'SYNOPSIS 
 
 OF THE 
 
 THAYER 
 
 \ 3352s
 
 UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW 
 LIBRARY
 
 A SYNOPSIS 
 
 OF THE 
 
 LAW OF CONTRACT 
 
 ORIGINALLY PREPARED BY THE LATE 
 
 AMOS M, THAYER 
 
 UNITED STATES CIRCUIT JUDGE. 
 EIGHTH JUDICIAL CIRCUIT 
 
 FOR THE USE OF 
 
 THE ST. LOUIS LAW SCHOOL 
 WASHINGTON UNIVERSITY 
 
 REVISED BY 
 
 BYRON F. BABBITT. 
 
 OF THE ST. LOUIS BAR 
 
 UNITED STATES COMMISSIONER, EASTERN 
 DISTRICT OF MISSOURI 
 
 THOMAS LAW BOOK COMPANY 
 
 ST. LOUIS 
 
 1922
 
 Copyright 1922 
 By Thomas Law Book Company 
 
 
 Mound City Press, Inc. 
 St. Louis, Mo.
 
 NOTE. 
 
 For many years prior to his decease, Judge Thayer occupied the 
 chair of Contracts in the Washington University School of Law, 
 formerly, known as the St. Louis Law School, and while so engaged 
 he prepared this ''Synopsis of the Law of Contract" for the special 
 use of his classes in that subject. Since Judge Thayer's decease 
 on April 24, 1905, it has been deemed advisable to publish a second 
 edition, modifying the former text in the light of certain statutory 
 enactments and revisions which have since been made. The 
 arrangement of the original text has been preserved, and Judge 
 Thayer's exact language, as far as possible retained. His prior 
 statutory references have been brought down to date, and where- 
 ever the text book "Lawson on Contracts" is herein referred to, 
 additional and similar references to "Williston on Contracts" have 
 been made. 
 
 It is hoped that to many of Judge Thayer's old friends and 
 former associates of the Bench and Bar, and especially to the 
 present law students, this "Synopsis of the Law of Contract" will 
 be found a handy book of reference and information upon this 
 most important legal subject. 
 
 BYRON F. BABBITT.
 
 /' I 
 
 SYNOPSIS 
 
 OF THE 
 
 LAW OF CONTRACT 
 
 1. A contract is an agreement, either express or implied, to 
 do or refrain from doing some act, which the law will enforce. 
 Sturges V. Crowninshield, 4 Wheat. 197. 
 
 2. When the contract is expressed in words, either oral or 
 written, it is termed an express contract. When the promise is 
 not so expressed, but is left to be inferred from acts, circumstances, 
 or transactions, it is termed an implied contract. 
 
 3. Implied contracts are subdivided into two classes, to wit: 
 "Contracts Implied as a Fact," and "Contracts Created by Law." 
 
 4. Contracts implied as of fact are those in which an inference 
 arises from circumstances that a party intended to become bound, 
 as where a person goes into a store, examines an article and orders 
 it to be sent to his house, which is done, and the article is accepted. 
 In this instance a court or jury would be authorized to infer that 
 the person ordering the article intended to pay its reasonable 
 value, and he would be held bound as upon an express promise to 
 that effect. 
 
 5 A contract created by law is one in which a person is con- 
 clusively presumed to have made a promise, although he did not 
 in fact do so, or so intend. For example, a person takes possession 
 of my property, claiming it as his own and not intending to pay 
 for it. In such a case I may sue the wrong-doer as upon a promise, 
 which the law creates, to pay its reasonable value. Post, 57.
 
 6. CONTRACT IMPLIED FROM AN EXPRESS CON- 
 TRACT. — Under some circumstances a contract is implied from 
 an express contract. For example, when a person sells personal 
 property in his possession at an agreed price, or for its reasonable 
 market value, the law usually implies a promise on his part to 
 warrant the title, although nothing is said on that subject in the 
 contract of sale. 
 
 7. Contracts are also classified as follows: Contracts under 
 seal, simple contracts, and contracts of record. 
 
 Contracts under seal are those which have a seal or scrawl 
 attached to the promisor's name, such as deeds, bonds, or other 
 instruments. 
 
 Contracts of record are those which are evidenced by the record 
 of some court, such as judgments and recognizances. 
 
 All other contracts, whether express or implied, are termed 
 simple contracts. 
 
 8. When a contract has been fully performed by both parties, 
 it is termed an executed contract. When it has not been fully per- 
 formed, it is termed an executory contract. 
 
 9. ESSENTIALS OF A CONTRACT.— It is usually said that 
 four things are essential, as long as a contract remains executory, 
 to render it obligatory and enforceable: 
 
 First. There must be parties on each side who are competent 
 to make an agreement. 
 
 Second. There must be a lawful subject-matter. 
 
 Third. The parties to the contract must have mutually assented 
 or agreed to the terms thereof; and 
 
 Fourth. The promises made must be supported by a valuable 
 consideration. 
 
 10. But a promise, to become binding upon the party making 
 it, must possess several other requisites: 
 
 In the first place, it must be made under circumstances which 
 indicate an intention to become bound. Thus, where a person 
 laboring under great pains from wounds that had been inflicted, 
 exclaimed that he would give $200 to have the party who had 
 inflicted them arrested— it was held that he was not liable to one 
 who had acted on the promise, because it was manifest that the
 
 promisor had no intention of entering into a contract for the arrest 
 of his assailant. Stamper v. Temple, 6 Humph. 113. 
 
 Secondly. A promise must have reference to a legal, as dis- 
 tinguished from a mere social engagement, and must not have been 
 made as a mere joke or piece of fun. Thus, if two persons agree 
 to meet at a certain time and place, and go thence to a base-ball 
 game, no action lies, though one breaks his engagement. 
 
 Thirdly. The promise must not be so vague or indefinite as to 
 make it impossible to say what was undertaken. Thus, where A 
 promised B that if she would live with him until her marriage, he 
 would give her 100 acres of land, without specifjing the value or 
 location of the land, it was held that the promise was too vague 
 to be enforceable. Sherman v. Kitsmiller, 17 S. & R. 45. 
 
 11. PERSONS COMPETENT TO PROMISE.— Persons com- 
 petent to contract are those who have attained their majority, 
 who are of sound mind, and who are not subject to any legal 
 disability, such as the disability of coverture in the case of married 
 women. 
 
 12. SUBJECT-MATTER, WHEN LAWFUL.— The subjec^ 
 matter of a contract is lawful when the contract does not require 
 the doing of any act that is either forbidden by law, or that is 
 immoral, or is opposed to public policy. 
 
 13. WHEN UNLAWFUL.— A contract by which either party 
 thereto agrees to do an unlawful act — for example, to commit an 
 assault upon another, or to injure or destroy another's property — 
 is not enforceable for the reason that the subject-matter of the 
 contract is unlawful. The subject-matter of a contract is also un- 
 lawful if the act agreed to be done is prohibited by law although 
 it is not declared to be a crime. 
 
 14. OPPOSED TO PUBLIC POLICY.— The subject-matter of 
 a contract is unlawful if the act or acts stipulated to be done have 
 a tendency to injuriously affect the public welfare. Contracts 
 in total restraint of trade, wagering contracts of all descriptions, 
 and contracts which have a tendency to induce men to violate 
 public or private trusts — are contracts of this description. Post, 
 See. 98. 
 
 15. MUTUAL ASSENT.— To render a contract binding the
 
 proposition made by one party must be understood by and assented 
 to by the other, in the very sense in which the proposition is made. 
 Thus, if A says to B, pointing to a field in which there is a horse 
 and a mule, "you may have that animal for seventy-five dollars," 
 and B says, * ' I will take it, ' ' supposing that the horse was referred 
 to, whereas A referred to the mule — no contract is made, because 
 there is a want of mutual assent ; the minds of the parties have 
 not met. ( ^ 
 
 CONSIDERATION. 
 
 16. It is customary to speak of the consideration of a contract 
 as being either "good" or "valuable." A good consideration is 
 love and affection, such as a father entertains for his wife, child, or 
 kinsman. A valuable consideration, on the other hand, is anything 
 the value of which is capable of estimation in money. 
 
 17. A merely "good consideration" for an executory promise 
 is not sufficient, in law, to render it enforceable. For example, if 
 a father promises to give his son a horse or a farm, merely in 
 consideration of love and affection, the promise cannot be enforced ; 
 but if such promise is based upon a payment of money made by the 
 son, or upon the doing of any act by the son which is beneficial to 
 the father or detrimental to the son, it is enforceable. 
 
 18. Promises are not enforceable unless they are founded upon 
 what the law deems a valuable consideration ; but the doing of any 
 lawful act, or the promise to do any lawful act, which may be to 
 the disadvantage of one party to a contract, or beneficial to the 
 other, is deemed a valuable consideration. Thus, the rendition of 
 services of any kind by one person for another, is deemed a valu- 
 able consideration which will support a promise to pay for the 
 same. Or if A refrains from doing a certain act which he may 
 lawfully leave undone, in consequence of a promise by B to pay him 
 a certain sum of money for so doing, in such a case, the loss or dis- 
 advantage that A may sustain, or the benefit that may accrue to B, 
 is deemed a valuable consideration which will support B's promise. 
 Advice given by a lawyer to his client, or by a physician to his 
 patient, is deemed a valuable consideration to support a promise 
 to pay for such advice. 
 
 19. MUTUAL PROMISES A CONSIDERATION.— When a 
 contract is wholly executory (nothing thereunder having been done
 
 by either party), the consideration which necessarily supports such 
 contract is mutual promises. It follows that a promise made by one 
 person is frequently a valuable consideration for a promise made by 
 another person. 
 
 20. PROMISE TO DISCHARGE A LEGAL OBLIGATION. 
 —But when one party to an agreement promises to do no more 
 than it was his legal duty to do before the promise was made, such 
 promise will not support a promise made by the opposite party to 
 do something in return. 
 
 For example, if A owes B a sum of money and interest thereon, 
 which is due, and A promises to pay the interest if B will extend 
 the loan, which B promises to do, here B's promise to extend the 
 loan is not supported by a valuable consideration and cannot be 
 enforced. 
 
 21. VALUE OF SERVICES FIXED BY LAW.— Ordinarily 
 the law permits persons to agree as to the value of property or 
 services which form the subject-matter of a contract, but when the 
 law has fixed the value of a particular service, as by prescribing 
 the fees to be charged by an officer for official services, a promise 
 made by an individual to pay more than the established value of 
 the service is not enforceable. Burk v. Webb, 32 Mich. 173. 
 
 22. ONE SUM OF MONEY NOT THE LEGAL EQUIV- 
 ALENT OF A GREATER SUM.— When a person owes a certain 
 sum of money, say one thousand dollars, a promise by the creditor 
 to take a less sum in money (say seven hundred and fifty dollars) 
 and to discharge the debt, is not enforceable for want of consider- 
 ation. As the law measures all values in money, seven hundred and 
 fifty dollars is not regarded as the equivalent of one thousand 
 dollars ; therefore a promise to pay the smaller sum is not a valid 
 consideration for a promise to discharge a debt for the larger 
 amount which is at the time due. Nevertheless, a promise to accept 
 something besides money which the debtor is not bound to deliver, 
 in discharge of a debt of one thousand dollars, would be valid, 
 although the creditor received much less in value than one thousand 
 dollars. So a promise to take less than one thousand dollars in dis- 
 charge of the debt would be enforceable, if the money was paid in 
 advance of maturity, or at a place different from that specified in 
 the contract.
 
 10 
 
 23. Agreements, such as are referred to in the last section, to 
 take a less sum than is due in discharge of a debt, are usually con- 
 summated and rendered effectual, by paying the smaller sum and 
 taking from the creditor a release under seal. The seal imports a 
 consideration, as will appear hereafter. 
 
 24. COMPOSITION AGREEMENTS.— Where several cred- 
 itors enter into a mutual agreement among themselves and with the 
 debtor to take less than is due and to discharge their several debts — 
 such an agreement is held to rest on a sufficient consideration. 
 
 25. AVOIDANCE OF LITIGATION A CONSIDERATION.— 
 
 Although a promise to take a less sum of money than is due from 
 a debtor and to discharge the debt, is not an enforceable prom.ise, 
 yet where the amount actually due is in dispute between the debtor 
 and creditor, an agreement to take less than is claimed, and less 
 than is actually due, by way of compromise, is binding. In this 
 instance the law regards the avoidance of litigation as a valuable 
 consideration. 
 
 26. Also where one person brings a suit against another, or 
 threatens to do so, for a sum of money in good faith claimed to be 
 due, the dismissal of such suit, or a promise not to bring it, is a suf- 
 ficient consideration for a promise by the party sued or threatened 
 to be sued, to pay to the claimant a sum of money, or to do any 
 other lawful act. But if the claim preferred is utterly groundless, 
 and the promise to pay it is made without knowledge that it is 
 groundless, and in ignorance of material facts or circumstances 
 which have a bearing upon the validity of the claim, it is most 
 probable that the promise would not be enforced. 
 
 27. RELEASE FROM OBLIGATION.— If A is under a con- 
 tract obligation to B to do a given act, and B releases A from the 
 obligation, such release is a sufficient consideration for a promise 
 on the part of A to do something else. 
 
 28. PROMISE TO DISCHARGE A LEGAL OBLIGATION 
 ENFORCEABLE. — If a person is under a legal obligation to an- 
 other to do a given act, his express promise to do that act is enforce- 
 able. A legal obligation to do a thing is a sufficient consideration 
 for a promise to do it. But a merely moral obligation to do a given 
 act is not a sufficient consideration for a promise to do it. For ex-
 
 11 
 
 ample, a son is under a moral obligation to support his parents in 
 their old age, if he is able and they are needy, but a promise by 
 the son to so support them, based on such moral obligation, would 
 not be enforceable, for want of consideration. 
 
 29. INADEQUATE CONSIDERATION.— When a promise is 
 founded upon a consideration which the law deems valuable, it 
 will be enforced although the consideration may be inadequate. A 
 promise on the part of a person to sell a farm for one-quarter of 
 what it is worth, will be enforced at law, as well as a promise to 
 sell it for its full value. Courts pay no attention to the fact that 
 the consideration for a promise is inadequate, except in those 
 cases where the validity of a contract is assailed on the ground of 
 fraud. In such cases inadequacy of consideration may be strong 
 evidence of fraud. A promise to sell land will not be specifically 
 enforced in equity, if the consideration is grossly inadequate. In 
 such cases a party must sue at law for the damages sustained. 
 
 30. FAILURE OF CONSIDERATION.— It sometimes happens 
 that an article or thing bargained for, contrary to the expectation 
 of the parties, has no existence, or the title thereto fails, or the 
 article is different in kind or quality from what it was supposed 
 to be. In all of these cases the consideration supporting the buyer 's 
 promise to pay for the article or thing bought, is said to have failed. 
 
 31. FAILURE OF CONSIDERATION TOTAL AND PAR- 
 TIAL. — Sometimes the consideration fails in toto, in which event 
 the buyer 's promise cannot be enforced ; or if he has paid for the 
 article, the sum paid may be recovered. In other instances there 
 may be a partial failmre of consideration, in which event the seller 
 can only recover a portion of the contract price; in some cases 
 (depending on circumstances to be hereafter explained) the buyer 
 may altogether rescind a contract for even a partial failure of con- 
 sideration. 
 
 32. SALES WITHOUT WARRANTY OF TITLE OR QUAL- 
 ITY. — It may happen that a person buys property under such cir- 
 cumstances that there is no warranty by the seller either of title 
 or quality. A common instance of a sale of this kind is one made 
 by a sheriff or marshal under execution, in which case there is 
 ordinarily no warranty of title or quality. In the case of a sale 
 thus made without warranty, there is no such failure of consider-
 
 12 
 
 ation as will avail the buyer as a defence to his promise to pay, 
 although the title fails, or the article proves to be defective and 
 valueless. 
 
 33. ARTICLE SOLD BECOMES VALUELESS AFTER 
 SALE.— When an article sold is what it was supposed to be, or 
 was warranted to be at the time of the sale, but it subsequently be- 
 comes valueless, the loss falls upon the buyer. In such cases 
 failure of consideration cannot be successfully pleaded by the buyer 
 as a defence to his promise to pay for the thing bought. 
 
 34. CONSIDERATION IN PART UNLAWFUL.— It some- 
 times happens that a part of the consideration for a single promise 
 is lawful, and a part unlawful. In such cases no recovery can be 
 had on the contract. For example, if the consideration of a note 
 consists in part of merchandise sold and in part of liquor sold in 
 violation of law, no recovery can be had on the note. But if 
 a suit is brought upon an open account consisting of separate 
 items, a part of which are lawful and a part unlawful, a recovery- 
 may be had for such items of the account as are lawful. 
 
 35. ACTUAL CONSIDERATION MAY BE SHOWN.— In an 
 
 action brought upon a written contract the real consideration may 
 be shown, although it differs from the consideration expressed in 
 the contract. Such proof is permitted because the consideration 
 upon which a contract rests is not always fully described. Besides, 
 the admission of such evidence prevents the enforcement of con- 
 tracts that are founded upon an unlawful or immoral consider- 
 ation. 
 
 36. EXECUTED CONTRACTS.— When a promise has been 
 fully executed, it usually matters not whether it was supported by 
 a consideration. The law will not afford relief for what has been 
 done in accordance with a promise, although the promise was with- 
 out consideration and therefore not enforceable. Thus, if a person 
 without consideration promises to pay another a sum of money, 
 and makes such payment, the money cannot be recovered from the 
 payee. 
 
 37. GIFTS EXECUTED.— When a gift of money or property 
 is made and the article or thing given is delivered to the donee, it 
 cannot be recovered. But an exception to this rule is allowed in 
 favor of creditors of the donor; if the gift operates to prevent
 
 a 
 
 13 
 
 u creditor of the donor from collecting his debt, the donee may be 
 compelled to restore to the creditor what he has received, or so 
 much thereof as wiU discharge the creditor's claim against the 
 donor. 
 
 38. EXECUTORY CONTRACTS MUST BE MUTUALLY 
 BINDING.— If one party to an executory agreement promises to do 
 a given act and the opposite party does not promise to do anything 
 in return, the contract is said to lack mutuality and is not enforce- 
 able. For example, where C agreed to furnish coal to the amount 
 of 60,000 bushels and in such quantities as M might designate, but 
 M did not agree to take any given quantity of coal, the contract 
 was held to be void for want of mutuality. Campbell v. Lambert, 
 36 La. Ann. 35 ; see also Townsend v. Horning, 23 Wend. 435, and 
 Dodge V. Hopkins, 14 Wis. 630. But it sometimes happens that a 
 promise which was not binding when made becomes binding by 
 some act subsequently done by the promisee. For example, if A 
 promises to pay B a sum of money when B shall have done a 
 given act, here A becomes bound if B, within a reasonable time, 
 does the act, although B did not promise to do what A requested at 
 the time A's promise was made. 
 
 And where A promised to furnish B with such goods of a certain 
 kind as the latter might order within a certain period, and B gave 
 one order which was filled, and subsequently gave a second order 
 which A declined to fill, it was held that A was bound to fill the 
 second order. Railway Company v. Whitham, Law Reports, 9 
 C. P., 16, 20. In the last example given the promise made by A 
 was a continuing promise or offer, which became binding whenever 
 B accepted it by giving an order, providing the offer, in the mean- 
 time, had not been withdrawn. 
 
 39. CONSIDERATION EXECUTED.— If that which forms 
 the consideration for a promise has been wholly done or performed 
 before any promise is made, the promise is without consideration 
 and is not enforceable. For example, if A, without being requested 
 so to do, and as a mere favor, renders B a valuable service, a prom- 
 ise made by B, after the service is fully rendered, to pay for the 
 same, is not enforceable. So, if a creditor voluntarily forbears to 
 collect a debt for a year after it is due, a promise made by the 
 debtor after the expiration of the year to pay for the forebearance, 
 is not enforceable.
 
 14 
 
 40. CONSIDERATION IN PART EXECUTED.— But where 
 the consideration has been in part but not wholly rendered when 
 the promise is made, the promise may be enforced. For example, 
 if A makes B a present of a horse and A subsequently agrees to 
 sell and deliver to B another horse on condition that B will there- 
 upon pay the reasonable value of both horses, this latter promise 
 by B, although it rests upon a consideration that is executed in 
 part, may be enforced. 
 
 41. ACT DONE BY REQUEST.— Whenever a lawful act is 
 done or a service is rendered at another 's request, the doing of the 
 thing requested will support a promise to pay for it, if made by 
 the person at whose instance the act was done, although the prom- 
 ise is not made until after the service is fully rendered. The law 
 regards the promise and request as made at the same time. 
 
 42. EXPRESS PROMISE— WHEN IT WOULD BE IM- 
 PLIED. — So, if an act is done under such circumstances that the 
 law would imply a promise to pay for it, an express promise to 
 pay, made after the act is done, will be enforced. 
 
 43. WAIVER OF LEGAL RIGHTS. — In some cases, it seems 
 that a promise to pay a debt or demand, notwithstanding the ex- 
 istence of a legal defence thereto, does not require a consideration 
 to render the same obligatory upon the party making it. For ex- 
 ample: A promise made by a debtor to pay a debt that is barred 
 by the Statute of Limitations, or by a discharge in bankruptcy, 
 although made without a new consideration, will have the effect of 
 avoiding a plea of the statute or the discharge, and will render the 
 debt or demand collectible. In like manner, a promise made by 
 the indorser of a bill or note to pay it, after he has been released 
 from all liability on his contract of indorsement by a failure of 
 the holder of the note or bill to present it for payment at maturity, 
 or to give notice of its non-payment, is binding upon the promisor, 
 if the promise in question was made with full knowledge that he 
 had been released from liability. 
 
 44. But a rule different from that last stated seems to prevail 
 where a debt or liability has been cancelled by the act of the 
 parties. Thus, where a debt has been released by the creditor by 
 a release executed under seal, a subsequent promise to pay the debt,
 
 15 
 
 notwithstanding the release, is not enforceable, unless the same was 
 founded on a new consideration, , 
 
 s) 
 
 CONTRACTS UNDER SEAL. 
 
 45. A seal is something affixed to the paper on which a contract 
 is written, opposite to the party's signature, like a wafer, or it 
 may be an impression of some device made or embossed on the 
 paper. By statute in some states, a scrawl made with a pen after 
 a party's signature is a good seal, if the instrument on its face 
 purports to be a sealed instrument. The most common specialties 
 are deeds, mortgages, covenants and bonds. Many other instru- 
 ments, however, are executed under seal. 
 
 46. DELIVERY. — To make a specialty or any other written 
 contract operative, it must be delivered with intent that it shall take 
 effect as a contract ; but if a person merely puts his seal to a written 
 agreement, and then delivers it, intending that it shall take effect 
 as a contract, it becomes obligatory upon him, although he does 
 not sign it. 
 
 47. At common law, an agreement executed under seal was en- 
 forceable, although it failed to express a consideration, and al- 
 though no consideration was, in fact, paid or received. If a seal 
 was affixed to a contract after a party's signature, it was con- 
 clusively presumed that the agreement was executed for a valuable 
 consideration, and want of consideration could not be shown in 
 defence to a suit brought to enforce the agreement. The doctrine 
 of the common law in this respect, has been much modified by 
 statute. The statutes of many states permit want of consideration 
 to be shown in defence to an action on a sealed instrument. Such 
 statutes have been adopted in California, Iowa, Kentucky, Kansas, 
 Indiana, and Missouri, and in some of these states the distinction 
 between sealed and unsealed instruments has been abolished. The 
 Missouri statute provides that a seal need not be affixed to a deed 
 conveying real estate. Lawson on Contracts, Sec. 65 ; R. S. of Mo., 
 1919, Sec. 52159 ; Aller v. AUer, 40 N. J. (Law) 446 ; Williston on 
 Contracts, Sees. 109, 217, 218. 
 
 48. WANT OF CONSIDERATION A GOOD DEFENCE IN 
 EQUITY TO A SUIT FOR THE SPECIFIC PERFORMANCE 
 OF A CONTRACT UNDER SEAL.— But even where the common
 
 16 
 
 law is still in force, courts of equity will not decree the specific 
 performance of a promise executed under seal, when it appears 
 that there was no consideration for the promise, or that the con- 
 sideration was totally inadequate. And although an agreement is 
 executed under seal, it may always be shown in defence to a suit on 
 the agreement, that it was founded on an illegal consideration, or 
 that the party sued was induced to execute it through fraud or 
 duress. Thus it may be shown that the consideration of a bond 
 executed under seal, was an agreement by the obligee to compound 
 a felony. 
 
 49. MERGER. — By the common law, if the parties to a simple 
 contract subsequently entered into a contract under seal covering 
 the same subject-matter, the simple contract became merged in the 
 latter. 
 
 50. ALTERATION, RESCISSION AND DISCHARGE OF 
 CONTRACTS UNDER SEAL BY ORAL AGREEMENT.— A con- 
 tract under seal may be altered, rescinded or discharged by a sub- 
 sequent oral agreement, made on a sufficient consideration; but 
 where a specialty is thus modified by a subsequent oral agreement, 
 the whole contract is then reg^xded as a simple contract and is 
 so treated. ^H-^J 
 
 ORAL CONTRACTS. 
 
 51. Contracts may be made verbally, and when so made they 
 are as valid as if made in writing, unless some statute requires 
 them to be in writing. A statute termed the Statute of Frauds, 
 which was enacted many years ago in England, and which has been 
 adopted in most, if not all, of the states in this country, requires 
 a certain class of contracts, such as contracts relating to lands, or 
 the sale of an interest therein, promises to become responsible for 
 the debts of others, promises that are not to be fully performed 
 within one year, and contracts for the sale of goods, wares and mer- 
 chandise above a certain value (generally $30.00 or upward), to be 
 made in writing to render the same enforceable. There are some 
 other contracts, such as notes and bills of exchange, which, of 
 necessity, must be made in writing to render the same enforceable. 
 
 52. SIMPLE CONTRACTS.— A simple contract, partly in 
 writing and partly oral, is regarded as an oral contract. A simple
 
 17 
 
 contract need not be wholly on one paper, but may consist of a 
 number of papers. For example, a contract may be extracted 
 from a voluminous correspondence. 
 
 53. CONTEMPORANEOUS ORAL AGREEMENT ALTER- 
 ING CONTRACT. — When parties have reduced a contract to writ- 
 ing and have executed it, all oral bargainings and promises ante- 
 cedent to the signing of the instrument are merged in the instru- 
 ment, which is presumed to state all that the parties have agreed 
 to do or perform. Therefore, in a suit upon the contract neither 
 party will be permitted, by verbal testimony, to show that the 
 terms of the contract were different from what they appear to be 
 on the face of the instrument. Thus, if a written contract calls 
 for the payment of money, an oral contract made at or before the 
 execution of the contract to pay in something besides money, can- 
 not be proven. So if a deed contains a covenant of warranty 
 against all encumbrances, it cannot be shown in an action for a 
 breach of the warranty, that by an oral agreement made when the 
 deed was signed, a particular mortgage was excepted by the war- 
 rantor ; it cannot be shown by oral testimony that a chattel mort- 
 gage was to cover property that is not described in the mortgage. 
 
 54. FOREGOING RULE DOES NOT EXCLUDE ORAL 
 PROOF OF FRAUD, WANT OF CONSIDERATION, ETC.— 
 But in a suit of law to enforce a written contract, the defendant 
 may show, by way of defence to the action, and by oral testimony, 
 either one or all of the following facts: That the contract was 
 without consideration; that the consideration of the contract was 
 illegal; that the defendant was induced to sign the contract by 
 false and fraudulent representations ; that he was compelled to exe- 
 cute the contract by duress, or that the contract has been altered in 
 a material respect since it was executed. 
 
 55. SUITS TO ANNUL CONTRACT FOR FRAUD, OR TO 
 REFORM.— Sometimes suits are brought, not to enforce a written 
 contract, but to annul it on the ground of fraud or duress, or to 
 reform the contract on the ground of a mistake made in drafting 
 it. In suits of this character it is permissible to prove all oral 
 bargainings, promises and representations which preceded the exe- 
 cution of the instrument. It may also be shown oraUy that a deed 
 or bill of sale, absolute on its face, was really intended as a mort-
 
 18 
 
 gage. And where an oral contract is made contemporaneously with 
 a written one, it may be proven, if it does not contradict the written 
 agreement. Thus, if A, by an agreement in writing, sells and con- 
 veys property to B, and B cotemporaneously with such agreement 
 enters into a further verbal agreement with A, that if A, after a 
 time, should desire to sell the property, he will take it back at a 
 given price, this latter oral agreement may be proven. Greenwalt 
 V. Kohne, 4 Norris, Pa. 369. 
 
 56. SUBSEQUENT AGREEMENT ALTERING CONTRACT : 
 RECEIPT. — An oral agreement modifying or changing the terms 
 of a written contract, if made after the written contract is exe- 
 cuted and delivered, may always be shown ; or if a written contract 
 shows on its face that it is incomplete, and that there are other 
 stipulations between the parties not expressed in the writing — 
 what those other stipulations are may be shown by oral testimony. 
 A mere receipt for money may be explained by oral testimony, or 
 it may be contradicted, since a simple receipt for money is not re- 
 garded as a contract. The true date of a written contract may also 
 be shown, although it differsjrom the date stated in the contract. 
 
 CONTRACTS CREATED BY LAW: QUASI CONTRACTS. 
 
 57. The law, in many cases, assumes that a promise was made, 
 and enforces its performance, although none was in fact made or 
 intended to be made. It always assumes a promise on the part of 
 a person to do what it is his legal duty to do. For example, where 
 a man ran a toll-gate at which it was his duty to pay toll, it was 
 held that he might be sued for toll as upon an express promise to 
 pay the same, and that it was no defence that he did not promise or 
 intend to pay toll. Plank Road Company v. Lewis, 49 Ind. 161; 
 Central Bridge v. Abbott, 4 Gushing, 473. It is a husband's duty 
 to support his wife so long as she properly discharges her duties 
 as a wife ; if he fails to do so and a third person supplies her with 
 necessaries, the law implies a promise on the husband's part to pay 
 for the same, which may be enforced although the husband did not 
 so promise and did n-^t intend to pay for them. 
 
 58. PROMISE CREATED AGAINST ONE NOT COMPE- 
 TENT TO CONTRACT.— The law sometimes creates a promise on 
 the part of a person who is not at the time competent to make a
 
 19 
 
 contract. For example, an infant may be compelled to pay for 
 necessaries supplied to him while in need. In this instance, how- 
 ever, the law simply creates a promise to pay the reasonable value 
 of such necessaries. It does not compel the infant to pay more /Jj2^ 
 than their reasonable value, although the infant may have ex-(jl 
 pressly promised to pay more. In like manner, a person may re-OHO » ^ j 
 cover the reasonable value of necessaries furnished in good faith 
 to an insane person, on the strength of a like promise created or 
 implied by law. The common law compels a husband, who is a 
 minor, to pay the ante-nuptial debts of his wife. In this instance 
 the promise is created by law, the promisee himself not being com- 
 petent to contract to pay the debt of a third party. A physician, 
 who in expectation of receiving pay, renders medical services to a 
 person who has been rendered insensible by an accident of any 
 kind — such services being necessary to save the patient 's life — may 
 recover compensation of the patient, on a promise which the law 
 creates, although he was employed by an unauthorized person. 
 Bishop, Sec. 231 ; Williston on Contracts, Sec. 240. 
 
 59. DEBT OF ANOTHER PAID UNDER LEGAL OBLI- 
 GATION. — One who, in pursuance of a legal obligation so to do 
 pays another's debt, may recover the amount so paid from the 
 person in whose behalf it was paid. For example, a surety may 
 recover from his principal the amount of a suretyship debt which 
 he has paid ; or the surety may recover from his co-sureties their 
 just proportion of the sum by him expended, when he has himself 
 paid the debt. In like manner, a joint promisor who has paid the 
 whole of a debt, may recover from another joint promisor his just 
 proportion of the debt so paid. In all of these cases the recovery- 
 is upon a promise which the law creates or implies. 
 
 60. VOLUNTARY PAYMENT OF THE DEBT OF AN- 
 OTHER. — Except in the instances last mentioned, one who pays 
 the debt of a third party without his request, cannot recover the 
 sum so paid. But by the law merchant, one who pays a dishonored 
 bill of exchange under protest, to protect the credit of the drawer, 
 may, under certain conditions, recover the amount so paid. 
 
 61. SERVICES RENDERED WITHOUT REQUEST AC- 
 CEPTED. — Where services arc rendered to a person and they are 
 accepted (the services being such as are usually paid for), and
 
 20 
 
 when goods are delivered to and accepted by a party, the law, in 
 the absence of an express promise, will imply a promise to pay their 
 reasonable value, although the work was done or the goods were 
 furnished without request. But where one working for a salary 
 voluntarily does work in excess of his duties, without any agree- 
 ment for extra compensation, the law will not usually imply a 
 promise to pay for such extra service. Pew v. Gloucester Nat. 
 Bank, 130 Mass. 391, 396; Bishop, 222; Williston on Contracts, 
 Sec. 91. 
 
 62. PUBLIC OFFICERS.— As public officers are not entitled 
 to compensation for public service, unless the law gives them a 
 salary, and as they can only claim the amount allowed by statute 
 for doing official acts, it is always competent for the legislature to 
 increase the duties of an office without entitling the officer to re- 
 ceive increased compensation. Because the duties of an office are 
 increased, the law does not create or imply an obligation to pay an 
 increased salary. 
 
 63. MONEY OBTAINED BY FRAUD OR DURESS.— Where 
 money is wrongfully obtained by fraud or duress, the law creates 
 a promise on the part of the wrong-doer to refund it, which promise 
 may be enforced. In like manner, if a person saves property which 
 is in danger of being lost or destroyed, the law implies a promise 
 on the part of the owner to pay for such services, unless it appears 
 that he had abandoned the property. This is termed a salvage 
 service. It has also been held that if those on whom the duty of 
 burying the dead is imposed, fail to do so, a person who discharges 
 the duty may recover the expense from the one who was primarily 
 liable to perform the duty. The recovery in such a ease is upon a 
 promise which the law creates to refund the expense. Jenkins v. 
 Tucker, 1 H. Bl. 90; Ambrose v. Kerrison, 10 C. B. 776; Bishop, 
 See. 237 ; Williston on Contracts, Sec. 348, note 5. 
 
 64. MUTUAL ASSENT.— The parties to a contract may mani- 
 fest their assent thereto by signing and delivering the same, if it 
 is in writing ; or by word of mouth when it is oral ; or by conduct 
 and actions from which an assent to its terms will be implied. 
 When a contract is oral, if the proposition made by one party is 
 not understood and assented to by the opposite party in the sense 
 in which it was made, the minds of the parties do not meet and
 
 21 
 
 neither party is bound. (Ante, Sec. 14.) But when a contract is 
 in writing and the same is signed and delivered, neither party will 
 be permitted to say that he did not understand the agreement and 
 that he is not bound thereby. In the latter case the delivery of the 
 contract is conclusive evidence of mutual assent to all of its pro- 
 visions. 
 
 65. CONTRACTS BY LETTER OR TELEGRAPH.— When a 
 contract is made by letter or telegram, the parties are held to have 
 assented, and the contract is complete as soon as the letter of accep- 
 tance is deposited in the mail, or the telegram of acceptance is 
 sent. In such cases, although the offer has been withdrawn by 
 letter or telegram before the letter or telegram of acceptance is 
 sent, yet if the letter or telegram announcing the withdrawal is not 
 received before the letter or message of acceptance is sent, the con- 
 tract is complete. 
 
 66. THE MAIL OR TELEGRAPH THE AGENT OF HIM 
 WHO MAKES USE OF THE SAME TO TRANSMIT AN 
 OFFER.— In case an offer is made by mail or telegraph, the mail 
 or telegraph is regarded as the agent of him who makes the offer, 
 and the same agency may be used to transmit the acceptance of 
 the offer, unless the person to whom the offer is addressed is di- 
 rected to communicate his acceptance in some other way ; hence, if 
 an offer made by telegraph is altered in the course of transmission, 
 and the offer as transmitted is accepted, the contract becomes bind- 
 ing, notwithstanding the mistake. Saveland v. Green, 40 Wis. 431 ; 
 Lawson on Contracts, Sees. 20 to 23 ; Williston on Contracts, Sees 
 81 to 89. 
 
 67. RIGHT TO WITHDRAW OFFER.— A mere offer may be 
 withdrawn at any time before it is accepted, unless a consideration 
 has been paid to let the offer stand open for a given time. An 
 offer may be withdrawn otherwise than by actual notice that it 
 is withdrawn, as where before the acceptance of an offer to sell, 
 the article offered for sale is sold to another party, and he to whom 
 the offer was made becomes aware of the fact. 
 
 68. REASONABLE TIME.— A reasonable time only is allowed 
 to accept an offer, hence if an unreasonable time elapses before 
 notice of acceptance is given, the offer is regarded as withdrawn by 
 mere lapse of time.
 
 22 
 
 69. QUALIFIED ACCEPTANCE.— If an offer made is ac- 
 cepted with any reservations, or with any qualifications of the 
 terms of the offer, the contract is incomplete until the modification 
 of the terms of the offer has been assented to. 
 
 70. ACCEPTANCE IMPLIED FROM ACTS.— An offer may 
 be accepted by merely acting on it, as where goods are ordered of 
 a merchant and he ships them without formally notifying the 
 buyer that his order is accepted; and where a reward is offered 
 generally to anyone who apprehends a certain criminal, one who 
 acts on the offer and apprehends the criminal is entitled to the 
 reward. In the latter case, however, if the reward is offered by 
 public advertisement, it may be withdrawn in the same way, and if 
 the notice of withdrawal is thus given before the criminal is appre- 
 hended, the reward cannot be recovered, although the notice of the 
 withdrawal was not in fact sg^^until after the arrest. 
 
 CONTRACTS, HOW EXECUTED— SIGNING. 
 
 71. A contract that is reduced to writing and is assented to 
 orally and delivered, is valid, although it is not actually signed by 
 the parties, unless it is a contract which falls within the provisions 
 of the Statute of Frauds. The Statute of Frauds requires all 
 agreements relating to lands and certain other agreements to be 
 made in writing and ' ' signed by the parties to be charged. ' ' 
 
 72. SIGNATURE, WHAT SUFFICIENT.— A signature in 
 pencil is sufficient, and a signature is sufficient if only the initials 
 of the Christian name are given. Usually a person will be bound 
 by whatever name he chooses to adopt to evidence his assent to a 
 contract. The place of signature is also immaterial; a signature 
 may be placed at the beginning or the end of a contract, if it is so 
 placed to evidence one's assent to the contract. 
 
 73. A party to a contract may direct his name to be signed by 
 a third party in his presence, and such signing is valid ; it is also 
 valid if his name is written by another while he touches the pen. 
 
 74. SIGNING WITHOUT READING.— One who signs a con- 
 tract is bound by it although he does not read it, unless its contents 
 are falsely read or represented by the other party. It is usually 
 no defence to a contract that a party did not read it and did not
 
 23 
 
 understand the terms of the agreement. It is the duty of a party 
 to read a contract before signing it, and if he neglects to do so he 
 will be bound, unless he was induced to sign it by false representa- 
 tions, or by some deceit practiced by the opposite party. 
 
 75. When a person signs a contract with an oral or unwritten 
 stipulation that it shall not become binding until others sign it, 
 the party so signing is not bound until the others sign it as stipu- 
 lated. 
 
 76. DELIVERY NECESSARY TO RENDER CONTRACT 
 OPERATIVE.— After a written contract is signed it does not 
 become operative until it has been delivered and accepted with the 
 intent that it shall take effect or become operative. But a formal 
 or manual delivery of a contract is not always essential to render 
 it operative. For example : If a contract is signed by both parties 
 thereto with intent that it shall become binding, it is a sufficient 
 delivery if it is left in the custody of one of the parties, or in the 
 custody of a third person. So, if a person, after signing a contract, 
 tenders it to the opposite party, intending thereby to part with its 
 custody, and the latter party without taking it into his hands com- 
 mits it for the time being to the custody of the maker, the delivery 
 is sufficient to render the instrument operative. 
 
 77. DELIVERY TO AGENT.— The delivery of a contract by 
 one party thereto, after it is signed, to an agent of the opposite 
 party, or the depositing of the same in the mail addressed to the 
 opposite party, is a sufficient delivery so far as the party doing such 
 acts is concerned. And the receipt and retention of a contract 
 so delivered, without objection thereto, would constitute a sufficient 
 acceptance to render it binding. 
 
 78. DELIVERY PRESUMED.— Controversies concerning the 
 delivery of contracts most frequently arise with reference to in- 
 struments like deeds, bonds and notes, which are only signed by 
 one party. Under some circumstances the law will presume that 
 an instrument has been delivered, when there is no direct evidence 
 of such delivery. For example : The law will ordinarily presume 
 that a party has accepted an instrument, such as a bond, note or 
 deed, that is beneficial to him. So if an obligation like a note or 
 bond is found in the possession of the payee or obligee, or in the 
 possession of his agent, a presumption arises that it was duly de-
 
 24 
 
 livered. And if the grantor in a deed signs it and files it for 
 record in the proper office, such act will be regarded either as a 
 good delivery to the grantee, or a prima facie evidence that it was 
 delivered to, and accepted by, the grantee before being filed for 
 record. 
 
 79. DEED RECORDED, TRANSFERS TITLE.— A deed for 
 land, if duly executed by the grantor and by him filed for record 
 in the proper office, operates to transfer the legal title to the 
 grantee. Hence, in such cases, it is usually unimportant who sub- 
 sequently has possession of the deed. But if the deed, as drawn, is 
 not signed by the grantee, and it contains provisions imposing a 
 liability on the grantee, he will not be bound by such provisions 
 unless it is shown that he accepted the deed. For example: If 
 the deed contains an obligation binding the grantee to assume and 
 pay a mortgage on the property, the grantee will not be bound 
 without proof that he accepted the conveyance. 
 
 80. DELIVERY IN ESCROW.— When a contract is duly exe- 
 cuted by the parties thereto, and the same is placed in the custody 
 of a third party under an agreement that it shall not be delivered 
 or take effect until the happening of some future event, such de- 
 livery is termed a delivery in escrow. 
 
 81. UNAUTHORIZED DELIVERY.— If a person with whom 
 a contract is thus left in escrow delivers it before the happening 
 of the event, the contract will not become operative. This is true 
 of the delivery of all contracts, except such as are negotiable, to 
 wit : bills and notes. 
 
 82. Generally a deed held in escrow and delivered by the holder 
 on the happening of the contingency, takes effect as of the date of 
 the second delivery; but in some cases it will be given effect by 
 relation, as of the date of the first delivery. Thus, if a femme 
 sole makes a deed and places it in escrow, and marries before the 
 contingency happens on which it is to be delivered ; or if a person 
 who has placed a deed in escrow dies before the happening of the 
 contingency, in both of these cases, on the happening of the con- 
 tingency, after the marriage or death of the grantor, the deed may 
 be delivered, and it will be regarded as taking effect by relation 
 as of the date of the first delivery, as otherwise it would be inop- 
 erative. Bishop, 359, 360 ; Williston on Contracts, Sec. 212.
 
 25 
 
 83. LEAVING DEED AMONG GRANTOR'S PAPERS.— 
 
 If a grantor executes a deed and leaves it among his papers, in- 
 tending that the grantee shall find it at his death and record it, no 
 title passes by the deed when found and recorded, because it was 
 not delivered in the lifetime of the grantor. But if the grantor 
 had committed the deed thus fully executed and acknowledged to 
 the custody of a third party, with directions to deliver it to the 
 grantee at his death, and had reserved no right of control over it 
 in the meantime, or power to reclaim it, such deed, if delivered by 
 the custodian after the grantor's death, would pass the title and 
 take effect as of the date of the first delivery. In this case, how- 
 ever, if the grantor had reserved power of control over the deed 
 until his death, nothing would pass for want of a complete delivery 
 in the grantor's lifetime. 
 
 84. ORAL STIPULATION CONCERNING DEED VOID.— 
 It has been held that if a deed is executed by the grantor and de- 
 livered to the grantee under a verbal stipulation that it shall not 
 take effect until some future time, such verbal stipulation is void 
 and the deed becomes immediately operative. Miller v. Fletcher, 
 27 Grattan, 403. In such case the oral stipulation cannot be in- 
 corporated into the specialty without reducing it to the grade of a 
 simple contract. Ante, Sec. 50. But this reasoning will not apply 
 to a simple contract thus placed in escrow. 
 
 *7/ INTERPRETATION OF CONTRACTS. 
 
 85. Although a contract cannot be contradicted by verbal testi- 
 mony (Ante, See. 53), yet to attain a right understanding of the 
 contract, and of the intent of the parties, their relations to each 
 other and the surroundings at the time the contract was executed, 
 may be looked into. When such extraneous matters are considered, 
 and a doubt then arises as to the meaning of the contract, it may 
 be explained by verbal testimony. For instance, if A agrees to 
 sell his farm in the County of St. Louis, without further descrip- 
 tion, and it appears from extraneous evidence that he has two 
 farms in that county, verbal testimony may be given to show which 
 of the farms was intended. This is termed a latent ambiguity. 
 But if, on reading an instrument and without reference to extran- 
 eous matters, the meaning of the same cannot be made out, then
 
 26 
 
 verbal testimony will iiDt be received to explain it. The ambiguity- 
 is then patent. 
 
 86. PAROL EVIDENCE TO IDENTIFY SUBJECT-MAT- 
 TER. — Parol evidence, however, is admissible to identify the 
 subject matter of a contract. For example: If A agrees with B 
 to sell the latter his farm, or a certain number of horses, without 
 describing the property intended to be sold, parol evidence will 
 be admitted to identify the property which the parties had in view 
 when the contract was made. 
 
 87. If a contract is in a foreign tongue, the meaning of the 
 words must be proven ; but if in our language, the court then takes 
 judicial notice of their meaning, and also of well understood abbre- 
 viations like C. 0. D. or Adm. But the meaning of abbreviations 
 only used in certain localities, and not generally used, must be 
 proven. Local usages or customs must also be proven. Courts do 
 not take judicial notice of the same. 
 
 88. RULES OF INTERPRETATION.— The following are 
 some of the most general rules which govern in interpreting 
 contracts : 
 
 I. A contract should be so construed, if possible, as to carry out 
 or give effect to the intent of the parties. 
 
 II. Parties are bound by the meaning of the words they have 
 employed, and cannot plead ignorance of the meaning of the terms 
 they have used, no more than they can plead ignorance of the law, 
 
 III. The whole of the contract, whether written on one paper 
 or many, must be looked to, in order to arrive at the intent of the 
 parties. 
 
 IV. No inaccuracy in the use of language, bad grammar, or 
 omissions of words or phrases evidently intended to be inserted, will 
 defeat the intent if clearly manifest. Or may be read as and — may 
 as must — quarterly as annually— and party of the first part as 
 party of the second part — if necessary to carry out the intent. 
 
 V. Contracts should be so construed, if possible, as to give effect 
 to all the words and clauses which they contain. 
 
 VI. If the main body of a writing or agreement is followed by 
 a proviso wholly repugnant thereto, the proviso must be rejected. 
 For example : If a conveyance in fee simple, by a subsequent clause 
 of the deed is cut down to a less estate, it is usual to reject the latter
 
 27 
 
 as repugnant to the grant. So if a policy of insurance on groceries 
 which does not cover the building, contains a provision that the 
 keeping of gunpowder on the premises insured will render the in- 
 surance void, the provision will be rejected. 55 Vt. 142. 
 
 A false description of property in a deed will be rejected when 
 there is enough in the deed to show what property the grantor 
 in fact intended to convey. 
 
 VII. If the terms of a contract admit of two meanings, or two 
 ways of effecting an object, one of which is lawful and the other un- 
 lawful, the law will presume that that which is lawful was in- 
 tended. 
 
 VIII. Words and phrases will be understood in their popular 
 sense, unless they relate to some technical subject, such as a trade 
 or an art, and then their technical meaning will be given to them. 
 
 89. CONTRACT, WHEN VOID FOR UNCERTAINTY.— If 
 after applying the rules for the interpretation of contracts, and 
 after hearing evidence as to all such extraneous facts as are ad- 
 missible, the meaning of the parties to a contract cannot be ascer- 
 tained with certainty, the contract in question will be declared 
 void for uncertainty. 
 
 90. PROVISIONS IN DEROGATION OF COMMON LAW.— 
 Provisions in a contract which are in derogation of law— that is, 
 which alter the rights of the parties as they would be at law— are 
 strictly construed. For example: Stipulations in bills of lading 
 by which common carriers limit their common-law liability, are 
 always strictly interpretated. 
 
 91. CONSTRUCTION ADOPTED BY THE PARTIES.— 
 When the meaning of a contract, considered as a whole, is doubt- 
 ful, but the parties thereto by their acts and conduct have con- 
 strued it in a certain way, the courts will adopt the construction 
 which the parties themselves have adopted. Thus, where a contract 
 with the United States called for the delivery of a certain quantity 
 of barley, and for some time barley had been delivered in sacks, 
 the contract was construed as requiring a delivery in sacks, al- 
 though it was silent on the subject. Robinson v. U. S., 13 Wallace, 
 363; Cent. Trust Co. v. Wab. Ry. Co., 34 Fed. Rep. 254. 
 
 92. WORDS IN WRITING PREVAIL OVER THOSE IN 
 PRINT,— When a contract is made on a printed form, words in
 
 28 
 
 writing will usually prevail over words in print, if the two conflict. 
 It ia also a maxim which courts act upon, that what can be made 
 certain by reference to documents, memoranda or records which 
 are referred to in a contract, is sufficiently certain. 
 
 93. CUSTOM AND USAGE.— In this country custom and 
 usage are synonymous terms, and the rule is that a custom or 
 usage may be shown, not to contradict the terms of the agreement, 
 but to explain the meaning of language employed, where the 
 meaning is either equivocal or obscure, and also to ascertain the 
 extent or scope of the contract. Thus evidence has been received 
 in explanation of a contract which contained the phrase "a thou- 
 sand of rabbits, ' ' that by usage in a certain locality a thousand of 
 rabbits meant 100 dozen, that is 1200. 3 Barn & Adolph, 728. And 
 in a suit on a contract by a servant for a year's service, as the con- 
 tract did not specifically state how many days' service should con- 
 stitute a year, it was held competent to show a usage in the locality 
 to give servants certain holidays. 5 Ad. & El. 303. 
 
 94. A usage that will be permitted to control the interpre- 
 tation of a contract must be: 1st, Uniform, and known to the 
 contracting parties. 2nd, Within the limits where it prevails it 
 must be universal. If a custom is shown to be general or uni- 
 versal, knowledge of its existence may be inferred. 
 
 95. USAGE WILL NOT CHANGE THE LAW.— But a usage 
 cannot be proven to change the law, or the rights of the parties as 
 they are at law, nor to change the meaning of unambiguous words 
 or phrases. Thus where certain barrels of flour had been sold and 
 an order had been given by the vendor on his foreman for delivery, 
 it was held that a custom among merchants in the particular 
 locality to regard such an order as a delivery, was not admissible 
 to establish a delivery, because what will constitute a delivery is 
 a question of law. Cotton Press Co. v. Stanard, 44 Mo. 82. It 
 has also been held that a usage cannot be proven for the purpose of 
 showing that a contract to construct a ' ' mahogany counter ' ' meant 
 a counter of white wood, but so stained as to appear to be ma- 
 hogany. Greenstine v. Borchard, 50 Mich. 434. 
 
 96. USAGE BETWEEN INDIVIDUALS.— A long-continued 
 and particular course of dealing between two persons creates a 
 usage as between them, and such a course of dealing may be pre-
 
 29 
 
 sumed to have entered into a contract between them, and may be 
 proven for the purpose of aiding the court in the interpretation of 
 the contract. 
 
 97. ILLEGAL CONTRACTS.— A promise to do an unlawful 
 act will not be enforced under any circumstances (ante, Sec. 12) : 
 and on the other hand, the doing of an unlawful act by one party 
 to an agreement is not a valid consideration for a promise by the 
 other party to do anything in return. Hence when an action is 
 brought to enforce a contract, it is always competent to show that 
 the contract is unlawful, and if such fact appears, no relief will 
 be afforded to either party. Sometimes the unlawful character 
 of a contract is evident from the agreement itself, but more fre- 
 quently it can only be made to appear by extraneous oral testi- 
 mony, and such testimony is always admissible for that purpose. 
 Ante, Sec. 54. 
 
 98. AGREEMENTS OPPOSED TO PUBLIC POLICY.— To 
 render a contract unlawful in the sense that it will not be enforced, 
 it is not necessary that the parties thereto should undertake to 
 do acts that are expressly prohibited by law, for if the parties 
 to an agreement engage to do acts that are detrimental to the pub- 
 lic welfare, or immoral, the agreement is unlawful and will not be 
 enforced. The following are some illustrations of contracts that 
 are thus opposed to public policy : 
 
 (a) An agreement that tends to obstruct the administration of 
 justice, such as a promise to pay money to secure immunity from a 
 criminal prosecution, or a promise to pay a witness for refusing 
 to testify. Baker v. Farris, 61 Mo. 389 ; Porter v. Jones, 52 Mo. 
 399 ; Valentine v. Stewart, 15 Cal. 387. 
 
 (b) Generally a promise to pay money for services rendered 
 in influencing legislative proceedings, or official action of any sort, 
 is unlawful; but an agreement by a lawyer to appear openly be- 
 fore a legislative committee and argue the merits of a measure 
 pending before it, would not be so regarded. Satterly v. Jones, 
 3 Duer, 102 ; Mills v. Mills, 40 N. Y. 543 ; Winpenny v. French, 18 
 Ohio St. 469 ; Marshall v. B. & 0. R. R. Co., 16 Howard, U. S. 314, 
 335 ; Reed v. Peper Tobacco Warehouse Co., 2 Mo. App. 82. 
 
 (e) A promise by a candidate for a public office to divide the 
 fees of the office or to appoint a person to an office, in consideration 
 of aid and influence to be rendered in securing his election, is void.
 
 30 
 
 Martin v. Wade, 37 Cal. 168 ; Robertson v. Robinson, 65 Ala. 610 ; 
 Hager v. Catlin, 18 Hun. 448. 
 
 (d) The same may be said of a promise by an officer of a cor- 
 poration to resign his office for a sum of money to be paid ; also of 
 an agreement by a stockholder, for a consideration paid or prom- 
 ised, to vote for a person for a corporate office. Forbes v. Mc- 
 Donald, 54 Cal. 98 ; Woodruff v. Wentworth, 133 Mass. 309. 
 
 (e) An agreement among persons in trade to obtain control 
 of the market, with a view of suppressing competition and charging 
 exorbitant prices for any of the necessaries of life, is illegal and 
 void. Arnot v. Pittston Coal Co., 68 N. Y. 558. 
 
 (f) An agreement between two persons to defraud the public 
 or to defraud a third party, is unlawful, as where a physician of 
 reputation agrees that another physician may impersonate him at 
 his office in the treatment of patients. Jerome v. Bigelow, 66 111. 
 452-454 ; Sternberg v. Bowman, 103 Mass. 325. 
 
 99. TENDENCY TO INFLUENCE VIOLATIONS OF 
 TRUST. — Contracts are sometimes regarded as unlawful from their 
 mere tendency to induce the parties thereto to commit a breach 
 of trust, as where the officers of a corporation entered into an 
 agreement to purchase claims against the corporation on their own 
 account. Egerton v. Brownlow, 4 H. L. Cases, 1; McDonald v. 
 Houghton, 70 N. C. 393. 
 
 100. WAGERS. — By the common law, as enforced in the Eng- 
 lish Courts, wagers were held to be valid; but by statute (8 and 9 
 Vic. Chap. 109, Sec. 18), wagers were declared to be void. In the 
 United States, also, wagers have been very generally declared to 
 be void by statute. All contracts in the nature of wagers are there- 
 fore unlawful and will not be enforced. For example, a contract 
 to sell goods for future delivery, where no delivery is intended by 
 either party, is a mere wager on the rise and fall of prices, and 
 will not be enforced. For the same reason that the contract is a 
 mere wager on the duration of a human life, the courts will n6t 
 enforce a policy of life insurance, if the person to whom the policy 
 is issued has no interest either as a creditor or dependent relative 
 in the life of the person assured. Warnock v. Davis, 104 U. S. 775. 
 779 ; Cammock v. Lewis, 15 Wall. 643. 
 
 101. CONTRACTS IN RESTRAINT OF TRADE.— The 
 courts will not enforce a contract whereby a person utterly pre-
 
 31 
 
 eludes himself from following any lawful trade or avocation at any 
 place, as where one promises generally not to exercise his skill as 
 an inventor. Albright v. Teas, 10 Stew. Ch. 171 ; but in many cases 
 a business or professional man, in selling out his business or prac- 
 tice to another, may lawfully promise not to follow that business 
 or engage in that profession at a particular place or places, within 
 a certain territory. The general doctrine is that agreements in 
 restraint of trade of the kind last mentioned, will be enforced if the 
 restraint is reasonable. 
 
 102. RESTRAINT, WHEN REASONABLE.— If a stipulation 
 not to engage in a given business 'within a specified territory, is 
 no more comprehensive as to the territory described than is neces- 
 sary to fairly protect the purchaser in the enjoyment of the good 
 will of the business or practice which he has acquired, then the 
 restraint is reasonable, provided the other person is not utterly 
 precluded from following his calling at any place. Oregon Steam 
 Navigation Co. v. Winsor, 20 Wall, 64, 69. 
 
 103. IMMORAL CONTRACTS.— A promise to do an immoral 
 act is void, therefore no recoverery can be had for supplies or money 
 which one knowingly furnishes to another to enable him or her to 
 pursue an immoral avocation. Pearce v. Brooks, L. R. 1 Ex. 213, 
 217. 
 
 104. CARRYING ON BUSINESS WITHOUT LICENSE.— 
 If the law requires a person to take out a license before engaging 
 in a particular trade or calling, one engaging in that particular 
 trade or calling without a license cannot recover for goods sold or 
 services rendered while so carrying on such unlicensed business. 
 For example, a broker cannot recover for brokerage services 
 rendered without a license, if the law requires him to be licensed ; 
 and wages earned by a minor in a business in which it is unlawful 
 to employ minors cannot be recovered by a father who has know- 
 ingly placed the minor in such service. Birkett v. Chatterton, 13 
 R. I. 299. 
 
 105. CONTRACTS MADE ON SUNDAY.— Contracts made on 
 the Lord's day are valid, unless a local statute prohibits the doing 
 of any work on that day. In most of the states of this Union there 
 are statutes prohibiting the doing of any work on Sunday; other
 
 32 
 
 than "works of necessity and charity." Sheffield v. Bahner, 52 
 Mo. 474-477. 
 
 106. EXECUTED ILLEGAL CONTRACTS.— When an illegal 
 contract has been executed, the courts will not lend their aid to 
 undo what has been done or to compel the restitution in whole or 
 in part of money paid or property transferred in pursuance 
 thereof. But in one case it was held that a partner would be com- 
 pelled to account to his copartner for money realized in an un- 
 lawful venture, it appearing that the accounting did not relate 
 exclusively to profits made in the unlawful venture, and that all 
 the firm ventures had been consummated, and that the money real- 
 ized therefrom was in the possession of one of the partners, when 
 the suit for an accounting was brought. Brooks v. Martin, 2 Wal- 
 lace, 18. 
 
 107. IMPOSSIBILITY OF PERFORMANCE.— An agreement 
 between two parties to do what both know to be impossible, is 
 void. But a contract is valid where one of the parties is ignorant 
 of the fact that it cannot be performed and the other has such 
 knowledge, as where a man and woman enter into a marriage en- 
 gagement, the latter not knowing that the former is already married. 
 In such a case she may maintain an action for damages. KeUy v. 
 Riley, 106 Mass. 339 ; Wild v. Harris, 7 C. B. 999. 
 
 108. CONDITION PRECEDENT.— When one party to a con- 
 tract binds himself to do a given act, only after the other party 
 has fully performed a certain promise, the first party is under no 
 obligation to do what he has contracted to do until the other party 
 has complied with his undertaking. Thus, where a sailor was to 
 be paid a specified sum, on condition that he did duty as mate 
 until his ship reached Liverpool, and he died before its arrival, it 
 was held that nothing could be recovered. Cutter v. Powell, 6 
 T. R. 320, 322 ; Smith L. C. 1. But at the present day it would 
 probably be held in such a case that the reasonable value of the 
 service rendered might be recovered, although a suit on the con- 
 tract could not be maintained. Gibson v. Turner, 6 N. H. 481; 
 Yeats V. Ballentine, 56 Mo. 530; Eyerman v. Mt. Sinai Cem. Ass'n, 
 61 Mo. 489. 
 
 109. SUBJECT-MATTER NON-EXISTENT, OR CEASING 
 TO EXIST. — If at the time a contract is entered into, the thing
 
 33 
 
 to which the contract relates has no existence, and both parties are 
 ignorant of the fact, the agreement is void for the reason that it 
 was entered into under a mutual mistake of fact. Also where a 
 contract is entered into on the assumption that the thing, to which 
 the contract relates, will continue to exist, Dut before the time for 
 performance arrives, it is destroyed without the fault of either, 
 the contract is at an end. For example, where a hall was let for 
 an entertainment at a future day, and before the day arrived the 
 hall was accidently destroyed by fire, it was held that the lessee 
 could not recover damages, because the agreement was entered 
 into on the implied condition that the lessor should not be bound 
 if the hall was accidentally destroyed. Taylor v. Caldwell, 3 B. 
 & S. 826. 
 
 110. OBSTACLES OR ACCIDENTS PREVENTING PER- 
 FORMANCE, NO EXCUSE.— When a person contracts to do a 
 given act he pledges himself as having the capacity to do it, and 
 assumes the risk of being prevented from performing his contract 
 by obstacles or accidents ; against obstacles and accidents that may 
 interfere with performance, he should protect himself by contract. 
 Having promised generally to do a thing, he cannot allege that 
 difficulties and obstacles prevented him from fulfilling his con- 
 tract, although they did in fact render the doing of the thing by 
 him impossible. He is bound to do whatever any human being has 
 the power to accomplish. Ford v. Cotesworth L. R. 4, Q. B. 134 ; 
 Kearon v. Pearson, 7 H. & N. 386 ; Hills v. Sughrie, 15 M. & W. 253. 
 
 111. But when it becomes impossible for any one to do the 
 act contracted to be done, by reason of an act of God or the public 
 enemy, the better view is that the party is excused from per- 
 formance. The act of God here referred to is some manifestation 
 of the powers of nature which man has not contributed to and can- 
 not overcome — such as fires caused by lightning, but not by 
 accident. Bishop, 590; Williston on Contracts, Sec. 1090. 
 
 112. PERFORMANCE RENDERED IMPOSSIBLE BY 
 LAW. — A person will be excused from performing a contract, 
 when after it is made the law forbids its performance. For ex- 
 ample, a contract of affreightment will be dissolved by a declar- 
 ation of war rendering it unlawful to carry it out; a covenant 
 to defend the title to a slave during his life, is not broken by a
 
 34 
 
 law emancipating the slave. See also Atkinson v. Ritchie, 10 East 
 534; Bailey v. DeCrespigny, L. R., 4 Q. B. 180; Jones v. Judd, 4 
 N. Y. 412. And where judicial process, such as an injunction, in- 
 tervenes to prevent the doing of an act, it is a valid excuse for its 
 non-performance. U. S. v. St. L., A. & T. R. Co., 43 Fed. Rep. 414. 
 
 113. DUTY DEVOLVED BY LAW, EXCUSED BY ACT 
 OF GOD. — When a duty is devolved on a person by law and not 
 by an express contract, an act of God rendering its performance 
 impossible will excuse performance. On this ground common 
 carriers are sometimes discharged from the legal obligation to 
 carry safely. It was held, however, that a corporation that had 
 contracted to pay one-third of the expense of renewing and re- 
 pairing a bridge, during a term of years, was bound thereby to 
 help repair the structure although it was blown down by a cyclone. 
 Cent. Trust Co. v. Wabash, St. L. & P. Ry. Co., 31 Fed. Rep. 440. 
 
 114. ACCIDENT PREVENTING PERFORMANCE.— If a 
 
 person contracts to build a house on another's land, he is not dis- 
 charged from his promise although it is destroyed by an accidental 
 fire while in process of erection. The same rule applies to a 
 printer who bargains to supply and delivers a certain number of 
 books and suffers a loss of his premises by fire, before the rest are 
 completed. A covenant to pay the rent of a house under lease is 
 not discharged either by an accidental fire or one occasioned by 
 ' ' an act of God. ' ' In the last illustration given the reason is, that 
 the lease vests the lessee with an interest in the land, which is not 
 destroyed; the act of God does not render the payment of rent 
 impossible. 
 
 115. CONSIDERATION FAILING THROUGH ACT OF 
 GOD. — If a person is not able to receive the consideration for a 
 promise, his promise to pay for that which he could not receive 
 will not be enforced. For example, where a student who had con- 
 tracted to pay a certain sum for tuition, could not receive instruc- 
 tion on account of sickness, he was held discharged from his prom- 
 ise. Stewart v. Loring, 5 Allen 306. 
 
 116. ACTS THAT CANNOT BE DONE BY PROXY.— 
 One who contracts to do an act or that another shall do an act 
 that cannot be done by proxy, is released, if an act of God, such 
 as sickness or death, prevents performance. Hall v. Wright, 96 E.
 
 35 
 
 C. L. R. 793 ; Robinson v. Davison, L. R. 6 Ex. 269 ; Farrow v. 
 Wilson, L. R. 4 C. P. 774; Scully v. Kirkpatrick, 79 Pa. St. 324. 
 For the same reason a surety is not bound by a recognizance for 
 his principal's appearance on a given day, if before the day the 
 principal dies. But whenever the act may be done by proxy, as 
 where a carpenter agrees to erect a house, his sickness or death, 
 does not discharge the promise. Some other person may do the 
 act as well as he. 
 
 117. AGREEMENTS TO DO ACTS IN THE ALTERNA- 
 TIVE. — Where a person agrees to do one of two things in the al- 
 ternative, the impossibility of doing one act is no excuse for not 
 doing the other. 
 
 118. CONTRACTS VOID AND VOIDABLE.— A void contract 
 is one that has no effect whatever. Thus a void deed or bill of 
 sale conveys no title and may be impeached by any one. On the 
 other hand, a voidable contract is one which will not be enforced, 
 if one of the parties objects to its enforcement. Furthermore, void 
 contracts are incapable of ratification, whereas, voidable contracts 
 may be ratified. 
 
 119. Contracts are voidable under the following circumstances: 
 When they are without consideration; when the consideration is 
 illegal; when they are procured by fraud or executed under 
 duress ; also when the parties .thereto are incompetent to contract, 
 except in the case of contracts made by married women. 
 
 120. EXECUTED CONTRACTS.— A suit cannot be success- 
 fully maintained to rescind an executed contract, merely because 
 the contract when made was without consideration or because the 
 consideration was illegal. Ante, /Sec. 36. If a person pays money 
 or delivers property in execution of a promise that was not en- 
 forceable for want of a consideration, neither the money so paid 
 nor the property delivered can be recovered. Moreover, as all 
 persons are conclusively presumed to know the law, if money is 
 voluntarily paid under a mistake of law, it cannot be recovered. 
 For example: If a person voluntarily pays a tax which has been 
 illegally assessed, the money so paid cannot be recovered. 
 
 121. MISTAKE OF FACT.— But if while laboring under a 
 mistake of fact, a man pays money, he may recover it. For ex-
 
 36 
 
 ample : If A, intending to pay money to B, by mistake pays it to 
 C, he may recover the amount so paid. United States v. Park 
 Bank, 6 Fed. Rep. 852. And when a person has been induced to 
 pay money through fraud, or has been compelled to pay it by 
 duress, he may recover it. In such cases, the law, as we have seen, 
 creates a promise on the part of the wrong-doer to refund it. 
 Ante, See. 63. 
 
 122. "When an oral contract that is not enforceable under the 
 Statute of Frauds, is executed on one side, as by the payment of 
 the consideration, the money so paid cannot be recovered if the 
 other party is willing to execute the contract on his part. 
 
 Thus, one who has paid for land, under an oral contract of sale, 
 cannot recover the money so paid if the vendor is willing to con- 
 vey. And on the other hand, one who has accepted a conveyance 
 of land under an oral contract of sale, must pay the purchase 
 money. Beaman v. Buck, 9 Smede & Marshal, 207; Galley v. 
 Galley, 14 Neb. 174. 
 
 123. EFFECT OF FRAUD ON CONTRACTS.— It is a general 
 rule that fraud vitiates all contracts : that is to say, fraud renders 
 a contract voidable at the election of the defrauded party. Thus, 
 if one who has not read a contract is induced to sign it by a mis- 
 representation of its contents by the other party or his agent, he 
 will not be held bound by it unless the contract happens to be a 
 negotiable note or bill which has passed into the hands of an inno- 
 cent holder for value. 
 
 And where a person has been induced to enter into a bargain 
 by a misrepresentation of some material fact — as where he is in- 
 duced to buy an unsound horse on the representation that it is 
 sound — the contract is voidable at the election of the defrauded 
 party. 
 
 124. FRAUD THAT WILL RENDER A CONTRACT VOID- 
 ABLE. — A representation made by one party to a contract as an 
 inducement to the other party to execute it will render the contract 
 voidable when the following facts are established : First, that the 
 representation made was false and was known to be false by the 
 person who made it; Second, that the statements made were not 
 obviously untrue, and were in fact believed to be true by the 
 person to whom they were made, and that he was thereby induced
 
 37 
 
 to enter into the agreement ; Third, that the representation which 
 was made consisted in a statement of some material fact or facts 
 relative to the subject-matter of the agreement. 
 
 It is not neccessary, however, to show that the false statements 
 made were the sole inducement to the contract. It is sufficient to 
 render the contract voidable if the contract would not have been 
 made but for such false statements. Sioux National Bank v. Nor- 
 folk State Bank, 12 U. S. App. 347. 
 
 125. If a false representation is made knowingly and is be- 
 lieved and acted on, it will generally vitiate the contract, although 
 the party deceived had an opportunity to ascertain its falsity ; still, 
 when it appears that he had such opportunity, it will in many 
 cases be inferred that he did not rely on the misrepresentation and 
 was not in fact deceived. The law more readily assumes that the 
 defrauded party relied on the false statements made to him, if he 
 was drunk or weak-minded when the contract was made; it will 
 also readily assume that confidence was reposed in representations 
 made, when the parties to the contract occupy a confidential re- 
 lation to each other, such as guardian and ward, client and attorney, 
 principle and agent. 
 
 126. REPRESENTATIONS RECKLESSLY MADE WHICH 
 WERE NOT KNOWN TO BE TRUE.— In an action for fraud 
 and deceit in inducing another to enter into an agreement, it is 
 not always necessary to show that the person making the repre- 
 sentation complained of knew the same to be false. For example: 
 It has been held that a person who, for the purpose of inducing 
 another to enter into an agreement, affirms a certain thing to be 
 true as of his own knowledge, which he does not know to be true, 
 and which is in fact untrue, is as culpable as one who states what 
 he knows to be false. Pomeroy v. Benton, 57 Mo. 531 ; Dunn v. 
 White, 63 Mo., 181, 185. It has also been held that a statement 
 recklessly made without knowledge of its truth, which proves to 
 be untrue, is a false statement knowingly made such as will support 
 an action for fraud and deceit. Cooper v. Schlesinger, 111 U. S. 
 148 ; Barnes v. Union Pacific Railway Company, 54 Fed. Rep. 87. 
 
 127. HIDDEN DEFECTS KNOWN TO SELLER.— When 
 persons are bargaining about an article equally open to the in- 
 spection and knowledge of each, the law does not regard mere
 
 38 
 
 commendations of the article by the seller as a fraud; but if the 
 article has some hidden defects not visible, the vendor must dis- 
 close the defect if known to him. Praising an article under such 
 circumstances, the defect being known to the seller, is a fraud. 
 
 128. EXPRESSIONS OF OPINION— PROMISSORY REP- 
 RESENTATIONS. — Mere expressions of opinion as to the value of 
 an article and representations concerning it as to what will happen 
 in the future will not vitiate a contract. For example : if a person 
 selling land represents that a railroad will shortly be built in the 
 vicinity of the land, which will enliance its value, the representa- 
 tion in question does not amount :o a legal fraud, although the 
 Toad is not built and the seller did not expect it to be built. 
 To render a contract voidable for fraud, there must be a false 
 representation as to some existing matter of fact. 
 
 129. But if a person buys goods on credit with a preconceived 
 intent not to pay for them, the contract is voidable for fraud, 
 and no title to the goods passes to the vendee if the vendor elects 
 to treat the sale as void. 
 
 130. FRAUDULENT CONTRACTS VOIDABLE.— Contracts 
 affected by fraud as above indicated are voidable, not void. The 
 defrauded party is alone entitled to avoid the contract, whereas 
 the other party is bound. Furthermore, if a party fraudulently 
 acquires goods or lands of another, and then sells the same for 
 value to an innocent purchaser, the latter gets a good title notwith- 
 standing the fraud. The result would be different if a fraudulent 
 contract was utterly void. In that event the innocent purchaser 
 would acquire no titile, as is the case when stolen property is 
 purchased by a person who is ignorant of the theft. 
 
 ^ 131. REMEDIES FOR FRAUD.— The defrauded party on 
 ''' ^^'discovering the fraud, may act in one of three ways. He may 
 ^C\^ rescind the contract, he may ratify it, or he may sue for the 
 ^ I damages sustained in consequence of the deceit. 
 
 132. RESCISSION OF CONTRACT.— Rescission consists in 
 giving back that which has been obtained under a contract, and 
 reclaiming what has been parted with, whether it be money or 
 property.
 
 39 
 
 133. RIGHT TO RESCIND— WHEN EXERCISED.— A per- 
 son who elects to rescind a contract for fraud must do so promptly 
 after discovering the fraud, or the right to rescind will be lost. 
 A party cannot rescind a contract for fraud if the rights of inno- 
 cent third parties have attached, and he cannot rescind unless 
 both parties can be placed in substantially the same position 
 which they occupied when the contract was made. 
 
 134. RATIFICATION.— Any act done after the discovery of 
 the fraud by the defrauded party, that treats or recognizes the con- 
 tract as being still in force, is a ratification. Thus one who has been 
 defrauded of his goods, by bringing a suit for the purchase price, 
 thereby affirms or ratifies the sale. 
 
 135. REMEDIES AT LAW.— Although a party may have 
 lost his right to rescind a contract, yet he may bring a suit for the 
 damages which he has sustained in consequence of the fraud ; or if 
 he is sued by the other party in an action to enforce the contract, 
 he may plead the fraud as a complete defence, if the right to 
 rescind is not lost. If the right to rescind is lost, he may never- 
 theless offset against a recovery, all such damages as he has sus- 
 tained in consequence of the fraud. 
 
 C^ CONTRACTS ENTERED INTO BY MISTAKE. 
 
 136. When the subject-matter of a contract, contrary to the 
 belief of the parties, has no existence, the contract is void. Ante, 
 Sec. 109. Thus a deed given ostensibly for land which has no ex- 
 istence will not discharge the debt to discharge which the deed was 
 given. Counterfeit money believed to be genuine and given to dis- 
 charge a debt, will not discharge it. But, if only one party to a 
 contract labors under a mistake, and the other is in nowise respon- 
 sible for it, the contract is valid. Thus, where an agent of a rail- 
 road, intending to name a rate for the transportation of coke, 
 inadvertently used the word ''coal" instead of ''coke", and the 
 opposite party accepted the rate as offered, being ignorant of the 
 mistake, the contract was held valid. Central Trust Co. v. Wa- 
 bash etc. Railway Co., 38 Fed. Rep. 562. 
 
 137. MUTUAL MISTAKE OF FACT RENDERS THE CON- 
 TRACT AS MADE VOIDABLE.— When the parties to a contract 
 act under a mutual mistake as to some matter of fact, by virtue of
 
 40 
 
 which the contract does not express what the parties intended it 
 to express, it is not enforceable, but such a contract may generally 
 be reformed by a court of equity so as to conform the same to the 
 intentions of the parties. It is a general rule that courts of equity 
 will correct mistakes of fact in a written agreement, but that they 
 will not correct mistakes of law. Thus, in the absence of fraud, a 
 party to a contract cannot escape the obligations imposed upon him 
 by the contract because the legal obligation imposed thereby is not 
 what he supposed it to be ; but if in drafting a contract a mistake 
 is made in describing property to vv^hich the contract relates, or 
 if any other mistake of fact is made, the mistake will be corrected. 
 When a scrivener employed to draw a deed, by mistake misde- 
 scribes the land intended to be conveyed, a court of equity will 
 reform the deed ; but the proof in all such cases must be clear, and 
 even in such cases the rights of third parties acquired in good 
 faith will not be disturbed. 
 
 138. MISTAKES OF LAW.— There is one well established ex- 
 ception to the general rule stated in the last section, that courts 
 will not correct mistakes of law, namely; when persons undertake 
 to reduce a previous oral agreement to writing, if, through a mis- 
 take of law, the written agreement is so framed that it does not ex- 
 press the terms of the previous oral agreement, but differs there- 
 from in legal effect, a court of equity will rectify the mistake by 
 decreeing a reformation of the instrument. Hunt v. Rousman- 
 ierre, 1 Peters, 1 ; Oliver v. Insurance Co., 2 Curtis, 298, 299 ; Trav- 
 elers' Insurance Co. v. Henderson, 69 Fed. Rep. 762, 767. 
 
 DURESS— ITS EFFECTS ON CONTRACTS. 
 
 139. A person is said to have acted under duress when he pays 
 money, delivers property, or executes an obligation of any kind, 
 to obtain the release of himself, his wife or his child from any un- 
 lawful physical restraint imposed by another ; or when he executes 
 an obligation, pays money or delivers property to prevent the un- 
 lawful imprisonment of himself, his wife, or his child, such 
 imprisonment being threatened by another, with such a show of 
 force as justifies the belief that the threat will be executed; or 
 when he executes an obligation, or pays money or delivers property 
 to avoid any serious bodily harm to himself, his wife or his child, 
 which is threatened to be inflicted by another. Promises made
 
 41 
 
 under duress will not be enforced, and money paid or property 
 obtained by duress may be recovered. Ante, Sec. 63. 
 
 140. DURESS PER MINAS OR THREATS.— It wiU be ob- 
 served, that duress of one kind consists of threats merely. When 
 duress of that sort is pleaded in avoidance of a promise, it must 
 appear that the threats made in fact overcame the promisor's will 
 power and led him to promise against his will. According to the 
 modern decisions the threat need not be of an injury to life or limb, 
 amounting to a mayhem; it is sufficient if serious bodily harm is 
 threatened to the party himself, or to his wife, or to his child. See 
 Forshay v. Fergusen, 5 Hill, 154; Baker v. Morton, 12 Wall. 150, 
 158 ; Collins v. Westbury, 2 Bay, 211. 
 
 141. IMPRISONMENT, WHEN LAWFUL AND WHEN UN- 
 LAWFUL. — In this country persons can only be lawfully arrested 
 in the following manner ; first, by virtue of a warrant issued by 
 some court or magistrate having authority to issue warrants; 
 second, without a warrant by an officer of the law, such as a police 
 officer, constable, sheriff or marshal, who has reasonable ground to 
 believe that an offense has been committed, and that an immediate 
 arrest without warrant is necessary to prevent an escape, the arrest 
 being made in such a case, for the purpose of taking the accused 
 before an examining magistrate, and obtaining a warrant for his 
 detention. Hence, it follows that a person is unlawfully restrained 
 of his liberty unless he is arrested and held in custody in one or 
 the other of the modes last stated. 
 
 142. ARREST UNDER VALID PROCESS, NOT DURESS. 
 If a person is arrested for a debt under valid judicial process, and 
 while so held enters into a contract to secure his release, he will not 
 be regarded as necessarily acting under duress, but an agreement 
 thus made will be carefully scrutinized. A bond given to secure 
 one's appearance to answer for an alleged crime is not executed 
 under duress, though entered into while the obligor is under arrest. 
 And a mere threat to levy an execution or attachment, or to bring 
 a suit to collect a debt, is not such duress as will avoid a contract 
 made under the pressure of such a threat. 
 
 143. ARREST UNDER VALID PROCESS MAY CONSTI- 
 TUTE DURESS.— While it is generally true that a contract made
 
 42 
 
 by a person who is in custody, under a valid warrant, is not re- 
 garded as having been executed under duress and therefore as 
 voidable, yet there are well-defined exceptions to this rule. For 
 example: If a person is arrested under a warrant that was sued 
 out maliciously and without probable cause, and while so held he 
 pays money or executes an obligation to secure his release, he acts 
 under duress, although the warrant was valid. A person also acts 
 under duress if he pays money or executes an obligation to secure 
 his release from custody, under a warrant that was sued out for 
 an adequate cause, but for an improper purpose, namely, for the 
 purpose of extorting money from the accused, or for the purpose 
 of compelling him to settle a civil debt. Brown v. Pierce, 7 Wall. 
 205, 215 ; Richardson v. Duncan, 3 N. H. 508 ; Watkins v. Baird, 
 6 Mass. 511 ; 12. Wall 150. 
 
 144. MORAL DURESS. — In some cases it is said that a threat 
 to cause a person's arrest under a valid warrant to be thereafter 
 sued out for adequate cause does not constitute such duress as will 
 avoid a contract that is executed for a sufficient consideration under 
 the pressure of such a threat. But in a number of cases it has been 
 held to the contrary, that a threat made to a wife to cause the 
 arrest of her husband on a criminal charge, or to a parent to cause 
 the arrest of his child, does constitute such duress as will serve to 
 vitiate a contract if the threat, in fact, overcomes the will of the 
 person to whom it is addressed and occasions a forced assent, with- 
 out reference to the question whether there was or was not adequate 
 ground for the threatened arrest. This has been termed a species 
 of moral duress. Eadie v. Slimmon, 26 N. Y. 9 ; Adams v. Irving 
 Nat. Bank, 116 N. Y. 606; Taylor v. Jaques, 106 Mass., 291; 
 Gregor v. Hyde, 10 C. C. A. 290, 293. 
 
 145. MONEY PAID TO REGAIN PROPERTY WRONG- 
 FULLY SEIZED. — When a person pays money to regain posses- 
 sion of property unlawfully seized, or to avoid a threatened un- 
 lawful seizure, by a public officer who is authorized to make seizures, 
 it may be recovered. Hendy v. Soule, Deady Rep. 400. If a col- 
 lector of import duties demands more than the lawful duty, and 
 the sum demanded is paid to avoid heavy penalties, so much as was 
 paid in excess of the lawful duty may be recovered. Maxwell v. 
 Griswold, 10 How. U. S., 241, 256. But money paid to get 
 possession of goods lawfully seized under attachment, or paid
 
 43 
 
 to prevent the levy of an execution or attachment, is not recover- 
 able. 
 
 146. CONTRACTS MADE UNDER DURESS VOIDABLE.— 
 Contracts made under duress are said to be simply voidable. It 
 would seem to follow, therefore, that a negotiable note executed 
 under duress, may be enforced against the maker, by an innocent 
 purchaser for value. But under certain circumstances it would 
 seem that duress ought to render a note void; for example, if a 
 man is ordered by a highwayman to sign a note and does so to save 
 his life, while a pistol is held at his head to enforce obedience, such 
 a note ought to be held void, even in the hands of an innocent pur- 
 chaser for value. 
 
 ALTERATION OF CONTRACTS. 
 
 147. MATERIAL ALTERATION.— An unauthorized altera- 
 tion of a contract in a material respect by a party thereto, while 
 the contract is executory, renders it invalid as to the other party. 
 The same result follows if a contract is altered by a third party, 
 with the sanction of one of the parties to the contract. And any 
 alteration of a contract is material which changes its terms in the 
 slightest degree. Thus, adding an interest clause to a contract 
 which does not bear interest, increasing the rate of interest, or 
 changing the place or time of payment, are each material altera- 
 tions. 
 
 148. IMMATERIAL ALTERATIONS.— In construing con- 
 tracts, however, the law will supply obvious omissions of words or 
 phrases, and will disregard inaccuracies of language where the 
 intent is clear. Ante, Sec. 88. Hence, alterations which merely 
 interpolate words which would be supplied in construing the con- 
 tract, are not material. 
 
 149. ALTERED INSTRUMENTS VOIDABLE.— An altered i / 
 instrument is voidable, not void. The innocent party, notwith- *^ r^ 
 standing the alteration, may insist on the performance of the orig- 
 inal agreement, or he may insist on the execution of the contract as 
 altered, or third, he may treat the contract as no longer obligatory. 
 
 150. INTENT OF PARTY NOT MATERIAL.— A material 
 alteration of a contract by a party thereto, or by another with his
 
 44 
 
 authority, renders the contract voidable, although there was no in- 
 tent to defraud. It has even been held that an immaterial altera- 
 tion, if it was made with intent to defraud, will invalidate a con- 
 tract ; but this doctrine cannot be said to be fully established. 
 Kailroad v. Hurst, 9 Alabama, 513; Adams v. Frye, 3 Metcalf, 
 103. 
 
 151. ALTERATION BY A STRANGER.— A contract is not 
 impaired by a purely accidental alteration thereof by a third party. 
 This is the law both in the United States and England. It is held, 
 however, in England, that a party having the custody of a contract 
 is bound to preserve it intact, hence in that country it has been 
 ruled that if a contract is intentionally altered by a stranger, while 
 so in the possession of one of the parties, it is voidable at the 
 election of the other party. But such is not the law in this country. 
 In the absence of fraud or negligence, the unauthorized alteration 
 of a contract by a third party does not vitiate it. 
 
 152. ALTERATION BY CUSTODIAN WHO IS NOT A 
 PARTY. — It has also been held that the intentional alteration of a 
 contract, by one who is not a party to it, but who has its custody, 
 renders it voidable, without specific evidence that he had authority 
 from one of the parties to alter it. Pattison v. Luckly, 10 Law 
 Rep. Ex. 330 ; Morrison v. Welty, 18 Md. 169. This doctrine is not 
 well established. 
 
 153. NOTE OR BILL ALTERED.— If negotiable paper, such 
 as a note or bill, is altered in a material respect by the holder, it 
 cannot be collected, even by an innocent purchaser for value. 
 
 154. CONTRACT ALTERED— RIGHT TO RECOVER ORIG- 
 INAL CONSIDERATION.— It is the better view that when a party 
 has intentionally altered a written contract, in a material respect, 
 so that he cannot recover upon it, he cannot recover the original 
 consideration upon which the contract was founded. Thus if a 
 note given for borrowed money, is intentionally altered by the 
 holder, he should not be allowed to recover the sum loaned in an 
 action of assumpsit. 
 
 155. ALTERING DEED AFTER DELIVERY.— The altera- 
 tion of a deed, after the title has passed by delivery, does not in- 
 validate the instrument, or at IcasL does not affect the title.
 
 45 
 
 156. ALTERING CONTRACTS BY MUTUAL CONSENT.— 
 All contracts may be altered, as heretofore stated (Sec. 56), by 
 mutual consent of the parties ; but such alteration by consent will 
 discharge a surety, unless he also consents to the alteration. And 
 a contract may be altered orally by consent, although it contains a 
 clause that it shall not be altered except in writing. By such a 
 clause the parties do not deprive themselves of the power to subse- 
 quently agree to alter it orally. McFadden v. O'Donnell, 18 Cal. 
 160 ; Ins. Co. v. Earle 33 Michigan, 143. 
 
 157. When the contract is one that by the Statute of Frauds 
 must be in writing, a verbal alteration may either be ineffectual 
 to alter it, or it may destroy the contract altogether. 
 
 158. ALTERING NEGOTIABLE PAPER BY ORAL AGREE- 
 MENT. — Promissory notes and bills of exchange must be in writ- 
 ing; hence a verbal agreement varying or altering their terms is 
 repugnant thereto and void if made at the time of the execution 
 and delivery. Ante, See. 53. 
 
 r& 
 
 ELECTION AND WAIVER— RATIFICATION. 
 
 159. When a contract is broken by one of the parties, the oppo- 
 site party frequently has a choice of remedies, which is termed an 
 election. Some illustrations of this right of election have already 
 been given in the case of contracts vitiated by fraud or by a mate- 
 rial alteration. Ante, Sees. 131, 149. But in very many other 
 cases a party has a choice of remedies. Thus, if a party to a con- 
 tract refuses to execute it, the other party may sue for damages, 
 or elect to treat the contract as rescinded; and one who buys an 
 article in consequence of a false representation as to its quality, 
 may ordinarily either sue for damages, or rescind the bargain. 
 
 160. PROMISE TO DO ONE OP TWO OR MORE ACTS.— 
 When one party to a contract promises to do one of two things in 
 the alternative, by a given time, and he does neither, the opposite 
 party then has his election to require the performance of either act. 
 For example : where a debtor had an option to pay a debt in three 
 ways, by a given day, and he failed to pay it in either way — it was 
 held that the opposite party might claim payment in either way. 
 Corbin v. Fairbanks, 56 Vt. 538.
 
 46 
 
 161. ELECTION, WHEN BINDING.— An election as between 
 remedies or rights, when once made with full knowledge, of all the 
 facts, is in many cases Binding on him who makes it, and for that 
 reason the right of election should be carefully exercised. For 
 example, if property is purchased with an intent on the part of the 
 purchaser not to pay for it, the sale, as we have seen, is voidable 
 (ante, See. 129), and the vendor may reclaim his property; but if, 
 with knowledge of the fact that it was bought with such fraudulent 
 intent, the vendor sues for the purchase price, he thereby irrevoca- 
 bly elects to affirm the sale. Ante, Sec. 134. In like manner a 
 principal is held to have elected to become bound by an unauthor- 
 ized contract made by his agent, if, after he has knowledge of the 
 contract, he does any act that recognizes it as valid. 
 
 162. WAIVER. — By a waiver a party merely relinquishes some 
 right which a contract gives him, or which the law creates. As to 
 the waiver of a statutory defence, and the necessity for a considera- 
 tion in such cases, see Sec. 43. A right secured by a contract may 
 be waived and is waived when the person in whom the right is 
 vested knowingly does any act that is inconsistent with the asser- 
 tion of such right. The adjudged cases furnish many illustrations 
 of the doctrine of waiver. A vendor of goods, who with know- 
 ledge that the goods have not been delivered to the buyer and are 
 still in transit, sues the buyer for the purchase price and attaches 
 the goods as his property, thereby waives his right of stoppage 
 in transitu. 
 
 And generally, when by the terms of a contract a person is re- 
 quired to do a given act within a certain time or in a certain 
 manner, the right to insist upon performance within the prescribed 
 time or in the prescribed way, is waived, if the opposite party to 
 the contract by any act or neglect prevents the party in default 
 from doing that which he had contracted to do within the time or 
 in the manner contemplated. King Iron Bridge Co. v. City of St. 
 Louis, 43 Fed. Rep. 768. 
 
 163, RATIFICATION. — Ratification consists in doing some act 
 whereby a person becomes bound by an agreement made in his name 
 but without his authority. Whenever a person who knows that a 
 contract has been made in his name and without his authority, in- 
 tentionally does some act which recognizes the contract as binding,
 
 47 
 
 he thereby ratifies the agreement and becomes bound by it to the 
 same extent as if it had originally been executed with his knowledge 
 and sanction. 
 
 164. CONTRACT RATIFIED VALID FROM INCEPTION. 
 —Whenever a voidable contract is ratified it becomes valid from 
 Its inception ; all acts that were done under it before it was ratified 
 become binding on him who ratifies it, as well as those done subse- 
 quently. 
 
 165. Voidable contracts only are subject to ratification. An 
 utterly void contract cannot be ratified. And only those persons 
 who have capacity to make a contract are able to ratify it. 
 
 166. THE DOCTRINE OF ESTOPPEL.— In suits brought to 
 enforce contracts or to recover property, one or the other of the 
 parties thereto may be precluded by his previous statements or 
 conduct, from making a defence or asserting a claim which he 
 otherwise might have made or asserted. This is termed an estoppel. 
 For example, if a man stands by and sees his property sold, as be- 
 longing to another, without disclosing to the buyer his ownership 
 of the same, he will be estopped by his silence from asserting his 
 title to the property, either as against the buyer or as against any 
 one who has derived title from the buyer. If a father, by promis- 
 ing to give his son a piece of land, thereby induces him to enter into 
 possession of the land and to make valuable improvements on the 
 same, he will be estopped by his promise from asserting a title to 
 the land as against his son, although the promise to convey the land 
 to him rested upon no consideration when it was made, and for 
 that reason was not enforceable. 
 
 A lessee who takes a lease of land or premises and enters into 
 possession of the same under the lease, by so doing admits that the 
 landlord has a good title and is estopped from disputing his land- 
 lord's title, so long as he remains in possession under the lease. 
 Many other illustrations of the doctrine of estoppel might be given, 
 but they all rest upon the same principle. 
 
 167. ESTOPPEL, HOW CREATED.— To raise an estoppel it 
 is necessary to show that a person whose duty it was at a given time 
 to take a certain action, or to disclose certain facts, failed to take 
 such action or to make such disclosure, in consequence whereof,
 
 48 
 
 some third party was induced to act in a manner detrimental to 
 his interest. For example, where a person was asked if he had 
 any legal defence to a note, and he replied that he had not, know- 
 ing that the inquiry was made with a view of purchasing the note, 
 it was held that he was estopped from subsequently making a de- 
 fence which he happened to have, it appearing that the note had 
 been purchased in reliance upon the statement that no defence 
 existed against it. Hoover v. Kilander, 83 Ind. 420. 
 
 168. RECITALS IN CONTRACTS AND DEEDS.— When a 
 deed or a contract, or any other written obligation, contains recitals 
 of matters of fact (as where a bond contains a recital that it is 
 secured by a mortgage on certain property), one who signs such 
 deed, contract or obligation will be estopped from denying the fact 
 so recited. This is termed "an estoppel by deed." The illustra- 
 tions given in the preceding sections are instances of "estoppel 
 in pais." 
 
 ABROGATION OF CONTRACT— RELEASE. 
 
 / 
 
 169. After a contract has been executed it is always competent 
 for the parties to abrogate or annul it by mutual consent; mutual 
 promises made by the parties to a contract to release one another 
 therefrom, rest upon a valuable consideration and are effectual to 
 discharge the contract, although they are made orally, and although 
 the contract to be discharged is under seal. It must be borne in 
 mind, however, that an agreement to cancel a deed for land, after it 
 has been delivered and recorded, will not operate to divest the title 
 of the grantee. A re-conveyance is necessary. 
 
 170. RELEASE. — When one party to a contract releases the 
 other from his obligation, the release must either be supported by 
 a valuable consideration, or it must be executed under seal, which 
 imports a consideration. Ante, Sees. 44, 47. 
 
 171. CONTRACTS, JOINT AND SEVERAL— RELEASE OF 
 SAJVIE. — By the common law, when two or more persons unite in 
 making a promise, the contract thereby created (depending upon 
 the language employed) is either a joint or a several contract, or 
 it is both joint and several. If the contract is joint, the death of 
 one of the promisors operates to release his estate from all liability,
 
 49 
 
 and to devolve all the rights and liabilities created by the contract 
 upon the surviving promisors. But if the contract is several, or 
 joint and several, the death of one promisor does not operate to 
 discharge his estate or to deprive it of any benefits which may ac- 
 crue from the contract. 
 
 172. SUITS UPON JOINT CONTRACTS— HOW BROUGHT. 
 
 — In suing upon a joint contract, where the common law is not 
 modified by statute, it is necessary to sue all the living promisors, 
 and if either one has been released from the contract, such release 
 of one operates to discharge all. In suing upon a joint and several 
 contract, the plaintiff has an election to sue all of the promisors 
 together, or to sue any one of them separately. But it is a rule of 
 the common law that in a suit to enforce a joint and several con- 
 tract, a release of one promisor may be pleaded as a release of all. 
 
 173. RELEASE BY OPERATION OF LAW.— But when one 
 of several joint promisors is released by operation of law, as by a 
 discharge in bankruptcy or by the statute of limitations, it does 
 not operate as a release of others jointly bound ; and if one of sev- 
 eral joint promisors pleads infancy as a release from liability and 
 prevails, the other promisors are not thereby released. 
 
 174. COVENANT NOT TO SUE NOT A RELEASE.— A 
 
 covenant not to sue one of two joint, or joint and several promisors, 
 is not tantamount to a release, and hence does not discharge a co- 
 promisor. A creditor may in effect release one joint promisor by 
 reserving to himself the right to sue him along with the other joint 
 promisors, and at the same time covenanting not to levy an execu- 
 tion upon his property. This amounts to a mere covenant not to 
 sue, and does not discharge the other joint promisors. 
 
 175. CONTRACT MERGED IN JUDGMENT.— By the com- 
 mon law, if a judgment is obtained against one of two or more 
 joint promisors, there can be no judgment against the others, for 
 the reason that the contract becomes merged in the judgment. 
 
 But, if the judgment is founded upon a "joint and several" con- 
 tract, and the judgment is against one party only, it is no bar to a 
 suit against the others, unless the judgment has been paid. 
 
 176. PAYMENT.— The payment of a debt by any one of sev- 
 eral joint or several promisors operates to extinguish the debt, and
 
 50 
 
 such payment may be pleaded by either of the promisors in defence 
 to a suit. 
 
 177. MODERN RULE. — Very much of the law relative to joint 
 and several contracts has been rendered obsolete by statutes enacted 
 in many states which declare , in substance, that all contracts, 
 which, by the common law, were joint only, shall be construed as 
 joint and several. R. S. of Mo., 1919, Sec. 2155. Statutes have 
 also been enacted in many states permitting a creditor to compound 
 a debt with one or more of several joint or several debtors, and 
 release them for such sum as is deemed proper, without impairing 
 the creditor's right of action against others, for the residue of the 
 debt. R. S. of Mo., 1919, Sec. 2163. 
 
 178. ALL JOINT PROMISEES MUST JOIN AS PLAINT- 
 IFFS. — It is still necessary that all promisees should be parties to 
 a suit brought against the promisor to enforce the promise. But 
 those who will not join as plaintiffs may be made defendants. 
 R. S. of Mo., 1919, Sec. 1159. 
 
 13, 
 
 INFANTS— INCAPACITY TO MAKE CONTRACTS. 
 
 179. At common law, all persons, both male and female, under 
 21 years of age, were regarded as infants, but by virtue of statutes 
 that have been enacted in some states, females attain their ma- 
 jority at the age of 18. See Laws of 1921, pp. 117 and 399, amend- 
 ing R. S. of Mo., 1919, Sees. 506 and 370. An infant's contracts 
 are not enforceable against the infant, because an infant is want- 
 ing in contractual capacity. 
 
 180. OBLIGATIONS OF INFANTS THAT MAY BE EN- 
 FORCED. — Although an infant's contracts are generally invalid, 
 nevertheless some liabilities will be enforced against an infant. 
 
 For example: An infant will be compelled to pay the reason- 
 able value of necessaries that have been supplied to him at his re- 
 quest, or that have been supplied to his wife and family if he is 
 married. 
 
 He will also be compelled, when married, to pay the valid ante- 
 nuptial debts of his wife, and to discharge any other liabilities 
 which the law imposes on him, or has specially authorized him to 
 incur. Thus, where a surety for a minor in a criminal recognizance 
 has been compelled to discharge the recognizance, the amount so
 
 51 
 
 paid by the surety may be recovered from the minor. Bishop on 
 Contracts, Sec. 907; Lawson on Contracts (1st Ed.), Sec. 133; 
 Williston on Contracts, Sees. 228, 240. Contracts of enlistment 
 bind infant when authorized by law. And an infant cannot avoid 
 a deed which the law would have compelled him to make, as where 
 a son holding land in trust for his father, by the latter 's direction 
 sold it to a third party. In this case the son was not allowed to 
 avoid the deed. 10 Ala., 348. 
 
 181. INFANT LIABLE FOR TORTS AND FRAUDS.— An 
 infant is liable, like an adult, for his torts and frauds that do not 
 grow out of and are not immediately connected with a contract 
 which he may have made. Thus, an infant is liable for an assault 
 and battery, or for wilfully or negligently injuring the person or 
 property of another. But when the tort or fraud complained of 
 grows out of a contract which was made by the infant, he cannot be 
 held responsible for the tort. For example, an infant cannot be 
 held liable for false representations which he may have made in 
 connection with the sale of property, as to its quality or title, nor 
 for false representations as to his age, which were made to induce 
 another to enter into a contract with him. Lawson on Contracts, 
 Sec. 155 ; Williston on Contracts, Sec. 245. 
 
 182. FATHER'S LIABILITY FOR AN INFANT'S TORTS. 
 — When an infant lives with his father and is supported by him, 
 the law regards the infant as a servant of the father, and the 
 father, as well as the infant, is liable for the torts and negligent 
 acts committed by the infant in the course of his employment as 
 such servant. 
 
 183. NECESSARIES— WHAT THEY ARE.— If an infant is 
 already supplied, no matter from what source, with what is reason- 
 ably necessary for his personal comfort and well-being, considering 
 his station in life, or if he is living with and is supported and 
 clothed by his parents, then nothing which may be furnished to 
 him at his request is regarded as a necessary. A person trusting 
 an infant under such circumstances, does so at his peril. But when 
 an infant is not living with and is not supported by his parents, 
 then all articles that are suitable and proper for the infant, con- 
 sidering his station in life, and his fortune, may be supplied to him 
 and will be regarded as necessaries, provided the infant is not 
 already supplied therewith. Thus, suitable food, clothing, lodging
 
 52 
 
 and medical attendance, and the services of a lawyer when an in- 
 fant has been accused of crime, are regarded as necessaries. And 
 articles not absolutely essential to the infant's comfort will be re- 
 garded as necessaries, if persons of the infant's age, means and 
 station in life are usually provided with them. 
 
 184. MONEY NOT USUALLY REGARDED AS A NECES- 
 SARY. — An infant is not liable at law for money borrowed to pay 
 for necessaries, but he is liable for money directly applied by the 
 lender in procuring necessaries for him. Swift v. Bennett, 10 
 Cush. 436 ; Randall v. Sweet, 1 Denio, 460. The reason of this dis- 
 tinction is said to be that if money is loaned directly to an infant, 
 lie is liable to squander it instead of providing himself with 
 necessaries. In a court of equity, an infant, it seems, may be held 
 liable for money borrowed, which he actually applies in payment 
 for necessaries. Lawson on Contracts, Sec. 138, and cases there 
 cited. Williston on Contracts, Sec. 243. 
 
 185. ARTICLES FURNISHED TO A MINOR TO ENABLE 
 HIM TO CARRY ON BUSINESS, OR FOR ORNAMENT, OR 
 FOR MERE PLEASURE, NOT NECESSARIES.— If a minor 
 engages in business of any kind, articles furnished to him to carry 
 on that business, or to be used in repairing or improving his 
 property, and money loaned to him to enable him to pay off en- 
 cumbrances upon his property, or to insure it, are not regarded as 
 necessaries. Jewelry supplied to a minor, merely for the purpose 
 of personal adornment, and other articles supplied to him merely 
 for the purpose of gratifying his taste or adding to his pleasure, 
 are not necessaries. Lawson on Contracts, Sec. 137; Williston on 
 Contracts, Sec. 242. 
 
 186. PERSONS GIVING CREDIT TO MINORS DO SO AT 
 THEIR PERIL. — The burden always rests upon a person who 
 seeks to charge an infant with a liability for goods supplied to him, 
 of showing that the articles supplied were, in fact, necessaries. If 
 the plea of infancy is interposed and the fact of infancy is estab- 
 lished, the creditor cannot recover against the infant, unless he 
 shows to the satisfaction of the court that the articles supplied 
 belonged to the class of necessaries. Before trusting an infant, 
 therefore, for goods of any kind, a tradesman or other person must 
 ascertain at his peril that the articles supplied are necessary for 
 the infant's comfort and welfare, and that he is not at the time in
 
 53 
 
 possession of the same, nor living with persons whose duty it is to 
 supply them. Moreover, as a parent is not under any legal obliga- 
 tion to pay debts that have been contracted by his child, a parent 
 cannot be held responsible for necessaries furnished to the child. 
 Kelly V. Davis, 49 N. H. 176 ; In re Ryder, 11 Paige, 185 ; Lawson 
 on Contracts (1st Ed.), Sec. 129; Williston on Contracts, Sees.. 
 240, 242. An infant is not estopped at law from pleading infancy,, 
 even though he falsely represented his age. But the rule is dif- 
 ferent in equity. Lawson on Contracts (1st Ed.), Sec. 131. 
 
 187. LIABILITY OF INFANT ON NOTES, BONDS, ETC., 
 GIVEN FOR NECESSARIES.— The better view is that a minor 
 may be held bound on any special contract which was executed for 
 necessaries, such as a note, bill or bond, provided the obligation 
 is of such character that the consideration can be inquired into. 
 If by the local law the consideration of the contract executed by 
 the minor cannot be inquired into, because it is under seal, or for 
 any other reason, then the infant should not be held bound by such 
 special agreement, as it would deprive him of his privilege of show- 
 ing that he had agreed to pay more than the reasonable value 
 thereof. Lawson 140 ; Williston on Contracts, Sec. 240, note 11. 
 
 188. CONTRACTS OF AN INFANT VOIDABLE, NOT 
 
 VOID. — It was once thought, and there are some decisions to that 
 effect, that a power of attorney executed by a minor, his contracts 
 of suretyship and guaranty, and all other contracts that are mani- 
 festly to his disadvantage, are void and not capable of ratification. 
 But it is the better and more modem view that an infant's con- 
 tracts, of whatsoever nature, are simply voidable at his election, 
 and subject to ratification by the minor when he attains his ma- 
 jority. Lawson on Contracts, 130. and eases collected in the 
 notes thereto. Williston on Contracts, Sec. 226. 
 
 189. VOIDABLE CONTRACTS OF INFANT— HOW RATI- 
 FIED.— A minor after becoming of full age, may ratify his void- 
 able contract made during infancy, in the following ways : First, 
 by expressly agreeing to execute such contract ; Second, by acts and 
 conduct from which an agreement or an intention to execute it 
 will be implied ; Third, by failing to disaffirm in a reasonable time. 
 
 190. NEW PROMISES— CONSIDERATION THEREOF.— 
 An express promise made by an infant after attaining his ma-
 
 54 
 
 jority, to execute a voidable contract made during his minority, 
 does not require a new consideration to support it, but such a 
 promise, to operate as a ratification, must be made by the infant 
 with full knowledge that he is not liable thereon. Such promise 
 must also be made to the opposite party to the contract, or to his 
 agent, and must be couched in such language as shows an intention 
 on the part of the minor to execute the voidable agreement. The 
 new promise, however, need not be in writing, unless a statute of 
 the state where it is made so requires. Such a statute has been 
 enacted in Missouri (R. S. of Mo., 1919, See. 2173) and in some 
 other states. 
 
 191. ACTS OF INFANT AMOUNTING TO A RATIFICA- 
 TION. — If a person accepts rent after becoming of full age, under 
 a lease which was executed by him during his minority, or if, hav- 
 ing bought goods on credit, after he attains his majority, he retains 
 and uses them, or if, having sold property during his minority, 
 after becoming of full age he receives and retains the purchase 
 money, or if, after attaining his majority, he brings an action to 
 enforce a contract that was made by him during his minority, in 
 each of these cases, his conduct amounts to a ratification. So if, 
 having purchased property during his minority, a minor retains 
 possession of it for an unreasonable length of time after attaining 
 his majority, or sells or disposes of the property to a third party 
 — such acts amount to a ratification of the purchase, and render 
 him liable for the purchase money. 
 
 192. EFFECT OF RATIFICATION.— The ratification of a 
 voidable contract by a minor on attaining his majority, renders 
 the contract valid from its inception, and it cannot thereafter be 
 disaffirmed. 
 
 193. DISAFFIRMANCE OF A CONTRACT BY AN IN- 
 FANT. — A minor has the right, both during his minority and 
 afterwards, to disaffirm his voidable contracts. This right extends 
 to the disaffirmance of most of his executed contracts, as well as to 
 the disaffirmance of those that are executory. The right to disaf- 
 firm, however, must be exercised more promptly in certain cases 
 than in others, depending upon the nature of the contract. Thus, 
 if a contract with a minor is wholly executory, it is not binding 
 upon him until he has expressly ratified it after becoming of age,
 
 55 
 
 and until thus ratified he may plead infancy as a defence, without 
 reference to lapse of time, and such a plea is itself a disaffirmance. 
 And where a minor during his minority has executed a note, bond 
 or bill for borrowed money, he may usually plead infancy as a 
 defence to a suit brought to collect it, at any time after he becomes 
 of age, if in the meantime he has not expressly ratified the obliga- 
 tion!' An infant cannot disaffirm a conveyance of real estate until 
 he attains his majority, but may, during his infancy, enter into 
 possession thereof and enjoy the rents and profits. After having 
 attained his majority and disaffirmed his conveyance, he may sue 
 for and recover his property from a third party to whom it has 
 been theretofore conveyed. Lawson on Contracts (1st Ed.), Sees. 
 147, 148 ; Williston on Contracts, Sec. 235. 
 
 But in other cases, for example, where an infant has purchased 
 personal property during his minority, and has retained posses- 
 sion of it and has treated it as his own for an unreasonable length 
 of time after becoming of full age, such acts, as heretofore stated, 
 amount to an implied ratification (ante, Sec. 191), and he cannot 
 thereafter disaffirm the purchase. So, if a minor sells and conveys 
 his land to another, he must disaffirm the conveyance within a rea- 
 sonable time after becoming of full age, otherwise the right to dis- 
 affirm will be lost. Usually he may disaffirm his conveyance of real 
 estate at any time before his right to recover the property is barred 
 by the statute of limitations. 
 
 194. EXECUTED CONTRACTS THAT CANNOT BE DIS- 
 AFFIRMED.— There are some executed contracts of an infant, 
 which, as it seems, cannot be disaffirmed. For example, if an infant 
 goes shopping and buys goods of a tradesman, such as are usually 
 bought on such excursions, paying therefor no more than their 
 reasonable value, he will not be permitted to recover the- money 
 paid on offering to return the goods. Wilson v. Kearse, Peake Add. 
 Cas., 196. It has also been held that if an infant entrusts money 
 belonging to him to a third person, with directions to such person 
 to use the money if necessary in support of his (the infant's) 
 parents, and it is so used, the infant cannot recover the money upon 
 his becoming of full age. Welch v. Welch, 103 Mass. 562. It has 
 also been held that if an infant becomes a partner with another 
 and puts money into the firm business, and does work for the part- 
 nership, he cannot afterwards disaffirm the partnership agree-
 
 56 
 
 ment and recover of his partner the money invested in the firm 
 business, nor the value of services rendered for the firm. Page v. 
 Morse, 128 Mass. 99. 
 
 195. DISAFFIRMANCE— ITS EFFECT.— The disaffirmance 
 of a contract by a minor renders it void as to both parties from its 
 inception. Therefore, on disaffirming a contract, the title to prop- 
 erty which the minor may have parted with in execution of the 
 same becomes revested in the minor, and he may reclaim it from the 
 opposite party, or from the vendee of the opposite party. 
 
 Money which the minor may have given in exchange for prop- 
 erty, may also be reclaimed by him when the contract has been 
 disaffirmed, provided the property which was received by the 
 minor is restored to the vendor, or has been taken from the minor 
 by a third party. McCarthy v. Henderson, 138 Mass. 310 ; Whit- 
 comb V. Joslyn, 51 Vt. 79. 
 
 196. DUTY OF A MINOR ON DISAFFIRMANCE.— When 
 
 a minor disaffirms his contract, it is his duty to restore to the 
 opposite party all that he has received on the contract, either in 
 the form of money or property, if it is within his power to do so. 
 But if during his minority the infant has wasted or squandered 
 the money or property received by him from the opposite party, 
 and he is for that reason unable to restore it, he may, nevertheless, 
 reclaim what he has parted with. In other words, an infant's 
 right to disaffirm his voidable contract (unless the case is very ex- 
 ceptional) does not depend upon his ability to make restitution 
 of that which he has received. Lawson on Contracts, Sec. 153, 
 and eases cited ; Williston on Contracts, Sec. 238. 
 
 196a. Plea of infancy, a personal privilege of the minor. — 
 The infant alone has the right to plead infancy as a defence to 
 a suit upon a contract. An adult is not entitled to take advantage 
 of the fact that the opposite party to a contract is an infant, and 
 on that ground avoid it. He must execute the agreement if the 
 infant insists upon the performance. 
 
 M) 
 
 CONTRACTS OF MARRIED WOMEN. 
 
 197. CONTRACTS OF MARRIED WOMEN VOID.— A 
 married woman's contract, unlike that of an infant, is utterly 
 void wherever the common law prevails, and has not been modi-
 
 57 
 
 fied by statute. At common law the husband by virtue of mar- 
 iage became the absolute owner of all the wife's personal 
 property; also the owner of her choses in action when reduced 
 to possession, and the owner of a life estate in her lands. But 
 the husband at the same time became bound for all the ante- 
 nuptial debts of his wife, if reduced to judgment in his lifetime, 
 and for her ante-nuptial and post-nuptial torts. He also became 
 bound to support his wife ; but the same liability does not rest 
 on the wife to support the husband. 
 
 198. Statutes have now been enacted in many, if not all, of 
 the states of this Union, which enable women to make contracts 
 of a certain character, and which materially modify the effect of 
 marriage at common law. Rev. Stat, of Mo., 1919, Chap. 64. 
 As the capacity of a married woman to make a contract is at the 
 present time largely a matter of local law, no attempt will be 
 made to further define it. It may be said, however, that even at 
 common law when a married woman was possessed of a separate 
 estate (that is, of an estate vested in trustees for her sole and 
 separate use), she might to some extent charge such estate in the 
 trustee 's hands by her contracts. But such contracts could only 
 be enforced in a court of equity. 
 
 \L^c^ INSANE PERSONS. 
 
 199. INSANE PERSON'S PROMISE NOT BINDING.— A 
 promise made by an insane person will not be enforced. But this 
 rule is subject to the exception, that an insane person may be com- 
 pelled to pay for necessaries furnished to himself, or to his wife 
 or family. The law creates a promise to pay for necessaries thus 
 furnished. Ante, Sec. 58. 
 
 200. INSANITY— WHAT IT IS.— A person is said to be in- 
 sane in a legal sense, and his promise is not enforceable, if he 
 does not possess sufficient mental capacity "to understand the 
 subject-matter of the contract he is about to make, its nature 
 and probable consequences." It makes no difference what the 
 cause of such mental incapacity may be, whether it is imbecility 
 superinduced by old age, or long continued drunkenness, or mono- 
 mania, or actual lunacy. The effect of either form of insanity 
 is to render a contract voidable.
 
 58 
 
 201. LUCID INTERVALS.— PARTIALLY SANE.— An insane 
 person who has lucid intervals may make a valid contract during 
 such intervals. Furthermore, a person may have hallucinations 
 on given subjects, but be sane on other subjects. In the latter 
 ease a contract pertaining to matters to which his hallucinations 
 do not extend is valid. 
 
 202. CONTRACTS OF AN INSANE PERSON, EXECUTORY 
 AND EXECUTED. — The following propositions seem to be sup- 
 ported by the most recent decisions : 1st. That the contract of an 
 insane person, so long as it remains wholly executory will not be 
 enforced. 2nd. That the courts will not disturb a contract with 
 an insane person that has been fully executed, if the contract 
 was fair and honest, and was entered into without any knowledge 
 or suspicion of the person's incapacity — ^unless both parties can 
 be placed in statu quo. But if both persons can unquestionably 
 be placed in statu quo, most courts (in this country) will lend 
 their aid in setting the contract aside. 3rd. That when a contract 
 is fair and honest, and was entered into without knowledge or 
 suspicion of the party's insanity, and has been executed on one 
 side, the courts will refuse to set it aside at the instance of the 
 insane person or his guardian, unless the latter restores all that 
 has been received thereunder. Moulton vs. Camroux, 2 Exch. 
 487; Wilder vs. Weakley, 34 Ind. 181; Mutual Life Ins. Co. vs. 
 Hunt, 79 N. Y. 541 ; Ashcraft vs. DeArmond, 44 la. 229 ; Riggins 
 vs. Green, 80 N. C. 236; Crawford vs. Scovell, 13 Norris, Pa. 48; 
 Bevin vs. Powell, 11 Mo. App. 216. 
 
 203. CONTRACT— WHEN ANNULLED.— It follows as a 
 corollary from the propositions stated in the preceding section, 
 that when a contract is made by a person who either knows or 
 has reason to suspect that the person with whom he is dealing is 
 insane, such contract, although executed, will be annulled, and 
 the party so dealing with the insane person will be compelled to 
 restore what he has received, although the insane party may not 
 be able to restore all that he may have obtained under the contract 
 The same result follows when a contract made with an insane 
 person is not fair and honest. In some states it appears to be held 
 that an executed contract will be set aside at the instance of an 
 insane person, even though his mental condition was not known 
 or suspected when the contract was made, and even though the
 
 59 
 
 bargain was fair and honest, and even though the parties can- 
 not be placed in statu quo. Seaver vs. Phelps, 11 Pick. 304; 
 Hovey vs. Hobson, 53 Maine, 451, 453; Rogers vs. Blackwell, 49 
 Mich. 192; Edwards vs. Davenport, 20 Fed. Rep. 756. But this 
 is not believed to be a sound doctrine. 
 
 204. CONTRACT OF INSANE PERSON VOIDABLE.— Con- 
 tracts made by a person lacking in mental capacity are voidable, 
 not void. Such contracts may be ratified or disaffirmed during 
 a lucid interval by the insane person, or by his guardian. Al- 
 though such contracts are simply voidable, the better view is 
 that when an insane person conveys property to a grantee under 
 circumstances entitling the former to disaffirm, he may also re- 
 cover it from an innocent third party to whom his grantee has 
 conveyed it for value. In this respect the rule differs from that 
 which obtains in case of a purchase made in good faith from a 
 fraudulent vendee. Ante, Sec. 130. 
 
 205. DRUNKENNESS.— If a person enters into a contract 
 when he is to such an extent under the influence of liquor as to be 
 unable to understand the subject of the contract, its nature or 
 probable consequence, the contract is voidable at the election of 
 the drunkard. Such a contract is subject to the same rules which 
 apply to contracts of insane persons. 
 
 CORPORATIONS. 
 
 206. POWEROF CORPORATION— WHENCE DERIVED.— 
 
 A corporation derives all of its power to make contracts from 
 the statute or act under which it was incorporated. Hence, it 
 can only make such contracts as the act of incorporation author- 
 izes it to make. All of its contracts that are not so authorized 
 are ultra vires and voidable. 
 
 207. IMPLIED POWERS.— But a contract made by a cor- 
 poration is not necessarily void or voidable, because the power 
 to make the particular agreement has not been expressly con- 
 ferred by its charter. Very frequently its power to make a 
 given contract is implied from the nature of the business which 
 it is authorized to transact, or from other powers that have been 
 expressly granted. For example, if the nature of its business 
 renders it proper that a corporation should have a building for
 
 60 
 
 the transaction of its business, or a manufacturing plant, a power 
 to purchase and hold such real estate as may be necessary to erect 
 a building or a factory will be implied. So if a business corpor- 
 ation is authorized to borrow money it will be inferred that it 
 has power to execute a promissory note or a mortgage for a sum 
 of money that may have been loaned to it. 
 
 208. IMPLIED POWERS— GENERAL RULE.— Generally a 
 corporation has the implied power to make any contract which 
 an individual may lawfully make, if the contract relates to a sub- 
 ject which is within the sphere of its operations. That is to say, 
 so long as a corporation confines itself to the business which its 
 charter authorizes it to transact, it may make any contract that 
 an individual could make, which is conducive to the successful 
 prosecution of that business. 
 
 209. CONTRACT ULTRA VIRES.— But when a contract is 
 not within the express or implied powers of a corporation, it is 
 termed ultra vires, and such contracts are voidable. Cent 
 Transpt. Co. vs. Pullman Car. Co., 139 U. S. 24, 38, 48. 
 
 210. CONTRACT OF CORPORATION— HOW EXECUTED. 
 
 The English courts concede that a corporation engaged in trade 
 
 may make and accept commercial paper without the use of its 
 corporate seal; also that contracts which are entered into with 
 great frequency, or that are not important, need not be executed 
 under the corporate seal. But with respect to contracts other than 
 these, they appear to hold that the use of the corporate seal is 
 necessary to render them binding. Church vs. Imp. Gas Light Co., 
 6 A. & E. 846, 861; Ludlow vs. Charlton, 6 M & W. 815, 822; 
 Leak Con. 588. The American doctrine is, that any contract 
 which an individual can make without a seal, a corporation can 
 likewise make without a seal, unless its charter otherwise di- 
 rects. Blunt vs. Walker, 11 Wis. 334 ; Bank of Columbia vs. Pat- 
 terson's Adm., 7 Cranch. 299, 306; Railway Cos. vs. Keo. Bridge 
 Co., 131 U. S. 371, 381 ; Banking Co. vs. Knaup, 55 Mo. 154. 
 
 211. CONTRACTS— ORAL AND IMPLIED.— A corporation 
 can also enter into contracts through its officers and agents, when 
 duly authorized, either in writing or orally, the same as an in- 
 dividual ; and a contract will be implied on the part of a corpor- 
 ation under the same circumstances that it would be implied on
 
 61 
 
 the part of an individual, when the contract is within the scope 
 of its corporate powers. 
 
 212 FORM OF EXECUTION DIRECTED BY CHARTER.- 
 
 But when the charter of a corporation for any reason directs that 
 a particular contract shall be executed in a particular way as 
 by the use of its corporate seal, or by the signature of certain 
 officers, it must be executed in the mode pointed out by its charter 
 to rendei^A obligatory. Bissell vs. Spring Valley, 110 U. S. lb^. 
 
 AGENTS— CONTRACTS BY. 
 
 913 MINORS AND MARRIED WOMEN AS AGENTS.-All 
 
 persons, except the insane, are competent to act as agents for 
 others Thus, a minor or a married woman may act as agent tor 
 another and bind him by their acts, although they lack the capa- 
 city to bind themselves. A contract made by a person through 
 the intervention of an agent, who is duly authorized to make 
 the same, is as binding upon the party as if made by himself. 
 But a person cannot appoint an agent to do a personal act, such, 
 for instance, as making the contract of marriage, or a will. Law- 
 son on Contracts, (1st Ed.) Sec. 167; Williston on Contracts, Sees. 
 247, 270, 274, note 1. 
 
 214. DUTY TO ASCERTAIN AGENT'S AUTHORITY.— It is 
 a general rule that one who deals with an agent, for the first time, 
 is bound before dealing with him to ascertain the extent of his 
 authority. If one who has had no previous dealings with an agent 
 enters into a contract with him merely on his oral representation 
 that he has power to do a certain act or make a certain con- 
 tract, and it transpires that the representation was untrue, the 
 principal will not be bound. 
 
 215. AGENCY CREATED BY WRITTEN INSTRUMENT.— 
 When an agency is created by a written instrument which defines 
 the agent's authority, the extent of the agents power, in contro- 
 versies between the principal and persons who are acquainted 
 with such instrument, must be determined thereby. 
 
 216. EXPRESS AND IMPLIED POWERS OF AGENT.— 
 From an express authority conferred upon an agent to do a 
 given act, or to conduct a certain business or transaction, the
 
 62 
 
 law frequently implies other powers. Thus from a direction given 
 by a principal to his agent to get immediate possession of a 
 building, the law would undoubtedly imply an authority on the 
 part of the agent to promise to pay a bonus to induce an occupant 
 of the building to remove, if possession could not otherwise be 
 immediately obtained. An authority given to carry on a certain 
 business for the principal, carries with it an implied authority 
 to do all acts customarily done in the prosecution of such busi- 
 ness. The general rule is, that besides his express powers, an 
 agent has r:ueh implied powers as are necessary to accomplish 
 the object to be attained by the agency. 
 
 217. AUTHORITY OP AGENT IMPLIED FROM BUSINESS 
 USAGE. — Usages of business have much to do in determining 
 the powers of agents in their dealings with third parties. Third 
 parties may act on the presumption that an agent in a particu- 
 lar business has such powers as agents in that business usually 
 have and exercise. For example, payments of money to one os- 
 tensibly in charge of the principal's office or counting-room, and 
 sales by persons ostensibly employed to make sales in a store, 
 will bind the principal, though in reality such agents exceed their 
 authority 
 
 218. AUTHORITY IMPLIED FROM PREVIOUS ACTS OR 
 CONDUCT. — An agent's power to enter into a given contract, or 
 to do a particular act, may be implied, or inferred, from his 
 having made other like contracts or done other like acts in the 
 principal's name and with his knowledge and approval. When- 
 ever a person so acts as to justify the belief in the mind of a rea- 
 sonable person that another has authority to represent him in a 
 given transaction, he will be bound by whatever such other per- 
 son may do as his agent in the course of that transaction. In all 
 cases where one deals with an agent while acting under the belief 
 that he has authority to bind his principal, and such belief is 
 justified by the previous conduct of the principal, the principal 
 is estopped from denying the agent's authority. Ante, Sec. 166. 
 
 219. AUTHORITY— HOW CONFERRED.— Authority to exe- 
 cute a sealed instrument, like a deed, must be conferred on the 
 agent by a writing under seal ; but where the instrument to be 
 executed need not be under seal to bind the principal, authority
 
 63 
 
 to execute it may be conferred on the agent orally or by parol. 
 Verbal authority given to an agent suffices for the execution of all 
 contracts not under seal; and although the contract to be exe- 
 cuted, is required by the statute of frauds to be in writing, yet 
 the agent's authority to execute it need not be in writing. A 
 deed may be executed under parol authority if executed in the 
 presence of the principal by his direction, and if so executed un- 
 der such parol authority, is a binding contract to convey. Law- 
 son on Contracts (1st Ed.), Sec. 169; Williston on Contracts, 
 Sec. 275. 
 
 220. DUTY OF AGENT TO DISCLOSE PRINCIPAL.— The 
 general rule is that an agent who does not disclose his agency, 
 and the name of his principal, at the time of entering into a con- 
 tract, becomes personally bound. Hence, to avoid personal liabil- 
 ity upon a contract, an agent should always disclose to the 
 opposite party his agency and the name of his principal. 
 
 221. CONTRACT IN WRITING— HOW EXECUTED.— When 
 a contract made by an agent is in writing, the writing should 
 show on its face that it is the contract of the principal ; for if it 
 is so drawn that it appears to be the personal contract of the 
 agent, he may be held personally bound, although he may have 
 orally disclosed his agency and the name of his principal. But 
 when, from the whole tenor of a written contract, it sufficiently 
 appears that one of the parties thereto was in fact acting as 
 agent for some one else whom he intended to bind, that person 
 will be bound, and not the agent, pro vi led the agent had authority 
 to execute the agreement. 
 
 222. RIGHT TO HOLD UNDISCLOSED PRINCIPAL WHEN 
 DISCOVERED. — The principal when discovered may be sued on 
 a contract made by an agent in his own name, if the agency was 
 not disclosed at the time of making the contract. But in that 
 event the opposite party can not sue both the principal and the 
 agent ; they are not jointly bound to execute the agreement ; when 
 the opposite party discovers who the principal is, he must then 
 make his election to hold either the principal or the agent. 
 
 223. It follows that if the agent discloses the agency and the 
 name of the principal, when a contract is made, the opposite con-
 
 64 
 
 traeting party must elect then and there whom he will trust, the 
 agent or the principal. Thus, if A buys goods for B and the seller 
 takes A's note for the price, knowing that A is really acting for 
 B, he can not subsequently elect to hold B. 
 
 224. SPECIAL AND GENERAL AGENTS.— Agents are of 
 two kinds — special and general. A special agent is one authorized 
 to do a special act or series of acts, and has no implied powers, 
 further than such as are necessary to accomplish what he was di- 
 rected or authorized to do. General agents, on the other hand, 
 are those appointed by the principal to conduct all of his busi- 
 ness, or all of his business of a particular kind, or to act for him 
 generally or as they deem best in a given matter. A general agent 
 can not bind his principal by acts done in excess of his authority, 
 any more than a special agent, but his implied powers are much 
 greater than those of a special agent. 
 
 225. REVOCATION OF AGENCY.— A principal may ter- 
 minate an agency at his pleasure, unless it be an agency which 
 is coupled with an interest. For instance, if goods are committed 
 to an agent to sell, and after the sale the agent is to pay out of 
 the proceeds a debt due from the principal to himself, the agency 
 is coupled with an interest and can not be terminated by the 
 principal. 
 
 226. Although a principal is at liberty to terminate an agency 
 at his pleasure, yet when by so terminating it he violates a con- 
 tract with his agent, as where he has agreed that the agent shall 
 act as his agent for a definite period, and he discharges him be- 
 fore the expiration of that period, without good cause, the prin- 
 cipal may be held liable in damages for so doing. 
 
 227. AGENCY TERMINATED BY DEATH.— An agency is 
 at once terminated by the death of the principal, and this rule 
 is so absolute that an act done by an agent after his principal's 
 death is invalid, although the agent does not know of the prin- 
 cipal's death. And even an agency that is coupled with an in- 
 terest in a court of law is regarded as terminated by the death of 
 the principal. Insanity, like death, also terminates an agency, 
 but it does not terminate an agency coupled with an interest. An 
 agency is also terminated by the bankruptcy of either principal 
 or agent; or by the marriage of the principal, when a woman.
 
 65 
 
 228. AUTHORITY — HOW EXERCISED WHEN CON- 
 FERRED ON TWO OR MORE.— When authority to do a given 
 act or to execute a certain contract is conferred on two or more 
 persons, it is considered a joint agency, and both must act to 
 bind the principal, unless the instrument containing the authority 
 expressly declares that they may act severally. But when 
 authority is given to a firm to do a given act, either member of 
 the firm may exercise the authority if it is exercised in the firm 
 name. When the agency is joint, the death of one of the agents 
 revokes the agency. 
 
 229. AGENT'S POWER TO DELEGATE AUTHORITY.— 
 When the powers entrusted to an agent are such as require the 
 exercise of personal discretion, he can not delegate them to a 
 sub-agent. But mere ministerial powers not involving the exer- 
 cise of such discretion, the agent may delegate. Thus, an agent's 
 clerk may receive money under ordinary circumstances and give 
 receipts for the same, and a clerk may sign an agent's name to 
 papers that are usually signed that way. 
 
 230. FRAUDS OF AGENT.— When an agent in the particu- 
 lar business that he is authorized to transact commits a fraud, 
 the principal is liable. Thus, if an agent, who is authorized to 
 sell a horse, makes fraudulent representations to induce a sale, 
 the principal is liable, although he did not authorize them to be 
 made.. But for an independent fraud committed by an agent not 
 within the scope of his agency, the principal is not liable. For 
 his torts and frauds committed while acting as agent, even within 
 the scope of his agency, the agent is always person? My liable. 
 
 231. AGENT BOUND PERSONALLY WHEN ACTING 
 WITHOUT AUTHORITY.— It is a general rule that an agent 
 binds himself when he acts without authority, and does not bind 
 his principal. But when an agent makes a contract in his prin- 
 cipal's name, supposing that he has authority to do so, he does 
 not bind himself, although he acts in excess of his authority, if 
 the other contracting party has the same knowledge of the agent's 
 powers which the agent himself possesses. On this ground it has 
 on some occasions been held, that public officers, whose powers 
 are defined by law, are not personally liable for official acts done 
 in excess of their authority, which fo: that reason do not bind 
 the state.
 
 66 
 
 In all cases, however, where the agent and the party with whom 
 he contracts have not the same knowledge of the extent of the 
 agent's authority, a contract not binding on the principal for 
 want of authority in the agent, will bind the agent. An agent 
 who acts without authority is not liable unless the contract made 
 was one which would have bound the principal but for the agent's 
 want of authority. Lawson on Contracts (1st Ed.) Sec. 195; 52 
 N. Y., 494; Williston on Contracts, Sec. 282. 
 
 232. AGENT, HOW PROCEEDED AGAINST ON HIS UN- 
 AUTHORIZED CONTRACT.— It is generally held in England 
 and in the United States, that if the unauthorized contract is in 
 form the principal's contract, the agent can not be sued thereon 
 as a promisor ; but must be sued either on his implied warranty 
 that he had authority to do the act in question, or in tort for ex- 
 ceeding his authority, in those cases where he acts knowing that 
 he has no authority. Some courts hold, however, that he may be 
 sued on the unauthorized contract as though it was made in his 
 own name and behalf; and all courts concede that an agent may 
 be sued on a contract if it was really made for the agent's 
 benefit in the name of a fictitious principal, or ostensibly for an 
 undisclosed principal. Lawson on Contracts (1st Ed.) Sec. 195; 
 Williston on Contracts, Sees. 282 to 285. 
 
 233. UNAUTHORIZED CONTRACTS VOIDABLE— RATI- 
 FICATION. — The unauthorized contracts of an agent are merely 
 voidable; hence they may be ratified by the principal, and any 
 act done by the principal with knowledge that an unauthorized 
 contract has been made, which recognizes the contract as binding, 
 will amount to a ratification. Ante, Sec. 163. 
 
 234. PRINCIPAL CAN NOT RATIFY UNAUTHORIZED 
 CONTRACT IN PART.— When an unauthorized contract has 
 been made by an agent, the principal can not ratify it in part, and 
 refuse to ratify it in other particulars. He must adopt it as an 
 entirety or disaffirm it in toto ; thus, if an agent, employed to sell 
 a horse, without authority warrants its soundness, the principal 
 can not affirm the sale and reject the warranty. 
 
 235. SAME PERSON CANNOT ACT AS AGENT FOR BOTH 
 PARTIES TO A CONTRACT.— An agent will not be permitted 
 to undertake the performance of duties that are incompatible;
 
 67 
 
 hence a person can not act in making a contract as agent for 
 both of the contracting parties. For instance, in the sale of prop- 
 erty the same person can not represent both the buyer and the 
 seller. A sale thus made is voidable. There is one exception to 
 this rule, however ; an auctioneer and a broker may act as agent 
 of the buyer and seller in making a written memoranda of the sale 
 when such written memoranda is required by the Statute of 
 Frauds. 
 
 236. LIABILITY OF AGENT TO PRINCIPAL.— An agent is 
 personally liable to his principal for whatever damage the latter 
 sustains in consequence of a violation of duty, or failure to obey 
 instructions. But when an agent's unauthorized act has been 
 ratified by the principal, the latter can not sue the agent for 
 damages sustained in consequence of such unauthorized act. 
 
 ni 
 
 PARTNERSHIP. 
 
 237. PARTNERS OCCUPY TO EACH OTHER THE RELA- 
 TION OF AGENTS. — Each partner in a firm is regarded as the 
 agent of all the other members, and can bind the firm to third 
 parties by any contract within the scope of the partnership busi- 
 ness. As a result of this rule, whenever a person contracts with 
 another as an individual, and subsequently discovers that the lat- 
 ter is a member of a firm in whose behalf the contract was made, 
 he may sue the firm thereon. In like manner, a silent or undis- 
 closed partner may be sued on the obligations of the firm. 
 
 238. DISSOLUTION OF FIRM.— A person retiring from a 
 firm must give actual notice of his retirement to all who have 
 previously dealt with the firm, otherwise he will be liable for the 
 debts of the firm subsequently contracted in dealings with former 
 customers who were not aware of the dissolution of the firm. But 
 a general notice by publication will suffice to release him from 
 liability to those who have not theretofore dealt with the firm. 
 The death of a partner operates to dissolve the partnership, and 
 notice of his death need not be given to release the deceased 
 partner's estate. 
 
 239. CONTRACTS BY PARTNERS— HOW EXECUTED.— 
 
 In executing a sealed instrument, each partner should sign his 
 individual name and affix a seal opposite thereto. One partner
 
 68 
 
 can not execute an instrument under a seal (like a deed) for the 
 firm, unless he has a power of attorney under seal from his co- 
 partners authorizing him to do so. But if a partner without au- 
 thority from his co-partners conveys the firm's lands by a deed 
 under seal, in all probability such deed would be held tantamount 
 to an executory agreement to convey, which would bind the firm. 
 
 240. JOINT STOCK COMPANIES.— These differ from part- 
 nerships, usually in the fact, that one member of the association 
 is not an agent for the other members, and can not bind them 
 except where an authority to bind them is expressly conferred, 
 or mtay be implied from circumstances. 
 
 ^VW FILLING BLANKS IN WRITTEN INSTRUMENTS. 
 
 241. INSTRUMENTS UNDER SEAL.— If an instrument un- 
 der seal, like a deed, when delivered, contains a blank which must 
 be filled to render the instrument operative, such blanks can only 
 be lawfully filled in pursuance of authority conferred by an in- 
 strument under seal. But if the grantor in a deed should deliver 
 it without inserting the name of the grantee, and the person to 
 whom the deed was delivered should thereafter insert his own 
 name as grantee, and subsequently convey the property to an 
 innocent third party, the original grantor would undoubtedly be 
 estopped from denying the authority of the party to whom he had 
 delivered it to thus fill the blank. In this way, instruments exe- 
 cuted in blank and delivered often becomes binding through the 
 operation of the doctrine of estoppel. 
 
 242. UNSEALED INSTRUMENTS.— Authority to fill blanks 
 in unsealed instruments may be conferred orally. And where the 
 word or words left blank, either in a sealed or unsealed instru- 
 ment, are such as the law would supply by interpretation, they 
 may be filled by verbal authority; and although they are filled 
 without authority, the interpolation of such words will not invali- 
 date the instrument. Ante, Sec. 148. The date of executing a 
 contract may also be inserted in pursuance of oral authority, or 
 even without authority if the true date is inserted. 
 
 243. NEGOTIABLE INSTRUMENTS.— When a negotiable 
 instrument like a promissory note is delivered by the maker with 
 a blank left either for the amount of the note, or the name of the
 
 69 
 
 payee, such delivery carries with it an implied authority to fill 
 such blanks; and although the holder fills the blank for a sum 
 greater than was intended by the maker, yet the maker will be 
 bound to pay the amount to one who has purchased the same 
 without notice of the fraud. 
 
 ASSIGNMENT OF CONTRACTS AND CHOSES IN ACTION. 
 
 244. Executory contracts can not be asigned by either party, 
 so as to require the opposite party to accept performance from 
 some other person than the one whom he contracted with. For 
 example, where A agreed to sell B a certain quantity of wheat, 
 which was deliverable at A's option during a certain future 
 period, it was held that A could not sell or assign his right to 
 deliver the article, to a third party, without the consent of B ; in 
 other words, that B was not bound to accept the wheat from any 
 other person besides A. Boykin vs. Campbell, 9 Mo. App. 495; 
 Lansden vs. McCarthy, 45 Mo. 106 ; Arkansas Smelting Co. vs. 
 Belden Co., 127 U. S., 379 ; Mound Valley Vitrified Brick Co. vs. 
 Mound Valley Natural Gas & Oil Co., 258 Fed. Rep., 936, 943. 
 If A agrees to do a certain thing for B, such, for instance, as to 
 build a carriage, and it appears that A was not selected on ac- 
 count of his personal skill, B cannot complain if A employs C to 
 do the job. 5 Queen's Bench Division (Eng. Reps.) 149. 
 
 But when one party to a contract has done the act contracted 
 to be done by him, and has a claim against the other for the 
 price agreed to be paid, this latter claim is termed a chose in 
 action and the same may be assigned. 
 
 245. CHOSES IN ACTION.— It is a rule of the common law 
 that a chose in action can not be assigned by the creditor so as 
 to authorize the assignee of the chose or debt to sue thereon in 
 his own name. But while the common law denied the assignee's 
 right to sue in his own name, it conceded his right to sue in the 
 assignor's name, and would not permit the assignor to dismiss 
 or compromise the suit. In equity the rule was different : in that 
 forum the assignee was permitted to sue in his own name. 
 
 246. MODERN RULE.— At the present time statutes in 
 nearly all of the states permit the assignee of a chose in action 
 to sue in his own name. The right to assign choses in action has
 
 70 
 
 been so enlarged by statute in many states, as to permit an assign- 
 ment of any claim, whether it grows out of a contract or a tort, 
 provided the claim survives to the administrator or executor of 
 the assignor. Thus, in Missouri a claim growing out of an injury 
 done to personal property may be assigned, and the assignee may 
 sue thereon in his own name. Snyder vs. The Wabash, St. L. & 
 P. Ey. Co., 86 Mo. 613. 
 
 247. NOTICE OF ASSIGNMENT NECESSARY.— But to 
 make the assignment of a debt or claim effectual, the assignee 
 should notify the debtor of the assignment, otherwise payment 
 to the assignor will discharge the debt or claim, if made without 
 notice of the assignment. 
 
 248. POWER OF GOVERNMENT TO ASSIGN CHOSES IN 
 ACTION. — The government could always sue in its own name 
 as assignee of a chose in action, and its assignee could also sue 
 in his own name. 
 
 249. BILLS OF EXCHANGE ASSIGNABLE.— Foreign bills 
 of exchange and negotiable notes could also be sued upon by an 
 assignee or holder thereof in his own name. An assignment by 
 operation of law also authorizes a suit in the name of the assignee. 
 Thus, assignees in bankruptcy, executors and administrators 
 could alwavs. sue in their own names. 
 
 TIME— HOW COMPUTED. 
 
 250. GENERAL RULE. — In computing the time within which 
 an act is to be done or notice given, the rule is to exclude the 
 first day and include the last, unless the last day is Sunday, which 
 is also generally excluded. Thus, a promise made on Monday to 
 pay a sum of money in seven days would make it payable the 
 following Monday. 
 
 251. The word "until" is generally construed as exclusive, 
 so that one who has until October 10th to do a given act, can not 
 usually do the act on that day. But this rule is not invariable ; it 
 may be that other parts of the agreement will show that such was 
 not the actual intent of the parties, and the intent will always 
 govern. 
 
 252. TIME NOT THE ESSENCE OF A CONTRACT.— Time 
 
 is not generally regarded as being to such extent '*of the
 
 71 
 
 essence of a contract," either in courts of law or equity, that a 
 person can not recover upon a contract because the work under- 
 taken by him was not completed on the day agreed upon. It is 
 believed to be universally true that a person cannot avoid paying 
 for services rendered to him that were of some value, merely be- 
 cause they were not performd within the time specified in a con- 
 tract existing between the parties. But a contract may be so 
 worded that time becomes of the very essence of the agreement, 
 as where A agrees to do a given act provided B does some other 
 act by a given day ; here, if the act to be done by B is not done 
 by the appointed day, A will be released from his promise. The 
 parties to a contract may expressly agree that time shall be re- 
 garded as of the essence of the contract, and such agreements will 
 be enforced. 
 
 253. MONTH AND YEAR— LEAP YEAR.— At common law 
 the term "month" when used in a contract, meant a lunar month 
 of twenty-eight days ; but by statutes enacted in most, if not all 
 the states, the words "year" and "month" now mean a calendar 
 year or month. For example, if A, on the 16th day of January, 
 promises to pay to B a certain sum of money one month after 
 date, the payment will be due on the 16th day of February, pro- 
 vided days of grace are not allowed. So a promise on the 16th 
 of January to pay a sum of money one year after date, will mature 
 on January 16th of the following year. In leap years February 
 28th and 29th are counted as one day. 
 
 LEX LOCI AND LEX FORI 
 
 254. The obligation imposed by the terms of a contract is de- 
 termined by the law of the place where the contract was made or 
 was intended to be executed, which is termed the Lex Loci, but 
 the remedy for enforcing a contract is that which is provided by 
 the law of the place where the suit is brought to enforce the con- 
 tract, termed the Lex Fori. If a contract which was made in one 
 state to be there executed, is sued upon in another state, it will 
 be given such effect in the latter state as it would have had if it 
 had been sued upon in the former state; but the courts of the 
 state where the suit is brought will apply their own remedies for 
 its enforcement ; for example : they will not imprison a party for 
 the debt created by the contract if the remedy of imprisonment
 
 72 
 
 for debt has been abolished in that state, although such remedy 
 would have been available in the state where the contract was 
 made and was intended to be executed. 
 
 255. COMITY. — Through comity, the courts of one country 
 will ordinarily enforce a contract made in another country, if the 
 same is valid under the laws of the country where it was made. 
 The general rule is that a contract valid where made is valid 
 everywhere ; but if it is not valid where made it is not valid any- 
 where. As a result of this rule, if a contract valid where made 
 is sued upon in another state, it will generally be enforced, al- 
 though the contract would have been invalid if made in the state 
 where the suit is brought. 
 
 256. EXCEPTIONS TO RULE.— The rule last stated is sub- 
 ject to some limitations. Thus, if a contract which the parties 
 intend to perform in a state where such contracts are invalid, is 
 made in another state where such contracts are permitted, merely 
 to evade the laws of the former state, its courts will not enforce 
 it. Miller vs. Tiffany, 1 Wall. 298, 310; Lewis vs. Headley, 36 
 Ills. 433. Furthermore, the courts of a country or state are not 
 bound by comity to enforce contracts made abroad and there held 
 to be valid, if they are against good morals, or are opposed to 
 the general policy or institutions of the state whose courts are 
 asked to enforce them. Bliss vs. Brainard, 41 N. H. 256. 
 
 257. INTEREST. — Parties may bargain in one state for a 
 higher rate of interest than its laws permit, if the money is made 
 payable in a state where the rate of interest bargained for is 
 lawful, provided the contract is made in good faith and not for 
 the purpose of evading the laws of the former state. Miller vs. 
 Tiffany (supra) ; Andrews vs. Pond, 13 Peters, 65, 78 ; Curtis vs. 
 Leavitt, 15 N. Y. 92. 
 
 258. CONVEYANCES OF LAND AND PERSONAL PROP- 
 ERTY. — It is a rule of universal application that a conveyance of 
 land must be made in conformity with the laws of the place where 
 the land is located. For example, the law of the state where the 
 land is situated determines whether the grantor in a deed is of 
 the requisite age to make a deed, and not the law of the state 
 v/here the deed is made. Barnum vs. Barnum, 42 Md. 251. But 
 as personal property has no fixed situs, a conveyance of the same,
 
 ^3. 
 
 73 
 
 good by the laws of the place where the conveyance is made, 
 is effectual to pass the title, although the property is located in 
 another state. 
 
 259. PLACE OF CONTRACT— HOW DETERMINED.— The 
 obligation created by a contract is to be determined by the law of 
 the place where the parties intend that it shall be performed; 
 and the place where a contract purports to have been executed, 
 in the absence of proof, is presumed to be the place where it is to 
 be performed. If a contract contains nothing that fixes the 
 place of performance, no reason is perceived why the intent of the 
 parties in this respect may not be shown by oral testimony. But 
 when a promise is made to pay money, the place where payment 
 is to be made is the place of performance. For that reason a 
 draft drawn in one state, but made payable in another, is con- 
 strued according to the laws of the latter state. Stix vs. Mat- 
 thews, 63 Mo. 371. 
 
 260. LEX FORI — STATUTE OF LIMITATIONS — IN- 
 TEREST. — The Statute of Limitations applicable to a suit on a 
 contract, is that of the state where the suit is brought to enforce 
 it, although the contract was made and was to be performed 
 elsewhere. So when interest is allowed in a suit on a contract, 
 not because the contract calls for interest, but merely as damages, 
 the lex fori governs as to the rate of interest. Goddard vs. 
 Foster, 17 Wall. 123; 143. In those cases, however, where a 
 statute creates a right of action not known to the common law, 
 and fixes a period of limitation, such period of limitation is ap- 
 plicable to the cause of action when sued upon even in a foreign 
 state, rather than the local statute. Theroux vs. Northern Pac. 
 R. R. Co., 54 Fed. Rep. 84. 
 
 BREACH OF CONTRACT— RIGHTS AND LIABILITIES 
 OF PARTIES. 
 
 261. For a breach of contract, courts of common law can only 
 render a judgment for the amount of damages sustained; hence 
 it may be said that at common law a party to a contract has the 
 right to break or repudiate it, on condition that he pays the dam- 
 ages sustained by the opposite party. Courts of equity, however, 
 will not always permit a party to break his contract on the con- 
 dition last stated; in some cases they will compel parties to
 
 74 
 
 execute their agreements. For example, they will compel the 
 specific performance of a promise to sell and convey lands, if the 
 agreement is fair and honest and the consideration adequate. 
 Ante, Sec. 29. And in some special cases they will doubtless com- 
 pel the specific performance of contracts relating to personal 
 property. 
 
 262. CONTRACT BROKEN BY NOTICE THAT IT WILL 
 NOT BE PERFORMED.— If either party to an executory con- 
 tract notifies the other that he will not execute it, either before 
 or after the time to perform has arrived, the latter may imme- 
 diately treat the contract as broken and sue for damages. Frost 
 vs. Knight, L. R. 7, Ex. Ill, 114 ; Rochester vs. De la Tour 2 E. 
 & B. 678 ; Howard vs. Daly, 61 N. Y. 362 ; Zuck vs. MeClure, 98 
 Pa. St. 541. This rule, however, does not apply to unilateral con- 
 tracts, such as promissory notes. If the maker of a note says he 
 will not pay, he cannot be sued until the note matures. 
 
 263. CONTRACT BROKEN BY DISABILITY TO PERFORM. 
 
 — A contract is broken and a suit may be maintained for dam- 
 ages, if when it is made a party thereto lacks the power to execute 
 it, as where a man already married enters into a marriage engage- 
 ment with a woman, she not being aware of the fact that he is 
 married ; a contract is also broken, if after it is made either party 
 voluntarily puts it out of his power to perform, as where a person 
 after contracting to execute a lease at a future day, before that 
 day leased the premises to a third party. Ford vs. Tiley, 6 B. & 
 Co. 325; Short vs. Stone, 8 Q. B. 358; Sheehan vs. Barry, 27 
 Mich. 218. 
 
 264. When one party to an executory contract notifies the 
 other before the time of performance arrives, that it will not be 
 executed, the latter party has an election to treat the contract as 
 broken or still in force. If he elects to treat it as still in force, 
 such election keeps the contract alive for the benefit of the oppo- 
 site party, because if before the time to perform arrives an event 
 occurs which is a lawful excuse for non-performance, the latter 
 may avail himself of such event, as an excuse for non-perform- 
 ance, notwithstanding his original refusal to perform. Avery vs. 
 Bowden, 5 E. & B. 714. It has been held, however, that a person 
 can not recover for work done on the personal or real property 
 of another, although such work was done in pursuance of a con-
 
 75 
 
 tract, if before the work was done he was directed by the opposite 
 party not to do it. Clark vs. Marsiglia, 1st Denio, 317. When 
 a party to a contract receives notice from the opposite party that 
 he will not execute it, it is usually advisable, for the reasons above 
 indicated, to treat the contract as broken and no longer in force. 
 
 265. CONTRACT BROKEN WHEN WORK IS NOT DONE 
 WITH ORDINARY SKILL.— W^hen work of any sort is under- 
 taken, there is an implied obligation that it will be done with 
 ordinary skill and in a workmanlike manner. Hence, if it is not 
 done with ordinary skill or in a workmanlike manner, the eon- 
 tract is broken and an action for damages will lie. 
 
 266. OBSTRUCTING PERFORMANCE.— If a party to a con- 
 tract intentionally obstructs or hinders the opposite party in the 
 performance of what he has undertaken to do, the former is 
 guilty of a breach of contract. The party thus obstructed has 
 an election to treat the contract as broken in consequence of the 
 wrongful act of the opposite party, and sue thereon for the dam- 
 age sustained, or he may ignore the contract and sue upon a 
 quantum meruit for services rendered; or he may fully execute 
 the contract on his part and sue for the damage occasioned by 
 the obstacles interposed by the opposite party. In all cases where 
 one party to an agreement intentionally hinders or delays the 
 other in the performance of his duty, the latter may always plead 
 such fact as an excuse for an alleged non-performance or mis- 
 performance on his part. For example, if a contractor agrees to 
 build a house within six months and to pay a penalty for each 
 day's delay beyond that period, in a suit brought against him for 
 the penalties so incurred he may plead as a defence, if such be the 
 fact, that the delay in completing the house was due to impedi- 
 ments placed in his way by the opposite party. 
 
 267. CONCURRENT ACTS— CONTRACTS, WHEN BRO- 
 KEN. — When a contract contemplates the doing of concurrent 
 acts, as where one party promises to sell and convey property 
 on the payment of a certain price, the contract is not broken and 
 neither party thereto can sue as for a breach thereof, until one 
 party has performed his part of the agreement, or has tendered 
 performance, and the opposite party has refused to perform. But 
 even in such cases the contract of sale is broken without tender 
 of performance by the purchaser, if the vendor voluntarily puts
 
 76 
 
 it out of his power to convey, as by a sale of the property to a 
 third party. Ante, Sec. 263. 
 
 268. SUCCESSIVE ACTS— CONTRACT, WHEN BROKEN.— 
 It frequently happens that a contract requires the parties thereto 
 to do certain acts in succession or alternately. In all such cases 
 the contract is broken whenever one party fails to do anything 
 required of him, provided the other party is not at the time in 
 default. 
 
 A breach of this character, if the thing not done is important, 
 operates to discharge the party not in default from his liability 
 to further perform the contract, and he may maintain an action 
 against the opposite party for damages ; or, if prior to the breach, 
 the party not in default has already partially performed the 
 agreement, he may usually elect to abandon the contract and sue 
 the opposite party for the reasonable value of the services 
 rendered or materials furnished prior to the breach. Erlich vs. 
 Aetna Life Ins. Co., 88 Mo. 249, 257 ; Mitchell vs. Scott, 41 Mich. 
 108 ; Fitzgerald vs. Allen, 128 Mass. 234. 
 
 269. MANNER IN WHICH CONTRACT MAY BE BROKEN. 
 
 From what has been said it follows that a contract may be 
 
 broken in four ways: 1st, by notice that it will not be performed; 
 2d, by rendering performance impossible ; 3d, by wrongfully ob- 
 structing performance by the opposite party ; and 4th, by wholly 
 or partially failing to do what one has agreed to do when the 
 time to act arrives. 
 
 270. WHEN BREACH DISCHARGES CONTRACT.— For a 
 breach of contract committed by one party, the opposite party 
 may always maintain an action for damages ; but it is not always 
 the case that the opposite party is released from his obligation 
 to further perform, in consequence of the breach. Such may or 
 may not be the result, depending upon the nature of the agree- 
 ment and the character of the breach. German Savings Inst. vs. 
 De La Vergne Ref. Mach. Co., 70 Fed. Rep. 146. 
 
 271. INDEPENDENT PROMISES.— If the promises made by 
 the parties to a contract are wholly independent of each other 
 (as may happen), then neither party is released from his promise 
 by the failure of the other to perform. 
 
 Thus, in a very old case where W agreed to raise five hundred
 
 77 
 
 soldiers and bring them to a certain port, and C agreed to find 
 ships and victuals to carry them to a certain place, it was held 
 that W could maintain a suit for failure to provide the ships, al- 
 though C pleaded that at the time the suit was brought W had 
 not raised the soldiers. Ware vs. Chappel, Style's Rep. 186. 
 Here it will be seen that as the promises were construed to be 
 wholly independent or absolute, C was not released from his 
 promise by the failure of W to fulfill his. In these days it rarely 
 happens that promises are construed to be wholly independent of 
 each other. Mecum vs. R. R. Co., 21 Ills. 533; Peques vs. Mosby, 
 7 Sm. & M. 340. 
 
 272. DEPENDENT PROMISES.— Promises are said to be 
 dependent when an act stipulated to be done by one party to a 
 contract is only to be done after the doing of some act by the 
 opposite party. When the promises are dependent, a total failure 
 to perform by him who is first to act will discharge the opposite 
 party from his obligation to perform. 
 
 273. FAILURE TO PERFORM BEING IN SOME MINOR 
 MATTER.— But when the failure to perform is in some non- 
 essential or minor particular, the opposite party will not be dis- 
 charged unless the parties have expressly agreed that it shall be 
 deemed vital. Thus, where an opera singer engaged to sing for a 
 season, contracted to be in London six days before the commence- 
 ment of the season so as to attend rehearsals, and failed to arrive 
 until two days before the season opened, it was held that the 
 opposite party could not treat the contract as dicharged by such 
 default, but could only maintain an action for the damages sus- 
 ained. Bettini vs. Gye, L. R., 1 Q. B. 183. See also McAndrew vs. 
 Chappel, L. R., 1 C. P. 643. 
 
 274. SAME SUBJECT CONTINUED.— In many cases it is 
 hard to determine when a failure by one party to do some ante- 
 cedent act, in the precise manner and form agreed upon, is so 
 far vital that it will discharge the opposite party from his obli- 
 gation to perform. It was held in one case that the failure of 
 the principal singer in an opera to take part in the opening and 
 early performances of an operatic season, as agreed, discharged 
 the opposite party from his contract to employ her. Poussard 
 vs. Spiers, L. R., 1 Q. B. 410. In another case where a party sold 
 certain pig iron to be "shipped from Glasgow as soon as pos-
 
 78 
 
 sible," and it was shipped from Leith instead of Glasgow, it was 
 held that the buyer was discharged and was not bound to accept 
 and pay for the iron. Pope vs. Filley, 115 U. S. 213. See also 
 Lowber vs. Bangs, 2 Wall. 728. The opposite party will always be 
 discharged by a failure to perform in some respect that may seem 
 unimportant, if such failure in fact frustrates the object of the 
 contract, or if it appears that the parties regarded the particular 
 thing left undone as important. Davison vs. Von Lingen, 113 
 U. S. 40. 
 
 275. PROMISE CONDITIONAL ON ENTIEE PERFORM- 
 ANCE. — If one party promises to do a given act only after the 
 opposite party has fully performed the entire contract on his 
 part, and the latter fails to fully perform, the former is released 
 from his promise. But in such cases if the party not in default 
 has derived a substantial benefit from part performance, and 
 has accepted the same, he would at this day be held liable as 
 upon an implied promise to pay the reasonable value of the ser- 
 vices rendered. Ante, Sec. 108; Britton vs. Turner, 6 N. H. 481. 
 
 276. RIGHT TO TREAT CONTRACT AS DISCHARGED 
 LOST BY RECEIPT OF SUBSTAI^TIAL PART OF CONSID- 
 ERATION. — When a party has received a substantial part of 
 what was the consideration for his promise, he can not treat the 
 contract as discharged, although the opposite party has failed to 
 keep his promise in some respect that would have entitled the 
 former to treat the contract as abrogated, as long as it was wholly 
 executory. In such cases the party who has received a substan- 
 tial part of the consideration bargained for, should perform his 
 own promise and sue the opposite party for damages. Thus, 
 where B had conveyed a plantation and slaves to E and warranted 
 the title to the slaves, and E promised to pay B therefor a certain 
 annuity, it was held that E having received the plantation could 
 not treat his promise to pay the annuity as discharged, because 
 the title to certain slaves failed. Boone vs. Eyre, 1 H. Blk. 273 ; 
 Ellen vs. Topp, 6 Ex. 424; and German Sav. Inst. vs. De La 
 Vergne Refrg. Mach. Co., 70 Fed. Rep. 146. 
 
 277. CONTRACT BROKEN— PROMISE CREATED BY LAW. 
 — In this connection it should be stated that when a party has 
 failed to fully comply with his contract, but has nevertheless by 
 a partial or imperfect performance conferred a benefit upon the
 
 79 
 
 opposite party, which the latter has accepted, he may maintain 
 an action against the benefited party for the reasonable value of 
 what has been done and accepted, although he cannot recover in 
 an action upon the contract. But in such cases the benefited 
 party is at liberty to offset against a recovery the amount of the 
 damages which he has sustained in consequence of an imperfect 
 or partial performance of the contract by the opposite party. 
 Eyerman vs. Mt. Sinai Cemetery Association, 61 Mo. 489 ; Yeats 
 vs. Ballentine, 56 Mo. 530, 536. 
 
 278. FAILURE TO PERFORM INTENTIONAL.— Some au- 
 thorities maintain, however, that a party can not recover in any 
 form of action for a benefit conferred upon the opposite party by 
 a partial or imperfect performance, if the party in default wil- 
 fully abandoned the work undertaken, or intentionally did the 
 work in an improper manner. Dermott vs. Jones, 2 Wall. 1, 9; 
 Haslack vs. Mayers, 2 Butcher, 284; Plummer vs. Bucknam, 55 
 Maine, 105. 
 
 279. SEVERABLE CONTRACT, WHEN DISCHARGED BY 
 BREACH. — When a contract is severable (for example, when it 
 requires one party to deliver a certain quantity of goods in in- 
 stallments at different times, each installment to be paid for as 
 delivered), the Supreme Court of the United States holds, that the 
 buyer is discharged from his promise, if he so elects, as to all sub- 
 sequent deliveries, if the opposite party fails on any occasion to 
 deliver the stipulated quantity. Norring-ton vs. Wright, 115 U. S. 
 188. Contrary decisions have been made in England. Simpson vs. 
 Crippen, L. R. 8 Q. B. 14 ; Freeth vs. Burr, L. R. 9 C. P. 208 ; Law- 
 son on Contracts (1st Ed.) Sec. 448; Williston on Contracts, Sees. 
 685 to 687. 
 
 280. CONTRACT DISCHARGED OTHERWISE THAN BY 
 BREACH.— It has already been stated that a party to a contract 
 may be released from the same otherwise than by a breach 
 thereof by the opposite party. Thus, a party may be released 
 from his obligation to perform a contract, by consent of the op- 
 posite party, or because it has become impossible or unlawful 
 to execute it, ante, Sees. 109, 112 ; or because of a material alter- 
 ation by the opposite party, ante, Sec. 147; or by the happening 
 of some event which the parties have expressly agreed shall 
 operate to discharge it.
 
 80 
 
 INDEX: 
 
 (References are to sections.) 
 
 Sections. 
 
 / #2Abrogation of Contracts — Release 169-178y^^«-'^'^ 
 
 / 7Agents— Contracts by 213-236 ^ ^/'^'f. 
 
 /^Alteration of Contracts 147-158^ f%-if€ 
 
 ^ ^Assignment of Contracts and choses in action 244-249(M^4y*' lO 
 
 j?3Breach of Contract — Rights and Liabilitis of parties 2 6 1-2 80^*^ 7? ~7 7 
 
 7 Consideration 16- 44 ^ S^' '5 
 
 / Contracts — Definitions, classification, essentials of 1- 15 "*r* 
 
 ^Created by Law — Quasi Contracts 57- 70 Qfj^Jo'"*- 
 
 /f Oral contracts 51- 56 ^1^^ f^~f^ 
 
 3 Contracts under seal 45- 50 fy- ^^'-^J^fi 
 
 g Contracts entered into by mistake 136-138^5**** ■^ 
 
 (c How executed 71- 84^^^"'^*^ 
 
 ) (a Corporations — Contracts of 206-212^^t5^7"' «/ 
 
 (jl Duress — Its effect on contracts 139-146^^'^"^ 
 
 / / Election and Waiver 159-168 /*p.¥5-^o 
 
 I 3 Infants — Incapacity to make contracts 17 9-196ay^'^<^~^^ 
 
 /5~Insane Persons— same 199-205 /LfK^I'^l 
 
 n Interpretation of Contracts 85-135^ 2 5";^ 7. 
 
 ^:(,Lex Loci and Lex Fori 254-260%''^'^ 
 
 /'fMarried Women — Contracts of 197-198^4- ^^"^7 
 
 /^Partnership 237-240^^^^7'^ » 
 
 2. / Time— how computed 250-253(itf<7^''7/
 
 RULES OF CONSTRUCTION OF CONTRACTS. 
 
 1. 'Vhere there is a conflict between printed and 
 
 written words, the written words will control 
 
 2. A contract will be construed most strongly against 
 
 the maker. 
 
 3. A contract susceptible of two meanings will be 
 
 given the meaning which will render it valid; 
 
 wherever possible it will be construed to render 
 it reasonable rather than unreasonable; 
 
 the meaning v/hich best gives effect to the inten- 
 tion of the parties will be given; 
 
 the intention of the parties will be collected 
 from the whole document. 
 
 REL'IEDIES FOR BREACH OF CONTRACT. 
 
 The measure of damage is, so far as money can do so, 
 to put him in the same condition he would be in 
 if the other party had completed the contract. 
 
 Damages are furnished by way of compensation and not 
 for punishment. 
 
 Frequently parties make a provision for the amount tc 
 be paid as liquidating damages in the event thei 
 is a breach of contract. 
 
 In certain cases injured party can go to court of 
 
 equity and have the court decree spe-cific per- 
 formance of the contract; as to make a deed to 
 property, etc. 
 
 ■>>• -<C- "/^ '/• ■<'- •;?• i'' "Jr •?(- ^ "/?• 4^ ■}»• ^ "J^ -Jf 
 
 DISCHARGE OF CONTRACT. 
 
 1. By agreement of the parties. 
 
 2. By full and complete performance and termination 
 
 by its own terms. 
 
 3. By breach, 'jrhere one party breeiks the obligation 
 
 which has been imposed upon him. 
 
 4. *7here by act of God or otherwise the performance 
 
 is impossible as the death of a person who has 
 contracted to render his personal service. 
 
 5. By operation of law, this where a party becomes 
 
 bankrupt, or a document is discovered altered bji 
 •raaure or addition. Thi» applies to verbal con- 
 tracts as well as written contracts.
 
 SOUTHERN REGIONAL LIBRARY 
 
 AA 000 821 103 9 
 
 UNIVERSITY OF CAUFORNIA LIBRARY 
 
 Los Angeles 
 
 This book is DUE on the last date stamped below. 
 
 OCT 2 3 1981 
 
 PSD 1916 8/77