and in the land therein
described from being applied upon the debt
he owed, and of thereby enabling him to con-
tinue in the beneficial use and enjoyment of
the property. His object in the transaction
was to benefit himself and not to confer a
benefit on his attorney. For aught that ap-
pears, he would, with equal willingness, have
made the assignment to some other person,
had he been so advised.
The rule_of _c4€); and section 4 of chapter 115 ot
the Laws of 1845 (Laws of 184.5. p. Qij) pro-
vides that land held by the resident alien at
the time of his death shall descend to the
persons, although aliens, who, if citizens,
would have been the heirs of the deceased
had he been a citizen, and that such alien to
whom lands thus descend may hold the same
as against every one but the state.
I am of opinion that the judgment appealed
from should be affirmed.
Judgment affirmed.
JOHNSON, J. (dissenting). If we uphold this
judgment, we must decide that the maker of
an assignment, in fraud of his creditors, may
recover back for his own use the transferred
property, provided he choose his attorney as
assignee, and executes the instrument undi-r
his advice. Such a judgment would, at
least, have this consequence, that future
fraudulent transfers would generally be
made to attorneys, and the salutary rule that
the fraudulent grantor cannot undo, for his
own benefit, the transfer he had made, would
cease to have any practical operation in n>
straining frauds upon creditors. The case
of Osborne v. Williams, IS Ves. 370. upon
the analogy of which this cause was decided
in the supreme court, was put by the master
of the rolls upon the ground that the terms
which rendered the contract illegal were im-
posed by the father on his son, and that the
consent of the son to those terms was ob-
tained by a species of moral constraint, aris-
ing out of the circumstances. "He put up to
sale a situation which the young man would
naturally be desirous of obtaining, and could
obtain only on the terms prescribed by his
father." It was therefore held that the par-
ties were not in pari delicto, and an account
of the profits was decreed.
The grantor In a fraudulent conveyance is
certainly not less guilty tlian the grantee,
nor is that the species of dealing, between
client and attorney, as to which equity af-
fords protection to the client.
The judgment should be reversed and a
new trial ordered.
DENIO, C. J., also dissented
520
ILLEGALITY OF OBJECT.
i.^
^
WHITE T. FRANKLIN BANTI. ^ , /
(22 Pick. ISl.) ^ yi
Supreme Judicial Court of Massachusetts. Suf-
folk and Nantucket. March Term, 1839.
By an agreed statement of facts, it ap-
peared, that on the lOth of February, 1S37,
the plaintiff deposited with the defendants
the sum of $2,000, and received from them a
book containing the following words and fig-
ures, to wit:
"Dr. Franklin Bank, in account with B. F.
WMte, Cr., 1S37, Feb. lOth. To cash depos-
ited, $2,000. The above deposit to remain
until the 10th day of August E. F. Bunnell,
Cashier."
It further appeared, that on the 7th of
July, lSo7, the plaintiff brought this action
against the bank to recover the money so de-
posited by him, declaring on the money
counts, and on an account stated-
Lf the court should be of opinion, that the
action could be maintained, the defendants
were to be defaulted and judgment rendered
for the sum of ?2,000 with interest; other-
wise the plaintiff was to become nonsuit.
WILDE, J. The first ground of the de-
fence is, that the action was prematurely
commenced. The entry in the book given to
the plaintiGf by the cashier of the bank, is un-
doubtedly good evidence of a promise to pay
the amount of Uie deposit on the 10th day
of August; and if this was a valid and legal
promise this action cannot be maintained.
But it is very clear, that this promise or
agreement that the deposit should remain in
the bank for the time limited, is void by vir-
tue of Rev. St c 36, § 57, which prgvidr s
that no bank shall make or issiift nny nnt^
inli, ciieck, draft, fjccp.pt^gnce. certificate, o r
contractT in any form wh atever, for thp pny-
lii ent" of money^ a t any future Z ^ny cf^rt/iin ,
or with Tnteres tT'excepting formoney tha t
with
may be borro wed of the co mmonwea iu
other exceptions not material in the pi
case.
The agreement that the deposit should re-
main until the 10th day of August amounts
in law, by the obvious construction and
meaning of it to a promise to pay on that
day. This,_ therefor p, was f^r t illegal co n-
tr act and a dire i^t f>^^ntrfivontinT^ of t.iip st.n1. -
uEe. _ Such a promise is void; and no court
will lend its aid to enforce it This is a well-
settled principle of law. It was fully dis-
cussed and considered in the case of Wheeler
V. Russell, 17 Mass. 281, and the late chief
justice, in delivering the opinion of the court,
remarked, "that no principle of law is better
settled, than that no action will lie upon a
contract made in violation of a statute or of
a principle of the common law." The same
principle is laid down in Bank v. Merrick, 14
Mass. 322, and in Russell v. De Grand, 15
Mass. 39. In Belding v. Pitkin, 2 Caines, 149,
Thompson, i^ said, "It is a first principle,
and not to be touched, that a contract, In
order to be binding, must be lawful." The
same principle is fully established by the
English authorities. In Shiftner v. Gordon,
12 East 304, Lord Ellenborough laid it down
as a settled rule, "that where a contract
which is illegal remains to be executed, the
coiirt will not assist either party, in an ac-
tion to recover for the non-execution of it."
It is therefore very clear, we think, that
no action can be maintained on the defend-
ants' express promise, and that, if the plain-
tiff be entitled to recover in any form of ac-
tion, it must be founded on an implied prom-
ise.
The second objection, and that on which
the defendants' counsel principally rely, pro-
ceeds on the admission that the contract is
illegal; and t hey_ insist that where money
ha s been j3aid ^y one~ M~twTr"p"arti es^^a^e
qther ^ on an TTT eggl~r gn tract, botlTbeing j^ r-
ticip£g_ cnmini s^ ^o actlo n_can be main tajjied
to recover it back. The rule of law is so
laid down by Lord Kenyon, in Howson v.
Hancock, 8 Term R. 577, and in other cases.
This rule may be correctly stated in respect
to contracts involving any moral turpitude,
but when the contract is merely malum pro-
hibitum, the rule must be taken with some
qualifications and exceptions, without which
it cannot be reconciled \vith many decided
cases. The rule as stated by Comyn, in his
treatise on Contracts, will reconcile most of
the cases which are apparently conflicting.
"When money has been paid upon an illegal
contract, it is a general rule that if the con-
tract be executed, and both parties are in
pari delicto, neither of them can recover
from the other the money so paid; but if
the contract continues executory, and the
party paying the money be desirous of re-
scinding it, he may do so, and recover back
his deposit by action of indebitatus assump-
sit for money had and received. And this
distinction is taken in the books, namely,
where the action is in affirmance of an ille-
gal contract the object of which is to en-
force the performance of an engagement pro-
hibited by law, clearly such an action can
in no case be maintained; but where the
action proceeds in disaffirmance of such a
contract, and, instead of endeavoring to en-
force it, presumes it to be void and seeks to
prevent the defendant from retaining the
benefit which he derived from an unlawful
act, there it is consonant to the spirit and
policy of the law that the plaintiff should re-
cover." 2 Com. Cont. 109.
The rule, with these qualifications and dis-
tinctions, is well supported by the cases
collected in Comyn and by later decisions.
The question then is, whether, in conformity
with these principles, upon the facts agreed,
this action can be maintained.
The first ground on which the plaintiff's
counsel rely In answer to the defendants'
objection Is, that th ere was no illegality In
EFFECT OF ILLEGALITY.
>21
makmg_the deposit, and thaL-tlifi, illegalit y
of "tjae ti'ansu ( ■ u' < . i 'iifd^to^t he proinis e
of .the Jjauii uuil i ii rity g iven for the
repai'ment, that aioue Being _prohibitedby^
The leading case on this point is that of
Robinson v. Bland, 2 Burrows, 1077. Tliat
was an action an a bill of excliange given
for money lent and for money \sou at play.
By St 9 Anne, c. 14, It was enacted that all
notes, bills, bonds, judgments, mortgages,
or other securities for money won or lent at
play, should be utterly void. The court
held, that the plaintiff was not entitled to
recover on the bill of exchange, but that he
might recover on the money counts for tlie
money lent, although it was lent at the
same time and place that the other money
for which the bill was given was won. The
same principle was laid down in the cases
of Insurance Co. v. Scott, 19 Johns. 1; Insur-
ance Co. V. Caldwell, 3 Wend. 29G, and In-
surance Co. V. Bloodgood, 4 Wend. 652. In
these cases the decisions were, that although
the nott« were illegal and void as securities,
yet that the money lent, for which the notes
were given, might be recovered back. The
principle of law established by these deci-
sions is applicable to the present case. The
only doubt arises from the meaning of the
word "contract," in the prohibitory statute.
But taking that word in connection with the
other words of prohibition, we think it equiv-
alent to the promise of the bank, and that
the intention of the legislature was to pro-
hibit the making or issuing of any security
in any form whatever, for the payment of
money at any future day.
The next answer to the objection of the
defendants is, that although the plaintiff
may be considered as being partlceps criminis
with the defendants, they are not in pari
to the holder ther^jf, or delivered to th(-
plaintiffs. The case is thus distinguished
from Allen v. Williams, 12 Pick. 297, and
Bank v. Gardner, 15 Gray. 362, cited at the
argument. The cotton was not of sufl5cient
value to pay the draft and the balance of ac-
count between the defendants and the draw-
er, at the time of their receipt and sale of
the cotton, and ever since, was in favor of the
defendants. There is no ground therefore for
implying a promise from the defendants to
the plaintiffs to pay to them either the amount
of the draft or the proceeds of the cotton.
Tieman v. Jackson, 5 Pet 580; C^owporth-
waite V. Sheffield, 1 Sandf. 416. 3 N. Y. 243;
Winter v. Drury, 5 N. Y. 525; Yates v. Bell,
3 Bam. & Aid. 643. The plaintiffs did not
take the draft, or make advances, upon the
faith of any promise of the defendants, or of
any actual receipt by them of the cotton or
the bill of lading, but solely upon the faith
of the drawer's signature and implied prom-
ise that the defendants should have funds to
meet the draft The whole consideration of
the defendants' promise moved from the
drawer and not from the plaintiffs. And the
defendants made no promise to the plaintiffs.
Their only promise to accept the draft was
made to Hill, the drawer, after the draft had
been negotiated to the plaintiffs; and there
is no proof that the defendants authorized
that promise to be shown to the plaintiffs, or
that Hill, to whom that promise was made,
was an agent of the plaintiffs. His relation
to them was that of drawer and payee, not of
agent and principaL To infer, as suggested
528
OPERATION OF CONTRACT.
In belialf of the plaintiffs, that he was their
agent In recelTlng the defendants' promise,
so that they might sue thereon in their own
name, wouid be unsupported by any facts in
the case, and would be an invasion of the
rules of law, which will not allow any person,
who took the draft before that promise was
made, to maintain an action upon that prom-
ise, either as an acceptance or a promise to
accept Judgment for the defendants.
LIMITS OF CONTRACTUAL RELATION.
529
LAWRENCE v. FOX.
(20 N. Y. 2GS.)
Court of Appeals of New York. 1859.
I. S. Torrance, for apijelhiut. E. P. Cbapin,
for appellee.
H. GRAY, J. The fust objection raised on
the trial amounts to this: That tlie evidence
of the person present, who heard the decLi-
i-atious of Holly giving directions as to the
paj-uient of the money he was then advan-
cing to the defendant, was mere hearsjiy and,
therefore, not competent. Had the plaintiff
sued Holly for this sum of money no ob-
jection to the competency of this evidence
would have been thought of; and if the de-
fendant hao performed his promise by pay-
ing the sum loaned to him to the plaintiff,
and Holly had afterward sued him for its
recovery, and this evidence had been offered
by the defendant, it would doubtless have
been receive<.l without an objection from
any source. All the defendant had the
right to demand in this case was evidence
which, as between Holly and the plaintiff,
was competent to establish the relation be-
tween them of debtor and creditor. For that
pui-pose the evidence was clearly competent;
it covered the whole ground and warranted
the verdict of the jury. But it is claimed
that notwithstanding this promise was estab-
lished by competent evidence, it was void
for the want of consideration. It is now
more than a quarter of a century since it
was settled by the supreme court of thia
state — in an able and painstaking opinion
by the late Chief Justice Savage, In which
the authorities were fully examined and
carefully analyzed — that a promise in all
material respects like the one under consid-
ei-ation was valid; and the judgment of that
court was unanimously affirmed by the
court for the correction of errors. Farley
v. Cleaveland, 4 Cow. 432; s. c. in error,
9 Cow. G39. In that case one Moon owed
Farley and sold to Cleaveland a quantity of
hay, in consideration of which CleaveLond
promised to pay Moon's debt to Farley; and
the decision in favor of Farley's right to re-
cover was placed upon the ground that the
hay received by Cleaveland from Moon was a
valid considei-ation for Cleaveland's promise
to pay Farley, and that the subsisting liabil-
ity of Moon to pay Farlej' was no objection
to the recovery. The fact that the money
advanced by Holly to the defendant was a
loan to him for a day, and that it thereby
became the property of the defendant,
seemed to Impress the defendant's counsel
with the idea that because the defendant's
promise was not a trust fund placed by the
plaintiff in the defendant's hands, out of
which he was to realize money as from tlie
sale of a chattel or the collection of a debt,
the promise although made for the benefit
of the plaintiff could not inure to his bene-
fit The hay which Cleaveland delivered to ,
UOPK.SEL. CAS. CONT. — 34
Moon was not to be paid to Farley, but the
debt incurred by Cleaveland for the pui--
chase of the hay, like the debt incurred by
the defendant for money borrowed, was
what was to be paid. That c-ase has '>een
often referred to by the courts of this state,
and has never been doubted as sound au-
thority for the principle upheld by It. Bar-
ker V. Bucklin, 2 Denio, 45; Canal Co. v,
Westchester County Bank, 4 Denio, 97. It
puts to rest the objection tliat the defend-
ant's promise was void for want of considera-
tion. The report of that case shows tliat
the promise was not only made to Mooq
but to the plaintiff r"^rley. In this case
the promise was made to Holly and not ex-
pressly to the plaintiff; and this difference
between the two cases presents the question,
raised by the defendant's objection, as to the
want of privity between the plaintiff and
defendant As early as ISOO it was an-
nounced by the supreme court of this state,
upon what was then regarded as the settled
law of England, "That where one person
makes a promise to another for the benefit
of a third person, that third person maj-
maintain an action upon it" Schermerhora
V. Vanderheyden, 1 Johns. 140, has often,
been reasserted by our coui-ts and never de-
parted from. The case of Seaman v. White
has occasionally been referred to (but not by
the courts) not only as having some bearing
upon the question now under consideration,
but as involving in doubt the soundness of
the proposition stated in Schermerhorn y.
Vanderheyden. In that case one Hill, on the
17th of August, ISoo, made his note and pro-
cured it to be indorsed by Seaman and dis-
counted by the Phoenix Bank. Before the
note matured and while it was owned by the
Phoenix Bank, Hill placed in the hands of
the defendant, Whitney, his draft accepted
by a third party, which the defendant in-
dorsed, and on the 7th of October, lS3o, got
discounted and placed the avaUs in the
hands of an agent with which to take up
Hill's note; the note became due, Whitney
withdrew the avails of the draft from the
hands of his agent and appropriated it to a
debt due him from Hill, and Seaman paid
the note indorsed by him and brought his
suit against \Miitney. Upon this state of
facts appearing, it was held that Seaman
could not recover: first for the reason that
no promise had been made by Whitney to
pay, and second, if a promise could be im-
plied from the facts that Hill's accepted
draft with which to raise the moons to pay
the note, had been placed by HiU in the hands
of Whitney, the promise would not be to
Seaman, but to the Phcenix Bank who then
owned the note; although in the course of
the opinion of the court. It was stated that,
in all cases the principle of which was sought
to be applied to that case, the fund hadi
been appropriated by an express undertaJc-
ing of the defendant with the creditor. But
before concludLug the opinion of the court
530
OPERATION OF CONTRACT.
In this case, the learned judj^e who deliver-
ed it conceded that an undertaking to pay the
creditor may be implied from an arrange-
ment to that effect between the defendant
and the debtor. This question was subse-
quently, and in a case quite recent, again
the subject of consideration by the supreme
court, when it was held, that in declaring up-
on a promise, made to the debtor by a third
party to pay the creditor of the debtor, found-
ed upon a consideration advanced by the
debtor, it was unnecessary to aver a promise
to the creditor; for the reason that upon
proof of a promise made to the debtor to pay
the creditor, a promise to the creditor would
be implied. And in support of this proposi-
tion, in no respect distinguishable from the
one now under consideration, the case ot
Schermerhorn v. Vanderheyden, with many
intermediate cases in our courts, were cited,
in which the doctrine of that case was not
only approved but aflBrmed. Canal Co. v.
Westchester County Bank, 4 Denio, 97. The
same principle is adjudged in several cases
in Massachusetts. I will refer to but few of
them. Ai-nold v. Lyman, 17 Mass. 400; Hall
V. Mai-ston, Id. 575; Brewer v. Dyer, 7 Cash.
337, 340. In Hall v. Marston the court say:
•'It seems to have been well settled that if
A promises B. for a valuable consideration
to pay C, the latter may maintain assump-
sit for the money;" and in Brewer v. Dyer,
the recovery was upheld, as the court said,
"upon the principle of law long recognized
and clearly established, that when one per-
son, for a valuable consideration, engages
with another, by a simple contract, to do
some act for the benefit of a third, the lat-
ter, who would enjoy the benefit of the act,
may maintain an action for the breach of
such engagement; that it does not rest upon
the ground of any actual or supposed rela-
tionship between the parties as some of the
earlier cases would seem to indicate, but
upon the broader and more satisfactory basis,
that the law operating on the act of the par-
ties creates the duty, establishes a privity,
and implies the promise and obligation on
which the action is founded." There is a
more recent case decided by the same court,
to which the defendant has referred and
claims that it at least impairs the force of the
former cases as authority. It is the case of
Mellen v. Whipple, 1 Gmy, 317. In that case
one Rollins made his note for $500, payable
to Ellis and Mayo, or order, and to secure
its payment mortgaged to the payees a cer-
tain lot of ground, and then sold and convey-
ed the mortgaged premises to the defendant,
by deed in which it was stated that the
"granted premises were subject to a mort-
gage for ?500, which mortgage, with the
note for which it was given, the said Whip-
ple is to assume and cancel." The deed thus
made was accepted by Whipple, the mort-
gage was afterward duly assigned, and the
note indorsed by Ellis and Mayo to tlie plain-
tiff's intestate. After Whipple received the
deed he paid to the mortgagees and their
assigns the interest upon the mortgage and
note for a time, and upon refiising to con-
tinue his payments was sued by the plaintiff
as administratrix of the assignee of the mort-
gage and note. The court held that the
stipulation in the deed that Whipple should
pay the mortgage and note was a matter
exclusively between the two parties to the
deed; that the sale by Rollins of the equity
of redemption did not lessen the plaintiff's
security, and that as nothing had been put
into the defendant's hands for the purpose
of meeting the plaintiff's claim on Rollins,
there was no consideration to support an
express promise, much less an implied one,
that Whipple should pay Mellen the amount
of the note. That is all that was decided
in that ease, and the substance of the rea-
sons assigned for the decision; and whether
the case was rightly disposed of or not, it
has not in its facts any analogy to the case
before us, nor do the reasons assigned for
the decision bear in any degree upon the
question we are now considering. But it is
urged that becau;e the defendant was not in
any sense a trustee of the property of Holly
for the benefit of the plaintiff, the law will
not imply a promise. I agree that many ot
the cases whei-e a promise was implied were
cases of trusts, created for the benefit of the
promisor. The case of Pelton v. Dickinson,
10 Mass. 287, and others that might be cit-
ed are of that class; but concede them all
to have been cases of trusts, and it proves
nothing against the application of the rule
to this case. The duty of the trustee to pay
the cestui que trust, accoi-ding to the terms
of the trust, implies his promise to the latter
to do so. In this case the defendant, upon
ample consideration received from Holly,
promised Holly to pay his debt to the plain-
tiff; the consideration received and the
promise to Holly made it as plainly his duty
to pay the plaintiff as if the money had been
remitted to him for that purpose, and as
well implied a promise to do so as if he had
been made a trustee of property to be con-
verted into cash with which to pay. The
fact that a breach of the duty imposed in
the one case may be visited, and justly, with
more serious consequences titan in the other,
by no means disproves the payment to be a
duty in both. The principle illustrated by
the example so frequently quoted (which
concisely states the case in hand) "that a
promise made to one for the benefit of an-
other, he for whose benefit it is made may
bring an action for its breach," has been ap-
plied to trust cases, not because it was ex-
clusively applicable to those cases, but be-
cause it was a principle of law, and as such
applicable to those cases. It was also in-
sisted that Holly could have discharged the
defendant from his promise, though it was
intended by both parties for the benefit of
the plaintiff, and, therefore, the plaintiff was
not entitled to maintain this suit for the
LIMITS OF COXTRACTUAL KELATION.
551
recovery of a demand over which he had
no control. It is enough that the plaintiff
did not release the defendant from his
promise, and whetlier ho could or not Is a
question not now necessarily involved; but
if It was, I think it would be found difficult
to maintain the right of Holly to discliarge
a judgment recovered by the plaintiff upon
confession or otherwise, for the breach of
the defendant's promise; and if he could
not, how could he discharge the suit before
judgment, or tne promise before suit, made
as it was for the plaintiff's benefit and In
accordance with legal presumption accept-
ed by him (Beriy v. Taylor, 5 Hill, 577-r)S4
et seq.), until his dissent was shown? The
cases cited and especially that of Farley
V. Cl6aveland, established the validity of a
parol promise; it stands then upon the foot-
ing of a written one. Suppose the defend-
ant had given his note in which for value
received of Holly, he had promised to pay
the plaintiff and the plaintiff had accept-
ed the promise, retaining Holly's liability.
Very clearly Holly could not have discharged
that promise, be the right to release the
defendant as it may. No one can doubt that
he owes the sum of money demanded of him,
or that in accordance with his promise it
was his duty to have paid it to the plaintiff;
nor can it be doubtetl that whatever may be
the diversity of opinion elsewhere, the ad-
judications in this state, from a very early
period, approved by experience, have estab-
lished the defendant's liability; if, therefore,
it could be shown that a more strict and
teclmically accui-ate application of the rules
api)lied, would lead to a different result
(wliich I by no means concede), the effort
should not be made in the face of manifest
justice.
The judgment should be affirmed.
JOHNSON, C. J., and DENIO, J., based their
judgment upon the ground that the promise
was to be regarded as made to the plaintiff
through the medium of his agent, whose
action he could ratify when it came to his
knowledge, though taken without his being
privy thereto.
COMSTOCK, J. (dissenting). The plaintiff
had nothing to do with the promise on which
he brought this action. It was not made
to him, nor did the consideration proceed
from him. If he can maintain the suit,
it is because an anomaly has foimd its way
Into the law on this subject. In general,
there must be privity of contract. The party
who sues upon a promise must be the prom-
isee, or he must have some legal interest
in the undertaking. In this case, it is plain
that Holly, who loaned the money to the
defendant, and to whom the promise in ques-
tion was made, could at any time have
claimed that it should be performed to him-
self personally. He had lent the money to
the defendant, and at the same time directed
the latter to pay the sum to the plaintiff,
lliis direction he could countermand, and
if he liad done so, manifestly the defendant's
promise to pay according to the direction
would have ceased to exist. The plaintiff
would receive a benefit by a complete exe-
cution of the arrangement, but the arrange-
ment itself was between other parties, and
was under their exclusive control. If the
defendant had paid the money to Holly, his
debt would liave been disdiarged thereby.
So Holly might have relea.sed the demand or
assigned it to another person, or the parties
might have annulled the promise now in
question, and designated some other creditor
of Holly as the party to whom the money
should be paid. It has never been claimed
that in a case thus situated the right of a
third person to sue upon the promise rested
on any sound principle of law. We are to
iucjuire whether the rule has been so estab-
lished by positive authority.
The cases which have sometimes been sup-
posed to have a bearing on this question are
quite numerous. In some of them, the dicta
of judges, delivered upon very slight con-
sideration, have been referred to as the de-
cisions of the courts. Thus, in Schermer-
hom V. Vanderheyden, 1 Johns. 1-40, the court
is reported as saying: "We are of opinion
that where one person makes a promise to
another, for the benefit of a third person, that
third person may maintain an action on
such promise." This remark was made on
the authority of Button v. Foole, 'Vent 31S,
332, decided in England nearly two himdred
years ago. It was, however, but a mere re-
mark, as the ease was determined against
the plaintiff on another groimd. Yet this
decision has often been referred to as au-
thority for similar observations in later cases.
In another class of cases, which have been
sometimes supposed to favor the doctrine,
the promise was made to the person who
brought the suit, while the consideration
proceeded from another; the question con-
sidered being, whether the promise was void
by the statute of frauds. Thus, in Gold v.
I'hillips, 10 Johns. 412, one Wood was in-
debted to the plaintiffs for services as at-
torneys and counsel, and he conveyed a
farm to the defendants, who. as part of the
consideration, were to pay tliat debt. Ac-
cordingly, the defendants wrote to the plain-
tiffs, informing them that an arrangement
had been made by which they were to pay
the demand. The defense was, that the
promise was void within the statute, be-
cause, although in writing, it did not ex-
press the consideration. But the action was
sustained, on the ground that the undertak-
ing was original and not collateral. So in
the case of Farley v. Cleaveland, 4 Cow. 432,
9 Cow. G30. the facts proved or offered to
be proved were, that the plaintiff held a
note against one Moon; that Moon sold hay
to the defendant, who in consideration of
that sale promised the plaintiff by parol to
OrERATION OF CONTRACT.
pay the note. The only question was,
whether the statute of frauds applied to the
case. It was held by the supreme court,
and afterward by the court of errors, that
it did not Such is also precisely the doc-
trine of Ellwood V. Monk, 5 Wend. 23o,
where it was held that a plea of the statute
of frauds to a count upon a promise of the
defendant to the plaintiff, to pay the latter
a debt owing to him by another person, the
promise being founded on a sale of prop-
erty to the defendant by the other person,
was bad.
The cases mentioned and others of a like
character were referred to by Mr. Justice
Jewett, in Barker v. Bucklin, 2 Denio, 45.
In that case the learned justice considered
at some length the question now before us.
The authorities referred to were mainly
those which I have cited, and others upon
the statute of frauds. The case decided
nothing on the present subject, because it
was determined against the plaintiff on a
gi-ound not involved in this discussion. The
doctrine was certainly advanced which the
plaintiff now contends for, but among all
the decisions which were cited, I do not
think there is one standing directly upon It.
The case of Arnold v. Lyman, 17 Mass. 400,
might perhaps be regarded as an exception
to this remark, if a different interpretation
had not been given to that decision in the
supreme court of the same state where it
was pronounced. In the recent case of
Mfllen V. Whipple, 1 Gray, 317, that deci-
sion is understood as belonging to p class
where the defendant has in his ^ands a
trust fund, which was the foundation of the
duty or promise on which the suit is brought
The cases in which some trust was in-
volved are also frequently referred to as au-
thority for the doctrine now in question,
but they do not sustain It If A. delivers
mpney or property to B., which the latter
accepts upon a trust for the benefit of C,
the latter can enforce the trust by an ap-
propriate action for that purpose. Berly v.
Taylor, 5 Hill, 577. If the trust be of mon-
ey, I think the beneficiary may assent to it
and bring the action for money had and re-
ceived to his use. If It be of something
else than money, the trustee must account
for It according to the terms of the trust,
and upon principles of equity. There Is
some authority even for saying that an ex-
press promise founded on the possession of
a trust fund may be enforced by an action
at law in the name of the beneficiary, al-
though it was made to the creator of the
trust. Thus, in Comyn, Dig. "Action on the
Case upon Assumpsit," B, 15, it is laid down
that If a man promise a pig of lead to A.,
and his executor give lead to make a pig to
B., who assumes to deliver It to A., an as-
sumpsit lies by A. against him. The case
of Delaware & H. Canal Co. v. Westchester
County Bank, 4 Denio. 97, involved a trust
because the defendants had received from
a third party a bill of exchange under an
agreement that they would endeavor to col-
lect it, and would pay over the proceeds
when collected to the plaintiffs. A fund
received under such an agreement does not
belong to the person who receives It. He
must account for it specifically; and per-
haps there is no gross violation of principle
In permitting the equitable owner of it to
sue upon an express promise to pay it over.
Having a specific interest in the thing, the
undertaking to account for it may be regard-
ed as in some sense made with him through
the author of the trust. But further than
this we cannot go without violating plain
rules of law. In the case before us there
was nothing in the nature of a trust or
agency. The defendant borrowed the mon-
ey of Holly and received it as his own.
The plaintiff had no right In the fund, legal
or equitable. The promise to repay the
money created an obligation in favor of the
lender to whom it was made and not in
favor of any one else.
I have referred to the dictum In Scher-
merhorn v. Vanderheyden, 1 Johns. 140, as
favoring the doctrine contended for. It
was the earliest in this state, and was
founded, as already observed, on the old
English case of Dutton v. Poole, Vent 318.
That case has always been referred to as
the ultimate authority whenever the rule in
question has been mentioned, and it de-
serves, therefore, some further notice. The
father of the plaintiff's wife being seized of
certain lands, which afterward on his death
descended to the defendant, and being about
to cut £1,000 worth of timber to raise a por-
tion for his daughter, the defendant prom-
ised the father in consideration of his for-
bearing to cut the timber, that he would pay
the said daughter the £1,000. After verdict
for the plaintiff, upon the issue of non-as-
sumpsit, it was urged in arrest of judgment
that the father ought to have brought the
action, and not the husimnd and wife. It
was held, after much discussion, that the
action would lie. The court said: "It
might be another case if the money had
been to have been paid to a stranger; but
there is such a manner of relation between
the father and the child, and it is a kind of
debt to the child to be provided for, that the
plaintiff is plainly concerned." We need not
criticise the reason given for this decision.
It Is enough for the present purpose, that
the case is no authority for the general doc-
trine, to sustain which it has been so fre-
quently cited. It belongs to a class of
cases somewhat peculiar and anomalous, in
which promises have been made to a parent,
or person standing in a near relationship to
the person for whose benefit it was made,
and in which, on account of that relationship,
the beneficiary has Ik'CU allowed to main-
tain the action. Ilegarded as standing on
any other ground, they have long since
ceased to be the law in England. Thus..
LIMITS OF CONTRACTUAL RELATION.
>ii3
In Crow V. Rogers, 1 Strange, 502, one Hardy
was indebted to the plaiutiO: in the sum of
£70, and upon a discourse between Hardy
and the defendant, it was agreed that the
defendant should pay that debt in consid-
eration of a house, to be conveyed by Hardy
to him. The plaintiff brought the action on
that promise, and Button v. Poole was cit-
ed In support of it. But It was held that
the action would not lie, because the plain-
tiff was a stranger to the transaction.
Again, In Price v. Easton, 4 Barn. & Adol.
433, one William Price was indebted to the
plaintiff in £13. The declaration averred a
promise of the defendant to pay the debt,
in consideration that "William Price would
work for him, and leave the wages in his
hands; and that Price did work according-
ly, and earned a large sum of money, which
he left in the defendant's hands. After ver-
dict for the plaintiff, a motion was made in
arrest of judgment, on the ground that the
plaintiff was a stranger to the consideration.
Dutton V. Poole, and other cases of that
class, were cited in opposition to the mo-
tion, but the judgment was arrested. Lord
Demnan said: "I think the declaration can-
not be supported, as it does not show any
consideration for the promise moving from
the plaintiff to the defendant." Littlodale,
J., said: "No privity Is shown between the
plaintiff and the defendant. The case is
precisely like Crow v. Rogers, and must be
governed by It." Taunton, J., said: "It Is
consistent with all the matter alleged in the
declaration, that the plaintiff may have been
entirely Ignorant of the arrangement be-
tween William Price and the defendant."
Patterson. J., observed: "It Is clear that the
allegations do not show a right of action in
the plaintiff. There Is no promise to the
plaintiff alleged." The same doctrine is
recognized in Lilly v. Hays, 5 Adol. & E.
548, and such Is now the settled rule in
England, although at an early day there
was some obscurity arising out of the case
of Dutton V. Poole, and others of that pe-
culiar class.
The question was also Involved in some
confusion by the earlier cafics in Massa-
chusetts. Indeed,' the supreme court of
that state seem at one time to have made a
nearer approach to the doctrine on which
this action must rest than the courts of this
state have ever done. 10 Ma.ss. 287; 17
Mass. 400. But In the recent case of Mel-
lon v. Whipple, 1 Gray, 317, the subject was
carefully reviewed and the doctrine utterly
overthrown. One RoUin was Indebted to
the plaintiff's testator, and had secured the
debt by a mortgage on his land. He then
conveyed the equitj' of redemption to the de-
fendant, by a deed which contained a clause
declaring that the defendant was to assume
and pay the mortgage. It was conceded
that the acceptance of the deed with such
a clause in It was equivalent to an express
promise to pay the mortgage debt; and the
question was, whetlier the mortgagee or his
representative could sue on that undertak-
ing. It was held that the suit could not be
maintained; and in the course of a very
careful and discriminating opinion by Judge
Metcalf, It was shown that the cases which
had been supposed to favor the action be-
longed to exceptional classes, none of which
embraced the pure and simple case of an
attempt by one person to enforce a promise
made to another, from whom the considera-
tion whoUy proceeded- I am of that opin-
ion.
The judgment of the court below should,
therefore, be reversed, and a new trial
granted.
GROVER, J^ also dissented.
Judgment affirmed-
'53^.
OPERATION OF CONTRACT.
, ^ R^ PPLYE
V. RACIXE SEEDER CO.
(44 N. W. 363, 79 Iowa, 220.)
Supreme Court of Iowa. Jan, 31, 1S90.
Appeal from district court, Polk county:
Josiah Given, Judge.
Action for breach of contract in the sale
of certain seeders, in which the court, with-
out the intervention of a jury, found the
following' facts :
"First. That prior to Octolier 14, 1SS4,
the firm of Young- Bros., the plaintiff's as-
signors, were a copartnership engaged
principally as manufacturers' agents in sale
of agricultural implements throughout the
state of Iowa, having. their place of busi-
ness at the city of Des Moines, in said
state. (Second. That on the IDth day of
August, 1SS4, the Racine Seeder Company,
of Racine, "Wis., the defendant herein, made
with said Young Bros, the contract intro-
duced in evidence, and marked 'Exhibit A,'
as alleged in plaintiff's petition. Third,
That by said contract the defendant sold
to Young Bros, nine hundred Strowbridge
Broadcast sowers, for which payment was
to be made by the promissory notes of
Young Bros, as imi)lements were delivered,
and in consideration for such purchase the
defendant granted to said firm the exclusive
privilege of selling said implements in the
western half of the state of Iowa. Young
Bros, were to canvass said territory, and
solicit written orders for said Strowbridge
sower, in the name of defendant, using
blank orders prescribed by it; and the or-
ders thus taken were to be turned over to
the defendant, and thereupon the imple-
ments were to be shipped by the defend-
ant to the various purchasers, at the
times stated in such orders. Young Bros,
were further required to take promissory
notes in settlement for implements thus
sold, when sales were not for cash ; and
such notes were to be turned over to the
defendant, in addition to the contracts be-
fore mentioned, as collateral security for
the notes of Young Bros. If implements
were sold for cash, the same was to be im-
mediately applied by Young Bros, on the
purchase price of the implements contract-
ed for. Fourth. That, upon the faith of
the above contract, Young Bros, proceeded
to canvass the territory assigned them,
taking orders forthe said implements, and
•turning them over to defendant, and oth-
erwise performing their part of said con-
tract, and up to the 14th of October, 1SS4,
had sold about three hundred of said im-
plements, at prices varying from $16.50 to
$18,75. Said contracts were identical in
form with Exhibit A, hereto attached.
Fifth. That on the 14th day of October,
1884, the said Young Bros, made a general
assignment for the benefit of creditors to
one Isaac Henshie, who continued to per-
form the duties of said assignee until his
death, on December 8, 18S4; that the rec-
ord of the instrument found on pages Nos,
10, 11, 12, and 13 of book No. 154 of Chattel
Mortgage Records, in recorder's office of
Polk county, Iowa, introduced in evidence,
is a true copy of said general assignment;
that by said assignment all rights under
said contract of Young Bros, with defend-
ant passed to said assignee; that the plain-
tiff in this cause is the successor in ofiice to
said Isaac Henshie as assignee of said
Y^oung Bros., duly appointed by the ciiTuit
court of Polk county, Iowa, on or about
the 13th day of December, 1884. Sixth.
That on the 5th day of November, 1884,
the defendant sent to Young Bros.' recent
place of business, by messenger, the letter
of that date set out In defendant's answer
herein, giving notice of its refusal to go on
with the contract before mentioned; that
the defendant intended by the notice given
in said letter to put an end to the contract
entirely, and the same was understood and
treated by the assignee of Y'oung Bros, as
BO intended ; that soon after the service of
the above notice the defendants entered
this same territory which had been grant-
ed by said contract to Young Bros., made
new contracts, in its own name, with some
of the persons with whom Y^oujig Bros,
had contracted for the sale of said imple-
ments, and sold large numbers of the same
to divers other persons in said territory.
Seventh. That, as soon as practicable after
entering upon his duties as assignee of said
Young Bros. 'estate, the said Isaac Henshie
sought legal advice with reference to his
rights as such assignee under said con-
tract, and was advised that he had a right
under the law to go on with the same, and
require performance thereof on the part of
defendant; and there was evidence tend-
ing to show that he thereupon procured
an agent to further canvass the territory
named in saidcontract, and was otherwise
arranging to go on with the same, when
he received said defendant's letter of No-
vember 5, 1884, giving notice of its refusal
to perform said contract. Such evidence
was, in substance, that said assignee called
in from the road one William Gracey, who
had previously been employed by Young
Bros, to sell said Strowbridge sower, the
goods handled by Young Bros., in said ter-
ritory; that said Gracey was subsequent-
ly in the city; and that the account-book
kept by the assignee showed an account
with William Gi*acey, in which appeared
the following entry: "October 20, 1884,
Commenced work at sixty dollars per
month and expenses;" that said Gracey
received money from said assignee, and
subsequently took the two orders for thir-
ty-five of said Strowbridge sowers, which
were introduced in evidence, and marked
'Exhibit B,' (22 and 23,) but this was no
evidence that the defendant had knowledge
of these matters; that at the time said let-
ter of November 5, 1884, was received from
the defendant said assignee had not had a
reasonable time in which to perfect ar-
rangements for going on with said con-
tract. Eighth. That said Strowbridge
I3roadcast sower is a patented article, of
which defendant was the sole manufactur-
er. About the month of February or March,
1885, however, a similar sower was put up-
on the market by the Joliet Wire Com-
pany, of Joliet, 111., at less than this con-
tract price; but this was considered by the
defendant to be an infringement on the
Strowbridge patent. Ninth. That at no
time has defendant either made or ten-
dered to plaintiff, or to his predecessor in
office, the said Isaac Henshie, or to said
ASSIGNMENT.
53^
Young Bros., any compensation whatever
for the labor or nionoyw expendod by them,
or for any portion of their performance of
said contract, or made or offered in any
manner to place the said persons, or either
of tliern.j/i statu quo. Tenth. Thatdeiend-
ant never delivered, nor tendered a deliv-
ery of, any portion of said nine hundred
iStrowbridjie sowers sold to said Young
Bros., although such delivery was demand-
ed, to the number of said implements
named in said orders turned over to said
defendant, if such orders constituted a de-
mand ; and said defendant refused to deliv-
er any portion of said implements, or to
perform its part of said contract in any re-
spect whatever. Butno demand was made
upon defendant for i)erformance of said
contract, unless the delivery of said orders
constituted such demand. Eleventh. Tiiat
neither the plaintiff nor his predecessor in
ofliee, the said Isaac Henshie,ever tendered
the defendant any security in lieu of the
promissory notes of Young Bros, agx'eed
to be made, or made application to the
court for authority to carry out said con-
tract, or to require said defendant to ac-
cept any security in lieu of said notes, or
gavedcfendant any notice that he intended
to carrj^ out said contract. "
As a conclusion of law, the district court
found with the defendant, and the plain-
tiff appeals.
Cummins & Wrischt and N. B. Raymond,
for appellant. Lehman & Park, for appel-
lee.
GRANGER, J. I. The point receivingthe
principal attention in argument Is as to
the effect on the contract of the insolvency
of Young Bros., and the assignment for
the benelit of their creditors. Perhaps it
may be better stated as a query, thus:
Was the insolvency and assignment a jus-
tification for the defendant company in re-
scinding the contract? The answer to this
question is a practical determination of
the case, as to the plaintiffs cause of ac-
tion. Its consideration has led counsel for
appellant to consider at some length the
law as to the assignment of contracts, and
It is urged that the assignment in ques-
tion is within itscontemyjlation. A salient
feature of thecase isthe manner or method
of payment by Young Bros, for the seed-
ers. The contract was for t)00 seeders, to
be delivered on the orders of Young Bros.,
for which the firm was to give its notes.
Y'oung Bros, were to deliver the seeders to
purchasers from them, and settle for the
same either by receiving cash or notes. If
cash, it was to be turned over to defend-
ant, to apply on the notes of Y'oiing Bros.
If notes, they were to be turned over to
defendant as collateral security for the
notes already given by Young Bros. It is
said in argument that the district court
held the rescission sealed because, after the
assignment, Young Bros, were not in a
position to give their notes in pursuance
of the terms of the contract; from which
we infer this view of the court : That the
defendant was entitled, under the con-
tract, to the notes of Young Bros., aided
collaterally by the notes taken by them in
the sales of the seeders. As between de-
fendant and Young Bros., nothing less
could be regarded as a compliance with
the c(jntract. It could hardly- be claimed
that Young Bros., in a settlement for the
maehines, could substitute in lieu of their
note that of another person or firm, re-
gaidless of the question of solvency or
value, even though aided by the collateral
notes as agreed upon, for the sole and con-
clusive reason that their engagements are
for notes signed by them. Such a rule
needs no elaboration.
The argument, then, leads us to the
query, without reference to the statutory
assigriinent for the benelit of credilor.s,
could Young Bros, have so assigned the
contract, without the consent of defend-
ant, as tosubstituteanotherin their stead
for pei-formance, and whose note must be
accepted in lieu of theirs by the defendant?
This leads us to consider the autliorities
cited. Counsel for appellant quotes from
Code, § 2084, as follows: "Insti-uments in
writing, by which the maker promises
* * * to pay or deliver any property or
labor, or acknowledges any monc}' or
labor or property to be due, are assignable
by indorsement thereon, or by other writ-
ing; and the a.ssignee shall have a right of
action in his own name." Counsel then
say: "Under the very broad language
of this provision, this court has held that
all contracts are assignable, even in cases
where, by the terms of the instrument, its
assignment is prohibited." And reference
is made to Moorman v. Collier. 32 Iowa, 138,
and Bank v. Carpenter, 41 Iowa, 518. Sec-
tion 20*>4 is a part of thechar)teron "Notes
and Bills;" and the section deals only with
instruments in wi-iting, and tells how
they may be transferred, and who may sue
thereon. In both of the cases to which refer-
ence is made the court had under consider-
ation the validitj- of the transfer of an in-
strument in writing for the payment of
money; and the language used in e.ich case
is not too broad, if properly limited by the
subject of its application. In Moorman v.
Collier, the language relied on is that "all
instruments, under our statute, are assign-
able;" and the statement ttikes as author-
ity Revision, § 179G, which corresponds with
section 20^4 of the Code, and the language
of the case is only as to " instruments." It
does not say, "all coTitracts." The case
evidently means all instruments for the
payment or deli very of money, property, or
labor, as specified in the si^ction and cliap
ter. The case of Bank v. Carpenter was an
action on a written guarantj-, which was
held assignable; aad in its disrussion this
language is used : " Generally, by the com-
mon law, a guaranty is not negt)tiable. or
in any maTinertransiorable, so as to enable
the a-ssiguee to maintain an action there-
on. * * • But under our statutes this
and every other kind of contract is assign-
able." It cites for support Code, §;; 2os2-
20>7, inclusive; and it is said in the opinion
that "even in a case where, by the terms
of the instrument, its assignment is pro-
hibited, it may be assigned. " The sections
referred to are the six first sections in the
chapter on" Notes and Bills," which chap-
ter, of course, has reference to other instru-
ments than notes and bills, and the pro-
visions, in brief, as to assignments are
that a party entitled to recover on an in-
5o6
OPERATION or CONTRACT.
strument or an open account may transfer
his ripht of recovery to another: but there
Is nothing in the language of the chapter
to indicate a legislative intent to authorize
a party to a contract by assignment to
transfer his obligations to perform to a
third party, and thus effect liis release,
■without the consent of his obligee. Let us
suppose that A. contracts in writing to
render service, as a traveling salesman, to
B., for a si^ecilied compensation. Under
the laM', if B. shall be indebted to A. on the
contract, A. may assign his claim. But
suppose A. should assign his contract to
C, whereby C. was to receive the pay and
render the service. Must B. accept that?
B. has contracted for the services of A. He
is entitled to that; and, before B. can be
required to pay either to A. or his assigns,
he must have what hecontracted for. The
law will permit a person to assign what
is his, either in possession or by right of
action, butnot his obligations to another;
and such is the substiance of the provis-
ions of the statutes on the subject of as-
signments referred to. Thus we think
that Young Bros, could not, without ref-
erence to the assignment for the benefit of
creditors, have so assigned the contract in
question, without the consent of the de-
fendant, as to have required defeuhe
assignee could have done if defendant, after
insolvency, had been willing to deliver the
seeders. It may be conceded that the con-
tract could thus have been executed by the
a.ssignee on behalf of Young Bros. But
the query is, had the defendant the right
to refuse delivery of the seeders after in-
solvency and assignment? In other words,
had it the right to terminate the contract?
If it were a case of insolvency without the
assignment, we think it would be conceded
on authority that the obligation to deliver
could only be on a tenderofacash payment
in lieu of notes agreed upon. Pardee v. Kan-
ady, 100 N. Y. 121, 12 N. E. Rep. 885. Does
the fact of the assignment affect the rights
of the defendant? The reason of the rule
in cases of insolvency is too manifest to
need explanation, A person who contracts
to deliver property on a credit, in antici-
pation of a solvent purchaser, ought not
to be required to deliver it after insolv-
ency, which is a practical confession by the
purchaser of his inability to comply with
the terms of the contract. If to the fact of
insolvency is added that of an assignment
for the benefit of creditors, why should the
rule be changed? If the delivery is excused
in case of insolvencj' because the property
will not be paid for.thesame reasons exist
for excusing the delivery after assignment.
If the insolvent did not possess a right to
enforce the contract except by cash pay-
ment, he could convey no greater right to
his assignee. The argument deals with the
question of the right of appellant to a de-
livery of the seeders upon cash payment
therefor. To our minds, the record does
not present the question for consideration.
The contract was not to pay cash, but to
settle by note. After insolvency defendant
was not required to anticipate a readiness
for cash payment; and, if either Young
Bros, or plaintiff desired to make such pay-
ment, a tender to that effect should have
been made. Soon after the assignment, de-
fendant, as it should, gave notice that be-
cause of the insolvency' and dissolution pf
the partnership the contract was rescinded.
This notice was to Young Bros. If the as-
signee then desired to pay in cash, and have
the seeders delivered, the proposition or
tendershould have been made. Butneither
the pleadings in the case, nor the findings of
the court, deal Avith this question. The
case in the district court seems to have
been tried upon an issue as to the right of
the assignee to carry out the contract by
giving his note in lieu of that of Young
Bros. The pleadings and findings have to
do with a willingness on the part of the
assignee to carry out the contract; but it
appears only to have been a carrying out
of the contract as Young Bros, were au-
thorized to do, and not by payrnents in
cash. A reference to the elcA^enth finding
shows that the assignee has never in any
manner indicated to defendant a purpose
or desire to secure or perform the contract.
Insolvency, in such cases, implies an ina-
bility to perform, on which the defendant
might rely until otherwise assured.
Appellant contends, with much zeal, that
the mere fact of insolvency does not put an
end to the contract of sale; and several
authorities ai-e cited in support of the rule.
It is not necessary for us to state an
opinion on a state of facts so broad. The
case In re Steel Co., 4 Ch. Div, 108, cited by
appellant, bears upon the question of
when the facts will justify a seller on credit
in refusing to deliver because of the subse-
quent insolvency of the purchaser. The
facts in that case are that the Carnforth
Iron Company, in October, 1874, contracted
to supply iron to be delivered monthly,
and to be paid for in installments, but on
credit. The installments were delivered
till in February, 1875, when the purchasing
company called a meeting of its creditors,
and said it was carrying on business at a
loss, and was short of capital, and asked
for an extension of time, which the credit-
ors refused. The selling company then re-
fused to deliver the iron except upon cash
payments, and the purchasing company
then rescinded the contract. The selling
company then asked for damage, whicli
the court held could not be recovered;
holding that there was no such declaration
of insolvency as to justify the selling com-
pany in refu.sing to deliver. The syllabus
of the case, which appears to be supported
by the opiuion, deduces a rule as follows:
"In order to justify the vendors, in such a
case, in exercising their right of refusal to
deliver, there must be such proof or admis-
ASSIGNMENT.
537
eion of the Insolvency of the purchasers at
the time as amounts to a declaration of
intention not to pay for the goods. " The
case does not appear to be an authority
against the right of refusal to deliver
where the fact of insolvency exists, and is
so evidenced as to amount to a dec-laied
purpose not to pay. It is the fact of the
insolvency that Beema to be the turning
point in the case, and that would surely
seem to be the reasonable rule. The case
of Morgan v. Bain, L. R. 10 C. P. 15, also
cited by appellants, was one for the deliv-
ery of iron on credit; and the purchasers
became insolvent. Lord Colkridge, C. J.,
in his opinion, said: "It is not disputed
tliat upon the occurrence of insolvency the
vendor would not be bound to deliver to
the insolvent purchaser an installment of
the iron becoming due, without a tender
of the price. " Brett, J., in the same case,
said, without commitang himself to the
tlieory that the mere fact of insolvency
would pci se p'jt an end to the contract,
that such fact, with that of notice to the
seller of the insolvency, would justify an as-
sumption by the seller that the purchaser
intended to abandon the contract. The
notice upon which he relied, and gave his
adherence to the holding in that case, waa
the commencement of insolvent proceed-
ings under the bankrupt act. In this case
the fact of the insolvency is unquestioned,
and a like notice is given by an insolvent
proceeding for the benefit of creditors.
Hence it seems the defendant, in this case,
is within any of the rules cited. Other au-
thorities cited by appellant are not more
favorable to his position.
2. Defendant presented a counter-claim,
based on an open account alleging a bal-
ance due of $27.98, as to which the court
established a claim against the estate of
Young Bros, for $27, based on the follow-
ing finding of facts: " Twelfth. On defend-
ant's counter-claim, the court finds that
defendant received orders from Young
Bros, for the goods mentioned in the ac-
count under dates September 5, 6, 8, 15,
and 17, 18S4; that these orders were treat-
ed in the usual way, the usual directions
given for shipping, and the goods charged
on the books to Young Bros. ; that both
of Young Bros, were on the witness stand,
and neither of tliein denied having received
the goods; that, the balance of defendant's
counter-claim not beiug denied, the de-
fendant should recover the sum of three
hundred and twenty-seven and ninety-eight
one-hundredths dollars, less the sum of
three hundred dollars due the plaintiff for
commission earned by Young Bros, under
thecontractof LS'vj, declared on in plaintiff's
petition." It is urgi-d that tlie proofs are
not sufficient to sustiun the finding. The
argument concedes a practical disjjute in
the testimony, and the finding has the
force of a verdict by the jury. The evi-
dence is such that we cannot interfere,
3. It is next said that it was error to en-
ter a personal judgment against ttie as-
signee. The assignment is in these words:
"The court erred iu rendering a personal
judgment against the plaintiff herein for
the balance due upon defendant's counter-
claim, for the reason that such judgment
is contrary to law and the evidence. Said
defendant was entitled only to the estab-
lishment of his claim as a creditor of said
estate." The assignment is not sustained
by the record. The judgment of the court
is merely the establishment of a claim
against the estate. It is not a personal
judgment. It would only be su bject to pro
rata payment, like other claims. The
wording of the judgment is "that such be
andis hereby established asa claim against
the estate of Young Bros., and against the
eaid Eapplye as their assignee. " These
words have no other meaning than the es-
tablishment of the claim. It would ap-
pear that appellant has based this assign-
ment rather upon statements in the ab-
stract with reference to the judgment than
upon record of the judgment as copied in
the abstract. Affirmed.
0PERATI0:5( OF CONTRACT.
COOLIDGE V. RUGGLES.
(15 Mass. 3S7.)
Supreme Judicial Court of Massachusetts.
Suffolk and Nantucket. 1819.
Assumpsit on the following writing, viz.;—
"Boston, October 1, 1S12.
"For value received, I promise to pay the
bearer hereof, six months after date, nine
hundred and eighty dollars, provided the
ship Mary arrives at a European port of dis-
charge, free from capture and condemna-
tion by the British.
"Samuel Ruggles."
At the trial before Jackson, J., at the
sittings here, after the last March term, it
appeared that the said promise was made to
one W. S. Skinner, the consideration where-
of was a certain document, known by the
name of "a Sawyer license," which was in-
tended for the protection of merchant ves-
sels of the United States from capture by
British cruisers, war then existing between
the United States and Great Britain; and
that, about two years after receiving the
said note, the said Skinner transferred and
delivered the same, with other effects, to the
plaintiff, to be by him collected and passed
to the credit of Skinner, in an account then
open between him and the plaintiff, and
upon which Skinner was indebted to the
plaintiff. The signature of the defendant
was admitted, and the plaintiff proved that
the said ship Mary, mentioned In the said
note, arrived at a Eiiropean port of dis-
charge, and there delivered her cargo in
safety, without any capture or condemna-
tion whatsoever.
A verdict was returned for the plaintiff,
under the direction of the judge; and the
defendant tendered a bill of exceptions as
at common law, which was sealed by the
judge. The questiou chiefly insisted on at
the argument, and which alone was consid-
ered by the court, was, whether the plaintiff
could maintain the action, as assignee of
the note sued.
Mr. Hubbard, for plaintiff. The Solicitor
General and Mr. Cooke, for defendant.
PARKER, C. J., delivered the opinion of
the court. The only question to which we
have turned our attention in this case, is,
whether the written promise declared on is
negotiable in its nature, so that an action
may be maintained upon it in the name of
the plaintiff, who is assignee. And we are
all of opinion that it is not so negotiable, on
account of the contingency on which the
payment of the money is made to depend-
All promises to pay money, being at com-
mon law choses in action, were unassign-
able. It is only by virtue of the statute of
3 & 4 Anne, c. 9, that certain descriptions
of them are assignable, so as that the prop-
erty and the right of action vest in the as-
signee.
The paper declared on does not come with-
in the description of notes made assignable
by that statute. For it has been declared
by frequent judicial decisions, that a note or
bill, to attain that character, must be pay-
able in money absolutely. A note or bill
payable to bearer stands upon the same
ground as a note payable to order. The
only difference is in the mode of transfer.
The latter must be by endorsement; the
former may be by delivery; but both must
contain a promise to pay money uncondition-
ally.
The cases which show that an action may
be maintained by an assignee, in his own
name, are all where there has been, after
the assignment, a promise to pay to the as-
signee; and to this effect the case of Fen-
ner v. Mears, 2 W. Bl. 1269, is unquestion-
ably good law; and several cases have been
decided by this court upon the same princi-
ple. In this case, no promise is shown to
pay to the assignee.
Cases were cited to show that the promise
in this case is assignable in equity. But
the difference between that, and an assign-
ment under the statute of Anne, Is too well
known to need explanation. The verdict is
set aside and a new trial granted-
/v
V
.X
i
ASSIGNMENT.
i39
WALKER et al. v. BROOKS ct aL
(125 Mass. 241.)
Supreme Judicial Court of Massachusetts.
Worcester. Aug. 31, 1878.
G. F. Hoar aud F. T. Blackiuer, for plain-
tiffs. J. J. Storrow, for defendants.
GRAY, C. J. This bill was filed May 21,
1877, by Joseph H. Walker and Georf^e M.
Walker, copartners, against James W. Brooks
and Horace H. Bigelow. The material alle-
gations of the bill are as follows:
1st. That on March 21, 1872, the defend-
ant Bigelow executed to the two plaintiffs a
lease of and license to use a certain patented
machine for compressing heels for boots }>nd
shoes, for which the plaintiffs were to oav
him a royalty of ten cents, or, in case of their
rendering true accounts to him monthly, the
sum of one-half cent, for each pair of heels
thereby compressed.
2d. That, at the same date, Bigelow enter-
ed into an agreement with Joseph H. Walker,
one of the plaintiffs, to pay him monthly for
certain services in introducing the machine to
the public (which he afterwards performed)
sums equal to those to be paid by the plain-
tiffs to Bigelow under the lease and license
from him.
3d. That Bigelow has assigned each of these
contracts to the other defendant Brooks, who
has become in equity entitled to all the ad-
vantages thereof and to receive all sums of
money due or to become due from the plain-
tiffs under the same, and has become in eq-
uity bound to perform all the obligations ex-
pressed or implied therein to be performed
by Bigelow.
4th. That all the rights and obligations of
Joseph H. Walker, under his agreement with
Bigelow, have been assigned to and vested
in the plaintiffs, and they are in equity enti-
tled to receive all sums which are or may be-
come due under the same.
5th. That the plamtlffs, under the lease and
license to them, have used the patented ma-
chine, and have duly kept and rendered ac-
counts to the defendants, and have paid to
them in full for such lease and use to Febru-
ary 1, 1877, the sum of .$3000, and now owe
and are ready to pay to the defendant Brooks
a further sum of $164 75 for such use since
that time. .
Gth. That there is due a like sum from
Brooks to the plaintiffs, and that they have
demanded of him that he should pay to them
the sum so paid by them, and should set off
the sum so due from them as rent as afore-
said against the sum so in equity due to
them from him; and that he has wholly re-
fused to do so. and threatens to sue thorn for
this sum, and to set aside and avoid the
lease and license, and to seize uix)n and take
possession of the leased machines, alleging
that the plaintiffs have not performed the
stipulations and conditions thereof on their
part.
7th. That the plaintiffs have fully perform-
ed the same, and are nady and offer to do so
hereafter, except that they Insist and aver
tliat in equity they are entitled to have the
sums due as aforesaid, from either of the
parties to the othei. set off, and that such
right to a set-off operates as an extinguish-
ment and payment of tho.se sums.
The prayer of the bill is for a discovery un-
der oath; for an account of all sums due from
the plaintiffs to the defendants or either of
them, and from the defendants or either of
them to the plaintiffs; for a set-off of such
sums against each other; for an injunction
against bringing any suit against the plain-
tiffs on account of any claim against them as
above stated; and for further relief.
To this bill the defendants have demurred,
because the plaintiffs have a plain, adequate
and complete remedy at law, and because
they have not stated such a case as entitles
them to any discovery or relief In equity.
We are of opinion that the demurrer Is well
taken, and that the bill cannot be sustained
on any of the grounds assigned by the learn-
ed counsel for the plaintiffs.
It is attempted, in the first place, to bring
the case within the rule, that where there
are cross demands between the parties of sucli
a nature that if both were recoverable at law
they would be the subject of a set-off, then,
if eitlier of them is a matter of equitable ju-
risdiction, the set-off may be enforced in eq-
uity. It Is said that the defendant Brooks,
as the assignee of the claim of the other de-
fendant Bigelow against the plaintiffs, has
an equitable right of action against the plain-
tiffs, which, though at law it could only be
sued in the name of Bigelow, might in eq-
uity be sued by Brooks; and that such nght
of Brooks to sue the plaintiffs in equitv af-
fords a foundation for jurisdiction In equity
to order a set-off of that equitable right
against the plaintiffs' claim.
But a court of equity will not entertain a
bill by the assignee of a strictly legal right,
merely upon the ground that he cannot bring
an action at law in his own name, nor unless
It appears that the assignor prohibits and
prevents such an action from being brought
in his name, or that an action .so brought
would not afford the assignee an adequate
remedy.
In Hammond v. Mos.senger, 9 Sim. 327, 3.32,
Vice Chancellor Shad well so held, and said,
"If this case were stripped of all special cir-
cumstiinces, it would be simply a bill filed by
a plaintiff who had obtained, from certain
persons to whom a debt was due, a right to
sue in their names for the debt. It is quite
new to me that, in such a simple case as that,
this court allows, in the first instance, a bill
to be filed against the debtor by the person
who has become the assignee of the debt. I
admit that, if special circumstances are stat-
ed, and it is represented that, notwithstand-
ing the right which the party has obtained to
sue in the name of the creditor, the creditor
will interfere and prevent the exercise of that
540
OPERATION or CONTRACT.
right, this court will interpose for the pur-
pose of preventing that species of wrong being
done; and, if the creditor will not allow the
matter to be tried at law in his name, this
court has a jurisdiction, in the first instance,
to compel the debtor to pay the debt to the
plaintiff; especially in a case where the act
doue by the creditor is done in collusion with
the debtor. If bills of this kind were allow-
able, it is obvious that they would be pretty
frequent; but I never remember any instance
of such a biU as this being filed, unaccompa-
nied by special circumstances."
It is true that Mr. Justice Story, in his Com-
mentaries, observed upon that opinion, "Tliis
doctrine is apparently new, at least in the
broad extent in which it is laid down; and
does not seem to have been generally adopted
in America. On the contrary, the more gen-
eral principle established in this country
seems to be, that wherever an assignee has
an equitable right or interest in a debt or
other property (as the assignee of a debt cer-
tainly has) there a court of equity is the prop-
er forum to enforce it; and he is not to be
driven to any circuity by instituting a suit at
law in the name of the person who is possess-
ed of the legal title. A cestui que trust may
ordinarily sue third persons in a court of eq-
uity, upon his equitable title, without any
reference to the existence of a legal title in
his trustee, which may be enforced at law."
Story, Eq. Jur. § lOoTa. To the same effect
is the statement in Story, Eq. PI. § 153.
But the adjudged cases, including those cit-
ed by the learned commentator, upon being
examined, fail to support his position, and
show that the doctrine of Hammond v. Mes-
senger is amply sustained by earlier authori-
ties in England and in this country.
A century and a half ago, parties for whose
benefit their agent had obtained policies of
insurance in his own name, brought bills in
equity against the underwriters. But Lord
Chancellor King refused to sustain them, say-
ing, "At this rate, all policies of insurance
would be tried in this court, for they are gen-
erally taken in the name of a trustee;" and
again, "If I should give way to this attempt,
no action would ever be brought on a poli-
cy." And his decision was aflirmed in the
house of lords. Dhegetoft v. Assurance Co.,
Mos. 83. and 4 Brown, Pari. Cas. (2d Ed.)
4:]t;; Fall v. Chambers, Mos. 193; Lord Hard-
wicke afterwards expressed a like opinion.
Motteux V. Assurance Co., 1 Atk. 545, 547.
In Cator v. Burke, 1 Brown, Ch. 434, Cator,
with whom Hargrave had deposited, as secu-
rity for a debt of his own to Cator, a bond
made by Burke to Hargrave, filed a bill in
equity against Burke and Hargrave, to com-
pel Burke to pay the debt to the plaintiff,
out of a counter bond for a larger amount,
which Hargrave had made to Burke; and to
prevent Burke from setting up the counter
bond as a defense to any action at law which
might be brought against him in the name of
Hargrave. The bill was dismissed; Lord
Loughborough saying, "The bond can never
be considered in any other light than as an
unassignable security; to consider it other-
wise would bring all the causes on bonds in
Westminster Hall into this court. The plain-
tiff has mistaken both the law and equity;
for first, he has supposed that the holder of
a bond might, where there was no discovery
to be made, come bither, and have a differ-
ent relief from what he could have at law;
and secondly, that if there was fraud in giv-
ing the counter bond, it could not be made use
of at law. When this bill is dismissed with
costs, you may bring your action in the name
of Hargrave. If this bill would lie by the
simple act of assigning the bond, a suit in eq-
uity might be brought on eveiy bond that is
given." So m Rose v. Clarke, 1 Younge &
C. 534, 548, Vice Chancellor Knight-Bruce
said, "As I apprehend, an equitable title to
money secured by a bond is not of itself suf-
ficient to entitle the party so interested to
sue the obligor in equity for payment of the
money. There must, I conceive, be some-
thing more."
The decision in Riddle v. Mandeville, 5
Cranch, 322, allowing an indorsee of a prom-
issory note to sustain a bill in equity against
a remote indorsei, proceeded upon the ground
that in Virginia no remedy at law could be
had agamst him, except by the circuitous
course of successive actions by each indorsee
against his immediate indorser, and that in
that particular case the intermediate party
was insolvent See Mandeville v. Riddle, 1
Cranch, 290; Harris v. Johnston, 3 Cranch,
311. That Chief Justice Marshall, who de-
livered the opinions in these cases, did not
consider them as establishing the general
proposition that the assignee of a chose m
action, who could not sue thereon in his own
name at law, might therefore do so in eq-
uity, is manifest from his opinion in the
later case of Lenox v. Roberts, 2 Wheat
373, in which the assignee of all the property
of a banking corporation was allowed to main-
tain a bill in equity in his own name upon a
promissory note which had not been formally
indorsed to him, for the reason that, "as the
act of incorporation had expired, no action
could be maintained at law by the bank itself."
In Carter v. Insurance Co., 1 Johns. Ch.
4G3, Chancellor Kent dismissed a bill in equi-
ty brought against an insurance company by
the assignees of a policy of msurance; and
briefly stated his reasons to be, that the de-
mand was properly cognizable at law, and
there was no good reason for coming into the
court of chancery to recover on the contract of
insurance; that the plaintiffs were entitled to-
make use of the names of the original as-
sured in the suit at law, and the nominal
plaintiffs would not be permitted to defeat
or prejudice the right of action; that it might
be said here, as was said by the chancellor in
the analogous case of Dhegetoft v. Assurance
Co., supra, that at this rate all policies of in-
surance would be tried in this court; and
ASSIGNMENT.
541
that the bill stated no special ground for eq-
uitable relief.
It was hold by the courts of appeals of
Maryland and Virginia, and by the supremo
court of Tennessee in an opinion delivered
by Judge Catron, (afterwards a justice of the
supreme court of the United States.) that the
mere fact of the assignment of a legal chose
in action gave the assignee no right to involve
the jurisdiction of a court of equity. Adair
V. Winchester, 7 dill & J. 114; Moseley v.
Boush. 4 Rand. 302; Smiley v. Bell, Mart. &
Y. 378. The opposing decision in Townsond
V. Carpenter, 11 Ohio, 21, is unsupported by
.my reference to authorities.
The cases before Chancellor Walworth of
Field V. Maghee, 5 Paige, .539, and Rogers v.
Insurance Co., 6 Paige, 583, contain no de-
cision upon this point; and in the later case
of Ontario Banlj v. Mumford, 2 Barb. Ch.
596, 615, he said, "As a general nile, this
court will not entertain a suit brought by
the assignee of a debt or of a chose in ac-
tion, which is a mere legal demand, but will
leave him to his remedy at law by a suit in
the name of the assignor;" and referred to
the cases before Chancellor Kent and Vice
Chancellor Shadwell, and in the courts of Ma-
ryland, Virginia and Tennessee, already cited.
The statement in Story, Eq.. Jur. § 143r.a,
that "if a legal debt is due to the plaintiff by
the defendant, and the defendant is the as-
signee of a legal debt due to a third person
from the plaintiff, which has been duly as-
signed to himself, a court of equity will set
off the one against the other, if both debts
could properly be the subject of a set-off at
law," is pervaded by the same error that we
have considered.
The decision of the vice chancellor in Wil-
liams V. Davies, 2 Sim. 461, by which a cred-
itor appears to have been restrained in eq-
uity from taking judgment and execution at
law on a debt of one to whom he owed a
larger sum, is obscurely reported, and was dis-
approved by Lord Chancellor Cottenham.
Clarlc V. Oort, Craig & P. 154, 159; Rawson v.
Samuel, Craig & P. 161, 178. In Clark v.
Cort, the bill upon which the set-off was or-
dered was by tlie assignees of a claim which
required the investigation of accounts and the
application of a security, of which the court
would have had jurisdiction if the suit had
been by the assignor; and the chancellor
said, "The case, then, is not that of a mere
assignee of a legal debt, coming into equity to
have the benefit of a set-off which he could
not have at law." In Rawson v. Samuel, he
observed, "We speak familiarly of equitable
set-off, as distingui.shed from the set-off at
law; but It will be found that this equitable
set-off exists in cases where the party seek-
ing the benefit of it can sliow some equitable
ground for being protected agaiu.st his ad-
versary's demand. The mere existence of
cro.ss demands is not suflicient." And see
Watson V. Railway Co., L. R. 2 C. P. 593;
Spaulding v. Backus, 122 Mass. 553.
In this commonwealth, the assignee of a
chose in action has an adequate and complete
remetly at lav/, w the right to maintain an ac-
tion thereon in the name of his assignor, or of
his executor or administrator, without his con-
sent, and even against his protest, at least upH
on giving him, if sea.sonably demanded, a
bond of indemnity ag-ainst costs. Dennis v.
Twitchell. 10 Mete. (Mass.) ISO, 184; Rock-
wood V. Brown. 1 Gray, 261; Bates v. Kemp-
ton, 7 Gray, 382; Foss v. Bank, 111 ila.ss.
285. In any action at law, brought by Brooks
in the name of Bigolow, to recover the sums
due him from these two plaintiffs under the
license, they could set off the demand, under
the other contract assigned to them, of Jo-
seph H. Walker against Bigelow, if Bigelow
liad notice of such assignment before bringing
his action. Gen. St c. 130, § 5; Cook v. Mills,
5 Allen, 36, 38. Their neglect to give such
notice cannot entitle them to demand the In-
terposition of a court of equity. Wolcott v.
Jones, 4 Allen, 367.
The bill shows no case for an account that
cannot be taken at law. Badger v. McNa-
mara, 123 Mass. 117. It cannot be main-
tained to restrain a forfeiture; because it
does not show that there is any danger of ir-
reparable injury, therein differing from Flor-
ence Sewing- Mach. Co. v. Grover & B. Sew-
ing-Mach. Co., 110 Mass. 1. It cannot be
maintained under Gen. St c 113, § 2. to reach
and apply, in payment of a debt, property or
rights of a debtor which cannot be come at to
be attached or taken on execution in a suit at
law against him; because it is not framed in
that aspect and because the statute relates to
rights of property, or claims of the debtor
against third persons, and does not extend to
claims of the debtor against the plaintiff him-
self. Crompton v. Antliony, 13 AUen. 33, 37.
It cannot be maintained for discovery; be-
cause it cannot be maintained for relief, and
does not show that any discovery is required
in aid of proceedings at law. Pool v. Lloyd.
5 Mete. (Mass.) 525; Ahrend v. Odiome. 118
Mass. 261.
Demurrer sustained, and bill dismissed.
542
OPERATION OF CONTRACT.
'^
- ARKANSAS VALLEY SMELTING CO. v.
'V BELDEN MIN. CO. 'K^^ ^
^ (8 Snp. Ct. 130S. 127 U. S. 379.) 3^''
Sapremp Court of the United States. May 14,
ISSS.
In error to the circuit court of the United
States for the district of Colorado.
This was an action brought by a smelting
company, incorporated by the laws of Mis-
souri, against a mining company, incorpo-
rated by the laws of Maine, and both doing
business in Colorado by virtue of a compli-
ance with its laws, to recover da mages for
the breach of a contract to deliv er or e, made
by~tl3e~trerenaant witlf Billing & Eilers, and
assigned to the plaintiff. The material alle-
gations of the complaint were as follows:
On July 12, ISSl, a. contract in writing was
made between the defendant of the first
part and Billing & Eilers of the second part,
by which it was agreed that the defendant
should sell and deliver to Billing_ & Eiler s,
at their ^meltmg^worfe iiTTiead ville, 10,00
tons of car bonateT ead ore Jrgm its min e s at
Red Cliff^at_the,,nrtp-x)£-ai Jeaat-aO_tQfls_a
day, beginning upon the completion of a rail-
i-oaH" fv(fm. Leadville to Red Cliff, and continu-
ing until the whole should have been deliv-
ered, and that "aU. ^re jo jjellvered shall at
once, upon the delivery thereof, become the
property of the second party;" and it was
further agreed as follows: "The value of
said ore and the price to be paid therefor shall
be fixed in lots of about one hundred tons
each; that is to say, as soon as such a lot
of ore shall have been delivered to said sec-
ond party, it shall be sampled at the works
of said second party, and the sample assayed
by either or both of the parties hereto, and
the value of such lots of ore shall be fixed by
such assay; in case the parties hereto cannot
agree as to such assay, they shall agree upon
some third disinterested and competent par-
ty, whose assay shall be final. The price to
be paid by said second party for such lot of
ore shall be fixed on the basis hereinafter
agreed upon by the closing New York quota-
tions for silver and common lead, on the day
of the delivery of sample bottle, and so on
until all of said ore shall have been delivered.
Said second party shall pay said first party
at said Leadville for each such lot of ore at
once, upon the detennination of its assay
value, at the following prices;" specifying,
by reference to the New York quotations, the
price to be paid per pound for the lead con-
tained in the ore, and the price to be paid for
the silver contained in each ton of ore, vary-
ing according to the proportions of silica and
of iron in the ore. The complaint further
alleged that the railroad was completed on
November 30, 1881, and thereupon the defend-
ant, under and in compliance with the con-
tract, began to deliver ore to Billing & Eilers
at their smelting works, and delivered 167
tons between that date and .January 1, 1882,
when "the said firm of Billing and Eilers was
dissolved, and the said contract and t h£_b]ial-
ness ctTaid firm, and the smelting works a.t
whi c h sa id urcs wlto to be delivered, were
sold, assigUL'd, aud iraust'crred to Gj,_BUli^,
whereof the defendaBt had due notice ;" that
after such transfer and assignment the de-
fendant continued to deliver ore under the
contract, and between January 1 and April
21, 1882, delivered to Billing at said smelting
works 894 tons; that on May 1, 1882, the con-
tract, together with the smelting works, was
s old and ^on veyed by B illing^ to_th£ plaintiff,
whereof the defen dant had due notice; that
the defendant then ceased to deliver ore un-
der the contract, and afterwards refused to
perform the contract, and gave notice to the
plaintiff that it considered the contract can-
celed and annulled; that all the ore so deliv-
ered under the contract was paid for accord-
ing to its terms; that "the plaintiff and its
said assignors were at all times during their
respective ownerships ready, able, and willing
to pay on the Uke terms for each lot as deliv-
ered, when and as the defendant should de-
liver the same, according to the terms of said
contract, and the time of payment was fixed
on the day of delivery of the 'sample bottle,'
by which expression was, by the custom of
the trade, intended the completion of the as-
say or test by which the value of the ore was
definitely fixed;" and that "the said Billing
and Eilers, and the said G. BilUng, their suc-
cessor and assignee, at all times since the
delivery of said contract, and during the re-
spective periods when it was held by them
respectively, were able, ready, and willing to
and did comply with and perform all the
terms of the same, so far as they were by
said contract required; and the said plain-
tiff has been at all times able, ready, and will-
ing to perform and comply with the terms
thereof, and has from time to time, since the
said contract was assigned to it, so notified
the defendant." The defendant demm'red
to the complaint for various reasons, one of
which was that the contract therein set forth
could not be assigned, but was personal in
its nature, and could not, by the pretended as-
signment thereof to the plaintiff, vest the
plaintiff with any power to sue the defendant
for the alleged breach of contract. The cir-
cuit court sustained the demurrer, and gave
judgment for the defendant; and the plain-
tiff sued out this writ of error.
R. S. Morrison, T. M. Patterson, and C. S.
Thomas, for plaintiff in error.
Mr. Justice GRAY, after stating the facts
as above, delivered the opinion of the court.
If the assignment to the plaintiff of the con-
tract sued on was valid, the plaintiff is the
real party in interest, and as such entitled,
under the practice in Colorado, to maintain
this action in its own name. Rev. St. § 914;
Code Civ. Proc. Colo. § 3; Steel Co. v. Lund-
berg, 121 U, S. 451, 7 Sup. Ct. 958. The vital
question in the case, therefore, is w hether
the conti-act between the defendant and Bil-
ASSlGis^MENT.
543
ling & E ilers was assit^able by the latter^
cmder tje_circ umsta uc es stated 1b the com-
plaiuj. "At the present day, no doubt, an
agreemeat to pay money, or to deliver goods,
may be assiguod by the person to whom the
money is to be paid or the goods are to be
delivered, if there is nothing in the terms of
the contract, whether by requiring something
to be afterwards done by him, or by some
other stipulation, which manifests the Inten-
tion of the parties that It shall not be assign-
able. But every one has a right to select and
^ermine with whom he will contra cjt, and
caju not h ave anothejujerson thrust upon ^im
without his consent In the familiar phrase
of Lord'Deuman, "You have the right to the
benefit you anticipate from the character,
credit, and substance of the party with whom
you contract." Humble v. Hunter, 12 Q. B.
310, 317; Winchester v. Howard, 97 Mass.
303, 305; Ice Co. v. Potter, 123 Mass. 2S;
King V. Batterson, 13 R. I. 117, 120; Lansden
V. McCarthy, 45 Mo. lOG. The rule upon this
subject, as applicable to the case at bar.
Is well expressed in a recent English trea-
tise: " Rights -irisini? nn t _ of contract ca n-
not be transferred if th ey^are coupled with
liabilities, of_J f they invo lve a relation of
p ersonal confidence_ such that tBi; party
wIiose_ ag reement conf err ed thotJt^ rlgtrt s
must haye inten dad-^th em to be ~excrciscd
onlj hj Jiim Jn whom he actually^ ciuj fi ded . "
Pol. Cont. (4th Ed.) 425. The contract here
sued on was one by which the defendant
agreed to deliver 10,000 tons of lead ore
from its mines to Billing & Eilers at their
smelting works. The ore was to be delivered
at the rate of 50 tons a day, and it was
expressly agreed that It should become the
property of Billing & Eilers as soon as de-
livered. The price was not fixed by the
contract, or payable upon the delivery of the
ore. But, as often as a hundred tons of ore
had been delivered, the ore was to be as-
sayed by the parties or one of them, and,
if they could not agree, by an umpire; and
it was only after aU this had been done,
and according to the result of the assay,
and the proportions of lead, silver, silica,
and Iron thereby proved to be In the ore,
that the price was to be ascertained and
paid. During the time that must elapse
between the delivery of the ore and the as-
certainment and payment of the price the
defendant had no security for its uavmcp t
excepts jn _the^_chara£ter_jnid__aalteiiey — ef
Hilli ng & Jlil erSi, The defendant, therefore,
could not be compelled to accept the liabil-
ity of any other person or corporation as a
substitute for the liability of those with
whom it had contracted. The fact that upon
the dissolution of the firm of Billing & Ei-
lers, and the transfer by Eilers to Billing
of this contract, together with the smelting
works and business of the partnership, the
defendant continued to deliver ore to Bil-
ling according to the contract, did not oblige
the defendant to deliver ore to a stranger.
to whom Billing hn,tl midtjrtiken , withou t
tlie defendants consent j__toassigntbe_con-
Jxaiit^ The change in a!~'parlnership "by the
coming in or the withdrawal of a partner
might perhaps be held to be within the con-
templation of the parties originally con-
tracting; but, however that may be, an as-
sent to such a change in the one party can-
not estop the other to deny the validity of
a subsequent assignment of the whole con-
tract to a stranger. The technical rule of
law, recognized in Murray v. Ilarway, 50
N. Y. 337, cited for the plaintiff, by which
a lessee's express covenant not to assign has
been held to be wholly determined by one
assignment with the lessor's consent, has do
application to this case. The cause of ac-
tion set forth In the complaint is not for any
failure to deliver ore to Billing before hts
assignment to the plaintiff, (which might
perhaps be an assignable cnose in action,)
but it is for a refusal to deliver ore to the
plaintiff since this assignment Perform-
ance and readiness to perform by the plain-
tiff and its assignors, during the periods
for which they respectively held the con-
tract is all that is alleged; there is no al-
legation that Billing Is ready to pay for any
ore delivered to the plaintiff. In short, the
plain tiff undertakes to step i ntn .the shoes
on^uiin g, and to substitute its liability fo r
The aefendant had a perfect right to
liis.
"necITne to assent to this, ajid to refuse to
recognize a party, with whom it had never
contracted, as entitled to demand further
deliveries of ore. The cases cited in the
careful brief of the plaintiff's counsel, as
tending to support this action, are distin-
guishable from the case at bar, and the
principal ones may be classified as follows:
First. Casog_ of^ j.gr eements to sell ap d dij -
liver goods for a fix ed price, pay able ^n
cash on'SFliverY . in whTgfi the owneT would
receive the price at the time of parting
with his property, nothing further would
remain to be done by the purchaser, and
the rights of the seller could not be affected
by the question whether the price was paid
by the person with whom he originally
contracted or by an assignee. Sears v,
Conover, *42 N. Y. 113, 4 Abb. Dec. 170;
Tyler v. Barrows, 6 Rob. 104. Second.
Cases upon the question how far executors
succeed to rights and liabilities under a con-
tract of their testator. Ilambly v. Trott,
Cowp. 371, 375; ^Yent worth v. Cock. 10
Adol. & E. 42. 2 Perry & D. 251; 3 Wil-
liams, Ex'rs (7th Ed.) 1723-1725. Assign-
ment by operation of law, as in the case
of an executor, is quite different from as-
signment by act of the party; and the one
might be held to have been in the contem-
plation of the parties to this contract, al-
though the other was not. A lease, for
instance, even If containing an express
covenant against assignment by the lessee,
passes to his executor. And It is by no
means clear that an executor would be
544
OPERATION OF CONTRACT.
bound to perform, or would be entitled to
tbe benefit of, sucb a contract as that now
in question. Dickinson v. Calahan, 19 Pa.
St 227. Third. Cases of assignments by
contractors for public works, In which the
contracts, and the statutes under which
they were made, were held to permit all
persons to bid for the contracts, and to ex-
ecute them through third persons. Taylor
V. ralmer. 31 Cal. LMO, 247; St. I.ouis v.
Clemens. 42 Mo. 69; Philadelphia v. Lock-
hardt, 73 Pa. St 211; Devlin v. New York,
(]3 N. Y. 8, Fourth. Other cases of con-
tracts assigned by the party who was to do
certain work, not by the party who was to
pay for it and in which the question was
whether the work was of such a nature
that it was intended to be performed by the
original contractor only. Robson v. Drum-
mond, 2 Barn. & Adol. 303; Waggon Co.
V. Lea, 5 Q. B. Div. 149; Parsons v. Wood-
ward. 22 N. J, Law. 19r.. Without consid-
ering whether all tho cases cited were well
decided, it is suffi(i<'ut to say that none of
them can control the decision of the pres-
ent case. Judgment affirmed.
ASSIGNMENT.
345
rANBUSKIRK et al. v. HARTFORD FIRE
INS. CO.
(14 Cona. 141.)
Supreme Court of Errors of Connecticut. June,
lf>41.
W. W. Ellsworth, for plaintiCCa. Hunger-
ford & Cone, for assignee.
WAITE, J. The plainUffs brought their
suit, by foreign attachment, against Joseph
Mortimer, and attached a debt claimed to be
due to him from the defendants upon a pol-
icy of insurance. Having recovered judg-
ment in that suit they brought their scire
facias agaiust the defendants to recover
their demand. Payment was resisted, by
the defendants, upon the ground of an as-
signment of the debt made to John Morti-
mer, previous to the attachment It is found,
by the court below, that no notice of that
assignment was given to the defendants until
long after the attachment.
The question arising in this case, is, wheth-
er the plaintiffs are entitled to recover.
If the case is to be governed by the laws
of this sta,te, it is clear, that the defence
cannot prevail: for the rule here, is well
settled, that, in order to perfect an assign-
ment of a chose In action, as against bona
flde creditors and purchasers without notice,
notice of such assignment must be given to
the debtor within a reasonable time; and
unless such notice is given, creditors may at-
tach and acquire a valid lien; and others
may purchase the debt, and gain a title su-
perior to that of the first assignee. Bishop
V. Holcomb, 10 Conn. 444; Judah v, Judd, 5
Day, 534; Woodbridge v. Perkins, 3 Day,
364. And so far as regards subsequent pur-
chasers, the same law is fully recognized
and established in England. Williams v.
Thorp, 2 Simons, 257; Dearie v. Hall, 3
Russ. 1; Loveridge v. Cooper, 3 Russ. 30;
Foster v. Cockerell, 9 Bligh, 322; 2 Story,
Eq. 301. Here, ho notice of the assignment
of the debt to John Mortimer was given to
the defendants until after the attachment;
and it is not claimed, that the plaintiffs had
any knowledge of that assignment. They,
therefore, by the law of this state, acquired
a lien paramount to the title of the a.s-
signee. In this respect, an attaching cred-
itor stands In a situation, very similar to
that of a subsequent purchaser. He obtains
a lien upon the debt, as valid as the title
acquired by a purchaser.
UOPK. SEL. CAS. CONT. — 85
But although it is not denied by the de-
fendants, that such is the law of Connect-
icut, yet it is claimed by them, that the
assignment was made in the state of New
York, where a different rule of law applies
in relation to assignments of cljoses in ac-
tion; and that upon the principles of comity,
the same effect ought to be given to the as-
signment here as would be given to it, in
that state.
But does it appear, that the law of the
state of New York differs from ours? It is
found by the court, (and as we are informed
in the language of the witness,) that "an
assignment of a chose in action is effectual
to convey the title to the assignee, upon de--
livery of the instrument; and no notice need
be given, by the debtor, that such claim
agaiust him had been assigned." That un-
doubtedly is the law here, so far as regards
the parties to the assignment. It is even
good as against aU persons who have notice
of the assignment. But would it be effectual
as against attacliing creditors, and subse-
quent purchasers without such notice? That
fact is not found by the court; nor, in our
opinion, is It a necessary inference from
what is found.
To justify the conclusion that the laws of
the state of New York so widely- differ from
ours and those of England, upon a prin-
ciple, which, we believe so correct and sal-
utary, as that requiring notice to be given
of the assignment of a chose in action, to
protect It against the subsequently acquired
rights of other persons, It ought to be made
distinctly to appear, and not left to any
forced construction.
What would be the effect of such a con-
flict of laws upon the present case, were it
proved to exist, we do not deem it necessary
to determine. Upon that question there are
various and conflicting decisions. Manufac-
turing Co. V. Prall, 9 Conn. 4S7; Oliver v.
Townes, 14 Mart. 97; Pomeroy v. Rice, 10
Pick. 22; Daniels v. WiUard,"l6 Pick. 36;
Burlock V. Taylor, 16 Pick. 335.
But as we are not satisfied from the find-
ing of the court below, that any material
difference exists between the law of this
state and that of New York, we are of opin-
ion, that the plaintiffs are entitled to judg-
ment for the amount due by the defendants
on the policy, at the time the original writ
was served upon them.
In this opiiiioD the other Judges conctured.
546
-I
OPERATION OF CONTRACT.
MOTT V. CLARK.
(9 Pa. St. 399.)
Supreme Court of Pennsylvania. Dec Term,
1S4S.
Dec. IS. This was an ejectment to recover
a moiety of two pieces of land, one moiety of
which plaintiff was in possession of.
The main question arose out of the follow-
ing facts: In 1S20 John Clark obtained the
title by a sheriff's deed to the whole property;
but in fact he was trustee for his father, Vin-
son Clark, for a moiety. In 1S21 John convey-
ed this moiety to Vinson Clark, the defendant,
but the deed was not registered until 1836.
In 1S31, John Clark mortgaged the whole
property to Broadhead, the mortgage being
registered in November. But according to the
verdict Broadhead had notice at and before
the date of this mortgage, of the real extent
of John Clark's title, and of the deed to V.
Clark.
In 1S32, Broadhead, by deed which was
never registered, assigned the bond and mort-
gage to Johnson, who had no notice of V.
Clark's title.
In 1835, there was a judgment recovered by
Johnson on another cause of action against
John Clark, under which the whole of the
property in question was, in 1837, sold and
conveyed by the sheriff to Johnson. But at
this sale notice was given of Vinson Clark's
title to the moiety.
In 184i, Johnson conveyed to the plaintiff,
who, it was assumed, had notice of V. Clark's
title, and in 1845, he assigned him the mort-
gage. On the accompanying bond judgment
had been entered in 1832. Whether this was
assigned or not, could not be gathered from
the bill of exceptions.
Under these circumstances the defendant
contended that the sheriff's sale having pass-
ed but a moiety, on account of the notice
given by V. Clark, the plaintiffs right under
the mortgage was postponed: 1. Because of
the notice to the mortgagee of the state of the
title. 2. Because the assignment was not reg-
istered before Vinson Clark's deed was. 3.
Because the mortgage merged in plaintiff's
title under the sheriffs deed.
On this point the court (Jessup, P. J.) in-
structed the jury, that if Broadhead had no-
tice of V. Clark's deed, plaintiff was bound
by it
The other exceptions were as follows: L
The court permitted defendant to read the
proceedings under the judgment on the bond
whereby other property had been sold to
Johnson subsequently to his purchase of the
property in question. 2. They permitted de-
fendant to examine John Clark to prove no-
tice to Broadhead of the title and deed to V.
Clark, and that this moiety of the land was
included by mistake. 3. They also permitted
defendant to prove that Johnson at the sher-
iff's sale gave but the value of a moiety of the
premises. 4. The defendants had shown sev-
eral judgments against J. Clark, prior to that
under which plaintiff purcha .sod — which were
liens — and that no purchase-moin\v was paid
by him to the sheriff. The court told the
jury that if plaintiff held under the mortgage
only, then the amount of his bid, which was
applicable to other creditors on their liens
who had acquiesced, should be applied to the
payment of the mortgage debt.
Mr. Reeder, for plaintiff in error. J. M.
Porter, contra.
ROGERS, J. (after stating the two titles un-
der the mortgage and the sheriff's sale.)
Either of the titles as above stated would en-
title the plaintiff to a verdict. But the de-
fendants contend the plaintiff cannot recover
because Thomas Clark, on the 5th of Jan-
uary, 1841 conveyed an undivided half of the
premises (being the property in dispute) to his
father Vinson Clark. That this deed was ac-
knowledged on the day of its date, and was
recorded May 1st, 1821. The deed being re-
corded before the sheriff's sale, and moreover
V. Clark having given notice at the sale, the
court properly instructed the jury that the
purchaser at the sheriff's sale obtained no
title unless the deed from John Clark to V.
Clark was fraudulent. The jury decided that
it was a bona fide conveyance. There is
therefore an end to the title grounded on the
sheriff's deed.
Has then the plaintiff, the assignee of
Broadhead, a title under the mortgage?—
and this is a principal point in this case.
The mortgage to Broadhead was recorded
2Sth November, 1831, but the deed from J.
Clark to V. Clark, although prior in date,
was not recorded until May 1st, 1836. And
this would be decisive of the case; but the
defendant replies, that although his deed is
recorded upwards of five years after the en-
try of the mortgage, he is not to be post-
poned because the mortgagee had actual no-
tice of the conveyance of a moiety of the
property by John Clark to his father, V.
Clark. The fact of notice was properly left
by the court to the jury, who found that the
mortgagee had notice. But in answer the
plaintiff contends that admitting this to be
so, he is an assignee without notice, and.
however it may be as between the moi-t-
gagee and third persons, he takes the prop-
erty discharged of all equities of which he
had DO knowledge. The question, therefore,
is (granting he had no notice, which is un-
doubted), does the assignee stand in the
same or a better position than the mort-
gagee? On this point the court instructed
the jury, that the assignment of a mortgage
is not so within the recording acts, as to
give the assignee protection against an un-
recorded deed, of which the mortgagee had
full notice. That a mortgagee is a purchaser
within the statute of frauds is ruled in Lan-
caster V. Dolan, 1 Rawle, 245, on the au-
thority of Chapman v. Emery, Cowp. 278.
Now it has been repeatedly ruled, that al-
ASSIGNMENT.
547
though a purchaser has notice of an equi-
table claim, by which bis conscience Is af-
fect (cl, yet a person purchasing from him
bona Ode, and without notice of the right,
will not be bound by it. So a person hav-
ing notice of an equitable claim may safely
purchase of a person who bought bona fide,
and without notice. These positions are
elementary, and are fully sustained by the
authonties cited. If, therefore, a mortgagee
is to be considered on the footing of a pur-
chaser, it would seem to follow that an as-
signee without notice takes the property dis-
charged of a latent equity. If any existed.
These cases, although analogous, are not ex-
pressly in point, but the case of an assignee of a
bond and mortgage is expressly ruled in Liv-
ingston V. Dean, 2 Johns. Ch. 479. He takes
it subject to all the equity of the mortgagor,
but not to the latent equity of a third per-
son. To subject him to such an equity he
must have express or constructive notice at
the time of the assignment. It is a general
and well-settled principle, says the chan-
cellor in Murray v. Lylburn, 2 Johns, Ch.
443, that the assignee of a chose in action
takes it subject to the same equity it was
subject to in the hands of the assignee. 2
Vern. 691-7G5; 1 P. Wms. 497; 1 Ves. 122;
4 Ves. 118. But this rule is generally under-
stood to mean the equity residing in the
original obligor or debtor, and not an equity
residing in some third person against the as-
signor. He takes it subject to all the equity
of the obligor, say the judges in the very
elaborately argued case of Norton v. Rose,
2 Wash. (Ya.) 233, on this very point, touch-
ing the rights of the assignee of a bond.
The assignee can always go to the debtor
and ascertain what claims he may have
against the bond or other chose in action,
wliich he Is about purchasing from the
obligor; but he may not be able with the
utmost diligence, to ascertain the latent equi-
ty of some third person against the obligee.
He has not any object to which he can
direct his inquiries, and for this reason the
claim of the assignee, without notice of a
chose in action, in the late case of Redfearn
V. Ferrier, 1 Dow, 50, was preferred to that
of a party setting up a secret equity against
the assignor. Lord Eldon observed in that
case, that if it were not to be so, no as-
signment could ever be taken with safety.
It would be utterly impossible to guard
against combination by the mortgagor and
mortgagee, particularly with the aid of the
owner of the latent equity. If V. Clark the
owner as he alleges of the moiety, loses his
property, it is his own laches for it was his
duty to put his deed on record as notice of
his title. Having neglected his duty, he is
postponed to the mortgagee, who Is a pur-
chaser within the statute of frauds. At law
his title Is available against the owner, who
neglected to put his deed on record. The
assignee stands in the position of the mort-
gagee so far as regards the legal title, but
stands, as the authorities evidently show,
unaffected with an equity of which he had
no knowledge or possibility of knowledge,
and against which it would be irapossible
for him, with the most careful dihgeuce, to
guard himself. If be had notice of the out-
standing e B. nis moiety. B.
shows this direction to C, who refuses to ac-
count to B., but says he will pay B. if pro-
ceeds belong to him. It was held that the
agreement between A. and B. to sever their
interest would not entitle them to sue C. sev-
erally, unless, after notice, C. had consented
to it, and to account to each for his share.
But as the action was not on the original con-
tract but on C.'s promise to pay B. if he
was entitled, and he had shown he was enti-
tled, he might recover.
Without further review, the true rule ap-
pears to be that where all the parties in in-
terest in the joint contract agree to a sever-
ance of the joint interest, and the obligor
promises to pay each his several share, each
may sue therefor; the suit being based upon
the promise to pay each severally, and not on
the original joint promise. Here the count
is clearly in assumpsit, and the right of re-
covery is based upon the original undertak-
ing. The act of bringing the suit cannot in
law be effectual to work a severance of the
joint interest of Angus and Goff, and thus, by
way of a ratification of the unwarranted sev-
erance made by Goff and Robinson, give An-
gus a several action. The severance must
first be made, and a new promise must ap-
pear as the basis of the new right of action
springing from the severance.
The judgment of the county court sustain-
ing the demurrer, and adjudging the plaintifTs
new fourth count insufficient is affirmed, and
the case remanded.
652
4
INTERPRET ATIOX OF CONTRACT.
SMITH T. WILLIAMS.
(1 Murph. 426.)
Supreme Court of North Carolina. July, 1810.
This was an action on the case for a breach
of warranty in the sale of a negro. The dec-
laration stated, "that the defendant war-
ranted the negro to be sound and healthy
as far as he knew; that the negro was un-
sound and unhealtliy, being afflicted with a
rupture, and that the defendant well knew
he was so afflicted at the time of the war-
ranty and sale." The jury found a verdict
for the plaintiff, subject to the opinion of
the court on a point of law reserved in the
course of the ti-ial, viz.: Whether the plain-
tiff could be permitted to prove such a war-
ranty, when at the delivery of the negro, up-
on the sale, he received from the defendant a
written instrument, but not under seal, in the
following words:
"Know all men by these presents, that I,
Obed Williams, of the county of Onslow, and
state of North Carolina, have bargained and
sold unto David Smith, of the aforesaid cotm-
ty and state, one negro fellow, named George,
about thirty years of age, for and in consider-
ation of three hundred dollars. I do warrant
and defend the said negro against the lawful
claim or claims of any person or persons
w'homsoever, unto him the said Smith, his
heirs and assigns forever. Given under my
hand this 29th January, 1802.
"Obed Williams.
"Teste, George Roan."
This instrument had been proved in Onslow
county court, and registered. The point re-
served was sent to this court.
TAYLOB, J. The contract between the par-
ties is stated at length in the special case,
and appears to be both formally and substan-
tially a bill of sale in aU respects, except as
to the want of a seal This omission, how-
ever, is so important in the legal estimation
of the paper, that it cannot be classed
amongst specialties, but must remain a sim-
ple contract, on which no additional validity
can be conferred by the subsequent registra-
tion. For I do not apprehend that any legal
effect can be given to a paper by recording it,
if that ceremony were not required by law.
It might not, however, be an useless enquiry
to consider, whether a paper containing near-
ly all the component parts of a specialty or
deed, does not advance some greater claims
to be respected in the scale of evidence, than
such proofs of a contract as rest upon the
memory of witnesses.
The solemnity of sealed instruments has
been, from the earliest periods of the law,
highly regarded; because the forms and cere-
monies which accompany them, bespeak de-
liberation in the parties, and afford a safe
ground for courts and juries to ascertain and
settle contested rights. This deliberation is
inferred, not from any one circumstance at-
tending the transaction, but as the general
effect of the whole. Thus in Plowd. 308, B:
"It is said that deeds are received as a lien
final to the party making them, although he
received no consideration, in respect of the
deliberate mode in which they are supposed
to be made and executed; for, first, the deed
is i)repared and drawn; then, the seal is af-
fixed; and lastly, the contracting party de-
livers it, which is the consummation of his
resolution." Hence it appears, that the law
gives to deeds a respect and importance
which it denies to any other contracts; not an
empty and unmeaning respect, but such as
properly arises from the existence of all those
circumstances which are calculated to fix and
make authentic the contracts of men.
A contract cannot be a deed, if either it is
not prepared and drawn; if the seal be not
affixed, or if it be not delivered; but still if
the deliberation is inferred from all these cir-
cumstances, it is fair reasoning to presume
some degree of dehberation from any one or
two of them, and to give to the paper, when
it is introduced as evidence of the parties'
transaction, precisely such credence as be-
longs to it, from its partaking more or less of
the nature of a deed.
To give this rule a practical application to
the case before us, the conclusion would be,
that as the paper is without a seal, it cannot
be a deed, and is therefore not decisive evi-
dence as that instrument is; it is not a final
lien; but as it possesses some of the essen-
tials of a deed, viz. a formal draught and de-
livery, so far it shall be regarded as evidence
of no slight nature of the fact it is introduced
to establish.
The writers on the law of evidence have
accordingly, in arranging the degrees of proof,
placed written evidence of every kind higher
in the scale of probability than unwritten; and
notwithstanding the splendid eloquence of
Cicero, to the contrary, in his declamation for
the poet Archias, the sages of our law hav^
said that the fallibility of human memory
weakens the effect of that testimony which
the most upright mind, awfully impressed
with the solemnity of an oath, may be dis-
posed to give. Time wears away the distinct
image and clear impression of the fact, and
leaves in the mind, uncertain opinions, imper-
fect notions and vague surmises.
It is, however, contended by the plaintiff,
that contracts by our law are distinguished
by specialty and by parol; that there is no
third kind, and that whatever is not a spe-
cialty, though it be in writing, is by parol.
To establish this position, a case is cited from
7 Term R. 350, by which it is certainly
proved. But the position being established,
whether it will authorize the inference that
parol evidence is admissible to vary and e.x-
tend written evidence, will best appear from
an examination of the case, and from some at-
tention to the question which caUed for the
solution of the court.
KULES RELATING TO EVIDENCE.
In the case cited, the declaration states,
that the defendant, beinj,' indebted as admin-
istratrix, promised to pay when requested,
and the judgment Is against her generally.
From this statement It is manifest, tliat the
promise could not be extended beyond the
consideration which was Ln another right as
administratrix, and made to bind the defend-
ant personally. But in order to avoid Uiis
objection, it was contended, that the promise
being reduced to writing, the necessity of a
consideration was dispensed with; and that
the fact of its having been made in writing,
might well be presumed after verdict, if nec-
essary to support the verdict, which latter po-
sition was conceded by the court.
It is, then, perfectly evident:, that the only
question In the case was, whether nudum
pactum could be alleged against a contract
in writing, but witliout seal? That it could
not, had been a notion entertained by sev-
eral eminent men, and amongst the i-est by
the learned commentator, who observes, that
"every bond, from the solemnity of the in-
strument, and every note, from the sub-
scription of the drawer, carries with it in-
ternal evidence of a good consideration."
Tliis doctrine, however, is inaccurate as ap-
plied to notes, when a suit is brought by the
payee, and is only correct as between the
indorsee and drawer. To demonstrate the
propriety of the objection, it became neces-
sary for the court, in Ram v. Hughes, to
enter into a definition and classification of
contracts, into those by specialty and those
by parol; to which latter division every con-
tract belongs that is not sealed, though It
may be written. Everj^ written unsealed con-
tract is, therefore, in the strict language of
legal precision, a parol contract, and like all
others, must be supported l)y a consideration.
But let it be considered, what the court would
have said, if the case, instead of requiring
them to give a precise and comprehensive
definition of contracts, had called upon them
for a description of the evidence by which
contracts may be supported. They would, I
apprehend, liave said, (because the law says
so,) the evidence which may be adduced in
proof of a contract is threefold: 1st, matter
of record; 2d, specialtj*; 3d, unsealed writ-
ten evidence, or oral testimony. It is there-
fore necessary to distinguish between a con-
tract, and the evidence of a contract, for
though they may be, and are, in many cases,
idoutifiod; yet, in legal language, a parol
contract may be proved by written evidence.
This Is the case now before us, and this
brings me to the question it presents, which
I understand to be, whether oral evidence is
proper to ejxtend and enlarge a contract
which the parties have committed to writ-
ing? The first reflection that occurs to the
mind upon the statement of the question. In-
dependent of any technical rules, is, that the
parties, by making a written memorial of
their transaction, have implicitly agreed, that
in the event of any future misunderstand-
I
553
ing, that writing shall be referred to, as the
proof of their act and intention; that such
obligations as arose from the paper, by just
construction or legal intendment, sliould be
valid and compulsory on them; but that they
would not subject themselves to any stipula-
tions beyond their contract; because, if they
meant to be bound by any such, they might
have added them to the writing; and thus
have given them a clearness, a force, and a
direction, which they could not have by
being trusted to the memory of a witness.
For this end, the paper is signed, is wit-
nessed, and is mistakenly recorded. But the
plaintiff says, "Besides the warranty of title
contained in the writing, the defendant made
me another warranty as to the quality, which
I can prove by a witness present at the
time; and though he has complied with the
warranty which was committed to writing,
j'et he has broken the one which was orally
made, whence I am injured and seek com-
pensation."
We are then to decide, whether the law
deems such proof admissible.
By the common law of England, there
were but few contracts necessary to be made
in writing. Property lying in grant, as rights
and future interests, and that sort of real
property, to which the term incorporeal here-
ditament applies, must have been authenti-
cated by deed. So the law remained until
St. 32 Hen. VIII., which, permitting a par-
tial disposition of land by will, required the
will to be in writing; but estates In land
might still be conveyed by a symlwlical de-
livery in presence of the neighbors, without
any written instrument; though it was
thought prudent to add security to the trans-
action by the charter of feoffment. The
statute of 29 Car. II., commonly called the
statute of frauds, has made writing and
signing essential in a great variety of cases
wherein they were not so before, and has
certainly increased the necessity of caution
In the English courts, with respect to the
admission of verbal testimony, to add to or
alter written instruments, in cases coming
within the provisions of that statute. That
law, being posterior to the date of the char-
ter under which this state was settled, has
never had operation here; so that the com-
mon law remained unaltered until the year
1715, when a pailial enactment was made of
the provisions of the English statute.
The law must therefore bo sought for in
cases arising before the statute of frauds,
and expositions upon that statute are no oth-
erwise authoritative than as they afllrm or
recognize the ancient law. But I believe
there can be no doubt that the rule is as an-
cient as any in the law of evidence, and that
It existed before the necessity of reducing
any act into writing was introduced.
In riowd. 345, Lord Dyer remarks, "Men's
deeds and wills, by which they settle their
estates, are the laws which private men are
allowed to make, and they are not to be al-
554
INTERPRETATION OF CONTRACT.
V,
tered even by the king, in bis courts of law
or conscience."
In Rutland's Case, 5 Coke, the court re-
solved that it was very inconvenient that
matters in writing should be controlled by
averment of parties, to be proved by uncer-
tain testimony of slippeiy memory, and
should be perilous to purchasers, farmers,
&c.
The case of Meres v. Ansel, 3 Wilson, 275,
is directly in point upon the genei-al princi-
ple, to shew that parol evidence shall not
be admitted to contradict, disannul or sub-
stantially vaiy a written agreement.
In 2 Atk. 3S4, Lord Hardwicke says: "It
is not only contrary to the statute, but to
common law, to add anything to a written
agreement by parol evidence,"
All written contracts, says Justice Asliurst,
whether by deed or not, are intended to be
standing evidence against the parties enter-
ing into them. 4 Term R. 331.
1 Ves. Jr. 241, parol evidence to prove an
agreement made upon the purchase of an
annuity that it was redeemable, was rejected.
In a very recent case, in 7 Ves. 211, we are
furnished with the opinion of the present
master of rolls. Sir William Grant, than
whom no judge ever ranked higher in the
estimation of his contemporaries, for pro-
found and accurate knowledge in legal sci-
ence, and a proper and discriminating appli-
cation of well grounded principles to the
cases which arise in judgment before him.
His observations are, "By the rule of' law,
independent of the statute, parol evidence
cannot be received to contradict a written
agreement. To admit it for the purpose of
proving that the written instrument does
Qot contain the real agreement, would be
the same as receiving it for every purpose,
[t was for the purpose of shutting out that
enquiry that the rule was adopted. Though
the written instrument does not contain the
terms, it must, in contemplation of law, be
taken to contain the agreement, as furnish-
ing better evidence than any parol can sup-
ply."
To these authorities, I will add a decision
of the circuit court of Pennsylvania, because
it appears to be in principle the very case
under consideration.
An action on the case was brought by the
assignee of a bond against the assignor, up-
on a written assignment In general terms.
The plaintiffs offered oral evidence to shew
that the defendant had expressly guarantied
the payment of the bond. "Chase, Justice.
You may explain, but you cannot alter a
written contract by parol testimony. A case
of explanation implies uncertainty, ambigui-
ty and doubt upon the face of the instru-
ment. But the proposition now is a plain
case of alteration; that is, an offer to prove
by witnesses, that the assignor promised
something beyond the plain words and mean-
ing of his written contract. Such evidence
is inadmissible, and has been so adjudged in '
the supreme court, in Clark v. Russell, 3 Dal.
415. I grant that chancery will not con-
fine itself to the strict rule, in cases of fraud,
and of trust; but we are sitting as judges
at common law, and I can perceive no reason
to depart from it."
I suppose the above authorities are amply
sufficient to establish the proposition Lor
which they are cited, and therefore I forbear
to make any other references for that pur-
pose. The exceptions to the general rule
may be comprised under the heads of fraud,
surprise, mistake, in cases of resulting trust,
to rebut an equity, or to explain latent am-
biguities; and there may also be some other
cases which cannot be properly ranged un-
der the titles specified. But as the case
stated is, in my opinion, directly opposed by
the general rule, so far as it seeks to estab-
lish the proof of wan-anty as to quality, by
parol, and presents no fact to bring it with-
in any of the exceptions, it would be need-
less to multiply authorities with respect to
them.
As to the exception on the ground of fraud,
I conceive that only occurs, where some-
thing intended to have been inserted in the
contract, is omitted through the misrepre-
sentation or unfair practice of one of the
parties. In such case, the omission may be
supplied by parol evidence. But there is no
allegation here that the additional warranty
was intended or understood by either party
to have been inserted in the agreement.
It is also necessai-y to attend to the nature
of the remedy adopted by the plaintiff in
this case, which is founded on the warranty,
and is in assumpsit The questions arising
upon the general issue are, whether the war-
ranty was made, and whether it was true
at the time of making. For if the warranty
were made, and not complied with, it is
wholly immaterial whether the defect was
known to the seller or not,— a principle that
seems to extend to every case where the
plaintiff proceeds on the wan-anty. But in
an action of deceit, the scienter or fraud is
a material part of the declaration, and must
be brought home to the defendant to author-
ize a recovery against him, and in such case
it seems, from the authorities, that proofs of
the fraudulent conduct of the defendant may
be drawn from sources dehors the written
contract. It cannot be contended that in-
serting the scienter in a declaration on the
warranty, will convert It into an action of
deceit founded on tort In the latter ac-
tion, the knowledge of the defendant, or
something equivalent to it by whicli the
fraud is charged, is a substantive allegation,
and must be proved; In the former, it is^
merely surplusage, and may be rejected.
RULES DELATING TO EYIDEXCE— PllOOF OF CUSTOM AND USAGE. 555
COOPER V. KANE.
(19 Wend. 3SG.)
Supreme Court of New York. 1838.
This was an action of replevin, trif^d at the
Albany circuit in October, ISS.'i, before the
Hon. Hiram Denio, then one of the circuit
jud^'cs.
The action was in the dotinot for detaining
a quantity of sand taken from a lot in the
city of Albany belonging to tlie plaintiff, which
the defendant had excavated under a contract
with the plaintiff, so as to make the lot con-
form to a profile or plan of the streets es-
tablished by the corporation. The contract
was in writing; the defendant was to exca-
vate the lot and malco the necessary embank-
ments within a limited time, for which he
was to be paid by the plaintiff i^lSO, when
the work was done. The defendant com-
pleted tiio job and Was paid the stipulated
price. Whilst engaged in the work, the defend-
ant placed a large quantity of sand, which
was taken off of the lot in order to make it
conform to the required plan, on an adjoining
lot not belonging to the plaintiff, and when re-
quested by the plaintiff to permit her to take
it away, he refused such permission; for this
detention the action was brought. There was
no stipulation In the contract as to whom the
sand, taken from the lot in mailing the ex-
cavation, should belong after it was taken off
the lot. The defendant then offered to prove
a custom of the city of Albany which had ex-
isted for a great number of years and was
well known and understood, that in the ex-
cavation of lots, the material excavated be-
longed to the excavator and not to the own-
er of the lot, unless there was an express res-
ervation in the contract to the contrary. The
judge rejected the testimony, and instructed
the jury, that on the evidence adduced the
plaintiff was entitled to their verdict, who ac-
cordingly found a verdict for the plaintiff
with six cents damages, and six cents costs,
and assessed the value of the propert}' at
$157. The defendant moves for a new trial.
The cause was submitted on written argu-
ments.
J. Holmes, for plaintiff. C. M. Jenkins, for
defendant.
NELSON, O. J. I am inclined to the opin-
ion that the evidence of the custom in re-
spect to contracts like the one out of which
this action has arisen, by wny of explaining
It, and which was offered by the defendant
for that purpose, was admissible. It did not
go to vary any express or necessarily im-
plied stipulations between the parties therein
contained, but rather to establish what
amoimted to a complete performance agree-
ably to the presumed understanding of the
parties.
Mr. Starkle says (2 Starkie. Ev. 258, 259),
"where parties have not entered Into any ex-
press and specific contract, a presumption
nevertheless arises, that they meant to con-
tract and to deal according to the general
usage, practice and understanding, if any such
exist. In relation to the subject matter." The
same rule of evidence is also recognized by
Phillipps (volume 1, pp. 420, 421). and Lord
Kenyon remarked in Whitnel v. Gratham, ti
Term R. 398. that evidence of usage was ad-
missible to expound a private deed, as well
as tho king's charter. The right of carriers,
dyers, wliarfiugers, &;c. to a lien on the goods
entrusted to them for their compensation, is
frequently established by usage, independent-
ly of the contract. In Rushforth v. Hadfleld,
6 East, 519, Lord Ellenborough pennitted the
defendants (common carriers) to go into proof
of common usage to detain the goods for a
general balance, on the ground of an implied
agreement arising out of it between the par-
ties. He observed that if there be a general
usage of trade to deal with common carriers
in this way, aU persons dealing in the trade-
are supposed to contract with them upon tho
footing of the general practice, adopting the
general lien into their contract. Lawrence, J.,
admitted that the lien must be by contract be-
tween the parties, but observed that usage of
trade was evidence of the contract, and if sc
long established as to afford a presumption it
was commonly known, it was fair to concludi^
the particular parties contracted with refer-
ence to It. In Kirkman v. Shawcross, 6 Term
R. 14, the dyers, dressers, whisters, printers,
&c., of a neighborhood, held a public meeting
and entered into an agreement ttiat Lhey would
receive no more goods in the way of their
trade, except on the condition that they
should have a lien on them for a general bal-
ance, which was extensively published. The
court held that any person who delivered
goods to them after notice must be deemed to
have assented to the terms prescribed: and,
as we have seen, notice might be inferred
from the general notoriety of the terms thus
published.
Now, in this case, there is simply an agree-
ment to excavate the earth in a certain street
and to make the necessary embankment, ac-
cording 'to a map of the corporation, for a
given compensation. Nothing is said about
the surplus earth, where it Is to be laid, or
what is to be done with it Would It be a
workmanlike execution of the contnict to pile
it upon the adjacent bank? or may the con-
tractor dispose of it as he sees fit, and as most
convenient and profitable to himself? It ap-
pears to me, the solution of these questions
may very well be referred to common us;ige
in such cases, if any exist; and that if it
should he proved as said by Lawrence, J., "It
is fair to conclude the particular parties con-
tracted with reference to it" This usage
may often have a very important influence up-
on the minds of the parties as exemplified in
this case: for the value of the materials, which
the plaintiff lias recovered, nearly equals the
price of the job. If in fact the usage exists,
and the contract was made In reference to it,
serious Injustice must be the result of up-
holding the verdicu
New trial granted.
INTERPRETATION OF CONTRACT,
GRAY V. CLARK et aL
(11 Vt. 6S3.)
Supreme Cotirt of Vermont. Washington.
July, 1S39.
Ejectment for a third of an acre of land in
Marshtield. Plea, not guilty, and trial by jury.
Upon the trial in the court below, it appeared
in evidence, that on the 26th day of July. 1836,
Luther Hunt deeded the land in controversy,
■with some sixty seven acres more, to Eli Whee-
lock. and the lands so deeded are described as
follows:
"All that part of lot No. three in the fifth
range of lots in said town, meaning to convey
all that part of said lot that was deeded to me
bv Daniel AVilson on the 20th day of August,
1823, bounds the same, being more or less;
also, about one third of an acre of land of lot
No. three, in the fifth range, lying south of the
road, bounded westerly by the land conveyed
to the school district, "north by the road, east-
erly by the western line of Mr. Carleton, mean-
ing the same land that Luther Hunt's buildings
stand on, having recourse to the deed from
English to said Wilson for more particular
bounds."
The consideration of this deed was eight
hundred and fifty dollars. On the same 2»jth
of July, 1826, Wheelock executed to said Hunt,
for the consideration of eight hundred dollars,
a mortga^-e deed of lands described as follows:
"all that part of lot No. three in the fifth range
of lots in said town, m&aning to convey all that
part of said lot that Luther Hunt deeded to me
this day. excepting seventeen acres lying in
the southeast corner of said lot, also including
one quarter of an acre which James En-
glish deeded to Daniel Wilson, and *Wil- *584
son to Hunt, to Wheelock, " to secure the
payment of eight hundred and fifty dollars,
specified in four promissory notes, in the con-
dition of said mortgage deed mentioned. Tho
land in controversy is the piece described in
the last mentioned deed as one quarter acre
which James English deeded to Daniel Wilson.
Wheelock continued in possession of the prem
ises until the 29th of January, 1830, when he
executed to the plaintiff's intestate a mortgage
deed to secure her maintenance during her life,
and soon after absconded, and wholly failed to
perform the condition of this last mortgage.
Afterwards, in March, 1832. Hunt brought a
bill of foreclosure against Wheelocl^ and the
plaintiffs intestate, obtained a final decree,
took possession of the premises, and conveyed
them to one Damon, who deeded them to the
defendant. It was admitted that Hunt had a
good title to the land when he conveyed to
Wheelock, and that the plaintiff was entitled
to recover, unless the land in question was con-
veyed to Hunt by Wheelock's mortgage deed
to him, but if the land was not conveyed to
Hunt by that deed, then the defendants were
entitled to a verdict. The county court direct-
ed the jury to return a verdict for the defend-
ants, and the plaintiff excepted.
A. Spalding and L. B. Peck, for plaintiff.
Wm. Upham. and 0. H, Smith, for defend-
ants.
The opinion of the court was delivered by
REDFIELD, J. The only question to be deter-
mined in this case is, whether the land in ques-
tion was included in the exception in Whee-
lock's mortgage deed to Hunt, or in the grant.
All the land referred to in this deed origi-
nally belonged to Hunt, and had all, that day,
been deeded to Wheelock. — The notes secured
by the mortgage were a portion of the consid-
eration of the purchase, and, from the amount,
?S.50, being the same as the consideration ex-
pressed in Hunt's deed to Wheelock, it is pre-
sumed were for the principal part of the con-
sideration. The land in dispute, instead of
being deeded, as recited in Wheelock's deed to
Hunt, by English to Wilson, and by him to
Hunt, was deeded by English directly to
Hunt. *In Hunt's deed to Wheelock, *58o
the land is described in different parcels,
by reference to the deeds by which he derived
his title. The mortgage deed, executed by
Wheelock to Hunt to secure the consideration,
from the precise correspondence in the terms
of description of the estate, was manifestly
copied from the deed, and, after the entire es-
tate had been described by general terms, and
the exceptions also, the dubious clause is super-
added.
If we adopt the rule, ut res magi$ vaUat quam
pereat, we must consider this as forming a part
of the exception, for as the whole estate had
already been described, it would not enlarge,
nor in any way render more certain, the grant,
but would enlarge the exception. But this
maxim in regard to the construction of deeds
is but one among the very great number which
the sages of the law have left us. The great
object, and, indeed, the only foundation of all
rules of construction of contracts, is, to come
at the intention of the parties. And any rule,
which leads us aside of this grand object, is to
be disregarded. In the present case, from the
general nature and object of the transaction
and the common course of business, there can
be little doubt of the intention of the parties
to include the buildings, which constituted the
principal value of the purchase, in the mort-
gage, which was executed to secure the pur-
chase money. This view is favored, too, we
think, by the manner in which the mortgage
was drawn, being copied from the deed, and,
in that, the different parcels being described
separately, it did not probably occur to the
parlies, that a general reference to that deed
would include all its particulars, therefore, ex
maxima cautela, these particulars are again re-
peated. We ought not, therefore, to adopt a
construction which will defeat the obvious in-
tention of the parties, and produce a result
which it is highly improbable, perhaps absurd,
to suppose they contemplated. This view is in
accordance with established rules of construc-
tion. Cholmondeley v. Clinton, 2 B. & Aid.
Rep. 625. Hassell v. Long, 2 M. & S. 363.
It has been repeatedly said that, in the inter-
pretation of contracts, a nice grammatical con-
struction is not always to be regarded. Crom-
well V. Grurasden, 1 Ld. Raym. 335. — 2 Salk.
462. Fountain v. Guavers. 2 Show. R. 333. 7
Peterds. Ab. 13'J. Hence we are under
•586 no necessity of re*ferripg the word "in-
cluding" to the next immediate antece-
dent "excepting." The term "including" may
have reference to the deed, as well as the ex-
ception. And, it is evident, the most natural
and obvious import of the word is, "including"
in the deed, and not in the exception.
But, at most, the term "including" in its con-
nection, is equivocal. In such cases, resort
may always be had to the circumstances under
which the contract was executed, and the con-
temporaneous construction given to it by the
parties, as evidenced by possession or other
similar acts. Attorney General v. Parker, 3
Atk. R. 576. King v. Varlo. Cowoer, 248;
Bainbridge v. Statham, 7 Dowl. & Ryl. 141, (16
Eng. C. L. 279.) Wadlev v. Bayliss, 5 Taunt.
R. 752. (1 Eng. C. L. 385.) Jackson v. Wood.
RULES or CONSTRUCTION.
13 Johns 340. In this view, it is evident that
the construction contender! for by the defend-
ant must prevail. For the land ^as alwaya
been claimed and held under the deed by de-
fendant, and that claim fully acquiesced in by
plaintiff for many years, without any pretence
of claim on his part, so far as appears in tiia^
Inevery view of the case. then, we think the
construction ?iven to the deed by the county
court must prevail.
Judzmeat aiUrined-
INTEEPRETATION OF CONTRACT.
beck: & FAULT LITnOCxRAPHING CO. t.
COLORADO MILLING & ELE-
VATOR CO.
(3 C. C. A. 248, 52 Fed. 700.)
Circuit Court of Appeals, Eighth Circuit. Octo-
ber 31. 1S92.
No. 141.
In error to the circuit court of the United
States for the district of Colorado. Reversed.
Statement by SANBORN, Circuit Judge:
This was an action by the plaintiff in error
to recover the contract price of certain sta-
tionery and advertising matter furnished the
defendant. It was tried on the merits, .and
at the close of the evidence the comrt instruct-
ed the jury to return a verdict for the defend-
ant, and this instruction is assigned as error.
The plaintiff was a corporation of Wisconsin,
engaged in lithographing and printing, and its
principal place of business was at Milwaukee,
in that state. The defendant was a corpora-
tion of Colorado, engaged in the business of
milling, and its principal place of business
was at Denver, in that state. In June, 1SS9,
the plaintiff agreed to make new designs of
certain buildings of defendant, with sketches
of its trade-marks; to execute engravings
thereof in a strictly first-class style; to em-
body these on the stationery described below;
to submit to defendant for approval proofs
thereof; to submit designs and proofs of
hangers, on fine chromo plate, for advertis-
ing defendant's business, by the following
fall; to engrave a strictly first-class vignette
of one of defendant's plants; to submit a
sketch and proof thereof to defendant; to fur-
nish defendant with 10,000 basiness cards and
5,000 checks in Augiist, 1889; to furnish. In
the course of the year, letter heads, note-
heads, bill heads, statements, bills, envelopes,
and cards to the defendant to the number of
331,100, and 5,000 hangers; and to furnish the
vignette and 5,000 hangers more after the ap-
proval of the proofs thereof by the defendant.
The defendant agreed to take and pay for
this stationery, this vignette, and those hang-
ers at certain agreed prices, which amounted
in the aggregate to about $6,000. The plainr
tiff furnished the 10,^)00 cards and 5,(XX)
checks required under the contract in August,
1889, and the defendant received and paid for
them. The plaintiff; introduced testimony to
the effect that it strictly complied with and
fully performed these contracts In every re-
spect, except that it shipped the articles con-
tracted for (which were not delivered in Au-
gust) by rail from Milwaukee to the defend-
ant, at Denver, in December, 1889, In five
boxes, four of which did not arrive at Denver
until 9:42 a. m., January 1, 1890, and the fifth
did not arrive there until January 4, 1890;
that before January 8, 1890, all of these arti-
cles were tendered to the defendant, and it
refased to examine or receive them; that the
sketches and proofs of the designs, trade-
marks, and hangers had been submitted to
and approved by the defendant during the
summer and fall of 1SS9, before these articles
were niauufacturod, and that the last proof
was approved November 16, 1&S9; that on
December 16, 1889, the defendant wrote the
plaintiff to forward by express 2,000 state-
ments and 3,000 envelopes "as per proofs sub-
mitted;" that the state of the art and process
of lithographing is such that, after the gen-
oral idea of a piece of work is conceived, it is
customary to make first a pencil design, and,
when this is found satisfactory, to prepare a
colored sketch where colored work is requir-
ed; that after the sketch is colored it is litho-
graphed, that is, transferred to a stone; that
each color requires a separate stone; and in
these hangers there were nine colors; that it
requires from two to three months to repro-
duce on stone a colored sketch like that used
for the hangers; that the artists' work and
the reproduction on stone were the most ex-
pensive parts of this work contracted for;
and that the expense of the materials and
printing was but a small part of the entire ex-
pense of the work.
F. W. V. Cotzhausen, for plaintiff in error.
V. D. Markham, for defendant in error.
Before CALDWELL and SANBORN, Cir-
cuit Judges, and SHIRAS, District Judge.
SANBORN, Circuit Judge (after stating the
facts). The ground on which it is sought to
sustain the instruction of the court below to
return a verdict for the defendant in this case
is that the plaintiff failed to tender or deliver
the articles contracted for to the defendant,
at Denver, until six or eight days after the ex-
piration of the year, that the plaintiff did not
therefore furnish them "in the course of the
year," and that this faUure justified the de-
fendant in repudiating the contract, and refus-
ing to pay any part of the contract price.
It is a general principle governing the con-
struction of contracts that stipulations as to
the time of their performance are not neces-
sarily of their essence, unless it clearly ap-
pears in the given case from the express stip-
ulations of the contract or the nature of its
subject-matter that the parties Intended per-
formance within the time fixed in the con-
tract to be a condition precedent to its en-
forcement, and, where the intention of the
parties does not so appear, performance short-
ly after the time limited on the part of either
party will not justify a refusal to perform by
the party aggrieved, but his only remedy will
be an action or counterclaim for the damages
he has sustained from the breach of the stip-
ulations. In the application of this principle
to the cases as they have arisen, in the pro-
mulgation of the rales naturally deduced from
it, and in the assignment of the various cases
to the respective classes in which the stipu-
lation as to time of performance is, or is not,
deemed of the essence of the contract, the
controlling consideration has been, and ought
to be, to so decide and classify the cases that
unjust penalties may not be inflicted, nor un-
KULES OF CONSTRUCTION— RULES AS TO TIME
559
Tcasonable damages recovered. Thus, in the
ordinary contract of merchants for the sale
and delivery, or the manufacture and sale, of
marketable commodities within a time cer-
tain, it has been held that performance with-
in the tim.e is a condition precedent to the en-
forcement of the contract, and that a failure
In this rej?ard would justify the ajisrieved
party in refusing performance at a later day.
Norrlngton v. Wright, 115 U. S. 18^203, 6
Sup. Ct. 12. This application of the general
principle commends itself as just and reason-
able, on account of the frequent and rapid in-
terchange and use of such commodities made
necessary by the demands of commerce, and
because such goods, if not received in time by
the vendee, may usually be sold to others by
the vendor at small loss, and thus he may
himself measure the damages he ought to suf-
fer from his delay by the difference in the
market value of his goods. On the other
hand, it has been held that an express stipu-
lation in a contract for the construction of a
house, that it should be completed on a day
certain, and that, in case of failure to com-
plete it within the time limited, the builder
would forfeit $1,000, would not justify the
owner of the land on which the house was
constructed in refusing to accept it for a
breach of this stipulation when the house was
completed shortly after the time fixed, nor
even in retaining the penalty stipulated in the
contract but that he must perform his part
of the contract, and that he could retain from
or recover oi' the builder the damages he sus-
tained by the delay and those only. Tayloe
T. Sandiford, 7 Wheat. 13, 17. This applica-
tion of the general rule is equally just and
reasonable. The lumber and material be-
stowed on .a house by a builder become of lit-
tle comparative value to him, while they are
ordinar'Jy of much greater value +o the own-
er of the land on which it stands, and to per-
mit the latter to escap-e payment because his
house iJ ccmpleted a few days later than the
contract requires would result in great injus-
tice to the contract£>r, while the rule adopted
fuUr protects the owner, and does no injus-
tice to any )C2. The cases just referred to
illustrate ♦:wo well-settled rules of law which
have been deduced from this general princi-
ple, and In «ccordaiK:e with which this case
must be determined. They are:
In contracts of merchants for the sale and
delivery or for the manufacture and sale of
marketable commodities a statement descrip-
tive of the subject-matter, or some material
Incident, such as the time of shipment, is a
condition precedent, upon the failure or non-
performance of which the party aggrieved
may repudiate the whole contract. Norrlng-
ton V. Wright 115 U. S. ISS. 203. 6 Sup. Ct
12; Rolling Mill v. Rhodes. 121 U. S. 255,
261, 7 Sup. Ct. SS2. But in contracts for
work or skill, and the materials upon which
it is to be bestowed, a statement fixing the
time of performance of the contract is not
ordinarily of its essence, and a failure to
perform within the time stipulated, followed
by substantial performance after a short de-
lay, will not justify the aggrieved party in
repudiating the en'^ire contract, but will sim-'
ply give him his action for damages for the
breach of tlie stipulation. Tayloe v. Sandi-
ford, 7 Wheat. 13, 17; Ilambiy v. Railroad
Co., 21 Fed. 541, 544, 554, 557.
It only remains to determine whether the
contracts in the case at bar are the ordinary
contracts of merchants for the manufacture
and sale of marketable commodities or con-
tracts for labor, skill, and materials, and
this is not a difficult task. A contract to
manufacture and funiish articles for the
especial, exclusive, and peculiar use of an-
other, with special features which he re-
quires, and which render them of value to
him, but useless and unsalable to others.—
articles whose chief cost and value are de-
rived from the labor and skill bestowed upon
them, and not from the materials of which
they are made,— is a contract for work and
labor, and not a contract of sale. Engraving
Co. V. .Moore, 75 Wis. 170. 172, 43 N. W.
1124; Goddard v. Rinney, 115 Mass. 450;
Hinds V. Kellogg (Com. PI.) 13 N. Y. Supp.
922; Turner v. Mason (INIich.) 32 N. W. 840.
Thus in Engraving Co. v. Moore, supra, where
the lithographing company had contracted
to manufacture a large quantity of engrav-
ings and lithographs for a theatrical man-
ager, with special features, useful to him
only during a certain season, and they were
completed and set aside in the rooms of the
lithographer, and there burned before de-
livery to the manager, the court held that the
contract was not one for the sale of persomil
property, but one for work, skill, and ma-
terials, because it was not the materials, but
the lithographer's work of skill, that gave
the value to the finished advertisements, and
was the actual subject-matter of the contract,
and because that work and skill, while It
added the chief value to the finished articles
for the especial use of the defendant, made
both the articles and the materials worthle-^s
for all other purposes.
The contracts in the case we are consider-
ing were not for the blank paper on which
they were finally impressed; that was of
small value in proportion to the value of the
finished articles; they were not for the sale
of anything then in existence; they were for
the artistic skill and labor of the employes
of the defendant in preparing the sketches
and designs, transferring them upon stone,
and finally impressing them upon the paper
the defendant was to furnish; and they au-
thorized the plaintiff, without other orders
than the contracts themselves, and the ap-
provals of the designs and proofs there call-
ed for, to prepare and furnish all the articles
named In the contracts and to collect the
contract price therefor. These contracts re-
quired the names of defendant's mills and its
trade-marks to be so impressed upon all these
articles that when they were completed they
560
USTTERPRETATIOX OF CONTRACT.
\ .
were not only unsalable to all others, but
worthless to plaintiff for all purposes but
waste paper. The contracts are evidence
that on December 31, 1SS9, the articles con-
tracted for would have been worth about
$6,000 to the defendant, and if a few days
later, when they were tendered, they were
not worth so much, the defendant may re-
cover the damages it suffered from the delay
from December 31, 1SS9,' to the date of the
tender, in a proper action therefor, or may
have the same allowed in this action under
proper pleadings and proofs, and no injustice
will result; while, if the defendant was per-
mitted on account of this delay to utterly
repudiate the contract, the plaintiff must
practically lose the entire $6,000. The con-
tracts contain no stipulation from which it
can be fairly inferred that the parties in-
tended the time of performance to be even
material; indeed, they strongly indicate the
conti'ary. They provide that a certain por-
tion of the articles shall be furnished in two
months, that the remainder of the stationery
and 5,000 hangers shall be furnished in the
course of the year, and that 5,000 hangers
more and the vignette shall be furnished
within a reasonable time after the proofs are
approved by the defendant; there is no stipu-
lation for the payment of any damages or
the avoidance of the contracts on account
of a failure to perform within any of the
times stipulated in tie contracts, and the
parties themselves proceeded so leisurely
theix'under that the first and only admitted
request by the defendant for the delivery of
any of the articles not delivered In August
was on December 10, 1S89. In Tayloe v. \
Sandiford, supra, the court refused to permit \
the owner to retain the $1,000 which the '| i
house builder had expressly agreed to pay if -^
he failed to complete the house within the
time fi^xed in the contract. In the absence
of any such stipulation, or any clearly-ex«
pressed intent that time should be material
even, it would be clearly unjustified by the
law and inequitable to hold that the plaintiff
is compelled to forfeit his entire contract
price on account of this trifling delay that
may have been immaterial to the defendant,
and, if not, may be fully compensated In
damages.
The result is that these conti*acts were not
for the sale and delivery, or the manufacture
and delivery, of marketable commodities.
They were contracts for artistic skill and
labor, and the materials on which they were
to be bestowed in the manufacture of articles
which were not salable to any one but tiie
defendant when completed because impress-
ed with special features useful only to it
There was nothing in the contracts or their
subject-matter indicating any intention of the
parties that the stipulations as to time shouiu
be deemed of their essence; and the defend-
ant was not justified on account of the slight
delay disclosed by the record in refusing to
accept the goods, or in repudiating the entire
contract This conclusion disposes of the
case, and it Is unnecessary to notice other er-
rors assigned. The judgment below is re-
versed, and the cause remanded for further
proceedings not inconsistent with this opin-
ion.
5 OF CONSTRUCTION— PENALTIES AND LIQUIDATED DAMAGES. 5G1
•JAQUITH V. HUDSON.i
(5 Mich. 123.)
Supreme Court of Micliigan. May Term,
1858.
Error to circuit court, Wayne county.
The action was by Jaquitli against Hudson,
upon a pronii.ssory note for one tliousand dol-
lars, given by the latter to the former, April
15th, 1855, and payable twelve months after
date. Defendant pleaded the general issue,
and gave notice that on the trial he would
prove that, previous to said 15th day of April,
1855, plaintiff and defendant had been and
were partners in trade, at Trenton, in said
county of Wayne, under the name of Hudson
& Jaquith; that, on that day the copartner-
ship was dissolved, and the parties then en-
tered into an agreement, of which the follow-
ing is a copy:
"This article of agreement, made and en-
tered into between Austin E. Jaqnlth. of Tren-
ton, Wayne county, and state of Michigan, or
the first part, and Jonathan Hudson, of Tren-
ton, county of Wayne, and state of Michigan,
of "the second part, witnesseth, that the said
Austin E. Jaquith agrees to sell, and by these
presents does sell and convey unto the said
Jonathan Hudson, his heirs and assigns, all
his right, title, and interest in the stock of
goods now owned by the firm of Hudson and
Jaquith, together with all the notes, books,
book accounts, moneys, deposits, debts, dues,
and demands, as well as all assets that in any-
wise belong to the said firm of Hudson &
Jaquith; and that the copartnership that has
existed between the said firm of Hudson &
.Jaquith is hereby dissolved; and that the
said Austin E. Jaquith, by these presents,
agrees that he will not engage in the mercan-
tile business, in Trenton, for himself, or in
connection with any other one, for the space
of three years from this date, upon the for-
feiture of the sum of one thousand dollars, to
be collected by the said Hudson as his dam-
ages. In consideration whereof, the said Jon-
athan Hudson, of the second part, agrees for
himself, his heirs and administrators, to pay
unto the said Austin E. Jaquith the sum of
nine hundred dollars, for his services in the
firm of Hudson & Jaquith, together with all
the money that he (the said Austin E. Jaq-
uith) paid into said firm, deducting there-
from the amount which he (the said Austin
E. Jaquith) has drawn from said firm; the
remainder the said Hudson agrees to pay to
the said Jaquith, his heirs or assigns, at a
time and in a manner as shall be specified in
a note bearing even date with these presents.
And the said Hudson, for himself, his heirs
and assigns, agrees to pay all the debts, notes
and liabilities of the firm of Hudson &
Jaquith, and to execute imto the said Jaquith
a good and sufficient bond of indemnification
1 Irrelevant parts omitted.
HOPK.SEL.CAS.CONT. — 36
against all claims, debts, or liabilities of the
firm of Hudson & Jaquith.
"Trenton, April. 1S55.
"Austiu E. .Jaquith. [L. S.]
"Jonathan Hudson. [L. S.]
"Witnr'ss: Arthur Edwards. Arthur Ed-
wards, Jr."
And defendant further gave notice, among
other tilings, that he would show, on the trial,
that, after the execution of said agreement in
writing, and the giving of said note in pur-
suance thereof, on or about the 15th day of
July, 1855, plaintiff, in violation of said agree-
ment, entered into the mercantile business at
Trenton, and had continued to carry on the
same ever since; by means whereof the con-
sideration of said note had failed. And he
further gave notice, that he (the defendant)
continued to cairy on the mercantile business
at Trenton, aftor the dissolution of said co-
partnership; and by means of the breach of
said articles by plaintiff, defendant had sus-
tained damages to the sum of one thousand
dollars, liquidated by said articles for a breach
thereof, which sum he would claim to have
di'ducted from- the amount of said note, on
the trial.
* * * • * • '
The court was then asked by plaintiflf'g
counsel to charge the jury, as follows:
"2. That, even if the agreement set up was.
In the opinion of the jury, properly delivered,
as between the parties, the defendant can
not recoup any damages against the plaintiff,
except upon evidence showing that some dam-
age was actually sustained by him; that the
clause in the agreement as to damages, can
not, of itself, and In the absence of evidence,
operate to the reduction of the claim of the
plaintiff, as the sum fixed in the agreement
is in tlie nature of a penalty, and not liquidat-
ed damages; and no damages can be recov-
ered under it except such as are proven."
The court refused so to charge; and plaintiflP
excepted.
The court charged the jury, that it was not
necessary for the defendant to prove any ac-
tual damage under the plaintiff's breach of
the said agreement, as the damages therein
fixed were liquidated damages, and not a pen-
alty.
The issue was then submitted to the jury
on the evidence, who found a verdict for the
plaintiff, in the sum of eighteen dollars and
eight cents, allowing the defendant the sum
of one thousand dollars mentioned in the
agreement
Plaintiff brought the case to this court by
writ of error, accompanied by bill of excep-
tions.
D. Bethune Duffield. for plaintiff in error.
G. V. N. Lothrop, for defendant In error.
CHRISTIANCY, J. • • • The second
exception raises the single question, whether
562
mXERPKETATIO]^ OF CONTRACT.
the sum of Sl.OOO. mentioned in tlie covenant
of Jaquitla not to go into business in Trenton,
is to be construed as a penalty, or as stipu-
lated damages— the phiintiff in error insisting
it should be construed as the former, the de-
fendant as the latter.
We shall not attempt here to analyze all the
decided cases upon the subject, which were
read and cited upon the argument, and which,
with others, have been examined. It is not
to be denied that there is some conflict, and
more confusion, in the cases; judges have
been long and constantly complaining of the
confusion and want of harmony in the deci-
sions upon this subject But, while no one
can fail to discover a very great amount of
apparent conflict, still it will be found, on ex-
amination, that most of the cases, however
conflicting in appearance, have yet been de-
cided according to the justice and equity of
the particular case. And while there are
some isolated cases (and they are but few),
which seem to rest upon no very intelligible
principle, it will be found, we think, that the
following general principles may be confident-
ly said to resmt from, and to reconcile, the
great majority of the cases, both in England
and in this country:
First. The law, following the dictates of
equity and natural justice, in cases of this
kind, adopts the principle of just compensa-
tion for the loss of injury actually sustained;
considering it no greater violation of this
principle to confine the injured party to the
recovery of less, than to enable him, by the
aid of the court to extort more. It is the ap-
plication, in a court of law, of that principle
long recognized in courts of equity, which,
disregarding the penalty of the bond, gives
only the damages actiially sustained. This
principle may be stated, in other words, to be,
that courts of justice will not recognize or en-
force a contract, or any stipulation of a con-
tract, clearly unjust and unconscionable; a
principle of common sense and common hon-
esty so obviously in accordance with the dic-
tates of justice and sound policy as to make
it rather matter of surprise that courts of
law had not always, and in all cases, adopted
it to the same extent as courts of equity.
And, happily for the puiposes of justice, the
tendency of courts of law seems now to be
towards the full recognition of the principle,
in all cases.
This principle of natural justice, the courts
of law, following courts of equity, have, in
this class of cases, adopted as the law of the
contract; and they will not permit the par-
ties by express stipulation, or any form of
language, however clear the intent, to set it
aside; on the familiar ground, "conventus pri-
vatomm non potest publico juri derogare."
But the court will apply this principle, and
disregard the express stipulation of parties,
only in those c-ases where it is obvious from
the contract before them, and the whole sub-
ject-matter, that the principle of compensa-
tion has been disregarded, and that to carry
out the express stipulation of the parties,
would violate this principle, which alone the
court recognizes as the law of the contract
The violation, or disregard, of this prin-
ciple of compensation, may appear to the
court in various ways — from the contract, the
sum mentioned, and the subject-matter. Thus,
where a large sum (say one thousand dollars)
is made payable solely in consequence of the
non-payment of a much smaller sum (say one
hundred dollars), at a certain day; or where
the contract is for the performance of several
stipulations of very different degrees of im-
portance, and one large sum is payable on
the breach of any one of them, even the most
trivial, the damages for which can, in no rea-
sonable probability, amount to that sum; in
the first case, the court must see that the real
damage is readily computed, and that the
principle of compensation has been overlook-
ed, or purposely disregarded; in the second
case, though there may be more difficulty in
ascertaining the precise amount of damage,
yet as the contract exacts the same large sum
for the breach of a trivial or comparatively
unimportant stipulation, as for that of the
most important or of all of them together, it
is equally clear that the parties have wholly
departed from the idea of just compensation,
and attempted to fix a rule of damages which
the law wiU not recognize or enforce.
We do not mean to say that the principle
above stated as deducible from the cases, is
to be found generally announced in express
terms, in the language of the courts; but it
wiU be found, we think, to be necessarily im-
plied in, and to form the only rational founda-
tion for, all that large class of cases which
have held the sum to be in the nature of a
penalty, notwithstanding the strongest and
most explicit declarations of the parties that
it was intended as stipulated and ascertained
damages.
It is true, the courts in nearly all these cases
profess to be construing the contract with
reference to the intention of the parties, as if
for the purpose of ascertaining and giving
effect to that intention; yet it is obvious, from
these cases, that wherever it has appeared to
the court, from the face of the contract and
the subject-matter, that the sum was clearly
too large for just compensation, here, while
they will allow any form of words, even those
expressing the direct contrary, to indicate the
intent to make it a penalty, yet no form of
words, no force of language, is competent to
the expression of the opposite intent. Here,
then, is an intention incapable of expression
in words; and as all written contracts must
be expressed in words, it would seem to be a
mere waste of time and effort to look for such
an intention in such a contract. And as the
question is between two opposite intents only,
and the negation of the one necessarily Im-
plies the existence of the other, there would
seem to be no room left for construction with
liULES OP CONSTRUCTION— PENALTIES AND LIQUIDATED DAMAGES. 5G3
reference to the Intent. It must, then, be
manifest that the intention of the parties In
such cases is not governing consideration.
But some of the cases attempt to justify
this mode of construing the contract with ref-
erence to the intent, by declaring, in sub-
stance, that though the language is the strong-
est which could be used to evince tlie iul.eiitiun
In favor of stipulated damages, still, if it ap-
pear clearly, by reference to the subject-mat-
tor, that the parties have made the stipulation
without reference to the principle of just
compensation, and so excessive as to be out of
all proportion to the actual damage, the court
must hold that they could not have intended
it as stipulated damages, though they have so
expressly declared. See, as an example of
this class of cases, Kemble v. Parren, 6 Bing.
141.
Nove this. It is true, may lead to the same
result in the particular case, as to have
placed the decision upon the true ground, viz.,
that though the parties actually intended the
sum to be paid, us the damages agreed upon
between them, yet it being clearly uncon-
scionable, the court would disregard the in-
tention, and refuse to enforce the stipulation.
But, as a rule of construction, or interpreta-
tion of contracts, it is radically vicious, and
tends to a confusion of ideas in the construc-
tion of contracts generally. It is this, more
thaji anything else, which has produced so
mucti apparent conflict in the decisions upon
this whole subject of penalty and stipulated
damages. It sets at defiance all rules of in-
terpretation, by denying the intention of the
parties to be what they, in the most imam-
biguous terms, have declared it to be, and
finds an intention directly opposite to that
which ii? clearly expressed — "divinatio, non
Interpretatio est, qua? omnino recedit a litera."
Again, the attempt to place this question up-
on the intention of the parties, and to make
this tho governing consideration, necessarily
implies that, if the intention to make the
sum stipulated damages should clearly ap-
pear, the court would enforce the contract ac-
cording to that Intention. To test this, let It
be asked, whether, in such a case, if it were
admitted that the parties actually intended
the sum to be considered as stipulated dam-
ages, and not as a penalty, would a court of
law enforce It for the amount stipulated?
Clearly, they could not, without going back
to the technical and long exploded doctrine
which gave the whole penalty of the bond,
without reference to the damages actually
sustained. They would thus be simply chan-
ging the names of things, and enforcing, un-
der the name of stipulated damages, what In
its own nature is but a penalty.
The real question in tliis class of cases will
be found to be, not what the parties intended,
but whether the siun is, in fact, in the na-
ture of a penalty; and this is to be determin-
ed by the magnitude of the sum, in connec-
tion with the subject-matter, and not at all
by the words or the understanding of the
parties. The intention of the parties can not
alter it. While courts of law gave the penalty
of the bond, the parties intended the pay-
ment of the penalty as much as they now
intend the payment of stipulated damages;
it must, therefore, we think, be very obvious
that the actual intention of the parties, in
this class of cases, and relating to this point,
is wholly immaterial; and though the courts
have very generally professed to base their
decisions upon the intention of the parties,
that intention is not. and can not be made,
the real basis of these decisions. In en-
deavoring to reconcile their decisions with
the actual intention of the parties, the courts
have sometimes been compelled to use lan-
guage wliolly at war with any idea of inter-
pretation, and to say "that the parties must
be considered as not meaning exactly what
they say." Homer v. Flintoff, 9 Mees. &
W., per Park, B. May It not be said, with at
least equal propriety, that the courts have
sometimes said what they did not exactly
mean?
The foregoing remarks are all to be confin-
ed to that class of cases where it was clear,
from the sum mentioned and the subject-mat-
ter, that the principle of compensation had
been disregarded.
But, secondly, there are great numbers of
eases, where, from the nature of the contract
and the subject-matter of the stipulation, for
the breach of which the sum is provided, it
is apparent to the court that the actual dam-
ages for a breach are uncertain In their na-
ture, difficult to be ascertained, or impossible
to be estimated with certainty, by reference
to any pecuniary standard, and where the
parties themselves are more intimately ac-
quainted with all the peculiar circumstances,
and therefore better able to compute the ac-
tual or probable damages, than courts or ju-
ries, from any evidence which can be brought
before them. In all such cases, the law per-
mits the parties to ascertain for themselves,
and to provide in the contract itself, the
amount of the damages which shall be paid
for the breach. In permitting this, the Liw
does not lose sight of the principle of compen-
sation, which is the law of the contract, but
merely adopts the computation or estimate
of the damages made by the parties, as being
the best and most certain mode of ascertain-
ing the actual damage, or what sum wiU
amount to a just compensation. The reason,
therefore, for allowing the parties to ascer-
tain for themselves the damages in this class
of cases, is the same which denies the right
in the former class of cases; viz.. the courts
adopt the best and most practicable mode of
ascertaining the sum which will produce just
compensation.
In this class of cases where the law per-
mits the parties to ascertain and fix the
amount of diimages in the contract, the first
inquiry obviously is, whether they have done
564
INTERPEETATION OF CONTRACT.
so In fact? And here, the intention of the
parties is the governing consideration; and
in ascertaining this intention, no merely
technical effect will be given to the particu-
lar vrords relating to the sum, but the en-
tire contract, the subject-matter, and often
the situation of the parties with respect to
each other and to the subject-matter, will be
considered. Thus though the word "penal-
ty" be used (Sainter v. Pergason, 7 Man,, G.
& S. 71G; Jones v. Green, 3 Younge & J.
299; Pierce v. Fuller, S Mass. 223), or "for-
feit" (Noble v Noble, 7 Cow. 307), or "for-
feit and pay" (Fletcher, v. Dycke, 2 Term R.
32), it will still be held to be stipulated
damages, if, from the whole contract, the
subject-matter, and situation of the parties,
it can be gathered that such was their in-
tention. And in proportion as the difficulty
of ascertaining the actual damage by proof
is greater or less, where this difficulty grows
out of the nature of such damages, in the
like proportion is the presumption more or
less strong that the parties intended to fix
the amount.
It remains only to apply these principles to
the case before us. It is contended by the
plaintiff in error, that the payment of the
one thousand dollars mentioned in the cove-
nant of Jaquith is not made dependent sole-
ly upon the breach of the stipulation not to
go into business in Trenton, but that it ap-
plies equally— First, to the agreement to sell
to Hudson his interest in the goods; sec-
ond, to sell his interest in the books, notes,
accounts, etc.; and, third, to the agreement
to dissolve the partnership. But we can per-
ceive no ground for such a construction.
The language in reference to the sale of the
interest in the goods, books, notes, accounts,
etc., and that in reference to the dissolution,
is not that ot a sale in futuro, nor for the
dissolution of the partnership at a future
period, but it is that of a present sale and a
present dissolution— "does hereby sell," and
"the copartnership is hereby dissolved," is
the language of the Instrument It is plain,
from this language, from the subject-matter,
and from all the acts of the parties, that
these provisions were to take, and did take,
Immediate effect. There could be no pos-
sible occasion to provide any penalty or
stipulated damages for the non-performance
of these stipulations, because this sale and
dissolution would already have been accom-
plished the moment the contract took effect
for any purpose; and, until it took effect,
the stipulation for the one thousand dollars
could not take effect or afford any security,
nor would Hudson be bound or need the se-
curity. But it remained to provide for the
future. If Jaquith were to be at liberty to
set up a rival store in the same village, it
might seriously affect the success of Hud-
son's business; and we are bound to infer,
from the whole scope of this contract, that
Hudson would never have agreed to pay the
consideration mentioned in It, nor to have
entered into the contract at all, but for the
stipulation of Jaquith "that he will not en-
gage in the mercantile business in Trenton,
for himself or in connection with any other
one, for the space of three years from this
date, upon the forfeiture of the sum of one
thousand dollars, to be collected by said
Hudson as his damages." This stipulation
of Jaquith not to go into business, is the only
one on his part which looks to the future;
and it is to this, alone, that the language
in reference to the one thousand dollars ap-
plies. Any other construction would do vio-
lence to the language, and be at war with
the whole subject matter.
The damages to arise from the breach of
this covenant, from the nature of the case,
must be not only uncertain in their nature,
but impossible to be exhibited in proof,
with any reasonable degree of accuracy, by
any evidence which could possibly be ad-
duced. It is easy to see that while the
damages might be very heavy, it would be
very difficult clearly to prove any. Their
nature and amount could be better esti-
mated by the parties themselves, than by
witnesses, courts, or juries. It is, then, pre-
cisely one of that class of cases in which it
has always been recognized as peculiarly
appropriate for the parties to fix and agree
upon the damages for themselves. In such
a case, the language must be very clear to
the contrary, to overcome the inference of
intent (so to fix them), to be drawn from
the subject-matter and the situation of the
parties; because, it is difficult to suppose,
in such a case, that the party taking the
stipulation intended it only to cover the
amount of damages actually to be proved, as
he would be entitled to the latter without
the mention of any sum in the contract, and
he must also be supposed to know that his
actual damages, from the nature of the case,
are not susceptible of legal proof to anything
approaching their actual extent. That the
parties actually intended, in this case, to
fix the amount to be recovered, is clear from
the language itself, without the aid of a ref-
erence to the subject-matter, "upon the for-
feiture of the sum of one thousand dollars,
to be collected by the said Hudson as his
damages." It is manifest from this lan-
guage that it was intended Hudson should
"collect," or, in other words, receive this
amount, and that it should be for his dam-
ages for the breach of the stipulation. . This
language is stronger than "forfeit and pay,"
or "under the penalty of," as these might be
supposed to have reference to the form of
the penal part of a bond, or to the form of
action upon it, and not to the actual "col-
lection" of the money.
It is, therefore, very clear, from every view
we have been able to take of this case, that
it was competent and proper for the parties
to ascertain and fix for themselves the
RULES OF CONSTRUCTION— PENALTIES AND LIQUIDATED DAMAGES. 5C5
amount of damages for the breach complain-
ed of, and equally clear that they have done
so In fact. From the uncertain nature of
the damages, we cannot say that the sum in
this case exceeds the actual damages, or that
the principle of compensation has been vio-
lated. Indeed, it would have been perhaps
difficult to discover a violation of this prin-
ciple had the sum in this case been more
than it now is, though, doubtless, even in
such cases as the present, if the sum stated
were so exces.sive as clearly to exceed all
reasonable apprehension of actual loss or in-
Jury for the breach, we should be compelled
to disregard the intention of the parties, and
treat the sum only as a penalty to cover the
actual damages to be exhibited In proof.
In this case the party must be held to the
amount stipulated in his contract
The second exception, therefore. Is not
well talien; the court properly refused to
charge as requested, and no error appearing
in the record, the judgment of the circuit
court for the county of Wayne must be af-
firmed.
The other justices concurred.
DISCHARGE OF CONTRACT.
\^1
HOBBS et al. v. COLUMBIA PALLS
BRICK CO.
(31 N E. 756. 157 Mass. 109
F
Supreme Judicial Court of Massachusetts.
Suffolk. Sept. 7, 1892.
Exceptions from superior court, Suffolk
county.
Action by John S. Hobbs and others
against the Columbia Falls Brick Company
on a contract foi the sale and delivery of
brick. Judgment for plaintiffs, and defend-
ant excepts. Exceptions sustained.
S. L. Whipple, for plaintiffs. P. T. Benner,
for defendant.
MORTON, J. We think that upon the
facts which were agreed, and upon those
which appeared in evidence from the testi-
mony of its president and treasurer, the de-.
fendant was entitled to go to the jury on the
'que stion whether there had been "an abandon-
men^__ofthe contract bj^hej la intiff^^^ and
the ir assignee s which was assented to by^e
defendant. The court ruled generally upon
the evidence thus disclosed that it would not
constitute a defense. If, therefore, the de-
fendant can avail of it In any aspect as a de-
fense, it is entitled to a new trial. As the
case was left it appeared that after the con-
tract was entered into the plaintiff s Jjg came
i nsolvent, and made a_ voluntary assignment
for the benefit _^ Jiheir creditors, of which
t hey ^ave notice to the defendant They aft-
erwards took the benefit of the Insolvent act,
and compounded with their creditors by com-
position proceedings. No reference to the
contract was contained in the schedule of as-
sets which they filed In the insolvency court,
and there was no allusion to it in the state-
ment of their assets which was made by them
at a meeting of their creditors. The contrac t
w as an executory one, and the pla intiffs ! knt^ w
^>^f^t the tjrifk ■^ere to be made at the plain-
t iffs' P lace., In Main e. They gave no notice,
directly or inrHrPctly, tn tTiP dgfgJljj'^t, till
May 12th,— more than four months afterThe
notice of their assignment,— that they would
claim performance, and did not till then offer
to pay or secure the defendant under the
contract The defendant sold the brick some
time in ApriL We tbiBkJt_would_haveJieen
competent for the. Jury to And, tmder these
circumst ances. tha t_the_-Plai iitiffs had aban -
^^£3^_the ^contractTand that thg defen dant
had_a5sented_tp^ and acted up on such aba n-
donmejit. The jury could_properly_ have re-
garded the ^lyTng of tbe_noticg^_o L the assi gn-
ment as equivalent to the pl aintiffs sayin g
that they' could ^61 go~on"wit h the contra ct,
especially wheDTtaken in~cqnnect|o n w ith all
tb^e~blheF circumstances. Morgan v. Bain^ L.
R. 10 C. P. 15^ in re Steel Co., 4 Ch. Div.
lOS; Ex parte Stapleton, 10 Ch. Div. 586; Ex
parte Chalmers, L. R. 8 Ch. App. 289.
While the fact that the plaintiffs became
insolvent after entering into the contract
would of itself not have terminated the con-
tract, it was competent for the jury to find
that the notice which they gave to the de-
fendant of the assignment, and their subse-
quent conduct, justified the defendant in the
assumption that they had abandoned the con-
tract The conduct of the assjgnees,_assum-
ing that the~ cont r act pasied to them, d oes
not put the matter in any better shape for the
plaintiffs. It was their duty within a rea-
sonable time after the assignment to elect
whether to proceed or not with the contract,
and to notify the defendant accordingly. Ex
parte Chalmers, supra; Ex parte Stapleton,
supi'a. They did not do this. On the con-
trary, when the defendant's treasurer in-
quired whether they were going to claim the
contract, the reply which he got left on his
mind the impression that they were not.
They did nothing to Indicate that they were
going to claim it, and did not offer to pay or
in any way secure the defendant for the per-
formance of the contract. They continued to
hold the pr»perty assigned to them till April
17th, without taking any action In reference
to the contract when they reconveyed it to
the plaintiffs, who could derive no higher
right from the assignees than they themselves
possessed. Inasmuch as there must be a new
trial, and the case may then go off on the
ground which we have indicated above, or
the facts relating to it may not then be as
now stated, we have not considered the ef-
fect of the testimony offered by the defendant,
tending to show that the plaintiffs were hope-
lessly insolvent at the time when they made
the contract, and knew themselves to be so,
and concealed the fact from the defendant,
who was thereby Induced to enter Into the
contract. Exceptions sustained.
(^3^
SUBSTITUTED AGREEMENT.
CUTTER V. COCHRANE
567
(116 Mass. 408.)
Supreme Judicial Court of Massaclrosetts.
Suffolk. Dec. 28, 1874.
Contract for money had and received, with
counts on an atireement to repay money paid
by the plaintiff to the defendant on a con-
tract, alleged to have been rescinded.
At the trial in the superior court, before
Rockwell, J., the plaintiff offered evidence
tending to prove the following facts: In
November, 1870, the plaintiff and the defend-
ant, acting through his agent, Hugh Coch-
rane, e ntered into a v erbal agreement for pur-
ch ase Ey the Dia iTitTff~7>? tj ig^defendnnt.^ as
guardiai . of ce rtaiiLJPl""r bpirs,.-Qf,-n ^imell-
IngHI ouse and la nd connected, Iheressith,^ Stri-
ated In Maide n. On November 11, the plain-
'tirt made rhe first payment, and took a re-
ceipt and memorandum, as follows: "Re-
ceived of Mrs. E. J. Cutter one hundred dol-
lars, on account of purchase of estate known
as CcK:hrajne estate, situated op court leading
from Main street; price, forty-seven hun-
dred dollars; to be paid in instalments of
sev°aty-fiv^ dollars per month, until June 1,
1871. ;iL whk.i time amounts of payments to
equal one thousand dollars, and one thou-
sanr doilars to be paid in quarterly payments
from that date. Balance on mortgage for
thite year- from chat date. Bond for deed
to be siren on that date, and deed when the
balanr^- >if the second thousand is paid. Hugh
Cochraic, f r Guardian."
The authority of Hugh Cochrane to act as
agent for the defendant vnis not denied. Va-
rious payment.: were rm-de by the plaintiff,
from November 11, ^870, to Octo'oe/ 17, 1871,
amounting to $950 In all. for which receipts
wen; given, sometimes signed by the defend-
ant and sometimes by Hugh Cocar"jie In his
behalf.
In Noveniber, 1870, the plaintiff entered into
possession of the house and premises under
the agreement of sale, and continued to oc-
cupy the same until July, 1872. About April
1,^ 1872, no further payments having been
made, Hugh Cochrane wont to the house of
the plaintiff, and said the defendant was dis-
satisfied, on account of the delay in making
the payments; a nd it w na thpn j^gT-P ^d that
the_a£:reement ^j jsale sb ould_b e rescinded ;
that t he plainti ff should give up possession of
the^prein ises _t o~tbe defenda nt,^ but should
hold~possession and keep tlie house furnished
for a while, to enable the defendant to make
a more advantageous sale of the same, and
pay the defendant interest at eight per cent.
per annum on the purchase money for the
time she should have occupied; and that the
defendant, in consideration thereof, should
pay back to the plaintiff the several sums
she had paid towards the purchase, with eight
per cent, per annum on the several payments
from the date of such payments, and al.s:o re-
fund to her $00.03, being the amount of taxes
on the estate paid by her. The plaintiff re-
mained, and kept the house furnished until
the defendant sold the same on May 24, 1872,
and, as soon as requested thereafter, gave up
the possession to the purchaser on July 18,
1872. In September, 1872, she went to the
store of the defendant in Boston for a settle-
ment, where she found Hugh Cochrane and
the defendant together, and where Hugh, in
the defendant's presence, made out a state-
ment of the balance due the plaintiff, placing
it at $207.75; that it differed from the above
agreement only in that it did not embrace
the item of taxes, nor did It allow her inter-
est on the payments made by her; while on
his side was claimed an item of .$24.25, al-
leged to have t)een paid by him for insurance,
and which he contended ought to be paid by
the plaintiff. The plaintiff declined to set-
tle on these terms, and subsequently, and be-
fore suit brought, made formal demand for
aU the money paid by her as above, which
was refused by the defendant
After the evidence was closed, the defend-
ant's counsel asked the Judge to rule that the
plaintiff was not entitled to recover, on the
ground that there was no consideration for
the alleged promise on the part of the de-
fendant. The judge so mled and ordered a
verdic*: for the defendant, and the plaintiff
alleged exceptions.
N. B. Bryant, for plaintiff. J. P. Convvjrsj
aiid E. A. Kelly, far defendant
AMES, J. Whether by her failux-e to make
the stipulated payments the plaintiff had lost
all her rights under the original contract, and
forfeited the money which she had paid, is
a question which the defendant is not enti-
tled to raise in this case. The settlement
which was had between the parties proceed-
ed upon a very different ground. An agree-
ment to rescind a previous contract imports
that, until It Is rt^sclnded. It Is recognized by
botli parties as subsisting and binding. J^
regci iidln g ^ of a previotis_contract contai ning;
milt uarstlpulaSong is a relensp by p-TclTp ailjj
tqliiejitlier^^ The release by one Is the con-
sideration for the release by the other, and
the mutual releases form the consideration
for the new promise, and are sufficient to
give it full legal effect. I The defendant is
bound to account for the money that has been
paid to him, not because the purchase did not
go into effect, but because, in consideration
of mutual releases, he has excused the plain- .
tiff from its fulfilment, has consented to a /
new agreement, and has expressly promised
to accoimt for the money.
Exceptions sustained.
668
DISCHARGE OF CONTKACT.
3I
BUTTERFIELD v. HABTSHORN. ^
(7 N. H. 345.) ^J^
Superior Court of New Hampshire. Hillsbor-
ough, Dec. Term, 1S34.
Assumpsit for money bad and received.
On trial, it appeai-ed that prior to the 29th
of September, 1826, one John Hartshorn was
duly appointed executor of the last will of
Benjamin Hartshorn, whose estate was de-
creed to be administered in the insolvent
court.
The plaintiff presented a claim against
said estate, of $45.06, which was allowed by
the commissioner, and a decree of the pro-
bate court was passed on the 29th of Sep-
tember, 1826, for the payment of the claim
allowed the plaintiff and other creditors of
the estate.
It further appeared, that on the 17th of
November, 1826, the said John Hartshorn,
executor, sold and conveyed to the defend-
ant a farm which had belonged to the tes-
tator, for the sum of $1900, and that upon
that occasion, by agreement between him
and the defendant, the defendant retained a
sufficient amount of the purchase money to
pay the claims against said estate which re-
mained unpaid, among which was that of
the plaintiff; and the defendant agreed with
the executor to pay to the plaintiff the
amount of his claim, to recover which this
action is brought.
Upon this evidence, verdict was taken for
the plaintiff by consent; and it was agreed
that judgment should be rendered upon the
verdict, or that the verdict should be set
aside, and judgment entered for the defend-
ant^ as the court should direct.
J. U. Parker, for plaintifL E. Parker, for
defendant.
UPHAM, J. In this case, the plaintiff hav-
ing a claim against the estate of Benjamin
Hartshorn, which had been allowed, it be-
came the duty of the executor to provide for
its payment, if he had assets. If the execu-
tor might have compelled the plaintiff to a
suit upon the bond, in order to recover the
amount of his claim, it was no part of his
duty as executor to adopt that course; and
it is evident that he intended to provide for
the payment of the plaintiff's claim without
compelling him to resort to legal proceed-
ings. For this purpose h e directed the
a mount due the plaintiff to be paid out o£
funds_ left by him with the defendant, a ris-
ing from the s ale^_of__landa hp"inngnn^ j-n
t he est^ e: and "the defendant cannot pre-
vail in the exception which has been taken
by him in this case,— that it was in the power
of the executor to have done differently, and
to have withstood payment until compelled
by a suit upon his bond. Besid,cs, the exec-
utor is a stranger to this suit; and, if this
defence should be considered as open to him
(see, contra, Adams v. Dakin, 2 N. H. 374),
it is open only to him, and cannot avail to
this defendant.
The second exception which has been tak-
en is equally untenable. The defendant pur-
chased the land, and thereby became in-
debted to the executor. By agreement be-
tween the executor and. the defendant, the
defendant retained, not the land, as that Jiad
passed to him by the sale, but a portion of
the purchase money, for the purpose of pay-
ing the debts of certain creditors of the es-
tate, among which was the debt due the
plaintiff; and if there is a sufficient privity
betwixt the defendant and the plaintiff, the
purchase money so retained is the plaintiff's
money, for which the defendant is liable to
him in an action for money had and re-
ceived to his use. As between the plaintiff
and defendant, it is the .same as if the land
bad been paid for, and the executor had then
deposited a portion of the purchase money
with the defendant, directing him to pay.
certain debts due from the executor, and!
Hvhich the defendant promised to pay.
But the principal question in this case is,
whether . the plain tiff can avail himself of
the^^j)romise^ made j2J__theJdefendant to t_he
executor, — he" ^ever havi ng agreed to accept
thedefendant^s his dibtor, nor having made
any -demand of him for the rnpney ^rior^ to
t h^ prTirnpenceme nt of this_suit.
Can the plaintiff avail himself of the de-
posit of the money by the executor with the
defendant, and the defendant's promise to
Hartshorn, the executor, to pay it, without
some evidence of assent on the part of the
plaintiff before the institution of a suit?
It is apparent, that in cases of this kind, a
contract, in order to be binding, must be
mutual to all concerned, and that until It is
completed by the assent of all interested, it
is liable to be defeated, and the money de-
posited countermanded.
It seems, also, to be clear, that no contract
of the kind here attempted to be entered
into can be made, without an entire change
of the original rights and liabilities of the
parties to it. There is to be a deposit of
money for the payment of a prior debt, — an
agreement to hold the money for this pur-
pose, and an agreement on the part of a third
person to accept it in compliance with this^
arrangement. It is made through the agen-
cy of three individuals, for the purpose of
payment; and it can have no other effect
than to extinguish the original debt, and cre-
\ate a new liability of debtor and creditor be-
'twixt the person holding the money and the
individual who is to receive it On any oth-
er supposition there would be a duplicate
liability for the same debt; and the depos-
ite, instead of being a payment, would be
a mere collateral security, — which is totally
different from the avowed object of the par-
ties.
What proceedings will constitute an assent
to this contract and discharge the original
debtor? Will a demand of the money have this
SUBSTITUTED AGREEMENT.
5G9
• effect? An Individual who should receive ad-
vices from his debtor of a deposite of money
for hia beuelit, would hardly deum a demand
of the money, accompanied by a refusal of
payment, a discharge of the prior debt. A
suit to recover money is no more decisive
evidence of an election to receive it, than a
demand; and the l)ringing of a suit cannot
be considered evidence of an assent to a con-
tract, and tliereby support the action which
had no foundation until It was brought.
To entitle the plaintiff to recovg r, there
must be nn PYting nishment of the o riginal
4obt; a nd it i s quesU onablewhether, in cas-
es o flrois ^kind, anyl ElSg can "ope rate aa a n
~exti n guishme nt of the origlnald ebtbnt pay -
mem, or an expres s agreem entof the cred it-
or~to _tak fi. another"~pe rsQP.-aa-bi3 debtor^in
discharge of the original claim. A contract
of this description is an extinguishment of
the original debt. Coxon v. Cbadley, 3 Bam.
& C. 591.
The bailee is either a stakeholder— holding
the money to abide a contingency, and bound
either to deliver it to the depositor, if he re-
mands it, or to the creditor if he claims it,—
1^ the first claimant thereby making it his mon-*^
ey; and of course, If the creditor's money
then a payment of the original debt, — or the
bailee is liable solely to the depositor, there
being no privity of contract betwixt himself
^and any other person.
If this be true, the money being holden npy-
on a contingency neither party can sue with-
out a prior demand. It is unnecessary to de-
termine, in this case, whether suit may be
made with demand. If so, it must be solely
on the ground that by such demand the prior
debt is extinguished.
It is important in this case to refer to such
authorities as bear upon It. The case of
Hall V. Marston, 17 Mass. 575, directly con-
flicts with the principles laid down as above.
But one authority is cited to sustain it,
which Is from Com. Dig., "Action upon the
Case upon Assumpsit," E: "If money be
given to A to deliver to B, B may have an
action." The reference In Comyn Is to
RoIIe, Abr., and Haidres, 321. The case In
H^rdres is Bell vs. Cliaplaln, where A deliver-
ed goods, the property of B, to C, who prom-
ised, for a consideration given by A, to de-
liver them to B; and It was holden that either
A or B might sue C for not delivering them.
In that case the goods delivered were the
property of B, and no question arose as to
the extinguishment of a prior debt. The case
In Massachusetts proceeds upon the same
principle. The court remark, that "wher-
ever one has In his hands the money of an-
other which he ought to pay over, he is
liable to this action." The question of title
to the money, which settles the question of a
right of action. Is assumed to be in the plain-
tiff.
The case of Weston v. Barker, 12 Johns.
276. is similar to that in 17 Mass., except
that there was an express agreement to hold
the balance of the money subject to the or-
der of the depositors; and an order was
afterward.s drawn by them for the money in
favor of the plaintiff, of which the defend-
ant had notice. In this case Spencer, J., dis-
sented. Neilson v. Blight, 1 Johns. Cas. 205,
Is a similar authority.
The cases, Wilson v. Coupland, 5 Barn. &
Aid. 228; Meerh v. Moes.sard, 1 Moore &
P. 8; Israel v. Douglas, 1 H. Bl. 239; Tat-
lock V. Harris, 3 Term R. 180,— differ from
this case. In those cases there was an agree-
ment of all tlie parties operating to the ex-
tinguishment of the original debt, and a new
promise was made by the person holding
the money directly to the creditor. These
cases are similar to Cuxon v. Chadley and
Heaton v. Angler, above cited. On such a
promise there is no doubt a suit would lie,
Surtees v. Hubbard, 4 Esp. 203; Gill v.
Brown, 12 Johns. 385; Beecker v. Beecker, 7
Johns. 103; HoUey v. Rathbone, 8 Johns. 149.
It would be Irrevocable on the part of the
promissor. A person cannot revoke an au-
thority to his debtor to pay a debt to a tliird
party, the creditor of the former, after the
debtor has given a pledge to such third party
that he will pay the money according to the
authority. Chit Cont. 185.
These cases are distinct from the case now
under consideration. Up to the time when
this action was brought, the plaintiff had
never consented to receive the money of this
defendant, and there never had been any
contract made betwixt them relative to it.
The case, Wharton v. Walker, 4 Barn. &
C. 1G3, conflicts with the Massachusetts and
New York authorities, and is directly in point
in favor of the defendant One Lythgoe was
Indebted to the plaintiff in the sum of £4. Ss.
and gave the plaintiff an order for that sum
upon the defendant, who was his tenant to
be paid out of the next rent that became
due. When the next rent became due, Lyth-
goe left in the hands of the defendant the
amount due to the plaintiff, and gave a re-
ceipt for the whole rent; and the defendant
promised to pay the plaintiff, who after-
wards brought an action for money had and
received. It was held that the action could
not be maintained, because the plaintiff's
debt against Ljthgoe was not discharged.
Bayley, J., says, that if, by an agreement
betwixt the three parties, the plaintiff had
undeiiaien to look to the defendant and
not to his original debtor, that would have
been binding, and the plaintiff might have
maintained an action, on the agreement; but
In order to give that right of action there
must be an extinguishment of tlie original
debt But no such bargain was made in this
case. Upon the defendant's refusing to pay
the plaintiff, the latter might still sue Lyth-
goe, as In Coxon v. Chadwell, 3 Bam. & C.
591.
The other judges severally expressed a con-
curring opinion.
See, also, Bourne v. Mason, 1 Vent 6; Crow
570
DISCHARGE OF CONTRACT.
T. Rogers, 1 Strange, 192; Williams v. Ever-
ett, 14 East, 532; Johnson v. Collins, 1 East,
104; Stewart v.. Fry, 7 Taunt. 339; Lowther
V. Berry, S Mod. 116; Crifford v. Berry, 11
Mod. 241; 3 East, 171.
The general rule applicable to cases of this
kind is, that the legal interest In the con-
tract resides with the party from whom the
consideration moves, notwithstanding it may
inure to another's benefit, or even is to be
performed to another in person. So that
"were A to promise B, for some considera-
tion he has given him, to pay C a sum of
money, B, and not C, would be legally con-
cerned in this agreement-" Tliis rule Is
laid down by Hamm. Part Act. p, 6, after
adverting to the authorities referred to in
Comyn, and cited in 17 Mass., which he says
militate against the general rule, and are
unsustained by subsequent decisions.
There is some conflict in the authorities on
this subject, but we consider the general rule
as laid down, and which is recognized as
settled law in England, to be the better opin-
ion, and established on sound legal principles.
The verdict, therefore, for the plaintiff, must
be set aside, and judgment entered for thfr
defendant-
PERFORMANCE— PAYMENT.
571
nATFIELD. , o -4
L^(^ MARKLE V.
(2 Johns. 455.)
Sapreme Court of New York. 1807.
This case came before the court on a writ
Of error, from the court of common pleas, of
Dutchess county, founded upon a bill of ex-
ceptions.
The suit below was an action of assumpsit.
The declaration contained a count for divers
cattle, sold and delivered to the defendant;
and counts for money paid, &c. lent, &c. and
for money had and received, to the use of the
plaintiff, and an insimul computassent. Plea,
non-assumpsit.
Upon the trial, the plaintiff below proved,
that in October, 1805, he sold to the defendant,
who was a butcher, a number of cattle, for
120 dollars, and that the defendant paid him
the said sum in bank bills, which the plain-
tiff. recei.vciL jn . lull payment. Among the
bilTs so received, there was one for fifty dol-
lars, of the Boston Branch Bank of the Unit-
ed States. The plaintiff, on the same day on
which he sold the cattle and received the bills
in payment, paid the same note of 50 dollars
to a third person; and soon afterwards, it
was discovered to be counterfeit, and was re-
turned to the plaintiff. The same b ill was
pro duced, and proved jo becouaterfelt, upon
the trial. No evidence was given that the
"deJendant below knew the bill to be counter-
feit, and he was proved to be an illiterate
man. The counsel for the defendant, at the
trial, Insisted, that the plaintiff was not en-
titled to recover upon the proof; but the court
charged the jury that the evidence was sulli-
cient, and that the plaintiff was entitled to
recover the fifty dollars, with interest, though
there was no evidence of any fraud in the
defendant, and the jury found accordingly.
The blU of exceptions was taken to this opin-
ion, and V. > charge of the court below.
Mr. Ruggles, for plaintiff in error. J. Tall-
madge, contra.
KENT, C. J. The justice of this ease is
clearly with the defendant in error. He part-
ed with his goods to the plaintiff, without re-
ceiving the compensation which was intend-
ed. It would be matter of regret, if the law
obliged us to regard a payment in counter-
feit, instead of genuine bank bills, as a valid
payment of a debt, merely because the cred-
itor did not perceive and detect the false
bills, at the time of payment. The rexisonablo
doctrine, and one which undoubtedly agrees
with the common sense of mankind, is laid
down by Paulus in the Digest; and has been
incorporated into the French law. He says,
that if a creditor receive by mistake any
thing in pnyTnt>nt. different from what was
due, and upnn the supposition that it was the
thing actually due, as if he receive brass In-
stead of gold, the .debtor is not discharged,
and the creditor, upon offering to return that
which lie received, may demand that which
Is due by the contract. Si quum aurum tibi
promisissem, tibi Ignoranti quasi anrura aes
solverim, non liberabor. Dig. 46. 3. 50; Poth.
Tr. Obi. No. 4l>5.
But there are some ancient dicta in the Eng-
lish law, which advance a contrary doctrine,
in respect to gold and silver coin. It is said,
that the crcnlitor must at his peril count and
examine the money at the time he receives It.
Bank biUs are not money, in the strictly legal
and technical sense of the term, but as they
circulate, and are received as money, in the
ordinary transactions of business, it becomes
material to examine into the authority and
solidity of these positions In the books. In
Shep. Touch, p. 140, It is laid down, and with
a reference to the Terms de Ley, that if pay-
ment be made paiUy with counterfeit coin,
and the party accept it, and put it up, it is a
good payment Shepherd's Touchstone i.s
supposed to be the work of Mr. Justice Dod-
eridge, and as such, it has always been con-
sidered as a book of authority; but it loses
some of its character for accuracy, when we
consider it as a posthumous and surreptitious
publication. The book to which it refers,
gives no increased weight to the dictum. The
same doctrine is contained in Wade's Case.
5 Coke, 114, but it is supported only on the au-
thority of the case of Vane v. Studley, which
is there cited, in which it is said to have been
adjudged, that where the lessor demanded
rent of his lessee, according to the condition
of re-entry, and the lessee paid the rent to
the lessor, who received it and put it into his
purse, and afterwards discovering a counter-
feit piece among the money, he refused to
carry it away, and re-entered for the condi-
tion broken, the re-entry was held not to be
lawful, because he accepted the money at his
peril. This case of Vane v. Studley is cited
cautiously, and stated, as said to have been
so adjudged. With regard to Wade's Case
itself, it did not require the aid of any such
decision, because no such question arose in
that case, and it was adopted by Lord Coke
merely In illustration of his opinion. Per-
haps, the question arising upon the forfeiture
of a condition, might have induced the judges
the more readily to adopt the rule, though in
Shepherd the rule is laid down as general,
and without any special application. These
loose dicta, and this doubtful case of Vane v.
Studley, are then, as far as I have been able
to discover, all the authority which we have
for this ancient doctrine; and it is to be re-
marked, that we find no subsequent sanction
of it, through aU the accumulated decisions
in the English law. On the contrary, the
modern decisions are founded on different
principles. They apply another and juster
rule to cases of payment in negotiable paper.
These cases are so very analogous to the one
before us, that it would be very difficult to
raise a distinction.
In Stedman v. Gooch, 1 Esp. 3, the plaintiff
took in payment, for goods sold to the defend-
ant, three promissory notes of one Finlay,
payable at the house of one Brown, and gave
572
DISCHARGE OF CONTRACT.
the defendant a receipt to that effect. It ap-
peared that Finlay had no effects in the hands
of Brown, and the plaintiff sued upon the
original demand, before the notes were pay-
able. Lord Kenyon held, and his opinion was
afterwards concurred in, by the other judges
of the king's bench, that if such a bill or
note was of no value, the creditor might con-
sider it as waste paper, and re^oiTto his orfg-
iual demand. If the plaintiff in that case
was not boimd by the acceptauce of the prom-
issory note of Finlay, because it proved after-
wards to be of no value, why should the de-
fendant in the present case, be bound by the
acceptance of a pretended promissory note
from the Boston Branch Bank, when the note
proves, afterwards, to be coimterfeit? Wheth-
er it be the promissory note of an individual,
or of a corporation, can make no difference.
The creditor, in both cases, is presumed to
have been ignorant of the want of value in
the note. He cannot be chargeable with neg-
ligence. In not detecting, in the iirst instance,
the want of value, because, the means of as-
certaining whether the note was or was not
of value, may be, and probably were, equal-
ly in both cases, absent from the party. The
like doctrine was advanced in the case of
Owenson v. Morse, 7 Term R. 64, and it has
been adopted and applied to a similar trans-
action of payment, in a negotiable note, in
the case of Roget v. Merritt (decided in this
court) 2 Gaines, 117.
The negotiable note of a third person, and a
bank note, are equally promissory notes, for
the payment of money; and if the receiver
may be presumed in the one case, and not in
the other, to have taken upon him the risk
of the solvency of the drawer, there is no pre-
sumption in either case, that he assumes up-
on himself the risk of forgery. In the case
of goldsmiths' notes, which were formerly ac- ^ >
counted as ready cash, Lord Ch. J. Holt did,
indeed, once say (Tassel v. Lewis, 1 Ld.
Raym. 743) that the receiver gave credit to
the goldsmith, and took them at his peril;
but this doctrine has since been exploded by
repeated decisions (Strange. 415, SOS, 1248).
Even were we to admit, (which I do not) that
there might be some difficulty in surmounting
the opinion of Lord Coke, as to gold and silver
coins, yet, as to bank bills and other promis-
sory notes, we must conclude, upon the
strength of authority, as well as upon the rea-
son and justice of the case, that the charge of
the court below was correct, and that the
judgment ought to be affirmed.
I have not thought it requisite to pay much
attention to the case of Price v. Neal, 3 Bur-
rows, 1354, which was cited in the argument,
because, I consider that case as decided upon
principles, which have no application to the
case before us. It was there held, to be in-
cumbent upon the acceptor of a forged bill of
exchange, to satisfy himself of the genuine-
ness of the drawer's hand, before he accepts
and pays it, as he must be presumed to know
his correspondent's hand; and that it was not
incumbent upon the defendant to inquire into
that fact- That decision, therefore, turned
upon the negligence imputable to the one
party and not to the other. No such imputa-
tion arises in the present case. The accept-
ance of a bill, and the indorsement of a note
give a credit to the pap«r, which, ui>on com-
mercial principles, the party is not afterwards
at liberty to recaU.
Judgment affirmed.
PERFORMANCE— PAYMENT.
573
(^
CHELTENHAM STONE & GRAVEL CO. y.
/ GATES IRON WORKS.
^ (16 N. E. 923, 124 111. 623.)
r-3'
Supreme Court of Illinois. May 9, 1SS8.
Appeal from appellate court. First district,
Frederic Ullmann, for appellant. Henry H.
Anderson, for appellee.
SHELDON, C. J. This Is an appeal frijm a
judgment of the appellate court for the First
district, affirming a judgment of the supe-
rior court of Cook county. The case made by
the evidence was this: Betw een March_19
and October 15, 1 885, appelleeTTtie Gate s
Ttqp \Vnri>s;^ snifr~hpppiTivriT the Ci icltenham
Stone & Qravei (jompduy. machinery and
counts were rendered monthly, and payments
were made on account from time to time.
During August, 1885, appellee receiv ed fro m
appeUant Iron to the amount of $!?7j0^, and a
note dated August 10, 1885, for $1,000, due
90 days from said date, signed by the Chelten-
ham Improvement Company, payable to_ap-
pellee. Both these items, the iron and the
note, were credited appellant on appellee's
books, and the statement of account rendered
appellant on September 1st showed a credit
of the two amounts, and the statement of
account thereafter rendered started off with
the balance after deducting these amounts.
When the transactions for the season were
closed, appellee's books showed an Indebt-
edness against- appellant of $145.97. This
amount is conceded to be still due. Prior tn^
t he maturity _ji£_Jt§_iiote, the improvement
(jmnnn y hadbecome insolvinT7~a"nd the no te
was not paid. Annellee sued the improve-
ment company on the note, and obtained judg-
ment, but was unable to collect it. Then It
bro ught this suit against appellant on' the a c-
T^'iimt',' ipiiormi: tlu> credit it li.id given for the,
amount of the ni,t.c', ;md on th e trial tender ed
appellant an a^si-iimont of " its iudirme nt
against the irniirM\ 'inont com pany. Appel-
lant recovered a ver°Jict and judgment for
$1,145.97, the full amount of its claim.
It is Insisted that the presumption of law
from these facts was that the note was taken
in absolute payment; and, as there was no
eridence offered tending to rebut that pre-
sumption, appellee was, on the case made by
it, only entiUod to a verdict for $145.97; and
that the court erred in not granting appel-
lant's motion, made when the appellee rested
its case, to direct the jury to find a verdict
for appellee for $145.97, and also in not giv-
ing the following Instruction asked by appel-
lant, but refused, viz.: 'Tf the jury believe,
from the evidence, that the note referred to
was credited by the plaintiff to the defend-
ant on the books of the plaintiff, and included
as a credit in statement of account after-
wards rendered by the plaintiff to defendant,
then the presumption of law is that said note
was received in payment, and the burden of
proof is upon the plaintiff to show that such
was not the intention of the parties at the
time said note was given; and if the plaintiff
has failed to show such Intention, that the
.same .should not be received as payment, by
a fair preponderance of testimony, the jury
will find for the defendant on that issue."
Story, in his work on Promissory Notes (sec-
tion 104), lays down the rule in this respect as
follows: "In general, by our law, unless
otherwise specially agreed, the taking of a
promissory note for a pre-existin g d ebt or a
^contemporaneous consideration is tn atcd pri -
ma facie as a conditional payment only; that
Is, as payment only, if it is duly paid at matu-
rity. But in some of the American states a
different rule is applied, and, unless it is other-
wise agreed, the taking of a promLssorj- note
Is deemed prima facie an absolute payment
of the pre-existing debt or other considera-
tion. But, In each case, the rule Is founded
upon a mere presumption of the supposed in-
tention of the parties, and is open to explana-
tion and rebutter, by establishing, by proper
proofs, what the real Intention of the parties
was; and this may be established, not only
by express words, but by reasonable impli-
cation from the attendant circumstances." In
Tobey v. Barber, 5 Johns. G8, a note of a
third person was given for rent due, and a
receipt given for the rent The note was not
paid, the maker having become insolvent be-
fore the note became due. The court ^ay:
"The taking of the note was no extinguish-
(ment of the debt due for the rent It is a
rule, well settled and repeatedly recognized
in this court, that taking a note, either of
the debtor or of a third person, for a pre-ex-
isting debt ib no payment imless it be ex-
pressly agreed to take the note as payment ,
and to run the risk of its being paid, or lia- /
less the creditor parts with the note, or is I
[guilty of laches in not presenting it for pay-
ment in due time; and it was held that the
inference arising from the reeceipt was not
enough to establish such a positive agree-
ment." Johnson v. Weed, 9 Johns. 310. is to
the same effect, — a case where the note of a
third person had been given in payment of a
debt, and a receipt in full given. Melntyre v.
Kennedy, 29 Pa. St. 448; Himter v. Moul,
98 Pa. St. 13; Brown v. Olmsted, 50 Cal. IGJ,
—are authorities in support of the rule that
taking the note of a third person for a pre-
existing debt is no payment unless it be ex-
pressly agreed to take the note as payment
The decisions In this state are essentially to
the same effect Walsh v. Lenaon, 98 IlL
27; Wilhelm v. Schmidt &i 111. 185.
It is insisted that although the acceptance
of the note merely might not be payment
yet, treating the note as payment, as was
done here, by crediting it as payment on ap-
pellee's books, and in statements of account
rendered, shows that the note was taken in
payment. We do not consider this any strong-
er evidence. In that regard, than were the
receipts in full which were given in the cases
574
DISCHARGE OF CONTRACT.
cited from Johnson. In regard to the receipt
in Johnson v. Weed, the court remarked:
"It might still have been understood, consist-
ently with the words of it, [receipt,] that the
note was received in fiill, under the usual
condition of its being a good note." And so
in Brigham v. Lally, 130 Mass. 4S5, a case
where such a note of a third person had been
taken on an open account, and the debtor
credited therewith, it was held that the trial
com-t properly refused to rule that placing the
cote to the credit of the defendant upon the
plaintiff's journal and ledger, and making no
other appropriation of the money, was in
law a payment. We think the ruling of the
court here complamed of is entirely well sus-
tained by authority.
Counsel for appellee, in his address to the
jury, was allowed by the court, against ap-
pellant's objection, to argue that a* sch«me
had existed whereby one of the defendant's
officers had foisted the note upon the plain-
tiff, knowing the maker to be or about to
become insolvent, so that the loss might fall
upon the plaintiff; and an instruction asked
by the defendant that there was no evidence
in such regard, and that the jury should dis-
regard the remarks of counsel with refer-
ence thereto, was refused; and this action of
the 'court is assigned for error. While these
remarks of counsel may have been improper,
and the court might well have interposed as
requested, we cannot say that the refusal
to do so v,-as such error as should cause a re-
versal of the judgment The judgment of
the appellate court must be aflaxmed.
6
PERFORMANCE— TENDER.
575
/ <2 LAMB V. LATHROP et aL
^^ ^ (13 Wend. 95.)
Supreme Court of New York. Oct, 1834
Demurrer. The plaintiff declared on a note
made by the defendants, bearing date 8th
March, 1831, whereby the defendants prom-
ised, one year after date, fCLimy ^" ^^^^ plain,-
tifC $50 in a horse , heat Bto,cJj,lor iirst rale
pine lumber, to be ' delivered in Cortland vil-
lage, at the markeFprice^at the ajppraisal qjC.
I WO [jt^ 'l'Si'iLs Of (]i. uaiues _ of _ BarUett and
Rowley, uiili use, ;md alleged non-per form -
ance. The defendants pleaded, that when
the note became due, to wit, on the Sth March,
1832, they tendered to the plaintiff the siiid
sum of $50 and the interest tliereof for onejf-
year, in a horse, appraised by Bartlett at $70,v
averring that Rowley was not on that day in|
the state, but was in the state of Pennsyl\a- 1
nia, wholly beyond the reach, power and con- /I
Itrol of the defendants, so that they could not/
procure his attendance to unite with Bartlett ||
in the appraisal of the horse, and concluding
Ijy alleging that the plaintiff refused to re-
ceive the horse so tendered by them; where-
fore they prayed •Judgment, &c This plea
did not contiiin the averment of tout temps
prist. The plaintiff replied, that after the
tender of the horse, to wit, on the 10th day of
March, &c. at, &c. he demanded the same
horee of the defendants, which horse then
was in their possession, and that the defend-
ants refused to deliver the horse to him, un-
less he would pay to thejn $16.50,_the diff e^
ence between
ie_appraised value of th e horse
an d the snm of $50, witli the interest there
o f for one year; concluding with a veriflca-
fiou and prayer of judgment. To which rep-
lication the defendants demurred.
M. 7. Reynolds, for plaintiff. J. A. Spen-
cer, for defendant:.
SA'v'AGE, C. J. The principal qnestlon
arises up.on the plea of the defendants, the
validity ci which is denied by the plaintiff,
and the Iirst ground urged on his part is, that
it L"^ not averred that the defendant is still
read> to deliver the horse. It is contended,
on the authority of Chipman's Essay on Con-
tracts, p. 96, that such an averment is nec-
essary; and that. In a case like this, the rep-
lication of a subsequent demand and refusal
authorizes a recovery upon tlie original cause
of action. The learned author of. this essay
argues that as there is at this day no case
where property is lost to the creditor by a
tender and refusal, it follows that every plea
of tender must contain an averment that the
property is still ready. It is true tliat prop-
erty tendered is not lost to the creditor by his
neglect or refusal to receive it; but it is also
time that, i n the case of a tender of spe cj^c
articles, the courts in thl"s state conside r the
contract to deliver or pay such articl es" dis-
cEarged. The tender, properly made, is a
Batistaction ol: tne denl'and; the debt is paid,
and the articles tendered become the proper-
ty of the creditor, and afterwards are kept
at his risk and expense. In the case of
Slingerland v. Morse, 8 Johns. 478, the com-l
say, "We consider it a complete bar to the
suit upon the contract" In Slielden v. Skin-
ner, 4 Wend. 528. 529, this subject was again
considered by this court, and such a tender
held analogous, as it was in the List case
cited, to the French consignation, whereby
the debtor is dLscharged. The creditor must
resort to the specilic articles, and to the per-
.«;on who tendered them as the bailee thereof.
The relation of debtor and creditor no longer
subsists between those parties, but that of
trustee and cestui que trust, or lyailor and
bailee. See 2 Kent, Comm. 508, 509. Itl
'such be the law, the defendant in this case)
' was not bound to aver that the horse was still '
iready; and the plea is not faulty for want]
•of such averment. '
The remaining obje-^tions to this plea are,
that it is not averred that the appraisal was
by the persons agreed upon, nor at the mar-
ket price, nor that the tender was made Ln
satisfaction of the debt No authority la cit-
ed to show that it should be averred that the
offer was made in satisfaction of the debt;
the precedents are not so, nor do I see any ne-
cessity for such an averment. The plaintiff
complains that the defendant did not pay him
$50 and interest in a horse, according to his
contract. The^ef ^ndnnt an^n , j ;hat_ on th e
day, ^Tid^nj^ti^f^i^nfL ftppnintxiil^hrtrnrlrrrrl
tcP Sim th e said sum in a hor seTaccoriTrngto
his contract"; that is enou^E Nor can it be
necessary, iB such cese, to aver that the ap-
praisement was at the market price. Th.^
market price is the price of every article, un-
less some other is mentioned The market
price, I apprehend, was inserted as directory
to the appraisers and the averment that tlio
horse was appraised by the appraisers is suf-
ficiently minute and certain; to appraise at
any other price would be a violation of duty,
even if the words market price were omitted.
The presumption, in such cases is, tliat the
persons designated have done their duty; not
that they have violated It
But the objection that there is no averment
that the property in question was appraised
by the persons agreed upon is not so easily
obviated. The defendants, by their contract,
agreed to pay $50 and Interest for one year,
in a horse, at the appraisal of Bartlett and
Rowley. They aver that they tendered the
horse at the appraisal of Bartlett; that is n<>t
a compliance with the contract The ap-
praisement by two p ersons is a condit ion pre-
cedent t"o~~tne Tender; the plaintiff h a s not
agreed t o accept a horse at the ap praisement
0? iJart lett in6he, n oFof Bartlett and any ctn -
£r except Kowiey i It is not sufficient that
the act done may be equivalent The plain-
tiff relied upon the judgment of those particu-
lar persons; the defendants undertook to pro-
cure It: if they failed, they must pay the
money. There is a debt due the plaintiff;
676
DISCHARGE OF CONTRACT.
he agrees to receive a horse, provided it is
appraised by Bartlett and Rowley. The de-
fendants agree to pay the money, if they do
not deUver a horse at the appraisal of Bart-
lett and Rowley. This is the legal effect of
the contract. It is majiifest that the defend-
ants have not procured the appraisal of the
two persons named; and as they have no t
p erformed the condition upon wiuen tSev
worA t^ ho p-;^pnse^ from the payment ._Qf_ th e
money, it follows that the mnngy must be
Daid. It is not for the defendants to say
m?rt-tiiey can make a new agreement for the
plaintiff; nor can the court do it The plain-
tiff has substantially said, I will not agi-ee to
take a horse at all, unless at the appraisal of
these two men. I will not take the appraisal
of one of them, but of both. The defend-
ants entered voluntarily into the agreement,
and they must perform it. This case ap-
pears to me to be analogous to the cases
upon fire policies, where, if the certificate of
certain persons is required, no other can be
yubstituted- 6 Term R. 719; 1 H. BL 254;
2 H. BL 574. This view of the subject Is
suflficient to authorize a judgment in favor of
the plaintiff. '
It is not improper to remark, that the plea
is defective in another particular, though the
point is made here as an objection to the
replication. The horse, it seems, was ap-
praised at $70, and the defendant claLuis the
payment of the difference in money, before
he is liable to deliver tlie horse. Under what
agreement of the plaiutiff do the defendants
set up this claim? The plaintiff hath said
that he will receive a horse worth $53, on
certain conditions; but it does not follow that
he is to receive a horse of a greater value,
and pay the difference. He has entered into
no such agreement. The defendants must
tender the horse according to agreement; if
he is of greater value, they must either tender
him at the amount to be paid, or keep him,
and pay the money.
The plea is bad, and the plaintiff is entitled
to judgment, with leave to defendants to
amend, on payment of costs.
CONDITIONS SUBSEQUENT.
577
^■^^
EAY V. THOMPSON.
(12 Gush. 281.)
//2'<
Supreme Judicial Court of Massachusetts.
Middlesex. Oct. Term, 1853.
Assumpsit for the price of a horse sold
to the defendant The defence was that
the horse was sold under a con ditional
cojii j;act, with a rij^ht to return__h im w unin
a speci flod t j^ me, If IJofgatTs^factory toTHe '
^fGIlflant, and that the^efendanf cII3 so
rettlTn him . At the trial in the court of
"T'Unriil^~pIt»as before Mellen, J., the plain-
tiff offered evidence tending to prove that
during the time limited by the contract for
the return of the horse, and while he was
in the defendant's possession, the defend-
ant misused and abused the horse, whereby
he was materially Injured and lessened in
value, and that the plaintiff did not ac-
cept him in return; which evidence, the
presiding judge, on objection by the defend-
ant, rejected, and, the verdict being for the
defendant, the plaintiff alleged exceptions
to the ruling. •
HOPK, 8KL. CAS. CONT. — 87
J. W. Bacon, for plaintiff. G. A. Souier-
by, for defendant,
PER CURIAM. The evidence offered by
the plaintiff ought to have been admitted,
to prove, if he could, that the horse had
been abused and injured by the defendant,
and so to show that the defendant had put
it out of his power to comply with the con-
dition, by returning the horse. The pale
was OD a condition subsequent; that Is, on
condition, ho did not elect to keep the horse,
to return him within the time limited. Be-
ing on a condition subsequent, the prop-
erty vested presently in the vendee, defeasi-
ble only on the performance of the condi-
tion. If the defendant. In the meantinie,
disabled himself from performing the con-
dition,— and if the horse was substantially
injured by the defendant by such abuse,
he would be so disabled,— then the sale
became absolute, the obligation to pay the
price became unconditional, and the plain-
tiff might declare as upon an indebitatus
assumpsit, without setting out the condi-
tional contract. Moss v. Sweet, 3 En;?.
Law & Eq. 311, l(i Adol. & E. 493.
New trial ordered.
576
DISCHARGE OF COXTKACT.
njo
LAKE SHORE
& M. S. RY.
ARDS.
CO. V. RICH-
(38 N. E. 773, 152 IlL 59.) ^
Supreme Court of Illinois. June 19, 1894
Jt^
'•^-f%f Said contract recited by way of preamble f
- '-T^liat one of its objects was to provide a cheap-
Appeal from appellate court. First district
Assumpsit by Edward S. Richards, sur-
vivini; partner of the firm of Richards, May-
nard & Co.. against the Lake Shore & Michi-
gan Southern Railway Company. Plaintiff
obtained judgment, which was affirmed by
the appellate court. Defendant appeals. Re-
versed.
The other facts fully appear in the following
staement by BAILEY, C. J.:
This was a suit in assumpsit, brought by
Edward S. Richards, surviving partner of the
firm of Richards, Mayuard »& Co., against the
Lake Shore & Michigan Southern Railway
Company, to recover damages for breaches of
a contract, the material provisions of which
will be stated presently. Prior to the exe-
cution of said contract, grain, brought by
western railroads to Chicago, and destined,
either before or upon its arxlval in that city,
for transportation by rail to the east, was de-
livered by the western to the eastern rail-
roads, and was by the latter weighed and
transferred from western to eastern cars.
At that time the transfer of such grain was
accomplished by placing the loaded and emp-
ty cars side by side on pai-allel tracks, and
by shoveling the grain from one car to the
other by hand. The weighing was done on
track scales, by first weighing the loaded
car, and then weighing it after it was unload-
ed, the difference between such weights being
the weight of the grain. This process was
expensive, and the weights thus obtained, as
the evidence tends to show, were, owing to a
variety of causes, liable to be inaccurate.
Richards, the plaintiff, was the inventor an d
patentee of_ a. new_process_ for^weighing _and
transferring grain in buUj L j^hich w as claimed
to be cheaper than the old method, and which
furnished tuore accurate weights, tMiE_Cfiuld
be had by the existing mode of weighing.
By this process, the loaded cars of grain
were run up onto an elevated track va. a trans-
fer house, and empty cars were placed along-
side of them on a lower track. The grain
was then shoveled by steam shovels from the
loaded cars into hoppers, where it was
weighed, and then allowed to run by force
of gravity into the empty cars below. Ne-
gotiations were thereupon entered into be-
tween Richards and the defendant company
with a view to the adoption by the latter
of this new mode of weighing and transfer-
ring grain, and these negotiations resulted in
a written contract between the company, of
the first part, and Richards, of the second
part, bearing date January 2, 1884, which con-
tract was aftei-wards assigned by Richards to
the firm of Richards, Maynard &. Co., con-
sisting of Richards and John W. Maynard-
er method of transferring grain, mUl feed,
and seed from one car to another than the
one employed by said company, and for that
puipose to use the device of Richards, se-
"vcured to him by letters patent, etc.; and that
Richards intended to erect and build a grain
transfer house on the Land thereinafter de--
scribed, for the purpose of so handling, weigh-
ing, and trausfeniug in bulk such grain, mjll
feed, "and seed as might be deUVered to him
for tliat purpose by the comp3.ny. The com-
pany then agreed, in consideration of the
nominal rental of $10 per year, and of the
covenants in the contract to be kept and per-
formed by Richards, to lease to him, for the
term of 10 years, certain land upon which to
erect such transfer house and the necessary
approaches thereto, and also agreed that, as
soon as such transfer house and approaches
were constructed, U would build and main-
tain thereon and through such transfer house
such track or tracks as might be necessary
to transact the business contemplated by said
agreement, and do aU switching of loaded and
empty cars to and from said transfer house
at its own expense, and without cost to
Richards, provided that the actual cost there-
of should be taken into account in determin-
ing the fair amount to be paid Richards, as
provided in the following covenant: "Third.
Said first party further covenants and agrees
that, in case there shall be any saving to it
in switching, weighing, and transferring of
products in this agreement referred to through
the methods and devices adopted by said sec-
ond party, over and above the actual cost
of doing the same work under the ways and
methods now in use by said first party, then,
and in that event, it will pay to second party
one half of said saving, the just and actual
ainoimt tHeFeoF to 15e~aseertained and deter-
mined as provided in covenant 'First,' of
'Mutual Covenants,' said amounts, if found
due, to be paid to said second party on or
before the middle of each month for the
month preceding." Richards, on his part,
agreed at his own cost and expense to con-
struct and maintain, for the full period of
10 years, on said land, a transfer house and
appi'oaches, suitable and proper for carrying
out the purfHDse in said contract expressed,
and furnish and supply said house with hop-
per scales and every other device necessary
to properly weigh and transfer said grain,
etc. He also covenanted as follows: "Sec-
ond. That he will receive, weigh, and trans-
fer all products contemplated by this agree-
ment which may be delivered to his said
transfer house by or under the direction of
said first party with promptness and dis-
patch, and within such time as to prevent
any accumulation of cars or freight, where-
by shippers might have just ground of com-
plaint; and, if said second party shall fail
to transfer as fast as required, the said first
party may transfer by such other method as
BREACH— EENUNCIATION.
679
it deems proper, and said sec-ond party shall
do all said work in trausfer Ikjusu at Lis
own cost and expense, without cost to said
first party: provided, that the actual cost of
iluiuii said work sliall be taken Into account
in deternuninj,' the savinj?, if any, between
the Ricliards method of transferriuf^ grain and
the methods in use by the first party at tlie
date of this aj^reenieut, and also for tlie pur-
pose of determining the just amount to be
paid to said second party, as provided in cove-
nant 'Third' of first party: piovided, also,
that the cost of weijihinj,' sucli products shall
not be considered in determining the actual
cost of such transfer."
Said conti-act then contained various para-
grapiis denominated "Mutual Covenants," the
first of wliich provided the mode for ascer-
taining and determining the cost of transfer-
ring grain, etc.. by the new method, and tlie
amount of money thereby saved. The only
other provisions of the contract material to
the present controversy are the third, fourtli,
and sixth of said "Mutual Covenants," which
are as follows: "Third. And it is mutually
covenanted and agreed that all shipments
originating at points west of Chicago, and
properly billed thrcnigh to eastern points, and
requiring transfer through said house, shall
be classed 'through shipments,' and be trans-
ferred in the same manner as reconsigned
projjcrty, and upon the same basis of c-ost
to said first party; it being specially imdei'-
stood and agreed that under no circumstances
is said first party to be charged for any
weights upon any transfers made through
this house, but nothing in this agreement
contained shall be so construed as to prevent
said second party from charging such fees as
may be agi-eed upon between him and the
owner of the propcn-ty delivered for weights
and transfer, and for such other service as
he may render in connection therewith, and
from collecting his charges as provided in
the following mutual agreement. Fourth. It is
further mutually understood and agreed that
said second pai'ty is to receive his compensa-
tion for his time, labor, and investments em-
ployed in building, operating, and maintain-
ing said transfer house entirely from the
weighing of property passing through it, and
from the owners thereof, and not from said
first party, except as provided in covenant
third of Siiid first party; and said first party
sliall not make use of the weights obtained
from said second party in the conduct of its
business for any other purpose than billing
property to destination, but. upon the request
of said second party, said first piirty will col-
lect such weighing charges as he may show
are due to him, in the same manner as other
advanced charges are collected, and pay the
amount so collected to said second party on
or before the middle of each and every
month." "Sixth. If at any time differences
should arise between the said parties hereto
as to its spirit, meaning, or execution, such
differences shall be settled by a reference of
all matters in dispute to three disinterested
arl)itratoi-s, each of the jiarties hereto to se-
lect one, and the two so chosen to select a
third, and the decision of any two of the
court so formed shall be binding between
the parties hereto, final, and without appeal."
The declaration, after setting forth said
contract in hiec verba, alleges lliat on the
2;kl day of January, 1.S.S4, the plaintiff as-
signed all his interest in said contract to the
firm of Richards, Maynard & CfJ.. and that
said_ assi gnment was ratifie d and c-onfirmed
by_jhe_jlefeiulan t ; that said firm thereuixm
erected, on the land described in the contract,
a grain transfer house and hopper scales,
and all machinery pertaining thereto, the
same being completed June 24, 1.SS4, wlien
said firm entered upon the business of trans-
ferring grain, etc., from car to car. aud"weigh-
ing the same, as provided for in the agree-
ment; that said firm could not conveniently
transfer mill feed through their transfer
house, and that tlie right to have such tran.s-
fer of mill feed and the weighing thereof was
waived bj- the defendant; that .'^aid firm cfin-
tinued to transfer and weigh all such grain
and seed as was presented to them by the
defendant at their transfer house to be trans-
ferred and weighed until June IG, ISSG, and
kept and performed the contract on their
part, yet the defendant, although often re-
quested so to do, has not kept and performed
said contract on its part; that on June 10.
ISSG, the defendant abandoned said contrac t,
and neglected and refused to perform it. aud,
without reasonable or just caiisc, refused to
be_bound thereby; that,'"af{eFnie abandon-
ment of said contract by the defendant, and
its refusal to perform the same, to wit, in
December, 1SS7. said Maynard died; that said
fir m a nd the plaintiff have always^been
ready and willing and hav e offered the 5e-
"feUdunt to con tinueTfu the s ervi ce ^nd £in-
p ToymenF^f the de fendant in^ weijrhing^and
traiisferring gi-ain and seed as provided by
said contract; that the weights so obtained
by said firm in weighing and transferring
grain and seed were of the value of $1.40
per car, and that the number of c-ars annually
transferred on the track to the cars of the
defendant company amounted to IS.OOO; that,
to wit. IS.fMX) cars of grain and seed per an-
num will continue to be transferred en said
track to the cars of the defendant company;
that the saving to the defendant in the
switching, weighing, and transfer of grain
and seed by the plaintiff's method is $5,000
per annum; that the plaintiff's firm was
obliged to and did lay out and expend in
building and equipping their transfer house
a large sum of money, and that said tr:ms-
fer house is valuable only for the puiposes
contemplated by said agreement, and that in
consequence of the refusal of the defend-
ant to be boses no other, except, perhaps, that this vio-
lation of the contract by the defendant iB
5S6
DISCHARGE OF CONTRACT.
failing to make the payment, may justify
the plaintiff in ti-eating the conti-act as re-
scinded." Or they could go ou and complete
the contract, and, at the end, recover the
amount due thereunder. There was in that
case no refusal to receive locomotives under
the contract, nor were plaintiffs forbidden to
complete it nor was it in any way put out of
their power to do so. Yery many of the
cases before referred to have been decided
since the Palm Case, which, it must be re-
mai-ked, cites no authority sustaining the
view of that case contended for by appellant
in this ease. The learned judge who wrote
in the Palm Case says: "I have examined
all the authorities referred to by counsel, and
have made diligent search myself, but have
found no case where the plaintiff had been
allowed to recover for losses sustained by not
being permitted to complete the conti-aet, un-
less he has been prevented from going on
with his work by the positive affirmative act
of the other party, or where the other pai-ty
has neglected to do some act, without which
the plaintiff could not, in the nature of
things, go on with his contract * * *"
After giving instances of conditions preced-
ent the learned judge holds, as before said,
that the failiu-e to pay would not authorize
the plaintiff to treat the contract as aban-
doned by the defendant unless payment in
a specified time and manner, was, by the
contract made a condition precedent to per-
formance by the plaintiff. The case of
Christian Co. v. Overholt 18 111. 223, is simi-
lar in its facts to the Palm Case, and is de-
cided upon the same principle. In that case
it is said: "The plaintiffs could only re-
cover for prospective profits where they have
been prevented from going on, either by some
affirmative act of the defendant as by being
ordered to desist from further work, or by
the omission to perform some condition preced-
ent to the further prosecution, as to fm-nish
or do something necessary to its further prog-
ress." The breach there alleged was a fail-
ure to pay an Installment as it fell due under
the contract and the case was disposed of
upon the authority of the Palm Case. Stress
is laid by counsel upon the words, "prevented
from going on." It is apparent from the lan-
giiage of the court especially in the Overholt
Case, that physical prevention was not con-
templated, for the illustration given shows
that at least an order to desist from the
work would be a prevention, within the
meaning of the term as used. While, in
those cases, there was no failure to perform
a condition precedent or a legal prevention
from going on with the work under the con-
tract which would authorize the plaintiffs to
treat the contract as repudiated by the other
party, and sue for prospective damages, and
the court so held, still the cases clearly rec-
ognize that when there is a failm-e to per-
form a precedent condition, or there is a le-
gal prevention of performance, by one party,
the other may treat the contract as aban-
doned by him, and bring suit for future prof-
its or prospective damages. The same lan-
guage, i. e. that the party suing must be "pre-
vented" from performance, has been used in
numerous cases, but, wherever the attention
of the com-t has been directly called to the
sense in which the word has been used, it
has been held not to mean that there must
be physical prevention, but that any acts,
conduct, or dcclai-ations of the party, evin-
cing a clear intention to repudiate the con-
tract and to treat it as no longer binding, is
a legal prevention of performance by the
other party. Thus, in Hosmer v. Wilson, su-
pi-a, it was held that an absolute refusal of
the defendant to accept tie manufactured
article when it should be completed was to
be considered in the same light, as respects
the plaintiff's remedy, as an absolute physi-
cal prevention by the defendant; citing, in
support Cort v. Railway Co., supra; Derby
V. Johnson, 21 Vt 21; Clark v. Marsiglia, 1
Deuio, 317; Hochster v. De Latour, supra.
In Cort V. Railway Co., supra, the plain-
tiffs contracted to supply the defendants with
3,900 tons of iron chairs to be used in railway
construction. They manufactm-ed and deUv-
ered various quantities of chairs from May,
1847, \mtil December, 1S49, when the defend-
ants informed plaintiffs that they did not
want any more, and not to send any more,
leaving 2,113 tons undelivered. Whereupon,
phiintiffs brought suit to recover damages, in-
cluding loss of profits. It was objected that
to entitle the plaintiffs to recover, they should
have proved that the chairs had been made
and had been tendered in the manner pro-
vided by the contract, or at least before the
bringing of the suit etc. In delivering the
opinion of the com*t Lord Campbell, C. J.,
said: "We are of opinion that the jmr were
fuUy justified, from the evidence, in finding
that the plaintiffs were ready and willing to
perform the contract although they never
made and tendered the residue of the chairs.
In common sense the meaning of * * *
'readiness and willingness' must be that the
noncompletion of the contract was not the
fault of the plaintiffs, and that they were dis-
posed and able to complete it if it had not
been renounced by the defendants. What
more can reasonably be required by the par-
ties for whom the goods are to be manufac-
tured ?" And after showing that if, after hav-
ing accepted a part tlie defendants resolved
not to accept the balance, the effect of com-
peUing the plaintiffs to proceed with the man-
ufacture and tender of them would be the
enhancement of the damages the defendant
would be required to pay, his lordship pro-
ceeds: "Upon the last issue, was there not
evidence that the defendants refused to ac-
cept the residue of the chairs? If they had
said, 'IMake no more for us, for we will have
nothing to do with them,' was not that re-
fusing to accept or receive them according
to the contract? But the learned coimsel for
the defendant laid peculiar stress upon tlie
BREACH— RENUNCIATION.
587
^
words [of the plea], 'nor did they prevent or
discharge the plaintiffs from supplying the
residue of the chairs, and from the fm-ther
execution of the contract.' We consider the
material part of the allegation which the last
plea traverses to be that the defendants re-
fused to receive the residue of the chairs.
But, assuming that the whole must be proved,
we think there is evidence to show that the
defendants did prevent and discharge the
plaintiffs from supplying the residue of the
chairs, and from the further execution of the
contract. It is contended that 'prevent,' here,
must mean obstruction by physical force; and,
in answer to a question from the com-t, we
were told it would not be a preventing of de-
livery of goods if the purchaser were to write,
in a letter to the pereon who ought to sup-
ply them, 'Should you come to my house to
deliver tliem, I will blow your brains out.'
But may I not reasonably say that I was pre-
Tcnted from completing a contract by being
desired not to complete it? Are there no
means of preventing an act from being done,
except by physical force or brute violence?"
After reviewing and commenting upon cases
cite done, stilThoIfTTng fE~Tis
prospectively binding for the exercise of the
option, which may be advantageous to the
innocent party, and cannot be prejudicial to
the wrongdoer." And it was there held that,
after the defendnnt had signified his deter-
mination not to be bound by the contract.
the plaintiff was entitled to bring his action
Immediately, and was not obliged to wait un-
til after the day for the performance to begin
had arrived. In Frost v. Knight, supra, the
defendant had promised to marry the plain-
tiff upon the death of his father. While his
father was still living, he repudiated the en-
gagement, and announced his intention not
to fulfill his promise. The plaintiff, without
waiting for the death of the father, at once
brought her action to recover damages for
the breach. And the court there say: "The
promisee, if he pleases, may treat the notice
of intention as inoperative, and await the
time when the contract was to be executed,
and then hold the other party responsible for
all the consequences of nonperformance.
But in that case he keeps the contract alive
for the benefit of the other party as well as
688
DISCHARGE OF CONTRACT.
his own; he remains subject to all his own
obligations and liabilities under it, and en-
ables the other party, not only to complete
the contract, if so advised, notwithstanding
his previous repudiation of it, but also to
take advantage of any supervening circum-
stance which would justify him in declining
to complete it On the other hand, the prom-
isee may, if he thinks proper, treat the repu-
diation of the other party as a wrongful put-
ting an end to the contract, and may at once
bring his action as on a breach of it; and in
such action he will be entitled to such- dam-
ages as would have arisen from the nonper-
formance of the contract at the appointed
time, subject, however, to abatement in re-
spect of any circumstances which may have
afforded him the means of mitigating his
loss." The case of Freeth v. Burr, supra, al-
ready quoted from, is an instructive case,
and fully sustains Hochster v. De Latour,
and other cases of like tenor before cited. It
is there said that the test of whether there is
a renimciation or not is "whether the acts
and conduct of the party evince an intention
no longer to be bound by the contract." In
Iron Co. V. Naylor, 9 Q. B. Div. 648, Jessel,
M. R., reaffirms and approves the doctrine of
Freeth v. Burr, and holds that the question
of whether there has been a renimciation of
the contract by the defendant is a question
of fact, to be determined by the considera-
tion of the nature of the breach, and the cir-
cumstances under which it occurred. The
case, however, went off upon the holding that
the circumstances were not sufficient to
evince a determination on the part of the de-
fendant to put an end to the contract, and to
be no longer bound by it The decision was
affirmed by the house of lords on appeal,
Ix>rd Selborne there saying: "You must
look at the actual circumstances of the case,
in order to see whether the one party to the
contract is relieved from its future perfoi-m-
ance by the conduct of the other. You must
examine what that conduct is, so as to, see
whether it amounts to a renunciation, — to an
absolute refusal to perform the contract-
such as would amount to a rescission if he
had the power to rescind, and whether the
other party may accept it as a reason for not
performing his part; and I think that noth-
ing more is necessary, in the present case,
than to look at the conduct of the parties,
and see whether anything of that kind has
taken place here." Iron Go. v. Naylor, L. R.
9 App. Cas.4.38. See, also. Roper v. Johnston,
L. R. 8 C. P. 167; Ex parte Stapleton, 10 Ch.
Div. 586; Planche v. Colbum, 8 Bing. 14;
Railway Co. v. Xenos, 13 C. B. (N. S.) 82.5.
The principle seems to have found general
recognition by the courts of the country, a
few only of which need be noticed. In Mas-
terton v. Mayor, etc., 7 Hill, 61, the plain-
tiffs undertook and partially performed their
contract with defendants to furnish mate-
rial, etc, for the construction of the city
hall. By order of the defendants, the work
was indefinitely suspended, and the plaintiffs
brought suit to recover damages, including
future profits. The principle announced in
the English cases before noted is approved.
Beardsley, J., there said: "The party who
is_ready_lQ_peiiorm is entitled to full in-
demnity f OJLJthe loss of his contract He
should not be made__to_ snuffer by the de-
linquency of the oUier party, but ought to
recover ..precisely-wlLa±he_would Ijave made
byjperiormance. This is as sound in morals
as it is in law. * • * The plaintiffs were
not bound to wait till the period had elapsed
for the complete performance of the agree-
ment nor to make successive offers of per-
formance, in order to recover all their dam-
ages. They might regard the contract as
broken up, so far as to absolve them from
making further efforts to perform, and give
them a rigLV: to recover full damages as for
a total breach." The case of Hosmer v.
Wilson has been already cited. In Derby v.
Johnson, supra, after holding that by the
order of the defendants to discontinue the
work, the plaintiffs were prevented from fur-
ther performance, it is said: "The plaintiffs
might, in addition, in another form of ac-
tion, have recovered their damages for being
prevented from completing the whole work.
In making these claims the plaintiffs would
be acting upon the contract as still subsist-
ing and binding, and they might well do so,
for it doubtless continued binding on the de-
fendants." In Hinckley v. Pittsburgh Steel
Co., 121 U. S. 264, 7 Sup. Ct 875, the defend^
ant agreed to purchase from the plaintiff
steel rails, to be drilled as the defendant
might direct The defendant refused to
give the directions, and at his instance the
rolling of the rails was postponed until after
the time of delivery, when the defendant re-
fused to accept any rails under the contract
It was there said: "The defendant con-
tends that the plaintiff should have manu-
factured the rails, and tendered them to the
defendant, and, upon his refusal to accept
and pay for them, should have sold them in
the market at Chicago, and held the defend-
ant responsible for the difference between
what they would have brought on such sale
and the contract price. But we think no
such rule is applicable to this case. This
was a contract for the manufacture of an
article, and not for the sale of an existing
article. By reason of the facts found as to
the conduct and action of the defendant the
plaintiff was excused from actually manu-
facturing the rails, and the rule of damage
applicable to the case of the refusal of a pur-
chaser to take an existing article is not ap-
plicable to a case like the present." In
Haines v. Tucker, 50 N. H. 307, the defend-
ants agreed to purchase of the plaintiffs
5,000 bushels of malt, and to receive and
pay for the same at the i-ate of 1,000 bush-
els per month. Although plaintiffs were pre-
pared to deliver the 1,000 bushels per month,
the defendants called for and received less
BREACH— RENUNCIATION.
589
tlian 1,000 bushels during the firet three
months. The plaintifis informed defendants
that they were prepared to furnish the malt
according to the terms of the contract, and
requested them to receive the same at the
rate of 1,000 bushels per month, which the
defendants refused to do. The undelivered
malt, not utilized by plaintiffs themselves,
was sold on the market, and plaintiffs
brought assumpsit against the defendants to
lecover damages for a breach of the con-
tract And it was tliere held— following
Cort V. Railway Co., supra, and oUier cases
— tliat the conduct of the defendants
amounted to an unqualified renunciation of
the contract, and that after such renuncia-
tion it was no longer neces^:^■y that the
plaintiffs should hold theuiselves in readi-
ness to perform, or to go to the trouble and
• expense of offering what had already been
refused- In Smith v. Lewis, 21 Conn. C24,
the doctrine as announced in Cort v. Rail-
. way Co. was approved and followed, and
again reaffirmed in the same case. 2G Conn.
110. In these cases the holding was that,
under a conti-act containin g mutual an d_dc-
pendent_co veuants^ refusal on the part^ of
"the defendant to p^erform obviated the ne-
cessity of pe rforma nce, or tencler of per-
formance, on the j)art of the pLaiutiff, after
stich refusal. See, also, U. S. v. Behan, su-
pra; Crabtree v. Messorsmith, 19 Iowa, 179;
Ilolloway v. Griffith, 32 Iowa, 409; Dugau
V. Anderson, 3G Md. 5G7; Burtis v. Thomp-
son, 42 N. Y. 24G; Howard v. Daly, 61 N. Y.
."G2; Smoot's Case, 15 Wall. 3G; Dingley v.
Oler, 117 U. S. 503, 6 Sup. Ct 850; Mount-
joy V. Metzger (Pa, St) 12 Am, Law Reg.
2?ft S.) 442.
^'^ It follows that upon principle and au-
I'tthority, we are of opinion that insti-uctious
1/2 and 3, when considered together, as they
^/^must be, announced the law to the jury cor-
^ ' fectly. The objection that the jury were
'^j thereby left to determine what were the
"substantial provisions of the contract" is,
in view of the coui-se of the trial and facts
proved, obviated by the instructions 7, 12,
13, 16, and 17, given for appellant By the
seventh, as will be observed, the jury were
told that, if the defendant committed bi-each-
es, still, if they did not defeat the substan-
tial objects of the contract or render it
unattainable by proper performance on the
part of Richards, ^Nlaynard & Co., then the
plaintiff could not recover. By the 12th they
were told that the mere failure or refusal
of the defendant to pay the plaintiff or his
firm any sum of money demanded and
claimed to be due on account of services ren-
dered under the contract could not be con-
strued as an abandonment of the conti-act
by the defendant such as would entitle the
plaintiff or his firm to maintain the present
action. By the sixteenth the jury were told,
as a matter of law, that to entitle tbe plain-
tilf to recover in this case, it was necessary
for him to establish, by a preponderance of
the evidence, that he and Richards, May-
nard & Co. were, by tlie acts of the defend-
ant, prevented from performance of said con-
tract on their part cic By the seventeenth .
they are again told that a failure to pay
money due and owing to the plaintiff under
the contract was not such an act or omis-
sion. In itself, on tho part of the defendant
as would prevent the plaintiff from complet-
ing the contract And by the thirteenth In-
struction given on behalf of the defendant
the jury were told that if they believe from
the evidence that the plaintiff's firm closed
their transfer house for tho reasons stated
in their letter of June 11, ISSG, to Mr. Anjs-
den, namely, for refusal to pay their claim
of ?2,.592.95, and their account for the month
of May, ISSG, "and for no other reason," then
the plaintiff could not recover, and the ver-
dict must be for defendant So, by the
eleventh instruction given on behalf of de-
fendant, the jury were told that In deter-
mining whether the damages arising from
any breach of the contract by the defendant
can be ascertained and compensated for,
they were not to take into coniiideration any
refusal of the defendant to submit any dif-
ferences between it and Richards, Maynard
& Co. to arbitration; that the refusal to sub-
mit matters in dispute to arbitration was not
such a breach of the terms of the contract
as to warrant a recovery for such breach.
It seems clear, therefore, under the facts
proved, that the question submitted to the
jury was whether the acts and conduct of
the defendant showed a fixed determination
to be no longer bound by the substantial pro-
visions of the contract upon its part. As. al-
ready seen, the consideration moving to Rich-
ards, Maynard & Co. for entering into the
contract was the stipulation, on defendant's
behalf, to deliver, to be weighed and trans-
ferred through their house, all grain re-
ceived by it from western roads, to be trans-
ported east over its lines, that it could con-
trol; that pi-actieally the only benefit to be
derived by Richards, Maynard & Co. from
the contract was by the sale of weights of
grain thus transferred. The evidence tend-
ed to show that the railroad company had
repudiated its liability to perform this part
of its contract, and its duty, under the con-
tract to use tlie weights derived from the
plaintiff's firm only in billing the grain to
destination, but gave the same away, so as
to deprive plaintiff's fii-m of the profits it
would derive by the sale of such weights.
From what has preceded, no extended dis-
cussion will be necessary of tlie point made,
that there was a variance between the spe-
cial count of the declaration and proof. It
w;is alleged "that on the IGth day of June,
1SS6, the defendant abandoned the contract
on its part, neglected and refused to per-
form the same, and refused, witbout any
reasonable or just cause, to be bound by the
same," etc. As already shown, the effect of
the position taken by, and the conduct of.
590
DISCHAIIGE or CONTRACT.
appellant, was a denial of its obligation to
perform the substantial parts of tlie con-
tract on its part
In connection with this point, it will be
proper to notice the contention that in the i
suit brought June 5, ISSG, before referred
to, the plaintiff recovered damages for all
the breaches of the contract up to the bring-
ing of that suit, and that, therefore, such
breaches, being merged in the judgment in
that cause, could not subsequently be made
the occasion, by Richards, jNlaynard «&: Co.,
for treating the contract as abandoned by
appellant In bringing that suit, the plain-
tiff undoubtedly treated the contract as sub-
sisting, and had not then elected to treat it
as abandoned by the defendant, and to sue
for prospective damages. The suit was
brought and recovery had for actual breach-
es to the time of bringing it We are not
required to determine the question thus pre-
sented. If It should be conceded that the
plaintiff's claim in bringing that action is
inconsistent with his right to show such
breaches in this proceeding, it could not af-
fect the result Subsequent to the bringing
of that action, as already shown, the rail-
road company refused to recede from its
previous position, both in respect of its obli-
gation under the contract to deliver cars to
Richards, Maynard & Co., and to observe its
contract in respect of the use to be made
of the weights. And the evidence tends to
show that at the time Richards, Maynard
& Co. closed their transfer house, appellant
was denying its liability under the contract
and evinced a clear intention not to be bound
by its provisions.
It is urged, however, that there was here
only a partial breach, arising from a differ-
ence In the construction of the contract and
that there was at no time a repudiation or
renunciation of the contra<;t by appellant;
that they were at all times desirous of keei)-
Ing it in force, and performing it These
are, as a matter of course, questions of fact
which are conclusively settled by the judg-
ment of the appellate court But in view of
the instructions aslied and refused, which
sought to take the case from the jury, it
may be remarked that the evidence tended
to show a repudiation by the railway com-
pany of the substantial provisions of the
contract which formed the consideration for
the execution of it by plaintiff's firm. It
was not enough, to show that there was
no repudiation of the contract obligation of
the plaintiff, to prove tliat appellant was
furnishing some cars to be transfeiTed
through plaintiff's transfer house, whereby
plaintiff was partially receiving the benefits
he claimed under the contract The cor-
respondence between the parties before and
after the 5th of June, ISSfJ, shows that appel-
lant was not delivering cars of grain to be
transferred through the transfer house be-
cause it recognized any obligation on its
part to do so, but claimed, and acted on such
claim, that it was only bound to deliver such
cars as it saw proper. In other words, it
refused to be boimd Dy the provision of the
contract requiring it to deliver cars to plain-
tiff's firm. Under the construction of the
contract upon which it had acted, and was
proposing to continue to act it was under
no obligation to deliver any cars to be trans-
ferred by plaintiff's firm, thus absolutely
repudiating its contract liability to do so.
True, it had not altogether ceased to dehver
some cars to be thus transfeiTed, but they
were not delivered because of any contract
liability to do it but at their convenience
and option. Its persistence in this couree
of conduct had been shown by its repeated
refusal to submit the matters in dispute to
arbiti-ation imder the contract The presi-
dent of the company wrote, in reply to the
demand of plaintiff's firm for arbitration, "I
have to say tbat this company having jt all
times faithfully performed its obligations
under said contract, I do not consider there
are any matters calling for arbitration," and
declining the request for arbitration. While
It is imdoubtedly true that refusal to arbi-
trate would not under the provisions of this
contract, justify the plaintiff in treating the
contract as renounced by appellant company,
yet such refusal, and the correspondence in
respect of the matter, tend to show the
persistency with which appellant refused to
be bound by the contract
It is also objected that the court erred In
the admission of testimony: Fii-st that ap-
pellee was permitted to prove the cost of
the transfer house, etc It is a sufficient an-
swer to say that it does not appear the evi-
dence was objected to. It is, however, said
that the coiu-t erred in refusing to give the
fifth instruction for appellant, which was,
in effect tliat no recovery could be had for
the cost or value of the transfer house and
its equipments in this action. This instruc-
tion might with propriety have been given,
but its refusal was not error. At the be-
ginning of the healing before the jury, coun-
sel for the plaintiff stated that he did not
attempt to show the breaches for the purpose
of recovering for them, but proved them for
thepurpose of showing simplya breachof the
contract, which entitled the plaintiff to aban-
don the further performance of it and sue
for damages for loss of future profits, when
the following colloquy occurred: Mr, Jew-
ett (for defendant): "In other words, there
is nothing but the claim for future profits in
this case." Mr. Pence (for plaintiff): "That
is all there is in this case." Later, and at
the close of plaintiff's testimony, the plaintiff
sought to show what the transfer house was
worth, "standing tliere, useless for the pur-
pose for which it had been erected," to
which an objection by the defendant was
sustained. This all took place in the pres-
ence of the jm*y. and would leave no ques-
tion in the mind of any Intelligent per-
son as to the damages sought and allowed to
BREACH— RENUNCIATION.
591
be lecovered. It seems clear that the jury
could not have understood that they were
to take anything into consideration other
than the profits to be derived from the trans-
fer of grain under the contract, and they
were in effect so told by the fourth instruc-
tion given at tlie instance of plaintiff.
On the trial of the cause, certain letters
written, one by Mr. Blodgett and one by Mr.
Clark, commendatory of plaintiff's method of
transferring grain, etc., were offered and
reati in evidence over the objection of defend-
ant. That these letters were incompetent
scfircely admits of question, and it is diflieult
to DfL-e^ve upon what principle they were
admitted. That the error was a harmless
one Is equally apparent It was not contro-
verted that the "Itichards Method," so call-
ed, accomplLshefl the purpose, nor was there
any pretense that it was a failure, so that
the plaintiffs did not p'-rform tlieir contiacL
Other points are made In argument, which,
in view of the length of this opinion, seeming-
ly made neces.sary by the very Ingenious ar-
gumout of the learned counsel, it must suffice
to say, have been carefully con.sidered, and
are not deemed of such gravity as to warrant
further discussion. Finding no prejudicial er-
ror In tliis record, the judgment of the appel-
late court will be allirmed. AfiirmeU.
6
592
DISCHARGE OF CONTRACT.
NEWCOMB V. BRACKETT. ^
(16 Mass. 161.) 'V'
Supreme Judicial Court of Massachusetts,
Norfolk. 1819.
The declaration was in case, "for that the
said B. at, &c. on the 8th of August, 1808,
by his memorandum in writing of that date;
by him subscribed, acknowledged that he
had then and there received of the plaintiff
a bill of sale of one half of the sloop Union
and her apparel, the consideration whereof
the said B. then and there acknowledged in
writing under his hand to be 200 dollars;
which sum the said B. then and there, in
said memorandum by him subscribed, prom-
ised the plaintiff to account to him for^jn
a transfer of a deed which the said B. then
held against one Jackson Field's -estate, ,aa.
soon as the^Iainfiff^hould pay said B. the
residue of a~^debt to him,~~wHchZsEouIdr noT"
exceed 100 dollars^ 5nd the plaintiff ^rerS
that the transfer of a deed against said J.
Field's estate, mentioned in said memoran-
dum, was to be a transfer, assignment and
conveyance of the land, described in a cer-
tain deed made to said B. by one J. Field,
which land the said B. then and there prom-
ised to convey to the plaintiff. And the
plaintiff further avers that the said B. on
the 19th of April, 1810, by his deed of re-
lease and quitclaim, by him duly executed,
did release and qtiitclaim to one J. N. Arnold
all the right, title and interest, which he the
said B. then had to a certain real estate de-
scribed in said deed, which said real estate
was the same of which the said BTtljen held
a deed from said J. Field, and of wljifliTbe
said B. was then in possession, and which
he had in and by said memorandum engaged
to transfer to the plaintiff; and upon which
transfer he had engaged to account for said
200 dollars. And the plaintiff further avers,
that the said B. had not before said 19th of
April accounted to the plaintiff for said 200
dollars, in a transfer of a deed held by him,
the said B., against said J. Field's estate.
And the plaintiff further says, that the said
B., by his deed aforesaid made to said J. N.
Arnold, has broken his promise aforesaid,
and become unable to perform the same, ac-
cording to the terms thereof. To the dam-
age, &c."
The defendant demurred to this declara-
tion, and assigned the following causes of
demurrer.
1. That the plaintiff hath not alleged or
shown, that he has ever paid or tendered
to the defendant the residue of said debt,
mentioned in the declaration.
2. That he has not alleged or shown, that
he has paid or offered to pay to the defend-
ant the sum of 100 dollars, mentioned in
the declaration.
3. That he has not alleged or shown, that
he ever requested the defendant to transfer
to him the deed which the defendant held
against J. Field's estate, or to assign and
transfer to him the land mentioned in the
declaration.
The demurrer was joined by the plaintiff.
Mr. Loud, for the defendant. The under-
taking of the defendant, as it is stated in
the declaration, should receive the same con-
struction, as it would have, if the sale of
the sloop by the plaintiff had been executory,
and had been written thus: "In considera-
tion that J. Newcomb has agreed to execute
a bill of sale of one half of the sloop, &c.,
the value of which is 200 dollars, I promise
to account for the same in the transfer of a
deed, «S:c. as soon as," «&c. It was a part of
the same transaction, executed at the same
time, and given in consideration of the de-
fendant's promise to convey the land. The
plaintiff was to convey the sloop, and to pay
100 dollars; and when he had done both,
the defendant was to give a deed of the land
spoken of.
If the plaintiff can recover in the present
action, he must do so, either upon the
ground of the contract's^ being rescinded, or
Because ne has p erform ed all the precedent
condrtion s orfhis ^artTTo^ entitle himself to
damages;, and" we contend that he cannot
recover on either ground. Not on that of
the contract's being rescinded; because he
declares only upon the special agreement,
and admits it to be open. He claims, not
the value of the sloop, as so much money
paid, but general damages; the rule of which
would probably be the value of the land, at
the time it was conveyed to Arnold, or at
the time of bringing his action. Assumpsit
for money had and received is the usual ac-
tion to recover monej' paid by the plaintiff,
in pursuance of a contract which has failed;
as where either of the parties had a right
to consider the contract rescinded by the
terms of it, or where the plaintiff is pre-
vented by the defendant from performing
some antecedent condition. No case is rec-
ollected, in which an action upon the special
agreement has been brought, to recover back
money so paid, or the value of any goods
sold and delivered, unless upon the notion
of fraud practised by the purchaser.
Another reason, why the contract cannot
be considered as rescinded, is that the par-
ties cannot be put in statu quo. It was a
barter transaction. The sloop sold to the
defendant was not money paid. The plain-
tiff' then has performed a part of the con-
tract.
If the contract is to be considered as still
open, the action can be no better supported.
The payment of the 100 dollars is a condi-
tion precedent on the part of the plaintiff,
and that too upon which the defendant as-
sumed to convey the land. If the defendant
had not subsequently conveyed the same land
to Arnold, there could be no pretence for an
action by the plaintiff, before payment or ten-
derof thelOO dollars. It is difficult to perceive
why that conveyance should alter the case.
BREACH— IMPOSSIBILITY CAUSED BY PARTY.
593
The misfeasance of the defendant cannot ex-
cuse the plaintiff from performing the whole
of a condition precedent, of which he has
performed a part; and it certainly ouglit not
to have that effect here, where the plaintiff
has lain by until the dofend^int has lost any
other remedy for the recovery of the money,
by lapse of time.
This is not like that class of cases, which
contain mutual covenants, and in which it is
held that the plaintiff, after having perform-
ed the gist of the consideration on his part,
may maintain an action against the defend-
ant for non-performance on his part; upon
the ground that the latter has his remedy
against the plaintiff, for neglect of any col-
lateral stipulations. This is the conditional
promise of the defendant alone.
If the plaintiff, on the contrary, has sus-
tained any loss, it has always been and stiU
is in his power, by paying the 100 dollars,
to compel the defendant to execute a good
conveyance of the land, or to answer in
damages for its value.
Mr. Metcalf, for plaintiff.
PARKER, 0. J. The contract set forth in
the declaration Is substantially, that in con-
sideration of the value of a sloop sold by the
plaintiff to the defendant, estimated at 200
dollars, the defendant would, upon payment
of 100 dollars by the plaintiff, which was
due to the defendant from one Field, and
to secure which he had taken a deed of
Field's estate, convey said estate to the
plaintiff; and the breach of the contract al-
leged is, that the defendant had disabled
himself from performing the contract, by
conveying the same estate to another per-
son.
The declaration Is demurred to, and the
objection to It is, that the plaintiff had nei-
ther paid, nor offered to pay, the debt of
Field to the defendant; and therefore has no
title to the action-
No time Is fixed in the contract, within
which the money was to be paid, or the es-
tate conveyed to the plaintiff. The plaintiff
then had a reasonable time, by virtue of the
contract, to perform his part of it; and the
defendant might have hastened him, by ten-
dering the deed, and demanding the money
which the plaintiff had assumed to pay.
HOPK. SEL. CAS. CONT. — 38
It is Implied in the contract, on the part of
the defendant, that he would do nothing by
which he should become unable to perform
It; and by making a deed to another per-
,son, he has di.sablcd himself, and so virtual-
|ly broken his contract. It being impossible
for him, after having thus done, to account
/for the 'KM) dollars in the land, as he under-
I took, there is a breach of his contract, for
I which proper damages may be recovered.,
The law will not, in such circumstances, re-
quire a payment or tender by the plaintiff;
for this would be to hazard an additional
loss, without any possible advantage.
This opinion is supported by several de-
cided cases, which are collected by Mr. Met-
calf in a note to the case of Raynay v. Alex-
ander, In his valualjle edition of Yelverton's
Reports (page 7G). The case in the text is—
The plaintiff declared upon a promise to de-
liver, on a particular day, fifteen out of sev-
enteen tods of wool, to be chosen by the
plaintiff, upon payment of £G, and averred
that he was ready to pay the £G on the day;
yet the defendant had not delivered the
wool. Verdict for plaintiff— and judgment
arrested, because not averred tbat the plain-
tiff had chosen the fifteen tods out of the
seventeen; which was a condition precedent.
But Popham, C. J., said, if the defendant
had sold one of the tods of wool before the
election made by the plaintiff, that had de-
stroyed the election and made the promise
absolute, and had been a breach of it. The
same law, If the defendant would not have
permitted the plaintiff to see the wool, that
he might make election; for that had ex-
cused the act to be done by the plaintiff,
and had been a default by the defendant.
The law is well summed up by Mr. Metcalf
In his note: "When the consideratioiLQ^ the
c ontract Is^,exe cutory, oTTts^efformanc^ili^
pends upon some act to l)e~doni~or forborne
by fhe_glaintiff, or_onsome_other^ event. The
plalntiffmust aver performj^c^Iof siich^re-
cedent condition, or show some excuse for
the non-performance." ~ — "-
The declaration, in the case at bar, shows
that the defendant had conveyed to a stran-
ger the land, which he promised to convey
to the plaintiff. This excuses the plaintiff
from tendering the money, and entitles him
to damages from the breach of the contract.
Declaration adjudged good.
5'J4
DISCHARGE OF CONTRACT.
MORTON T. LAMR
(7 Term. R. 125.)
Trinity Term. 37 Geo. IIL
V/
In an action on the case the plaintiff
declared against the defendant for that
whereas on, the 10th Feb. 179G, at Manches-
ter in the county of Lancaster, in consid-
eration tliat the plaintiff, at the special in-
stance and request of the defendant had
then and there bought of the defendant
200 quarters of wheat at £5 Os. 6d. per quar-
ter, suoli price to be therefore paid by the
plaintiff to the defendant, he the defend-
ant undertook and then and there promised
the plaintiff to del iver the s aid corn to him
(the plaintifiEl) a t Shardlow In theL_CQiinty_pf
Derby in one mont h_from^that ,time, viz. of
the sale; and then he alleged that although
he (the plaintiff) always from the time of
making such sale for the space of one
month then next following and afterwards
was ready and W illing to receive . the— gald
corn at^ Shardlow, yet the defendant not
regarding his~~said promise &c. did not in
one month from the time of the making
of such sale as aforesaid or at any other
time deliver the said com to the plaintiff
at Shardlow or elsewhere, although he (the
defendant) was often requested so to do,
&c. The defendant pleaded the general is-
sue; and at the trial the plaintiff recov-
ered a verdict.
Mr. Holroyd obtained, in the last term,
a rule calling on the plaintiff to shew cause
why the judgment should not be arrested,
because it was not averred that the plain-
tiff had tendered to the defendant the price
of the com, or was ready to have paid for
it on delivery. He said this was necessary
on the principle established In many cases,
particularly in Thorpe v. Thorpe, Salk. 171;
Callonel v. Briggs, Id. 113; Kingston v.
Preston, Doug. GS8; Jones v. Barclay, Doug.
684, and Goodisson v. Nunn, 4 Term R. 761,—
that when something Is to be done by both
parties to a contract at the same time, as in
thi.s case the tendering of the money and the
dehvery of the com, there the party suing the
other for non-performance of his part must
aver an offer at least at the same time to per-
form what was to be done b y himself.
Messrs. Law, Wood, and Scarlett, now
shewed cause. The covenants here are
mutual and independent, and each party
has a remedy by action against the other
for non-performance of his part. But if
thprpijTg_ pny .pteeedp.nn£_J:ietween thf'Tn, ^^^ifi*
delivery of the goodsaught, in the regular
order7^5r~linngs, to precede the^jBJXi^Dt
of th e price. In neither case can the aver-
ment^contencTed for be necessary, '^t^g.^disr
tinction is taken_Jn_inany-Gases-fehat— v^itei*
two ii ' to be ^onej_and^ the time
of (Ti.': ..Lntionc d for one and n otlfor
the other, there the thing for doing which
the time is stipulated must be done first,
and so averred to be. Pafford v. Webbe,
2 Rolle, S8; Pordage v. Cole, 1 Saund. 319;
Peters v. Opie, 2 Saund. 352; 1 Vent. 177,
214; El wick v. Cud worth, 1 Lutw. 493;
Plilton V. Smith, Id. 49G. So in Thorpe v.
Thorpe, 1 Salk. 171; 1 Lutw. 250; it was
said by Holt, C. J., that if by the agree-
ment a day certain is appointed for the pay-
ment of money, and this day is to happen
before the act can be performed for which
the money is to be paid, there although the
words are that he shall pay so much for
the performance of the act, yet after the
day appointed the party shall have his ac-
tion for the money before the thing is per-
formed. And that is a stronger case than
the present, because the act for which the
recompense is to be given ought in reason
to precede the recompense itself. In Black-
well V. Nash, 1 Strange, 535, the plaintiff
declared in debt for a penalty on a cove-
nant that he should transfer so much stock
to the defendant on or before the 21st Sep-
tember, and that the defendant in consid-
eration of the premises covenanted to ac-
cept and pay for it; and then the plaintiff
averred that he was ready and offered to
transfer the stock on that day, but that the
defendant refused to accept or pay for it:
It was objected in arrest of judgment that
the actual ti*ansfer of the stock was a con-
dition precedent which ought to have been
averred: But the court held that "in con-
sideration of the premises" meant in con-
sideration of the covenant to transfer, and
not of an actual transferring, for which the
defendant had his remedy; though if it
did mean the latter, a tender and refusal
would amount to performance. And the y
added that in all such ca ses the gre at ques-
^^n_waSj_who_was_to do the first act? But
that where the traa sfer was to "Be upon pay-
rn5Trt7^there "was no colour to make the
transfer a con3Ttion precedent. The same
doctrine" wa^ "held" in Dawson v. Myer, 1
Strange, 712. These cases went on the
ground that the parties had mutual reme-
dies on their reciprocal promises, and there-
fore there was no need of the avennent
contended for. But the case of Merrit v.
Rane, 1 Strange, 458, applies as strongly
in another point of view. There the plain-
tiff declared on an agreement that in con-
sideration of £252 paid to the defendant
he agreed to transfer £G000 South-sea stock
to the plaintiff or his executors, &c. at any
time before the 0th January 1720, within
thi'ee days after demand in writing, upon
payment of the further sum of £0(KK) then
he averred the demand in writing, and that
he attended on the day, but that the de-
fendant did not appear to transfer: One
of the objections was, that the plaintiff
had not averred that he had money there
on the day to have paid upon the transfer:
But the court said that as to the plaintiff's
not shewing a tender that ought to have
BREACn— CONCURRENT CONDITIONS.
595
cuiuu from the defendant by way of ex-
cuse, that he was there leady to have
tniusferred if the plaintiff had been there
to have paid the money. To apply there-
fore the reasoning of all these authorities
to the present case:— g,ere the tlrst act to
ljfi.._done__v>'jis_by_ the defendant, namely-,
the carrying^ the corn to Shardl.owi_by
out doing which he Ijroke his aijreement,
and a cause of action accryed to the plaln-
tiff_according to that class of cas es, where-
in agreements of this sort have been con-
strued to sivc mutual remedies to the. parties.
But admitting that he was not bound to deliv-
er the com there until the plaintiff was pre-
pared to pay for it; still that ought to come
from the defendant by way of excuse, and the
tender of payment was not necessary to be
averred by the plaintiff as a condition pre-
cedent to the right of action. The defendant
might have shewn in excuse for the non-
performance on his part, either that he
caiTied the corn to the place, and was
ready to have delivered it, but that the
plaintiff was not there to receive It; or
that the plaintiff refused to receive it; or
that he was not ready to pay for it l.au-
cashire v. Klllingworth, 12 Mod. 531, Salk.
C23. Ughtred's Case, 7 Coke, 10. Where
an action is brought for money due, the
defendant may shew in his defence a ten-
der and refusal, or that he was prepared
at the day and place appointed to pay the
money, but that the plaintiff was not there
to receive it; yet it never was held neces-
sary for the plaintiff to aver in his declara-
tion that he was ready to receive it. And
here, if the readiness to pay had been
averred, it could have answered no puiTpose;
because no issue could have been taken on
it. Besides in no case is tender of payment
necessary to be averred when the contract
Is executory, as it is in this case; for there
the parties necessarily rely upon the mu-
tual remedies arising out of it; they give
mutual credit to each other. All the cases
cited on the other side are, if strictly con-
sidered, cases of condition precedent. Sev-
eral of them, as well as the subsequent
cases of Campbell v. Jones, G Term li. 570,
and Porter v. Shepherd, Id. GG5, laid down
the rule that whether covenants be or be
not independent on each other must depend
on the good sense of the thing; Uiat is,
w] }o in the fa_ ir sense and meaning of the
parties wa s required to do the first act.
Now_here_there is no doubt that the first
act was to be^^done by the defendant whic-h
iie'^eg^lected to do: and it would be absurd
to require a person to pay for goods before
he had received them; though if he were
not ready to pay for them at the time when
the other was ready to deliver them, that
might be a reason for the non-dolivery.
But still that is only matter of defence
and excuse on the part of the defendant,
which it is incumbent on him to shew.
And yet the effect of the avenuent required
is, that the plaintiff was bound to tender
the price before the goods were even offered
to him.
Mr. Holroyd, contrS,. Thl8__ action la not
brought against the defendant for having
omitted to carrj'" the corn to Shardlow, even
allowing that to be the first act to" be do£e;
and therefore much of the piainiiffi's argu-
ment does not apply. But the ground of
complaint Is that it was not delivered to hijn
tjiere;_ and conseqliently upon this form of
declaring it may be assumed that the de-
fendant did carry the com there. Tlie
question then comes to this, whether the
defendant was bound to deliver his corn,
the plaintiff not being there ready to pay
for it For If not then it follows, accord-
ing to all the late determinations, that he
ought to have averred a tender of the price,
or that he was there ready to pay for it
If the defendant had been there ready to
receive it, and deliver the com. And for
this purpose it is not necessary to shew
that the tender of the price was a condi-
tion precedent strictly so considered; for
according to Goodikson v. Nunn, 4 Term R. 7G1,
and Kingston v. Preston, Doug. GSS, Lf the
acts are concurrent and in the nature of
the transaction to be done at the same time,
before one of the parties can maintain an
action against the other for the non-per-
formance of his part, he must aver that
he performed or was ready to perform
every thing on his own part. Callonel v.
Brig'gs, 1 Salk. 113, is hi point. TkU
was an executory agreement, like the pres-
ent, to pay so much money six months after
the bargain, the plaintiff transferring stock.
There Lord Holt said, "If either party
would sue upon this agreement, the plain-
tiff for not paying, or the defendant for
not transferring, the one must aver and
prove a transfer or a tender, and the other
a payment or a tender; and this." says he,
"though there be mutual promises. If I
sell you my horse for fio. if you will have
the horse, I must have the money; or if I
will have the money, you must have the
horse." Or according to Lancashire v. Kll-
lingworth. Salk. 023. the plaintiff should
have averred that he was ready at the
place to have received the com on the last
day of the time within which it was to be
delivered, and ready and willing to have
paid the price; but that no person was
there on the part of the defendant to deliver
the com. The delivery of the corn, and
the payment of the price, were concurrent
acts to be done by the parties at the same
time, the one depending on the other; and
if so, then within the principle of all the
modem cases, the plaintiff ought to Jie^e
averred In his declaration a tender of the
price, for want of which it is^bad.
Lord KENTON. Ch. J. If tliis question de-
pended on the technical niceties of pleading,
596
DISCHARGE OF CONTRACT.
I should not feel so much confidence as I do:
but it depends altogether on the true con-
struction of this agreement The defendant
agreed with the plaintiff for a certain quanti-
ty of corn, to be delivered at Shardlow with-
in a certain time; and there can be no doubt
but that the parties intended that the pay-
ment should be made at the time of the de-
livery. It is not imputed to the defendant
that he did not carry the com to Shardlow,
but that he did not deliver It to the plaintiff:
to this declaration the defendant objects, and
says "I did notjieliver the ^orn_to^ you (the
plaintiff), because you dojiot say that you
were ready to' pay for it; and if you were
not ready, I am not bound to deliver^ the
corn;" and the question is whetlier .that
should or should not have been alleged.- The
case decided by Lord Holt, in Salii. 112, if
indeed so plain a case wanted that authority
to support it, shows that where two con-
current acts are to be done, the party who
sues the other for non-performance- must
aver that he had performed or was ready to
perform, his part of the contract. Then the
plaintiff in this case cannot impute to the
defendant the nondelivery of the com, with-
out alleging that he was ready to pay the
price of it. A plaintiff, who comes into a
court of justice, must show that he is in a
condition to maintain his action. But It
has been argued that the delivery of the com
was a condition precedent, and some eases
have been cited to prove it: but they do not
appear to me to be applicable. In the one
in Saunders (Saund. 350), the party was to
pull down a wall, and was then to be paid
for it; there is no doubt but that the pulling
down of the wall was a condition precedent
to the paj'ment; the act was to be done, and
then the price was to be paid for it So in
the case in SaHi. 171, where work was to
be done, and then the workman was to fee
paid. And in ordinary cases of this kind
the work is to be (lone before the wages are
earned: but those cases do not apply to the
present, where both the acts are to be done
at the same time. Spealdng of conditions
precedent and subsequent in other cases only
leads to confusion. In the case of Campbell
v. Jones, I thought, and still continue of that
opinion, that whether covenants be or be
not independent of each other must depend
on the good sense of the case, and on the
order in which the several things are to be
done: but here both things, the delivery of
the corn by one, and the payment by the
other, were to be done at the same time; and
as the plaintiff has not averred that he was
ready to pay for the corn, he cannot main-
tain this action against the defendant for not
delivering it
GROSE, J. It Is difficult to reconcile all the
cases in the books on the subject of con-
ditions precedent; but the good sense to be
extracted from them all is, that if one party
covenant to do one thing in consideration of
the other party's doing another, each must
be ready to perform his part of the contract
at the time he charges the other with non-
performance. Here the question is, what
was the intention of the parties; they clear-
ly intended that something should be done
by each at the same time. The corn was to
be delivered at Shardlow to the plaintiff for
a certain price to be therefore paid by him,
that is, at the time of the delivery; then the
readiness to pay should have been averred by
the plaintiff.
LAWRENCE, J, It has been argued, on
behalf of the plaintiff, that this must be con-
sidered as a declaration on mutual promises,
and that as this is a demand on the defend-
ant on the ground of some mutual promise
made by him, and which was the considera-
tion of the plaintiff's promise, it was not
necessary to aver performance on his part:
but if so, the declaration is not adapted to
the truth of the case, in not stating that the
defendant's promise was in consideration of
the plaintiff's. But on this declaration I
can only consider it as an agreement by the
defendant to deliver the com at Shardlow on
being paid for it The payment of the
money was to be an act concurrent with the
delivei-y; and then the case is like that of
CaUonel v. Briggs, which was on an agree-
ment to pay so much money sjx months after
the bargain, the plaintiff transferring stock;
and there Lord Holt said, "If either party
would sue upon this agreement, the plaintiff
for not paying, or the defendant for not
transferring, the one must aver and prove
a transfer or a tender:" he -did not say, that
the not doing it should c5me from the de-
fendant by way of excuse, but that the do-
ing it must be alleged in the declaration; and
that affords an answer to great part of the
argument urged on behalf of the defendant
in this case. The tendering of the money by
the plaintiff makes part of the plaintiff's
title to recover, and he must set out the
whole of his title. The strongest case cited
for the defendant was that of Merrit v. Rane,
1 Strange, 458: but that does not appear to
me of sufficient weight to overturn the au-
thority of the case of CaUonel v. Briggs. I
do not quite understand what the court there
said, that it was not necessary to allege a
tender, for that it should have come from the
defendant by way of excuse; for as it was
stated that the plaintiff's agent was ready
to receive a transfer of the stock, but that
the defendant did not attend, it would have
been absurd to state a tender of the money
to a person who was not present to receive
it. There is however another case, not re-
ferred to in the argument. Lea v. Exelby,
Cro. Eliz. 888, which is an authority to show
that the plaintiff in this case should have
averred a tender. There the plaintiff declar-
ed that in consideration that he had promised
to pay the defendant (who was possessed of
a lease for years, the inheritance of which-
BREACH— CONCURRENT CONDITIONS.
597
was In the plaintiff) a certain sum on such
a day, the defendant promised on payment
to surrender to him the lease; and that he
had tendered the money at the time, but thai
the defendant bad not surrendered; and on
motion in arrest of judgment, because It was
not "alleged that the defendant refused as
well as that the plaintiCt tendered, the court
held that the declai-ation was bad for th.it
reason. Therefore, on the authority of that
case, and of that of Callonel v. Briggs, I am
of opinion that the declaration cannot be
supported, and that the judgment must be
arrested. Rule absolute.
DISCHARGE OF CONTRACT.
DEY V. DOX et al
/ ' (9 Wend. 129.)
Supreme Court of New York. May, 1832.
This was an action of assumpsit, tried at
the Seneca circuit in June, 1830, before the
Hon. Daniel Moseley, one of the circuit
■judges.
The pLaintiflf proved a contract signed by the
defendants in these words: "We have this day
bought of David Dey 1280 bushels of first
quality merchantable wheat to be delivered
on board of boats, at or near the store house
of David Brooks, at any time we may require
the delivery of the same after the first day of
April next, and are to pay seventy-five cents
per bushel, payable the first of September
next, and have paid him one dollar on ac-
count . of the same; Geneva, 2Gth March,
1828;" and claimed to recover the price stipu-
lated in the contract • The defendants insist-
ed that the plaintiff was not entitled to re-
cover, unless he proved a delivery of the
wheat or an offer or readiness to do so. The
judge ruled that the promises of the parties
were independent and refused to nonsuit the
plaintiff. The defendants thep proved a ten-
der of the price and a demand of the wheat,
made about the middle of September, 1828,
and the refusal of the plaintiff to accept the
money and to deliver the wheat— this evi-
dence was objected to by the plaintiff. The
plaintiff then introduced the record of the
judgment in favor of the defendants against
the plaintiff, docketed the loth January, 1830,
as of January term, 1830, by which it ap-
peared that the defendants had sued the
plaintiff for the non-delivery of the wheat
and obtained a verdict against him for $1,-
670.92, being the full value of the wheat on
the day it was demanded. In the record,
however, there was a remittitur of $1,005.25,
stated to be the value of the wheat at G5-100
per bushel, T\ith the Interest thereof, and
judgment was taken for only $771.61, the bal-
ance of the verdict and the costs of increase.
The plaintiff also proved the issuing of an ex-
ecution on such judgment, which was deliv-
ered to the sheriff on the IGth January, 1830,
directing the levy of 5771.61, and that the
same was returned satisfied; all which evi-
dence in relation to the judgment and execu-
tion was objected to by the defendants. The
suit in this case was commenced on the 11th
January, 1830, previous to which time the
plaintiff demanded of the defendants the
price of the wheat as stipulated in the con-
tract; the defendants told him they would re-
mit such price from their verdict which the
plaintiff said he would not accept, and that if
they entered such remittitur, they would do
so against his wishes and consent The con-
tract price of the wheat with the Interest
thereof, was shewn to be .$992.16, for which
sum the jury found a verdict notwithstand-
ing the presiding judge in his charge to the
jury expressed his opinion, that the plaintiff
was not entitled to recover. The defendants
now moved to set aside the verdict
J. A. Spencer, for plaintiff. J. C. Spencer,
for defendants.
NELSON, J. The plaintiff must fail u^on
principles too well settled to requii'e examina-
tion, and the omission to avail himself of
those principles, when prosecuted by the
present defendants on the contract relative
to this same subject matter, has no doubt
given rise to the present suit; for, had they
been applied, he would have had no cause of
complaint. K a greater amount in damages
for a breach of his agreement has been re-
covered against him than the well settled
principles of law would warrant, it is his own
fault, and cannot be heard or admitted as a
suSicient reason to indulge him In a cross suit
to right himself. But before inquiring to see if,
upon principles of law and justice, the whole
subject of litigation arising upon this agree-
ment could not have been properly adjusted
in the former suit I will examine this case
for the present as if the former suit was out
of the question, and which Is perhaps placing
It upon the ground upon which it ought to
have been litigated. It would then stand
thus: the plaintiff, after being called upon to
carry into execution the agreement on his
part peremptorily refused; and while persist-
ing in such refusal, instituted a suit for dam-
ages, for the non-fulfilment of the agreement
on the part of the defendants. There is cer-
tainly no principle upon which such an action
can be sustained, nor have we been referred
to any authority in support of it It cannot be
that the plaintiff seeks to recover damages in
the strictest sense of that term for the breach
of the contract on the part of the defendants,
for his own conduct is conclusive to shew that
he considers the fulfilment of it an injury to
him, and has therefore preferred the hazard
of responding in damages himself, rather than
carry it into execution. Can he recover the
whole consideration for the wheat? This
would be unjust, for he has positively refused
to deliver the wheat when demanded, imless,
indeed, under the idea that they are inde-
pendent agreements, the court is bound to af-
ford to each party a specific performance, or
its equivalent in damages. Suppose the court
should do so, how would the case then stand?
The plaintiff would recover the consideration
to be paid for the wheat and the defendants
the same sum for the non-delivery of it be-
sides such damages as a jury would aUow for
the default in not delivering it It is obvious
from this view, that confining the remedy for
a violation of this contract to a suit for dam-
ages against the party violating it the result
is exactly the same to both parties as that to
which we arrive after the above circuity of
action, and I apprehend that such is the well
settled law of tlie case. It is true, where the
covenants or agreements are mutual and in-
dependent that is. mutual and distinct one
BREACH— CONDITIOXS PRECEDENT.
599
party may maintain an action against the
other without averring or shewing perform-
ance on his part, and the defendant in such
ease cannot plead the non-performance by
the plaintiff in bar of the action. Wheat.
Selw. 383; 1 Saund. 320, note. When this
prhiciple is rij;litly understood and applied,
there can be no objection to It; and tlie sound
reason given for It is, that the damages in
each covenant or agreement may be very dif-
ferent, as where they are in the same instni-
ment and the one not the consideration of the
other, or where th-: covenants or agi'eemcnts
gc only to part of the consideration on both
sides, part having been executed, and the like
cases; in all such the damages might be dif-
ferent and a remedy must be sought in a suit
by each party for a breach. So the terms of
the insti-ument may be such that the cove-
nants; or agreements must necessarily be in-
dependent, without the existence of the rea-
Boi- above assigned; in such case, the court
will can-j into effect the agreement, accord-
hig to the intent cf the parties; but whether
the covenants or promises are independent
or no',, where the agreement is wholly execu-
tcry.aiH the ono covenant or promise or per-
foTcarce i-
ped by one steamer in time, and 3,301 quar-
ters were shipped too late, it was held that
the buyer was bound to accept the 1,139
quarters, and was liable to an action by the
seller for refusing to accept them. Such be-
ing the condition of tlie law of England as
declared in the lower courts, the case of
Bowes v. Shand, after conflicting decisions in
the queen's bench division and the court of
appeal, was finally determined by the house
of lords. 1 Q. B. Div. 470; 2 Q. B. Div. 112;
2 App. Cas. 455. In that case, two contracts
were made in London, each for the sale of 300
tons of "Madras rice, to be shipped at Madras
or coast for this port during the months of
March ^'^^^t' April, 1874, per Rajah of Cochin."
The GOO tons filled 8,200 bags, of which 7,120
bags were put on board, and bills of lading
signed in February; and for the rest, con-
sisting of 1,030 bags put on board in Feb-
ruary, and 50 in March, the bill of lading
was signetl in March. At the trial of an ac-
tion by the seller against the buyer for re-
fusing to accept the cargo, evidence was
given that rice shipped in February would
be the spring crop, and quite as good as
rice shipped in March or April. Yet the
house of lords held that the action could
not be maintained, because the meaning of
the contract, as apparent upon its face, was
that all the rice must be put on board in
March and April, or in one of those months.
In the opinions there delivered the general
principles underlying this class of cases are
most cleiirly and satisfactorily stated. It
will be sufficient to quote a few passages
from two of those opinions.
Lord Chancellor Cairns said: "It does not
appear to me to be a question for your lord-
ships, or for any court, to consider whether
that is a contract which bears upon the face
■ if it some reason, some explanation, why it
I was made in that form, and why the
stipulation is made that the shipment
should be during these particular months.
It is a mercantile contract, and mer-
chants are not in the habit of placing
upon their contracts stipulations to which
they do not attach some value and impor-
j tance." 2 App Cas. 403. "If it be admitted
that the literal meaning would imply that
the whole quantity niust be put on board
during a specified time, it is no answer to
that literal meaning,— it is no observation
which can dispose of, or get rid of, or dis-
place, that literal meaning,— to say that it
puts an additional burden on the seller with-
out a coiTesponding benefit to the purchaser;
that is a matter of which the seller and pur-
, chaser are the best judges. Nor is it any
] reason for saying that it would be a means
i by which purchasers, without any real cause,
; would frequently obtain an excuse for re-
jecting contracts when prices had dropped.
j The non-fulfillment of any term in any con-
tract is a means by which a purchaser is
able to get rid of the contract when prices
have dropped; but that is no reason .why a
j term which is found in a contract should not
be fulfilled." Pages 4G5, 400. "It was sug-
gested that even if the construction of the
contract be as I have stated, still if the rice
was not put on boaid in the particular
' months, that would not be a reason which
would justify the appellants in having re-
jected the rice altogether, but that it might
afford a grouna for a cross-action by them
if they could show that any particular dam-
age resulted to them from the rice not hav-
ing been put on boai-d in the months in ques-
tion. My lords, 1 cannot think that tht re is
any foundation whatever for that argument.
If the construction of the contract be as I
have said, that it bears that the rice is to
be put on board in the months in quesnon.
that is part of tlie description of the subject-
matter of what is sold. What is suld is not
300 tons of rice in gross or in general. It is
300 tons of Madras rice to be put on board
at Madras during the particular months."
"The plaintiff, who sues upon that contract,
has not launched his ca^e until he has
shown that he has tendered that thing which
has been contracted for, and if he is unable
to show that, he cannot claim any damages
for the non-fulfillment of the contract."
Pages 407. 40S.
Lord Blackburn said: "If the description
of the article tendered is different in any re-
spect, it is not the article bargained for,
and the other party is not bound to tiilce it.
I think in this case what the parties bar-
gained for was rice, shipped at Madras or
the coast of Madras. Equally good rice
might have been shipped a little to the
north or a little to the south of the coast of
Madras. I do not quite know what the
boundary is, and probably equally good rice
might have been shipped in February as was
shipped in March, or equally good rice might
608
DISCHARGE OF CONTRACT.
have been shipped in May as was shipped
in April, and I dare say equally good rice
might have been put on board another ship
as that which was put on board the Kajah
of Cochin. But the parties have chosen, for
reasons best known to themselves, to say:
We bargain to take rice, shipped in this par-
ticular region, at that particular time, on
board that paiticular ship; and before the
defendants can be compelled to take any-
thing in fulfillment of that contract it must
be shown not merely that it is equally good,
but that it is the same article as they
have bargained for, otherwise they are not
bound to take it." 2 App. Cas. 4S0, 481.
Soon after that decision of the house of
lords, two cases were determined in the court
of appeal. In Renter v. Sala, 4 C. P. Div.
239, under a contract for the sale of "about
25 tons (more or less) black pepper, October
^^'^ November shipment, from Penang to
London, the name of the vessel or vessels,
marks, and full particulars to be declared to
the buyer in writing within 60 days from date
of bill of lading," the seller, within the 60
days, declared 25 tons by a particular vessel,
of which only 20 tons were shipped in No-
vember, and five tons in December; and it
was held that the buyer had the right to re-
fuse to receive any part of the pepper. In
Honck V. Muller, 7 Q. B. Div. 92, under a
contract for the sale of 2,000 tons of pig-iron
to be delivered to the buyer free on board at
the maker's wharf "in November, or equally
over November, December, and January
next," the buyer failed to take any iron in
November, but demanded delivery of one-
third in December and one-third in January;
and it was held that the seller was justified
in refusing to deliver, and in giving notice to
the buyer that he considered the contract as
canceled by the buyer's not taking any iron
in November.
The plaintiff in the case at bar greatly relied
on the very recent decision of the house of
lords in Mersey Co. v. Naylor, 9 App. Cas.
434, afiirming the judgment of the court of
appeal in 9 Q. B. Div. 648, and following the
decision of the court of common pleas in
Freeth v. Burr, L. R. 9 C. P. 208. But the
point there decided was that the failure of
the buyer to pay for the first installment of
the goods upon delivery does not, unless the
circumstances evince an intention on his part
to be no longer bound by the contract, entitle
the seller to rescind the contract, and to de-
cline to make further deliveries under it. And
the gro\mds of the decision, as stated by Lord
Chancellor Selborne in moving judgment in
the house of lords, are applicable only to the
case of a failure of the buyer to pay for, and
not to that of a failure of the seller to de-
liver, the first installment. The lord chan-
cellor said: "The contract is for the purchase
of 5,000 tons of steel blooms of the company's
manufacture; therefore, it is one contract for
the purchase of that quantity of steel blooms.
No doubt, there are subsidiary terms in the
contract, as to the time of delivery, — 'delivery
1,000 tons monthly, commencing January
next,'— and as to the time of payment,— 'pay-
ment net cash within three days after receipt
of shipping documents,'— but that does nut
split up the contract into as many contracts
as there shall be deliveries for the purpose
of so many distinct quantities of iron. It is
quite consistent with the natural meaning of
the contract that it is to be one contract for
the purchase of th.-it quantity of iron to be
delivered at those times and in that manner,
and for which payment is so to be made. It
is perfectly clear that no particular payment
can be a condition precedent of the entire
contract, because the delivery under the con-
tract was most certainly to precede payment;
and that being so, I do not see how, without
express words, it can possibly be made a con-
dition precedent to the subsequent fulfillment
of the unfulfilled part of the contract by the
delivery of the undelivered steel." 9 App.
Cas. 439.
Moreover, although in the court of appeal
dicta were uttered tending to approve the de-
cision in Simpson y. Crippin, and to disparage
the decisions in Hoare v. Rennie and Honck
V. Muller, above cited, yet in the house of
lords Simpson v. Crippin was not even refer-
red to, and Lord Blackburn, who had given
the leading opinion in that case, as well as
Lord Bramwell, who had delivered the lead-
ing opinion in Honck v. Muller, distinguished
Hoare v. Rennie and Honck v. Muller from
the case in judgment. 9 App. Cas. 444, 446.
Upon a review of the English decisions, the
rule laid down in the earlier cases of Hoare
V. Rennie and Coddington v. Paleologo, as
well as in the Jater cases of Reuter v. Sala
and Honck v. Muller, appears to us to be sup-
ported by a greater weight of authority than
the rule stated in the intermediate cases of
Simpson v. Crippin and Brandt v. Lawrence,
and to accord better with the general prin-
ciples affirmed by the house of lords in Bowes
V. Shand, while it in no wise contravenes the
decision of that tribunal in Mersey Co. v.
Naylor. In this country there is less judicial
authority upon the question. The two cases
most nearly in point that have come to oiu-
notice are Hill v. Blake, 97 N. Y. 216, which
accords with Bowes v. Shand, and King Phil-
ip Mills V. Slater, 12 R. I. 82, which approves
and follows Hoare v. Rennie. The recent
cases in the supreme court of Pennsylvania,
cited at the bar, support no other conclusion.
In Shinn v. Bodine, 60 Pa. St. 182, the point
decided was that a contract for the purchase
of 800 tons of coal at a certain price per ton,
"coal to be delivered on board vessels as sent
for during the months of August and Septem-
ber," was an entire contract, under which
nothing was payable until delivery of the
whole, and therefore the seller had no right
to rescind the contract upon a refusal to pay
for one cargo before that time. In Morgan
V. McKee, 77 Pa. St. 228, and in Scott v. Kit-
tanning Coal Co., 89 Pa. St. 231, the buyers
BP^EA'.n— CONDITIONS PRECEDENT.
609
rijrht to rescind the whole contract upon the
failure of the seller to deliver one installment
was denied, only because that rif,'lit had Iji'cn
waived, in the one case by unreasonable delay
in asserting it, and in the other by liaving ac-
cepted, paid for, and used a previous instaJl-
ment of the goods. The decision of the su-
preme judicial court of Massachusetts in Win-
chester V. Newton, 2 Allen, 492, resembles
that of the house of lords in Mersey Co. v.
Naylor.
Being of opinion that the plaintiff's failure
to make such shipn ents in February and
March as the contract required prevents his
maintaining this action. It is needless to dwell
HOPK.SEL.CA8.CONT.— 89
upon the further objection that the shipments
in April did not comply with the contract, be-
cau.se the defendants could not be compelled
to take about 1,(mjO tons out of the larger
quantity shipped in that month, and the plain-
tiff, after once designating the names of ves-
sels, as the contract bound him to do, could
not substitute other vessels. See Busk v.
Spence, 4 Camp. 329; Graves v. Legg, 9 Exch.
7U9; Renter v. Sala, above cited.
Judgment affirmed.
The CHIEF JUSTICE was not present at
the argument, and took no part in the decision
of this ca.se.
610
DISCHARGE OF CONTRACT.
a^
^^f
WOOTEN V. WALTERS et aL
J a-A S. E. 12A, 110 N. C. 251.)
Snpreme Court of North Carolina. March 15,
1892.
Appeal from superior court, Lenoir county;
E. T. Boylcin. Judge.
Action by Simeon Wooten against John D.
Waltere and others to avoid a contract for the
SJ^le of real and personal property, and to re-
cover such property. Exceptions were taten
to the report of a referee, and from 'a judg-
ment modifying the report, sustaining an ex-
ception of defendants and oveiTuling plain-
tiff's exceptions, plaintiff appeals. Affi rmed.
The other facts fully appear in the follow-
ing statement by MERRIMON, C. J.:
The following is a copy of the case settled
on appeal: "The facts found by the referee
are as follows: (1) That in the year 1SS9 the
plaintiff and defendants formed themselves
into a company and were incorporated under
the name of the 'Kinstou Oil-Mill Company,'
for the purpose of manufacturing cotton^seed
oil. (2) The plaintiff and each of the defend-
ants agreed to^ke one:fourth_ea£h^ pXJthe
capital stock, and the company was organ-
ized, and the defendant J. D. "Walters was
elected president of the company, and was the
general superintendent of the business in
erecting buildings, machinery, and making
the necessary preparation for commencing
the manufacture of the oil. (3) That no cer-
tificates or other evidence of stock were ever
issued by said company. (4) In November of
said year 1SS9, and before the company was
ready to commence operation, the plaintiff
agreed with the defendant J. D. Walters to
selL to him his stock of merchandise and tw o
Stores, a nd lots. aU being i n La Grange, a nd
was to take in payment therefor the interests
of the s aid X. D. Walters and the^Sef endant
41ex. Sutton'inl;Ee~said oil-mill, the difference
to be^^aidjas If sliould appear on estimation.
(5) The contract above mentioned was as fol-
lows: Walters was at the store of Wooten,
and a proposition to trade was made, by
which party is uncertain, and whether the
stores were then named or not is uncertain.
They agreed to meet again that night At
night Walters went to Wooten's store, and
after a while they agreed that the goods were
worth twenty per cent less than their original
cost They then immediately began to talk
about the price of the stores, but did not
agree as to their price. They then began to
talk about the price of the oil-mill property.
Walters said it was worth dollar for dollar
for what had been put into the mill. Wooten
thought he ought to make some reduction.
Walters refused to do so. Then they began
to talk again about the stores, bu ^ did not
■ascree .aS-to,the. price . At this point Walters
said to Wooten, 'Do we understand each oth-
er?' Wooten said he thought so. Walters
said, 'You are to take the oil-mill property at
what it cost us, and I am to take the goods
at 20 per cent off first cost' Wooten made
no reply, but walko;! off to attend to some
matter, came back, and they walked out of
the store, and went to the pump, and got
some water. Walters_again spoke about the
stores L Wooten asked $3,000; Walters offer-
ed $2t500. Before they separated tht^ agreed
on the price of the stores at $2,750, and
Wooten then asked Walters when he wanted
to take an inventory of the goods. (6) The
contract was not reduced to writing, nor any
note or memorandum thereof. (7) An inven-
tory of goods was taken, and they amounted
to $9,514.38. This amount, reduced six and
one-fourth per cent., would be the first cost
of the goods, which is $8,919.73, (first cost)
This, reduced by 20 per cent, would leave
$7,135.79, the price Walters was to pay Woot-
en for the goods. (S) After th ejnventory was
completed, Wooten delivered^he_ stores and
^oods~lnto'jEie_ possession of Waltejrs. (9)
WooEeiT took possession of the oil-mill prop-
erty, completed the erection of machinery,
etc., and operated the mill about two weeks,
and then stopped running the mill, and about
a week after informed Walters he should not
carry out and complete the contract, and of-
fered to return to him the miU property, and
demanded of Walters the return of the stores
and goods. (10) Walters has always been
willing and able to perform his part of the
contract and several timr ^ crfrLgq gnm f|io
contract i^^ not se v erable. The seller is bound
to deliver the whole of the things sold, and
the buyer to pay the whole price, in the ab-
sence of fraud. Hence it has been held that,
where a cow and 400 pounds of hay were
sold for $17, the contract was entire. Mr.
Ju.stice Story says that "the principle upon
which this rule is founded seems to be that,
as the contract is founded upon a con.sidera-
tion dependent upon the entire performance
thereof, If for any cause it be not wholly i>er-
foimed, the casus foederis does not arise, and
the law will not make provision for exigencies
against which the parties have neglected to
fortify themselves." 1 Storj', ConL (5th Ed.)
§ 2G. Such contracts are enforceable nnly qh
I L whole . On the other hand, a severable
contract is one in its nature and purpose sus-
ceptible of division and apportionment, hav-
ing two or more parts, in respect to matters
and things contemplated and embraced by it,
not necessarily dependent upon each otJier,
nor is it intended by the parties that they shall
be. Hence an action may be maintained for
a broach of it in one respect, and not neces-
sarily in another, or for several breaches,
while in other material resfKiCts it remains in-
tact. In such a contract, the consideration is
not single and entire as to all its several pro-
visions as a whole until it is performed; it
is capable of division and apportionment.
Thus, though a number of things be bought
together without fixing an entire price for the
whole, but the price of each article is to b€
ascertained by a rate or measure as to thr
several articles, or when the things are of
different kinds, though a total price is named
but a certain price is aflixed to each thing,
the contract in such cases may be treated as
a separate contract for each article, althoug
they all be included in one iosfrument of couJ
veyance, or by one contract Thus where a
party purchased two parcels of real estate,
the one for a specified price and the other for
a fixed price, and took one conveyance of
botli, and he was afterwards ejected from
one of them by reason of defect of title, it
was held that he was entitled to recover there-
for from the vendor. Johnson v. Johnson, 3
Bos. & P. 1G2; Miner v. Bradley, 22 Pick. 45G.
So, also, it was held, where a certain farm
and dead stock and growing wheat were all
sold together, but a separate price was affix-
ed to each of these things, tluit the contract
was entire as to each item, and was severable
into three contracts, and hence a failure to
comply with the contract as to one item, did
not invalidate the sale, and give the vendor a
right to reject the whole contract. In such
case, the contract may be entire or several,
according to the circumstances of each partic-
ular case, and the criterion is to be found in
the question whether the whole quantity — all
of the things as a v^hole — is of the essence of
the contract If it appear that the purpose
was to tike the whole or none, then the con-
tract would be eaitire; otherwise it wonld be
severable. It is sometimes difficult to deter-
mine whether the contract is entire or sever-
able in such cases, and there is great di-
versity of decision on the subject, "but, on
the whole, the weight of opinion and the
more n^sonable rule would seem to be that
612
DISCHARGE OF CONTRACT.
where there is a pu rc basR of different a rtl-
. cleg, at different j>rl£es, _at the same tim e^the
"contract would be seve rable as to eacli arti-
ie taEinj
unle ss the talking of the whoie was ren-
^ed^ essential eittrer-by the nature of the
subject-matter or by the acT of the parties."
This rule maues the interpretatton of the con-
tract depend on the intention of the parties
as manifested by their acts and the circum-
stances of each particular case. Brewer v.
Tysor, 3 Jones, (N. C.) ISO; Niblett v. Her-
ring, 4 Jones, (N. C.) 262; Brewer v. Tysor, 5
Jones, (N. C.) 173; Dula v. Cowles, 7 Jones,
(N. C.) 290; Jarrett v. Self, 90 N. a 478;
Chamblee v. Baker. 95 N. C. 9S; La wing v.
Rintels, 97 N. C. 350, 2 S. B. 252; Pioneer
Manuf'g Co. v. Phoenix Assur. Co., 14 S. E.
731 (decided at the present term); Story, Cont.
(5th Ed.) §§ 21-25; 3 Pars. Cont 187; Whart
Cont. §§ 338, 511, 748.
Applying the rules of law thus stated to the
case before us, \££_a,re-_of -opinion that__the
contract to be interpreted,_treated as^ execu-
tory, .is severable, and the sale of the goods
therein mentioned was not necessarily an in-
separable part of the sale of the land em-
braced by this contract. Although it is sm-
gle, it embraces the sale of two distinct
things, each having a certain price affixed to
it, and the price paid for the whole being
susceptible of apportionment Neither by the
terms of the contract settled by the findings
of fact nor by its nature and purpose, does
it appear that the store-house lot of land and
stock of goods, distinct things, were both
necessary parts of an entire contract These
things were not necessary parts of each oth-
er; they were entirely capable of being sold
sepan;tely. Nor does it appear that they
were sold as a single whole. On the con-
trary, they were spokMi of and treated as dLf-_
ferent subjects of sale, a specified price was
affixed to the land, and a distinct, defiuite
price affixed to the goods. Wherefore this
distinction? "Why was the price fixed as the
separate and distinct subject of sale? As we
have seen, the two things were not necessary
to each other, and nothing was said or done
by the parties, nor does anything appear to
show that the parties would not have made
the contract unless it embraced both the sale
of the land and the stock of goods. The sale
of the stock of goods was not part or parcel
of the sale of the land, nor dependent upon
it although the sale of both was made at
the same time, and embraced by the same con-
ti-act severable in its nature and purpose.
Thej' were treated as distinct subjects of sale,
the price of each being definitely fixed. The
mere fact that the plaintiff was about to
change the character of his business did not
imply that the store-houses and the land on
which they were situate must be sold with
the goods, else the goods would not be sold.
Such things are valuable to let for rent
There is the absence of anything that shows
a purpose to sell the two things as an insep-
arable whole. When, therefore, the plaintiff
avoided the contract, not reduced to writing
as to the land, as he might do under the
statute pertinent he did not avoid the con-
tract as to the stock of goods. The contract
was severable, and, as to the goods, was
valid and remained^of force and continued to
have effect It seems that reaUy: _the con-
tract wvcs executed as to the goods, and the
sale might on that ground, be upheld with-
out reference- ta_±he ineffectual sale of the
land; hut no jjueslion in that aspect-- of the
case was raised. Judgment affirmed-
BREACH— CONDITIONS PRECEDENT.
^3^
-0^^^^,
613
BAST V. BYRNE.
(8 N. W. 494, 51 Wis. 531.)
Supreme Court of Wisconsin. March 24, 1881.
Appeal from circuit court, Green coimty.
January 19, 1870, the defendant, Byrne,
agreed In writing to pay the plaintiff, Bast,
$300 fo r one year's work in his store, and
to let liTm Tiave" all the goods ho needed for
himself airP6st,~wTth 10 per cent, added, dur-
ing the tlme^and reserving to himself the
privilege of dismissing Bast at the end of
six months if ho should no longer need his
services; and Best agreed therein and there-
for to work strenuously in the store for
Byrne's interest. The complaint alleged the
substance of the agreement, and performance
by the plaintiff, and admitted payment of
$14S..o4 in goods. .1553.29 in cash, etc., and loss
of time amounting to $9, and claimed a bal-
ance of ?l-i9.29. The defendant offered and
tendered judgment for $120, with costs of
action, which the plaintiff refused to accept.
The answer alleged payment, and that the
plaintiff had forfeited his wages by leaving
his employ many times without leave, and
by altogether absenting himself from the de-
fendant before he had completed the work-
ing of his year. On the trial in the circuit
court the defendant objected to any evidence
under the complaint, on the ground that it
appeared from the complaint that the plaintiff
agreed to work a year, but had failed to work
out his time; which objection was overruled
by the court and the defendant excepted.
The undisputed evidence shows that the plain-
tiff began work under the contract January
26, 1878, and quit on the evening of Jan-
uary 25, 1879; that the plaintiff had l ost at__
different times in^ the_aggi:e:gate_iune^aad— a.
half days. _At the close of the plaintiff's tes-
Hmony the defendant moved for a nonsuit,
which was overruled, and the defendant ex-
cepted. There was evidence tending to show
that there was an attempt and failure to set-
tle on the evening that he quit and some dis-
pute about the amount he had received, and
whether his time was out, or would not be
out, until the following day. At the close
of the testimony and the ai'gTiments of coun-
sel, the court charged the jury. Thereupon
the jury retired and returned a verdict for
the plaintiff of $147.32, which the defendant
moved to set aside and for a new trial, which
motion was overruled by the court, and the
coimsel for the defendant excepted. No ex-
ception was taken to any portion of the
charge, and no instructions were refused or
requested.
A. A. Douglass, B. Dunwiddie, and S. U.
Pinney, for appellant. P, J. Clawson, for re-
spondent.
CASSODAY, J. There Is no dispute but
what it was a year from the time the plain-
tiff began the work until he quit. Had he
lost no time he would have fully complied
th his contract. It is urged, however, that
never the plaintiff, from his own fault
or necessity, lost any time, it Ix'came optional
with the defendant to allow him to resume
work or not, and that when he did "choose
to allow him to resume work" then the plain-
tiff became bound to make up the days so
lost by working after what would have other-
wise been the end of the year. In other
words, it Is claimed that the clau.se, "agrees
to pay * • • th e sum of _S3C0 forgone
Xcax.! ! does no t refer tcji. delinile. period of
time, but fl d^'fi^'te nnmher nf days of S£iy-
ice> a nd that until the number of days of
service we re in fact rendered, either during
the year or subsequently, no recovery -c^uild
b e bad upon the co ntract In support of this
theory we are referred to Winn v. Southgate,
17 Vt 3.55, and Lamburn v. Cruden, 2 Man.
& G. 253. In Winn v. Southgate the con-
tract was that the plaintiff should labor six
months for the defendant. He commenced
work May 17th, and during the term, with
the consent of the defendant was absent on
a journey 16 days, but returned October 5th,
and continued to work untU October 30th,
when he quit, being 17 days before the end
of the six months, and then insisted that his
time was out, claiming that 24 working days
was a month, and thereupon sued for the
balance of his wages, and the court held that
he could not recover. It is evident from this
statement that the question here involved did
not there arise. In Lamburn v. Cruden the
plaintiff had been engaged by the defendant
at a yearly salary, payable quarterly. The
last year of service expired S^tember 29,
1837, and his salary up to that time had been
duly paid. Before the expiration of the year
a misunderstanding had arisen. October 20th
the plaintiff tendered his resignation, which
was accepted December 13th. In the mean-
time he had performed no service, except
upon one occasion, and tlien against the as-
sent of the defendant. The action was for
services between September 29th and De-
cember 13th, but the plaintiff was nonsuited,
and the rule for a new trial was made abso-
lute, on the ground, that the court should
have submitted to the jury the question as
to whether there was a new agreement.
The question there involved seems to have
lx>en foreign to the question here presented.
There the subsequent services were claimed
under a new agreement; here subsequent
services were demanded by virtue of the old
agreement Of course it was competent for
the parties In this case to have made a new
agreement whereby the plaintiff should work
a certain number of days in lieu of the nme
and one-half days which he had lost but
there Is no claim that any such new agree-
ment was ever made, and the question is,
can the court expand an agreement which by
its terms was limited to "one year," so as
to require a party under it to render services
after the expiration of the year, in lieu of
certain days of service which he failed to
614
DISCHARGE OF CONTRACT.
perform during the year? No case has been
cited going to tliat extent, and we have no
disposition to furnish one. A party contract-
ing to labor for a limited period cannot be
required, after the expiration of the period,
to render additional services under such con-
tract, without any new agreement, merely be-
cause he had lost certain days during the
term. The court charged the jury on the
theory that it was competent for the defend-
ant, during the contract, to waive a strict
performauco of any particular day's work,
and that when the plaintiff from time to time
lost a day, and the defendant, with knowl-
edge of the fact, received him back into his
employ, it was such waiver; at least to the
extent of preventing the defendant from en-
forcing a forfeiture of payment for the serv-
ices actually performed. It is true the charge
in this respect is not very full or explicit,
but if the defendant desired to have it more
definite he should have so requested. We are
convinced that the theory upon which the
cause was submitted to the jury was correct.
Such acts of the defendant, without objec-
tion, we regard as a prima facie waiver of
the breach. They presume condonation. The
loss of a half day, a day, or two days, at in-
tervals, and long prior to the termination of
the contract, without objection on the part of
the defendant, should not, upon principle,
operate so harshly as to work a forfeiture
of payment for services subsequently ren-
dered in good faith, and with no notice that
such forfeiture would be insisted upon.
There may be adjudged cases going to that
extent, but we should be very slow to follow
them. In Ridgway v. Hungerford, 3 Adol.
& E. 171, Lord Denman, C. J., declared that
nrhere the servant was guilty of misconduct
in .Tune, and the master, knowing it, retained
him until November, "a condonation might
be presumed." This was dicta, to be sure,
but we think it was good law. In Prentiss
V. Ledyard, 2S Wis. 131, although the con-
tract was for no definite time, yet it was held
that, "where the employe was to receive pay-
ment at a specified rate, if he continued tem-
perate and faithful in the employer's service,
the fact that he was occasionally intemperate
and discontinued the service for short peri-
ods would not prevent bus recovering the
stipulated rate for the time actually spent in
such service, if he was received back into it,
and continued therein, without any new ar-
rangement being made, or any intimation
given that the old one was terminated." We
see no difference in principle between the
waiver of the conditions of a contract In re-
spect to personal habits, and In respect to
interruptions of service, or any other stipula-
tion. The question of waiver of the breach,
by the retention of the employs for 11 or 12
days after the master's knowledge of the ex-
istence of the causes, was held properly sub-
mitted to the jury m McGrath v. Bell, 33 N.
Y. Sui>er. Ct. 195. It is certainly equitable,
and, we think, according to well-established
principles of law, to hold that where an em- /
ploye, for a fixed period and without any
fault of his employer, absents himself for a
short time, and then the employer, with
knowledge of the fact, receives him back into
his service without objection, and retains him
until the termination of the contract, he there-
by waives the right to declare the contract
forfeited as to the services actually renderedJ
^his is not going as far as the opinion of tne
court in Britton v. Turner, 6 N. H. 4S1. It
is true, that case has frequently been dis-
approved, but it is also true that it has been
frequently approved. Elliot v. Heath, 14 N.
BL 131; La ton v. King, 19 N. H. 280; Davis
V. Baxrington, 30 N. H. 517; Pixler v. Nich-
ols, 8 Iowa, 106; Byerlee v. Mendel, 39 Iowa,
382, and cases there cited, in which last case
it was held that "where a party hires himself
to another for a fixed period of time, and
leaves the service before the expiration of
the term, without any fault on the part of
the employer, the former may recover the
value of his services performed as upon a
quantum meruit, without showing that he
left the service of his employer for good
cause." Britton v. Turner, was also followed
In Fenton v. Clark, 11 Vt. 5G0; Oilman v.
Hall, Id. 510; Blood v. Enos, 12 Vt. 625.
There are strong equitable reasons to sus-
tain the doctrine of. the above cases, but they
would seem to be in conflict with the weight
of authority, and we therefore cite them
merely because they furnish strong reasons
in favor of the conclusions which we have
reached in this case.
There is still another reason why this
judgment should be sustained. Prior to the
first trial there was a dispute as to the amount
due, and the defendant offered and tendered
judgment for the amount which he consid-
ered due, with costs of action. Such offer
and tender were competent evidence, and au-
thorized a verdict of waiver of all forfeiture
under the contract. Cahill v. Patterson, 30
Vt. 592; Seaver v. Morse, 20 VL 620; Pat-
note V. Sanders, 41 Vt GO; Boyle v. Parker,
46 Vt 343. A party who proposes to insist
upon a technical forfeiture should act prompt-
ly, and consistently with the right claimed.
The judgment of the circtiit court is af-
firmed-
BY OPEKATION OF LAW— IMPOSSIIilLITY.
615
SUrERINTENDENT & TRUSTEES OF
PUI5LIC SCHOOLS OF CITY OF
TRENTON T. BENNETT et aL
^:^/ (27 N. J. Law, 513.) ^V3
Supreme Court of New Jersey. June Term,
1859.
Argued at Feb. term, 1859, before GREEN,
C. J., and OGDEN, VREDENBURGII, and
WHELPLEY, JJ.
E. W. Scudder and Mr. Butcher, for plaln-
tlCfs. Mr. Gummere and W. L. Dayton, for
defendants.
WHELPLEY, J. This case presents the
naked question whether, where a builder has
agreed, by a contract under seal, with the
owner of a lot of land, " to build, erect, and
completea building upon th e lot for a certai n
entire price, but payable in arbitrary in-
stallments, fixed without regard to the value
of the work done, and the house before its
cuinplotiou falls do'wn, solely by reason of
^latent defect in the soil, and -not on ac -
count of faulty construction, the loss falls
upon the builder or the owner of the land."
The case comes before the court, upon a
certifiealj from the Mercer circuit, for the
advisory opinion of this court.
The covenant of Evernham and Hill was
to build, erect, and complete the school-house
upon the lot in question for the sum of
$2G10; the whole price was to be paid for
the whole building; the division of that sum
i nto install me nts, payable at certain staged
of the work, "was not intended to sever (he
entirety of the contract, and make the pay-
ment of the installments payments for such
parts of the work as might be done when
they were paj-able: this division was made,
not to apportion the price to the different
part:j of the work, but to suit the wants of
the contractor, and aid him in the comple-
tion of the work; the consideration of the
covenant to complete the building was the
whole price, and not the mere balance that
might remain after the payment of the in-
stallments: it cannot be pretended that the
contractor, after payment of a part of the
installments, might refuse to go on and
complete the building, and yet retain that
part of the price he had received. Haslack
V. Mayers, 2G N. J. Law, 284.
No r ule of law is more firmly establisned
by a~r iui^ - ir!il ' ti o f doc t stoutf thiin thife. tha t
where a pa rty, by his ow n contract, croatos
a'TTuiy or cnarge upon hims^ir . L'J is uuiinij "^
to make it good if he may, notwithstanding
any accident by inevitable necessity, because
he jnl ght have p rovid ed against it by his
^H^tractl iherefore. ir a lessee c ovenant' to
repair a hous^ thoug"h It bo burno
/when, having discontinued the office in Ne\Y
York, and removed what goods were there
I to Providence, where Keach had anothen
(place of sale, they declined longer to emJ
ploy the plaintiff, or to pay him his salary,
though from that time to the date of the
writ, he had been ready and willing to serve
In said business, and had tendered his serv-
ices in it to them, and had been unable to
procure other employment; that the defend-
antSj_as administrators of Ke a ch, wouutt~ap
his hn pjfi ess b y selling the goods removed
from New Yor k , with other p^oods of his, a t.
Providence, and had been allowed by the'
icourt of probate, for their services as admin-y
istrators, the sum of three thousand dollars.'
Upon this state of facts, the chief justice
instructed the jury, that the death of Keach
terminated this contract of service, and that
no recovery of damages could be had of the
defendants, as his administrators, for their
refusal to employ the plaintiff under it after-
wards; whereupon, the jury having return-
ed a verdict for the defendants, the plaintiff,
having duly excepted thereto, now moved for
a new trial, on the ground of error in law in
said instruction.
Mr. Browne, for plaintiff. James Tilling-
hast, for defendants.
AMES, C J. It is, in general, true, that
death does not absolve a man from his con-
tracts; but that they must be performed by)
his personal representatives, or their non-per-'i
Lformance compensated, out of his estate J
An exception to this rule, equally well estab-
lished, at both the civil and common law, is,
that in contracts in _which performance de-
pends ' triTD n_tIl£_continued existence of a c er-
taTn~person or thing, a condition als^ j mplig d,
that"^the^jmg0S 5tbITrty o f performancearis-
ing from the perishin^of .tlie-persan_or^ing
shall excuseT^perfo^aance. The implica-
ti^^'arlSesTn spite of the unqualified char-
acter of the promissory words, because, from
the nature of the contract, it is apparent
that the parties contracted upon the basis
of the continued existence of the particular
person or chattel. The books afford many
illustrations of this reasonable mode of con-
struing contracts, de certo corpora, as the
civil law designation of them is, in further-
ance of the presumed and probable jntent of
the parties. The most obvious cases are,
the death of a party to a contract of mar-
riage before the time fixed by it for the mar-
riage; the death of an author or artist be-
fore the time contracted for the finishing and
delivery of the book, picture, statue, or other
work of art; the death of a certain slave
promised to be delivered, or of a horse prom-
ised to be redelivered, before the day set for
the delivery or redelivery; and the death of
a master or apprentice before the expiration
of the term of service limited in the inden-
ture. The bodily disability from superven-
ing illness, as of an artist, from blindness, ta
paint the picture contracted for, or of a
scholar to receive the instruction his father
had stipulated should be received and paid
for, has been held, for the like reason, ta
excuse each from the performance of his
contract Hall v. Wright, 1 El., BL & El. 746;
Stewart v. Loring) 5 Allen, 306. The cases
in support of these and other illustrations of
the exception to the general rule are set
down in the defendants' brief, and It is un-
necessary to repeat them. Both at the civil
and the common law, it is necessai r. that
the pa rty ^who^ ^ would "avail himseff'"'gf' tST s
ex^use^ f orjaon-perfouBance of the_ contrac t.
should be without faultjn the mattex -Jipon
which he relies as an excuse. The latest
and most instructive case, upon this subject,
so far as the discussion of the principle of
decision is concerned, is that of Taylor v.
Caldwell, decided by the queen's bench, in
May last, 8 Law T. Rep. 356. In that case
It was held, that the parties were discharged
from a contract to let a music hall for four
specified days for a series of concerts, by
the accidental destruction of the hall by fire
before the first day arrived. The full and
lucid exposition by Mr. Justice Blackburn,
who delivered the opinion of the court, of the
BY OPERATION OF LAW— IMrOS.-^IBILITY.
GVJ
prior cases uud of tliu principle upon whicli
they have been decided, leaves nothing fur-
ther to be desired upon this subject.
Does the case at bar fall witliiu tlie gen-
eral rule, or within the exception we have
been consider in;;'.' This must depend upon
the nature of the contract, whether one, re-
quiring the continuing existence of the em-
ployer, Keacti, for performance on his part,
or one which could, according to its spirit
and meaning, be performed by the defend-
ants, his administrators. The contract was,
to employ the plaintiff as clerk and agent of
the intestate, in his business, in New York
and PLiladelphia: and it seems to us un-
doubted, that th*^ ^!jiiiDtiniie<1 eyiRy pncp of
6oth pa rties to_the contract for the whole
gtipulat ej^er m, was the basis upon whic h
t h e_contractj)rocecd(i4» a-Q(~edent. thcTv
/ the contract, bound no longer to
plaintiff, any more than he to
'Che act of God had taken away the
master and principal,— tho law had revoked
his agency, and" stopped the business to
which alone his contract bound him,— and if
he would serve the administrators in wind-
ing up the estate, it must be imder a new
contract with them, and under renewed pow-
ers granted by them. Any other result than
that this contract of service was upon the
implied condition that the employer, as well
as the employed, was to continue to live
during the stipulated term of employment,
would involve us in the strange conclusiea,
that the administra tors might go on with the
business of their mtestale ; m which — the
plainti ff must continue w ith p6\\'{^ra uure-
vo ked by the death of his principa l, or, thsL^
Tie, with new powers from them, was boundJ
by the contract to serve them as new mas-j
Iters, and In a different service, and that they!
Iwere bound to grant him such powers, and!
employ him for the stipulated time in such'
service. The novelty of such a claim, and
the contradiction of well-settled principles
necessary to mlintain it, justify the ruling
of the judge who tried the cause; and this
motion must be dismissed with co>ts, and
judgment entered upon the verdict.
620
DISCHARGE OF CONTRACT.
^>
TAX VLEIT et al. v. JONES et aL
(20 N. J. Law. 340.)
^'
Supreme Court of New Jersey.
1845.
Feb. Term,
This was a certiorari to tlie common pleas
of Hudson county to remove certain pro-
ceedings, had in that court, uijder the "Act
to secure to creditors an equal and just
division of the estates of debtors, who con-
vey to assignees for the benefit of credit-
ors."
The facts of the case appear in the opin-
ion of the court delivered by
RANDOLPH, J. The papers come before
us in rather an irregular form;— there being
two statements of the case sent up by dif-
ferent branches of the court below; and un-
der a rule to take proof as to what were the
facts in evidence before the court of com-
mon pleas, there have been two sets of
affidavits taken; and each of these state-
ments and affidavits differs from the other.
Such a course of proceedings may have
grown out of the situation of the court and
the parties and the circumstances of the
case; but it certainly Is not to be com-
mended for a precedent, nor yet can this
court reject the proceedings, if there shall
appear to be sufficient on which to found
iheir judgment The case according to the
papers, is this. Some time prior to Decem-
ber, 1841, S amuel Bridgart of Hudson
county, madeajQ_a5SismrLent-^OE— the—benfir
fit of his creditors, amo ngst whom w ere
the plaintitTS Ih cer tiorari. Van Vliet Thd
"Wlkog, who filed their account pursuant
t o law, amounting to $2103; to which
Jones and the other defendants in certio-
rari, who were also applying creditors of
Bridgart, filed their exceptions; and this
claim and the exceptions' thereto coming
before the court of common pleas for trial,
neither party demanding a jury, the court
disaUowed the account o n the ground that
Van Vllet and Wikoff had taken . a bond an d
mortgage of Bridgart for the same accoun t.
ATthough there is much discrepancy as to
what was proved before the court, fortu-
nately as to this bond and mortgage, both
the statements and affidavits substantially
agree; and from these sources it appears
to have been proved before the court be-
low, that Bridgart had an account with the
plaintiffs for goods bought of them, and that
as a collnteral s emritv both as to that ac-
count and also a further running account
all of which is embraced In the present
claim, the bond and mortgage were given, —
a small note was also included in the ac-
count and covered by the security. The
mortgage was on a house and lot in Jersey
City, being the third in priority, and a bill
to foreclose was filed by one of the prior
mortgagees and the plaintiffs made parties,
who also became the purchasers of the prop-
erty, on its being sold under a decree, for
fifteen dollars less than the amount of the
prior incumbrances. There can be no douM,
as a general rule, that the taking o f" aT bond
"giid murlgage OT~ol:her security of a hig her
nature ext inguishes a de bt arising from mere
matter of account , yet~ this^will depend on
the intention of the parties. If the higher
security was given as the future evidence
of the debt, to which the party was to look
for payment, then the less security would
merge in the greater; but, if t he higher se-
ional or "col-
c nrity -wna tn pe merely ^
lateral to the less, showin g that the int_en-
tl on of _jt £e^ parties was to ]ieep_the latter
open ^o be looked p]p" hnn gi,«rn)>)| th'^ y^c^\(^ gnri witlmni- hid
I knowledqe or consent. These circumstances
■nere unknown to Wood and to Allis. Steele
was the surety of Newson. It does not /ap-
pear that there was any controversy about
the facts. The argument being closed, the
court instructed the jury, " ^hat if the sai d
alteration wa s made after the note was sign -
e d by the detenaant, Steele, and by him de -
livered to the other maker, Newson, Steel e
was discharged from all liability on said
note." The plaintiff excepted. The jury
T O uu TT^for the defendant, and the plaintiff
prosecuted this writ of error to reverse the
judgment Instructions were asked -by the
plaintiff's counsel, which were refused by the
court One was given with a modification.
Exceptions were duly taken, but it is deemed
unnecessary particularly to advert to them.
The views of the court as expressed to the
jury, covered the entire ground of the contro-
versy between the parties.
The state of the case, as presented, relieves
us from the necessity of considering the ques-
tions,— upon whom rested the burden of proof,
the nature of the presumption arising from
the alteration apparent on the face of the pa-
per, and whether the insertion of a day in a
blank left after the month, exonerates the
maker who has not assented to it
Was the instruction given correct?
It was a rule of the common law as far back
as the reign of Edward III, that a rasure in a
deed avoids it. The effect of alterations in
deeds was considered in Pigot's Case, 11
Coke, 27, and most of the authorities upon the
subject down to that time were referred to. In
Master v. Miller, 4 Term R. 320, 1 Smith,
Lead. Cas. 1141, the subject was elaborately
examined with reference to commercial pa-
per. It was held that the established rules
apply to that class of securities as well as to
deeds. It is now settled, in both English
and American jurisprudence, that a material
alteration in any commercial paper, without
the consent of the party sought to be charged,
extinguishes his liability. The materiality of
the alteration is to be decided by the court.
The question of fact is for the jury. The
alteration of the date, whether it hasten or
delay the time of payment, has been uniform-
ly held to be material. The fact in this case
that the alteration was made before the note
passed from the hands of Newson, cannot af-
fect the result He had no authority to
change the date.
The grounds of the discharge in such cases
are obvious. The agreement is no longer the
one into which the defendant entered. Its
identity Is changed: another is substituted
without his consent; and by a party who had
no authority to consent for him. There is no
longer the necessary concurrence of minds.
If the instrument be under seal, he may well
plead that it is not his deed; and if it be not
under seal, that he did not so promise. In
either case, the issue must necessarily be
found for him. To prevent and punish such
tampering, the law does not permit the plain-
tiff to fall back upon the contract as it was
originally. In pursuance of a stern but wise
policy, it annuls the instrument, as to the
party sought to be wronged.
The lailes, that where one of two innocent
persons must suffer, he who has put it in the
power of another to do the wrong, must bear
the loss, and that the holder of commercial
paper taken in good faith and in the ordinary
course of business, is unaffected by any latent
infirmities of the security, have no application
this class of cases. The defendant couldi
o more have prevented the alteration tharu
he could have prevented a complete fabrica
tion; and he had as little reason to anticipat(
one as the other. The law regards the secur
ity, after it is altered, as an entire forgery
with respect to the parties who have not con
sented, and so far as they are concerned,
deals with it accordingly.
The instruction was correct and the judg-
ment is affirmed.
mc
INDEX.
ACCEPTANCE.
See "Offer and Acceptance."
Of goods sold within statute of frauds, see
"Statute of Frauds," § 8.
ACCOMMODATION.
Liability of wife's separate estate, see "Mar-
ried Women."
ACKNOWLEDGMENT.
Of contract made during infancy, se»» "In-
fants," § 3.
ADEQUACY.
Of consideration, see "Consideration," § 2.
AFFECTION.
See "Consideration," § 6,
AGE.
Presumption as to undue influence, see "Undue
Influence."
AGENCY.
Of husband for wife, see "Married Women."
ALTERATION.
See "Reformation."
Alteration of the date of a note without the
consent of the party sought to be charged ex-
tinguishes his liability. — Wood v. Steele, 622.
The fact that an alteration in a note is made
by one of the parties signing it before it passed
from his hands does not alter its effect of re-
leasing one who had signed previously. — Wood
V. Steele, 622.
APPRENTICES.
Code Md. art. 6, § 20, provides a method by
which a father may bind his son as appren-
tice until he reaches the age of 21. A mother
entered into a written agreement with defend-
ants to bind her son, then '20 years of age,, as
apprentice for 5 years. Ilclil, that the contract
was void.— Baker v. Lauterback, 218.
ASSIGNMENTS.
See "Assignments for Beneflt of Creditors."
Of mortgage, see "Mortgages."
Right of assignee to disallirm contract made by
infant, see "Infants," § 6.
One who acquires title to real estate from
the owners thereof after a contract of sale bv
the latter to others cannot maintain an action
on the contract. — McGovern v. Hern, 183.
A contract in restraint of trade, running to a
corporation, "its successors and assigns," is
assignable to and enforceable by a corporation
who succeeds to the business and property of
such obligee. — Diamond Match Co. v. Roeber,
461.
Manufacturers of a certain machine made a
contract for the sale of a number of them, to
be paid for by the notes of the purchasers. It
was provided by the contract that the purchas-
ers were to sell such machines within a given
territory, receiving in payment either cash,
which was to be applied in payment of their
notes, or notes, which were to be delivered to
the manufacturers as collateral security. Held,
that the purchasers cannot assign the contract,
so as to compel the manufacturers to take the
notes of other persons, in lieu of the purchas-
ers', in payment of the machines, as Code
Iowa, g§ 2082-2087, declaring all contracts as-
signable, only authorize the transfer of the as-
signor's rights in possession or in action under
such contracts, but not of his obligations there-
under. — Rapplye v. Racine Seeder Co., 534.
A written promise to pay bearer a sum of
money provided a certain ship arriyus at a
European port of discharge free from capture
and condemnation by the British is not assign-
able.— Coolidge V. Ruggles, 538.
A court of equity will not entertain a bill
by the assignee of a strictly legal right, merely
because he cannot bring an action at law in
his own nanic. ^^•hero he has a complete legal
remedy. — Walker v. Brooks, 539.
Defendant contracted to deliver 10,000 tons
of lead ore from its mines to the firm of B. &
E., at their smelting works, the ore to be de-
livered at the rate of 50 tons per day, and to
become the property of B. ^S: E. as soon as
delivered. The price was not fixed, but as
often as 100 tons had been delivered the ore
was to be assayed by the parties, or, if they
could not agree, by an umpire; and after that
had been done, and according to the result of
the assay, and the proportions of lead, silver,
silica, and iron thereby proved to be in the
ore, the price was to be ascertained and paid.
During the time that must elapse between the
delivery of the ore and the ascertainment of
the price, defendant had no security for its
paviiu'iit. (>xrcpt in the character and solvency
of B. & E. Held, that the contract was per-
sonal in its nature, and that plaintiff, claim-
ing as assignee, could not compel defendant^ to
continue delivering the ore. — Arkansas Val.
Smelting Co. v. Belden Min. Co., 542.
After a part of the ore had been delivered,
the firm of B. & E. dissolved, and the contract
was assigned to B., to whom thereafter de-
fendant continued to deliver ore under the con-
tract. Held, that this fact did not put defend-
ant under any obligation to deliver ore to plain-
tiff, an entire" stranger to the contract, to whom
B. had assigned it without defendant's con-
sent.— Arkansas Val. Smelting Co. v. Belden
Min. Co., 542.
Hopk.Sel.Cas.Cont.
An attaching creditor without notice of the
assignment acquires a lien on the debt as valid
(623)
G24
INDEX.
as the title of a purchaser.— Vanbuskirk T.
Hartford Fire Ins. Co., 545.
Where one assigned a claim against an in-
surance company, and before notice to the
company a creditor of the assignor attached it,
such as'sicnment would not defeat the attach-
ment.— Vanbuskirk V. Hartford Fire Ins. Co.,
545.
To perfect an assignment of a chose in ac-
tion, notice of such assignment must be CTven
to the debtor within a reasonable time.— Van-
buskirk V. Hartford Fire Ins. Co., 545.
ASSIGNMENTS FOR BENEFIT OF
CREDITORS.
A creditor who, by a secret agreement not
to assert his claim, induced an assignee for
the benefit of creditors and other creditors to
release the debtor, cannot maintain an action
against the assignee for the dividend on his
debt.— Frost v. Gage, 509.
Where the purchasers under a contract to
buy certain machines to be sold, and the pro-
ceeds paid to the vendors on account, become
insolvent, and make an assignment for the ben-
efit of creditors, the manufacturers may re-
fuse to complete the contract.— Rapplye v.
Racine Seeder Co., 534.
Where a party to an executory contract be-
comes insolvent before performance, it is the
duty of the assignees within a reasonable time
to elect whether or not to proceed under the
contract, and notify the other party thereto ac-
cordingly.— Hobbs V. Columbia Falls Brick
Co., 506.
Where the assignees held the assigned prop-
erty for more than three months, and took no
action with reference to an executory contract
made between the assignors and defendant, but
gave defendant to understand they were not
^oing to claim under it, a reconveyance of the
assigned property to the assignors gave them
no right of action on the contract. — Hobbs v.
Columbia Falls Brick Co., 566.
ATTACHMENT.
Validity as against assignment, see "Assign-
ments."
ATTORNEY AND CLIENT.
See "Breach of Trust"; "Champerty and Main-
tenance."
Contracts against public policy, see "Injury to
Public Service."
AUCTIONS.
Withdrawal of bid, see "Offer and Acceptance,"
§ 10.
BANKS AND BANKING.
A deposit of money to remain in a bank for
a certain time being illegal and void under
Rev. St. c. 36, § 57, no action can be main-
tained by the depositor on such contract. —
White V. Franklin Bank, 520.
The parties to an illegal deposit in a bank
not being in pari delicto, the depositor may
maintain an action for the money. — White v.
Franklin Bank, 520.
BASTARDY.
A joint plea of the infancy of one defendant
in an action on a joint and several bastardy
bond is bad iu substance, as in proceedings un-
der the bastardy act the infancy of the re-
puted father is no defense, when he is legally
chargeable in exoneration of the public. — Town-
ship of Bordertown v. Wallace, 281.
BILLS AND NOTES.
See "Alteration"; "Corporations."
As payment, see "Payment."
By wife, see "Married Women."
Effect of duress, see "Duress," §§ 3, 4.
Rights of holder of unauthorized notes of cor-
poration, see "Corporations."
BONA FIDE PURCHASERS.
From fraudulent vendee, see "Fraud," § 6.
Of mortgage, see "Mortgages."
BONDS.
In bastardy proceedings, see "Bastardy."
A bond of a public officer voluntarily given
to the United States, although not prescribed
or required by law, is binding on the parties
to it.— United States v. Tingey, 276.
Where it is charged that a voluntary bond
has been given, irregularities in proceedings
under the statute are irrelevant in an action on
the bond. — Township of Bordentown v. Wal-
lace, 281.
BREACH OF MARRIAGE PROMISE.
Defendant, who was a suitor of plaintiff, an
unmarried woman, solicited her to have sexual
intercourse with him, and on her refusal agreed
that if she should yield to his wishes, aud there-
by become pregnant, he would at once mari-y
her, to which she assented, and did have sexual
intercourse with defendant, from which preg-
nancy resulted, and from which a child was
born to plaintiff. Ueld, that an action for the
breach of the contract to marry would not lie,
the contract being based on an immoral con-
sideration.— Saxon V. Wood, 444.
BREACH OF TRUST.
A contract by which an attorney takes a
claim against an intestate for collection, and
to that end agrees to administer the estate,
is void.— Spinks v. Davis, 452.
BROKER.
Sufficiency of memorandum by broker, see
"Statute of Frauds," § 9.
CAPACITY.
Of parties, see "Corporations"; "Drunkards";
"Infants"; "Insane Persons"; "Married Wo-
men": "United States."
CARRIERS.
A common carrier cannot stipulate for ex-
emption from responsibility for the negligence
of himself or servants.— Railroad Co. v. Lock-
wood, 480.
INDEX.
625
CHAMPERTY AND MAINTENANCE.
A contract by which an attorney agrees to
institute and prosecute suits at his own ex-
Ijensc, and receive as Lis only compensation a
portion of the projierty I'ecovered, is void. —
Thompson v. Keynolds, 440.
Defendant was a devisee, under a will, of
certain real estate, and the validity of the wijl
was threatened in proceedings instituted in the
surrogate's court. He sought and retained
plaintiff as attorney, and gave him a deed of
the undivided half part of the property, taking
back his covenant to conduct the defense, pay-
ing all costs and expenses, and indemnifying
defendant against liability. Uclu, that this did
not constitute champerty, and the statute did
not condemn such an agreement. — Fowler v.
Callan, 442.
The New York Code contemplates a case in
which the action might never have been
brought but for the inducement of a loan or
advance ottered by the attorney, and by which
the latter, by oUicious interference, procures
the suit to be brought, and obtains a retainer
in it.— Fowler v. Callan, 442.
The old rules regarding champerty are abro-
gated except as preserved by the statutes. The
attorney may agree upon his compensation, and
it may be contingent upon his success, payable
out of the proceeds of the litigation. — Fowler
V. Callan, 442.
A champertous and illegal contract between
plaintiff and his attorney can only be set up
by the client against the attorney when the
champertous agreement itself is sought to be
enforced. — Courtright v. Burns, 443.
CHARTER.
Limitation of corporate authority, see "Cor-
porations."
COLLATERAL AGREEMENT.
See "Statute of Frauds," §§ 3, 4
COMBINATIONS.
See "Monopolies."
COMPROMISE.
See "Consideration," § 4.
CONCEALMENT.
Amounting to fraud, see "Fraud," § 3.
CONDITIONS.
Concurrent, see "Performance or Breach." § 4.
Conditional acceptance, see "Offer and Accept-
ance," § 9.
Precedent, see "Performance or Breach," § 2.
Subsequent, see "Performance or Breach," § 3.
CONSIDERATION.
See "Pleading"; "Subscriptions."
Expression of consideration in written con-
tracts, see "Statute of Frauds."
Sealed agreements, see "Contracts under Seal,"
§ 1.
Hopk.Sel.Cas.Cont.— 40
§ 1. Necessity.
An administratrix, who promises to pay a
debt of her intestate, cann>t bf held liable in
her personal capacity, where made witiiout con-
sideration, although in writing. — Kann v.
Hughes, 224.
§ 2. Adequacy.
An agreement by A. to perform a contract
and rent B.'s store 10 days before the contract
required is sulhcient consideration for a prom-
ise by B. not to engage in the grocery lousi-
ness for five years in a certain town. — Doyle v.
Dixon, 350.
Refraining from the use of liquor and to-
bacco for a certain time at the request of an-
other is a suUicient consideration for a prom-
ise by the latter to pay a sum of money. —
Hamer v. Sidway, 220.
Giving up a guaranty for advances on be-
half of one party is sulhcient consideration for
a promise by the guarantor to pay acceptances
of the first party.— Haigh v. Brooks, 220.
Where one had received something which at
the time he considered valuable, in considera-
tion of a promise, he cannot excuse a breach of
the promise because the thing was not of the
value he supposed.— Haigh v. Brooks, 22G.
An agreement made by a father, in considera-
tion of the surrender to him of his son's note,
to pay the amount of the note, is founded on
a valid consideration, though the son at the
time of such agreement may have been dead,
and the note may, to the knowledge of both
parties, have been uncollectible because of the
insolvency of his estate.— Judy v. Louderman,
227.
The law will not enter into an inquiry as to
the adequacy of the consideration for a prom-
ise, but will leave the parties to be the sole
judges of the benefits to be derived therefrom,
unless the inadequacy of consideration is so
gross as of itself to prove fraud or imposition.
— Judy V. Louderman, 227.
A consideration of one cent will not support
a promise to pay $000.- Schnell v. Nell, 230.
A promise by a husband to legatees to pay
legacies given by his wife, she having no prop-
erty to pay them with, is not binding on him.
— Schnell v. Nell, 230.
§ 3. Mutual promises.
Plaintiff's promise to account to defendant
for one-half of the profits is supported by de-
fendant's obligation to share one-half of the
losses. — Coleman v. Eyre, 232.
A promise to refund in case of a deficiency
is coosideratimi for a promise to pay for an
excess over what is called for in a deed. — Sew-
ard V. Mitchell, 233.
Where the agreement of plaintiff and defend-
ant to abide by an award are not concurrent,
the promise of defendant is not binding on him.
— Keep V. Goodrich, 236.
An agreement by an indorser to pay a note
not yet matured is a valid consideration for
an agreement to pay for the money paid by
him upon it. — L'Amoreux v. Gould, 238.
A verbal agreement by plaintiffs to work in
defendant's mine, and to receive ^l.'iO per ton
for all the ore they produced, "as long as they
could make it pay," is not enforceable as an
executory contract, because of its uncertainty
and want of mutuality. — Davie v. Lumber-
man's Min. Co., 240.
§ 4. Forbearance.
An agreement by a creditor to forbear prose-
cuting his claim, and an actual forbearance, ia
626
INDEX.
good cousideration for a note by a third person i
to the creditor. — Robinson v. Gould, dJb.
Compromise of a claim is good consideration
for a promise, although litigation has not been
actually commenced.— Cook v. Wright, -4'-.
The abandonment by the sole heir at law
of a testator of opposition to the probate of the
will, at the request of the executor, is a sutb-
cient cousideration for the promise of the es-
ecutur to pav a named sum to a third person,
thousrh such payee had no interest in the es-
tate under the will, or otherwise.— Rector, etc.,
of St. Mark's Church v. Teed, 246.
Forbearance to sue on an honestly asserted
claim for damases arising out of a trade of
property is suliicient consideration for a prom-
ise to pay, whether such damages could haye
been recoVered or not.— McKinley v. Watkins,
248.
Forbearance of suit to enforce a disputed
claim or right, where the claim or right is
honestly asserted under a belief that it is sub-
stantial, although it is in fact wholly uufouud-
ed, is a good consideration for a promise to pay
money.— Rue v. Meirs, 249.
§ 5. Natural affection.
The love a husbaud bore his wife is no con-
sideration for a promise to legatees to pay
legacies left by the wife.— Schnell v. Nell, 2dU.
Natural love and affection is not a sufficient
consideration for a promissory note given by
father to son.— Fink v. Cox, 253.
§ 6. Moral obligation.
Services bv a wife in the acquisition of her
husband's property are no consideration for his
promise to legatees to pay legacies left by her.
-Schnell v. Nell, 230.
A promise by a father to repay strangers for
expenses incurred in caring for his son, who
was of full age, and not a member of his fam-
ily, cannot be enforced.— Mills v. Wyman, 2o4.
Where a creditor accepts his debtor's notes
secured by a chattel mortgage for part of the
debt due, in satistaction of the whole, the whole
debt is extinguished. — Jalfray v. Davis, 26G.
I § 9. Fast consideration.
I Transfer of an unenforceable bargain for the
purchase of land, not made at the request of
the maker, is not consideration for a note. —
iihle V. Judson, 269.
An oral contract by defendant's testator with
plaintiff to purchase land, and on its resale to
pay plaintiff the increase over the original pur-
chase price, iu consideration of which plaintiff
agreed to pay an old debt he owed testator, and
to pay the taxes, insurance, etc., on the land,
and keep it in good repair, though void under
the statute of frauds, its performance by plain-
tiff was sufficient to uphold a subsequent prom-
ise by testator, after a resale of the land, to
pay plaintiff the amount realized over the orig-
inal purchase price. — Pool v. Horner, 271.
If the consideration, even without request,
moves directly irom the plaintiff to the defend-
ant, and inures directly to the defendant's ben-
efit, the promise is binding though made upon a
past consideration. — Boothe v. Fitzpatrick, 272.
Plaintiff had guarantied repayment of ad-
vances made to defendant, and defendant, who
became a bankrupt, after the fiat was issued
promised to repay plaintiff" if he was compelled
to pay the advances. Ueld made on good con-
sideration.— Earle V. Oliver, 274.
CONSTRUCTION.
§ 7. Impossible promises.
A contract by which one bound himself that
certain land, belonging to another, should sell
for a certain amount or more on a certain day,
is void. — Stevens v. Coon, 256.
§ 8. Doing wliat one is bound to do.
Promise of a captain of a ship to divide the
wages of deserting members of the crew
among the remainder is void.— Stilk v. Mynck,
257.
Plaintiff agreed by an instrument under seal
to erect a building at a fixed price, which was
inadequate, and refused to proceed, but, on de-
fendant's parol promise to pay for the material
and work, finished the building. Held, that
he might recover on the promise.— Munroe v.
Perkins, 258.
Where one contracted to do work, and receive
in payment of an installment an assignment of
a mortgage, the completion of the work by him
is no consideration for a guaranty of the mort-
gage by the assignor.— Vanderbilt v. Schreyer,
260.
The receipt of a part of a debt in full satis-
faction being void, the fact that a similar agree-
ment was made with all the creditors, without
its appearing that they had been paid, or had
released their debts, or signed any composition
deed, does not alter the case.— Wheeler v.
Wheeler, 264.
The receiving of a part of a debt, then due,
in full satisfaction, is no legal defense to an ac-
tion to recover the balance.— Wheeler v. Wheel-
er, 264.
Effect of custom, see "Custom and Usage."
Parol evidence to vary or alter terms, >-'ee "Evi-
dence."
§ 1. General rules of construction.
In the construction of contracts the first rule
to be regarded is, to make them speak the in-
tention of the parties, as gathered from the
entire transaction. All other rules are subor-
dinate to this one, and when they contravene
it are to be disregarded.— Gray v. Clark, 556.
Nice grammatical construction is not always
to be regarded, especially when instruments are
inexpertly drawn.— Gray v. Clark, 556.
When a term or phrase is eqtiivocal in re-
gard to the subject to which it refers, resort
may be had to the circumstances under which
the contract was executed, and the contempora-
neous exposition of the parties, as evidenced
by possession and other similar acts.— Gray v
Clark, 556.
§ 2. Parties.
The purchaser of a business, who delivers
goods to one contracting with the original own-
er, without informing such person of the
change, cannot recover for the goods.— Boston
Ice Co. V. Potter, 524.
A factor who promised the consignor to ac-
cept a draft drawn against cotton consigned to
him when he received the bill of lading is not
liable to the payee on such promise, or for the
proceeds of the cotton.— Exchange Bank v.
Rice, 526.
Plaintiff may enforce a promise made by de-
fendant to a third person for his benefit, al-
though not privy to the consideration, nor cog-
nizant of the promise when made.— Lawrence
V. Fox, 529.
§ 3. Nature of contract.
A contract to manufacture and furnish arti-
cles for the especial, exclusive, and peculiar
use of another, with special features which he
INDEX.
627
requires, and which render them of value to
him, but useless and unsalable to others, — arti-
cles whose chief cost and value are derived
Iroiu the labor and skill bestowed upon ihciii,
and not from the materials of which they are
made, — is a contract for work and labor, and
not a contract of sale.— Beck eal t after becoming of full age.— Henry
V. Root, 301.
§ 4. Disaffirmance.
An infaiit having a general guardian may
maintain trover before coming of age for a
horse sold, but not delivered with his own
hands, without demanding the horse.— Stafford
V. Roof, 200.
The sale and actual delivery of a personal
chattel by au infant is voidable before he at-
tains the age of 21 years. — Stafford v. Roof,
200.
Deed conveying real estate, executed by
minor, must be disaflirmed within a reasonable
time after he cumes of age, or he will be barred
of his right to do so. — Goodnow v. Empire
Lumber Co., 202.
Reasonable time within which minor must
disaffirm deed is a question for the court, and
a delay of three years and a half, unexjjlained,
is unreasonable. — Goodnow v. Empire Lumber
Co., 292.
Where an infant executed a deed of his
realty, and after coming of age deeded the
same property to another, the second deed
is a disaffirmance and avoidance of the first. —
Tucker v. Moreland, 205.
Where an infant purchased a stock of drugs
which were afterwards taken on execution
against a third party, the infant may on dis-
ailirmance of the contract maintain an action
for the recovery of the purchase money, even
though he took no steps to recover the prop-
erty thus wrongfully taken. — Lemmon v. Bee-
man, 313.
The contract of an infant is voidable, and
may be repudiated during nonage, so as to ef-
fectually destroy the contract for all purposes.
— Rice V. Boyer, 315.
§ 5. Performance of contract.
An infant contracting to labor until of age
for his board, clothing, and education, which
was approved by his guardian, where the con-
tract has been fully performed cannot recover
on quantum meruit.— Stone v. Dennison, 116.
§ 6. Personal privilege.
The defense of infancy being a personal priv-
ilege, a joint plea of the infancy of one defend-
ant in an action on a joint and several bond
is bad on demurrer. — Township of Bordentown
V. Wallace, 281.
Under an assignment by an insolvent, includ-
ing "all his rights of action for goods or es-
tate, real or personal," the assignee will not
bo permitted to disaffirm a mortgage made by
the insolvent while under age, and not ratified
or aOirnied by him after attaining his majority;
the right to avoid such a contract is a per-
sonal i>rivilcge of the infant. — Mansfield v. Gor-
don, 204.
INJUNCTION.
Where a bond was given providing liquidated
damages in the sum of .'?1.5,000 for a breach of
this covenant, the obligee is not confined to his
remedy by way of damages for the breach of
contract, but upon defendant's violation there-
of, is entitled to an injunction restraining him
from continuing to disregard his covenant. —
Diamond Match Co. v. Roeber, 461.
It is not necessary that, before a preliminary
injunction issue restraining violation of an
G32
INDEX.
agi-eement not to engage in a certain business
in a certain place, the rights of the parties be
established by a judgment at law.— Carll v.
Snyder, 4(J5.
INJURY TO PUBLIC SERVICE.
An assignment by a public officer of the fu-
ture salary of his office is contrary to public
policy and void. — Bliss v. Lawrence, 425; Same
V. Gardner, Id.
An agreement for compensation for procur-
ing a contract from the government cannot be
enforced.— Providence Tool Co. v. Norris, 428.
A contract to take charge of a claim before
congress, and prosecute it as an agent and at-
tornev for claimant, is void.— Trist v. Child,
430.
Professional services by an attorney in pro-
cuiing the allowance of a claim by congress
may be recovered for when they are not
blended with services which are forbidden. —
Trist V. Child, 430.
INSANE PERSONS.
A deed executed by a person when non corn-
pos mentis is voidable only, and may be rati-
fied by him when he is of sane mind by ac-
ceptance of the benefits. — Allis v. Billings, 319.
The deed of an insane person not under guar-
dianship, which has never been ratified or af-
firmed, may be avoided by his heirs. — Hovey v.
Hubsou, C)22.
An obligation entered into by an insane per-
son to repay money loaned, of which he had the
benefit, is valid.— Mutual Life Ins. Co. v. Hunt,
325.
Declaring a person insane on inquisition taken
subsequent to an agreement to repay money
loaned does not affect such agreement. — Mutual
Life Ins. Co. v. Hunt, 325.
It is no defense to trover for a note pledged
by plaintiff while insane that defendajit did
not know of, and had no reason to suspect,
such insanity, and that he acted without fraud.
— Seaver v. JPhelps, 326.
The liability of the estate of an insane per-
son over 21 years of age and under guardian-
ship for necessary nursing and care furnished
in good faith and under justifiable _clrcura-
stances is not changed by Rev. St. c. 67, § 22.
— Sawyer v. Lufkin, 328.
INSOLVENCY.
See "Assignments for Benefit of Creditors."
INTENT.
Contractual intention, see "Offer and Accept-
ance," § 12.
INTEREST.
See "Implied Contracts"; "Usury."
INTOXICATING LIQUORS.
One who soils lirpior without a license in
violation of the excise law cannot recover of
the purchaser.— Griffith v. Wells, 416.
JUDGMENT.
See "Pleading."
A judgment is not a contract. — O'Brien v.
Young, 11.
KNOWLEDGE.
As affecting false representations, see "Fraud,"
§2.
LAPSE.
Of offer or acceptance, see "Offer and Accept-
ance," § 11.
LETTERS.
Acceptance by letter, see "Offer and Accept-
ance," § 7.
LIBEL AND SLANDER.
A journalist cannot protect himself from the
consequences of publishing a libelous article by
assurances of its truthfulness, and by a con-
tract of indemnity from the writer of the libel.
The case comes within the rule that there can
be no contribution or indemnity between joint
wrongdoers. — Atkins v. Johnson, 412.
Nor will such contract avail the publisher,
though renewed after the publication of the
libel, and made in consideration that he would
not disclose the name of the writer on its be-
ing demanded by the victim of the article. —
Atkins V. Johnson, 412.
A contract between an author, intending to
write an autobiography, and a publisher,
whereby the author agrees "to accept full re-
sponsibility for all matter contained in said
work, and to defend at his own costs any suits
which may be brought against the publisher
for publishing any statement contained in said
work, and to pay all costs and damages arising
from said suits." does not show on its face that
the parties contemplated the publication of
scandalous or libelous matter, so as to prevent
the publisher from recovering for the author's
refusal to permit it to publish the work after
it was written.— Jewett Pub. Co. v. Butler,
414.
LICENSES.
Sale of liquors without license, see "Intoxicat-
ing Liquors."
To enter lands, see "Statute of Frauds," § 6.
MAINTENANCE.
See "Champerty and Maintenance."
MARRIAGE.
See "Breach of Marriage Promise"; "Restraint
of Marriage."
Agreement in considoi'sitlon of marriage, see
"Statute of Frauds," § 5.
MARRIED WOMEN.
A covenant entered into by a feme covert,
except as to her separate property or property
subject to exclusive control, is void.— Martin v.
Dwelly, 331.
A deed of lands belonging to a feme covert,
executed by her with her husband, but not
INDEX.
633
acknowledged by her pursuant to the statute,
is not such an agreement to convey as will be
enforced against her heirs. — Martin v. Dwelly,
331.
A wife is not liable on a note as a feme
«ole, unless her husband has voluntarily sepa-
rated from and abauduued her with an in-
tent to renounce de facto the marital relation. —
Gregory v. Pierce, 335.
A debt of a married woman, contracted for
accommodation of another, without considera-
tion to her, will not be enforced iigainst her
separate estate, unless exi)rossly made a charge
thereon. — Willard v. Eastham, 330.
A maVried woman is bound by a charge cre-
ated by her own express agreement for a good
consideration, though for a purpose not benefi-
cial to her separate estate. — Owen v. Cawlev,
339.
A married woman is liable for services ren-
dered by her procurement I'or the benefit of her
separate estate.— Owen v. Cawley, 339.
A married woman may avail herself of the
agency of her husband as if they were not mar-
ried. — Owen v. Cawley, 339.
.\ married woman may bestow hoi- separate
«state upon her husband. — Osburn v. Throckmor-
ton, 374.
MASTER AND SERVANT.
No recovery can be had on a quantum mer-
uit, for services rendered in the grocery part
of the business under a contract to work for
agreed wages as bartender and clerk for a
dealer in groceries and liciuors, the sale of the
latter being prohibited when the contract was
made and the services rendered. — Sullivan v.
Hergan, 490.
MEMORANDUM.
Sufficiency under statute, see
Frauds," § 9.
'Statute of
MERGER.
Of oral agreement in writing, see "Offer and
Acceptance," § 12.
See "Infants."
MINORS.
MISTAKE.
§ 1. Of law.
Where wife transfers her separate estate to
her husband, she cannot avoid the transaction
because of her ignorance of the law. — Osburn
V. Throckmorton, 374.
§ 2. Of fact.
One who indorsed a bill of exchange on the
representation that it was a guaranty, and be-
lieving it to be a guaranty, is not liable as in-
dorser. — Poster v. MacKinnon, 358.
Where one ordering goods signed his name
so that it resembled the name of a reliable
firm, and the goods were directed to the firm,
though to his address, there was no contract
with him, and a sale bv him conveyed nothing.
—Gundy v. Lindsay, 3G0.
A factor who sold corn in ignorance of the
fact that it had already been sold to another
is not liable for the price. — Couturier v. Hastie,
3G3.
One who has exchanged land for land in
another state, with which both parties are un-
acquainted, but whose value is stated to them
by a third person, under a mistake as to the
identity of the laud, can, on learning of the mis-
take a few mouths after the deeds have been
maile and delivered, rescind by tendering back
a deed of the land and the notes ami mortgage
received by him to boot, on the ground of mu-
tual mistake, since he cannot be considered
negligent in relying on the third person's state-
ments.— Irwin v. Wilson, 3G(j.
Where defendants had sold a blooded cow
for 514 cents per pound, supiiosjnj; her to be
sterile, hrlil that they were justili"!! in rescind-
ing the sale before delivery on finding her to be
in calf.— Sherwood v. Walker, 370.
MODIFICATION AND MERGER.
Release of a party from performance of a
contract is sufficient consideration for his prom-
ise 1o aocnunt with the other party for moneys
paid by the latter under the contract.— Cutter
v. Cochrane, 507.
A lesser security merges in and is extin-
guished by a higher security, taken for the
same debt, unless taken as further collateral
security.— Van Vleit v. Jones, 620.
MONEY HAD AND RECEIVED.
Recovery from depositary under illegal con-
tract, see "Depositaries."
MONEY LENT.
Recovery of money lent for gambling, see
"Gaming."
MONOPOLIES.
Where coal companies having control of certain
coal regions enter into an agreement to con-
trol the output, a bill drawn by one company
on another to equalize prices on a settlement
under the contract cannot be recovered. — Mor-
ris Run Coal Co. v. Barclay Coal Co., 469.
An agreement between several parties, sever-
ally engaged in the business of manufacturing
and selling balance shade rollers, for the pur-
pose of avoiding competition, organize them-
selves into a corporation, and severally enter
into an agreement with the corporation, so or-
ganized, that all sales of the shade roller shall
be made in the name of the corporation, and
at once reported to it: that, when either party
shall establish an agency in any city for the
sale of a roller made exclusively for that pur-
pose, no other party shall take orders for the
same roller in the same place; and that the
prices for rollers of the same grade, made by
the different i>arties. shall be the same, and
shall be according to a schedule contained in
the contract, subject to changes which may be
made by the cori>oration ui^on recommendation
of three-fourths of the stockholders. — is not
void as in restraint of trnde. — Central Shade-
Roller Co. V. Cushman, 473.
An agreement by a patentee to allow an as-
sociation and its members the exclusive use and
sale of inventions patented by him is not illegal
as creating a monopoly or being in restraint of
trade. — Good v. Daland, 474.
An association of stenographers, formed
to establish and maintain uniform rates of
charges, and to prevent competition among its
members under certain penalties, is illegal, as
in restraint of trade and against public policy.
and one member cannot maintain an action
t)o4
INDEX.
against another for damages occasioned by the
latter underbidding the former, in violation of
the rules of the association. — More v. Bennett,
476.
MORAL OBLIGATIONS,
See "Consideration," § 6.
MORTGAGES.
Notes were given, secured by mortgage, the
consideration being the good will, fixtures, and
stock of a business, the two latter specified in in-
ventories upon which each article with its price
was separately cariiod out. A part of the
stock sold and specified in the inventory was
lager beer, cider, ale, porter, and alcohol, the
sale of the ale, porter, and alcohol being illegal.
On petition to foreclose by an assignee for
value and without notice of the iiotos and
mortgage, held that, the articles illegally sold
and their value being certainly ascertainable,
the contract is divisible, and mortgage may be
foreclosed for the amount of the legal sales. —
Shaw V. Carpenter, 491.
An assignee of a bona fide assignee of a
mortgage, whose assignment was not register-
ed, is not affected by registry, after the first
assignment and before the second, of a prior
conveyance to a cestui que trust under a secret
trust.— Mott v. Clark, 546.
Assignee of a mortgagee talces subject to the
equities of the mortgagor, but not as to latent
equities of cestuis que trustent of the mort-
gagor or other persons. — Mott v. Clark, 546.
MUTUAL PROMISES.
.See "Consideration," § 3.
NECESSARIES.
Infant's contracts for, see "Infants," § 1.
NEGLIGENCE.
Limitation of carrier's liability, see "Carriers."
NOVATION.
Where a debtor left money in the hands of a
third person, who agreed to pay a debt, the
creditor having never accepted such person as
his debtor, or released the original debtor, can-
not maintain an action against such third per-
son. — Butterfield v. Hartshorn, 5G8.
OBSTRUCTING JUSTICE.
A creditor of one who has sold all his prop-
erty, and fled from the country, agreed with
complainant that if he would procure the alli-
davits and testimony of the debtor, and of two
other witnesses, showing that no consideration
was paid for said property, and that the pur-
chaser knew of the debtor's insolvency, lie
would give complainant a share of whatever he
recovered upon a creditors' bill filed by him
against the debtor and said purchaser. Held,
that the agreement was illegal, as leading to
subornation of perjury. — Goodrich v. Tenney,
434.
A creditor of one who had sold all his prop-
erty, and fled from the country, agreed with
complainant that if he would procure the affi-
davits and testimony of the debtor, and of two
other witnesses, showing that no consideration
was paid for said property, and that the pur-
chaser knew of the debtor's insolvency, he
would give complainant a share of wliiitever
he recovered ui)ou a creditors' bill filed by him
against the debtor and said purchaser. Held
that, the contract being illegal, the creditor,
although he has recovered a large sum of
money by help of it, will not be compelled by
the courts to account therefor to conii)lainaut.
— Goodrich v. Tenney, 4o4.
A promissory note given for compounding a
public prosecution for a misdemeanor is found-
ed on an illegal consideration. — Jones v. Kice,
439.
OFFER AND ACCEPTANCE.
Acceptance of goods within statute of frauds,
see "Statute of Frauds," § 8.
Knowledge of oiler of reward, see "Rewards."
§ 1. Necessity of offer and acceptance.
To constitute a binding contract, there must
be a meeting of the minds of the parties. —
Thurston v. Thornton, 14.
A document signed by the owner of prop-
erty purporting to be an agreement to sell at
a fixed price, with a postscript, "This offer to
be left over until Friday, 9 a. m.," is only an
offer. — Dickinson v. Dodds, 77.
<§ 2. Effect of acceptance.
A contract is obligatory from the moment the
minds of the parties meet, signified by overt
acts, though such occurence is not known to
buth parties at the time. — Mactier's Adm'r v.
Frith, 38.
Acceptance of an offer to sell constitutes a
contract for sale only from time of accept-
ance. — Dickinson v. Dodd, 77.
§ 3. Necessity of communication — Offer.
One receiving a ticket on deposit of goods,
in which the liability of the bailee is limited, ia
under no obligation to read the condition. —
Parker v. Southeastern Ry. Co., 18.
§ 4. -^— Acceptance.
Plaintiff, a builder, received a note stating-
that upon an agreement to finish worlc in cer-
tain time he might commence at once, to which
he did not reply, but purchased lumber for the
work, and commenced to prepare it. Held no
acceptance. — White v. Corlies, 16.
§ 5. Manner of communication.
Communication of acceptance of an offer sent
to a different place than that directed in the
offer does not bind the party making the offer.
— Eliason v. Henshaw, 24.
§ 6. Communication by conduct.
One not a subscriber, who takes a newspaper
directed to him from the postoflicc, and pays
postage thereon, and continues doing so after
demand of the subscription price, is liable there-
for. — Fogg V. Portsmouth Atheneum, 26.
One who made no objection to work which
he had reason to know was being done in ex-
pectation that he would pay for it, is liable
therefor.— Day v. Caton, 28.
Plaintiff, seeking to establish a renewal of
his policy, called a clerk of his agent as a wit-
ness, who testified that lie asked defendant's
agent to bind or renew the policy in question;
that he received no reply, and the agent did
nothing indicating either that he heard or in-
tended to comply with the request. Held, that
no inference could be drawn from such silence
to imi]ose a contractual ofilitrntion on defendant.
—Royal Ins. Co. v. Reutty, 29.
INDEX.
635
8 7. Communication by correspondence. '
A contract is accepted by the posting of a
letter declaring its acceptance. — Duolop v. Hig-
gins, 31.
Posting an answer to a letter containing an
offer on the day of receiving the oiler is suffi-
cient. — Dunlop V. Higgins, 31.
Acceptance, by letter, of an offer made by
letter before retraction, completes the contract,
although the acceptance does not reach its des-
tination until after death of acceptor.— Mac-
tier's Adui'r V. Frith, 38.
A company allotted shares to defendant for
which he had applied, and addressed to him,
and posted a notice of the allotment, but which
he never received. //(■/(/, that he was a share-
holder. — Ilouseliuld Fire & Carriage Ace. Ins.
Co. V. Grant, 58.
An offer by letter, requesting an answer by
telegraph, and stating that, unless received by
a certain date, the answer would be considered
a refusal, is made dependent upon actual re-
ceipt of the telegram before such date. — Lewis
v. Browning, G2.
A contract made by telegraph is completed
when an acceptance of the proposition is de-
posited for transmission in the telegraph office.
— Minnesota Linseed Oil Co. v. Collier White
Lead Co., 87.
§ 8. General offer.
An advertisement offered to pay a certain
sum to any one contracting influenza after
using a certain remedy. IJchl, that one pur-
chasing the remedy on faith of such advertise-
ment, and using it, who contracted the disease
afterwards, may recover the sum offered. —
Carlill v. Carbolic Smoke Ball Co., 67.
§ 9. Character of acceptance.
Whatever amounts to a manifestation of de-
termination to accept an offer, c(juiniuuicated,
or put in a i)roper way to be communicated, to
the other party, is an acceptance. — Mactier's
Adm'r t. Frith, 38.
Where one is to decide on the happening of
a certain event, whether he will accept an
offer or not, happening of the event docs not
complete the contract until the decision is
made. — Mactier's Adm'r v. Frith, 38.
A conditional acceptance of a proposition by
letter does not constitute a contract. — Harris
V. Scott, 03.
Defendants wrote plaintiff offering to sell a
quantity of powder of different grades at a
unifurm price, but reserving to themselves the
right to retain 1,500 pounds thereof, and also
certain caps and fuse, ending the letter say-
ing: "Should you decide to order these goods,
you may give us indorsed note that we can
use as cash, * * *" etc. Plaintiff replied :
"* * * I will take 7.200 lbs. of the powder,
leaving you the 1.500 lbs. in reserve, os you
wish, * * * and on receipt of invoice will
forward indorsed note. etc. You are too high
on caps and fuse." Held, that there was no
valid contract. — Thomas v. Greenwood, G5.
§ 10. Revocation of offer or acceptance.
Revocation of offer under seal, see "Contracts
under Seal," § 2.
A bidder at an auction may retract his bid
any time before the hammer is down. — Paine v.
Cave, 74.
An offer to sell land at a certain price if
taken within 30 days is a continuing offer, ac-
ceptance of which within the time limited and
before retraction constitutes a valid contract.
—Boston & M. R. R. v. Bartlett, 75.
Formal notice of withdrawal of an offer be-
fore acceptance need not be given. Knowledge
by one to whom the offer is made of acts incon-
sistent with a coutinuame of the offer is suffi-
cient. — Dickinson v. Dodds, 77.
Sale ul" property to a third person amounts
to withdrawal of the offer, even though the
party to whom the offer was first made had no
knowledge of it. — Dickinson v. Dodds, 77.
Sale of property to a third person, which
came to the knowledge of the person to whom
an offer was made, is an effectual withdrawal
of the offer.— Dickinson v. Dodds, 77.
Though the extension of an option for the
sale of land is not binding when unsupported
b\ a licw consideration, the acceptance thereof,
and tender of the price within the time named,
constitutes a valid contract of sale. — Ide v.
Leiser, S2.
§ 11. Lapse of offer.
Acceptance of an offer after the expiration
of the time to which it is limited will not be
binding. — Longworth v. Mitchell, 85.
Where the market in certain goods is subject
to sudden and great fluctuations, an accept-
ance of a proposition by telegraph, after a
delay of 24 hours, is not within a reasonable
time. — Minnesota Linseed Oil Co. v. Collier
White Lead Co., 87.
Where one has refused to accept an offer,
but has made an offer himself, which has been
refused, he cannot revive the first offer by
afterwards accepting it. — Hyde v. Wrench, 89.
An offer in writing to subscribe to the capital
stock of a railroad company, conditioned upon
the construction of its line of road along a ,
designated route, is revocable, at the option of
the party making such offer, at any time be-
fore its delivery to and acceptance by such
company ; and his death before such delivery
antl acceptance works such revocation. — Wal-
lace v. Townsend, 90.
§ 12. Contractual intention.
In an action by a cousin for services as
housekeeper it must appear that when the ser-
vices were rendered both parties expected that
they should be paid for. — Heffron v. Brown, 95.
Letters which the parties intend only as pre-
liminary negotiations, or as mere advercise-
meuts or business circulars, should not be con-
strued as a contract. — Moulton v. Kershaw, 99.
Where the written draft of a contract is
viewed as the consummation of the negotia-
tions, there is no contract until it is finally
signed. — Mississippi &: Dominion S. S. Co. v.
Swift. 101.
OFFICERS.
Assignment of future salary, see "Injury to
Public Service."
OPINION.
As fraudulent representation, see "Fraud," $ 5.
PARENT AND CHILD.
See "Implied Contracts."
PAROL AGREEMENT.
See "Statute of Frauds."
G36
INDEX.
PARTIAL INVALIDITY.
Of contract of employment, see "Master and
Servant."
Of mortgage, see "Mortgages."
PARTIES.
Construction as to parties, see "Construc-
tion," § 2.
An action cannot be maintained against one
of three joint obligors, on allegation that the
other two have paid their share.— Eller v.
Lacy, 549.
An agreement by which "plaintiffs are to
pay" is a joint obligation. — Eller v. Lacy, 549.
Where a sale is made by two joint owners,
and the purchaser afterwards pays one of them
his full share of the purchase money, the other
cannot maintain an action in his own name
for the balance, unless all parties have agreed
to a severance of the joint contract, and the
purchaser has made him a new promise. — An-
gus V. Robinson, 551.
PAST CONSIDERATION.
See "Consideration," § 9.
PAYMENT.
Part payment as consideration for release, see
"Consideration," § 8.
A forged note or bill, which proves to be of
no value, given in payment of goods, does not
extinguish the debt.— Markle v. Hatfield, 571.
The acceptance by a creditor of the note of
a third person, which he credits on an open
account existing between him and the debtor,
is not such evidence of payment as to prevent
the creditor from suing on the account. — Chel-
tenham Stone & Gravel Co. v. Gates Iron
Co., 573.
PENALTIES.
Penalty or liquidated damages, see "Damages."
PERFORMANCE OR BREACH.
See "Payment."
Part performance under statute of frauds, see
"Statute of Frauds," § 10.
§ 1. Tender.
An agreement that directions shall be left by
will or otherwise, whereby the survivor should
have a prior right to purchase certain shares
of stock, is fully complied with by the adminis-
tratrix by an offer at the price for which they
were finally sold, which was rejected. — Harris v.
Scott, 63.
Where a note is payable in specific articles,
tender of such articles at the time and place
specitiecl satisfies the contract. — Lamb v. La-
throp, 575.
Where a note is payable in specific articles,
the promisor must tender such articles at
the amount agreed to be paid. — Lamb v. La-
throp, 575.
% 2. Conditions precedent.
A party who has refused to fulfill his part
of an agreement cannot maintain an action
for damages against the other party. — Dey v.
Dox, 59S.
Under a contract providing that one install-
ment of the purchase money of land should
be paid before and one after delivery of the
deed, such delivery was a condition precedent
to recovery of the second installment. — Grant
T. Johnson, 601.
In a mercantile contract, a statement descrip-
tive of the subject-matter, or of some material
incident, such as the time or place of shipment,
is ordinarily to be regarded as a warranty or
condition precedent, upon the failure or non-
perlormauce of which the party aggrieved may
repudiate the whole contract. — Norrington v.
Wright, 604.
Plaintiff contracted to sell his stock of goods
and his two stores and lots to defendants. Both
goods and land were sold at the same time,
and embraced in the same contract ; but they
were treated as distinct subjects of sale, the
price of each being definitely fixed. Held, that
the contract was divisible, and that an avoid-
ance of the contract by plaintiff as to the laud
did not avoid the conti'act as to the stock of
goods.— Wooten v. Walters, 610.
Plaintiff agreed to work for defendant one
year, and defendant to pay him therefor a
certain sum. During the year plaintiff lost
time to the amount of nine days, but defendant
allowed him to resume work without objec-
tion, and he continued at work until the ex-
piration of a year from the original hiring.
Held, that allowing plaintiff to continue work,
after the loss of time, without objection, was
a waiver of any right of forfeiture defendant
might have therefor, and plaintiff was not
bound, after the expiration of the year, and in
the absence of special agreement, to make up
the lost time.— Bast v. Byrne, 613.
§ 3. Conditions subsequent.
A sale of personal property on condition that
the vendee may return it in a specified time
becomes absolute if the vendee impairs its value
by misuse during that time. — Kay v. Thomp-
son, 577.
§ 4. Concurrent conditions.
Under a contract for the sale of corn, de-
livery of the corn and payment of the price are
concurrent acts, to be done by the parties at
the same time. — Morton v. Lamb, 594.
§ 5. Renunciation.
Where one party to a contract violates some
of its substantial provisions, so as to deprive
the other party of the benefits of the contract,
and manifests an intention to continue such
breaches, the other party may abandon further
performance of the contract, and sue for future
]>rotits. although sueli breaches did not amount
to a physical obstruction or prevention of per-
formance by such other party. — Lake Shore &
M. S. Ry. Co. v. Richards, 578.
The right to do so is not lost by a previous
suit for damages for breach of the conti'act,
where the breaches of the contract continue
after the bringing of such suit.— Lake Shore &
M. S. Ry. Co. V. Richards, 578.
§ 6. Impossibility caused by party.
Where defendant conveyed land to another,
which he had promised to convey to plaintiff',
plaintiff need not tender him the purchase
price.— Newcomb v. Brackett, 592.
§ 7. Deatb of party.
Death of the employer before expiration of
the stipulated term of service of a clerk and
salesman excuses further performance of the
contract.— Yerrington v. Greene, 618.
INDEX.
637
§ 8. Destruction of subject-matter.
Under a contract to erect a building for a cer-
tain entire price, payable in installments,
where the building is destroyed before comple-
tion, the owner may recover the installments
paid. — Superintendent and Trustees of Public
Schools of Trenton v. Bennett, 015.
Under a contract to erect a complete build-
ing the loss falls on the contractor if the
building falls before completion by reason of
a latent defect in the soil. — 8ui)erintendent and
Trustees of Public Schools of Trenton v. Ben-
nett, 615.
PLEADING.
A complaint alleging that defendants are in-
debted to plaintiff in the sum of i$:i.()i)0 for
damages by reason of their failure to sliip cer-
tain goods bought of Ihem, is iiisuilic ient, as
there is no consideration stated for the alleged
agreement, and as it docs not allege promi.se
to pay any amount for which defendants were
indebted to plaintiff, nor any promise by de-
fendants to ship, nor tender of payment or per-
formance by plaintiff', and fails to allege a
valid contract of any kind. — Thomas v. Green-
wood, 05.
A complaint praying specific performance of
a contract for the sale of land need not allege
that plaintiff has no adequate remedy in dam-
ages, nor that defendant is the owner of the
land when the action is brought, wliere it does
allogo that ho was such owner when he made
the offer, and the complaint was tiled on the
day when plaintiff accepted it. — Ide v. Leiser,
82.
In an action on a joint and several bastardy
bond, a joint plea of duress of unlawful im-
I)ris()nniont of one dofeiidant is had where the
relationshin. such as father, son, etc., is not
averred in the plea. — Township of Bordertown
v. Wallace, 281.
A complaint in an action for damages, al- I
leging that defendant, in order to induce plain-
tiff to lease from him certain premises, fraud-
ulently concealed the fact that a certain build-
ing thereon did not belong to him, but which
fails to allege that defendant knew or had
reason to know that plaintiff was ignorant of
the fact that defendant did not own such build-
ing, and that the leasing of the premises by
plaintiff was actually induced by such conceal-
ment, is demurrable for failure to state a
cause of action. — Sheldon v. Davidson, 382.
In an action on the case by the seller of
property for fraudulent representations and
contealmont by the purchaser in regard to its
value, the price paid was set forth in the
declaration less than it was proved on trial
to have actually been. Ildd to be no variance.
— Mallory v. Leach, 390.
A complaint seeking to set aside a ffaud-
ulent conveyance to satisfy a judgment, which
mei-ely alleges the recovery of judirment against
defendant, without stating any facts to show
the character and validity thereof, is insuffi-
cient. — Eller V. Lacy, 549.
An action setting up a judgment must state
the amount and character and validity of the
judgment sued on. — Eller v. Lacy, 549.
I PUBLIC POLICY.
See "Breach of Trust"; "Monopolies"; "Re-
straint of Marriage"; "Restraint of Trade."
Limitation of carrier's liability for negligence,
see "Carriers."
Right of sheriff to reward, see "Rewards."
Where owners of corporate stock agree to
vote only for certain officers as directors, and
that in case the salary of one is increased tliat
of the other should also be increased, the con-
tract is void as against public policy.— Harris v.
Scott, 03.
QUANTUM MERUIT.
Recovery by servant under contract invalid in
part, see "Master and Servant."
QUASI CONTRACTS.
See "Constructive Contracts"; "Implied Con-
tracts."
PRINCIPAL AND AGENT.
Husband for wife, see "Married Women.
PROPERTY.
Duress of property, see "Duress," { 2.
RATIFICATION.
By infant, see "Infants," § 3.
Of contract made for corporation, see "Cor-
I)orations."
RESCISSION AND ABANDONMENT.
Rescission for fraud, see "Fraud," § 0.
A decree rescinding a deed from a ward to
her guardian need not require the refunding
of the consideration when the guardian is in-
debted to the ward to a greater amount.—
McParland v. Larkin, 406.
On rescinding a deed made by a ward to her
guardian, the ward's estate should not be char-
ged with improvements made by the guardian
M-ithout the ward's authority.— McParland v
Larkin, 400.
A party to a contract prohibited by law, but
not malum in se, may, while it rem'ains exec-
utory, rescind it, and recover money advanced
by him to the other party, who had performed
no part of it.— Congress »fc Empire Spring Co.
V. Kuowlton, 513.
In an action on a contract for the sale and
future delivery of brick by defendant to plain-
tiffs, it appeared that after the contract was
made plaintiff's became insolvent, and made a
voluntary assignment, of which they gave no-
tice to defendant, and afterwards compounded
with their creditors. No reference was made to
the contract in the schedule tiled, nor in the
statement of assets made by plaintiff's to their
creditors. Plaintiffs knew that the brick were
to be made in Maine, but gave no notice to
defendant that they would claim performance
of the contract, and made no offer to pay or
secure defendant till more than four months
after the assignment, and after defendant had
sold the brick. IJdd, that the question of
abandonment of the contract by iilaintiffs and
acceptance by defendant should have been sub-
mitted to the jury. — Uobbs v. Columbia Falls
Brick Co., 500.
Abandonment of an executory contract by
plaintiffs, and acceptance thereof by defendant.
Constitute a defense to an action on such con-
tract.— Hobbs V. Columbia Falls Brick Co.,
500.
REFORMATION.
A contract will not be reformed which must
be construed and carried into effect before
638
INDEX.
reformation exactly as it would be after it has
been reformed.— Kue v. Mens, 249.
RENUNCIATION.
Operating as discharge, see "Performance or
Breach," § 5.
RESTRAINT OF MARRIAGE.
An agreement by defendant to pay plaintiff
a certain sum if he should marry any other
person than plaintiff is void.— Lowe v. Peers,
454.
RESTRAINT OF TRADE.
See "Monopolies."
Agreement within statute, see "Statute of
Frauds," § 7.
A conti-act by defendant not to teach the
French or German language, nor aid or ad-
vertise to teach them, nor to be connected with
any person or institution teaching them, in the
state of FJiode Island, for a year after leavmg
complainant's employ, is not void on the ground
of public policy, simply because it applies to
the entire state.— Herreshoff v. Boutineau, 4o8.
But where complainant offers to allow de-
fendant to teach at a place in the state other
than that at which complainant's school is
established, and does not aver that such teach-
ing would injure him, the fact that the con-
tract applies to the entire state renders it un-
reasonable.— Herreshoff V. Boutineau, 458.
A contract made by a seller with the pur-
chaser, that he will not, at any time withm
99 years, directly or indirectly engage in the
manufacture or sale of friction matches, ex-
cepting in the capacity of agent or employe of
said purchaser, within any of the several states
of the United States of America, or the terri-
tories thereof, or within the Disti'ict of Co-
lumbia, excepting and reserving, however, the
right to manufacture and sell friction matches
in the state of Nevada and in the territory of
Montana, is not void as a covenant in restraint
of trade.— Diamond Match Co. v. Roeber, 4G1.
An agreement not to engage in a certain busi-
ness in a certain place is not invalid because
not specifying any limit of time.— Carll v. Sny-
der, 40.").
Defendant, who owned a factory for the man-
ufacture of a certain kind of cheese, desig-
nated by a certain name, sold it, together with
the secret of the manufacture, to plaintiffs,
and covenanted that neither she, nor her hus-
band, her father, nor her brother-in-law, who
had all assisted her in running the factory,
would impart the secret to any other person
than plaintiffs, nor engage in the business of
manufacturing or selling such cheeses. Udd,
that the covenant is not void as in restraint of
trade.— Tode v. Gross, 467.
REVOCATION.
In-
DisalBrmance of infant's contract, see
fants," § 4. ,,^^ , ^
Of offer or acceptance, see "Offer and Accept
ance," § 10. o , ,
under seal, see "Contracts under Seal,
§ 2.
Of subscription, see "Subscriptions."
REWARDS.
Since it is the duty of a sheriff to make ar-
rests, he cannot claim a reward offered there-
for. — Stamper v. Temple, 93.
To entitle a party to a reward for an arrest,
there must be an oi'fcr clearly intended as such,
and knowledge of the offer by the other party
at the time of the arrest.— Stamper v. Temple,
93.
SALES.
See "Intoxicating Liquors."
On Sunday, see '"Sunday."
Rescission for mistake, see "Mistake," § 2.
Sale to third person as withdrawal of offer, see
"Offer and Acceptance," § 10.
Within statute of frauds, see "Statute of
Frauds," § 8.
A vendor may recover for goods sold, al-
though he knew they were bought for an illegal
purpose, where it was not part of the contract,
that they should be so used, and he has done
nothing else in aid of it.— Tracy v. Talmag«,
497; State of Indiana v. Leavitt, Id.
SEDUCTION.
Consideration for marriage, see "Breach of
Marriage Promise."
SEPARATE ESTATE.
See "Married Women."
SHERIFFS.
Right to reward, see "Rewards."
SIGNATURE.
Of memorandum, see "Statute of Frauds," § 9.
SLANDER.
Agreement to publish libelous matter, see "Li-
bel and Slander."
SPECIFIC PERFORIVIANCE.
See "Pleading."
STATUTE OF FRAUDS.
§ 1. InstTuments under statutes.
An undertaking required by statute to give
a right of appeal containing the requisite stipu-
lation is valid, though it do*s not express a
consideration, and is^not under seal.— Thomp-
son v Blanchard, 115.
Instruments created under and deriving their
obligation from special statutes need not ex-
press consideration.— Thompson v. Blanchard,
115.
§ 2. Executed contracts.
A contract for services not to be performed
within a year, but which has been fully per-
formed on both sides, cannot be avoided be-
cause not in writing.— Stone v. Dennison, 110.
§ 3. Promise by executor or administra-
tor.
The oral agreement of an executor to pay
one of the testator's heirs at law a certain sum
in consideration that he would forbear further
opposition to the probate of the will is an origi-
nal agreement, not within the statute; and the
consideration is sufficient.— Bellows v. Sowles,
lis.
INDEX.
63f)
§ 4. Promise to ansiver for debt of an-
other.
An agiec'iiiL'iit by one person to pay for goods
fiirnisht'd to another is not a collateral promise
to pay the debt or answer the default of an-
other, within the nieaniug of the statute of
frauds. — Larson v. Jenson, 120.
Whore an agent, having, contrary to instruc-
tions of his principal, loaned money without
security, and taken a note therefor, and, on
being told by the principal that he will hold
him responsible, guaranties the payment of the
note, the guaranty is nut a promise to answer
for the debt of another, within the statute of
frauds, so as to be void for failure to express
the consideration. — Crane v. Wheeler, 122.
A parol promise to pay the debt of another
in consideration of property placed by the debt-
or in the i)rc)misor's hands is an original prom-
ise, and binding upon the promisor, whether the
liability of the original debtor continues or is
discharged. — Wait v. Wait's Ex'r, 123.
Testator, in consideration of the conveyance
of a farm to him, upon which plaintiff, at the
request of testator's grantor, had erected a
barn, promised to pay plaintiff the cost of said
barn. UiIJ, that this promise, being made
upon a new consideration, was binding, though
it was not in writing, and though the original
liability of the grantor remained undischarged.
—Wait V. Wait's Ex'r, 123.
One having a lien on property for repairs,
who delivers it to the owner on the orarl prom-
ise of a third party to pay for the repairs,
cannot enforce the promise. — Mallory v. Gil-
lett, 124.
§ 5. Agreements in consideration of
marriage.
An antenuptial contract, by which each party
is to retain the title of his or her property,
and dispose of it as if unmarried, is a contract
in consideration of marriage, within the stat-
ute of frauds (Gen. St. c. 22, § 1), and must be
in writing. — Mallorv's Adm'r v. Mallory's
Adm'r, 138.
S 6. Agreements relating to land.
A person sold land, representing it to have a
certain frontage. The buyer paid for the land,
but, finding it to have a less frontage, refused
to accept a deed. The seller then agreed, if he
would accept the deed, to repay the difference
in value between the actual land and the land
as represented. II dd not an agreement for the
sale of land, or of an interest in or concerning
it, necessary to be in writing. — Haviland v.
Sammis, 139.
A license to enter on lands of another to
do a particular act or series of acts, without
possessing an interest in the lands, need not
be in writing. — Mum ford v. Whitney, 140.
A parol agreement that a party may abut
and erect a dam for a i)ernianent purpose on
lands of another is void. — Mumford v. Whit-
ney, 140.
An agreement for the sale of growing trees,
with a right to enter and remove them, must be
in writing. — Green v. Armstrong, 145.
A sale of standing timber, whether or not the
parties contemidate its immediate severance
and removal by the vendee, is a contract con-
cerning an interest in lands, within the mean-
ing of the statute of frauds.— llirth v. Graham,
147.
A parol agreement by a mortgagee to fore-
close his mortgage, bid in the land, and hold it
until it could be sold for its value, and, when
sold, to pay the mortgagor the balance over
the mortgage, cannot be enforced. — Wheeler v.
IleynolJs, 208.
A parol agreement in reference to lands, not
authorized by the statute of frauds, is void as
well in equity as in law. — Wheeler v. Reynolds,
208.
A parol agreement subsequent to a deed of
land that the land should be surveyed, and
any excess over what the deed called for should
be paid for at a certain price, is valid. — Seward
V. Mitchell, 233.
§ 7. Agreements not to be performed
within a year.
A promise to save a co-surety harmless may
be performed within a year, and need not be in
writing. — Blake v. Cole, 140.
An agreement not to engage in a certain busi-
ness at a particular place for a specified num-
ber of years is not within the statute of frauds.
— Doyle V. Dixon, 150.
A contract to serve for one year, service to
commence the second day after the contract
was made, is within the statute of frauds. —
Britain v. Rossiter, 213.
§ 8. Sale of goods.
A contract for the sale of promissory notes
is within the statute of frauds. — Baldwin v.
Williams, 151,
An executory agreement for the manufacture
and sale of a specific chattel to be manufac-
tured according to the terms of the agreement
is not a contract of sale. — Goddard v. Binney,
153.
Defendants purchased lumber, pointed out
the piles from which it was to be taken, and
directed that when it was dressed and cut it
should be placed on plaintiff's dock and notice
given, which was done. Ilcld, that there was
no acceptance and receipt of the lumber. —
Cooke v. Millard, 155.
Where a chattel verbally contracted for is in
existence, but the vendor is to do some work
on it to adapt it to the uses of the vendee,
it is a contract of sale under the statute. —
Cooke V. Millard, 155.
Defendants ordered from plaintiffs' salesman
a bill of boots and shoes, to be manufactured
by plaintiffs. The salesman made a copy of
the order, signed it himself, and gave it to
defendants. Before the order was shiitped, it
was countermanded by defendants. IJiUI, that
the contract was for the sale of "goods," with-
in the meaning of Rev. St. 1S79, § 2514, pro-
viding that "no contract for the sale of goods,"
etc.. "for the price of $30 or upwards, shall be
good, unless some note or memorandum thereof
be made in writing, and sisned bv the party to
be charged."— Pratt v. Miller, 163.
There must be a receipt and acceptance of
the goods by the vendee in a parol contract to
bind him, where no part of the imrchase price
is paid. — Caulkins v. Hellman. 100.
A purchaser's receipt and acceptance of
goods sufficient to satisfy the statute of frauds
may be constructive. — Garfield t. Paris, 168.
Receipt and acceptance of labels, furnished
as part of n parol contract for the sale of liq-
uor, satisfies the statute of frauds. — Garfield
V. Paris, lOS.
A contract for the sale of goods, which is
void for failure to pay some part of the con-
sideration as required by the statute of frauds,
cannot be validated by an unaccepted ofifer of
payment. — Edgerton v. Hodge, 172.
Subsequent payment by check, on a contract
void under the statute of frauds, and a re-
statement of its essential terms, validates the
contract. — Hunter v. Wetsell, 174.
G40
INDEX.
§ 9. Tlie memorandum in 'writing.
An option to sell laud at au agreed price,
a consideration for the option bciuj; stated, is
a surSeient compliance ^vith the Montana stat-
ute of frauds (.Comp. St. div. 5, p. G52, § 2111),
which only requires that the memorandum of
sale shall be signed by the seller. — Ide v. Leiser,
S2.
On the 30th of June, A. bargained with B.
for his cheese, amounting to over $40, but
nothing was done to bind the bargain. The
nest day B. wrote to A., "I shall stand to
it"' (alluding to the contract), "but shall want
you to pay me fifty dollars to bind it." The
day following (July 2d) A. inclosed ifoO in a
letter, and sent it by mail to B., which he re-
ceived on the Sth, and immediately returned it
to A. Held, that B. had a right to decline to
receive the money, and by so doing left the
contract void under the statute of frauds. —
Edgerton v. Hodge, 172.
Where parties in making a contract omit to
do what the statute of frauds requires to be
done to make a valid contract, it requires the
cons(|nt of both parties to supply the thing
orsiitted. — Edgerton v. Hodge, 172.
A paper stating the terms of the contract,
signed by the party to be charged, and di-
rected to a third person, may be deemed part
of a sufficient memorandum, though not at the
time known to the other party. — Peabody v.
Speyers, 176.
A writing signed by defendant, directed to a
bank cashier, to the effect that he would pay
plaintiff a certain amount in currency for a
certain sum in gold, and one by plaintiff that
he would accept such currency for gold, is a
sufficient memorandum. — Peabody v. Speyers,
176.
A verbal order for goods given to plaintiff's
traveling salesman, entered in his memorandum
book, and signed by him, a copy of which was
forwarded to plaintiff, together with a letter
written by defendant to plaintiff, countermand-
ing the order, is a sufficient memorandum. —
Louisville Asphalt Varnish Co. v. Lorick, 178.
A memorandum of a sale, which neither
names nor describes the sellers, is not sufficient
to satisfy the statute of frauds. — McGovern v.
Hern, 183.
A memorandum of a contract for services,
not containing the condition on which defend-
ants were to pay and the subject-matter of the
agreement, is insufficient. — Drake v. Seaman,
184.
An agreement signed by the vendor to de-
liver certain articles to the vendee at a speci-
fied price, cash on delivery, is a sufficient
memorandum, and binds the vendor, although
not signed by the vendee. — Justice v. Lang, 187.
A contract in writing for services for a term
exceeding one year, at a stipulated salary,
signed by the employer only, and containing no
promise on the part of the employe to pei'l'orm
such services, is void, and the employe cannot
recover if discharged before the expiration of
the term. — Wilkinson v. Heavenrich, 199.
A memorandum written by a broker em-
ployed to make the purchase in his book in
presence of the vendor, containing the names
of the parties and terms of purcha.se, but not
subscribed by the parties, is sufficient.— Clason
V. Bailey, 201.
A letter from the vendor, confirming to the
purchaser a sale of personal proiierty at a cer-
tain price per pound, and inclosing an order on
its keeper for delivery and weighing, is a suf-
ficient memorandum. — Sherwood v. Walker.
370.
§ 10. Effect of noncompliance \iritli stat-
ute.
The statute of frauds affects the remedy only»
and not the validity of a contract. — Townsend v.
Hargraves, 205.
Where there is a completed oral contract of
sale of goods, acceptance and receipt of part
of them takes the case out of the statute, al-
though after the destruction of the rest of the
goods while in the hands of the seller. — Towns-
end V. Hargraves, 205.
Where, in reliance on parol agreement with-
in the statute of frauds, one party has so far
partly performed that it would be a fraud
on him unless performed, the agreement will
be enforced. — Wheeler v. Reynolds, 208.
Plaintiff, one of several lessees of land for
ten years, made an oral contract to transfer to
defendant, an outsider, his interest in the lease
for the remaining four years of the term, de-
fendant agreeing to stand in plaintiff's stead
and pay his share of the rent. Defendant oc-
cupied and paid the rent for the year, and
abandoned his portion of the land. Uchl, in an
action to recover the rent for the remainder of
the term which plaintiff was compelled to pay,
that the contract was invalid under the stat-
ute of frauds, and the equitable doctrine of
part performance was inapplicable, the action
being at law. — Nally v. Reading, 212.
A contract not enforceable by reason of the
statute of frauds is an existing contract, and
not void, and a new contract cannot be im-
plied from acts done under it. — Britain v. Ros-
siter, 213.
The doctrine of part performance making a
contract not in accordance with the statute of
frauds enforceable in equity applies only to
contracts relating to land. — Britain v. Rossiter,
213.
The mother of deceased attempted by writing
to bind him, then 20 years of age, as appren-
tice to defendants, for 5 years, for a stipulated
sum; $200 to be retained by defendants from
the wages as a penalty if deceased left for any
cause. The contract was not signed by de-
fendants. Deceased remained with them after
coming of age, until killed by accident. Ileld,
that the contract was void, under the statute
of frauds; but as deceased continued to work
after coming of age, with knowledge of the
terms, he would be bound to that rate of com-
pensation, but the forfeiture could not be en-
forced. — Baker v. Lauterback, 218.
STATUTES.
Contracts in violation of statutes, see "Intoxi-
cating Liquors"; "Sunday"; "Usury."
SUBSCRIPTIONS.
As consideration for other subscriptions, see
"Consideration," § 3.
Until some action is taken on the basis of a
subscription to a benevolent or other enterprise,
it may be revoked. — Wallace v. Townsend, 90.
Where decedent signed a church subscrip-
tion, the fact that the trustees made efforts to
secure other subscriptions in order to fulfill
the conditions on which the liability of the sub-
scribers deiiended, but merely as individuals,
and not because of any request by the dece-
dent, constituted no consideration for his
promise. — I'resbyterian Church v. Cooper, 234.
Where defendant's intestate signed a sub-
scription paper by which the signers agreed to
pay to the trustees of plaintiff" church the
INDEX.
G41
amounts set opposite thoir names on condition
that a certain flxed sum was subscribed, the
fact that otli'-r pcr.son.s signed sucli subsorii)-
tion on the laith of the siKnalure of the de-
cedent constituted no consideration for tlie
promise of the latter, as between him and the
payee. — Presbyterian Church v. Cooper, 234.
SUFFICIENCY.
Of consideration, see "Consideration," § 2.
Of memorandum within statute of frauds, see
"Statute of Frauds," § 9.
SUNDAY.
A sale or exchange of horses, attended with
the circumstances Avhich usually attoud those
i'xchiuif,'es, is a secular labor or euiploymout,
within the meaiiinj: of the statute for the ob-
servance of the Sabbath. — Lyon v. Strong, 417.
No action can be maintained on a warranty
made on the sale or exohango of horses on
Sunday.— Lyon v. Strong, 417.
The court will not enforce a contract made
on the Sabbath. — Lyon v. Strong, 417.
TELEGRAMS.
Acceptance by telegram, see "Offer and Ac-
ceptance," § 7.
TENDER.
see "Perform
THEATERS.
Of performance, see "Performance or Breach,"
§ 1.
An actor may recover for his services in an
unlicensed theatrical exhibition, unless he knew
that his employer had no license. — Koys v.
Johnson, 41)6.
TIME.
Disaffirmance of contract by infant, see "In-
fants," § 4.
Of acceptance, see "Offer and Acceptance,"
§ 11.
TREES.
Parol sale of growing trees, see "Statute of
Frauds," § 6.
TRUSTS
Where an uncle, who is indebted to his
nephew for money due on the lattcr's tweiity-
first birthday, writes the' nephew that he had
the money in bank that he intended for him,
and that the latter should certainly have it,
adding that he would not interfere with the
money until he thouirht the nephew capable
of taking care of it, the relation of the parties
Hopk.Sel.Qis.Cont.— 41
is thereby changed from debtor and creditor
to trustee and beneficiary.— iiamer v. Sidway,
220.
UNDUE INFLUENCE.
The fact that one of the parties to a contract
is old, and relies u[)on and is the grandfather
and employer of the other, does not raise a
prcsuuiiition of undue influence. — Cowee v.
Cornell, 402.
Where a female ward, a few days after at-
taining her majority, and before her guardian
has made his final report, conveys her land to
the guardian's wife, who is her elder sister,
and with whom she is living, the burden is on
the guardian to show good faith and the ab-
sence of undue influence. — McParland v. Lar-
kin, 40(j.
Where a conveyance of land was obtained in
exchange for property of about half its value
by taking advantage of the grantor's ignorance
and unfounded apprehensions that if he did
not convey it would be taken on a ju(l||pent,
the transaction was held to be unconscionable,
and the conveyance was set aside. — Wooley v.
Drew, 410.
UNITED STATES.
The United States may, within the^ sphere
of its constitutional powers, enter into'- a con-
tract not prohibited by law, and appropriate
to the exercise of such powers. — United States
v. Tingey, 27G.
USURY.
A deed granting a rent_ charge of $500 per
year in consideration of $5,000, with an option
in the grantor to obtain a release of the rent
charge after five years by paying $.">.000 and
arrears of rent, held usurious and void. — Lloyd
V. Scott, 421.
VENDOR AND PURCHASER.
Agreements relating to land, see "Statute of
Frauds," § 6.
Offer under seal, see "Contracts under Seal,"
§ 2.
WAGER.
See "Gaming."
WARRANTY.
Implied warranty, see "Implied Contracts."
WITHDRAWAL.
Of offer or acceptance, see "Offer and Accept
ance," § 10.
YEAR.
Agreements not to be performed within a yem
see "Statute of Frauds," § 7.
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