THE LAWS OF Crabe anb Commerce, DESIGNED AS A BOOK OF REFEREIVCE IN MERCANTILE TRANSACTIONS. Potius ignoratio juris litigiosa est, quam scientia. Cic. de Leg. It is incumbent upon every man to be acquainted with those laws, at least, with which he is immediately concerned. Blackstone's Commentaries, By JOUK IVILLIAJMS, Esq. LONDO N: PRINTED FOR SHERWOOD, NEELY, AND JONES, PATERNOSTER-ROW ; AND THOMSON AND WRIGHTSON, BIRIII VGHAM ; BTIODIF, DOTVDIN'C, AND I.T;s- FORD, SALISBURY ; MEYLER AND SON, BATH ; REF.S AND CURTIS, PLYMOUTH, W. ROBINSON, LIVE«P0OL ; MOTLEY, MILLER, AND HARRISON, PORTSMOUTH ; MONDAY AND SLATTER, OXFORD ; CONSTABLE A^D CO, , EDINBL'RCH ; BRASS AND REID, GLASGOW; AND CUMMINGS, DUBLIN. 1812. T UiclMrd Taylor and Co. Printers, Shoe Lam, Lo?idon. TO ALEXANDER BARING, Esq. M.P. THIS WORK IS, BY PERMISSION, inscribed: as a testimony of esteem for his extensive commercial knowledge AND ACKNOWLEDGED PRIVATE WORTH, BY HIS MUCH OBLIGED AND MOST OBEDIENT SERVANT, THE AUTHOR. INTRODUCTION J- HE importance of Commerce is a point so gene- rally understood and acknowledged, that it would be superfluous to attempt any new proof or illus- tration of its necessity or advantages. It tends, says an elegant historian, to wear off those preju- dices which maintain distinction and animosity between nations. It softens and polishes the man- ners of men. It unites them by one of the strongest of all ties, the desire of supplying their mutual wants. It disposes them to peace, by establishing in every state an order of citizens bound by their interest to be the guardians of public trancuillity. From a view of the beneficial effects which com- merce is capable of producing on the happiness and comfort of mankind, it is a natural inference, that the means by which it may be most success- fully cultivated, as also those established rules and principles which regulate nations in their com- mercial dealings with each other, must be the ob- ject VI INTRODUCTION. ject of the most solicitous inquiry of every one whose interests and pursuits are of a mercantile na-r ture. But experience proves the contrary. So far from a knowledge of the principles of political oeco- nomy, and their practical application to commerce and finance, of those laws and customs which uni- versal consent, or the more obligatory authority of compacts or treaties, has established for the commer- cial intercourse of independent states, being thought necessary, there are few men engaged in commerce who have any notion of the privileges, regulations^ and restrictions of the municipal laws of their native soil with regard to commercial affairs. The reason is obvious. The statutory enactments and judicial decisions concerning the regulation of commerce , have become so numerous, and are oftentimes so fluctuating, as to preclude all, except such as de- vote themselves to the attainment of legal know- ledge for professional purposes, from an acquaintance with their provisions. It must also be admitted, that those to whom, from their destination in life, this knowledge is accessible, appear not to have been very solicitous to remove this obstacle. From the few publications which, until of late years, have appeared on commercial branches of the law, it would seem that professional men had formed the same opinion of their clients' capabilities of understand- ing the mysteries of law, as Erasmus did of the ca- pacity of those who happened not to be born to a splendid fortune and liberal education, with regard to INTRODUCTION. Ml to the truths of religion — "Non expedit omnem ve- ri.tatem," says that great divine in one of his letters to Melancthon, " prodere vulgo." Within the last twenty or thirty years, however, several valuable treatises on commercial law have been published; but as these are numerous, and chieBv calculated for professional readers, little advantage or assistance can be derived from them to the mercantile part of the community. To obviate this defect, then, is the design of the present publication. Its object is to afford a com- pendium of commercial law applicable to subjects of frequent recurrence, and digested in a form to which reference can readily be made in the hurry of busi- ness. With what skill the design has been executed, the compiler does not take upon himself to deter- mine. In treating of so great a variety of subjects, if he has failed, his consolation is, that his endea- vours were well meant. On a review of his work, he readily acknowledges that he is not satisfied with its execution. When he first sat down to his task, he expected to have constructed a much more goodly fabric than he finds he has done. His dis- appointment, however, has forcibly convinced him, that "the distance is always very great between actual performance and speculative probability." To those who are disposed to be captious, he repKes in the words of Columella, " Nihil perfectura, aut a singular! consummatum industria." VIU INTRODUCTION. The Compiler avails himself, here, of the oppor- tunity of acknowledging his obligations to the ex- cellent works on Commercial Law by the following gentlemen, viz. James Allen Park, Charles Abbot, William Cooke, Francis Whitmarsh, William Wat- son, Walter William Fell, William Paley, William Selwyn, Joseph Chitty, and George Ross, esquires. 5, Hare Court, Temple. July I, 1812. THE LAWS OF TRADE AND COMMERCE. PART I. AX HISTORICAL SKETCH OF THE RISE AND PROGRESS OF COMMERCE. Notwithstanding Xenophon expresses a doubt whe- ther commerce be of any advantage to a state (E'lSe xai «/*- TTOfia otpeXsi Ti itoXiv, &c.), and that Plato (De Leg. lib. 4.) totally excludes it from his imaginary commonwealth ; yet whoever looks into the history of the world will find, that in all ages its utility and advantages have been fully ap- pretiated by mankind. It is an observation justified by experience, that as soon as the commercial spirit begins to acquire vigour, and to gain the ascendant in any society, "^e discover a new genius in its policy, its alliances, its wars, and its negotiations. No nation that cultivated foreign commerce ever failed to make a distinguished figure on the theatre of the world. It was by its opulence and extensive commerce that Carthage counterbalanced the fortune and the grandeur of the Romans ; and in proportion as com- merce made its way into the various states of Europe, they turned their attention to those objects and adopted those manners which distinguish polished nations, and which lead to political consequence and eminence amongst the neighbouring powers'. ' Robertson's View of Society, p. 95- 2 Of the Rise and Progress of Commerce. Among tlie anciciils, e gold and silver which is purchased w ith those commodities, must necessarily tend to increase the annual production of European commodities, and consequently the real wealth and revenue of Europe. That it has derived much less advantage from its commerce with the East In- dies than from that of America, Dr. Smith observes, is pro- bably owing to the restraints that it every where labours under from the privileges of exclusive companies'. After the two important events in the history of com- merce, viz. the discovery of America and of the passag« to the East Indies, communities began to be animated by a commercial spirit of enterprise, and most of the poT^^rsof Europe began to think seriously of maritime corameroe, and to coiisider it as one of the most effective means of aug- menting their riclies and power. Some of them succeeded in acquiring possessions out of Europe. Others took care to encourage commerce, at least, in their home possessions, and to procure for their subjects, by the means of laws and treaties, solid advantages, which were no less solid for the siatc at the time, gince their chief tendency was to leave a balance in its favour *. ' Ibiii. pp. 178, 180. ' Martf n's Law of Nations, p. ii>0. c f ?iKI 20 PART II. OF THE MEDIUM OF COMMERCE. In the first stage of society, barter or permutation was tli« method of carrying on commerce between nations : some people having a superfluity of those goods which otliers wanted, both parties would naturally be inclined to ex- change their superfluities with each other, as by that means they could procure what they wanted, by parting with that which tliey did not want. This method of traffic con- tinued even to the seventeenth century. The English, French, and Dutch traders first carried their merchandize to Archangel, and there trucked it with the Russians for the products of that vast empire '. But as men and their wants multiplied, this sort of commerce, in its original form, could not be carried on at a distance, or pven among neighbours, it not always happening that one nation could spare what another wanted. Many different commodities, it is probable, were successivelj' both thought of and em- ployed for this purpose. In the rude ages of society, cattle are said to have been the common instrument of commerce ; and though tbey must have been a most inconvenient one, yet in old times we find that things were frequently valued according to the number of cattle which had been given in exchange for them. The armour of Diomede, says Ho- mer, cost only nine oxen ; but that of Glaucus cost a hun- • The revenues of the ancient Saxon kings of England are said to hare been paid not in money, but in kind ; that is, in victuals and provisions of all sorts. W illiam the Norman introduced the custom of paying them in money. This money, however, was for a long time rectived at the exche- quer t)y weight, and not by talr. Aad so late as the fourteenth century, twenty thousand sacks of wool were sent to Antwerp, to pay the expenses of .the English army in the Netherlands. SUiith's Wealth ef Nations, i. p. 40. dred. Of the Medium of Commerce. SI dred. It is also mentioned by Pausanias and Aristotle, as a custom which still subsisted in their times among the Barbarians : and we learn from other authors that it was the practice of the ancient Germans, Britons, and Lusita- nians. To this day, among the Tartars, as also among all nations of shepherds, who are generally ignorant of the use of money, cattle are the common instruments of commerce and the measure of value. Salt is said to be the common instrument of commerce and exchanges in Abyssinia 3 a species of shells in some parts of the coast of India ; dried cod at Newfoundland ; tobacco in Virginia ; sugar in some of our West India colonies ; hides and dressed leather in some other countries ; and in some towns in Scotland, even at this day, nails are used instead of money. Among the savages of North America, the only standard of exchanges is the skin of a beaver'. A common medium, which might be equally adapted to every one's wants, by being made by mutual agreement the common measure of exchange, which should be at the same time portable, and divisible into parts equal to the value of the goods bought or sold, was long the object of the most earnest investigation. Metals, therefore, were adopted. In all countries, men seem at last to have been determined by irresistible reasons to give the preference for this employment to rrietals above every other ^mmodity. Their homogeneous quality in all countries adapted them, in a peculiar manner, for facilitating the purposes of com- merce, and consequently as a standard of tJie comparative value of commodities. They cannot only be kept with as little loss as any other commodity, scarce any thing being less perishable than they are, but they can likewise, with- out any loss, be divided into any number of parts, as by ' Home's Sketches, vol. i. p. 61. Smitli's Wealth tf Nations, i. p. S6. Taylor's Elemetite of the Civil Law, p. 499. fusioB 22 Of the Medium of Commerce. fusion those parts can be easily UHiled again ; a quality Tvhich no other equally durable commodities possess, and which, more than any other quality, renders them fit to be instrument* of commerce and circulation. The man who ■wanted to buy salt, for example, and had nothing but cat- tle to give in exchange for it, must have been obliged to buy salt to the value of a ^vhole ox, or a ^vhole sheep^ at a time. He could seldom buy less than this, because what he was to give for it could sehloni be divided without loss ; and if he had a mind to buy more, he; must, for the sam« reasons, have been obliged to buy double or triple the quan- tity ; the value, to wit, of two or three oxen, or of two or three sheep. If on the contrary, instead of sheep and oxen, he had metals to give in exchange for it, he could easily proportion the quantity of the metal to the precise quantity of tiie commodity for >vhich he had immediate oc- casion '. Different metals have been made use of by different na- tions for this purpose. Iron Avas the common instrument of commerce among the ancient Spartans; copper among the ancient Romans, until five years before the first Punic war, when they first began to coin silver ; and gold and silvei among all commercial nations. In England, silver coins were in use in the time of the Saxons, but there was littl* gold coined till the time of Edward the Third, nor any copper till that of James the First ^ In the invention of money there are two periods, that wherein it was Aveighed, when it consisted either of small bars of iron, brass, or silver, or large plates of the same metals, and that wherein it was coined. The denomina- tions of money and the several terms of exchange, both in the Greek and Roman languages, evidently refer us to this ' Ibid, ut ante. » Smith's Wealth of Nations, i. p. 38, 61, ancient Of the Medium of'Coyninerce. 23 Sincietit practice '. Originally (he circulating medium consisted of rude bars of metal Avithout any stamp or coinage. Thus, we are tuld by Pliny, (Hist^ Nat. lib. xxxiii. c. 3.) upon the authority of Timaeus, an ancient historian, that till the tiUie of Servius TuUius the Romans had no coined money, but made use of unstamped bars of copper to purchase whatever they bad occasion for. These rude bars, therefore, performed at this time tho functions of money ^. But, in time, more nicety came to be introduced into the conrmcrce of metals ; instead of btung given loosely by bulk;, every portion was weighed in scales, or assayed in the crucible. Even weight and the tedious and difficult operation of assaying were at length discovered to be an imperfect standard; To pre- vent, then, fraud and imposition, and to facilitate ex- changes, pieces of these metals, with a public stamp vouching both the purity and quaiititj'^, were introduced ; and such pieces were termed coins i This was a notable improvement, says Lord Kaimsj in commerce; and, like other improvements, was probably at first thought the ut- most stretch of human invention. It was not foreseeu, continues that perspicacious writer, that tliese metals wear by much handling, so that in time the public slamp is re- duced to be a voucher of the purity only, not of (he quan- tity. Hence proceeded manifold inconveniences, and much embarrassment in commerce ; which no doubt, together \vith the scarcity of (he precious me(uls, facilitated the in- troduction of paper money, which is free fiom that embar- tassment'. It may not be improper (o state here the adva iiages arising trom the introduction of pa})er money as a circulating medium. A well regulated paper money, Dr. Smith ob- ' Tavlor's Llemrnts, p. 18S. ' U.id. 3 ilome's Sketches, voK i. p, al. serves 2i Of the Medium of Commerce. ficrvcs in his Woaldi of Nations, will supply a scarcity of the precious metals, not ojily without any inconveniency, but in some cases with some advantages. The substitution of paper in the room of <^old and silver money replaces a very expensive instrument of commerce ivith one much less costly, and sometimes equally con- venient. Circulation comes to be carried on by anew wbee!, ivhi'.h it costs less botli to erect and to maintain than the old one. But in wliat manner this operation is performed, and in what way it tends to increase either the gross or the neat revenue of the society, is not altogether so obvious, and may therefore require some further explication. There are several different sorts of paper money ; btft the circulating notes of banks and bankers are the species which is best known, and which seems best adapted for this purpose. A particular banker lends among his customers his own promissory notes, to the extent, wc shall suppose, of a hun- dred thousand pounds. As those notes serve all the pur- poses of money, his debtors pay him the same interest as if he had lent them so much money. The interest is the source of his gain. Though some of those notes arc con- tinually coming b.ick upon him for payment, part of them continue to circulate for months and years together. Though lie has generally in circulation, therefore, notes to the ex*' tent of one hundred thousand pounds, twenty thousand pounds in gold and silver may, frequently, be a sufficient provision for answering occasional demands. By this operation, therefore, twenty thousand pounds in gold and silver peribrni all the operations which a hundred thousand could otherwise have performed. The same exchanges may be made, the same quantity of consumable goods may be circulated and distributed to their proper consumers, by means of his promissory notes to the value of a hundred thousand Of the Medium of Cormnei-ce, Q3 thousand pounds, as hy an equal value of gold and silver money. Eighty thousand pounds of gold and silver, therefore, can, in this manner, be spared from the circula- tion of the country ; and if diflerent operations of the same kind should, at the same time, be carried on by many different banks and bankers, the whole circulation may thus be conducted with a fifth part only of the gold and silver which would otherwise have been requisite. Let us suppose, for example, that the wliole circulating money of some particular country amounted, at a particular time, to one million sterling, that sum being then sufficient for circulating the whole annual produce of their land and Mtbour. Let us suppose too, that some time thereafter, dif- ferent banks and bankers issued promissory notes, payable to the bearer, to the extent of one million, reserving in their diflerent cofiers two hundred thousand pounds for answer- ing occasional demands. There would reraaui, therefore, in circulation, eight hundred thousand pounds in gold and silver, and a million of bank notes, or eighteen hundred thousand pounds of paper and money together, ^ut the annual produce of the land and labour of the country had before required only one million to circulate and distribute. it to their proper consumers, and that annual produce can- not be immediately augmented by those operations of banking. One million, therefore, will be sufficient to cir- culate it after them. The goods to be bought and sold being precisely the same as before, the same quantity of money will be sufficient for buying and selling them. The channel of circulation, continues Dr. Smith, if I may be allowed sucli an expression, will remain precisely the same as before. One million we have supposed sufficient to fill ve enter upon the inquiry bow commerce iS' efl'ected by the quantity of circuhitini^ coin, it seems ne- cessary to premise a few observations concerning the opera- tion of the value of a conimodily on the demand. We may say, generally, that the value of a commodity depends chiefly, though notsolel}', on the demand. Quantity be- yond the demand renders even necessaries of no value ; of which water is an instance. It may be held accordingly as a general rnle, that the value of goods in commerce de- pends on a demand beyond what their quantity can satisfy ; and rises in proi)ortion to the excess of the demand above the quantity. Even water becomes valuable in countries where the demand exceeds the quantity : in arid regions springs of water arc highly valued • and in old times were frequently the occasion of broils and bloodshed. Com- paring next different commodities with respect to value, that commodity of which the excess of the demand above the quantity is greater, will be of the greater value. Were utility or intrinsic value only to be considered, a pound of iron would be worth ten pounds of gold ; but as the excess of the demand for gold above its quantity is much greater than that of iron, the latter is of less value in the market. A pound of opium or of Jesuit's bark is, for its salutary effects, more valuable than gold ; and y^i, for the reason given, a pound of gold will purchase many pounds of these drugs. Thus, in general, the excess of the demand above the quantity is the standard that chiefly Axes the mcrcau- tilc value of commodities. But as our chief view is to examine how far industry and commerce are aflected by the quantity of circulating coin, we Of Commercial Politics. 55 Vie premise, in that view, the following plain propositions : Supposing-, first, the quantity of money in circulation and the quantity of goods in the market to continue the same, the price will rise and fall with the demand. For when more goods are demanded than the market affords, those who offer the highest price will be preferred ; as on the other hand, when the goods brought to market exceed the de- mand, the venders have no resource but to entice purchasers by a low price. The price offish, flesh, butter, and cheese, is much liigher than formerly ; for, thchc being now the daily food of the lowest people, the demand for them is greatly increased. But though tlie increase of demand may in the beginning sometimes raise the price of goods, it never fails to lower it in the long run. It encourages production, and thereby increases tire competition of the producers, who, in order to undersell one another, liavc re- course to new divisions of labour and new improvements of art, which might never otherwise have been thought of. Supposing now a fluctuation in the quantity of goods only, the price falls as the quantity increases, and rises as the quantity decreases. The farmer whose quantity of corn is doubled by a favourable season, must sell at half the usual price; because the purchaser, who sees a superfluity, will pay no more for it. The contrary happens upon a scanty crop ; those who want corn must starve, or give the mar- ket price, however high. The manufactures of wool, flax, and metals, are much cheaper than formerly ; for though the demand has increased, yet by skill and industry the quantities producetl have increased in a greater proportion. It is easy to combine the quantity and demand, supposing a fluctuation in both. Where the quantity exceeds the usual demand, more people will be tempted to purchase by the low price ; and where the demand rises considerably above the quantity, the price >Yill rise in proportion. In mathe- D 2 matical 36 Of Comjnercial Politics. matical language these propositions may be thus cxprfssed, that the price is directly as the demand, and inversely a» the quantity. A variation in the quantity of circuhitinfic coin is the most intricate circumstance : because it never happens without making a variation in the demand for goods, and frequently in the quantity. 1 take the liberty, hoi\'ever, continues Lord Kaims, to suppose that there is no variation but in the quantity of circulating coin ; for though that cannot hap- pen in reality, yet the result of the supposition will throw light upon what really happens : the subject is involved^ and I wish to make it plain. I put a simple case, that the half of our current coin is at once s^ept away by some ex» traordinary accident. This at first will embarrass our ex- ternal conmierce, as the vender will insist for the usual price ; which now cannot be afforded. But the error of such demand will soon be discovered ; and the price of com- modities, after some fluctuation, Avill settle at the one half of what it was formerly. Ai the same time, there is here no downfall in the value of commodities, which cannot hap* pen while the quantity and demand continue unvaried. The purchasing for a sixpence what formerly cost a shilling., makes no alteration in the value of the thing purchased ; because a sixpence is equal in value to what a shilling was formerly. In a v/ord, when money is scarce, it must bear a high value : it must in particular go far in the purcha^ ©f goods ; which we express by saying that goods are cheap. Put the. next case, that by some accident our specie is instantly doubled. Upon supposition that the quantity and demand continue unvaried, the result must be, not in- stantaneous indeed, to double the price of commodities. Upon the former supposition, a shilling has in effect sunk down to a sixpence. And here again it ought to be ob- aeryedj that though the price is augmented, there is no real alteration- Of Commercial Politics, 37 alteration in the value of commodities. A bullock, says the same author, that some years ago could have been pur- chased for ten pounds, will at present yield fifteen. The vulgar ignorantly think that the value of horned cattle has risen in that proportion. The advanced price may, in some degree, be occasioned by a greater consumption ; but it is chiefly occasioned by a greater quantity of money in cir- culation*. Combining all the circumstances, the result is, that if the quantity of goods and of money continue the same, the price will be in proportion to the demand : if the demand and quantity of goods continue the same, the price will be in proportion to the quantity of money. And if the demand and quantity of money continue the same, the price will fall as the quantity increases, and rise as the quan- tity diminishes. OThe effects of money on the prices of labour are deservinfj of the closest attention. It may be held as a general rule, that the increase of money raises the price of every com- modity ; partly fiom the greater quantity of money, and partly from the additional demand for supplying those artificial wants which money generates. High wages will undoubtedly promote at first the spirit of industry, and double the' quantity of labour : but the utmost exertion of labour is limited within certain bounds; and consequently a perpetual influx of gold and silver will not for ever be at- tended with a proportionable quantity of work : the price of labour will rise in proportion to the quantity of money ; but the produce will not rise in the same proportion ; and * This import.nnt maxim has received the incontestable sanction of Dr. Smith, who in his TV'ealth of Nations observes, That degradation in the value of silver, which is the effect of the fertility of the mines, and which. operates equally or very nearly equally through the greater part of the commercial world, is a matter of very Ifttle consequence t!i any particular country. The consequent rise of all mojiey prices, though it does not make those who receive them really richer, does not make them really poorer. A service of plate becomes really cheaper, and every thing else rejjuClrjs precisely of the same real value 9s befpr.e. foi 3S Of Commercial FoUtics'. for that reason our maniifacturos v, ill be dearer than formerly. Hence a di-.mal scene. The high price at lio)ne of our ma- nnfactures ^vill exclude us from foreign markets ; for, if the merchant cannot draw theje for his goods what he paid at home, with some profit, he must abandon foreign commerce altogether. And what is even still more dismal, we shall be deprived even of our own markets ; for, in spite of the utmost diligence, foreign commodities cheaper than our own will be poured in upon us*. But however certain it may appear, that an augmenta- tion in the quantity of money must raise the price of labour and of manufactures, yet there is a fact that seems to con- tradict this proposition, which is, that in no country are la- bour and manufactures so cheap as in the two peninsulas on the right and left of the Ganges, though in no other coun- try is there such plenty of monej'. To account for this singular fact, political writers say, that money is there amassed by the nabobs, and withdrawn from circulation. This is not satisfactory : the chief exportation from these peninsulas are (heir manufactures, the price of which comes first to the merchant and manufacturer ; and how can that happen witliout raising the price of labour ? Rice, it is true, is the food of the labouring poor ; and an acre of rice yields * There serm? (o be, says Mr. Hume in his Essay on Money, a happy r<»rriirr»'nrc in hiimnii aflnirs, \vliirli rlucks (he 2;ro\vth of trade and richo?, and hinders thcni from hcini; foiilined entirely to one people; as might na- tiirallvat first he dreaded from (he advantages of an established commerce. XVhere one nation lias pot the start of another in trade, it is very difficult fy this aunnal exportation of silver to the East Indies, plate probably is somewhat dearer in Europe than it otherwise would liave been ; but this disadvantage is counterbalanced by the larger quantity both of labour and commodities which coined silver purchases. The former of these two efFects is a very small loss ; the latter a vpry great advantage, SECTION III. OF THE RESTRAINTS AXD ENCOURAGEMENTS OF TUJ) COMMERCIAL SVSTEII. From the two popular though erroneous notions, that TTcallh consisted in gold and silve clay, though acknowledged to be different from fuller's clay, yet on account of their resemblance, and because fuller's clay might sometimes be exported as tobacco-pipe chy, has been laid junder the same prohibitions and pe- nalties. By the ISth and lith Car. IJ. r. 7, the exportation of raw hides has been prohibited. The horns of cattle are also subject to the same restraint. Restraints, either by prohibitions or by taxes, extend io the exportation of goods which are partially but not com- pletely manufactured. Woollen yarn and worsted are prohibited to be exported under the same penalties as wool. Watch-cases, clock-cnses, and dial-plates for watches and clocks, have been prohibited lo be exported. By some old statutes of Edward III. Henry VIII. and Edward VI. the exportation of all metals was prohibited. Lead and tin were alone excepted ; probably on account of the great abundance of those metals ; in tJie exportation of which a considerable part of the trade of the kingdom in those days consisted. For the encouragement of the mining trade, the 5th of AVilliam and Mary,, c. 17, exempted from 4.S Of Commercial Politics. from this proliibiiion iron, copper, and mundic m«tsl made from British ore. The exportation of all sorts of copper bars, fon^if^n as well as British, was afterwards per- mitted by file m\ and 10th of William III. c. '26. Tbe exportation of nnmaniifacturod brass, of what is called gnn-mp(al, bell-metal, and shrofl-nictal, still continues to* be prohibited. Brass manufactures of all sorts may be ex* ported duty free. It is not always true policy to discourage the exportatiort of our own rude materials, as is evident from the restraints imposed upon wool. Liberty of exportation gives encou- ragement to produce them in greater plenty at home ; which consequently lowers the price to our manufacturers. Upo« that principle the free and open exportation of corn (of which we shall presently speak) has been permitted, andj in Britain, even encouraged with a bounty. But where exportation of a rude material will not increase its quantity, the prohibition is good policy. For example, the export- ing^ of rags for paper may be prohibited ; because liberty of exporting will not occasion one yard more of linen cloth to be consumcKl. Lyons, adds Lord Kaims, is the city of Europe where the greatest quantity of silk stuffs is made : it is at the same time the greatest staple of raw silk ; the silk of Italy, of Spain, of the Levant, and of the South of France, being tliere collected. The exportation of raw silk is prohibited in France, with a view to lessen its price at home, and to obstruct the silk manufacture among foreigners. The first is a gross error ; the prohibition of exportation producing scarcity, not plenty : and witli respect to tJic other view, it seems to have been overlooked, that the commerce of the silks of Ital}'^, of Spain, and of the Levant, is not confined to France, but is open to all trading nations. Thi^ prohi- bition is indeed so injudicious, continues the same author, that Of Commercial Politics. 49 t!iat. without any benefit to France it lias done irreparable mischief to the city of Lyons : ^vhile the commerce of raw silk, both buying and selling-, was monopolized by the merchants of that city, they had it in their power to regulate the price ; but to com^xl foreigners to go to the fountain-head, not only raises the price by concurrence of purchasers, but deprives Lyons of a lucrative monopoly. The same blun- der is repeated with respect to raw silk, spun and dyed. In Lyons, silk is prepared for the loom with more art than any where else ; and to secure the silk manufacture, the expor- tation of spun silk is prohibited ; which mijst rouse fo- reigners to bestow their utmost attention upon improving the spinning and dressing of silk. The exportation of the materials of manufacture, where it is not altogether prohibited, is in many cases subjected to considerable duties. Duties on exportationj continues the same writer, are in great favour from a notion that they are paid by foreigners. This holds sometimes ; as in the monopoly Britain formerly enjoyed of exporting coals to Holland. The duty paid on this exportation was agreeable to sound policy : it raised a considerable revenue to the public, and enabled us to cope with the Dutch in every manufacture that employed coal, such as dyeing, distilling, works of glass and of iron. But in every case where tlie foreign market can be suj)plied by others, it fails. And tiierefore in the above-mentioned case, the English monopoly of exporting coals to Holland would have been ruined by the coal ihines in the Austrian Ne- therlands, had not the exportation thereof been barred by an exorbitant duty. The Diitch many years ago ofiered to confine themselves to those inexhaustible mines, on condi- tion of being relieved from the duty. But the proposal was rejected. The duty on French wines exported from France, continues the same author, is equal to a bounty to the wines 30 Of Commercial Politics. of ncii;]ibouring countries. At the same time llie dutj is uiiskilfwUy impoisedj being tlie same upon all "winesexpoi ted, without regard to iiuvour or htiength ; wliich bars the com- merce of s:nail wines, tliough much more plentiful. A mo- derate duty ou exportation, such as sma'l wines can bear, would add a greater sum to the revenue, and alho be more beneficial (o commerce. To improve liie commerce of wine in I'Vance, the exportation ought to be free, or at most charged with a moderate duty ad valorem. In Spain an excessive duty is laid upon the plant barrilewhen exported, from a persuasion that it will not grow in any other coun- try. It is not considered, that this t:!x by lessening the de- mand is a discouragemtnt to its ctiUure. A motlerate duty would raise more money to the public, would employ more hands, and Avould make that plant a permanent article of commerce. lorme;ly in Britain the exportation of manu- factured copper was prohibited. That blunder in commer- cial politics was corrected by a statute in the reign of ting William, permitting such copper to be exported, on pay- ing a duty of four shillings the hundred weight. The ex- porta^tion ought to have been declared free ; which was done by a statute of queen Anne. But as people are apt to overdo in the rage of improvement, this statute, con- tiiiucs the same author, permits even unwrought co})per, a raw material, to be exported. This probably was to favour copper mines : but did it not also favour foreign copper manufactures? By the 8th Geo. I. c. 15., the exportation of all goods the produce or manufacture of Great Britain, upon which any duty luul been imposed by former statutes, was rendered duty free. The following goods, however, were excepted : alum, had, lead-ore, tin, tanned leather, copperas, coals, wool, cards, wlate woollen cloth, lapis ca- laminaris, skins of ail sorts, glue, coney hair or wool, hares' wool, hair of all sorts, horses, and litharge of lead. This statute. Of Commercial Politics. 51 statute, for the encouragement of such of our own manu- factures as employ any of tlie articles specified, leaves them subject to all the old duties which had ever been imposed upon them, the old subsidy and one per cent, outwards. By the same statute, a great number of foreign drugs for dyers' use are exempted from all duties upon importation. Eacli of them, however, is afterwards subjected (o a cer- tain duty, not indeed a very heavy one, upon exportation. Our dyers, it seems, while they thought it for their interest to encourage the importation of these drugs, by an exemp- tion from all duties, thought it likewise for their own in- terest to throw some small discouragement upon their ex- portation. The avidity, however, which suggested this notable piece of mercantile ingenuity, most probably dis- appointed itself of its object. It necessarily taught the im- porters to be more careful than they otherwise might have been, that their importation should not exceed what was necessary for the supply of the home market. The home market was at all times likely to be more scantily supplied ; the commodities were at all times likely to be somewhat dearer there than they would have been, had the exporta- tion been rendered as free as the importation. Bytlie above-mentioned statute, gum Senega or gum Ara- bic, being among the enumerated dyeing drugs, might be imported duty free. They were subjected, indeed, to a small poundage duty amounting only to three-pence in the hundred weight upon their re-exportation. France enjoyed at that time an exclusive trade to the country most pro- ductive of those drugs, that which lies in the neighbour- hood of the Senegal; and the British market could not easily be supplied by the immediate importation of them from the place of growth. By the 25tU Geo. II. therefore, gum Seuega was allowed to be imported (contrary to the E 2 general d2 Of Coihmerdal Politics. gciioral disroiiitions of Ihc act ot navigjition) from any part of Euroj^e. ^slLe law, however, did not mean to encou- rage this species of trade, bO contrary to tlie general prin- ciples of the mercantile policy of England, it impobed a duly of ten shillings the hundred weight upon sucii im- poilation, and no pait of this duty ^\as to be afterwards drawn back upon its cxporlation. Tlie succes-sful war >Uiich began in ]75j gave Great Britain the same exclu- sive (n'de to those countries which France had enjoyed be- fore. Our manufacturers, as soon as the peace was made, endeavoured to avail themselves of this advantage, and to establish a monopoly hi tiieir ovtn favour, both against the growers and against tlie importers of this commodity. By the 5th Geo. 111. c. 37, therefore, the exportation of gum Senega from his majesty's dominions in Africa was confined to Great Britain, and was subjected to the same restrictions, regulations, forfeitures,, and penalties, as tliat of the enu- merated cominodilics of the British colonies in America and the West Indies. Its importation a\ as subjected to a small duty of six-pence the hundred weight, but its re-ex- portation was subjected to the enormous duty of one pound ter» shillings the hundred weight. It was the intention of our nianufitcturers that the wl.oie produce of those countries slioaid be imported into (ireat Britain, and, in order that they themselves might be enabled to buy it at their ov, n price, that no part of it should be exported again, but at such an expense as would sufficiently discourage that ex- portation. Their avidity, however, upon this as well as upon many other occasions, disappointed itself of its object. Tile enormous duty presented such a temptation to smug- gling, that great quantities of this commodity were clan- destinely exporti?d, probably to all the manufacturing coun- tries of Europe, but particularly to Holland, not only from Great Of Commercial' Politics. 55 Great Britain but fro n Africa. Upon this account, by tlie I4th Geo. III. c. 10; this duty upon exportation was rcclncrd to five sliilliiig's tlie hundred weight. In the book of rates, according to wliicli the old subsidy was levied, beaver skins were estimated at six sliilling-s and eig:ht-peace a pi^'ce, and the difl'ercnt subsidies and imposts, wliich before the year 1722 had been laid upon their im- portation, amounted to one fifth part of the rate, or to six- teen-pence upon each skin ; ali of whicli, except half tlie old subsidy, was drawii back upon exportation. This duty upon the importation of so important a material of manu- facture had been thou5i;ht too high, and in the year 1722 the rate was reduced to two shinings and six-pence ; which reduced the duty upon importation to six-pence, and of this only one half was to be drawn back upon exporfation. Tlie same successful war put the country most prodsictive of beaver under the dominion of Great Britain ; and beaver skins being among the enumerated commodities, their ex- portation from America was consequently confined to the market of Great Britain. Our manufacturers soon be- thouglit themselves of the advantage tliey might make of this circumstance, and in the year 176i the duty upon importation of beaver skins was reduced to one penny ; but the duty upon exportation was raised to seven-pence per skin, without any drawl)ack of t!ie duty upon importation. By the same law, a duty of eighteen-pence the poiiiid was imposed upon the exportation of beaver wool or wombs, without making any alteration upon the importation of that commodity, which when imported by British merchants, and in British shipping, amounted at that time to between four-pence and five-pence the piece. With regard to the exportation of corn, Dr. Smith ob- serves that if ever it is prohibited, it ought to be prohibited when at a very high price. The liberal system of a free exportation 54 Of Commercial Politics. exportation and a free importation, continues the same aii- tlior, Mould be highly beneficial, if it were adopted hy all nations. But, to the incalculable injury of mankind, very few countries have adopted this liberal system. The free- dom of the corn trade is almost every "where restrained, and in many countries is confined by such absurd regulations, as frequently aggravate the unavoidable misfortune of a dearth into the dreadful calamity of a famine. When Suliy entered on the administration of the French finances, the corn in France was at an exorbitant price, oc- casioned by the neglect of husbandry during the civil war. That sagacious minister discovered the secret of re-establish- ing agriculture, and of reducing the price of corn ; wliicli is, to allow a free exportation. So rapid was the success of that bold and politic measure, that in a few years France became the granary of Europe ; and wliat may at present appear wonderful, we find in the English records, in the year 1G21, bitter complaints of the French underselling them in their own marliets. Colbert, who fortunately for us had imbibed the common error, renewed the ancient prohibition of exporting corn, hoping to have it cheap at home for his manufacturers. But he was in a gross mis- take; for that prohibition has been the cause of many fa- mines in France since that time. The corn trade in France lay long under great discouragements ; and tiie French ministry continued long blind to the interest of their coun- try. At last edicts were issued, authorizing the commerce of corn to be absolutely free, whether sold within the king- dom or exported. The generality, however, continued blind. In the year 1768, the badness of tho harvest hav- ing occasioned a famine, the distresses of the people were excessive, and their complaints universal. Overlooking al- together the bad harvest, they from amazing partiality at- tributed their misery to the new law. It was in vain in- culcated, Of Commercial Politics. 55 culeated, that fretxloin in the corn trade encourages agri- culture : the popuhir opinion \vas adopted even by most of the Parliaments : so difficult it is to eradicate established prejudice. In Turkey about thirty years ago, continues Lord Kaiuis, a grand vizier pcruiilted corn to be exported more freely than had been done luimcrly, a bushel of" wheat being sold at that time under scventeoa-'jence. Every nation flocked to Turkey for corn ; and in particular no fewer than three hundred P'rench vessels, from twenty to two hundred tons, entered Smyrna bay in one day. The Janissaries and populace took the alarm, fearing that all the corn would be exported, and that a famine would ensue. In Constantinople they grew mutinous, and could not be ap- peased tiU the vizier was strangled, and his body thrown out to them. His successor, who resolved not to .split upon the same rock, prohibited exportation absolutely. In that country refit is paid in proportion to the product of the land ; and the farmers, who saw no demand, neglected tillage. In less than three years the bushel of wheat rose to six shillings, and the distresses of the people became in- tolerable. To this day, the fate of the good vizier is la- mented. Formerly in Spain there was pUnty of corn for twenty millions of inhabitants, with a surplus for the great city of Rome ; but for many years back, on account of the absolute prohibition against exporting corn, there has not been sufficient for seven millions, its present inhabitants. In great states, says Dr. Smith, the unlimited freedom of exportation of corn is much less dangerous than in small ones ; for, the growth being much greater, the supply can be seldom much affected by any quantity of corn that is likely to be exported. In a Swiss canton, or in some of the little states of Italy, it may perhaps sometimes be neces- sary to restrain the exportation of corn. In such great coun- tries as France ai\d England it scarce ever can. Besides, to 5G Of Commercial Politics. to binder llic farmer from sending his goods at all times to the best market, is evidently to sacrifice the ordinary laws of justice to an idea of public utility, to a sort of rea- sons of state; an act of legislative authority -which ought to be exercised only, and can be pardoned only, in cases of the most urgent necessity. Unless more corn is either usually grown, or usually im- ported into the country, observes the same author, than •what is usually consumed in it, the supply of the home mar- ket can never be very plentiful. For unless the surplus can, in all ordinary cases, be exported, the growers will be care- ful never to grow more, and the inipoi'ters never to import more, than what tlie bare consumption of the home market requires. That market will very seldom be overstocked; but it will generally be understocked, the people whose business it is to supply it being generally afraid lest their goods sliould be left upon their hands. The prohibition of exportation limits the improvement and cultivation of the country to what the supply of its own inhabitants requires. The freedom of exportation enables it to extend cultivation for the supply of foreign nations. By the discouragement of importation, the supply of the market, even in times of great scarcity, is confined to the home growth. Trie exportation of British manufactures to our American colonies ought to meet with such encouragement as to pre- vent them from rivalling us : it would be a gross blunder to encourage their manufactures, by imposing a duty on what we exported to them. We ought rather to give a bounty on exportation ; which, by underselling them in their own markets, would quash every attempt at rivalship. I close this branch, continues Lord Kaims, with a com- mercial lesson, to which every other consideration ought to yield. The trade of a nation depends for the most part on very delicate circumstances, and requires to be carefully nursed. Of Commercial Politics. 57 nursod. Forci<>"ners, in particular, ons^ht \o be flatlercd and encouraged, (hat they may prefer us before olhers. Nor ought we ever to rely entirely on our natural advan- tages ; for it is not easy to foresee wliat may occur to coun- terbalance tlieni.- As tlus reflection is no less obvious than weighty, facts will be more effectual than argument for making a deep impression. The Swiss some years ago im- ported all their wines from the king of Sardinia's dominions. The king laid a high duty on tliese wincS; knowing tlic Swiss had not ready access to any other wine country. lie did not foresee that this higli duty was equal to a premium for cultivating the viiie at home. They succeeded ; and now are provided with wine of their own growth. The city of Lyons, by making silver-thread in perfection, had maintained a monopoly of that article against foreigners as well as natives. But a high duty on the exporting of it, in order to monopolize also the manufacture of silver-lace,; has, by exciting foreigners to improve their own silver- tiiread and silver-lace, deprived them of both monopolies, by the very means employed for {Securing bot'i. Spanish oil exported to America would be a great article of commerce, were it not barred by a heavy duty on exportation equal almost to a prohibition : and the Spanish Americans, for want of oil, are reduced to use fat and butter. The prohi- bition of planting vines in Mexico, and the excessive duty on the importation of Spanisli wines into that country, in- troducixl a spirit drawn from the sugar-cane. Beside heavy duties, commerce with foreigners has been distressed by many unwary regulations. .The herring fislicry, which is now an immense article of commerce, was wigrossed originally by the Scots. Bixi grasping at all ad- vantages, the royal boroughs of Scotland, in the reign of .James the Second, prohibited their fishermen to sell her- rings at sea to foreigners ; ordering, that the herrings should. be 58 Of Commercial Politics. be first landed, in order that they themselves might be first served. Such Avas the policy of Ihose times. But behold the consequence : the Netherianders, and people of the Hans towns, being prohibited from purchasing as formerly, be- came fishers themselvrs, and cut tlie Scots out of that prO' fitable branch of trade. The tar copipany of Sweden, taking for granted tluit the English could not otherwise be supplied, refused to let them have any pitch or tar, even for ready money, unless permitted to be imported into Eng- land in Swedish bottoms ; and consequently in such quan- tities only as the company should be pleased to furnish. This hardship moved the parliament to give a bounty for pitch and tar made in our own colonies ; which has ren- dered us independent of Sweden. The Dutch, excited by the profitable trade of Portugal with the East Indies, at-, templed a north-east passage to China ; and that proving abortive, they set on foot a trade with Lisbon for East India commodities. Portugal was at that time subject to the king of Spain ; and the Dutch, though at war with Spain, did not doubt of their being well received in Portugal, with wliich k'mgdom they had no cause to quarrel. But the king of Spain, overlooking not only the law of nations, but even his own interest as king of Portugal, confiscated at shorthand the Dutch ships and their cargoes in the har- bour of Lisbon. That unjust and impolitic treatment pro- voked the Dutch to attempt an East India trade, which probably they would not otherwise have thought of ; and they were so successful as to supplant the Portuguese iu every quarter. And thus the king of Spain, by a gross er- ror in politics, exalted his enemies to be a powerful mari- time state. Hud he encouraged the Dutch to trade with Lisbon, other nations must have resorted to the same mar- ket. Portugal thereby would have been raised to such a height of maritime power, as to be afraid of no rival. The Dutch Of Commercial Politics. 59 Dutch wo:]kl not have thought of coping* wi(h them, nor VFOukl any other nation. Wc proceed to the encouragements to exportation, which are by means of bounties and drawbacks. Bounties are given for the encouragement of an infant manufacture, or of such sorts of industry of other kinds as are supposed to deserve particular favour, or of tliose branches of trade only which c;uinot be carried on widiout them. But every branch of trade in which tlic mercliaut can sell his goods for a pri^•e which repkices to him, with the ordinary profits of stock, the whole capital employed in preparing and sending them to marKet, can be carried on without a bounty. Those trades only require bounties in which the merchant is obliged to sell his goods for a price which does not replace to him his capital, together with the ordinary profit ; or in which lie is obliged to sell tliem for less than it really costs him to send tliera to market. Bounties upon the exportation of any home-made com- modity are kable, first, to that general objection wjiicli may be made to all the different expedients of the mercan- tile system ; the objection of forcing some part of the' in- dustry of the country into a cliannel less advantageous tiian that in whicli it would run of its o^n accord ; and, se- condly, to the particular objection of forcing if, not only iiito a cliannel that is less advantageous, but info one that is actually disadvantageous ; the trade which cannot be carried on but by means of a bounty being necessarily a losing trade. But if any particular manuflictnre is necessary for fhe defence of the society, and if such manufacture cannot o! her wise be supported at home, a bounty for its encou- ragement may be adviseable. The bounties upon the ex- portation o!*Bntish-madc sail-cloth, and Brifisii-raade gun- powder, 60 Of Commercial Pglitics>- powder^ may perliaps both be vindicated upon this prin-» ciple. To encourage the production of any commodity', a boun- ty on production, one \vouId imagine, would have a more direct operation tlian one upon exportation. It Avould, be- sides, impose only one tax upon tlie people ; that which tliey must contribute in order to pay the bounty. Instead of raising-, it Avouid tend to lower tiie price of the commo- dity in the home market ; and thereby, instead of imposin* a second tax upon the pi?ople, it might, at least in part, re- pay, them for what they had contributed to the first. Bounties upon production, however, have been very rarely granted. The prejudices established by the commercial system have taught us to believe that natural wealth arises more immediately from exportation than from production. It has, accordingly, been more favoured, as the more imme- diate means of bringing money into the country. Bounties upon production, it has been said, too, have been found by experience more liable to frauds than those upon expor- tation. How far this is true, continues Dr. Smith, 1 know not. That bounties upon exportation have been abused to many fraudulent purposes is very well known. But it is not the interest of merchants and manufacturers, the great inventors of all these expedients, that the home market should be overstocked with their goods, an event that a bounty upon production might sometimes occasion. A bounty upon exportation, by enabling them to send abroad their surplus part, and to keep up the price of what re- mains in the home market, effectually prevents this. Of all the expedients of the mercantile system, accordingly, it is the one of which they are the fondest. I have known the different undertakers, adds the same author, of some particular works agree privately among themselves to give a bounty out of their own pockets upon the exportation of a cerlaiii Of Commercial Folit'ics. CI a certain proportion of the goods which they dealt in. This expedient succeeded so well that it more than doubled the price of their goods in the home market, notwithstanding a very considerable increase in the produce. Wliat is called a bounty is sometimes no more than a drawback, and consequently is not liable to the same ob- jections as that which is properly a bounty. The bounty, for example, upon refined sugar exported, may be considered as a drawback of the duties upon the brown and muscova- do sugars, fiom which it is made ; the bounty upon wrought silk exported, a drawback upon raw and thrown silk imported; the bounty upon gunpowder expoit^'d , a drawback upon brimstone and salt-petre imported. In the language of the customs, those allowances only are called drawbacks which are given upon goods exported in the same form in which they are imported. When that form has been so altered by manufacture of any kind as to come under a new denomination, they are called bounties. As to the bounty on corn, Dr. Smitli observes, (hat sy- stem of laws which is connected with the establishment of the bounty seems to deserve no part of the praise which has been bestowed upon it. The improvement and prosperity of Great Britain, which hiis been so often ascribed to those laws, may very easily be accounted for by other causes. That security \^hicli the laws in Great Britain give to every man, that he shall enjoy the fruits of his labour, is alone sufficient to make any country flourish, notwithstanding these and twenty other absurd regulatiofis of commerce ; and this security was perfected by the Revolution, much about the same time that the bounty was established. The natural effort of every individual to better his own condi- tion, when suflered to exert itself with freedom and secu- rity, is so powerful a principle, tliat it is alone and with* cut any assistance not only capable of carrying on the so- cictv 62 Of Commercial Politics. VAQiy to wealth and prosperity, but of surmounting^ a liun- drod impel tincnt obstructions Avitli uhich the folly of hu- man hiws too often encumbers its operations ; though the cllect of these obstructions is ahvaysmorc or less either to en- croach upon i(s freedom, or to diminish its sccurif}'. In Cateat Britain industry is perfectly secure; .and though it is far from being perfectly free, it is as free or freer than in any other part of Europe. The average price of corn, it has been said, has fallen considerably since the establishment of the bounty. . The average price of corn began to fail somewliat towards' the eiid of the seventeenth centiUy, and has continued to do so during the course of the sixty-four first years of the last century. But this event, says Dr. Smith, supposing it to be real, as I believe it to be, must have happened in spite of the bounty, and catmot possibly have happened in con- sequence of it. It has happened in France, as well as in England, though in France tliere was not only no bounty, but till 1764 the exportation of corn was subjected to a ge- neral prohibition. This gradual fall in the average price of grain, it is probable, therefore, is ultimately owing neitlier to the one regulation nor to the other, but to the gradual and insensible rise in the real value of silver which has taken place in the general market of Europe during the course, of the present century. It seems to be altogether impossible that the bounty could ever contribute to lower the price of grain. In years of plenty tlie bounty, hy occasioning an ex- traordinary exportation, necessarily keeps up the price of corn in the home market above what it would naturally fall to. To do so was the avowed purpose of the institution. In years of scarcity, though the bounty is freqiiendy sus- pended, yet the great exportation v/liich it occasions in j^ears of jplcnty must frequently hinder more or less the plenty Of Commercial Politics. 63 plenty of one year from relieving the scarcity of another. Both in years of plenty and in years of scarcity, therefore, the bounty necessarily tends to raise the money price of corn somewhat higher than it otlierwise would be in the home market. Tliat in the actual state of tillage the bounty must neces- sarily have this tendency will not, I apprehend, contiimes Dr. Smith, be disputed by any reasonisble person. But it h.\^ been thought by many people, that it tends to encou- rage tillage, and that in two different ways ; first, by opefting a more extensive foreign markc*t io the corn of the farmer, it tends, they imagine,' to increase the demand for, and consequently the pmduction of, the commodity; aiid secondly, by securing to him a better price than he could otherwise expect in the actual state of tillage, it tends, they , suppose, to encourage tillage. This double encouragemcfit must, they imagine, in a long period of years, occasion such an increase in the production of corn, as may lower its price in the home market much more than the bounty can raise it, in the actual state in which tillage may, at the end of that period, happen to be. I answer, adds the same excellent author, that whatever extension of the foreign market can be occasioned by the bounty must, in every particular year, be altogether at the expense of the home market ; as every bushel of corn which is exported by means of the bounty, and which would not have been exported without the bounty, would liave re- mained in the liome market to increase the consumption, and to lower the price of that conunodity. The corn bounty, it is to be observed, as well as every other bounty upon exportation, imposes two diflerent taxes upon the people ; first, the fax which they are obliged to contribute in order to pay the bounty ; and secondly, the tax which arises from the advanced price of the commodity in the home t'/i Of Commercial Politics, home market, and which, as the whole body of llie people arc the purchasers of the corn, must in this particular com- modity be paid by the whole body of the people. In this particular commodity', therefore, this second tax is by much the heavier of the two. Let us suppose that, taking one year with another, tlie bounty of five sjiiliings upon the cxporlation of the quarter of wheat raises the price of that commodity in the home market only six-pence the bushel, or four shillings the quarter, higher than it otherw ise would have been in the actual state of the crop.. Even upon this very moderate supposition, the great body of the people, over and above contributing the tax which pays the bounty of -live sliiliings upon every quarter of wheat ex^^orted, must pay ,a,nothcr of four shillings upon eveiy quarter which they themselves consume. But according to the very well informed author of the tracts upon the corn trade, the ave- rage proportion of the corn exported to ti!at consumed at home is not more than that of one to thirty-one. For every five shillings, therefore, which they contribute to the pay- ment of the first tax, they must contribute six pounds four shillings to the payment of the second. So very heavy a tax-upon the first necessary of life, continues Dr. Smith, must either reduce the subsistence of the labotaing poor, or it must occasion some augmentation in their pecuniary wages proportionable to that in- the pecuniary price of their subsistence. So far as it operates in the one way, it must reduce tiie ability of the labouring poor ^to educ;:te and bring up their children, and must so far tend to restrain the population of the countrj'. So far as it operates in the other, it must reduce the ability of the employers of the poor to employ so great a number as th(y oti^erwise might do, and must so far tend to restrain the industry of the country. The extraordinary exportation of corn, therefore, occaiiioikd by the bounty, not only in every paiticular year, Of Commercial Poiltics. 65 year, diminishes the home just as much as it extends the fo- reign market and consumption, but, by restraining the po- pulation and industry of the country, its final tendency is to stunt and restrain the gradual extension of the home market; and thereby, in the long-run, rather to diminish than to augment the whole market and consumption of corn. This enhancement of the money price of corn, ho^vever, it has been thought, by rendering that commodity more profitable to the farmer, must necessarily encourage its pro- duction. I answer, adds Dr. Smith, that this might be the case if the cilcct of the bounty was to raise the real price of corn, or to enable the farmer with an equal quantity of it to maintain a greater number of labourers in the same man- ner, whether liberal, moderate, or scanty, than other la- bourers are commonly maintained in his neighbourhood. But neither the bounty, it is evident, nor any other human institution, can have. any such elfect. It is not the real but the nominal price of corn wliicli can in any consider- able degree be affected by the bounty. And though the tax which that institution imposes upon the whole body of tlie people may be very burthensome to those who pay it, it is of very little advantage to those who receive it. The sooner bounties cease, and the lower they are, so luuch the better. And therefore the J 3th of the present king, c. 43, which takes off the old bounty of five shil- lings upon the exportation of wheat as soon as the price rises to forty-four shillings the quarter, instead of forty- eight, the price at which it ceased before, is founded on good policy. By tlie same statute, the high duties upon importation for home consumption are taken off as soon as the price of middling- wheat rises to forty -eight shillings the quarter, F thus 66 Of Commercial Politics. thus opening the liomr-mrrrket to foreign supplies at prices considrrablj lower than before. We come now to tlie second mode of encouragement to exportation, which is termed a draAvback. Drawbacks are given nptm two different occasions. When the home manufacturi s are subject to any excise or duty, cither the whole or a jjart of it is frequently drawn back upon their exportation; and when foreign goods liable to a dii/y are impoited in order to !>e exported again, either the wliol<> or a part of this duty is sometimes given back U])on such exportation. Of the encouragensents given by the mercantile s^'stem to espoitation, ^Ahat are called drawf)acks seem to be the most reasonable. To allow the merchant to draw back npon exportation cither the whole or a part of whatever excise or inland de.ty is imposed npon domestic industry, can never occasion tlie exportation of a greater quantity of goods than what would have been exported had no duty been imposed. Such enc(juragemen(s do not tend to turn toAvards any particular employment a greater share of the capital of the country than what would go to that emploj'- ment of its own accord, but only to hinder the duty from driving away any part of that share to otlier employments. They tend not to overturn that balance which naturally establishes itself among the various employments of the so- ciety, but to hinder it from being overturned by the duty. They tend not to destroy, but to preserve, what it is in most cases advantageous to preserve, tiie natural division and distribution of labour in the society. The same thing may be said of the drawbacks upon the re-exportation of foreign goods imported, which in Great Britain generally anioimt to by much the largest part of the duty npon importation. By the second of the rules annex- ed to the act of parliament, which imposed what is now called Of Commercial Politics. 67 called the old subsidy, every merchant, whether English or alien, was allowed to draw back half that duty upon ex- portation ; the English merchant, provided the exportation took place within twelve months ; the alien, provided it took place within nine montlis. Wines, currants, and wrought silks were the only goods which did not fall within this rule, having other and more advantageous allowances. The duties imposed by this act of parliament were at that time the only duties upon the importation of foreign goods. The term upon wliich this and all other drawbacks could be claimed was afterwards (by 7th Geo. I. c. 21, s. 10) ex- tended to throe years. The duties which have been imposed since the old sub- sidy are, the greater part of them, wholly drawn back up- on exportation. This general rule, however, is liable to a great number of exceptions. Upon the exportation of some foreign goods, of which it was expected that the importation would greatly exceed what was necessary for the home consumption, the whole duties are drawn back, without retaining even half the old subsidy. The revenue of the customs, continues Dr. Smith, in- stead of suffering, profits from such drawbacks, by that part of the duty w 'licli is retained. Jf tlie whole duties had been retained, the foreign goods upon which they are retained could seldom have been exported, nor consequent- ly imported, for want of a market. The duties, therefore, of which a part is retained, would never have been paid. These reasons seem sufficiently to justify drawbacks, and would justify them, though the wliole duties, whether upon the produce of domestic industry or upon foreign goods, were always drawn back upon exportation. The revenue of excise would in this case, indeed, suffer a little, and that of the customs a ^ood deal more ; but the nataral bitlanc© F 2 of 68 Of Commercial Politics. industry, the natural division and distribution of labour^ wliicli is always more or loss disturbed by such duties, would be more nearly re-established by such a regulation. These reasons, however, will justity drawbacks only upon exporting- goods to those countries which are altoge- ther foreign and indepaident, not to those in which our * merchants and manufacturers enjoy a monopoly. A draw- back, for exum[)!e, upon the exportation of European goods to our American colonies will not always occasion a greater exportation than what would have taken placL^ without it. Yiy means of the monopoly which our mer- chants and manufacturers enjoy there, the same quantity might frequently, perhaps, be sent thither, though the Avhole duties were retained. The drawback, therefore, may frequently be pure loss to the reveime of excise and cus> toms, without altering the state of the trade, or rendering it in any respect more extensive. In allowing the same drawbacks upon the re-exportation of the greater part of European and East India goods to the colonies, as upon their re-exportiition to any independent country, the iji- terest of the mother country Avas sacrificed to it, even ac- cording to the mercantile ideas of that interest. It was for the interest of the merchants to pay as little as possible fur the goods which they sent to the colonics, and consequently to get back as much as possible of the duties which they advanced upon their importation into Great Britain. They might thereby be enabled to sell in the colonies cither the same quantity of goods with a greater profit, or a greater quantity with the same profit ; and, consequently, to gain something in the one way or the other. It was likewise for (he interest of the colonies to get all such goods as cheap and in as great abundance as possible. But this might not always be for the interest of the mother country. She might frequently suffer both in her revenue, by giving back a great Of Commercial Politics. 69" a great pait of the duties which Iiacl been paid upon the importation of such goods ; and in her manufactiues, by being undersold in the colony market, in consL^quence of the easy terms upon which foreign manufactures could be carried thither by means of those drawbacks. The pro- gress of the linen manufacture of Great Britain, it is com- monly said, lias been a good deal retarded by the draw- backs upon the re-exportation of German linen to the Ame- rican colonies. 2. Of Importation, By restraining either by high duties, or by absolute pro- hibitions, the importation of sucli goods from foreign coun- tries as can be produced at home, ihc monopoly of the home market is more or less secured \o the domestic indus- try employed in producing tliem. Thus, the prohibition of importing either live cattle or salt provisions from foreign countries, secures to the graziers of Great Britain the mono- poly of the home market for butchers' meat. The higli duties upon the importafion of corn, which in times of mo- derate plenty amount to a prohibition, give a like advan- tage to the growers of that commodity. The proliibition of the importation of foreign woollens is equally favourable to the woollen manufactures. The silk manufacture, though altogether employed upon foreign materials, lias lately ob- tained the same advantage. The linen manufacture, con- tinues Dr. Smith, has not yet obtained it, but is making rapid strides towards it. JVIany other sorts of manufactures have in the same manner obtained in Great Britain, either altogether or very nearly, a monopoly against their coun- trymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely or under certain circumstances, greatly exceeds what can easily he suspected 70 Of Commercial Politics. suspected by those who are not acquainted with the laws of the customs. That tliis monopoly of the home market frequently gives great encouragement to that particular species of industry wliich enjoys it, and frequently turns towards tliat employ- ment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be donbted. But though a particular manufactilre may by such regulations be sometimes acquired sooner than it would have been otherwise, and after a certain time may be made at home as cheap or cheaper than in a foreign coimtry, it will by no means follow that the same total, either of its industr; or of its revenue, can ever be augmented by such regulation, or the most advantageous direction given to it. The industry of the society can augment ordy in proportion as its capital augments, and its capital can augment only in proportion to Avhat can be gradually saved out of its re- venue. But the immediate effect of every such regulation is to diminish its revenue; and what diminishes its revenue is not certainly very likely to augment its capital faster than it would have augmented of its own accord, had both ca- pital and industry been left to find out their natural em- ploy m.ents ' . This ' Monopolies hinder the capital of a ronntry, whatever may nf any par- ticular time l)e the extent of that capital, from maintaining; so prcat a quan - tity of protluctive labour as it would otherwise maintain, ami from alTord- ingsogre.ita revenue to the industrious "inhabitants as it Avould otherwise afford. But as cF.pi'.al would be inrreased only by savings from revenue, the monopoly, by hintlering it from affording so great a revenue a<- it would otherwise afford, Ticcessarily hinders it from inrreasing so fast as it would otherw ise increase, and consequently from maintaining a still greater quan- tity of prodiutive labour^ and affording a still greater revenue to the in- dustrious inhabitants of that country. One great original source of reve- nue, therefore, the wages of labour, the monopoly must necessarily have rendered at all times less abundant than it otheiit, the iiriprovenu-nt of land will draw capital from all mercantile employments. If She profit is Icsk, mercantile employ- ments will draw capital from the improv(^ment of land. Wliaf ever there- fore rais'-s the rate of mercantile profit, cither lessens the superiority or in- creases the inferiority of the profit of improvement ; and in the one case Jiinders capital from goinj? to improvement, and in the other draws capital from if. B'li by discouraj^in^ improvement, the monopoly necessarily re- tards the natural increase of another <;reat original source of revenue, the rent of land. By raisiiiij the rale of profit, too, the monopoly necessarily keeps up the market rate of interest higher than it otherwise ■would be. ]5ut the ])rice of land in proportion to the rent which it aftords, the num- ber of years purchase which is commonly paid for it, necessarily falis ag the rate of interest rises, and rises as the rate of interest falls. The mono- poly, therefore, hurts the interest of the landlord two dilferent ways ; by retarding the natural increase, first, of his rent, and secondly, of the price w hich he could get for his land in proportion to the rent wiiich it affords. The monopoly, indeed, raises the rate of mercantile profit, and thereby augments somev.hat the gain of our merchants. But as it obstructs the na- tural increase of capital, it tends rather to diminish than to increase the sum total of the revenue which the inhabitar.ts of the country derive from the profits of stock ; a small profit ujjon a great cajjital generally alTordino- a greater revenue than a gr^-at profit upon a small one. The monopoly raises the profit, bat it hinders the sum of profit from rising so high as it otherwise would do. AH the original sources of revenue, the wages of labour, the rent of land, and the profits of stock, the monopoly renders much less abundant than they otherwise would be. To promote the little interest of one order of men, it hurts the interest of all other orders of men in that country, and of all men in all other countvie?. fected 75 Of Commercial Politics. fectcd by tlie free importation of Iris]i cattle. Tlie frees? importation of foreign cattle, besides, can have no other eflect than to hinder the breeding countries of Great Britain from taking advantage of the increasing population and improyement of the rest of the kingdom, from raisin* their price to an exorbitant height, and from laying a real Ujx upon all the more cultivated parts of the country. The quantity of foreign corn imported, even in times of the greatest scarcity, may also satisfy our farmers that they can have nothing to fear from the freest importation. The average quantity imported one year with another, con- tinues Dr. Smith, amounts only, according to the very well informed author of the tracts upon the corn trade, to twenty- tliree thousand seven hundred and twenty-eight quarters of all sorts of grain, and does not exceed the five hundredth and seventy-first part of the annual consumption. But as the bounty upon corn occasions a greater exportation in years of plenty, so it must of consequence occasion a greatef importation in years of scarcity, than in the actual state of tillage would otherwise take place, ^y means of it the plenty of one year does not compensate the scarcity of an- other ; and as the average quantity exported is necessarily augmented by it, so must likewise, in the actual state of tillage, the average quantity imported. If there were no bounty, as less corn would be exported, so it is probable that, one year with another, less would be imported than at present. To prohibit by a perpetual law the importation of foreign cofn and cattle, is in reality to enact, that the popuiatiojti and industry of the country shall at no time exceed what the rude produce of its own soil can maintain '. There * No nation derives gr<'atcr benefit from a free and iinrrstrainod cora- mcrce than a landed nation. It can never be tlie interest of land^-d nations, observes Dr. Smith, to discourage or distress the industry of mercantile Of Commercial Politics. 73 There seem, however, to be two cases, adds the same author, in Aviiich it will generally be advantageous to laj- some burden upon foreign for the encouragement of domestic industry. The tirst is, when some particular sort of industry is necessary for the defence of the country. The detencc of Great Britain, for example, depends very much upon the number of its sailors and sbippisig. The act of navigation, therefore, very properly endeavours to give tlie sailors and shipping of Great Britain the monopoly of the trade of their own country, in son.re cases by absolute prohibitions, and in others by heavy burdens upon the shipping of foreign countries. The act of navigation, continues Dr. Smith, is not favourable states, by imposing high duties upon their trade, or upon the commoditifs ■«'!iich they furnish. Such duties, by rendering those commoditirj dearer, could serve only to sink the real value of the sur|)lus produce of their own land, with -which, or, what romes to the same tbiiig, with the price of which, those commodities are purciiased. Such duties could serve only to discourage the increase of that se.rplus produce, and consequently the !«•.- provcment and cultivafion of their own land. The most effectual expedient, on the contrary, for raising the value of the snr])lus produce, for encouran^in'- its increase, and consequently the improvement and cultivation of their land, would he to allow the most perfect freedom to the trade of all such mercantile nations. This perfect freedom of trade would even be the most effectual expedient for supplying them, in due time, with all the artificers, manufacturers and merchants, whom they wanted at home, and for filling up in the propcrest and most advantageous manner that very important void which they felt there. The continual increase of the surplus pfoduce of their land would, in due time, ci'eate a greater capital than what conld be employed with the ordinary rate of profit in the imjirovement and cultivation of land; and the surplus part of it would naturally turn itself to the employment of artificers and manufacturers at home. lUit those artificers and manufac- turers, finding at home both the materials of their work, and tlie fund of their subsistence, might immediately, even with much less art and skill, be able to work as cheap as the little artificers and manufacturers of such mercantile states, w ho had both to brinj^ from a greater distance. K\en though, from want of art and skill, they might not ifor some time be able to work as cheap ; yet, finding a market at home, they might be able to sell their work there as cheap as that of the artificers jtnd manufacturers of s»icli mercantile states which could not be brought to that marke{ but from so great a distance; and as theii'art and skill improved, they ^vould sooa be able to sell it cheaper. The artificers and manufacturers of such mer- cantile state;, therefore, would immediately be rivalled in the market of those 74 Of Commercial Politics. favourable to foreign commerce, or to the growtlt of that opulence which can arise from it. The interest of a nation in its commercial relatioris to foreig-n nations is, like that of a merchant with regard to tlie different peojile with whom he deals, to buy as cheap and to sell as dear as possible. But it will be most lii^ely to buy cl;enp, when by the most perfect freedom of trade it encourages all nations to bring to it the goods which it has occasion to purchase; and, for the same reason, it will be most likely to sell dear, when its markets are thus tilled with tlie greatest numljer of buyers. Tlie act of navigation, it is true, lays no burden upon foreigji sliips that come to export the produce of British industry. Even the ancient aliens duty, which used to be paid upon all goods exported as well as imi^orted, has, by several subsequent acts, been taken off from the those landed nations, and soon after undersold and jostled out of it alto- gether. The cheapness of the manufactures of those landed nations, in consequence of tiie g;ra(liial iinpr()vem?nLs of art and skill, would, in due time, extend fhfir snle beyond tlie home market, and carry them to many foreign markets, from which they would in the same manner gradually jostle out many of the manvfactufTs of eu'Ii mercantile nations. This continual increase both of the rude and manufactured produce of those landed nations woii'id in due time create a s;reaier capital than could, with the ordinary rate o" profit, be employed either in ai':riculture or in manufactures. The surplus of ttiis capital would ndturally turn itself to foreign trade, and be employed in exporting, to foreign countries, such parts of the rude and manufactured prod'ice of its own country as exceeded the demnnd of the home market. In the exportation of the produce of their own country, the merchants of a landert nation would have an advan- tage of the same kind over those of mercantile nations, which its artificers and mantifactHrers had over the artificers and manufacturers of such nations ; the advantage of finding at home that cargo, and those stores and provisions, w hich the others were obligrd to seek at a distance. W ith in- ferior art and skill in navigatinn, therefore, they would be able to sell that cargo as cheap in foreign markets as the merchants of such mercantile na- tions; and with equal art and skill they would be able to sell it cheaper. They would soon, therefore, rival those mercantile nations in this branch of foreign commerce, and in f ciibtniiis and ot'ier diitir=, as also of enforcing her revenue laws, and of sequfsteriua; or aaTiullins; the coniraets of fi)reij;ners tradins; to Ir r terrijories in eonienipt of such liMiitations and prohibilioiis. Marten, IJO. Vide Weymel! r. Keed, 5Y. Ro9y. 3 Manen, J 48. Vattci's Law of Nations, b. i. c. 8. s- 90, 90, 9-1 ; and b. ii. c. 2. s. 24. Puff. Jtis Nat. et Gent. lib. iv. s. 10. <■ Vattel't Law of .Nations, b. i. c. 8. s. 88—95 ; antl b. ii. c. 2. s- 25. ed so Of the International Laws ed odIj on imperfect rights depending on the will and jiidgemciit of anotlier, commercial powers have been obliged to have recourse (o treaties for their nuilual benefit. These treaties are the measure and rule of the right of commerce, and generally turn on three points' : 1. On commerce in times ofpeace : 2. On the measures to be pursued with re- spect to commerce and commercial subjects in case of a rupture between the parties: 3. On the commerce of the contracting party that may happen to remain neuter, while the other contracting party is at war with a third power ^. Such treaties of commerce are allowable among nations, provided they do not affect the perfect rights of others, or alter the jus gentium Avith respect to the rest of the world, and may be perpetual, temporary, or dependent on certain events'. When once a nation has entered into engagements by treaty, it is no longer at liberty to do, in favour of a third party, and contrary to the tenor of the treaty, what it might have granted agree,atu>ns, b. iJ. c. 10. s. IIT. 4 J bid. s. 132, of of CoTYimerce during Peace. 95 of ihe sea, and that a vessel in distress has a right to enter, even by force, into a foreigii port. But it must be ob- served, says Vattel, that ii'sucli vessel be infected \vith the plague, it may be kept at a distance by violent means \ But as this liberty of free and unrestrained commerce is founded either on treaties, or, in demi-sovereign states, on law ; in every case where it is founded only upon custom, that custom does not hinder a nation from making whatever regulations and restrictions it pleases, or from exercising over such parts of its territory all the rights of sovereign dominion ^. The permission of passage over the main seas depends on the question how fur nations liavc a right to appropriate to themselves the property and empire of any particular seas. This right of appropriation rests on the acknowledgement and submission of their neighbours, or on an ancient exercise of executive jurisdiction, founded presumptively on an admission of prior settlement on its shores, or of subsequent cession. Entire property is insisted on but by few nations. The question of jurisdiction has been the subject of the most earnest contention between nations. It may, however, be considered, that though the sole dominion may exist in theory, yet neither right of discovery, donation of (he Pope, nor prescription, will exclude other nations from a free pos-* session'. No nation can appropriate to itself dominion over the neighbouring seas further than is necessary for its safety, or for rendering itself respected : it would be a vain and ridiculous pretension to claim a riglit which it was na ways able to cause to be respected '*. After the vain pre- ' Vattcl, b. ii. c. 10. s. 123, 129 ; and b. i. c. 23. s. 288 ; and see Puff. Jus Nat. ct Gent. lib. iii. c. 3. s. 8. ' .Marten's Law of Nations, 1G8. 3 Vattel, b, i. c. 23. s. 281. Grot. Mare Liberum, Lugd. Bat. 1609. Seld. Mare Clausum, lib. i. c. IT. « Vattc!, b. i. c. 23. s. 289, tension* 96 Of the International Laws tensions and contestations of the Portuguese to the sove- reignty of the Guinea and Indian seas during the sixteenth and seventeenth centuries, all the powers* of Europe now ac- lino\\ ledge the ocean and the Indian Sea to be exempt from all property and dominion, and to be the common posses- sion of all lialions '. A nation may, however, renounce by treaty the liberty of navigating any particular sea. Thus the Iiouse of Au- stria renounced in favour of Enijland and Holland the right of sending vessels from the Netherlands to the East Indies. We may see in Grot, de Jure B. ac P. lib. ii. c. 3. s. 15. many examples of such treaties among the ancients : and in Bouchaud, p. 202, among the moderns*. But no nation can acquire an exclusive right of naviga- tion by prescription and long use. For, as we have already seen that the abstaining from the use of a right, or keep- ing silence while another makes use of it, can never have the force of consent, except we are obliged to speak or make use of such right ; consequently the immemorial possession of a navigation or fishery in certain seas will give not an ex- clusive right to the nation possessing it ; unless there ap- pears an evident intention of the party claiming the com- mon right to navigation and fishery in those seas to renounce such their common right*. The intention of a renunciation to a common right of navi- gation and fishery may, however, be inferred fiom a neglect of use attended with tlie nature of a consent, or a tacit pact ; and thus become a title in favour of one nation against another. Thu?,when a nation in the possession of the navigation and fishery in certain latitudes pretends an exclusive right, and forbids any other interfering in it ; if these obey that pro- hibition with sufficient marks of acquiescence, they tacitly ' Vattel, b. i. r. ?3. s. ?84. Marten, »66. * Vattd, b. i. c. 23. a. 284. » Ibid. s. 285. renounce of Commerce during Peace. 97 renouhee their right in favour of the other, and establish a right which the oilier may afterwards lawfully maintain against them, especially when it is confirmed by long use'. But notwithstanding the ocean and the four great seas that compose it are acknowledged to be the common pos- session of all nations *, there are out of Europe some in- considerable parts of the ocean claimed as the property and dominion of particular European nations ^ And in general it is heldj that the sea surrounding the coast, as well those parts of it that are land-locked, such as roads, bays, gulfs, &c., as those which are situated within cannon shot of the shore, (that is, witliin the distance of three leagues,) are so entirely the property, and subject to the dominion, of the master of the coast, that, first, he has the exclusive right to all the property of it, whether ordinary or accidental, as far as relates to things unclaimed by any other lawful proprietor. Secondly, he can forbid or restrain the naviga- tion of foreigners in his roads, and their enfry into his ports. Yet in time of peace this liberty is permitted to merchant ships, and even to ships of war to a certain num- ber. Thirdly, he has a right to impose duties, tonnage, &c. fees of entry, of clearance, &c. and he can institute tolls for the benefit olhis navigation. Fourthly, he may require the maritime honours that custom allows to those who have do- minion over any part of the seas. In short, those paits of the sea which surround the coast of every state are so com- pletely susceptil)le of propertv, that they are comprehend- ed in its territory, and no one can navigate them in spite of the proprietar3'' nation •♦. The riiihts exercised on the sea near the coast are also - Vattcl, b.i.c. 23. s. 28(t, '^ Puff. Dc Jure Nat. et Gent. lib. iv. c. 5. 5 Moser, Nordauiprica, vol. iii. * Marten, 168, Vattel, b. i. c 22. s. 274 ; c. 23. s, 287, 288, 291. • H exercised 98 Of the International Laws exercised in those straits which are not wider than the rarigc of two common shots. It is for this reason that the king of Denmark, by possessing the pn)perty and dominion of the navigable part of the Sound, cluims there not only the maritime honours due to him as sovereign, but tolls for the libcrly of passing, and for defraying tlie expense he is at in maintaining light-houses, sea-marks, and other things necessary for the safety of mariners. But it must be re- marked, that in siich straits (as for example the Straits of Magellan) over which empire cannot extend, and stil! less a right of property, the freedom of navigation is a remain- der of the primitive liberty enjoyed in common by mankind '. ^^'hat has been said of straits which are too extensive for the claim of empire and the right of property, may be understood of such bays as are too extensive for a like claim ; as Hudson's Bay ^. After the discussion of the question of the right of dominion and property in respect to the sea, it remains to mention what parts of the sea are acknowledged as free or subject. The three straits betweea Dcinnark and Sweden are under the dominion, and are considered as the property, of the king of Denmark : who also claims a right of ex- cluding foreigners from fishing and even navigating the seas adjacent to Iceland and Greenland, to the space of four miles from Iceland, and fifteen miles from Greenland. But the right of fishing has been disputed by many nations, particularly by the United Provinces. 2. The Straits of Sicily are under the dominion of the kiftg of Sicily. 3. The Gulf of Bothnia is under the dominion of the king of Sweden, ' Miirten, 17K Vatte!, b. i. c. 23. s. '291, 292. -' Ibid. s. -^91. 4. The of CoTfimerce during Peace. 99 4. The Turkish Emperor claims the dominion over the Black Sea, the Egean Sea, tlie Bosphorus of Thrace, the Propontis, and the Hellespont. Over the Black Sea he exercises his right of proprietor and sovereign in such a manner as not to permit even the entry or navigation of it to any nation whatever, unless he has granted it by treaty. 5. Great Britain. The extent of the maritime dominion of England seems to consist of two parts, the profitable and the Jionorary- The profitable regards our own coasts only, to a certain distance from the shore, in the sight whereof foreigners were not usually suffered to fish. The honorary is that of respect to the British fl;:;itioi;t, Ho. * ibid. Ui-1. -■• Ibid, rii, 117. blished i)J Commerce during Peace. 101 blished by custom or treuty, lliat it is now no longer dis- putal. Its origin may be traced to the remotest antiquity '. Both Grotius* and PufTendorf ' give it the sanction of their authority. These tolls or passnge duties, •which in some countries are called transit duties, are levied for the maintenance of the roads and navigation, and are justly imposed upon all those mIio receive advantage from their use. The most important transit duty in the world is that levied by the king of Denmark upon all merchant ships that pass through tlic Sound ^. • But when the transit duty is excessive, and bears no pro- portion io the expense of preserving these public passages ; or when it is levied fqr the preservation or construction of roads, or the convenience of navigation, where the master of the soil or the shore is at no expense for the same, such imposts are contrary to the law of nations '. It is necessary to mention the right to shipwrecks, the un- happy fiuils of barbarism, and which almost every where disappeared with it. This pretended strandright, which is consonant neither to reason nor humanity, has been re- strained from time to time, particularly since the thirteenth century, by privileges, laws, and a number of treaties ; so that, at present, it may be considered as generally abolished^. The humane expostulation of Constantine the Great on this subject deserves to be recorded. That prince, finding that by the Iniperial law the revciuie of wrecks was given to the royal treasury or Jisc us, restrained it by an edict ''j and ' Plin. Hist. Nat. xii. 14. ^ De.hitr I}. :vc P. lib. ii. c. 2. s. li. ^ l)e .lure N:u. ft Gent. lii). iii. c. S. =. 7. < Vauel, b. i. c. <>. s. lOS. 3 smith's Wealth of Nations, 3?,0. * Vatt«M, b i.e. 9. s. 104. ** Scliuback, Diss, de Jure Littoris, Got'. 1750. Commtniarius de Jure Litoris, vol. i. • Cfd. 11.5. 1. ordered lOf Of the International Laws ordered tliem to remain to the owners, adding, *• Quod enim jns ballet in aliena calamitate, ut de re tarn luctuosa corrpendium sedctur." But though the rigour of the law of wrecks has been softened in favour of the distressed proprietors, and that justice and humanity have forbid adding sorrow to sorrow ; yet the master of the shore has a right to a compensation for the expenses he may incur in preserving property %vrecl;ed on his coasts^ and assisting vessels in danger, and even to detain a part of the property by way of indemnifi- cation. This right (jus colligendi naufragium) is every where exercised, now-a-days, before restitution is made, even to those who appear in the appointed time. The time allowed for claiming ship-property is generally a year, counting from the day on which the proprietor is informed of the accident ; and if no proprietor appears, the effects saved from the wreck belong either to the first possessor, or to the sovereign of the shore if the law gives him a right tq them '. SECTION II. HOW COMMERCE IS AFFECTED BY INTERNATIONAL LAW IN TIME OF WAR. As between Belligerent and Belligerent. We have already said that, generally speaking, the com- merce of Europe is so far free, that no nation refuses posi- tively and entirely to permit the subjects of another nation, when even there is no treaty existing between them, to trade with its possessions in or out of Europe, or to esta- blish thciv.selves in its territory for that purpose. But a state of war forms an exception. A declaration of hostility naturally carries with it an interdiction of all commercial » Marten, 170. Vattel, b, i. c. £3. s. S93. intercourse j of Commerce during PVar. iOS intercourse; it leaves the belligerent countries in a state J hat is inconsistent with commerce. In the state of Marfare, all treaties, civil contracts, and rights of pro^iertj, are put an end to; and therefore trading, which supposes the ex- istence of civil contracts and relations, is necessarily con- tradictory to a state of war. From the moment a sovereign is in a state of war, he has a right, strictly speaking, to act as an enemy, not only with respect to the persons and property found in the ter- ritory of the enemy, but also wit ii respect to the enemy's subjects and their property which may happen to be si- tuated in his own territory at the breaking out of the war '. He has a right, then, to seize on their ships found in his ports, and on all their otiier property ; to arrett their per- sons, and to declare null and void all the debts which the state may have contracted with them^. However, nations, for their mutual benefit, have been induced to temper the rigour of this right. 1. In a great numlier of treaties, nations have stipulated, in case of a rupture between them, to give each others subjects residing in their territory at the breaking out of the war, or coming to it not knowing of the declaration of war, a specified time for the removal of themselves and their property. And if they are detained by sickness or any other impedi- ment, a further time is to be given them. 2. Sometimes it is agreed to let the subjects of an enemy remain during the whole course of the war, or so long as they live peaceably and quietly, o. Besides these precautions taken between nation and nation, many states have provided, by parti- cular laws and privileges, for the protection of the persons ajul properly of enemies' subjects. 4. Generally speaking. ' Marten's Law of Nations, SS?. ^ Grot. lib. iii. c. 9. s. 4. Puff. lib. vjii. c. 6. s. 19, 2C, "Wolf Jus Gent. s. 1181, 1198. a nation 104 Of the hiternational Laws a nation docs not venture lo touch tbe capitals whicli the subjects of the enemy may have in its funds, or that it may otherwise OAve to such subjects '. Where there are neither treaties nor laws touching these points, nations continue still to seize on all the property be- longins;: to its enemy's subjects which is carried into its ter- ritories after the declaration of -war*. Every sovereign engaged in war may prohibit all com- merce whatever with the enemy : first, in his own territory and maritime dominion ; secondly, in the places, provinces, &c. taken from the enemy ; thirdly, in such places as he is able to keep blocked up so as to prevent every foreigner from entering. In all these cases he may attacli penalties to the transgression of his prohibitions ; and these penalties may extend to the confiscation of goods and vessel, or to the corporal punisiiraent of those who assist in the carrying on of such prohibited commerce'. This principle of restraining the subjects of one bellige- rent nation from all commercial intercourse with the sub- jects of the other, is not peculiar to the law of any country ; it is laid down by Bynkershoek, with whom almost all the elementary writers on the law of nations concur, as an uni- versal principle of law. " Ex natura belli commercia inter hoistes cessare non dubitandum. Quamvis nulla spe- cialis sit commerciorum prohibitip, ipso tamen jure belli commercia esse vetita, ips^ae ijidictiones beliorum satis de- clarant, 8ic.* " To this authority Boerius, in his deci^ions, lends his sanction. In opposition to some distinctions and qualifications which had been suggested by particular lawyers, he maintains, '* Ego tamen contrarium credo, ' Marten's Law of Nations, 28,?. Vattcl, b. iii. c. 4. s. 63. Emerignon, vdI. i. p. 567. » Marten's Law of Nations, 283. ^ Ibid. i\L2. ♦ Quest. Jur. Pub. lib. i. c. 3. quod of Commerce durhig IVar. 105 quod non licet tarn I'lcitas quani iilicitas liostibi.'s de- ferre, tempore guenae ;" and he declares Ihis io be the ge- neral opinion of jurists. It is illegal for a subject in time of Avar, Avithout the king's license, to bring gootls even in a neutral ship from an enemy's port, Avhich after the commencement of hostili- ties had been purchased by Ids ai;cri( resident in (he ene- my's country, although it may not iippcar lliat they were purchased of an enemy ' . So in a conjoint Avar, tliLit is, Avhere viU be restored to the owners, if it appears that there was no possibility of countermanding the order. For though the demand against the merchant would be suspended during liostilitics, it miglit be ditficult to relieve the Britisli merchant from the demand when his foreign correspondent was rehabilitated and restored to his rigiit of action by the return of peace ^. If British subjects, who had been settled in trade in fo- reign states in time of amity, make arrangements for their removal, but are prevented from doing so by the detention of the hostile state, they will be entitled to restitution of their property from the captors ^. The situation, says Dr. Robinson, of British subjects wishing to remove from the country of the enemy in the event of a war, but prevented by the sudden interruption of hostilities ftom taking measures for that purpose suffi- ciently early to enable them to obtain restitution, forms not unfrequently a case of considerable hardship in the Prize Court. In such cases it would be advisable for persons so situated, on their actual removal, to make application to government for a special pass, rather than to hazard valu- able property to the effect of a mere previous intention to ' The Abby, 5 Rob. Adm. Rep. 251. " IbiJ. s The Jiiffrow Cntharina, 5 Ibid. HI. i The Ocean, b Ibid. 9L remove. 103 Of the International Laws remove, dubious as that iijtention may frequently appear under the circumstances that prevent it from beinj^ carried into execution ' . It is a decided point, that even an inactive and dormant partner cannot receive restitution in a transaction in which lie could not lawfully be engaged as a sole trader. There- fore, if a Britisii merchant is jointly interested with a mer- chant in America in a shipment from America to a coun- try in a state of hostility with Great Britain, his share of the cargo will be condemned, as the property of a British merchant engaged in commerce with the enemy. But the ihare of the cargo belonging to the neutral partner is held to be inviolable *. It remains to inquire how a natural-born subject may di- vest himself of his national character by residence in a hos- tile territory. In Europe and the western parts of the world, by the law of nations, traders take their national character from the gvineial character of the country in which they are re- sident, unless they trade under some recognised authority of their own country : they are considered subject to the same obligations, bound by the same duties, and amenable to the same coinm.on authority of tribunals as the natives of the state in which they reside. Therefore a British sub- ject, by settling in trade in an enemy's colony, exposes his property taken on a voyage from such colony to Europe to confiscation ; unless sonu; overt act or solid fact affords evi-r deijce of the party's intention to withdraw Irom such hos- tile territory ^ In the Eist, however, fiom the oldest times an immisci- ble character having been kept up, foreigners are not ad- mitted into the general body and mass of the society ; they ' Rob. Adm. Rep. note (a.) ^ The Franklin, 6 Rob. Adm. Rep. 127. 3 Tlie rresideiit, 3 Rob. Adm. Rep. 277. do of Cummerce during War. 109 do not acquiie any national character under the general so- vereignty of the country ; neither are they known in the'.i' own peculiar national character ; but are coasidered to take their national character from that association or factory un- der whose shelter aiul protection they live and carry on their commerce. And therefore the property of a foreign mer- chant, who lives under a British administration in JiuUm, and has the benefit of its protection for his person and com- merce, is liable to confiscation, if taken in trade with an enemy ' . But the character which is gained by residence ceases by residence: it is an adventitious character, which no longer adheres to the person from the moment that he pnts him- self in motion, bona fide, to quit the country, sine animo revertendi. Therefore a ship captured on its voyage from Batavia to Hamburgh, and belonging to a native American who had settled in England as a Britisli merchant, l:ut Avas actually preparing to return to his own countrj', was do creed to be restored ; for, the moment a person is on his way to his own couiitry, his native character is stj-ongly and substantially revived *. So in tlie case of the Snelle Zejdder ' ; Mr. Curtissos, wIjo was a British-born subject, had been resident in Surinam and St. Eustatius, and had left those settlements wiili an intention of returning to this country, to take up his final residence; but he had got no further than Holland, (w!)i- ther he had gone for the purpose of settling some accounts,) the moiiier country of those settlements, when the war broke out. It was deterniined by the Lords of Appeal, that he was in itinere, that he had put himself in motion, and was in pursuit of his native British character : and as such he was held to be entitled to the restitution of his property. » Thelndian Chief, 3 Rob. Adm. Rep. 22. ''The Indian Chief, 5 Ibid. 12. ' Lords, April 25, MBX .But 1 10 Of the International Laws liut wlictlicr the claimants had lakcn measures io with- draw, and had actually engaged in the operation of re* juoving, may be relieved by the circumstances of the set- tlements having been in British possession at the time of commencing their residence, taken in conjunction with the presumption raised by the stipulation of a treaty, that per- sons so settled would remove in three years, on the resti- tution of the settlement '. Though restitution will be decreed when a neutral or natural born subject has gone into an enemy's country for tlie purpose of Avithdrawing his property, and invested the same in a shipment to his own country ; yet it is otherwise if such investment is made with a view to mercantile spe- culations V, ith other countries*. If a house of trade in a neutral country sends a partner into a belligerent country, with an intention of not mixing in any other trade than the business of that house ; if the purpose be of such a natiue as may probably, or does ac- tually, detain the person for a great length of time in the hostile territory, such a circumstance will impress a national character upon him ^. A merchant of Embdcn, having also a share in a house in 'London, is not precluded by that circumstance from aveiTing an entire interest in his house at Embden, in a shipment from the enemy's country consigued to the house in London-*. In the case of the Phoenix ^j Sir \A'illiam Scott said, Certainly nothing can be more decided and fixed, as the principle of this court, and of the Supreme Court, than that the possession of the soil does impress upon the owner the character of the country, as far as the produce of the soil-is concerned, in its transportation to any other country. > The Diani, 5 Rob. Adm. Hep 60. 5 The Drpe Obrondcrs. 4 Ibid. 232. 3 The ITaimonv, 2 Ibid. 322. 4 The Herman, 4 Ibid. 258. s 5 Ibid. 20. whatever o/" Commerce during Wai . 1 1 1 whatever the local residence of the owner may be. On this principle, the property of the claimants taken in a voy- age from Surinam to MolLuul, and described to be the pro- duce of their estates in Surinam, was condemned as legal prize to the captors, though such claimants were properly domiciled in neutral territories : for it is an esiablishetl principle of the Prize Courts, that sucli property is to be considered under the national character of the pan-nt state. A natural born subject of this country admiltcd citizen of the United States of America, either before or after the declaration of American independence, may be considered as a subject of the United States so as to entitle him to trade to ihe East Indies under the treaty of commerce coniirme^^ by the statute 37 Geo. III. c. f}7. ' Property sent from a hostile territory cannot change its character in transitu, although the owners become British by capitulation before the capture^. A contract entered into between a British sul)ject and the government of the belligerent country, being illegal in the hands of such British subject, is illegal also in the hands of persons employed to execute it for him ^ The circum- stances of tlie case were, that a contract was entered into between Mr. Robinson, a British subject, resident at Cu- racoa, which had fallen under the British government when the contract was carried into execution, and the S'pa- niih government of the Caraccas, giving a monopoly of llie tobacco produced in those settlements for three years ; and that Mr. Robinson had entered into a sub-contract with IMessrs. Sontag and Co. of Hamburg to execute this contract. It was contended on the part of the captors, that the contract, being illegal in t,he hands of JMr. Robui- son, must be held to be illegal in the bands of Messrs. * Marryat v. Vv'ilson, in Error, 1 Bos. and Pul. 4S0. * Tiie i)arirkf'baar Africaan, 1 Rob. Adm. Rep. 107. * TIi»; Anna Catharina. 1 Ibid. 107. Sontasr 112 Of the Intrrnal'mial Laws Sontiig and Co. wlu) wt rt> employed to execute it under a contract with hiin ; and (hat the interest of Robinson was not even divested, since it appeared that his house at Cnrucoa was to have one-third of the profits. It was further coatendiii that the cir^o was to be considered as going to become the properij of tiie Spanish government on arrival, and therelbrc to Ijc deemed Spanisli property : that the nature of the coiihact with t'le Spanish government, giving a nion<)}H)iy of the tobacco of tliose settlements for three years, would also have the effect of impressing on the pro- perly passing under the contract, and the persons carrying it into execution, the SpaniJi character. On the nature of this contract, said Sir W. Scott, two questions arise : first, How is the property to be legally considered ? If the cargo is to be taken as being actually become Spanish property, there will be an end of the ca,se, under the rule which renders goods going to a belligerent, to become his property imuiedialely on arrival, subject to confiscdtion. This is a rule universally applied by this court, and confirmed by tl)e authority of the Supreme Court. A distinction lias indeed been admitted in favoui' of contracts made before a war, and without any considera- tion of war ; but if the conlriict being made before the war, and without any prospect t'nereto, is carried into execution by a shipment after tiie breaking out of lio-jtilities, the ground on which that l\ivoiirable distinction is made no longer exists. The original contract in this case was ori- ginally inoflL^nsive, both parties being enemies. But on the principle before adverted to, if a party becomes a neu- tral after the contmct, and before the execution of it, and ■shipment takes place afterwanls, that- also wiil compose a case not falling within the reach oi' the relaxation. By the cession of Curacoa, Mr. Robinson became not merely a neutral, but a subject of this country ; and :hcn his con-* tract rj" Commerce during War. 113 tract becoming illegal, ouglit (o have terminated ; for, by the change in his civil relations, his legal capacity to exc- c«te such a contract was totally extinguished. He, how>- ever, is not the person for v/lioni the present cargo is claim- ed. The goods Avcre not shipped by him, though lie was in Europe at Hamburgh, at the time, for the purpose of carrying the contract into execution. The sliipmcnt was made by Mr. Sontag, aiid other merchants of Hamburgh, to whom a part of his contract had been transferred by Ro- binson. It has been argned, that th.e contract bccomiiig illegal in the hands of Robinson, the illegality would t.avel over with it, and attach on those persons carrying it into execution. I am not disposed to hold that f/ luould aflect them, as a contract made or executed in breach of alh' glance. The immediate shippers arc neutral persons, Messrs. Sontag and Co. of Hamburgh, acting under the contract, as it was devolved on them, to supply the goods, and re- ceive the return cargof^s, in the same manner as Robinson was to have done. No duties of allegiance bound them to abstain from a direct commerce with the enemy of this country ; and it cannot be inferred that any violation of duties of that species, on his part, could at all be trans- ferred to them, who are neu'ral merchants, standing indif- ferent to both parties. But taking them to be such, how does the character of the goods stand in this transaction ? Was it not, in the first place, a cargo going to become the property of the Spanish government immediately on arri- val? Was not the Spanish gavernment entitled to posses- sion? It was only on the .violation of the contract on the part of the Spanish government that these goods were to take the chance of the market. The shippers coiisider^cd tJ 1 em selves a,f bound to deliver them for the use of tlie Spa- nish government, under the a^refMuent ; as entitli'd to the benefit, and subject to the obligatioim of that contract. I Were 114 Of the International Laws W ( re there any immediate acts to be clime after tlic arrival of the vessel? Is there any act of owiiersliip -wliich tlic claimant was at liberiy to (!xcrci«ie, so as \o prevent tlie delivery? If not, the g'ooils must be considered as having substantially become, in itiiiere, the property of the enemy. Uiit there is a second question — \\ hetlier such a con- tract docs not fix on Robinson the character of a Spanish merchant, aud, by conl'erring that chanicter on him, con- fer it also on tliose -who adopted the contract under liim ? What is the ellect of the contract ? It is to give a privileged monopoly of the tobacco trade of those settlements for three years ; and that privilege guarded by other privileges of a higher nature. Tliese goods Mere to te imported, and other goods exported, duty free. They Avere to he sold to the Spanish government, and for the use of the Spanish settlement. This gives at least the full benefit of the Spa- nish character. It may possibly go further, since there is no reason to suppose that a Spanish merchant, merely as a subject of Spain, Moidd have]>een admitted to such privi- leges in (he ordinary course of Ills private trade. Can such a communication of peculiar indulgence, "vvldch elevates Mr. Robinson above the private Spanish merchant, be consi- dered, then, aslcss thana communication to these individuals of the entire benefit of a Sjxmisli character, as far as this transaction is concerned ? In such a state, what is tliere want- ing to constitute tlie absolute Spanish character ? — Nothing, but actual bodily domicil. The parties can hardly be said t'veu to want ihut, because they have a stationed resident agent in the Spanish settlement, for the very purpose of conducting this permanent commercial undertaking. It is not, indeed, lield in general cases,_that a neutral merchant, trading in the ordinary manner to the country of a belli- gerent, does contract the character of a person domiciled there, by the mere residence of a stationed agent ; because, iu of Commerce during Ifar. 115 in general cases, the eflcct of such a residence is counter- arlcd by the nature of the trade, and tiie neutral character of the merchant liiinself. But it may be very differenf, Avhere tlie principal is not trading on the ordinary footing of a foreign merchant, but as a privileged trader of the enemy. There tlic nature «f his trade does not protect hira. On the contrary, the trade itself is the privileged trade of the enemy, putting him on the same footing as their own sub- jects, and even above it. This circumstance operates, if I may so express it, in sucli a case, to fill up the totality of all tliat is required to consititute aSpani^]l character. This is the state in which Mr. Hobinson Vtould have stood under the contract. Then how docs it aficct Mr. Sontna;, who is enoaa'cd ia carrying it into execution ? The legal consequence will be, to clothe him who accepts the contract, with the same character, so far as this transaction extends. It is by nothing peculiar in his own character, that Mr. Robinson would be liable to be considered as a Spanish merchant, but merely by the acceptance of this contract, and by acting upon it. If other persons take their share, and take those benefits, they take their share also in the legal effects. They accepted his privileges ; they adopted bis resident agent : it would be monstrous to say, that the effect of the original contract is, to give the Spanish cha- racter to the contracting person, but that he may dole it out to an hundred other persons, who, in their respective portions, are to have the entire benefit, but are not to be liable to the effect of any such imputations. The conse- quence would be, that such a c()n(raf:t v.ould be protected in the only mode in which it could be carried into efit^ct; for a contract of sucli extent must be distributed ; and if every subordinate person is protected, th"n here is a con»- tJractwhich concludes the original undertaker of the whole, 1 2 but 1 IG Of the International Laws but in no degree affecls one of those persons wlio carry that whole into cxccudon. On tliese grounds, I ara of opinion that these goods arc liable to be considered as the property of the Spanish go- vernment ; and further, that these parties are Hable to be considered as persons clothed, in this traJisaction, witli the character of Spanish merchants. But in the case of the Vrow Anna Catharina', -where neutral merchants cLtinied, under a sub-contract with Voute and Co, of Amsterdam, considerable parcels of Batavian produce purchased of tlie Dutch East India Company j, to be brought to Amsterdam, and tliere sold by the East India Company, restitution of the property captured on a voyage to Holland was ordered. Sir William Scott in giving judgement said. Several cir- cumstances approximate this to a Dutch tiansaction ; for, unquestionably, there is a great deal ot" Dutch agency and even of Dutch interest throughout : Out is ii so essentially Dutch, that a foreign ciiaracter cannot be predicated of it ? What are the circumstances to which such an efiect can be attributed .' Certainly not the mere purchasing of goods at Batavia out of the Company's stores ; for that we have •seen done in a variety of cases, without necessarily affecting the character of the foreign purchaser. That this is done by a contract with the Company in Europe, will not in- validate. That the contract engages, that the purchased articles shall come to Europe in Dutch vessels, will not invalidate. But this case turns upon two questions of law. The general fact out of which these questions arise, is a contract of sale from the Dutch Asiatic Company of a quantity of goods laying at Batavia to certain persons in Holland, who have contracted to undersell to certain other persons resident in foreign countries, who are the claimants • 5 Rob. Adm. Rep. 161. and of Commerce during JFar. 117 and ;tsscitocl proprietors. To entitle tliem io receive resti- tution, it must a ppear that they are proprietors ; and secoudiy, that they arc qualified proprietors ; that is, that tlicy are persons who are not disabled, by any circumstances belong- ing to tliis transaction, from receiving restitution of tbeir property in this comt. These are the two questions. In order to determine upon tliem, the nature of the ori»^inal contract, between the Dutcli Asiatic Company and the first purcliasers, must be first considered. Tluit coiidact appears to have been entered into on tlie Sitli of March, i802, betAveen Voute and Co, acting for themselves and divers other merchants of the commercial cities of Holland. Tliese parties are considered as actual proprietors, and are so described throughout. Under this contract " they are to provide ships, and to send them io JBatavia. They are tiiere to receive the goods, and to pay the price— one-third in Europe, one-third on delivery at Batavia, aiid the re- maini?\g tliird on the return (o Holland, where (he goods were to be deposited in the waieliouses of the Company, and sold by the Company under the usual conditions of their sales." The tirst question that has been raised, is, Whetlicr these persons are to be considered as proprietors ? But on what ground is it asserted that they are iiot ? Is it to be objected, that they had not paid the whole purchase money ? T'lat is an objection whicii every day's habits of considering such subjects will not support ; two-thirds had actually been paid, and the remaining tliird was to he. received, according to the contract, on the arrival of the goods in Europe : that is a sullicient legal payment. It is next contended that there was no delivery ! How does that stand in point of fact ? The goods had actually, been delivered to t'aeir agents, and were comingybr tJudr account and risk. It is true that they are, by iha contrict, to be delivered to the Asiatic Coinpanj- ; but iipon w hat autho- rity ? J 18 Of the International Laws lity ? By the contract of tlie partj that it shall he so. In what ca})acify are (lie Company to act in llieir sales ? In the opacity of agents. It is not a delivery to the Com- pany, that the Cornpany may do ^vhat they please with the goods. They are bound to sell them upon the terms prescribed, and to pay over (he proccetls. Does this de- prive the owner of the dominion over his goods, so as to destroy his right of property ? If I, having goods, hand them over to another to sell, the circumstance of the man's Iiaving been the original proprietor of the goods would make no difference. He had conveyed his right of pro- perty, and it would be no derogatioii of those rights, tha^ b}' the terms of the purchase lie Avas to have the manage- ment of the sale. There would be no foundation for the assertion tliat the goods were not completely delivered, merely because they reverted to their former proprietor in a new character. His possession, as agent, is my posses- sion. In the present case, it is hardly necessary to observe, that at the time of the capture the goods were in the pos- session of the purchasers ; they had not yd reverted. The obligation to revert, founded on a mere voluntary compact, Avould not defeat tlie immediate possession, if personal possession could be, held sufficient to support the right of property : but it is by uo means necessary. S\ippose tlie case of the East Jndia Company holding a delegated an(l confided possession of goods in this country, for the purpose of bringing tliem to their regular sales ; could it be said of such goods, that the contract under which they have been acquired by the proprietor, sul^jcct to this condition, was a contract for tlie profits only, and not for the goods them- selves ? Is it necessary tliat there should be a manuc^l possession by the hands of the purchaser himself? Is there not a legal delivery, an implied delivery, a presumed deli- ycry throug'i the' hands of the agent ? This is the ordinary mode of Commerce during JVar, 119 mode of effccling the traditio ; and v.liether it is given to the same person accepting the ollice of agent, or to a third person accepting it, still it does not interfere with the cmptio and venditio. In these first pnrchasers, then, tliere was a clear right of property ; and if they, not being restricted from conveying it by contract, transfer it to otliers capable of receiving it, it will equally be property in them : for what more stands in the way oi their riglils of property ? If Voute had all the rights of property, and the want of payment, and the want of delivery, is no objection against him, nei- ther will it be an objection against them, if he has transferred to them all those rights, having a legal faculty ?,o to do. Contracts of purchase ejected on the part of the belligerent, but loft executory as to payment, and con- tingent on a delivery at an ulterior port, at the risk of a neutral merchant, are not allowed in time of war : and goods sailing under such a contract, and taken in transitu, have been considered the absolute property of the enemy '. Hostilities, besides incurring a confiscation, occasion a siispensiim of all legal remedies, a total inability to sustain any contract by an appeal to the tribunals of the one coun- try, on the part of the subjects of the other ; for during warfare all comjauriicalioii is fundamentally inconsistent with the relation at that time existiiio: between the belligc- rent nations. In the law of almost every country, the cha- racter of alien enemy carries with it a disability to sue, or to sustain, in the langu:ige of the civilians, a persona standi in judicio. The peculiar law of our own country applies this principle Avith great rigour. No man can sue therein who is a su!)ject of the enemy, unless under particular cir- cumstances that pro hjtc vice discharge him from the cha- racter of an enemy ; such as his coming under a flog of truce, a cartel, a jmss, or some other act of public auiho- ' The Atl.ir,, 3 Rob, Adm. Rep. 30<0. rity 120 Of the Inter }iatio?ml Laws Tity that puts him in (l;e king's peace pro hac vice : bat otherwise he is totally exlex' ! ^s between Belligerents and Neutrals. AH writers admit that neutrals have a right to trade wiHi either belligerent nation in the way they consider most advantageous. The right which a nation enjoys, in time of peace, of selling and carrying all sorts of merchandize to every nation which chooses to trade witli it, it enjoys also in time of war, provided that it remains neuter. It follows, then, that a neutral nation may permit its subjects to carry all sorts of merchandize, including arms and am- jnunition, to the powers at war, or to that of them wit'i which this commerce mny be carried on to the greatest advantage. So long as the state, that is the sovereign power, in a neutral nation, does not interfere, by prohibit- ing commerce with either or all the powers at war, so long, it should seem, the nation dpes not transgress the laws of neutralitj^ However, a power at war liaving a right to hinder its enemy from reinforcing itself by the reception of warlike stores, necessity may authorize it to prevent mer- chandize of this kind from being conveyed to the enemy by a neutral power *. It is generally acknowledged, that a neutral power ought not to transport to either of the belligerent powers merchan- dizes unequivocally intended for warlike purposes. But as necessity is the only reason which can authorize a restriction of the trade and navigation of neutral nations, goods which liavc no relation to war must be carefully distinguished from those which are peculiarly subservient to it. Arms, military and naval stores, ship-timljer, pitch and tar^, cables, hetnp, provisions, &c. (but cordilla hemp being unfit for « Hoop, I Rob, Adm. Rep. 200. ' Marten's Law of JNations, oJiS. Vaitel's Law of Nations, b. iii. r. 7 s. 111. Puff. lib. iw. c. 6, Grot. lib. ii. c, 9. ? 1 Rob. Adui. Rep, 241. naval of Commerce dur vg JVar. 121 naval purposes is held not to be contraband ',) are pro- liibilcd as contraband. Provisions, however, are not generally deemed contra - band, but may become so under particular circumstances arising- out of the particular situation of (he war, or (he con- dition of the parties engaged in it. Grotius speaks of them as articles promiscui usus, and specifies some circumstances under which they may become contraband . Tliose circum- stances are of a very particular nature, snch as the relief of places in distress ; and the general character is to be consi- dered as innocent, and free (or all purposes of traffic, unless under such particular situations and circumstances. Among the causes of exemption which tend to prevent provisions from being treated as contraband, one is, tjjat they arc of the growth of the country which exports them. Another circumstance to which some indulgence, b}'- tlie practice of nations, is shown, is wlien ihc articles are in tlieir native and unmanufactured state. Thus iron is treated with indulgence, thougli anchors and other instruments fabricated out oi it are directly cont.aband. Ilcmp is more favourably considered than cordage ; and wheat is not con- sidered as so noxious a couTinodity as any of the final pre- parations of it for human use. But the most important distinction is, whether the articles were intended for the ordinary use of life, or even for mer- cantile ships' use , or whether they were going witli a highly probable destination to milifary use ? Of the matter of fact, on which the distinction is to be applied, the nature and quality of the port to which the articles were going is not an irrational test : if the port is a general commercial port, it shall be understood that the articles were jroino- for civil use, although occasionally a frigate or ships of war may be constructed in that port. Oil the contrary, if the grciit predominant character of a port be that of a port of ' 4 Rob. 91. naval 122 Of the International Laws naval niililarj- equipment, it shall be intended tlic articles were goin^ for military use, although merchant ships resort to the same place, and allhcuglj it is possible that the articles miglit have been applied to civil consumption ; for, it being impossible to ascertaiu the final application of an article ancipitis usus, it is not an injurious rule Avhich de- duces both Avays the (inal use from the immediate destination ; and the presumption of a hostile use, founded on its desti- Tiation to a military port, is very much inflamed, if, at the time when tlic articles "were going, a considerable armament was notoriously preparing, to which a supply of tiiosc articles would be eminently ^iseful '. The list of those merchandizes, commonly called conira- band, is expressed in treaties of commerce. And since the latter end of the seventeenth century the maritime power* began to issue declarations at the beginning of a war, to advertise the neutral powers that tliey shall look upon such and such mercliandizes as contraband, and to forewarn them of the penalties they intend to inflict on tliose who shall be found conveying them to the enemy. These' declarations are rather advertisements than laws, nor can their effects be by any means extended puerations of war being inconsistent with the relations of commerce ; yet since the world has grown more commercial, a practice has crept in of admitting particular relaxations, which, if sanctioned by the special license of their respective governments, are legal ^ In the passage before cited from Bynkershoek, he proceeds to ob- serve, that the interests of trade, and the necessity of ob- taining certain commodities, have sometimes so far over- powered the rule of prohibition of commercial intercourse between hostile states, that diflerent species of traflic have been permitted " prout e re sua, subditorumque suorum esse censent princij>es." ' The Vi^U.intia, 1 Rob. Adm. Rep. 1. » The M?irianna, 6 Ibid. 24. 9 The Hoop, 1 Ihid. 196. 1 Vcs.317. K These 130 Of the Inlernailonal Laws These relaxations, termed " licenses," are deiinetl by Sir William Scott, in the case of the Cosmopolite', to be an high act of sovereignty ; an act immediately proceeding from the sovereign authority of the state, -whicli is alone competent to decide on all the considerations of commer- cial and political expediency, by which an exception from the ordinary consequences of war must be controlled. In their construction, they must not be carried further than the intention of the great antlujrity which grants them may be supposed to extend. 1 do not say, adds the same learned and eloquent judge, that they are to be construed with pe- dantic accuracy, or tliat every small deviation should be held to destroy the eflect of them : an exctss in the quantity of the goods permitted might not be considered as noxious to any extent ; a variation in the quality or substance of the goods might be more significant, because a liberty of im- porting one specj^s of goods, under a license granted to import another, might lead to very dangerous abuses. And therefore where a license had been obtained for permission to import the following enumerated articles — barilla, wool, liquorice, orchilla wooil, and dyeing wood, — a quantity of wines and some hides being also imported. — this part of the cargo, not being provided for in the enumeration, was held to be subject to condemnation*. Another material circumstance in all licenses is the limi- tation of time in which they are to be carried into effect ; for as it is in the view of govermnent, in granting these li- censes, to combine all commercial and political considera- tions, a communication with tl'e enemy might be very pro- per at one time, and at another very unfit and highly mis- chievous. It therefore seems, that a license granted in 1799 would not be good for an importation in 1801 '. ' 4 Rob. Adin. Rep. I J. '^ Ibid. 3 ibid. And of CofnmefCe during War. 131 And if it be provided in such license that the party act- ing under it sliall give bond for the due exportation of the goods to the places proposed, and they are exported with- out such bond being given, such exportation is illegal. Neither will it be sufficient, wliere a license has been grant- ed to export and deliver goods to an enemy's country for a limited time, if the goods are shipped before the expiration of the time, the ship not sailing till afterwards'. So where a license was obtained for importing to an ene- hiy's port certain enumerated articles,— other articles not inserted in the enumeration, sent on the part of a British subject, Are liable to condemnation, notwithstanding, after the privileged part of the cargo had been delivered at such enemy's port, the non-enumerated articles had an ulterior • destination to a neutral port *. If a license is granted to two pensons, their agents ot bearers of their bills of lading, their interest is not trans- ferable to others not originally concerned with them iii the transaction ; and therefore neither the grantors nor grantees of such license are entitled to restitution of property captured under such circumstances^. A license to export goods to certain places within the in- fluence of the enemy interdicted to British commerce, grant- ed to H. N. on behalf of himself and other British mer- chants, is sufficient to protect the adventure under the li- cense, if it appears that H. N. was the agent employed by the British merchants really interested in it to get the license^ though he had no property in the goods himself '^. If a license is obtained, giving a neutral wider scope thaii the exceptions and conditions in the orders of council ^ive. ' Vandyck v. Whitmore, 1 East's Rep. 475. » The Vrieiidschap, 4 Rob-. Adm. Rep. 96. 3 The Jonge Johannes, 4 Ibid. 263. * Rawlin«on v. Janson, 12 East's Rep. 223, K 2 and J 32 Of the International Laws and not referring thereto, he may avail himself of the pri- vileges conferred by the license, and is not confined by the restrictions contained in those orders '. But possession of a general license to trade with the ene- my is not prima facie evidence that the holder is entitled to hold and use it : if he seeks to coyer his own interests under it, he must connect himself with it by other evidence than the mere possession ; as by showing from whom and when he received it, and thereby connecting his own par- ticular adventure with such general license : otherwise, in the absence of all proof of such connexion, there is a na- tural suspici- import, extend to shipments which he personally superin- tends in an enemy *^s country, as a merchant of that coun- try ; but he will be deemed an exporter of goods in the latter character, rather than an importer in his former ca- pacity; notwithstanding he had no estabUshcd domicil or • Spitfa V. Woodman, 2 Taunt. 416. " Barlow v. M'Intosh, \2 East's Rep. 3L1. ' Ferze v. Waters, 2 Taunt. '24S. • The Aurora, 4 Rob. Adin. Rep. 31*. 5xed •of Commerce during War. \^^ ■fixed counting'-house in such hostile stale. It apjicars, how- ever, from Sir William Scott's judg:emerit in this case, that iiad the shipper of the goods gone into the enemy's country for the purpose of collecting debts, or for occasional pur- poses not originally connected with this transaction, and not with a view i^ mwkxwg fitture mercantile arrangements, shipments made only for the piwpose of collecting his debts wonld not be subject to confiscation '. In the case of the JufFrow Catharina^ «nder a license to import certain raw materials, restitution of a parcel of lace not included in the enumerated articles, but which had been shipped under tin order given previous to the com- mencement of hostilities, in letura for a cargo sent out from this country, was ordered. A license granted during the pendency of negotiation cannot be construed to extend to the contingency of a new war, which arises out of the inefficacy and inexecution of that treaty. And therefore a ship captured under suck circumstances will be liable to condemnation *. Where a license has been granted to trade with an ene- my, the courts of justice will permit every thing to be done, though not expressed, which is necessary in order to effectuate the inteirtion of the king in granting the license, from the principle of law, " ut res magis valeat, quam pereat." Thus, in an action on a policy of insurance, where a certain trading with an alien eneray, for specie and goods to be brought from the enemy's country, in his ships, into our c^ilonial ports, was licensed by the king's authority ; it was held, that an insurance on an ene- my's ship, as well as on the goods and specie put on board for the benefit of the British subjects, was incidentally Ic- « TliP Joii£;e Klassina, 5 Rob. Adm. Rep, «9T. « 5 Ibid. 111. J The Planters Wenscb, 'y Ibid. 'i'i. galized; 154 Of the International Laws galized ; and that it was competent for the British agent of both parties, in whose name an insurance was effected, to sue upon the policy in time of war : for although the king's license cannot, in point of law, have the effect of removing the personal disability of an alien enemy, in respect of suit, so as to cnabif' him to sue in his own name ; it purges the trust, in respect to him, of all those injurious qualities, in regard to the public interest, which constitute the public ground of objection to the alien himself'. So it has been held, that a native Spaniard domiciled here in time of war between this country and Spain, having been licensed in general terms by the king to ship goods '\x\ a neutral vessel from hence to certain ports in Spain, such commerce is legalized for all purposes of its due and effecf tual prosecution, either for the benefit of the party himself or of his correspondents, though residing in the enemy's country ; for, in lespect of such licensed trading, the sub^ jects of Spain concerned in it are to be regarded as British subjects *. The legal result of the license granted in this case is, said Lord Ellenborough, that not only the plaintiff, the person licensed, may sue in respect of such licensed commerce in our courts of law, but that the commerce itself is to be re- garded as legalized for all purposes of its due and effectual prosecution. To hold otherwise, would be to maintain a proposition repugnant to national good faith and the honour of the crown. The crown may exempt any persons and any branch of commerce, in its discretion, from the dis- abilities and forfeitures arising out of a state of war : and its license for such purpose ought to receive the most liberal construction. To say that the plaintiff might export the goods specified in the license from Great Britain to an enc- • Kensington v. Inglis, in Error, 8 East's Hep. 273. s Usparicha v. Noble, 13 Last's Rep. 332. my's Of Commerce, during Wdr, 135 my's country, for the benefit of himself or otliers, (and the license contains no rcslriclion in this particular,) and yet 16 hold that, uhere he lias so done, he could not insure, or, havins which may be captured of his majesty's subjects, it is declared illegal, by the statutes 22 Geo. 111. c. 2j. and 33 Geo. III. c. 66., for the captains or owners of any British ships who may be captured, to ransom themselves from the enemy ; and the contract to ransom is not only declared absolutely void, but the parties entering into it are punished by fine. And by a still later act (43 Geo- III. c. 160.) the above provisions are continued ; and by the 3ai\ section, if any captain of a privateer shall agree to ransom any ship or cargo taken as prize, and shall in pursuance of such agree- ment set the prize at liberty, instead of bringing the same iflto the ports of his majesty's dominions, unless in a case of extreme necessity to be allowed by the Court of Admi- ralty, he shall forfeit his letter of marque, and shall sufler such penalties of fine and imprisonment as the said court shall adjudge. Of 142 Of the International Laws Of Reprisals. Reprisals areiwed between nation and nation to do justice to themselves, when they cannot otherwise obtain it'. One' of the species of reprisals the most frequctitly employed^ is the seizure of tJie properly and persons of the subjects belona^ing to the state from which an injury lias been re-» ccived *. Effects seized are preserved while there are-Jthy hopes of obtaining satisfaction or justice. As soon as this hope is lost, tliey arc confiscated, and then the reprisals are accomplished. If the t^^o nations upon this qudrrel cora^ to an open rupture, satisfaction is considered as refusedj iVcin the moment of the declaration of wiir, or the tirst hos* tilitlcs, and then also the effects seized may be confiscated ^t A state can make reprisals for injuries committed against itself or agaias^t its subjects ; but not in favour of a third person *. By right, tlieie are many persons exempted from repri* sals ; and those whose persons are so privileged have also protection for their goods, some-by the law of nations, some by the civil law, others by the common law ; among whom, ambassadors, by the law of nations, their retinue and goods> arc exempt, coming from him who awarded reprised Travellers through a country, whose stay is but short, and a merchant of another place than that against which reprisals are granted, although the factor of his goodg was of that place, are not subject to reprisals'''. When ships are d'-iven into port by storm or stress of weather, they have an exem.ption from the law of re- prisals, according to the jus commune, though by the lavr ' VaHel, b. ii. s. 342. "^ Bynkeishock, Qiisest. Jur. W'h. lib. i. c. 24. 3 Vattel, b. ii. s. S42, * Marten's Law of Nations, 22G. Grot. lib. iii. c. 2. Yattel, b, ii. s. 3-J8. * licawcs's Lex Merc. 235. " Ibid. of of Commerce during War. 145 of England it is otherwise, unless expressly provided for in the writ of commission : but if such ships fly from their own country to avoid confiscation, or for some other fault, and are driven in by stress of weather, they may in such case become subject to be prize ; though it is unlawful to make seizure in any ports for reprisals, but in that prince's who awarded them, or in his against whom the same i^ issued ' . Of Embargo. An embargo is an arrest laid on ships or merchandize by public authority, or a proliibition of state commonly issued to prevent foreign ships from putting to sea in time of war, and sometimes also to exclude them from entering our ports"'. This term has also a more extensive signification ; for sliips are frequently detained to serve a prince in an expedition, and for this end have their loading taken out, without any regard to the colours they bear, or the princes to whose subjects they belong. The legality of such a measure has been doubted by some^ ; but it is entirely conformable to the law of nations, for a prince in distress to make use of whatever vessels he finds in his ports, that may contribute to the success of his enterprise. Embargoes laid on ship- ping in the ports of Great Britain, by royal proclamation, in time of war, are strictly legal, and will be equally bind- ing, as an act of parliament ; because such a proclamation is founded on a prior law, namely, that the king may pro- hibit any of his subjects from leaving the realm. But in times of peace the power of the king of Great Britain to lay such restraints is doubtful ; and therefore when such a proclamation issued in the year 1766, against the words of the statute then in force, although absolutely necessary for » Beawes's Lex Merc. 235. • Ibid. 260. 3 Grotius de Jive B. ac P. lib. ii. c. 2. s. lO. Marten's Law of Nations, 326. the 144 Of the International Laws the prevention of a dearth in the countr}', it vras thought prudcnl to procure an act ' of the legislature mystery, or manual occupation, within the realm of Eng- land or Wales, without having previously served as an apprentice thereiji for seven years ; nor set any person on work, in such mystery, art, or occupation, except he shall L Lave 146 Of the Liberhj of Trade. liave been apprentice, as is aforesaid ; on jKiin of forfeiting for every default forty sliillings for every month. Tliis statute, however, being in restraint of the eommon law, the resolutions of tlie courts have rather confined than extended tiie restriction. It has therefore been held, tliat if a person has without interruption worked at, or in any maiuicr followed, a trade for seven years, either as master, servant, or inmate, at home or beyond sea, he is not subject to the penalties of this statute, although he has never loeen an apprentice or bound to the trade. In like manner, if the wife of a tradesman is employed in his business for seven years, and he dies, she may use the trade alter his death '. So, by a particular custom in any town or village, a widow may con- tinue her husband's business ^. A service as an apprentice for six years, and one year as a journeyman', or as a clerk and poller for fifteen years *, has been held suGicient to entitle the party to the benefit of this statute. So, it is sufficient if the pavtj' has followed a trade for seven years abroad^ ; and the term of seven years may be made out by months and weeks ?tt different times ^ : but a service of five years abroad will not be a sufKcient compliance wiih tlie statute, although the law of that country does not require a longer period^. It has also been decided, that if a person uses a trade mciely for the use of his family, and not with a view to gain a profit, he is not within the statute ^ So, if a person advances a sum of money in a trade, and becomes a partner, but does not interfere in the executive part of the business, he is not liable to the penalties of^the statute*^.. And if a man who has not served an apprenticeship himself, exports or sells goods which have been manufactured by journcy- ' 1 Barnardiston, 367. ' Bar. Abr. Master and Servant, D. 2, 3 3 Keb. 400. * Peake's N. P. C. 148. 5 1 Salk. 67. ^1 Saund. 309. n. 6. 7 10Mod.70. »8Co.l29. lllbid.51.a. Cro.Car.499. Hob.211 » Kaynard v. Chase, 2 Wils. 40. 1 Bur. 2. S. C. men Of the Llhertij of Trade, M7 men who Iiave regularly served and been employed by hini, he is not within the act, if he has not intevfered ia the manual occupation of the trade '. Neither is a person who carries on particular branches of a general business by such. as have served an apprenticeship to those pas ticulir branches of the business in which they arc employed, subject to the penalties of tlie statute, if lie merely exercises such parti- cular trade incidentally as a branch of his general business; for the statute applies only to those wIk) substantively set up and exercise a frade without having served an appren- ticeship. And therefore a master coach-maker may law- fully employ journeymen blacksmiths to make the iron- work for coaches, as may a master carpenter journeymen sawyers, although the one may not have served an appren- ticeship to the trade of a blacksmitli, nor the olher to that of a sawyer ^. Neither is a person who carries on a trade as trustee only for children, and wlio does not assist in the several opera- tions, or take any part in the conduct of the business, liable to the penalty of the statute, for carrying on a trade without having served an apprenticeship K Neither does the statute restrain a man from exercising several trades at the same time, if he has served an appren- ticeship to each ■*. It has also been decided that this statute does not extend to a person w Iio works as a jouraiey- man, though he has not served an apprenticeship, but that his master is liable to the penalty K Neither are employments which do not require skill and experience within the statute ; and consequently a hemp- • 1 Sannd. S!9. n. 1. ^ Coward v. Mabeily, 2 Camp. N. P. C. 127. Spencer v. Mann, 5 Esp. N. P. c, no. 3 Meazcan v. Poarsall, 6 Esp. N. P. C 1. < Carth. 16.S. I Bl. Rep. 's^i.S. 2 Wils. 1(58. ^ Beach V. Turner, 4 tiur. ^419. S Mod. Sl.'J. I. 2 l)ip. By 17 Geo. III. c. 33. dyers in Middlesex, Essex, Surry, and Kent, may employ journeymen who have not served ap- prenticeships. As may hatters by the 5.5th section of the same statute, and Avoolcombers by 35 Geo. III. c. 121. By 21 Geo. III. st. 2. c. 6. all ollicers, mariners, and soldiers, may, if they have not deserted tlii'ir wives and cliiidren, exercise such trades as they are sufficient to, in any town or place. By 2(5 Geo. III. c. 107. every person having served in t];e militia, -when drawn out into actual service may, if a married man, exorcise any trade in any town or i-lace. .And by .00 Geo. III. c. 41. hawkers and pedlars dnly licensed are authori.sed to trade. No trades are held to be within the statute but such as are enumerated in its provisions, or wereus^d and exercised at the time of makistg it '*. Tlic trades witliin the statute are: Bakers, barber.'^, brewers, drapers, fcltmongers, fruiterers, ironmongers, knife- ' Cro. Car. 409. ? 1 Til- Com. 128. a'l Sauiui. oil^ ♦ Viz. .JaHiuiry I2th, 156-2- luift- Of the Liberty of Trade. 149 liaft-makers, point-makers, soap-roakers, 5-purrierR^ lanners, tailors, tilers, upliolstcreis ', cable-makers, hornere, anercers, inillers, milliners, pin-makers, pippiii-monijers, salesmen, salters, scriveners, silk-weavers, surg-eons, tallo-sv-c:haodleis, ' taggers of points, ^veuvers of silk, ^^ool-comhers*, cotnb- - makers, cooks, cook-shops, shoe-makers ', avrow-head- makers, bawyt rs, c:!ppers, clothiers, cloth -workers, ciirritrs, cullers, djers, f.\hic:h is confirmed b\' two subsequent statutes'^, fornis the f{;unda- tion of the indulgences which alien merchants enjoy in tiiis realm. By this statute it is provided, that all merchants (unless publicly prohibited before hatid ) sh'dl have safe conduct to depart from, to come into, to tarry in, and to go through Enghiud, for the excrci>x' oi' merchandize, without any unreasonable imposts, except in time of war: and if a war break out between us and tlu ir country, they shull be attached (if in England) wit'iout harm of body or goods, till the king or his chief justiciary bo informed ho'.v our merchants are tre^ited in the lind with which we are at war : and, if ours be secure in that land, they shall be secure in ours. ' Com. Diir. title Trailp, D. 5. » Viii. Abr. fit. Trade, A. 3 Bac. Aiir. title .Master aiiil .'•prvant, 1). J, '• .") I liz. r. 4. * XU). AhV. tii. Tnide, A. " Com, Dinr. tit. Ira'l. , i). f>. 7 Bac. Abr. tit. .;M;ist. r and Sorv.int, 1). i. * "^ Camp. Iv i'. C. 391. 9 I Ld. ill. c.';9. a Lil. ill. St. I. Thin 150 Of the Liberty of Trade. This protection of aliens in the exercise of commerce is .fuither secured by the statute ofthe Staple, 27 Ed. III. st. 2. c. 2. as well as by numerous other statutes. By this statute it is ordained, that all nurcliant strangers, not of enmity, may safely come and dv^ell in the realm, where they will, and thence return with their ships, wares, &c. and freely buy and sell within the reahn, p'lying the customs and subsidies due Ihcreon. And by stat. 9 Ed. III. c. 1.' wiiocver gives disturbance shall be subject to double damafjTCs. . And by stat. 27 Ed. III. st. 2. c. 17. in case of war, all merchant strangers shall have convenient time, by pro- clamation, to sell their goods and depart; and if they ar« prevented by sickness or any otiicr accident, they shall have a further extension ofthe time. But tjiough aliens are allowed the free exercise of trade in Great Britain, yet by the slat. 12 Car. II. c. 18. s. 2. no alien, unless naturalized, or made denizen, shall exercise the trade of a merchant or factor in the English plantations iii Asia, Africa, or America, on pain of forfeiting all his goods, &c. And to prevent frauds in colouring strangers' goods, wares, or merchandizes passing inwards or outwards, it is enacted by the 10th section ofthe 13th and I4th a^ the same king, that the children of aliens under 21 years of age shall not be traders, and that no goods or merchandize shall bo entered in their names. So by stat. 6 Hen. IV. c. 4. merchants strangers shall not carry, or cause to be carried, oiitof tlic realm any merchant dizes brought within the realm by sncli alien merchants. The statute of 1 Hie. HI. c. 9. which prohii)ited an alien artificer from exercising any trade in England, unless as servant to a subject, or to make any cloth, or to sell wares by ' Confirm?!) !>y 2 Ric. II. c. i. and 11 Rie. II. c. 7. retail, Of the Liherhj of Trade. 151 retail, is held lo be virtually repealed by the 5 Eli?;, c. 'I.' As is also the 1 Ric. 111. c. 9. and U Hen. VIII. c. 2. which prohibited a stranger arlificer ^rom taking any servant or apprentice, and employing above two journeymen, not subjects; togctlier wiihtheSlIlcn.VIII. c. lb. Avhich prohi- bited such alien from keeping in his house at the same time above two servants. The 32 Hen. Vlll. c. 16. s. \o. remains yet unrepealed. But this law, contrary to good policy and the spirit of commerce, is construed very strictly in favour of aliens *. For if an alien occupy a dwelling-house of the yearly value of 10/. for forty days, he gains a settlement under the statute 13th and 14th Car. II. c. 12.^ And Mr. Justice Blackstone in his Commentaries, page 372, says, that an alien may hire a house for his habitatioii ; for this indulgence is necessary for the advancement of trade. Besides these restrictions, aliens are sul)ject to certain higher duties at the custom-house than subjects are "♦. To which extra duties, by tlie course of the Exchequer, tlie son of an alien, thor.gh born within the realm, is liable for the first generation K But by 24 Geo. III. st. 2. c. 16. aliens are exonerated from the extra impositions, except from those which have been granted to the cKy of London. The description of persons with whom an alien trader may deal, has also been the object of legislative inlerference. By 9 Ed. III. St. ] . c. 1 . 25 Ed. III. st. 4. c. 2. 2 Ric. 11. st. 1. c. 1. and 11 Ric. II. c. 7. all merchants, strangers or ;'s Tracts. '« I :-hV«.. 3>. establish Of the Restraint of Trade. 1 57 cstablisli new ones ; they only enforce such laws as are already in being, in such manner as the king shall judge necessary '. Where a place for trade is discovered by any per- sons, the king may |,rant to them Uie sole trade there, as in the case of the Greenland Company *. Another of the prerogatives of the king for the regulation of trade, is the right of granting letters of marque and re- prisal ; words used as synonymous, and signifying, tlie lat- ter a taking in return, the former the passing of the frontiers in ordtT to such t;iking. These letters may be obtained, in order to seize the bodies or goods of the subjects of the ©(lending state, until sali.sfsrction be made, wherever they happen' to be found : a custom which, as the elegant com- mentator observes, seems dictated by nature herself. But here the necessity is obvious of calling in the sovereign power, to determine when reprisals may be made ; else every private sufferer would be a judge in his oAvn cause. In pursuance of this principle, it is with us declared by the statute 4: Hen, V. c. 7- that if any subjects of the realm are oppressed in time of truce by any foreigners, the king will grant marque in due form to all that feel themselves grieved. Bat during war, the Lord High Admiral, or tlie Commis- sioners of the Admiralty, are, by various st;»tutes, empowered tcj grant commissions to merchants and others to tit out pri- vateers Or armed ships, upon giving security to the /Vdmi- ralty to make compensation for any violation of treaties be- tween those powers with whom the nation is at peace : and by 21 Geo. HI. c. 47. such armed ships shall not be em- ployed in smuggling. The prizes captured are to be di- vided according to the contract entered into between the owners and the captain and crew of the privateer ^. When a private person sues for letters of marque and ' 1 BI. Com. 271. 12 Co, 75. ' 1 Rrl. 5. » J HI. Com. 259; and Mr, Christian's note. reprisal J58 Of the Restrahii of Trade. reprisal tor an injury he lias sustained during the time of truce, before he can olMain Iheni, tlie following requisitions must appear, says Mr. Beawes in his Lex Mercatoria, page 2 J 4. 1. The oath of the party injured, or oiher sulllcient proof, touching the pretended injury, and the loss or da- mage thereby sustained. 2. A proof of the due prosecu- tion for obtaining satisfaction in a legal way. S. A proof of the delay, or tlie denial of justice. 4. A coijiphiint io Ills o^vn prince or state. 5. A requisition of justice by him, or them, made to tlie supreme head or state, where justice in the ordinary course was denied. 6. Persistence still in the denial of justice. By 43 Geo. IH. c. IGO. s. ll. every person applying to obtain a commission or letter of marque shall make such application in writing, and therein set Ib'.th a particular, true, and exact description of the ship or vessel for which such commission or letter of matque is requested, specifying i\\e name and burthen of such ship or vessel, what sort of built she is, and t!ic number and nature of the guns on board the same, to wiiat place belonging, and the name or names of the owner or owners of such ship or vessel, and the nuralx'r of men intended to be put on board the same. Letters of marque may be revoked by the king's express revocation', or by the Admiralty^ . They may be forfeited for ofienccs against the revenue laws, ^ for acts of cruelty on tlic part of the captors towards their prisoners •*. And although there is a clause in the letters patent that no treaty of peace shall prejudice them, yet lliey may be repealed in Ctianccry after a ])cace K By By-Law or Custovi. General restraints of trade are bad ; particular restraints, either as to time or place, are good, if for a suliicient con- » Molloy, vol. i. v. 58. ^ 48 Geo. III. r. 160. s. 11. 3 ibid. s. 13. 4 TUc JiiaiiumiiC;, 5 Hob. Adm. Rep. 9. 5 'fiie King v. Care^v, i Vern. 54. sideration . Of the Restraint of Trade. 159 sideiation ' . For a custom which makes a total restrahit of trade, as a custom that a man shall not use a trade in such a city, is void, unless it be founded upon some considera- tion. But a cust( ii which restrains trade sub modo, may- be good ; and theretbre the custom o^ foreign loug/it, and foreign sold, whereby a man not free of a city, &c. Avillbe re-strained from buying or soiling goods to other foreigners within such city &c. is good ^. When the general consent of persons engaged in a trade, has established certain rules for the conduct of that trade, it is not compcteiit for any number of individuals to pro- mulgate a contrary regulation. And though they may agree among themselves to adopt new rules, they cannot thereby deprive one wlio has not assented to their compact, of the benefit of the old rules, as against themselves ; even in a trade recently established '. In the case of Stone v. RawUnson-*, Willes C. J. said, " The Courts have always in mercantile affairs endeavoured to adapt the rules of law to the course and method of trade and commerce, in order to promote it ; and when new cases have arisen on the mercantile law, they consult traders and merchants as to their usage '." Although it is a general rule of law, that a woikman is entitled to bo paid for his labour where the work is destroyed, without any default of his own, before it is completed or delivered to his employer ^, yet the law, in this respect, may be controlled by the usage of a particular trade ; for custom, as far as it extends, controls the general law "'. By Contract. Stipulations in general restraint of trade are unlawful and » f-ondon v. Ft-ll, Vv'iUes's Rep. 384. "^ G Com. Dig. 366. 3 Fennings and others v. Lord Grenvillc. 1 Taunt. 241. 4 Willes's Rep. 561. * For the particular instances when a by-l.iw or custom is ^ood or not for the restraint of trade, see ti Com. Dig. S6G. 1 Ibid. 152, 155. and I Bac. Abr.3.S8. • Menetone v. Athames,3 Bur. 1592. ' GilleU v. Mawman, 1 Taunt. 137. void ; \()0 Of the Restraint of Trade. voi',1 ; and oven a promise or obligation which restrains the total use of a trade in a particular place is void, unless it appc.irs (o have been made upon good consideration. But if I he robtraint be qualified, so as only a preclude the party from trading in a particular, or vv^ithin a certain distance, as for i.-.slance ten milos, if a consideration v/as given, the con- tract will not be impeached either in law or equity, although the breacii of the stipulation tends apparently to the detri- ment of the party in whose favour it was made '. By Mo7iopoly. All monopolies are contrary to JNIagna Charta. By statute ^S Edw. 11 f. all merchants may deal freely in all manner of nierchandize, notwithstanding any charter to the contrary. And therefore every grant of the king, which tends to a monopoly, v,\\\ be void by the common law*. 80 by statute 21 Jac. II. c. 3. all monopolies, and all eommissioiis, graiits, licenses, letters patent, &c. to any person, body politic, &c. for the sole buying, selling, making, working, using of any thing, &c. shall be void. But by a proviso in the same statute, letters patent, &c. heretofore made for twenty-one years or hereafter to be made for fourteen years, for the sole working or making of any new inventions or manufactures, are excepted, pro- vided tluy be not contrary to law, or mischievous to th« state, or generally inconvenient. Grants to a city or corporation, or to any company &c. for the maintenajice or ordering of trade ; and letters patent concerning printing, saltpetre, gun-powder, great ordiiance, and shot, are also excepted. By Statute, An enumeration of the restraints that are imposed by statute is to be Ibund under the preceding heads. ■ ' G Com. Dii;. 366. Co. Lit. £06. 1), n. 1. 2 Sau-.v^. laG. n. 1. ^ 1 liol. 4. CHAPTER Of the Charge upon Trade. IGl CHAPTER III. OF THE CHARGE UPON TRADE. Bv 27 Geo. III. c. 13. called the Consolidation Act^ till tlie former statutes imposing- duties of custom and excise vere repealed with regard to the quantum of the duty, and- the duties ordered to be paid according to a new book of lutes annexed to that statute. Bullion, wool, and some few other commodities, mny be imported duty free. All the articles enumerated in the tables or book of rates pay upon importation or exportation the sum therein specified, ac- cording to their weight, number, or measure. And all other goods and merchandize, not being particularly enu- merated or described, and permitted to be exported and used in Great Britain, shall pay upon importation 27/. VQs. per cent, ad valorem, or for every 100/. of the value thereof, but subject to a drawback of 25/. per cent, upon exporta- tion. Very few commodities pay a duty upon exportation ; and where the duty is not specilied, and the exportation is not prohibited, all articles may be exported without pay- ment of duty, provided they are regularly entered and shipped ; but on failure thereof they are subject to a duty of bl. 105. ad valorem. And to prevent fraud in the re- presentation of the value, a very simple and equitable re- gulation is prescribed by the act, viz. the proprietor shall himself declare the value, and if this slioulil appear not to be a fair and true estimate, the goods may be seized by the proper officer ; and four of the commissioners of the cus- toms may direct that the owner shall be paid the price which he himself fixed upon them, with an advance often per cent, besides all the duty which he may have paid ; and they may then order the goods to be publicly sold, and if they raise any sum beyond what was paid to tlie owner M and .162 Of the Charge upon Trade. and the subsequent expenses, o.ic hall of Ihc overplus shall be paid to the olBcer who made the seizure, and the other halt" to the public revenue'. Similar provisions are made by 43 Geo. III. c. 68. by ivhich statute the then- existinii^ duties of customs and drawbacks, except the duties of pac ka^e, scavage, bail- lage, or porterage, payable to the city of London, or other corporations, shall cease, and those specified in the annexed schedule and tables shall be levied, and the drawbacks therein inserted be allowed in their stead. By the common law, customs are due by the importation, where any act is done by way of merchandize ; as bulk broken, part of the goods sold, &c. But where goods are brouglit into a port not by way of merchandize; as if a ship enters a port by default of provisions, stress of weather^ &c., customs arc not due until the goods are landed ^ By 12 Car. II. s. 3. if any goods be shipped or put into a boat or vessel to the intent to be carried beyond sea, or to be brought from beyond sea' into any port, &c. by way of merchandize, and unshipped, &c. the customs due not being paid or tendered to the collector or his deputy, with consent of tlic comptroller or surveyor there, or one of them, nor agreed for at the custom-house, such goods shall be forfeited. And therefore, where bulk is broken, or that there is a manifest intent to do it, before the customs are paid, tendered, or agreed for, tiie goods are forfeited ■*. And that even though they are U\Vcu by way of reprisal ^. If goods and merchandize are brought by a merchant to a port or haven, and there part thereof sold, but never put upon land, they must pay the customs ; and discharging out of the ship into another uj)on tiie sale, amounts in law ' Blacktatc in money, as \\d\ as an cstat*' in land, houses, and t';c like, migl it be let out to hire, with- out the breach of one moral or religious duty. And indeed, when the source ot this prejudice is examined, it will be found to have originated in a political and not a moral pre- cept ; for though the Jews were prohibited from taking usii- ry, that is, interest, from their brctiuen, they were in ex- press words permiUed to take it from a stranger. In the reign of Henry the Eighth, 10/. percent, was al- lowed as the legal rate of interest ; but this statute was re- pealed by the 5th and 6th EdAv. VI. c. 20., by wJiicli all interest was prohibited, the money lent and the interest were declared to be forfeited, and tiie ofienJer to be subject to fme and imprisonment. And thus the law stood till the sta- tute 13th Eliz. c. 8., which revived the 37th Henry VIII. c. 9., and ordained that all brokers should be guilty of a premunire, who transacted any contracts for more.; and that the securities themselves should be void. The statute 21 Jac. I. c. 17. reduced tlie rate of interest to eight per cent. ; and it having been lowered in 1650, during the Usurpation, to six per cent., the same reduction was re- enacted after the Restoration, by statute 12 Car. H. c. 13. ; and lastly, the statute 12 Ann. st. 2. c. 16. has reduced it to 5/. per cent., which is now the extremity of legal inter- est that can be taken. By this statute 12 Ann. c. 16. no person shall take, di- rectly or indirectly, for loan of any money, or any thing, above the value of 5/. for the forbearance of TOO/, for a year, and so proportionably for a greater or less sum ; and all bonds, contracts, and assurances made for payment of any principal sum to be lent on usury, above the rate of 5/. per cent, shall be utterly void. And whoever shall take, accept, or receive, i)y way of corrupt bargain, loan, &c. a greater interest, sliall forfeit treble the money bor- rowed : 1G8 Of Offences against Trade. rowed ; one half of the penalty to the prosecutor, the other to the kinfr. And if any scrivener or broker takes mdre than tiv^e shillings per cent, procuratioti money, or more than twclvepence for making a bond, he shall forfeit 20/. M ith costs, and suffer imprisonment for half a year. These restrictions, however, do not apply to contracts made in foreign countries ; for on such contracts the Court will direct the payment of interest according to the law of the country in which such contract was made'. Thus Irish, American, Turkish, and Indian interest have been al- lowed in our courts to the amount of even twelve per cent. ; for the moderation or exorbitance of interest depends upon local circumstances ; and the refusal to enforce such con- tracts would put a stop to all foreign trade. The following determinations will further explain the ge- neral principles that govern the cases on this subject. It is not necessary that money should be actually ad- vanced to constitute the offence of usury ; but any contri- vance or pretence whatever to gain more than legal interest, where it is the intent of the parties to contract for a loan, will be usury : as where a person applies to a trades- man to lend him money, who, instead of cash, fur- nishes him with goods, to be paid for at a future day, but at such an exorbitant price as to secure to himself more than legal interest upon the amount of their intrinsic value; this is an usurious contract. The question of usury, or whether a contract is a colour and pretence for an usurious loan, or is a fair and honest transaction, must under all its circumstances be determined by a jury, subject to the cor- rection of the court by a new trial*. » Eking V. East India Company, 1 P. W.r.s. 396. Ibid. 2 Bro. Pari. Ca. 7'2. ' Flover v. Edwards, Cowp. 112; Lower. Waller, Doug. 70S. Tate v. Welliiig"s,3 T. R. 531. It Of Offences against Trade. 169 It is remarkable, that one species of indirect usury is guarded against by the statute 37 Hen. VIII. c. 9. ; and tliis part of the statute seems to be still in force. I3y this it is enacted, that no person shall sell his merchandize to any other, and within three months after buy the same, or any part tliereof, for a less price, knowing it to be the same, on pain of forfeiting double the value ; half to the informer, and half to the king ; and also to be punished by tiiic and imprisonment. It is now clearly settled, that bankers and other persons discounting bills may not only take five per cent, for interest, but also a reasonable sum besides, for their trouble and risk in remitting cash, and for other incidental expenses '. But if a banker deducts the discount of 5/. per cent, upon a bill and, instead of paying the remainder in cash, gives a draft for it, even at a short date, this has been held to be usury ; for he not only gains five per cent., but also the further be- nefit of the money till that draft is paid^. But whether more than bl.^ex cexii.hcintentionaihj iaken for the loin and forbearance of money, is a question of fact to be decided by a jury. It ought not to be considered usury, if it is done at the request and for the convenience of the party, who might have had cash instead of such bills, and m here it is not a device and contrivance to get beyond the fair allow- ance of interest and expense of commission '. If a person discounts a bill for the drawer upon the terms that he shall receive bl. per cent, discount, and an addi- tional sum for guarantying the payment of the bill by the acceptor, he having no doubt of the acceptor's solvency, this is an usurious contract ■*. On a contract for a loan reserving bl. per cent, interest. > Vyrinch V. Fenn, 2 T. R. 52. - Parr v. Eliason, 1 Ea?ts Rep. 9'. 3 Ilammettv. Yea, Bart. 1 Bos. and Pul. 114. * Lee V, Cass, 1 Taunt. 511. if 170 * Of Offences against Trade. if a premium be taken at the time of tlic loan, the crime of usurj,' is complete as soon as any interest is paid '. If a contnicl is entered into to pay more than legal interest, though all securities are immediately void, yet the penalty is not incurred till more than legal interest is actually paid ^. For to subject tlie party to the pcnalt}' under the statute 12 Ann. st. 2, c. 16. there must be both an usurious con- tract at the time of the loan, and an usurious taking in pur- suance of it of money, or money's worth '. But in order to avoid a security, it must be shown that the agreement was in its origin illegal and usurious : it will not be usury if more than legal interest is afterwards paid, if not originally agreed for ■*. An agreeiiioit to replace stock and pay the amount of the dividends, tliough more than 51. per cent., is not usu- rious 5. Where the principle is secured at all events, except from the insolvency of the borrower, and more than 51. per cent, may be gained by the terms of the contract, as by tlic profits of some concern, the contract is usurious'''. But it is an established rule, that no contract is within the statute of usury, although more than five per cent, is to be paid upon the money advanced, if the principal is actually put in hazard, and may be totally lost to the lender'. And if the original contract be not usurious, nothing done afterwards can make it so; a counterbond to save one liarmless against a bond made upon a corrupt agreement, will not be void by the statutes. But if the original agree- > Wado V. Wilson, 1 East's Rep. 195. ^ I'ishr . V. licaslev, Dmis- 2T3. 3 Per AsJihurst J. in Scott v. Brest, 2 T. R. 211. 4 3 Anstr. 9iO. s jate v. Wellings, 3 T. R. SSI. 6 Morse V. Wilson, 4 T. R. 353. 7 Ibid. Sharpley v. Hanel, Cre. Jac. 208, ment Of Offences against Trade. 171 raent be corrupt between nil (he parties, and so ^vithin the statute, no colour will exempt it from the danger of tlie statutes against usury'. After usurious securities given for a loan have been de- sfroyed by mutual consent, a promise by ihe borrower to repay the principal and legal interest is founded on a sufii- cient consideration, and is binding ^. A contract for 6/. per cent, m.'wlc before the statute, is not within the meaning of it ; and therefore it is still lawful to receive such interest, in respect of any such contract. The receipt of higher interest than is allowed by the statule, by virtue of an agreement subsequent to tlie first contract, docs not avoid an assurance fairly made'. Neither is a bond made to secure a just debt, payable with lawful in- terest, avoided by a subsequent usurious contract, but the obligee is thereby subject to the penalty, by the latter clause pf the statute IS Car. IL c. 13.* 4. Cheating. Cheating, as it was understood at common law, may in general be described to be deceitful practices, in defrauding another of his known right, by means of soiuc artful con- trivance, of a nature to affect the public interest, and so subtle and concealed that the common prudence and caution of mankind is not sufficient to elude the eflect of it. But there being many species of fraud which could not, in strictness of law, be comprehended within this definition, the statute 33 Hen. Vlil. c. 1. (uacis, tliat if any person shall falsely and deceitfully obtain any money or goods, by colour and means o( a.uy false priuy tokeii, or counterfeit letter made in another raaii's name, &c. for obtaining money ' 1 Brownl. 73. 2 And. 42'^. A SIicp. Abr. 173. ' Hnrncsv. KrdScv, y Taunt. 18 t. 3 3 Anstr. OlO. ' •» IVrrall v. Sbaon, 1 Saund. SOh or 172 Of Offences against Trade. or ^oods from such person, he shall suffer punishmenl by im- prisonment, setting upon the pillory, or any corijoral pains short of death that the court in its discretion may think proper. But this statute not affecting those frauds to guard against which the common prudence of mankind was thonght insufficient, the 20 Geo. II. c. 24. introdiues a new ofibnce, and enacts, that all persons who knowingly and designedly hij false pretences, or by sending thicateuing letters in order to extort money or goods, shall obtain from any person money, goods, wares, or merchandizes, with intent to cheat or defraud any person of the same, shall be put in the pillory, or publicly whipped, or fined and ini-? prisoned, or transported. A false assertion or afhrmation, without an artful device or contrivance, will not amount to a false pretence ; and therefore it has been determined that it is not a false pretence within the statute to purchase goods, and to give a bill for them, drawn upon a banker with whom the drawer lias no effects'. But where the defendant had made a bet upon a race to be run upon a future day, by which false representation he obtained a sum of money from the prosecutor to let him have a share of the wager ; this was held to be a false pretence within the slatute*. So where a man pays a number of workmen, and receives from a clerk what is due to them, if he represents that more is due to them than actually is, he may be indicted for ob- taining the difference under a false pretence^ Changing corn by a miller, and returning bad corn in the stead, is punishable by indictment, being an offence against the public-*. Qui selling beer short of the measure is not indictable as a cheats Nor selling gum of one de- > Rrx V. Lara, 6 T. R. 365. ' Rex v. Young, 3 T. R. 828. 3 Wiichdl's case, 2 Last's. P. C. c. 18. s. 8. < 1 Sess. Ca. 217. J 1 Wils.301. 1 Bl. R. 274. nomination Of Offences against Trade. 173 nominafion far that of another '. Nor selliiio; wrought gold, as and for gold of the true standard ; the offender not being a goldbmilh *. As there are frauds which may be relieved civilly, and not punished criminally, so tliere are other frauds which in a special case may not be helped civilly, and yai shall be punished criminally. Thus, if a minor, pretending to be of age, defrauds many persons by taking credit for a considerable quantity of goods ; the persons injured cannot recover the value -of their goods, but may indict and pu- nisli him for a common cheat ^. The distinction laid down as proper to be attended to in all cases of this kind, is this : — That in such impositions and deceits, where common prudence may guard persons against their suffering from them, the offence is not indict- able : but the party is left to his civil remedy for redress of the injury done him : but where false weights and measures are used, or folse tokens produced, or sucli methods taken (o cheat and deceive as peoj)le cannot by any ordinary care or prudence be guarded against, there it is an offence indictable •*. 6. Forestalling, Ingrossing, and Regrolinrr. Forestalling, ingrossing, and regrating, are ofle/ices ge- nerally classed together as of the same nature and equally hurtf ,1 to the public. The offence of fo estalling the market is an offence ajjainst puhlic trade. This is described by 5 and 6 Edw. VI. c. 1(3. to be the "buying or contracting for any cattle, mer- chaudia', or victual coming in the way to the market ; or dissuading persons from buying their goods or provisions there ; or persuading them to enhance the price when tliere • • Saver, 205. •» Rex v. Boyer, Cown. 323 3 Barl. 100. " * Per J ustice "VVilmot, in Rex ▼. Whcatly, 2 Bur. 1129. any ?7i . Of Offences against Tradi, w\y of \^hic]i ])rac(ices makes Ihc market dearer loflsc faJr trader. And in' kex v. Wadditiiiton ' it was decided, that the roHoYuiig' acts innoiiiit to the sanse ofFence, 1. Spread- ing rumours with intent !oni of the realm, is where a f(;Bi'^-covert being the wife of a freeman, by tlie custon- of the city of London, trades by herself in a trade with which her hus- band does not iniermeddle; in such case she may sue and be sued on her contracts as a feme-sole ; and the husband shall be named only for conformity ; and if ju;lgement be given against them, execution sh;ul be against the feme only ^. A feme-covert may also by the voluritary agreement of her husband have a separate interest in her husband's trade. Thus, wlicre a husbaud voluntarily, ar.d after marriage, allowed the wife for her separrstc u.-.e to make profit of all butter, eggs, pigs, poultry, and fruit, beyond ' Wnlford V. Dichftss De Pienne, 2 Esp. N. P. C. 55-1. Ibid. 5S7. 2 Eos. ami Pill. N . P. H^O. ^ Do Gailiou V. L'Aiglr, I Ibid. ,S5T. 3 Marsh v. Hutchinson, 2 Ibid. 220. 4 Farrer v. (Oiuitcss of Cranarit, 1 Ibid. SO. * Marsh v. Hutchinson, ut supra, and Bofvgett r. Frier, citf d in 1 Sclw. ^' . P. .S02. * L^n^ham v. Bewctt, C'lo. Car. 68. %vha(" \ 1 86 Of Mercantile Contracts for the Mhat was used in the family ; it was decreed that such an aijreeinent was valid, and that the wife had the entire disposal of the profits arising- from the same '. 2. Of Contracts lij Idiots, Lunatics, Persons insensible, under Duress, or attainted. J . The contracts of idio(s and lunatics may be avoided either during the continuance of their idiocy or lunacy l)y the king *, or after their restoration to their perfect mind hy themselves ^ 2. Contracts made by persons labouring under the de- privation of the organs of sense, as if they are deaf, duml>, and blind, arc ipso facto void -*. But contracts entered into during a state of intoxication must be fulfilled. The having been in drink is not any rea- son to relieve a man against any deed or agreement gained from him when in those circumstances ; for this were to encourage drunkenness : but it would be otherwise, if through the management or contrivance of him who gained the deed, &c. the party from whom such deed had been gained was drawn in to drink ^ 3. If a man, by duress of imprisonment, or by threats, and fear of bodily harm, enter into a contract, it seems that it is voidable^ ; but contracts made under such con- straint will remain valid until avoided by the party in- jured. 4. Contracts for the sale and purcliase of goods by per- sons attainted are absolutely void ; for by the conviction all their personal property becomes forfeited to the crown. ' Slanr.ing; v. Stvl<^, .3 P. W^ms. 335. <= Bract, lib. iii." 100. Fitz. N. B. 232. 4 Co. 126. 3 Bui. N. P. 168. * Perk. s.25. 5 Per Sir Joseph Jckyll, at the Rolls, Johnson v, Mcdlicott, May 29th, i7,S-l. 3 P. Wm?. 130 (A). 6 2 Inst. 4.S3. 3 Rol. Abr. 687. 3. Of Sale and Purchase of Goods. IS7 3. Of- Contracts ly Infants. In goneral,. all contracts entered into with an infant will not bind him, except for diet, lodging-, apparel, physic, and such other necessaries ; as also for his teaching and instruction '. 3ut though an infant is liable for necessaries, yet if he enters into a bond with a penalty for the payment there- of, he will not be liable*. However, if he should give a single bond for such necessaries ', or a bill of exchange or promissory note for their value •♦, he will be bound by it. But he will not be liable as acceptbr of a bill of exchange, altliough the ground of his acceptance should have been for necessaries furnished to him''. Neither is he liable for money lent to him to purchase necessaries, although the money was actually expended in the purchase of necessa- ries ''. Nor upon an account stated, though all the items in the account are ruicessaries''. Nor for goods purchased id trade with^, or for work done for him in the course of his trade '^, although he gains his living by carrying on trade. Neither is instruction in a trade a sufficient consi- deration to bind an infant '°. As to the question, what things shall be deemed necessa- • Co. Lit. 172, Pickering; v. nuniiing, Palm. 528. "- Aviiffv. Archdale, Cro. Eliz. 920. 3 Hufsel V. Lep, I Lev. 86. 4 Ibid. Ayliffv. Archdale,ut supra. Earle v. Pcalc, 10 Mod. 6T. 5 Williamson v. Watts, 1 Camp. 562. « Darby v. Boucher, 1 Salk. 279. Probart v. Knouth, 2 Esp. N. P. C. 472. n. But under surh circumstances the lender would in equity be entitled to I'estovcr against the infant; courts of equity holding that in such cases the lender stands in tho))lacc of the person furnishing the necessaries. MrtrloW T. Pitfield, I P. Williams, 558. 7 Triieman v. Hurst, 1 T. Jl. 40. 8 Whiftingham v. irill,Cro. Jac. 491. Wh-vwall v. Champion. 2 Str. lOS.*?. 9 Di!k V. Keighley, 2 Esp. N. P. C. 481. " »" I Keb. 446. ries. 1S8 Of Mercantile Contracts for the vies, in order to chars^e an infant, it has been held liiat sncli things only as are suitable to his rerJ circumstances, and not with his appearance or station in life, are to be so con- sidered. And therefore where an infant, v ho was a lieute- nant in i\\Q army, had been furnished with clothes proper for a man of figure aiid fortune, they were not held to be necessaries '. So, where the defendant, who was one of the gentlemen of ihe chamber to the Earl of Essex, had been s'k plieil with clothes, part fustian suits, a:id part yelvet and satin suits laced with gold, the Court held tlmt the suits of velvet and satin were not necessary for an in- fant, although he was a gentleman ^. So w here the infant, an officer in the army, had orders d a livery for his servant, and cockades for some of the soldieis of his company, the cockades were held not to be netessary '. In the case of Ford v. Fothergill, Lord Kenyon said, the question of necessaries was a relative fact to be governed by the fortune aiid circumstances of the i;if at. Necessaries for an infant's wife are necessaries for him ; but if provided in order to the marriage, he is not charge- able, though slie uses them "*. Money lent to an infant to procure his liberation from an arrest may come under the description of necessaries ; and may be recoverable in assumpsit, if it appears that he was in custody for a debt for necessaries, or in execution '. But tliongli an infant is not liable on his contracts for things which are not necessaries, yet if after he comes of age he expressly promises to pay, the subsequent promise "will operate upon the preceding consideration ^ ; for he lias ' Foifl V. Fothrrrin, 1 F,.=p. N, P. C.^U. » Mackaicl v. liarli-lor, Cro. i liz. 583. 3 Hands v. Slancy, 8 T. R.578. * Ppri'rattC. J. in1\tr;;erv. Tri'.bv, I Sfr. 1G8. 5 Cl.irke V. Lesli?-, 5 lisp. N. P. C. i;8. * Sni'thf^rJon v. Wnitlisrk, 2 Str. 689. Hilling v. Hastings, 1 Ld. Raym. 3S9. Borihrt ick v. C uratiiL-rs, 1 T. R. 648. Cocksboft v. Bennett, S lb. 766. thereby Sale and Purchase of Goods. 189 tbeieby ratified the contract ; it being a general rule of law, that a moral obligation is a good consideration for an ex- press promise '. And thougli no subsequent promise will revive a void security, yet a security given by an infant^ which is voidable on account of his infancy, may be re- vived by a promise after he comes of age *. But to bind an infant on such a subsequent promise, it must be made volun- tarily, and with full knowledge that he then stood discharged by law ; for if the promise were extorted under the terror of an arrest, or given from an ignorance of the protection which the law affordtd, it will not be binding'. And in ail cases of subsequent promise, if the original transaction was not perfectly f lir, equity will give relief, if the infant is immediately on his coming of age entrapped into a ratifica- tion of the bargain ■♦. By the case of Thrupp v. Fielder ^, it appears, that pnymeiit of money generally, on account of a bill vvliich had been given during infincy, will not have the eifect of confirmifig the contract; bat that to re~ vive such liability, the promise must have been express ou the party's coming of Aul age. If the infant, on the attainment of his full age, promises to pay when he is able, the onus probandi of such ability lies on the j)l;n:itiff, who, in tiie absence of other prooi, may give evidence of ability, from the defendant's ostensi- ble appearance and circumstances in the world''. The privilege of infancy is personal, and no one can take an advantage of it but the infant himself: it cannot (here- fore be extended to the otlier contracting party, however injurious the execution of tiie'contract inny be to him "'. As an infant is not bound by his contract, if goods are ' Per Lord MaiipfieUl in Watson v. Turner, Bu!. N. P. 14T. " Per Ashhurst.T. in Coiksbott v. hcnnett, 2 Y. R. 766. 3 Hariner v. Killing, 5 lisp. N. P.C. lUV. 4 Urooke v. Gail v,? Atk, 35. 5 :> £bp. N. ]\ C. 6.'8. ° Coic V. Saxh-y, S Ibid. 1.59. ' Sniith V. Boweii, 1 Jlod. 'Jo. Holt v. Ward Clareacieux, a Str. 937. delivered 1 VO Of Mercaiitile Contracts j'or the (lelivcrcd to him upon a contract, and with a knowledge of liis infancy, they are not recoverable from him in any form of action. But if an infant, -without any contract, wih'ully take away the goods of another, or upon contract under false pretences, trover lies against him for the tort ^ But a plaintiff cannot convert an action founded on a contract in- to a tort, so as to charge an infant defendant. Therefore, w here the plaintiif declared that at the defendant's request he had delivered a mare to him, to be moderately ridden, and that the defejidant, maliciously intending, &c. wrong- fully and injuriously rode the mare so that she was da- maged, &c. ; it was held, that the defendant might plead liis infancy in bar, the action being founded on a con- tract ^ While an infant lives with and is properly maintained by his parent, he cannot in any case be liable even for ne- cessaries '. . But where a father vho is a subject of the enemy, unless under particular cir- cumstances that pro hac vice discharge him from the cha- racter of an enemy; such as his coming under a flag of truce, a cartel, a pass, or some other act of public autho- rity tiiat puts him in the king's peace pro hue vice. But otiierwise he is totally cxlex ! Even in the case of ran- soms ' Avhich W(!re contracts, but contracts arising ex jure belli, and tolerated as such, the enemy was not permitted to sue in his own proper person for the payment of the ran- som bill ; the payment was enforced by an action brou"Iit by the imprisoned hostage iu the Courts of his own coun- try for the recovery of his freedom. A state in which con- tracts cannot be enforced cannot be a state of legal com- merce. If the parties who arc to contract have no right to compel the performance of tlie contract, nor even to appear in a court of justice for that purpose, can there be a stronger proof that the law imposes a legal disability to contract ? To such transactions it givc^ no sanction ; they have no le- gal existence ; and the whole of such commerce is attempt- ed without its protection and against its authoritj-. Byn- kcrshoek expresses himself with great force upon this argu- ment in his first book, chapter 7, where he lays down that the legality of commerce and the mutual courts of justice are inseparable : he sajs, that cases of commerce are un- distinguishable from cases of any other species in this re- spect. Si liosti semel pcrmitfas actiones exercere, difficile ' By the .S:'d Geo. III. c. 66. it is en.nrtrd, tiiat the ransom or any con- tract entered into by any of liis majr.'ty's suhjcrts for the rins^rii rtf any ship or iiierehandize captured hy an enemy is unlawful; and tli;it all coir- tracls and securities for that purpose are abf;;)liitely void; and tii:itev;rv person entering into ■such ;i contrjict shall forfeit 500/. est 193 Of Mercantile Contracts for the est (listin^uerc ox qua causfi oriautur ; ncc poUii animad- veitorc illani distiuctioncm iinquam nsu fuisse servatain. But though all Lyiik. QuiPit. J. p. lib. i. c. 3. 2 Tiinson v. iMf rac, 9 East's Rep. 35. • .. So Sak and Purchase of Goods. 193 So ■where a trading with an alien enemy for specie and goods, to be brought from the enemy's country, in bis ihips, into our colonial ports, was licensed t)y the king's authority, it was held, that an insurance on the enemy's ship, as well as on the goods and specie put on board for the benefit of the British subjects, was incidentally legalized ; aiid that it was competent for the British agent of both par-? ties, in whose name the insurance was eifected, to sue upon the policy in time of war ; the trust not contravening any rule of law or of public policy, and there being no per- sonal disability in the plaintifion the record to sue '. But though a trading between belligerent nations is le- galized by the king's license, yet it will not have the effect of removing the personal disability of an alien enemy re- siding in the hostile country, flagrante bello, to sue in a British court, of justice ; and as the right to sue on a con- tract of sale is a chose in action, no action can be main- tained on his behalf by his assignee or trustee^. But if an alien enemy comes into this kingdom with a safe conduct, or by license, or under the king's protection, his disability to sue and be sued upon contracts relating to personal property is removed ' ; and it is not necessary to show an actual license in such case ; for, " if an alien ene- my comes here in time of war, and continues without dis- turbance, it shall be intended that he came with a li- cense •*." With respect to the contracts made by prisoners of war in this country, it seems from the leaning of tiie opinions of the Judges iii the caseof Sparenburgh v. Bannatyne, that ' Kensington v. Inj^iis, 8 East's Rc]). 913. ' Brandon v. Nesbitf, 6 T. R. 23. Biistow v. Tovrers, Tbtd. .S5. s W ells V. Williams, 1 Salk. 46. 1 Ld. Raym. 282. S. C. Usyaricha v, Noh'.e. 13 East's ftpp. 3.'«. * 1 Lutw. 3-1, 35. S. C. reco2;nised by Mr. Justice Rooke in Maria v. Hail, 1 Taunt. 33, n. ; and by Mr. Justice Heath in Sparenburgh v. Banna- tyue, 1 Bj3. andPul. 171. ^ o prisoners 194 Of Mercantile Cmtracts for the prisoners of war on their parole, by the license of the king, may make binding contracts. In that case, Lord Chief Justice Eyre said, " As to the grounds of policy, namely, that a benefit would result to the enemy from the plaintiff recovering ; it is a policy, perhaps doubtful, certainly re- mote, and which I do not hold to be satisfactory. I take the true ground upon which tl)e plea of alien enemy has been allowed is, that a man professing himself hostile to this country, and in a state of war with it, cannot be heard if he sue for tlie benefit and protection of our laws in the courts of this country. We do not allow even our own subjects to demand the benefit of the law in our courts, if they refuse to submit to the law and jurisdiction of our courts. Such is the case of an outlaw. Modern civiliza- tion has introduced great qualifications to soften the rigours of war, and allows a degree of intercourse with enemies, and particularly with prisoners of war, which can hardly be carried on without the assistance of our courts of justice. It is not therefore good policy to encourage these strict no- tions, which are insisted on contrary to morality and public convenience." So from the above cases of Sparenburgh v. Bannatyne, and Maria v. Hall, it appears, that a prisoner of war, whe- ther an alien enemy or a neutral subject taken in the service of a hostile power, may sue for a remuneration for his per- sonal labour performed for a subject of this country. And this is sanctioned by the authority of Grot i us ' and Pufrendorf^ As to the law respecting contracts entered into by part- ners and agents, see those respective heads. » De Jure B. ac P. lib. iii. c. 21. s. 2S. ' Lib. viii. c. 7. s. 14. Sr.CTIO.V Sale and Purchase of Goods, 195 SECTION II. OF THE .SUBJECT MATTER OF A CONTRACT. All tbings may legally be the subject matter of a contract if founded on a sufficient consideration, unless the execu- tion of such contract is contrary to public policy, or the principles of morality, or in contravention of the express statutes made for the regulation of particular trades. Among contracts contrary to public policy, is that of buying and selling the current coin of the realm for more than its denomination. By statutes 5 and 6 Edw. VI. c. 19. it is enacted, that if any person or persons exchange any coined gold, coined silver, or money, giving, receiv- ing, or paying any more in value, benefit, profit, or ad- vantage for it, than the same is or shall be declared by the king's majesty's proclamation to be current within this his highness's realm and other his dominions, that then all the said coined gold, silver, and money so exchanged, and every part and parcel thereof, shall be forfeited, and the parties so offending shall suffer imprisonment by the space of one whole year, and make fine at the king's pleasure. In the case of the King v. De Yonge, 14 East's Rep. 402. it was decided, that to purchase guineas at a higher rate than the current value, in bank of England notes, is not an offence within the meaning of this act. But by Lord Stanhope's temporary act ' , to receive or pay for any gold coin current within tlie realm more than its true and lawful value, whether such value or advantage be paid or taken in lawful money, or in notes or bills of the bank of England, or in silver tokens, or any other means or contrivance whatsoever, is a misdemeanour. » 51 Geo. III. c. 127. o 2 It 196 Of Mercantile Contracts for the It is also contrary to the policy of our law to ffive eflfect to any contract the object of which is to foicstall the mfir- ket, regratc, or ingross the article bouglit. And (herefuie, where goods are bought or contracted to be bought with such an intent, the contract is not only illegal and void, but no action is maintainable for the non-performance ot it '. The agreement must not be contaminated with, or arise out of, an illegal transaction. And therefore no contract can be given effect to, which originates in an act contrary to the statute 7 Geo. II. c. 8. s. 5. (an act to prevent stock-jobbing,) which enacts, that all contracts to deliver, accept, or refuse any stock or share therein, of which stock or share therein the contracting parties are not actually pos- sessed or entitled to, shall be void, and the persons entering into such contract, and t!ie brokers negotiating the same, subject to a penahy of 500/. On this statute it has been decided, that if A., who was employed as a broker for B. in stock-jobbing transactions, paid the differences for him ; but a dispute arising between them respecting the amount of A.'s demand, the matter was referred to C, who awarded oQOl. to be paid; on which A. drew on B. for 100/. part of the above, and in- dorsed the bill to C. after B. had accepted it : C. could not recover on tlic bill ^. But though payment of the differences, or of a bill given for the differences, cannot be enforced ; yet if mon(?y is lent for that purpose, it may be recovered notwithstanding the statute 7 Geo. II. Thus, if two persons jointly engage in a stock-jobbing transaction, and incur losses, and employ a broker to pay the differences, and one of them pays the » 1 Hawk. p. C. c. 80. Rex v. Waddington, 1 East's Rep. 142, 167. 2 Steers v. Lashley, 6 T. R. 61. broker, Sale arid Purchase of Goods, 197 broker, -with the privity and consent of the other, (he whole sum, he may recover a moiety from the other in an action for monc^y paid to his use '. Neither does the statute ex- tend to invalidate a bond given for reimbursing a com- pounder of diffi'rences, mIio had paid mom'y for himself and another jointly concerned with him, the sura he had paid on that other person's account^. So no action can be supported on any contract made con- trary to the statute 6 Geo. I. c. IS. the twelfth section of which directs, tliat societies and partnerships (except the two cor- porations mentioned therein) sliall be restrained from under- writing any policy, or making any contract of assurance ; and if any person acting in such society or partnership shall pre- sume to underwrite any such policy, or make any contract of assurance, every such policy siiall be void, and the sum underwritten shall be forfeited . And therefore a contract for a marine insurance in which the plaintiff did not alone stand the risk insured, but associated one or more in partnership with him, cannot be enforced K And although one partner in such illegal in- surances has paid the wliole of the h)ss, he will not be allowed to recover any part of the premiums from his co- partners ■♦. A contract for the shipment of goods to the East Indies is void by the stat. 7 Geo. I. c. 21., which declares that all contracts and agreements whatsoever made by any of his majesty's subjects for the loan of any money by way of bottomry, " on any ship or ships in the service of foreign- ers and bound or designed to trade to the East Indies, and all contracts and agrecinents made by any of his majesty's ' Petriev. HannaY,3 T. R. 418. * Faikncy v. Reynous, t Bur.2069, 5 Sullivan V. Greaves, Sittings after E. T. 1789. ♦ iiooih V. iJodgsoi), 6 T. R. 403. Mitchell v. Cockburn, 2 Hen. Bl. 379. subjects^ 1S8 Of Mercantile Contracts for the subjects, or any person or persons in trust for them, for tlic loading or supplying any such ship or ships with a cargo or lading of any sort of goods, merchandize, &c. shall be void'." Neitlier can contracts made in violation of the revenue laws be made the subject of complaint in a court of jus- tice, llencc, Avhcre an agreement was made between two I)arties subjects of this country, for the sale and delivery of gooils in Guernsey, for the purpose of being smuggled into Enghlnd, it was held that the vendor could not maintain an action for Vae value of (he goods *. And in a subsequent case it was decided, that the circumstance of the vendor being an inhabitant of Guernsey would not vary the case, for he was still an inhabitant of this country ^. So where the vendor was concerned in giving assistance to the vendee to smuggle goods, by packing them in the manner most suitable for and w ith intent to aid that pur-, pose, although the vendor was a foreigner resident abroad, and the sale and delivery of the goods were completed abroad, it was held, that the vendor could not resort to the laws of this country io give effect to his agreement +. But tlie rhere knowledge of (he vendor that the goods were pur- chased for the purpose of being smuggled is not sufficient to prevent his recovering in an action for the price of the goods, if the vendor was a foreigner resident abroad, and the sale and delivery were completed abroad \ Contracts in restraint of the general freedom of trade are also contrary to public policy. But an agreement not to use a trade in a particular place is legal ''. And therefore where a contract was entered into by a practising attorney, > Li^htfoot V. Tenant, 1 Bos. and Pul. 551. » Bigss '• Lawrence, :5 T. R. 454. 3 chigas v. Panalnma, 4 T. R.467. 4 Waymoll v. Head, 5 T. R. 509. s Holman v. Johnson, Cowp. 341. « MUchell V. Reynolds, 1 P. Wms. 181. Broad v. Jollyfc, Cro. Jac. 596, that Sale and Purchase of Goods, Vj^ that he would relinquish and make over to B. and G. i\io other aliorneys, his business as an attorney, as far as respected his practice in the profession within London, and one hundred and fifty miles from thence, and all his business as agent for any attorney, and that he would re- commend his clients and permit B. and G. to use his name in the business, has been held valid '. No action can be supported on a contract contrary to the principles of morality ; for the law prohibits every thing contra bonos mores, and ex turpi causa non oritur actio ; or, in the elegant paraphrase of Lord Mansfield, justice must be drawn from pure fountains. And therefore the value of prints on obscene and immoral subjects is not recoverable ^. Neither can a contract for articles of dress % or for board and lodging^ , if furnished for the purpose of enabling the defendants to carry on the business of prosti- tution, be enforced. It is to be observed, however, that to relieve the defendant from tiie obligation of fulfilling the contract on kcr part, it must appear that the clothes were ' supplied, and the board and lodging furnished, in further- ance of the defendant's immoral way of life : a mere know- ledge of that fact will not produce such an effect 5; which distinction was also taken by Lord Chief Justice Eyre in Crisp V. Churchill, E. 34 Geo. IIL cited in Lloyd v. John- son, 1 Bos. and Pul. 340, in which latter case a prostitute was held liable for washing done for her. It remains to speak of contracts entered into in contra- vention of statutes made expressly for the regulation of particular trades. Much of the matter referable to this head having been ' Bunn V. Gay, 4 East's Rep. 190. ^ Fores v. Jolines, Esq, 4 Esp. N. P. C. 97. 3 Bowry v. Bennt-t, spinster, I Camp. N. P. C. 3^8. *Girardv v. Richardson, 1 Esp. N. P. C. 13. Howard v. Hodges, cited in 1 Sclw.N. P. 79. » Per Lord Llleiiboroiigh in Bowry v. Bennct. necessarily 200 Of Mercantile Contracts for the necessarily treated of in other parts of this work, little re* mains to be enlarged upon here. It remains merely to observe, that whenever tl^e sale or manufacture of any article is prohibited by any statute, except in the manner prescribed, no action can be maintained upon any contract for the sale of such article, unless the requisites of the sta- tute have been complied with : and therefore if such article has been delivered to the vendee, it cannot be recovered from him in any form of action : it is a mere gift '. But if a sale has been made in breacli of an act of par- liament, containing mere revenue regulations, which are pro- tected by a specific penalty, and there being no clause in the act making the contract of sale illegal, such sale is valid. And therefore an omission to take out a license for liberty to deal in exciseable goods will be no objection to an action for the recovery of the price agreed for on the sale of them *. We shall close this division of our subject with a brief exposition of fraudulent contracts. The agreement must be fair and honest, and not entered into for a fraudulent purpose ; for no action can be main- tained for the breach of a fraudulent contract. Thus, if all the creditors of an insolvent debtor consent to accept a com- position for their respective demands upon an assignment of his effects by a deed of trust, to which they are all par- ties, and one of them, before he executes, obtains from the insolvent a promissory note for the residue of his demand, by refusing to execute till such note be given ; the note is void in law, as a fraud on the rest of the creditors; and a sub- sequent promise to pay it is a promise without considera- tion, which will not maintain an action'. The same principle was established in Jackson v. Lo- i Law V. Hodgson, 1 1 East's Rep. 300. » Johnson v. Hudson, Ibid. 182. 3 Cockshott V. Bennet, 2 T. R. 763. mas; Sale and Purchase of Goods. 201 nias '; in Avliich case an insolvent had assigned over his ef- fects for the benefit of his creditors, and in tlie deed tliere was a proviso that the shares of those en ditors who did not execute it before a given day should be paid to tlie insol- vent ; it was held that an agreement made between the in- solvent and a creditor after that day, that the latter should sign the deed, and the former pay the remainder of the whole debt, was fraudulent and void. So where A. having given B. a sum of money for goods in advancement of C, a secret agreement between B. and C, that C. should pay B. a further sum for the goods, was held to be void, on the ground that it was a fraud upon A.* So where a trust deed was proposed to the creditors of an insolvent, a\ hereby they all engaged to accept payment of their debts by six instalments, the first four of which were guarantied by collateral security, the two last to remain upon the single security of the insolvent; but several of the creditors refusing to sign unless the plaintiiTsdid, the plain- tiffs stipulated privately with the insolvent, as the condition of their signature, that he should procure them collateral security for the two last instalments as well as the two prior ones ; and upon the faith of sucli private agreement the plaintiffs signed the trust deed, which the other creditors did also, but without a knowledge of the private agreement : such private agreement was held to be a fraud against the other creditors, and void, although the efiect of it was not to secure to the plaintiffs the payment of more money than the other creditors were to receive, but only further gecurity for the same sum ^ ' 4 T. R. 166. " Jackson v. Diichaire, S Ibid. 551. 3 Leicester v. Rose, 4 East's Rep. 31 1 . SECTION 202 Of Mercantile Contract% for the SECTION III. OF THE ASSENT TO OR ACCEPTANCE OF A CONTRACT. la contracts or bargains for the sale and purchase of goods, where the contract or bargain is not to be presently executed by a simultaneous or consecutive payment or delivery to fix the contract, and transmute the property, the assent of the contracting parties is regulated by the sta- tute of frauds '. Before this statute, a bargain for the sale and purchase of goods at a future stipulated time, provided there was a quid pro quo, or that motive or consideration which our law requires to raise an actionable demand upon any contract, was unrestricted in distance of time, and not necessary to be accompanied and ascertained by those acts of payment, or delivery of part, or the whole, of the thing contracted for, which, in contracts or bargains to be pre- sently executed, were necessary to their obligation and com- pletion, and to the legal alteration of property in the sub- ject of the contracting parties *. We sliall consider the nature of an assent to a contract in a threefold, point of view : — 1 . for the sale of goods in pos- session ; 2. for the sale of goods not in possession ; and 5. for the sale of goods on condition, or on sale and return. 1 . Tor the Sale of Goods not in Possession. By the common law, upon all sales of goods the property was immediately vested in the vendee upon the making of the contract, although the actual possession was not obtained by him until tlie fulfilment of the stipulated terms. But by the statute of frauds^ it is enacted, " That no contract for the sale of any goods, wares, or merchandizes to the price of ten pounds and upwards, shall be good, except the buyer ' 29 Car. II. c. 3. *" Roberts on Frauds, 165. 3 29 Car. II. c. 3. s,. 17. shall Sale and Purchase of Goods. 203 shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the bargain, or in part of payment ; or that some note or memorandum, in writing, of the said bargain, be made and signed by the parties to be cliarged by sucli contract, or their agents thereunto lawfully authoyiscd." And by the fourth section of the same statute all executory contracts which are not performed within one year from the making, whether for the sale of goods (whatever may be the value), or the doing of any other act, must be in writing ; it being enacted, " That no action shall be brought whereby to clmrge any person upon any agreeinent that is not to be performed within the space of one year from the making thereof, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorised." In the exposition of the seventeenth clause of this statute, it has been determined, that executory contracts, that is, "where the goods contracted for are to be delivered at a fu- ture time, are within the statute, as well as such as are to be completed immediately ; and consequently if tlie requi- sites of the statutes have not been complied with, viz. nei- ther earnest, delivery of a part of the goods, nor agreement in writing, such contracts are void ' . The fourth clause of the statute is confined to those cases where it clearly appears from the tenor of the agreement to have been tlie understanding of the parties, tliat the con- tract was not to be completed within a year from the time of making it^ ; but it does not extend to such contracts as depend upon a contingency, and which by possibility, and « Rondeau v. Wyaft, 2 Hen. Bl. 63, Alexander v. Comhor, 1 Ibid. 20. Cooper V. Elston, 1 T. R. 14. •^ 11 East, 14a. in 204; Of Mercantile Contracts for the in the contemplation of the parties, may be performed withia the 3 car, though the conlino^ency on which they depend does not, in fact, happen within that time ; for '* a contin- g-ency isnotwithin theintent of the statute, nor any casewhich depends upon a contingency. It docs not extend to cases where the thing only may be performed within the year '." So, if the subject of the contract is not in esse, and capa- ble of an immediate delivery at the time of contracting; as where the contract was for a chariot to be made *, or for corn to be threshed ', or fur a waggon to be made •* ; or for a barge to be built ' ; or for a crop of grass, which at the time of the bargain for the sale of it was unsevered ^ ; such contracts are not within the statute, and therefore will be valid, notwithstanding its requisites have not been complied with. And in these cases no property vests in the vendee until the thing contracted for acquire the character in which it is to be delivered, and that although the whole price has been paid in advance '. But as soon as the thing contracted for is complete and ready for delivery, the vendee is enti- tled, on tender of the price, to the goods, and the vendor, to the price, on tender of the goods ^. But if it appears to have been the understanding of the parties contracting, that the contract was not to be com- pleted within a year, though it might and was in fact part performed within that time, it is within the statute, and if not in writing, &c. cannot be enforced*^. The next consideration is what may be considered a sufficient acceptance within the statute. ' Per Dennison J. in Fenton v. Emblers, 3 Bur. 1281. * Towers V. Sir John Osborne, 1 Str. 606. 3 Clayton V. Andrews, 4 liur. 2001. 4 Duinnore'v. Tavlor, IVake's N- P. C. 41. SMucklowv. MansKs, I Taunt. 318. « Crosby v. Wordsworth, 6 least's Hep. 60?. 7 Muckiow V. Mans;les I Taunt. 318. » 1 Sir. 506. Noy'sMax. c. 42, » Boydell t. Drummond, 11 Last's Hop. 14'2. Where Sale and Purchase of Goods. ^Qj Where the goods are ponderous and incapable of an actual delivery, it may be done by something that is tan- tamount : a symbolical delivery, as of the key of (he ware- house in which the goods are lodged, or other indicia of the property, will satisfy the slafute '. So also a constructive delivery may arise from words, as where the vendee desires the vendor to keep the goods b;ir- gained for in his possession for an especial purpose, and the vendor accepts the order ; this is a sufficient delivery within the statute ^. . , A written order given by the seller of goods to the buyer, directing the person (viz. the wharfinger or warehouseman) in whoi»e custody the goods are, to deliver them to the ven- dee, is a sufficient delivery within the statute ^ : and that whether a transfer is made into the name of the purchaser in the v^harfinger or warehouseman's books or not^. So it seeiuSj that if the goods bargained for remain in the hands of the vendor, tlie acceptance of warehouse-rent for them afier the period when they ouglit to have been taken away, according to the terms of the sale, amounts to a com- plete transfer of tliem to the purcliaser, and consequently a delivery within the statute ^ It has also been decided, that while the goods remain in the custody of the vendor, if the purchaser, with the know- ledge and approbation of (he vendor, exercises any act of ownership over them, as by a resale to a third person, it will amount to a delivery and acceptance within (he sta- tute ^ So if a purchaser write his name or initials on the goods ' Chaplin v. Ro2:ers, 1 East's Rpp. 192. ' Elmore V. Stone, 1 Taunt. 458. 3 Scrle V. Koeves, « Esp. N. P. C. 593, ♦ Harman v. Anderson, ^ Camp. N. P. C. 245. | 5 Hnrry v. lMano;les, I Ibid. 452. 6 Chaplin v. Rogers, I East's Rep. 192. bargained 206 Of Mercantile Conlractsfor the bargained for, or the same be done by his order' ; or if he accv pis and actually receives a sample Avliich is absolutely part of the commodity sold*; or if the goods be vveiglied for the purpose of delivery, though put into another vessel than that -which the vendee desired ^ ; such conduct Avill be a sufficient delivery and acceplance to satisfy the statute. But to constitute an acceptance -vvithin the statute, such acceptance must have been made in affirmance, and with a view to the performance, of tlie contract ; and therefore, if, on examination, the goods, being found to be inferior iir quality to those ordered, are returned to the vendor, it will not amount to a sufficient acceptance by the vendee so as io render him liable for their value*. As to what shall be deemed sufficient earnest to bind the bargain, Mr. Justice Blackstone says, " that if any part of the price is paid, if it is but a penny, or any portion of the goods delivered, the property is bound ^." From the word- ing of the statute, however, which speaks of a partial deli- very o£ the goods, or the giving of somelhing in earnest, or in part of payment, it does not aprx'ar absolutely that the. earnest must consist of money : the deposit of a ring, a glove, or any otlicr article, would, it should seem, equally satisfy the statute. The third requisite enjoined by the statute, in order to render valid a contract for the sale of goods above the value of ten pounds, and for which immediate payment lias not been made, is, " that a sufficient note or memorandum in writing of the bargain must be signed by the party souglit to he charged by the contract, or by his agent thereunto lawfully authorized." > Hocison V, Le Bret, 1 Camp. N. P. C. 233. Anderson v. Scott, Ibid. 235. ^ Hinde v. Whitehojic and Galan, T Eusfs Rep. 55S. Klinitzv. Surry, 5 j'.tp. N. P. C. 267. 3 1 "Bl. Rep. 600. •» Kent v. Huskinson, 3 Bos. and Pul. 233- 5 2 B). Com. 44".- But Sale and Purchase of Goods. 207 But tlioiigli the signature of tlie party to be charged, or of his agent, is required by the statute, and that otherwise the bargain will be void ; yet it has been held, that the sig- nature of the party seeking the benelit of such a contract is not necessary '. The names, however, of botli the contracting parties must appear (tlie name of the purchaser as well as that of the seller) either on the face of the memorandum, or in some- thing which is tliereby referred to, or connected wilh it by legal reference. And therefore, where a note was made by the plaintill's clerk in a common memorandum book, spe- cifying the quantity of the commodity purchased, the price, and time of delivery, and in which note the commodity w a^ stated to be bought of the vendor, without saying by whom ; it was held, that the vendee was not entitled to the beueiit of his contract -. As to what is a sufficient wriUng willi'n the intent of the statute, it seems, that the writing or printing (as the deli- very of an invoice or a printed bill of parcels) of the party's name, on any part of Oie memorandum of the contract, will be considered as a signature K So if an agreement is drawn up in the party's own hand-writing, beginning " I ^. B. agree," and a place is left at the bottom for a signature, but which is never signed, it may be considered as a note or me- morandum within the statute^. The initials of the party also are considered as a sufficient signature to satisfy the sta- tute 5. A letter containing the terms of an agreement, or wliich upon the face of it refers (6 any other writing which docs, amounts to a suihcient memorandum, or note in writiiii!,-, ' E,;^(>rton V. Matthews, 6 East's Rep. 306. " Ch-rimpion v. PUiininer, 5 tsp. .\. P C. 2iC}. 2 Saimders;;ii v. .7ac! i5os. and Pul. 2^8. « Per Lord 5 Idon in Co!e,s v. Trecothick, 9 Vf-s. Jun g'M. 3 Welford v. Beazelny, I Ves. 6. * Coles v. Trecothick, ut ante. S Lemayne v- Staii't-y, .'i Lev. 1. * Simon V. IMetivier, 1 iii. Re).). 599, Emiaeraoti v. Hcelis, 2 Taunt. 33. buted Sale and Purchase of Goods . 209 buleJ printed catalogues of sale, at the time of the sale read from a w ritJeii paper the conditions on which the goods enu- luerated in the catilogiie were to be sold ; it Mas held, that the \Nriting of t!ie i)urchaser's name in such catalogue by. the auctioneer, against the lot purchased, would not binji> the purchaser, the two papers being neitlier externally an- nexed Jior containing aiiy internal reference to each otlier '. So where a broker is authorised by one man to sell goods, and to buy such goods for another, an entry in his books ftf a sale of these goo:ls from one to the other, signed by hiiu, is a binding contract between the parties, without any bought and sold note being sent to them ; for the sending of such note is not for tiieir approbation, but only to inform them of the terras of the contract ^. But a memoranduin of the sale of goods cannot be signed hy one of the contracting parties, as the authorised agent of the other : tiie agent must be a third person '. As to the manner of appointing such agent, it has been repeatedly decided, that a parol appointment is sufficient "♦; and that the authority need not be given for a particular purpose : a general authority is sufficient. And such authority may be countermanded at any time before a memorandum of the contract of sale is written and signed by the broker ; although he has previously entered into a verbal agreement to sell the goods K A power to contract does not seem. to come within the scope of the general authority of a mercantile clerk or agent, unless specially authorised for that purpose. We have seen, that at common law, upon all sales of goods, the property was immediately vested in the vendee ' Hind? V. Whiteliouse, T East's Rep. 558; and see Bojdell v. Drummond, 11 lhid.142. ' Hevman v. Ncale, 2 Camp. N. P C. 337. 3 Wright V. Dannah, Ibid. yO'2. « Chapman v. Partridjce, 5 Esp. N. P. C. 253. .« Farmer v. Robinson, 2 Cainp. a*J. P. C. 339. F upon 2 10 Of Mercantile Conirnctsfor the upon the making of the contract : where the requisitions of the contract have been complied uith, the effect is similar, the property is changed, and absolutely vests in the vendee from the time of the sale, and remains at his risk, although no actual change of possession should have taken place. And therefore, whatever damage may happen to the goods while in the vejidor's possession, the loss will fall upon the purchaser'. But this is to be understood only where no act remains to be done on the part of the vendor ; for where any act of the seller, such as counting, weighing, filling up, &c. re- mains to be done for the purpose of ascertaining the exact quantity sold, the property in the goods does not vest ab- solutely in the vendee, before the counting, weighing, &c. which was to precede the delivery, and to ascertain the price ; but, till such act is done, remains at the risk of the vendor^. Thus, where a sale note for the purchase of Miy tuns of Greenland oil was delivered by the seller's broker to the purchasers, to be paid for by their acceptance, payable at a future day ; and they afterwards received from the sellers an order from their wharfingers for the delivery of the fifty out of ninety tuns of their oil ; yet as the custom of the trade was for the casks to be searched by the sellers' cooper, and for a broker on behalf of both parties to ascertain the foot dirt and water in each, (for which allowance was to be made) and then the casks were to be filled up by the sellers' cooper at their expense ; all which was to precede the delivery to the buyer : it was held that the sale was not complete to pass the property, but that the sellers, on the insolvency and subsequent bankruptcy of the buyers, before such acts done and delivery made, might countermand it'. > PhiUimore v, Barry, 1 Camp. N. P. C. 573. 'Hanson V. Meyer, 6 East's Rep. 614. RugJ v. Minett, 11 Ibid. 2U>. Zagury V. Furnell, 2 Camp. N. P. C. 240. 3 V^^allace v. Breeds, 13 East's Rep. 522. But Sale and Purchase of Goods. 211 But altliough some act remains to be done between the vendor and the persons who retain the custody of the goods, for the purpose of ascertaining either the quantity or the price; yet ifnosnchact remains to be done Ijctween the vendor and vendee to perfect the sale, the sale is complete. Therefore where A., having forty tuns of oil in a cistern, sold ten tuns to B. and received the price, and 13. sold the same to C. and took his acceptance for the same at four months, and gave liim a written order on A. for delivery, who wrote and sio-ned his acceptance upon the said order ; but no actual delivery was made of the ten tuns, which con- tinued mixed with the rest in A.'s cistern ; it was IvAd to be a complete sale and delivery in law of the ten tuns by B. to C. ; nothing remaining to be done on the part of the seller, though, as between him and A., it remained to be mea- sured off'. 2. For the Sale of Goods not in Possession. Among mercantile men it is usual to contract for the sale of goods which they have reason to expect -^vill be consign- ed to them by their correspondents abroad. And in this case the contract is complete, though the execution of it is suspended. Thus, if a contract is entered into for the sale of goods by a particular ship on arrival, it means on the arrival of the goods which the ship is expected to bring ; and if the ship arrives empty, without any default upon the pari of the vendor, he is not liable to the purchaser for the non- delivery of the goods ^. So, if the vendor contract for the sale of all the gooJs which his agents abroad may send by certain vessels, yet lie will not be answerable to the vendee for more than has been actually shipped on his account. Thus, A. sold to » Wliitehouse v. Frost, 12 East's Rep. fil4. » Boyd V. Siffkin, 2 Camp, N. P. C.-32T p 2 B. all 212 Of Mercantile Contracts for the B. all the hemp Hiat might be shipped on board certain vessels at Ria^a, not exceeding three Imndred tons, by C. the agent of the concern. C. shipped on board these ves- sels only sevcnt3'-one tons of hemp on account of A. ; but upwards of three hundred tons on account of other persons. Held, that the contract must be confined to such hemp as C. should ship as agent to A. ; and that A. was not answer- able to B. for more than seventy-one tons'. But in contracts of this kind, if the vendor absolutely engages that tlie goods agreed to be sold shall actually be shipped, and the shipment is prevented by the seizure and condemnation of them as enemy's property, he will be obliged to make good the contract *. 3. For the Sale of Goods on Condition^ or on Sale and Return. If goods are sold for such a price as A. shall name, when A. shall have fixed the price, the contract is complete ; and if the vendor sells the goods between the time of the contract and the ascertainment of tlie price, an action on the case lies against him' . But if the contract becomes impossible by the act of God, or of the person who was to name the price, as by his death, refusal, or the like, the contract is absolutely void •*. W licre goods are sold upon sale or return, no property in such goods vests in the conditional vendee, until the completion of the condidon of the resale. But though, whilst the goods remain unsold in the hands of such condi- tional vendee, no absolute property vests in him ; yet, un- der the statute 21 Jac. I. c. 19. s. 11. they will pass by as- signment under a commission of batikruptcy against him, as goods in his possession, order, and disposition ^ If goods be sold to a trader, with a proviso, that in case ' Hay ward v. Srougall, 2 Camp. N. P. C 56. ' Splidtv. Heath and others, Guildhall Sitt. March 7th, 1809, 2 Camp. N. P. C. 57.n. 3 Kit. 181. ♦ Co. Lit. 206. b. 5 Livesay v. Hood, 2 Camp. N. P. C. 83. of Sale afid Purchase of Goods. 123 of bankruptcy the vendor may retake them, such a condi- tion is void under the statute 21 Jac. J. c. 18. s. 11. if the goods remain under the control and disposition of the ])ankrupt ' ; for the statute enacts, " that if any persons shall become bankrupt, and at such time as they shall so become bankrupt, shall, by the consent and permission of the true owner and proprietors, have in their possession, order, and disposition, any goods or chattels Avheieof they shall be reputed owners, and take upon themselves the sale, alteration, or disposition as owners ; that in any such case the commissioners, or the greater part of them, shall have power to sell and dispose of the same, to and for the benefit of the creditors who shall seek relief by the commission, as fully as any other part of the estate of the bankrupt." SECTION IV. OF THE TIME WHEN A CONTRACT MAY BE MADE. By the statute 29 Car. II. c. 7. s. 1. it is enacted, that no person or persons whatever shall publicly cry, show forth, or expose to sale, any wares, merchandizes, goods, o" chattels whatsoever, upon the Lord's day. But it has been held, that a sale of goods made on a Sunday, which is not made in the exercise of the ordinary calling of the vendor, or his agent, is neither void at common law nor by the statute. Thus, where it appeared that the plaintiff, who was a banker by trade, had sent his horse to one Hull, who kept a commission sial)le for the sale of horses by auction, for the purpose of being sold ; and that the defendant came on a Sunday to the stable, and, after having tried the horse, requested that he might carry it to show to a Major Mac- kensie, that he might try it. Hull told him that the price of the horse at the hammer was a hundred guineas, but if the defendant would bring him back 100/. it would suffice. That he must either bring 100/. or return the horse by two ' Holroyd v. Gwynne, 2 Taunt. 1.7S. o'clock 214; Of Mercantile Contracts for the o'clock at the furthest ; and that if the defendant did not re- turn it by two o'clock, the horse should be his own. The horse not being brought back till eight o'clock, Hull refused to receive it, and insisted tiiat the sale was complete at two o'clock. To bring this case within the act, said Sir James Mansfield, we must pronounce tliat either Drury or Hull worked within their ordinary callings on the Sunday. But the sale of horses by private contract was not Drury's ordi- nary calling, nor was it Hull's ; his calling was that of a horse-auctioneer, and he was not within his ordinary calling in selling this horse by private contract; and therefore, al- though it is to be lamented, the sale must be held good '< SECTION V. OF THE PLACE WHERE A CONTRACT MAY BE MADE. As property may in some cases be transferred by sale, though the vendor has none at all in the goods, it is expedient that sufficient notoriety should attend such sale as to secure the purchaser of his purchase. The general rule of law is, tiiat all sales and contracts of any thing vendible, in fairs or mar- kets overt, (that is open.) shall not only be good between tlie parties, but also be binding on all those that have any right or property therein -. And for this purpose, tlie Mirrour ' informs us, tolls were established in markets, viz. to testify the making of contracts ; for every private con- tract was discountenanced by law : insomuch that our Saxon ancestors prohibited the sale of any thing above the value of twenty-pence, unless in open market ; and di- rected every bargain and sale to be contracted in the pre- sence of credible witnesses'*. Market overt in the coun- try is held only on special days, provided for particular towns by charter or prescription ; but in London every ' Drurj' v.Defontaine, 1 Taunf. 135. 2 2 Inst. 113. 3 Cap. 1,8.3, * LL. lithds. 10,11. W ilk. 80. day, Sale and Purchase of Goods-. 215 Aay, except Sunday, is market-day '. The market-place, or spot of ground set apart by custom for the sale of par- ticular goods, is also in the country the only market-place; but in London every shop in which goods are exposed pub- licly to sale is market overt, for such things only as the owner professes to trade in ^ And therefore, if goods are stolen and sold openly in a scrivener's shop on the market- day, the property is not changed by the sale ; for a scri- vener's shop is not a market overt for plate; etsic de simili- bus'. Neither, had the sale been in the shop of a gold- smith, would it change the property, if it had been either behind a hanging, or in any secret manner, so that any that stood or passed by could not see it*. So, if the sale be not in the shop, but in the warehouse, or other place of the house, or where the windows of the shop are shut, the property will not be changed ^ Neither is property changed Avhich lias been sold to a bona fide purchaser, at a wharf where goods of the same sort are usually sold, if the sale lias been without the authority of the owner of the goods ^. And, even in market overt, if the goods be the property of the king, such sale (though regular in all other respects) will in no case bind him ; though it binds infants, femes coverts, idiots, and lunatics, and men beyond sea or in prison ". So likewise, if the buyer knows that the seller has no right ; or there be any fraud in the transaction ; or he knows the seller to be an infant, or ferae covert not usually trading for herself^ ; the owner's property is not bound thereby. Nor will this rule of market overt extend to cases where the treaty for the sale was begun out of mar- ket J for the sals must be originally and wholly made in the iair or market 'K Nor to sales not at the usual hours ; for though a sale made between sun-setting and sun-rising is ' See the case'; cited in 5 Co. 81, in notes. ^ 5 Co. 84. 3 Cro. Jac. ey. 4 5 Co. 84. 2 Rol. Abr. tit. Market Overt, 50. 5 Il)iJ. 6 Wilkinson v. King, -2 Camp. N. P. C. 333. 7 i> Inst. 7 J 3. « ibid. " 9 Ibid, binding 216 Of Mercantile Contracts for the binding between the parties, yet it will not divest the own- er's property in his goods'. Neither docs it extend to pa'.vns in market overt, for there can be no market overt lor pawning^. Also, by statute I Jac. I. c. 21. it is pro- vided, (hat the sale of any goods wrongfully taken to any pawnbroker in liondon, or within two miles thereof, shall not alter the properly : and therefore, if gooJs be stolen and pawned, the owner may maintain trover against the pawn- broker '. Nor ould not be afterwards j)ut io dilhculties by reason of the previous knavery of the seller'. But there is one species of personal chattels in which the ' 2 Inst. 713. " Harfop v. IIoarc,2 S«r. 1187. 1 Wils. 8. 3 Atk. 44. 3 Packer v. Gillies, ^2 Camp. N. P. C. "AM. n. 3 Hilt the statnie do s not i>rot<'ct ;!;()()(ls obtaincfl under fal;-p pretenrrs : and there fore, where goods so <;(>tainetl are pHwiieii, it seems that the paw- nee is rntiilod fo retain his lien aj^aiiist t!ie tnie ov^ ner, thoui'h he has prose- cuted the otl'eudcr to conviction. Parker v. Patrick, 5 T. ti. 175. <2Inst.7l:i. 5 It.id. 21ilen. Vlll.r. 11. " llorw ood V. >.mi.h, 2 T, R. 750. 7 2 Q\, Cora. 450. property Sale and Purchase of Goods. 217 property is not easily altered by sale, even in market ov( rt, without the express consent of the owner, and tliat is horses. For a purchaser gains no property in a horse that has beea stolen, unless it be boiiglit in a fair or market overt, accord- ing to the directions of the statutes 2 P. and M. c. 7. and 31 Eliz. c. 12. By these statutes it is enacted, that the horse shall be openly exposed, in the time of such fair or nia;kct, for one whole hour togetlier, between ten in the morning and sun-set, in an open part of the market to be set apait ■for that purpose ; and that all the parties to tlie bargain shall appear with the horse before the toll -gatherer, who must enter in a book the price, colour, and one mark at least of the horse^ with the names and dwelling-places of such parties properly attested. Nor shall such sale take away the property of the owner, if within six months af(( r the horse is stolen he puts in his claim before some magis- trate, where the horse shall be found; and, within forty days more, proves such his property by tlie oath of two wit- nesses, and tenders to the person in possession such price as he bona fide paid for him in market overt. And in case any one of the points before mentioned be i:ot observed, such sale is utterly void ; and the owner shall not lo.^e his property ; but, at any distance of time, may seize, or brin^ an action for his horse, wherever he happens to find him. SECTION VI. OF THE FULFILMENT OF THE CONTIIACT BY PAYMENT AND DELIVEUY. ]. ^s lo Delivery. As much of the matter v.hiGh is properly referable to the tide Delivery of Cioods has unavoidably been discussed in the third section of this chapter, little is left to be enlarged upon in this place. The cases, however, stated in that part of the work are only such as arose upon or out of the statute : 218 Of Mercantile Contracts for the statute: it remains to state what constitutes a delivery, in law. The making of goods to be delivered, or otherwise sepa- rating tlieni from a larger quantity, of which they formed a part, w ith a view to the delivery ' ; or the delivery of goods to a carrier to be forwarded to the vendee ^, and a fortiori, if delivered to a carrier named by the vendee ' ; or the de- livery of goods to a wharlinger •» ; have all been construed to be evidence of a delivery, and consequently to entitle the vendee to the price of the goods. So the shipment of goods, according to the order and on tlie account of the consignee, "will operate as a delivery K But the mere act of packing goods sold in cloths which liave been furnished by the vendee is no delivery ^\ It has been held, that where several articles have been or- dered at tiie same time, at separate and distinct prices, but forming one entire contract, (he vendor cannot by a deli- very of some of the articles entitle himself to the price of thciu separately, as in the case of a separate contract for each article: unless the veiidee accepts any one article so delivered ". 2. As to Payment. Where no time of payment is specified in the contract of sale, the money is demandable immediately upon the delivery of the goods*'. But wiiere the term of credit is specified, as where acceptances are given by the vendee for the value of the goods, or where a period is fixed for the payment, without the vendee being required to give any negotiable security in the mean time, the contract being executory on the part of the vendee till the time of such ac- ceptances becoming due, or till the expiration of such pe- » Keil\vav,77. pi. 25. * Duttoii v, Solomonson, 3 Bos. and Pul. 582- " Dawes V. Peck, 8T. R.?,30. « Cooke V. Liidiow, 2 Bos. and Pul. Hi). 5 Huxhara v. Smith, 2 Camp. N. P. C. 19. Brown v. Hodgson, Ibid. 36. 6 Goodal! V. Skclton, 2 Hen. Bl. .316. ' Champion v. Short. 1 Camp. N. P. C. 53. * 1 Salk. 113. riod Sale and Purchase of Goods. 219 riod of credit, the vendor cannot maintain an action for tbe value of his goods in the interim. Thus, where goods were sold upon a contract tliat the vendee was to pay for them in three montlis hy a bill at two months, it was held, that the contract was for a credit of live months ; and therefore that assumpsit for goods sold and delivered could not be brought at the end of three months upon t!ie neglect of the vendee to give his bill at tv,o months : for when, by the terms of the sale, the vendee is to give his acceptance for the value of the goods at any given time, and omits or refuses so to do, the remedy is by a special action on the case for damages for the breach of contract in not giving or accepting such bill'. Where goods had been sold at two months credit, to be paid for by a bill at twelve months, and more than four- teen montlis had expired between the delivery of the goods and the commencement of the action ; an action for goods sold and delivered is maintainable ^ But thougii, where credit has been given at the time of the sale of goods, no action lies till the expiration of the time given ; yet if the credit given was a voluntary act of the vendor, subsequent to and not making part of the ori- ginal contract, or that the purchase was not bona fide on the part of the vendee, it may at any time be revoked % unless in such case the vendor takes a bill or note payable at a future day ; and then, if the bill or note is a valid se- curity, he cannot commence an action for the original debt until the time the bill or note has to run -*. In some branches of trade custom has fixed one universal ' Musspn V. Prire and another, 4 F.nsfs Rep. Ml. Anrl see IMillar v. J. s Smith V. Field, 5 T. R. 402. Tow crs v. Barrett, 1 Ibid. 133. Hunt y. feilk, b Eaif? Rep. 449, which Sale and Purchase of Goods. 223 \viiich shows Lis anirmancc of the contract, the contract will be deemed comjilcte. Tims, where the vendee of goods, being apprehensive of his insolvency, sent word to tJie vendor to take back his goods, but the vendor instituted an attachment to attach the goods in the hands of a })ackcr as the property of the vendee, it was considered as an election by the vendor riot to rescind the contract ; and the vendee having since become a bankrupt, it was held that the vendor could not recover the goods fromthe packer in trovcF'. But though the renunciation of the contract by the vendee will not have the effect of revesting the property in the vendor, if he lias done any act by which he shows that he considered the goods as the property of the vendee; yet it has been decided, that if goods are bought by an agent for the vendee, and delivered by him to the vendee's packer, in whose hands they are attached by t!ie vendee's creditors, the property revests in the vendor so as to avoid the attachment, if the vendee countermanded the purchase by letter to his agent, dated before such delivery, though not received till afterwards, and the vendor assented to take back the goods*. So where the goods Avere sent by the vendee to a third person, and accepted by him to the use of the vendor be- fore the bankruptcy, although notice was not sent to the vendor,of sucha delivery to his use till after the bankruptcy, it was held a sufficient countermand and relinquishment by the vendee, so as to revest the property in the vendor *. Upon a bargain for the sale of goods, if the vendee does not come and pay for them, and take them away in a reasonable time after request, the vendor may elect to con- sider the contract as rescinded, and resell the goods ■♦. So where some act is to be done by each party under a ' Smith V. Field, 5 T. R, 402. » Salte v. Field, 5 II)id. 211. 3 Alkins V. Barwitk, 1 Str. 165. * Langfort v. Tyler, 1 Salk. 1 13. special 224 Of Mercantile Contracts for the special agreement, and the vendor by his neglect prevents the vendee from carrying the contract into execution, the vendee may rescind the contract, and recover back any mo- ney he has paid under it. The tacts of the case were shortly these : the defendant agreed, on the 6th of June 1791, to sell to the plaiiitifFall his cordwood tlien growing at 1 \s. 6d. per cord, ita'.ly cut, which was to be paid for by the plaintiiT in March 1793, and cut, corded, and cleared olFtlic premises by the defendant by Michaelmas following. It also appeared that the custom Avas for the seller to cut off the boughs and trunks, and cord the wood, and for the buyer to re-coal it ; after which it became his property. The defendant cut sL\ty cords, ten of Avhicli he corded, and the plaintiffs re- corded half a cord, and measured the rest. On the Sth of March 1792 the plaintiff paid the defendant twenty gui- neas ; but the defendant neglecting to cord the rest of the wood, the plaintiffs brought this action to recover back the twenty guineas, as having been paid on a contract that liiid failed : held that they were entitled to recover '. A contract for the sale of goods may also be avoided by the statiiteof limitations, 21. J ac. I. c. 2G. or the time limited by act of parliament, beyond which no plaintiff can lay liis cause of action. The use of this statute was to pre- vent the setting up of stale claims, when perhaps all vouch- ers and documents relating to the transaction were either lost or destroyed ; or, as Sir William Blackstone says, for preserving^ the peace of the kingdom, and to prevent those innumerable perjuries which might ensue, if a man were allowed to bring an action for an injury committed at any distance of time. By this statute of 21st Jac. I. c. IG. s. 3. it is enacted, >' that all actions of account and upon the case, other than such accounts as concern the trade of merchandize between •Giles V. Edwards,? T. R. 181. merchant Sale and Purchase of Goods. 225 mcrcliaut and int^rcliaut, (hoir Factors ajid servants, shall be commenced anil sncd within the time and limitation here- at'ter expressed, viz. the said actions npon the case, and the said actions for accoujit, &c. witiiin six years next after the canse of snch actions or snils, and not after." It has been a subject of much controversy, whether the exception relative to mcTchants' accounts extends to all ac- tions and accounts relatin;^ to merchants and merchandize, or to actions of account open and current only ; the words o(f the statute bein^-, "ull scti(ms of a<3count and upon the case, other than sncii actions as concern the trade of mer- chants ;" so that by the words " other than such actions," Ret l)cing actions of account, it has been insisted that all actions concerning merchants are cxceptal. But it is now settled, that accounts open and current only arc within the statute. Therefore, if an account be stated and settled bctvve(Mi merchant and mercliant, and a sum certain be agreed to l^e due to one of them ; if, in such case, he to whom the money is due does not bring his action within the limited time, he is barred by the statute '; but if it be only adjusted, and a folio whig account is added, in suck case the plaintiff shall not be barred by the statute, because it is arun'iing account ^. U is a pretty ditiicult construc- tion, said. Lord liardwicke in the case of Welford v. Lid- die ', how to apply the exception in the statute relating to merchants' accounts. It is not^ that the defendant may ttot plead ti'.e statute in all cases where the account is closed and concluded between the purties, and the dealing and transaction over. It was not the meaning to hinder that, but it was to prevent dividing the account between mer- chants where it was a running account, when perhaps part jnlght iiave been loiig hefure the time of the statute, and « Wcl>l)er V. Tivill, 2 Sauiid. 124, and note 6. 3 rarrin^tou v.. Lee, -2 MoU. 311. ■> '2 Ves. 400, q^ the 226 Of Mercantile Contracts for the the account never settled, and perhaps there miglit hav^ been dealings and transactions uitldn the time of the sta- tute. So if there be a mutual account of any sort between the plaintift" and defendant for any item for which credit ha3 been given Avithin six years, that is evidence of an acknoAV-' ledgement of there being such an open account between tJie parties, and a promise to pay the balance, as to take the case out of the statute '. So where there is a mutual unsettled account, and reciprocal demands, • the statute of limitations does not attach *. But Aviiere all the items are on one side, as in an account betv/ecu a tradesman and his customer, tlie last item which happens to be within six years shall not draw after it those ■which arc of a longer standing, but the statute will bar thof^e beyond six years ^. To the plea of the statute of limitations the courts have shown such discountenance, that it has been held, that the statute does not extinguish the plaintitl's right of action, but suspends the remedy only, and that this suspension is CO pable of being removed by a subsequent promise on the part of the defendant witiiin the limited time. Jn Hyleing v. Hastings ^, Lord IJolt said, " Doubtless an ex- press promise will revive the debt, though it were ivfeniy years after." And not only an express promise, but any acknowledgement of the existence of tlie debt, however slight, will take it out of the statute, and the limitation will run from that time. Thus expressions to the following effect, " Prove your debt, and I will pay you '. I am rea- dy to account, but nothing is due ;" " I do not consider » Catlins v. Skouldin;;, 6 T. R. ISP. « Cranch v. Kirkman", Peakf's N. P. C. 120. Bui. N. P. 149- 3 Bui. N. P. 141. Catling V. Skouli;ing,6 T. R. 189. ♦ Ld. Rajm. 389. s i Salk. '29. myself Sale and Purchase of Goods. 227 ^nyselF as owing Mr. B. a farthini^, it being more than six years since I coHtracted ;" "I have had the wheat 1 acknowLnlge, and have paid for some of it, and 261/. remains due ':" and ranch sUgliter aclniovvledgemjcnts thau these, will take a debt ont of tlic statute ^ The statute makes an exception for all persons who shall be under age, feme- coverts, non compos mentis, in prison, or abroad, when the cause of action accrues, and the limitations of thtj statute shall only comm.ence from the lime when their respective impeiliments or disabilities are removed, sec. 7. But if one only of a number of part- ners lives abroad, tiicy must bring ilieir action within six years after the cause of it accrued ^ A contract may also be avoided on the ground of fraud ; far either " suppressio veri" or " suggestio falsi " is a good leason to set aside any contiact *. . And therefore, where a party has bean guilty of any fraud in his dealings or ac-? counis, the courts of law and equity have determined, that he shall only protect himself by the statute of limitations from the time his fraud is discovered K It does not seem improper to speak in this place of con- tracts for the sale of goods entered into by a debtor with intent to dciVand his creditors. Ail contracts entered into for i\^Q sale or assignment of ^oods, where the vendor is sufleval to remain in the pos- session of them, are, by the statute 13 Eliz. c. 5, void as against creditors. The words of the statute are, " It is declared, ordained, and (-nucted, that all and every feoff- ment, giit, grant, alienittion, bargain, and conveyance of lands, tenements, heretiitarnrjnts, goods and chattels, or any of them, or of a/iy Ie;ise &c. that then was, or at any time • 4 Ea>fs Rci). 599. » P. r Ld. Mansfield, Cowp, 548. 3 Perry v. Jack5on,4 T. R. 516. * Broderic v. Brodtrit , 1 P. Vv tns. 210. 5 South Sea Company v. W yinoiidsells, Dong. 630. Q_ 2 thereafter 2!yS Of Mercantile Contracts for the thereafter should be had or made, to or for any intent 05 purpose before declared and expressed, should be from henceforth deemed and token (oiilj as against that person or persons, his or their heirs, successors, executors, admi- nistrators, and assigns, and every of them, whose actions, suits, debts, accounts, dama-^es, penalties, forfeitures, heri- ots, mortuaries, and reliefs, by such guileful covenaiits and iraudulent devices and practices aforesaid, were, or should or might be in any wise disturbed, hindered, delayed, or defrauded,) to be clearly and utterly void, frustrate, and of no effect ; any pretence, colour, feigned consideration, ex- pressing of use, or any other matter or thing to the con- trary notwithstanding." In the construction of this statute it has been uniformly held, that all transfers or assignments of property by way of bill of sale will be fraudulent, and consequently void, as against creditors, unless absolute possession ' accompanies and follows the deed *; and the case Avill not be varied if the creditor has suffered his debtor to continue in possession of the goods, although he had condilioiied that the profits of the trade should be accounted for to trustees from the date of the assignment ^; or that he had reserved to him- self the liberty of taking possession of them within a sti- pulated time •♦; or that he had possessed himself of them, if he suffers the debtor to exercibC any act of ownership over them ^. So a bill of sale t<3 a particular creditor of all the'effects of a trader, in trust to satisfy his debt, and • "When gooHs are eitlirr sold or morf2:a Up^hare v. Aidep, 1 Com. S5. ^ 1 ?elw. N. P. 413. 3 1 Inst. 89- Bui. N. P. TO". « 1 Rol. Rep. 79. m 254: Of Mercantile Contracts for the in mIhcIi the g'oocls lia'l bren deposited by the carrier in the courso of his jouniev, lie was held liable '. So where common curriers froju A. to B; charg^ed and received for cartage of gotxh to the cor}si^i|;nee's house at B., from a ^varehouse there, where they usually loaded, but Avhich did not belong to them; they were held re- sporisible for a loss by an aoeidental tire while the sjoods were in tlse warel>ouse ; allhoug!) they allowed all the profits of the caruige to anotlyer person, and which circinnstance was knov.n to the consignee*. These two crises differed in circumstances, but were both governed by the contracL, of undertaking to deliver; dt appearing in evidence, that the goods liad not reached the place of their final destination. Where, however, goods not having arrived at the place of final delivoy, are out of t])e custody of the carrier as such^ this con- ftfuction does not apply. On this disdnction it has been determined, thiit a comuKm carrier between A. andB.. employed to carry goods from A. to B., to be forwarded to a third place (by another carrier, according to the custom); was not, by putting them gratuitimsly in his warehouse at B.jMJicre tliey Wv'i-ic acciueaiaily destroye-tl hy fire before lie had an opportunity of for\t.'!rding thenj. vc^ponsible for the loss ^ Whether it is a duty incumbent upon carriers to deliver as well as carry good.<, may te collected from the case of Golden v. Manning, 3 Wils. 429. and 3 Bi. Bep. 916; the circumstances of which were : A box waadirecled to A . in B. street inLondon ; the direction was obliteraied ; but A.'s name and abode were in the printed directory ; his name only in the way-bill : the defendants made no inquiry of ' Fonrard v, Pittard, I T. R. 27. " Hydi- V. the Trent and Mersey N.'ivi^atiori Coinijanj-, 5 Ihid. 399. 3 Garside v. the Propriet(»rs of the ireut and Meisey ^'avigati(>n, 4 T. R. (he Conveyance of Goods. 535 tlie plaintiff, nor of A., but suflbred the hox to vernal ri in their wardioiise (iil the ^oods were damaged, although tliey kept a constant porter to carry out parcels. The court ivcro of opiriioti that the defendants were liable, because it appeared that their general course of trade was to deliver goods at the liouses to which tliey were directed, that they received a premium, and kept a servant for that special purpose. Mr. Justice Gould expressed an opinion, that all carriers were bound to give notice of the arrival of goods to the persons to whom they were consigned, whether bound to deliver or not. Also in IJj'de v. tlie Trent and Mersey Navigation Company, 5 T. R. 396. Ashhurst, Duller, and Grose, Justices, were of opinion that a carrier was bound to deliver the goods to the person to whom they vv^ere elirected. Before the time of Henry the Eighth, it appears to have been generally held, tliat a common carrier was chargeable, in case of a loss by robbery, only when lie had travelled by ways dangerous for rolibing, or driven by night, or at an inconvenient liour ; but in the commercial reign of Eliza- beth, it was resolved, upon the broad principles of policy and convenience, that if a common carrier is robbed of the goods delivered to him, he shall answer for the value of them ', for, having his hire, there is an implied understand- ing for the safe custody and delivery of the goods '. If a common carrier who is offered his hire, and who has convenience, refuses to carry goods, he is liable to an ac- tion*. Bathe may refuse to admit goods into his ware- house at an unseasonable time, or before he is ready to take his journey ^ In order to charge the carrier, these circumstances are io be observed : ' 1 \tv-i. 89 a. 1 Rol. Abr. 33«. ' Jackson v. Rogers, 2 Show. 82T. 3 l-an*? V.Cotton, 1 Ld. Ravtii. 652. 1. The ^36 Of Mercantile Contracts for the 1. Tlie goods must be lost ^vllilc in possession of tlie car- tici' hiinselF, or in liis soL^ care. Therefore, where the plain- tiflV, the Ivisf In lia Company, sent their servant onboard the vessel, v. ho took ch;5 Esp. N. P. C. 41. not Conveyance of Goods. 2S9 iioi take any contraband goodi ' nor colourable papers o^ board ^5 which may occasion the foifcifurc, capture, or de- tention of the ship. He must take care that the jroocls of wliich the cargo consists be so stowed that they may not be injured by each other, or by the motion or leekage of the ship : but if by usijge or agreement the stowage or arrange- ment of tlie goods is to be performed by persons hired by i\\c mercliant, he is then released from this obligation^. And as soon as any goods are put on board, the master must jjrovide a sufficient number of j:eraons to protect them''^. After the necessary preparation for the commencement of the voyage, the master must forthwitli obtain the necessary clearances, and, as soon as tlie ^veather h favourable, pro- ceed upon his voyage 5. But he must not upon any ac- count set sail during tempestuous weat'itr^. And if there has been an underlakh^g or v/arranty to sail v/it'i convoy ,, he must conduct his vessel to the place of rendezvous, and put himself under the protection and control of the ships appointed for that purpose. ^. Of the Duty of tlie Owner and Master during the Course of the Voyage. Having commenced his voyage, the master must proceed (o the place of destination without delay, and without stop- ping at any intermediate port, or deviating from the straight and shortest course, unless to repair his sliip, or to avoid. enemies or pirates. A ship, however, is allowed to deviate for a supply of water and provisions to the places ilsually re- sorted to in long voyages for that purpose". But neither in this case, nor if the ship be driven into a port through stress • Moiloy, b. ii. c. 2. s. 7. ' Ibid. s. 9. •^ Wellwood'.s Scii Laws, p. 29. * Morse v. Slue, I Ventr. 190, _s 2 Magens, 102. e Moiloy, b. ii. c. 2. s. -i. " Hoccus deAssec. not. 52. of ^0 Of Mercantile Contracts for the «f weather, caii the master wait there longer than iicccssii{\\ as aforesaid, or other malversation of the master or mariners, shall be committed. But as this statute relieved the responsi!)ility of the owners only in the €;isc of a roblxTy com.mitt-ed by the master and mariners, and that they still remained liable for robberies committed by persons not bolongiug to the ship ; it was enacted by tlie statute 86 Geo. III. c. 86. s. 2., which contains the same provisions of the preceding act, that the * Rocciis, not. 55. J?i4 Of Mercantile Contracts for the same limits .shall be fixed to the responsibility of the owners in the case of robbery, although the master or mariners sliall not be in anj' -wise concerned in or privy to stich rob- bery, cn^bezzlement, secreting, or making away w'vh. And by the third section of the same statute it is(Mi;ictcd, that no master or owner of any ship or vcsstl shr.U be responsible, for any loss or damage Avhich may happen to any gold, silver, diamonds, watches, jewels, or precious stones ship- j:ed on board any vessel, by reason of any rt)bbery, embez- zlement, making away v, ith, or secvcting thereof, unless the owner or shipper tliereof shall, at the time of siiipping tlie same, insert in his bill of lading, or olherwise declare in Avriting to the master or owner of such ship or vessel, the true nature, quality, and value of such gttlcl, silver, dia- monds, watches, jewels, or precious stones. 3. OF THE STOPPAGE OF GOODS IX TRANSITU. ^^ hen goods have been consigned upon credit, ai;d the consignee has become a bankrupt or insolvent before the de- livery of the goods, the law, in order lo prevent the less that would hap])cn to the consignor by the delivery of (hem, permi(s him, in many cases, to resume the possession, by countermanding the delivery, and, before or at tlui: arrival at the place of destination, to cause them to be delivered to himself, or to some other person for his use. This right Avhich the consignor has, upon the insolvency of the con- signee, and, if the full price has nut been paid, of resuming the possession of his goods during their transit to the place of destrnat'ori, is technically called stoppage in traiisiiu '. This practice, which is founded on principles of natural justice and equity, was first sanctioned and estiiblished in the Court of Chancery -, and lias been subs -queiitly rc- * Ahbott on Merchant Sbini)inp,.S51. 2Srlw. 1171. ■ 2 Vern, W:i. 1 Atk.-iJo. Amhl. 599. coinUh V. (io^s 1 Cauip N. P. C. i;8i. Lilis v. Hunt, S T. R. 469. Hodgson and otlicrs v. Loy, 7 T. R.4'10. <3 i:a:t"s Rt-p. asi. during 248 Of Mercantile Contracts for the during tlie performance of quarantine, claimed tlic p:oods on behalf of bis principal ; it was luld that the rigl)t of the consignor to stop the goods in transitu existed when' t hi; claim was made on his behalf, because the voy-:ige was not at an end till the performance of quar;>iiti;ie '. When gooc's coiisigned, but thf duties not being pat:!, are lodged in tije King's stores, the consignor may stop them in transitu,' if lie claims them before they are actually sold for the payment of the duties ; or, if sold, he is entitled to the proceeds^. 2. \Vhen the transitus shall be considered as determined. "VVhrn the transitus shall be considered as com[;lete, and the delivery of such a nature as to divest the vendor's riglit of stopping in transitu, will appear from thefoilo^ung cases. In a case of goods sent by a waggon, which, on their arrival in London at the inn where the waggon usually put up, were attached hy process of foreign attachment, at the suit of a creditor of tlie vendee, and which while remain- ing in that siluation at t!ie in it were claimed and marked by the assignee of the vendee, who had become a bank- rupt before t»ieir arrival in London ; it was held that (he vendor could not afterwards countermand the deli- very ; lor, from the impracticability of removing the goods on account of the attaciiment, on their arrival at the imi they had attained their ulterior destination, and were no longer in transitu ; and that the assignee, Avho was clothed with the rights of the bankrupt, had, by putting his mark upon them, done what was equivalent to taking actiial pos- session'. Where a part of the goods sold by an entire contract has ' Hoist V. Pownal and Sponcer, 1 Ei\t. N. P. C. 2-iO. ' Northev and another v. Field, 2 Ibid. 613. 3 LUis V. Hunt, 3 T. R. -16i. come Conveyance of Goods. 219 co^nctothc actual possessionoftbe vendee, the vendor's right to counteimaiul is -wholly at an ciui, and caiirtol be exercised over tlie residue which may not have been delivered '. Delivery of goods on board a ship wholly cliartered by (he consignee, will not, as we have seen, divest tlie con- signor's right to stop the goo;ls while in the h.anc's of tlie carrier**. But where a ship liad been liired by the consignee for a term of years, who during tliat time had Vaq entire disposition and control over such ship, having iitted, vic- tualled, and manned her, goods delivered on his account onboard, on a mercantile adventure, cannot be sto];pL-d in transitu ; the consignee beuig in such case the owner of tiie ship pro tempore, and t'le delivery of the goods on board thereof being equivalent to a delivery into the consignee's Avarehouse ^ From the cases of Mills v. Ball, and Hunt v. Ward, we have seen that where goods have been delivered to a packer, or wharfinger, to be forwarded to the consignee, and the packer or wliarfinger maybe considered merely as a middle man, the transit is not at an end by sucli dehvery. But when the consignee uses the warehouse of the wharfinger, packer, &c. as his own, and has the goods ser.t tliither as the place of their ulterior destination, the tr msitus Avill be considered lis at an end when the gooJs have arrived at such v.are- house ; and consequently the right of stoppage in transitu has ceased -*. Where goods have so far arrived at the end of their jour- ney, that they wait for fresh orders from the purchaser to put them again in motion ; as wliere goods ordered for the ' Slubcy and another v. Hey ward and othf-rs, 2 IIpii. B1. 504. Ham- moRd and others v. Anderson, 1 Bos. and I'ul. N. 11. 69. ■^ Rohtlinjik v. \ns,\h, .'5 East's R.-p. 381. 3 I'Ovvler and anothi-rv. i\l' ra--;;art and others, cited in 7 T. R. 442. 1 East's Rep. 524. 3 I!)id. 386. 4 Scott aii.i others v. Pettit, 3 Bos. and Ful. 469. Lccd and another v Wri^iit, 3 Ibid. 320. purpose 250 Of Mercantile Contracts for the purpose oi being soiit abroad, liave come to the hands of an agent of the vdidee, in whose liaiuls they were to re- main until he received orders as to tiicir ulterior dt-stination; the right to stop in transitu is determined on the arrival of the goods at the hands of hudi agent. Thus, AVhere A. and B., traders in Loudon, were in the course of ordering goods of the defendants, cotton manufacturers at Manchester, to be sent to M. and Co. at Hull, fur the purpose of afterwards being sent to the corres]}ondents of A. and B. at liamburgli ; it was hchl that, as between buyer and seller, tlie right of the defendants tostop wliile in trans- itu was at an end when the goods came to the possession of ]\I. and Co. at Hull ; for they were for this purpose tlie ap- pointed agents of the vendees, and received orders Irom them as to the ulterior d:s1inauance of orders from a im-rchant in this country, j)urchases goods on his , own credit without naming the trader here, and ships to him at the original price, charging only his ccmimission, the forrcspondent abroad, in case of the insolvency of the ' Coxp V. Tfr.rdrp, 4 lasf's Rep. 21 1 . » Siftk^n ai;d another V. Wray, 6 Easfs Rrp. 371. consignee. Conveyance of Goods. 253 consignee, is (o be considered as the vendor for the purpose of stopping the goods in transitu, for there was no privity bet\Aeen the original owiser of the goods and the bankrupt '. So also is a person 'vvho consigns goods to be sold on the joint account of himself and the consignee ^. Where goods arc coiisigned iii pursuance of an agrre- niont b;>tween the consignor and tliird persons, to be applied in the execution of a certain trust, as to indenmiiy against acceptances, or the like ; oa the failure of the consignee in trust, the consignor cannot countermand the delivery, while the truit and object of tiic con^ignn^ent remain unsatisfied ^ Neither can the consignor repossess himself of goods du- ring their transit, Avnirh have bicn smtty order of the con- signee, on !iis account and at his risk, and to be paid f ( r at the expiration of a limited credit, or by bills at a given date, ti'.e consignee being willing to accept the bills and remaining solvent ■^. IJut in case oftlie failure of the consignee, a payment by bids for the amount of the goods, and accepted^ before his bankruptcy, will not dsfeat the consignor's right of repossissing hinisdfof the goods during their transit, al- though at the time of sticli repossession the bills were not due ; for though such btils may be proved under the com- mission against the consignee, it will amount but to a j)ar- tial payment \ . So where the consignor has a right to stop goods in transi- tu, such riglit is not affected win re a past of tbe, price of the goods has i3e.-n paid by the consignee ; for part p jy- ment only diminishes the vendor's lien, pro tardo, on the goods (ktainci ^\ ' IVize and .-inoth r v. Wray, 3 F.aFt's Rrp. 9'?. " J\evvs':ii an('. niotlirv v. Thornioii and another, 5 Ibid. 17. 3 Haille V. Smiiii and anotiici , 1 Bos. and Pul.5fi3. 4 Walliy V. Montgmn ry, 3 iiast'.s \lcp 58'J. s I"' izp aad anoti.rr v. Wray, .'i liiid. 9^. * llod^sou and others v. Lov, 1 T. II. 4i0. Nor 254 Of Mercantile Contracts for the Nor is the right of (he consignor to stop in transitu af- fected by any claim made u{.o;i (lir goods ia their transit by a crc(iiU)r of the consignee, as wlierc the goods had been attached by process of foreign aitaehTnerit at (he suit of such creditor; for t!ic vcjulor's right of intercepting the goods, being t!ie elder and prcil-rable lien, cajznot be superseded by the attachment '. This right of stoppage in transitu can only be exercised 'where the relation of vendor and vendee subsists between the consignor aiid consignee ; it does not bi long io a person who has only a lien upon tJie goods without aiiy property in them. And therefore if a person, wlio by local custom has a lien tor his general balance, or is entided to retain (ha particular goods until bis demand for rendering them mer- chantable is paid, parts v/ith the goods in piirstiancc of the orders of his employer, he cannot countermand the deli- very ; for his lien and right to retain the goods only coiiti- nue wliile they are in his possession, and the moment he parts ^yit]l the pos-ession, in pursuance of the order and on the account of his employer, his lien ceases, and conse- quently' the rigi)t of slopping them in transitu ^. Neither is tills right of the consignor defeated by an usao-e for carriers to retain goods as a security for the gene- ral, balance of account due to them by the consignee; but the consignee will be entitled to reclaim them out of tlieir hands, on payment of the price of the carriage of the par- ticular goods, and a tender of indemnification to them'. Nor will a similar usage, when the carriage is to be paid by the consignor, antiiorize the carrier to detain goods Irom the consignee who has paid the price for them *. With respect to the legality of the consignee's rc-deli- » Smith V. Onss 1 Cnrnp. N. P. C. 282. « Sweet v. Pym, 1 Ea't's Rep. 4. 3 0])])fii;ieiin V. Husse), .'? Bos. auil I'ul. 4'i. * iiulU-r V. Woolcot, 2 Bos. and I'ul. N. II. 61. very Convei/ance of Goods. 255 very of the goo;ls consigned, in case of bankruptcy, to the consignor, the cases on this point seem at variance. In or- der to divest the property of goods in transitu out of the consignee, tlie act of repossession must be adverse on the part of tiio consignor against the consignee; an amicable agreement Jjetween them will not have that effect in case of the failure of the latter. In the case of Siffken and W'ray ', where a consignee after an act of bankruptcy delivered up the bills of lading to his agent upon his undertaking to ap- ply the proceeds of the goods in discharge of bills of ex- cliange drawn for the price, and he accordingly took pos- session of the goods l;y tlie consent of the vendee, who iiad become a bankrupt ; it was held that ha coidd not retain tlK'ui against the assignees of the bsuArupt, althongh tlie original consignor approved of the arrangement, there beirig no adverse stopi)i!'g in transitu. But in the case of Mills V. Bali^, where the consigute of goods being insolvent, atul liaving couiinitted an act of bankruptcy, informed the con- signor of his circuiMstancts, and refused to receive the goodt>; in c^iiseejuence of \vhich the consignor repossessed himself of the goods whilst in transitr. ; it v/as held that such repossession was valid, and that the iiiformation given by the consignee was not an e.ndue preference given by the bankrupt (o the consignor over the rest of his creditors. The distinction between tliese cases, Mr. Ross ob:;erves in his Law of Vendors and Purchasers, p. 214, is \^ry fine spun. *' in Siifkeu v. Wray, the possession of the con- signor was obtained by the act of the baiikntpl, wlio deii- vered up the bdl of lading, willsout which (for the agenf had no duplicate) the goods coulJ not have b.'en stop'ied : whereas in the J »st case the stoppage was only eflected through the means of the bankrupt, as by his giving notice." It is remarkable, tliat in the case of Muls v. B;dl, Mr. Justice ' 6 East's Rep. 371. » 2 Bos. and Ful. 457. Rooke S56 Of Mercantile Conlracls for the Rooke saiJ, " In wliai munnor (lie iuCornKition Mas obiuincd can make no diffcrt'iict'." ; WLerc the vendors h.ild possession of .siiy, we have to consider, by vvhe.t acts the right of the consignor may be defeated during tlie tninsi!. ]u the con.sideration of this division of our subject, we shall have to inquire how far tlie negotiation of the bill (;f lading may tend to defeat t!ie right of stopping in transitu. And for this purpose we shall first ad.vcit to the diiicienfe forms iii comuion use. Sonietiints a bill of lading is made for deUvery to ihe. consignor by name, or assigns ; sometimes to order, or as- signs, not naming any person ; and at other times to tlie consignee by name, or assigns. In the two first cases, the consignor either transmits it without any indor.siment, or indorses his own name generally upon it, without mention- ing any other person ; or he indorses it specially for delivery lo a person nan.ed i>y the indorscraent^. ' Divon nnd ot!irrs v. "R;.l;iwpn anH anothur, 5 Ensfs R. 175. ' Abbot: oil riiercbant^^l.if'piiig, ;Ji'5. The Conveyance of Goods, 257 The mere possession of a bill of lading, made for deli- yery to the consignor, and not indorsed by him, will not authorize the holder to dispose of the goods. But on the other hand, if the bill of lading be originally made for de- livery to the consignee ; or being made for delivery io the consignor or assigns, or to order or assigns, be indorsed by tlie consignor, either to a third person by name, or gene- rally without designating any person ; in both cases the con- signee named in the bill of lading, and holding it indorsed in blank, has authority to transfer his property in the goods '. In commercial transactions it is usual for the consignee, Laving received the bill of lading, to sell the goods, or io raise money upon them, before their arrival, and indorse and deliver over the bill of lading to the vendee, by which indorsement and delivery the property in tlie goods is trans- ferred to such other person ^. This practice of assigning bills of lading by the con- signee to a third person, who may be totally ignorant of the nature and terms of the consignment, and may not know that the consignee is not absolutely entitled to receive and dispose of the goods, has given rise to a very impor- tant question of law, as to the right of the consignor to countermand the deliviery as between him and the person to whom the assignment has been made, without any fraud or collusion'. The earliest mention of this subject in our law books, Mr. Abbott observes, is in the case of Evans v. Mariett"*, in which Holt, C. J. said, " the consignee of a bill of la- ding has such a property that he may assign it over." But in this case, as well as in the subsequent ones 5, the question • Abbott oh Merchtflit Shipping, 366. « Vide 5 T. R. 685. and 1 Bos.' and P\\\. 503. 3 Abbott on Merchant Shipping, 307. < 1 Ld. R.iym. 271. 5 Applcbv V. Pollock, Abbott, 368. Wright v. Campbell, 4 Bur. 2046. i Bl, Rep. 628. S. C. and Caldwell v. Ball, 1 T. R. 205. s upon '256 Of Mercantile Contracts for the » upon the effect of such an assignment not being properly b 'fore (he Court, tliere a]>poars no direct evidence of the legality of the transfer, until the casepf Lickbarrow and another v. Mafon and others reported in 2 T. R. 63. In that' case it was decided, that a bill of lading is a negotia- ble and transferable instrument, by the consignee's indors- ing his name on it, and delivering or lran>,mit(ing the same to the person to whom it is indorsed ; and that by an assign- rhent made by the consignee, for a valuable consideration, Inhere tlie transaction was bona tide, and the assignee has no notice that the goods are not paid for, the property is absolutely transferred to the assignee, and that the consignor is by such assignment deprived of the right to stop in tran- situ, which as against the original consignee he might have exercised. So the mere circumstance of the indorsee's knowledge, at the time the bill of lading was indorsed and delivered to him, that the consignor had not received payment in money for his goods, but had taken the consignee's acceptances, pay- able at a future day not then arrived, is not sufficient to in- validate the title of the indorsee, if the transaction was bo- m\ fide, and the assignment Avas made for a valuable consi- deration '. The legal title, however, of the indorsee of a bill of la- ding may be defeated on the ground of fraud, as between hitn and the consignor, who hi such case may repossess himself of flie goods *. To enable a consignee to assign a bill of lading, an in- dorsement and delivery must have been made to him. There may, however, exist special circumstances which may bd tan( amount to an indorsement and delivery, which may en- » Cumingv. Brown, 9 East's Re|>. 506. ' 'Wneht and another v. Campbell and anothrr, 4 Bar. £9-16. Solomons V. Mssen,2T. R. 674. able Conveyance of Goods. 259 able the consignee to do this. As where the consi<^nors sent a bill of ladiiio^ not indorsed to their factors, but having the names of the factors on the back, and being applied to by them for an indorsement, answered by letter, that if the bill of lading was not indorsed it was a mistake, and they would send an indorsement : held that a letter of this kind was a sulficient transfer of property, and amounted to an indorse- ment, so as to enable the factors to transfer tlie property in the goods*. But if there be not sucli facts, and the bill of lading be for delivery to order or assigns, and transmitted unindorsed, the consignee cannot, by a transfer of the property in the goods to a third person, although such assignment be for a va- luable consideration and without fraud, divest the right of the consignor to stop the goods in transitu *. Of the Dissolution of Contracts for the Carriage of Goods iy Water. Contracts of this natnre may )je dissolved either by the voluntary act of the contracting parties, or some extrinsic matter happening after the making of the contract, and be- fore its completion. If before tlie commencement of a voy- age, war or hostilities take place between the state to which the ship or cargo belongs and that to which they are de- stined, or commerce between them is totally prohibit d, the contract for conveyance is at an end, and the owner is not entitled to any damages against tlie freighter, who has thus been compelled \o abandon his agreement'. But as the laws of one nation do not give eOect to the positive institu- tions of another inconsistent with its own, if a merchant hire a ship to go to a foreign port, and covenant to furnish » Dick V. Lumsden, Peakn's N. P. C 1 89. « Nix V. Olive, Guildhall Sitt. afler Trin. T. 1805, cited in Abbott on Merchant Shippins;, 37 7. 3 Abbott's Law of I\Ierchant Ships and Seamen, 406. s 2 a lading 260 Of Mercantile Contracts for the a lading tbere, a prohibition by (lie government of tlisit country to export Ihe inlcnded articles neiiber dissolves the contract, nor absolutely excuses a pcrlbrniaiice of it '. An embargo imposed by the government of the country in Tvhose ports the vessel may happen to be, will not operate as a dissolution of a contract of this nature *. But in tlie case of an embargo impo.'-ed by the government of the country of whicii the merchant is a subject, in the nature of reprisals atid partial hostility against the country to which the ship be- longs, the m( rchant may put an end to the contract, it' the object of the voyage is likely to be defeated by the delay ^ O'P CIIARTERPAnXIES OF AFFREIGHTMENT. Of the Nature of a Charterparty. The terfti charterparty is generally understood to be a corruption of the Latin words chai ta partita. It is a con- tract l)y which an entire ship, or some principal part there- of, is let to a merchant for the conveyance of goods on a de- termined voyage to one or more places. The contract by charterpaity is in general mutually obligatory upon each party ; they may however by particu- lar clauses render it obligatory upon one, and optional to the other. Tlius, if a ciiarterparty is executed, in which it was covenanted, that if the ship should not be arrived at Winyaw, in South Carolina, by the first day of March, that it should be in the option of the m.erchaijt cither to load the &])ip on the terms specified, or not, or to refuse entirely, provided that the merchant declared such his intention to th€ master of the said ship, within forty -eight hours after ap- plication ; it was held that it was optional to the merchant ' Rliffhtand cthrrs v. Page, Guildhall SUtin-s after M. T. ISOl, cited in 3 no<;. and Piil. ^9"). n (a.)' •' Had!, yv. Clarke, 8T. K.'i59. 3 Touicng V. Hubbard, 3 Bos. and Pnl. 291. to Conveyance of Goods. — Cliarterparties. 261 to loail or not, if the ship arrived after the first of March, althougk the master had been unavoidably delayal by rea- son of contrary winds and bad weallier '. If before the dejiartnre of a ship there should happen an enibarg-o occasioned by war, reprisals, or otherwise, with tjie country to whicli tlic sliip is bound, so that she cannot proceed on her voyage, t!ic charierparty shall be dissolved without damages or charges to eitiier party, and the mer- chant shall pay the charges of unlading his goods ; but if the restraint arises ftom a difference between the parties th(Miisdves, the charterjiarty sliall remain valid in all its points. If the ports of (he country to which the ship is bound be only shut, and tlic vessel slopped for a time, the charterp'iity will still be valid, and the master and merchant will be reciprocally obliged to wait the opening of such port, without any pretensions for damages on either side. The merchant may, however, unlade his goods du- ring the shutting up of the port, upon condition either to reliidetlicm or indemnify the master ^. By IV horn it may he exercised. TJiis instrument may be executed by an agent lawfully authorized on the part of the owner or merchant, who may Govenaut in his own naine for performance by his principal, go as by force of the deed to aus->ver for his principars dq-^ fault. 13 ut if the authority of such agent arises from a power of attorney, then the execution must be in the name of his principal^. Of the usiial Slip7ilatio?is. The usual sti|3uIatior!s on the part of the owner or master qre, that the ship shall be tight aiid staunch, furnished ' Siuibrick v. Siilinonil, 3 Rnr. 1SS7. ^ Bcawcs's Lex IMerc. 141. i Wilks V. Back, '2 East's It<;[). \i'>, with 262 Of Mercantile Contracts for the ■with ail necessaries for the intended voyage, ready by a day appointed to receive the cargo, and wail a certaiji num- ber of days to take it on board. That after lading she shall sail with llie first fair wind and opporlnmly to the de-stined port (tlie dangers of the seas excepted), ami there deliver the goou's (othc merchant or his assigns in the same condi- tion they were received 0!» board ; and further, that (hiring the conrse of the voyage the sliip sliall be kept tight and staunch, and furnished with sufficient men and olher ne- cessaries, to tl'.c best of tlie owner's endeavours '. On the other hand, the merchant usually covenants to load and unload the ship within a limited number of days after slie shall be ready to receive the cargo, and after ar- rival at the destined ]-»ort ; and to pay the freight in the manner aj-pointed. It is usual also for each of the parties to bind himself, h's heirs and executors, in a pecuniary pe- nalty for tl;e true pcrform-ancc of tiieir respective covenants. Frequently also it is stipvdated that the ship shall, if re- quired, wait a further lime to load and unload, or to sail with convoy, for which the m.erchant covenants to pay a daily sum. This delay, and the payment to be made tor it, are both called demurrage. Sometimes also particular clauses are introduced in fitvour of the owners, to takeaway their responsibility for embezzlement by the master, or other matters, for which they woitld otherwise be responsible *. Of the Construction of a Charterparty. In the construction of charterparties it is a general rule that it should be agreeable to the intention and design of the parties concerned, and conformable to the usage of trade in general, and of the particular trade to which the con- tract relates. Thus, wliere it was covenanted that the ship AbboU's Law of Merchant Sliips and Seamen, 191. - Ibid. should Conveyance of Goods. — Charterpariies. 263 should hail on the mlciule.] voy'ige with the first fair wind, it was held not to mean the next wind, but such a wind as would enable llic vet-scl to perform the voyage '. But if by a tlclay in (ho conimcnccinent of (he voyage the merciiant sustains any injury, he will be cntided to a compensation commcnsura(e to IiJs loss-. But although a chadcrparty is to receive a liberal con- struction, ye( the constnic(lor» must not be inconsistent with the jilain and obvious meaniiii^ of the parties in(erested. And therefore, i\\ an action of covenant for demurrage on a chaitcrparly given " while waiting at Portsmouth for convoy, and discliar^iir.g her cargo at Barpelona," it was held that demurrage coui j onl\' be claimed for the time (he ship A\as waiting for convoy at Portsmouth, and discharg- ing her cargo at Barcelona, and not for any delays at other intervening places ^ Upon the construction of a cliar(erpar(y of the East In- dia Conipanj-, it has been decided, (hat the owner is not liable to make satisfaction to the Company for the damage done (o goods in the ship by storm -». JVhcn a Cliarlcrparty takes its Eff'ect and Operation. A charterparty takes its effect and operation from the day. of its execution, and not from the day of its date, if difiereiit from the day of (be delivery, unless the contrary appears'. Of ike Rights and Duty of the Charterer. As the hirer of any thing must use it in a lawful manner, and according (o the purpos(^ for which it is let, the char- terer mast not !a le any prohibited goods by which the ves- ' Constablr v. Cliberie, Palm. 307. ^ Malynf , 08. 3 MarshaH v. Do la Torrp, i Ksp. N. P. C. 367. * Tod V. the Vast Ipdia Company, Dong, 'iVZ. 5 Oshey V. HkkB, Cro. Jac. i^GJ. 2(i4 Of Mercantile Co7itracts for the sel may be subjected to detention or forfeiture '. Neither can he, after having laden his goods, insist upon having them rdancJcd, and delivered to him, without paying the freight that might become due for the carriage of them, and indemnifying the master against the consequences of any bill of lading signed by him *. But if eilher party is not ready by the time appointed for the lading of (lie ship, the other may seek another ship or cargo, and bring an action to recover the damages he has sustained '. And if the freighter has not sufficient goods of his OMn, he may take in the goods of other persons, or may wholly underlet the ship. ]f a person freight a ship at 48/. per month, and afterwards agrees to allow certain merchants to lade the ship at 9L per ton, the owner, in the event of the freighter's bankrupt- cy, cannot recover of the merchants any more than they had engaged to pay the freighter **. In general, incase of affreightment by charterparty, the command of the ship is reserved to the owners or the master appointed by them, and therefore the person freighting or lading has not the po^er of detaining the ship beyond the stipulated time, or employing it in any other than the sti- pulated service. But by the charterparties under which ships are freighted to the East India Company, the com- mand and disposal of the ship is reserved to them, and the master, although appointed by the owners, is bound to obey the orders of the Company at home, and of their factors and seiTants abroad ; and it is always stipulated that nothing shall be paid by the Company for freight or demurrage, unless the ship returns home in safety. Yet if the Company detain a ship so long in India that she becomes unfit for the voyage ; or if they employ a ship in a service not warranted « Roccus, not. 45. '^ 2 Eq. Ca. Abr. 98. 3 Beawcs's Lex Merc. 134. ♦ Paul v. Birch, 2 Atk. 621. . by Conveyance of Goods. — Char terpar ties. 205 by the charterparfy, and without the knowledge or con« ser.t of the owners, and it is lost, the owners will be en- titled to a proper allowance for the actual and probable earnings and the value of the ship '. As this Company are by their charterparties warranted in employing their cliartered ships in trade, warfare, or on any other service whatsoever, it lias been decided that a ship of that description was still under the charterparty, though alterations were ordered to be made in her upper works by the Company, to enable her to carry a larger number of guns, &c. than her stipulated force; and though a king's oflicer assumed the command of her, and hoisted the king's broad pendant on board ^ OF DEMURRAGE. The payment of demurrage, which is an allowance sti- pulated to be made while a ship is waiting for convoy or to receive a cargo, ceases, in the first case, as soon as the con- voy is ready to depart ; and, in the second, as soon as the ?hip is fully laden and the necessary clearances are obtained; although the ship may in either case happen to be further detained by adverse winds or tempestuous weather. And if the ship has once set sail and departed, but is afterwards di'iven back into port, the claim of demurrage is not there- by revived'. By the custom of the merchants of I^ondon, the word " days" used alone in a clause of demurrage, without the p,nnexation of the words "-working" or " running," does not comprehend Sundays or holidays ■*. ' Edwin and others v. the T'ast Tndia Comj)any, 2 Vern. 210. Lewiu and others v. the liast India Company, Peake, N. P. C. 241. * Dobreeaiid others v. tlic Kast India Company, 12 East's Ilep.290. 3 Lannay v. W erry, 2 Bro. P. C. 60. Jamieson v. Lauvie,6 Ibid. 474. * Cochran v. iletberghetal. 3 Esp. N. P. C- I'^l. OF gt)6 Of Mercanlile Contracts for the OF BILLS OF LADING. TJie dinerencc between ci b 11 of lading and a charter- party is, that the first is required and given for a single ar- ticle or more laden on board a ship uliicli lias sundry mer- chandize shipped on sundry accounts ; the latter is a con- tract for ihe wboL' ship. Bills of lading ougiit to be signed by th;' master within twenty-ibar hours after the delivery of the goods on board. And upon ilic delivery of the g(jods, the master, or oilier person officiating for him in his ab- sence, is to give a common receipt for them, whieli is to be lielivered up, upon tiie master's signing the bills of lading '. Upon delivering the goods at the port of destination to ihe shipper's factors or assigns, the giving up of the bdl of lading sentto the factor or assigns is noi a sufficient dis- charge, but the master niust ir.sist upon a receipt *. As the transfer of property by assignment and indorse- ment of a bill of lading' ii intimately connected Avith the ria;hf of the consignor to s'op in transitu, t'le law concerning it will b^ found under that head. OF FREIGHT. Freisrht is the sv.m agreed on for the hire of a ship, en- tirely or in part, for the carriage of goods from one port to anotlicr, or to many ports ; and must be paid in preference to ail other dobts ■*. If a merchant f; eights a ship, b'lt declines to lade her in pursuance of his agreement, or if before tlie commence- ment, or during the course of the voyage, he withdraws his goods from the ship, or having hired a ship to go to a distant po. t, and engaged to funii di a cargo homewani, fails ' Bcawe.'s Lex Merc. 142. - Ibid. 3 Jbid. 133. to Conveyance of Goods.- — Freight. 2G7 to do so, whereby tlic sliip is forced to return in ballast, by tlie law of England the owners are entitled to a compensa- tion, to be ascoriaii'.ed, in case of disagreement, by a jury, upon a consideration of all thc^ circumstances of the case, and of the real injury sustained by the owners '. Unless a contract for the conveyance of merchandize is cornplettly perf )rmed by the delivery of ihe goods at the place of destination, tl:e merchant will not be subject to the payment of any freight whatever. But an interruption, as in the case of capture and recai:turc, of the regular course of the voyage, not arising from any iault of the owner, will not deprive him of his freight, if the ship afterwards pro- ceeds with the cargo to the place of destination -. So if part of the cargo be thrown overboard for the pre- servation of the ship and the remainder of the goods, or if the master is compelled (o sell a part of the cargo for victuals or repairs ; in these cases, if the ship afterwards reach the place of destination, the owners will be entitled to the value of the freight for the goods so thrown overboard or sold ; as in the first case they must answer to tlie merchant for the value of the goods thrown overboard by way of general average ; and, in the second, must pay him the price which the goods would have fetched at the place of desti- nation ^ As to the payment of freight for the conveyance of living animals, whether men or cattle, which may die during the voyage, the following distinction has been taken : if the agreement be to pay freight for lading them, the owners will be entitled to freight notwithstanding their death ; but if for transporting them, then no freight is due for those • See Wesdand v. Robinson, cited 2 Vern. 212. •^ The Racehorse, 3 Roii. Adm. Rep. 101. 3 Roccus, not, 89. Ord. of Wisbuy, art. 35. that 2(5S Of Mercantile Contracts for the that die on the voyage. No freight however is due for an infant born during the voyage '. U\ the case of a char Rocrus, not. 12. 3 Ladv James v. E. I- Company, Guildhall Sit. afier Mich. T. 1789. 4 Bell r. Puller, 2 Taunt. '^83! breaks Conveyance of Goods. — Freight. 269 bfeaks ground, and will continue during the whole course of the voyage, and during all unavoidable delays, not occa- sioned by capture, or such circumstances as entitle to gene- ral average or contribution. If a neutral vessel, having on board enemy's gooLls, is taken, the captor is to pay the whoie freight, although it has not been "wholly earned by the completion of the voyage', unless the goods so captured are contrabund ac- cording to the law of nations, such as naval stores, &c ; and then no freight is to be paid by the captor : and it makes no difference wiiether the master does or does not know the <^uality of the goods ^. Neither is any freight to be paid by the captor, if a neutral ship is employed in a direct trade between the colonies and the mother country of the enemy ^; or in the coasting trade, between one port and anotiier of a belligerent power •*; or in carrying tlie goods, even of neutrals, directly from the mother country of an enemy to its colony ^; or from one enemy to the colony of another enemy allied in the war *'; if these trades were not, in time of peace, open to the neutral nation whose ship is so employed. But freight is to be paid to the owners of a neutral ship employed in carrying the goods of an enemy from the port of one enemy to the port of another nation eq-ually hostile to the country of the captors ". If a ship is carried by the recap. • The INIercmius, Rob. Adin. Rep. 288. -t The Rebecca, 2 Ibid. 101. « The Emaiigel, 1 Ibid. 296. s The Immanntl,2 Fiob. Adm. Rep. ISO, ^ The Rose, Ibid. 206, ^ The "VVilheiiniiia, 'i Ibid, in no!i?. master S70 Of Mercantile Contracts for the master has waited a reasonable time belbre departure for the result of a claim of restilntion '. If an eiiemj's vessel, havini^ on board neutral goods, l)e taken, and the captor conduct the ship and cargo to the original port of destination, having performed the contract of t!'.e master, he is, upon rcfstitution of the goods to tlie consignee, entitled to the freight, on tiie same principle on which he would be held not to be entitled, where he does not proceed, and perform the original voyage*. ^VIlere goods have been so deteriorated during the course of the voyage, as lo be of no value, it is undecided, whether the merchant is bound to receive tliem, or is at li- berty to abandon thcni, and by so doing discharge him- self from tlie freight. Jf the deterioration has proceeded from the fault of the master or mariners, the merchant is entitled to a compensation, and may recover it in an ac- tion against tije owners or master, provided he has not re- ceived the goods ^ But if it has proceeded from an in- trinsic principle of decay naturally inherent in the com- modity itself, the merchant must bear the loss and pay tlse freight. In the case of BaiUic v. I\Ioudigliani -*, Lord Mansfield said, the ov\ner of tlie ship has a lien for freight, but in a total loss, literally so called, no freight is due ; irt case of a loss total in its nature, wi(h salvage, the merchant may either take the part saved, or abandon. And again, in the case of Luke and another v. Lyde ', the same judge said, if a freighied ship becomes accidentally dis- abled on its voyage, without the fault of the master, the master has his option of two things ; either to rciit it, (if that can be done within convenient time,) or to hire another ' The R;i'-ehnr?e,3 Rob. Atlm. U^p. 101. '^ Th.- Fortnnn, 4 Ibid. 278. 3 Millrs and otliori v. Baiiibrid^-e and others Guil'iiiall, Dcr. 'iOtii, 1804. « .'ark's Insurance, bll. s 2 liur. SS2. I Bl. Rep. 190. ship Conveyance of Goods. — Freight. 271 ship to carry the goods to the port of dcliverj. If the mer- chant disagree s to lliis, and will not let hiin do so, \]\q mas- ter will be entitled to the Avhole freii^ht of (he full voyage ; and so it was determined in the House of Lords in the casS of Lutwidge and How v. Grey et al. As to the value of the goods, it is nothing to the master of the sliip, whethcif the goods are spoiled or not, provided the freighter takes them ; it is enougii if the master has carried them ; for hy so doing, he has earned his freight : and the merchant sludl be obliged to take all that is saved, or none : he shall not take .some and abandon the rest, and so pick and choose what he likes, taking that which is not damaged, and leaving that whicli is spoiled or damaged. If he abandons all, he is excused freight ; and he may abandon all, though they arc not all lost. In the case of the ship York, which had been chartered by the East India Company, and on her return home from India met with a violent storm off Margate, where she was stranded and sunk under water, the Company were held liable to pay the freight of a quantity of pepper delivered io and received by them, although greatly damaged by the sea water ; and the owners were held not to be answerable for the expense incurred in endeavouring to remove the in- jury occasioned by the salt water '. A covenant in a chartcrparty of affreightment, that the owner shall at his expense forthwith make the ship i\g\\i and strong, ^zc. for the intended voyage, and keep her so, is not a cor!(^ition precedent to tiie recovery of freight, after the freighter had taken the ship into his service and used her for a cerlain j5eriod. But if the freighter be afterwards delayed or injured by the necessity of repairing her, or if the owner's neglect to repair in the first iisbtance liad prc- ' Ilotham and clhers v. th- Ea*t India Company, Douj;. 27'2. cludei S79 Of Mercantile Contracts for the cludccl (lie froigliter fn^m making any use of the vessel, th'e iVeighter has his remedy in damages \ The cases in -which an apportionment of freight, or a part only of the sum stipulated for freight, may be claimed, rire, fiikt, When the shij) has performed the ivhole voyage, bat lias brouglit apart only of tiie merchant's goods in safe- ty to the place of destination. Secondly, When the ship from any disaster is unable to pS^osecutc and complete the whole voyage, but the master has delivered the goods to the merchant at a place short of the port of destination. Upon this subject of the apportionment of freight Malyne says*, " that if from any disaster the master is unable to prosecute the voyage, he may repair his ship or freight an- other ; but if he is uriable, or if he declines to do this, the raeithant shall pay freight according to the proportion of the voyage performed. And ■with this the maritime law conforms K This rule of the maritime law, wliich directs the pay- ment of freight according to the proportion of the voyage performed, pro rata itineris peracli, was recognised and fully adopted in the casi^s of Luke and another v. Lydc, and of Lutwidge and another v. Grey and another, before mentioned ; in the latter of which Lord Mansfield further observed, 'If ths master lias his election to provide another ship to carry the goods to the port of delivery, and the merchant does not desire him to do so, the master is stiiJ entitled t(i a proportion, pro rat fi, of tlie former part of the voyage.' .But if a ship, having proceeded but a few days on the voyage, is, from had weather and beconuug leaky, obliged to return, and is there detained by an embargo; it has been. > Ilavrlock v. Geddes, 10 East's Rrp. 555. ■= P. 9S. 3 Sec A'jbutfs Law of Sicrcliant Sliips and Seamen, p. '.iSj. held Gonveyance of G'aq^s. — Freighti 213 \f^Xil lliat no freight is due : if any expenses, however, have been incurred by the ship on account of the cargo, they must be paid '. So if the ship is prevented from setting forth on the Yoy* at^e, no partition of freight pro rata itineris can be claimed for goods laden on board, even if such prevention arises without the fault of the master ; as where the vessel while waiting for convoy was cut out of (he river by the enemy. For freight dcfes not commence until the ship ha« brolien ground and begun the voyage *; So where, under an agreement in a charterparty, the plaintiff let his ship to the defendants on a voyage from Shields to Lisbon, with convoy, the freight to be paid on riglit delivery of the cargo ; the ship having sailed from Shields with tlie cargo, and joined convoy at Portsmouth, and after being detained near a month off Lymington, her sailing orders being recalled by the convoy in consequence of the occupation of Portugal by the enemy ; and the de- fendants having refused to accept the cargo at Portsmouth^ to which the ship returned, it was unloaded by the plain- tiff after notice to the detendants, and then was sold by consent of both parties without prejudice : Iseld that the plaintiff could not recover freight pro rata on demurrage ^ So where the master of a vessel coveng^nted witli the freighter (inter alia) that the vessel should proceed v,iih the first convoy from England for Spain and Portugal, o? either, as he should be directed by the freighter or hi? agents, and there make a right and true delivery of the Cargo agreeably to the bills of lading signed for the same, and (o take in a home cargo, and return and make a right and true delivery thereof at London, &c, ; in consideration > The Isnbella .Tarobina, 4 Rob. Adm. Rep. 77. « Cnrlino; v. Lon-, I Bos. and Pul. 634. 3 Liddsrd v. Lopes and another, 10 liasfs Rep. B23. whereof, !^74 Of Mercantile Contracts for the whereof, the frciohter covenanted (uiter alia) to load the vessel out and home, and pay certain frei D.iVidionv.G Wynne, 12 i:as*,S81- ^ and Conveyance of Goods. — Freight. 275 ^nd homeward voyage are distinct, freight will be due lor the proportion of time employed in the outward voyage'. If a ship freighted to H. is prevented by restraints of princes from arriving, and the consignees direct the muster to deliver the cargo at G., and accept it there, be is entitled to freight pro rata itincris. And if he is prevented by the default of the consignees from delivering the whole cargo there, he will be entitled to freight pro rata for the part delivered*. And from the same case it seems, if a ship }3e freighted on a single voyage outwards, and be prevented from deli- vering her cargo, that she is entitled to freight from the owner of the cargo for bringing it back ; as also demurrage from the time of her arrival at the port of loading and lio- ticCj till the owner receives the cargo, or the master has had time to discharge it, if abandoned by the owner. If there is no express stipulation to the contrary, the master is not bound to part with the goods, until his freiglit is paid. And if, by the regulations of the revenue, the goods are to be landed and put into tlie king's warehouse, if the duties are not paid, the master may enter them in his own name, and thereby preserve his lien'. If a consignee receives goods in pursuance of the usual bill of lading, by which it is expressed that he is to pay the freight, he by such receipt makes himself debtor for the freight, and may be sued for it ■*. But tlie master's right to exact payment of the freight from the consignee, does not arise till the delivery is completed or determined^. If a consignee, known as such to the master, sells the goods before they are landed, iie and not the buyer is liable > MoUoy, b^2. c. 4. s. 9. Malyne, p. 98. iMackrcll v. Sitnoud and Han- key, Trin. T. 16 Geo. III. B. R. "- Christy v. Row, 1 Taunt. 300. 3 Abbott, 276. * Roberts v. Holt, 2 Show. Ali'.i. Cock v. Taylor^ 13 iinst's Rep. S39. « Christy v. Row, I Taunt. 300. • . t2 • to 276 Of Mercantile Contracts for the to be sued for the freight, although the buyer enters the goods at the ciistoui-house in his own name'. Neither does such entry of goods at the custom-house, made by a person who is only agent for the consignor, and known to the master to be acting in that character, render such agent liable to be sued for the iVeight*. or INSURANCE. Insurance is a contract by which the insurer undertakes, in consideration of a premium, to run the hazard to iudeui- nify the person insured against certain perils or losses, or against some particular event'. The origin of insurance, like that of many other customs, which depend rather upon traditional than written evidence, lias occasioned much doubt among the writers upon mer- cantile law. From a passage in Suetonius ■♦, the origin of this contract has been ascrib<5d by MoUoy and Malyne to Claudius Caesar, the fifth emperor of Rome. Other authors have given the honour of it to i\\e Rhodians. But from several concur'^ent testimonies, it is evident that the inven- tion of marine insurance is of modern date : both Grotius' and Bynkershoek^ expressly declare, that among the an- cients this contract was unknown, 1. Of the Policy. The policy, which is the instrument in which the terms of the agreement are set forth, is generally printed, with a few terms superadded in writing, calculated either to con- tract or confine, or to enlarge or extend the printed language, and thereby to render it subservient to the intention of the « 7\rtaza v. Rmallpiero, 1 Esp. X. P. C. 23. ' Ward V. Fclton, 1 Easfs R. 507. ^ g jj. ^om. 458. « In Vita Tiberii Claiulii, c. 18. • ' 5 Dc Jure B. ac P. lib. ii. c. 12. s. .S. * Quasst. Juris Pubiiri, lib. i. c. '^I. ■ ' ' parties: Conveyance of Goods. — Insurance. ^IT parties to the particular contract'. It is not, like most con- tracts, signed by both parties, but only bj the insurer or underwriter^. Policies aro of four kinds : I . An interest policy. S. A wager policy. 3. An open policy. 4. A valued policy. 1. An interest policy is where the assured has a real, substantial, assignable interest in the thing insureds 2. A wager policy is an insurance founded on an ima- ginary risk. . 3. An open policy is where the value of the thing in- sured is not inserted in the policy, but must be proved if a loss happens. - 4. A valued policy is where the value of the thing in- sured has been settled by agreement between the parties, and that value inserted in the policy ■♦. After a policy of insurance has been once underwritten, it cannot be altered by either party, eitlier on the ground that the intention of the parties Avas mistaken, or that the policy had been framed contrary to the real agreement ' ; unless by the consent of the parties ^ ; cr that there exists some written document to show that the meaning of the parties was mistaken''. Of the Requisites of a Volicy. The essential parts of which a policy is composed arc eight. First, The Name of the Party inspired. It was formerly the practice to eiFect policies of insurance in blank, without naming the persons on whose accounts they were made. But this being found both mischievous and inconvenient, by the statute 25 Geo. III. c. 44, it wasdi- • 3 Bur. 1555. S^-lw. N. P. Q.'JQ. " Park's Insuranre, 1. 3 Mar-ihali's Insurance, \^0- * Srhv. N. P. 940. 5 Henklc v. 'J'he Royal Exohan^o Asfurancc Company, 1 Vcs. S17. • Bates V. (irabham, 2 Salk. 414. « Motteuj V. The Gov. and Coinp. of the London Assurance, 1 Atk. 545. rectcd, i?78 Of Mercantile Contracts for the reeled, that the name of all persons interested, or, if they resided abroad, the name of their ag-eats in this kingdom, should be inserted in the policy. The provisions of this act, however, being found inadequate to the purpose for which it iviis designed, it was rep(\iled by the 28th Geo. III. c. 5C, which enacts, that it sliall not be lawful for any person to effect any policy on siiips or goods, without first inserting the names or usual style or form of dealing of the parties interested ; or of the consignors or consignees of the pro- perty insured ; or of the persons receiving the order for, or elTecting, tlie policy ; or of tiie persons giving directions to the agent immediately employed to effect the same; and that every policy made contrary to the meaning of the act shall be imll and void. Upon this act it has been held, that it is not necessary, ivhere a policy is cflected by an agent, that the name of the agent, or any other description to his name, should be in- serted in the policy, eo nomine, as agent'. And it has also been decided, that a policy effected by a broker, de- scribiiig Jiimself therein as " agent," was a sufficient con^- pliauce with the requisition of the statute*. Secovdlij^ The Names of the Ship and Master, By the common law and usage of merchants, it seems necessary to insert the name of the ship. But should this be misfaken, tlie insurance will not be vitiated, provided the identity can be proved, and that there was no fraud*. To avoid any inconvenience which may arise from a mistake in the name of a ship, it is usual to add in the policy, to tlie name given, these words, " or by whateveir other name or names the same ship should be called •*.'* ' Ci- Vic^nifr v. Srvanjon, 1 Bos. and Pul. 346, n. ^ Bell V. Gir<.n, 1 B-ns. and Pul. 315. 3 Le McBuriir V. Vr,iigliaii, 6 Last's R. SSI. * Schv. N. P. 944.- Thirdly^ Convey ance of ^oods . — Insurance . 279 Thirdly^ The Siihject Matter of the Insurance. It must be specified whether the insurance is made upon ships, goods, or merchandises. With respect to goods, ihere are some kinds of property Avhich do not foil under the general denomination of" goods in a policy ; and for the loss of which the underwriters arc not answerable, unless they are specifically named. Thus goods lashed on deck, the captain's clothes, or the ship's provisions ; fot none of these things are within a general policy on goods, which meaiLS only such gooils as are merchantable, and a part of the cargo'. So goods stowed on deck have been held not within a general policy on goods, for tlie risk is greater as to them tlian as to other goods -. But ]\Iagens, in his Es- say on Insurances % says, that gold and silver, whether coined or uncoined, pearls, and other jewels, may be iiisured at London and Hamburgh, and several other places, under tiie general expression of mcrchandi>,c. Fourthly, The Voyage i/isiired. The. voyage insured must be truly and accurately de- scribed in the policy, namely, the time when, and place at which, the risk is to begin, the place of the ship's depar- ture, tlie place of her destination, and the time Avheii the risk shall ehd''. On the goods, the risk usually begins from tlie lading on board the ship, and continues till they are safely landed; on the ship, from her beginning to lad(^ at A. and continues till she arrives at the port of destination, a;'d is there moored in safety twenty-four Iiours. From the words of the policy, it is obvious, Mr. Park observes, that insurers are not answerable for any accidents « n('s> V. ThwaiJf , Guildlmll Sittings attrr Hil. 16 Qm), III, = Rackiionse V. Ripley, Sitt. alter Mich. 180i, C. P. 3 Vul. i. J). 10, ' 4 S.'lw. N. P. 915.. _ . ■\vhich 230 Of Mercantile Contracts for the ivhicli may happen to (he ^oods in lighters or boat? going aboard, previous to the vo/age. Yet, as the policy says, the risk shall continue '' till the goods are safely landed," it seems no loss obvious, m here ships cannot come close to the quay, in order to utiloiid, the insurer continues responsible for the risk to be run in carrying the goods in boats to the sliore. If there be a loss, however, in these cases, the accident must have happened while the goods were in the boats or lighters belonging to the ship ; for then it is consi- dered a continuance of the same ship and voyage. But if the owner of the goods chooses to emj^loy his own private lighter to land them ' ; or if, after the goods are put on board a public liglitrr, the owner takes them into his own possession, and discht^rges the lighterman % the underwriter in such cases will not be liable* But where the goods were laiidcd in a public lighter, publicly registered, the under- writers were held liable for Ihe damage which happened, although the lighters had been employed and paid by the consignees of the goods ^ Ffthly, The various Perils against ivhich the Insurer under -> takes to indemnify the Assured. The words now used in policies are so comprehensive, that there is scarcely any event unprovided for. The insurer undertakes to bear " all i;erils of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart an4 countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, aiid people, of what nation, condition, and quality soever; barratry of the mas- tej arid mariners ; and all other perils, losses, and rnisfor- X Sparrow V. Carr^itliprs, 2 Str. 1236- « Strons;v. Natallv, 1 N. R. 16. 3 Ifurry V. Th? Royil Exch. Ass. Comp. 2 Bos. and Piil. 4 SO- See Rucker V. •TheLoatlon Assurance Coir.p. ibid. 432, n. (a). Matthie v. Potts, '3 Ibid. 23. tunes, Conveyance of Goods. -^Insur mice. S2SI tunrs, dial have or sIi;;U come to the liiut, dctrimenf, or damage of the saiJ c^oods and merchandises, and ship, or any other part thereof." But although the words descriptive of the hazards run by t'le insurers, arc so very comprehensive, it should seem, says Mr. Park, that a great diflerence is to be made between the damage sustained by goods from inju- ries on board a ship, and that which occurs by external ac- cidents. 'I'liat the insurer is liable in the latter case cannot admit of a doubt ; but as the former may proceed from bad stowage of tlie goods, or from their being ex[)osed to wet, the, ship, and not the insurer, ought to be answeral:»Ie. lu Malyne' it is said, that if any loss arises from theft on board the ship by the mariners, the insurers are not chargeable with the loss, but the master must make it good; which opinion is supported by tlie statute 26 Geo. III. c. SG. by which the owners of the ship arc liable to make goodaiT losses happening on shipboard, to the aiiiount of the value of the ship and freiglit. But that the underwriter is liable for a robbery of the goods insured, when committed by thieves from without, cannot be doubted ; as thieves are a peril expressly insured against by the j olicy ^. The policy is frequently made with the M'ords"}ost or not lost'- in it, by which the hisurcr takes upon himself, not only the risk of future loss, but also the loss, if any, that may already have happened ^. Sixthly y The Premium, or Consideration for the Risk or Hazard run. This is the most material part of the policy, because it is the consideration of the premium received, that makes the underwriter liable for the losses that may happen. For, > P. ^g.l 2 Harford v. Maynard, Guildhall, Hil. Vac. 1T85. 3 -Marshall's Insurance /JoT. if •^2 Of Mercantile Contracts for . the if the premium Aveie not acliially paid at the time of the stil^sciiption, it does not apprar (hat tlie underwriter can aftc'iwardi maintain an action for ii against the assured^ the policy expressing it to have been received at the time .of underwriting. Seventhly f The Date, Rc^^ularly the policy should be dated ; tliat is, the day, month, and year iij which it is made should be added. It is usualj tliough not essentiidly necessary, to specify the sum insured. Eight/dj/j The Stamp. The policy m\ist be duly stamped, according to the regulatiojis of the 48 Geo. III. c. 140, Schcd. Part I. ■which are as follow : 1. Wi)ere the policy of assurance of any ship, or upon any goods or properly on board, or upon the freight of any ship, or upon any other interest relating to any ship, or upon, any voyage to or from any port or place in th<; United Ki?igdom of Great Britain and Ireland, or in the islands of Guernsey, Jersey, Alderncy, or Sark, or tlie isle of Man,. to any other port in the said United Kingdom of Great Britain, &c, where tlic premium or consideration shall not exceed 205. per (^ent. on the sum insured ; if the whole sum insured s:;all not exceed 100/. a duty must be paid o( Is. 3d. If it exceeds lOOl. then for every 100/. and also for any fiiictional part of 100/. whereof the same shall consist. Is. 3d. And where the premium or conidcration"" shall exceed 205. per cent, on the sum insured, if the whole sum shall jiot exceed lOOZ.— 25. 6d. ' If it exceeds' 100/. then for every 100/. and also fdr any fractional part of 100/. whereof the same shajl con- gist, 25. C(^. But Co?iveyance of Goods. — Insurance. 2S3. But if the separate interests of two or more distinct persons shall be insured by one policy, then the said duty pf Is. 3d. or 2s. 6d. shall be charged in respect of each fractional part of 100/. as v,e\l as in respect of every full sum of 100/. insured, upon any separate and distinct in- terest. 2. Policies of assurance upon any other voyage than before specified, or for any certain term, not exceeding twelve calendar months : Where the premium shall not exceed 205. per cent, on the sum insured, if the whole sum insured shall not exceed 100l.—2s. 6d. If it exceeds 100/. then for every 100/. and also for B.ny fractional part of 100/. whereof the same sliall consist, £5. 6d. And where the premium shall exceed the rate of 205. per cent, on the sum insured, if the ^\hole sura insured shall not exceed 100/. — js. If it exceeds 100/. then for every 100/. and also for any fractional part of 100/. whereof the same shall con- sist, 5s. But if the separate interests of two or more distinct per-, sons shall be insured by one policy, then the duty of 25. 6d. and 5s. shall be cliarged in resjiect of each and every^ fractional part of 100/. as well as in respect of every full sum of 100/. insured upon any separate interest. 3. Policies of assurance, commonly called a mutual in- surance, whereby persons insure one another without any premium or pecuniary consideration : Upon any voyage from any port in the United Kingdom of Great Britain, or in the islands of Guernsey, Jersey, AI- derney, or v^ark, or the isle of ?vlan, to any other port in jthe said kingdom, or islands, or isle of Man, for every 100/.- and 'SSi Of Mercantile Contracts Jbr the and also for each fractional part of 100/. thereby insured to any person, 9s. 6d. Upon any other voyaj^c whatsoever, or for any certain term, or period of time, not exceeding twelve calendar months ; for every sum of 100/. and also for each fractional part of 100/. insured to any jjcrson, 5s. The cases when alterations may be made in a policy of in- surance duly stamped, without an additional stamp being ne- cessary, arc regulated by the statute 35th Geo. Ill . c. 63. s. 1 3. which enacts, that provided the aKeration be made before notice of the determination of the risk originally insured, and tiiat the premium or consideration originally paid or contracted tor, exceed the rate of ten shillings on the sum insured, and that the thing insured remain the property of the same person or persons, and that the alteration do not prolong the term insured beyond the period (twelve months) allowed by this act, and that no additional or further sum be insured by means of such alteration ; that no additional stamp duty is necessary by reason of such alteration. Upon this statute it has been held, that where a policy of insurance had been ellected " on goods and specie on board of ship or ships sailing between the first of October 1799 and the first of June 1800," an alteration in the po- licy, extending the lime of sailing to the first of August 1800, did not require a new stamp ; for by the words of the act, " so that the alteration be made before the determina- tion of the risk originally insured," is to be understood such a determination of it, as is occasioned either by the loss or safe arrival of the thing insured, or by the final end and conclusion of the voyage'. But where the original policy was effected " on sliip and outfit," and after the ship had sailed, and the risk had attached, was altered to " on ship and goods," it was held that the policy in its altered ' Kensington v. Inglis, in error, 8 East's Rep. 273. state Conveyance of Goods. — Insurance. 2S0 state required an additional stamp; for the words, "the thing insured shall remain the property of the same persons," apply to one identical and contitmei subject matter during- the whole time insured '. 2. Of the Consiructinn of tfie FoUcy. A policy of insurance being considered as a simple con- tract of indemnity, must always be construed, as nearly as possible, according to the intention of the contracting par- ties, and not according to the strict and literal meaning of the words. And, in questions on such construction, no rule has been more frequently followed than the usage of trade '. lu the case of Robertson v. French ^, Lord EUcnborough said, " that the same rule of construction which applies \o all other instruments, applies equally to the instrument of a policy of insurance, namely, that it is to be construed according to its sense and meaning, as collected in the first place from the terms used in it, which terms arc tkemsclves to be understood in their plain, ordinary, and popular sense, unless they have generally in respect to the subject matter, as by the known usage of trade, or the like, ac- quired a peculiar sense distinct from the popular sense of the same words ; or unless the context evidently points out that they must, in the particular instance, and in order to effectuate the immediate intention of the ])ariies to that contract, be understood in some other special and peculiar sense.'' A policy on a ship gonendly from A. to B. shall not be construed to be discharged until tlie ship is unladed. But if it contain tlie usual words, " till moored twenty-four hours in safety,'* the insurers shall be answerable for no loss that does not happen before the expiration of that time ; • Hill V. PaUen, 8 East's Rep. 373. » " 1 Bar. 348. 3 4 East's Rep. 130. even ^86 Of Mercantile Contrdcts for the even though the loss "vvas occasioned by an act of barratry of the master during the voyage '. So if a ship be insured for six montlis, and three days before the expiration of the time receive her deatli's wound, but by pumping is kept afloat for three days after the time, the insurer is discharged ^. Under a policy containing the usual words, *' till moored twenty-four hours in safety," and where the cap- tain, the very day on which t]>c ship arri\cd at her moor- ings, was served with an order from Government to return in order to perform quarantine, the underwriters were held lia- ble for a subsequent loss ; for under such circumstances the ship could not be said to have been moored twenty-four Lours in safety, although she did not go back for some days^ In an insurance upon freight, if an accident happens be- fore any goods are put on board, which prevents her sail- ing, the freight cannot be recovered •*. But if the policy be a valued policy, and part of the cargo be on board when such accident happens, the rest being ready to be si lipped, the insured may recover to the whole amount of the policy \ So in an open policy on freight, the underwriters were held liable to pay the insurance, tliongh the ship had saili^d in ballast, and was captured before her arrival at the place where the cargo was to be put on board ; for on the instant of the departure of the ship, the contract for freight has its inception, and the right to freight commences ^\ When an insurance is '*at and fiom" any place, the sliip on her arrival at that place, is protected during her ' Lockver v. Omev, 1 T. R. 252. ' Meretonv v. Dnnlop, liastcr T. 23 Geo. TIT. B. R. 3 Waplrs V. Kaincs, 2 Str. J 243. • ■• Tonge v. Watts, 2 Stn. lioX, 5 Montgomery v. i;j^s;ii«.;toTi, ?, T. R. 36i. ^ Thompson V. Taylor, 6 T. R. 4TS. preparation Conveyance of Goods. — Insurance. 287 preparation for the voyage upon which it is insured : but if all thoughts of the voyage be laid aside, and the ship be there for a considerable time with the owner's privity, the insurer is discharged '. But a policy at and from a place, the name of whicli equally designates a particular town, and a port compre- hending an extensive district of coast, does not protect a cargo laden any where within the limits of the port, but refers to the town itself ^. Neither will a policy, if it describes a voyage at and from a place which is the head of a port, cover a voyage at and IJrom a distinct place which is a member of the same port '. And if a policy be cflected on goods on a voyage defined from A. to B., the risk to commence at and from the load- ing thereof on board, not specifying where, it must be in- tended a loading at tiie place from which the voyage com- menced. And if it be proved, tiiat the goods were loaded in an earlier part of the ship's coarse, and before her arrival at the place where the voyage insured was to commence, tlie assured, iu case of lois, cannot recover on the policy •*. Wlicre a ship was charteretl on a voyage from London to Dominica, and back to London, at a certain freight upon the outward cargo, and after delivering her outward cargo at Dominica, the charterers were to provide her a full cargo homeward, at the current freight from Dominica to London, it was held that an insurance, by the owner of the ship, on the freight at and from Dominica to London, attached while tlie ship lay at JJomiuica, delivcrino,- her outward cargo, and before asiy part of the liomev/ard cargo was shipped, during which time siie was captured \ : • Chitty V. Srhvyii, ? Atk. :ir,9. ^ Constable v. iVohle, 2 Taunt. 403, 3 Payne v. HiUchinsoii, Ibid. n. 4 ''"pitta V. Wootimnii, Ibid. 4)6. 5 Honicastle v. Stuart, 1 iiast's Rep. 400, So ^8; Of Mercantile Contracts for thi So on a policy on freii;lit, *' at and from London (o Ja- maica, with liberty to touch at Madeira, and to discharge and take ingoods there;" 8uch freight to be paid in Madeira, on delivery of the gooils shipped at London for that place, by Madeira Avine at 40/. per pipe, to bo carried in the said ship free of freight ; the uiiderwritcrs Mere hild liable for the total freight, though wlien tlie sliip was QJipturcJ the wine to be paid for freight was not on board ; for the con- tract of freiglit was entire, and the charterparty treats the whole as one voyage '. Where there was an assurance on the outward and home- ward bound voyage, and the latter ran *' at and from Ja- maica to London," it was held, thiit the homeward risk be- gan when the ship moored at any port of the island, and that there the outward risk ended, and did not continue till she came to the last port of deliver}' -. In the cases ofBarrass v. The London Ass. Comp.', and Leigh V. IMather ^, it was held that the risk upon the ship ended twenty-four hours after its arrival in the first port of the island for which it was destined ; but that the outw^ril risk upon goods coiitinued till tliey were landed. Li the construction of policies, the strictum jns, or apex juris,' is not to be the rule : but a liberal construction is to be adopted, and the usage of the trade called in to explain any doubts. Thus, in an insurance on goods from Malaga 4o Gibraltar, and from thence to England or Holland, the parties liaving agreed that the goods might be unloaded at Gibraltar, and reshipped in one or more British ship or ships, and it appearing in evidence that there was no Bri- tish ship at Gibraltar, but that the goods had been unloaded and put into a store ship (which was ab.vays considered as ' Atty V. Lindo, 1 New Rep. 230. ^ I'niTideii V. Cov.lpy, 1 151. Rp\). 111. 3 GiiiMliall Sin. aftrr Hil. MH->. < CiuildhaH Sitt. after Midi. T. 1795. a warehouse), Conveyance of Goods.— Ins2trance. 289 a warehoiistO, the insurers were held to be liable for the loss of these gooils in the store ship '. In the case of Pelly v. lloyul Exchange Assurance Gompany % Lord Mansfield s;iid, "the insurer ut thcdtne of umlerwriting-, has under his consideration the nature of the voyage, and the usual nuuuier of doing it ; aad what is usually done by snch a ship, with such a cargo, in such a voyage, is uiulcr.stood to be referred to by every policy." The same })rinciples were adhered to ia Noble V. Kennoway \, v»here the same learned judge said, " that every under uriter is presumed to be acquainted with the practice of the trade he insures, and that whether it is recently established or not." In no instance is a reference to tlic usage of trade more apparent than in the cases of insurance upon East India voj-ages. The charterparties of the East India Company give leave to prolong the sliip's stay in India for a year, and it is common by a new agreement to detain her a year longer. The v/ords of tlie policy too are very general, without limitation of time or place. These charterparlies are so notorious, and the course of the trade so well known> thatilic underwriter is always liable for any intermediate voyage^ upon which tiie ship might be sent while in India, though not expressly mentioned in the policy. Th(;se principles were fully laid down and settled in the nine causes tried upon the ship Winchelsea, Ea^t Indiaman ; the verdicts in whicli were ultiniutely uniform for the plain- tiifs the insured, against the underwriters •*. From these casi\s it is evident, that in the construction of East India policies, whether the wonb be large and com- prehensive, or restrained and limiti'd, the usage of trade will always be conxsiclered, and tiie intermediate and coun-, ' Timeyv. Ethcrinittoi), 1 Cur. 3!8. ' 1 Bur. 341. '' Dn^l^^)n v. i:wrr, I 5'. W. Vit. 5 l',ailli>- V, Moii(ii^li.i:ii,JIiI. 25 Gen. ]il. B. l\. « Doug. 327. ■ .\iott<''*i6 it al. V. r.'jr.doii As-ura(n;c C((!jij,ianv, 1 Atk. 5'15, Liberty Conveyance of Goods.— Insurance. 22 i I/ibf'riy given in ii policy on a Mshing voyiigc, to cliase, capture, and man prizes, does not aulhorise the ship to liy- by nine days oiKa port, -waiting lor an enemy's ship to come out, "when she shouhl have completed her cargo ; althougk she lay in wait during that lime within the limits of her fishinn^ oTonnd'. 3. What Versons may he insured. In this country all persons, wliethcr British subjects or aliens, may, in general, be insured. But an action cannot be maintained on a policy at the suit or on the behalf of an alien enemy during war, although the property insured be of British manufacture, and exported from this country*. An insurance, however, may be effected on a ship belonging to an alien by a British subject, as trustee on behalf of the ship-owner, and an action on tiie policy may be maintained at tlie suit of the trustee even in lime of war ^. So an alien domiciled here in time of war, and who is licensed to carry on commerce with the belligerent counlry lor the benefit o\^. himself or of his correspondents, may sue and recover upon a policy in his own name in case of a loss by capture, al- though his correspondents may be residing at the time in the enemy's country/. A neutral, although domiciled and carrying on trajc in an enemy ""s country, in partnership wilii an alien encrnvj may insure his interest in tlie joint property, and, oncomii.^- into this country, may sne for the recovery of the lutsS arising from one of the perils insured against ^ 4. IVIio may he Inmrers. By the comm.on law and usage i)f merchants, any person whatever nught be an insurer. But much inconvenience ' Ilibbi-rtv. JIalliday, 2 Taunt. 49H. • Hiandon v. ,\fs.I)itt", li T. II, '23. l!ri:tmv v. To-rVen, 5 Hid. S^. 3 Kciisin^itoii V. liij;;lis, b least's Ut-p. 'sibji, * Uspnriclia v. .Noble, l.'i Ibid. 'd'ai. ^ llnuii V. Etlic, 0' T. U. 'llS. V 2 ana ^2 Of Mercantile Contracts fur the and niihcbkif having arisen from insurances made bj persons in insolvent circmnsliiiiccs, by the htatiite ii Geo. I. c. 18, all socielies and part net siii^js, except tljc Royal Exchange and London Assurance Companies, arc prohibited from granting, signing, or under-writing any policy of assurance, or making any contracts for assurance, of or upon any ship or ships, goods or merchandises at sea or going to sea, and from lending any moneys by way of botlomr}', on pain of the policy being ipso facto void, and the mo- ney snbscribed or underwritten forfeited : and in case of any money advanced by way of bottomry contrary to this . act, (he bond or other security for the same to be voitl, and the offenders Iial>le to be sued for an usurious con- tract. It is however provided, that any individual may subscribe any policy or assurance, or may lend money by Avay of bottomry, notwithstanding this act, so that it be nut on the account or risk of a corporation or body politic, or upon account or risk of persons acting in a society or part- nership for that purpose. And therefore a contract for a marine insurance, in which the phuntiif did uot alone stand the risk insured, but asso- ciated one or more in partnership with him, cannot be en- forced'. And although one partner in such illegal in- surances has paid the whole of the loss, he will not be allowed to recover any part of the premiums from his co-partners". Which decisions have been fully confirmed in the case of Aubert v. Mdze, 2 Bos. and Pul. 371. But though this statute deprives the assurers of their remedies against each other, it does iiot operate so as to -tleprive thv assured of their action agaiijst the underwriter, ■if there be another secretly concemed with him in the risk*. ' Sullivan Vi Grea> PS. sittings iil'ic r i:. T. 1789. » |}....t!i V. llo.l!;:-,)!!, 6 T. K. -^n-). Mitihtl V. CockhajT.c, 2 IIpd. B1. Jiy, ' » i» 1'. !l. 403. The Conveyance of Goods. — Lmirunce. 2P3 ,. The rule then establislicd by llicsc cases teems to be, lliat if the credit of any {oriipany or society (except the two r.iciitioned m the sta(utc) be in any event pledged irj a con- tract of tills nadire, the coaliact is void. Thus, where a company of ship owners engaged to insure each others ships, thougli tlicy covenanted severally, and not johUly, to pay a crrhdn sum in case of loss, in proportion to their respective shares ; yciy as there was a clause providing tlud in case of tlie insolvency of any one of the members, ail Uie others were to be responsible, the contract was void '• But if in such an association, each iiidividual subscriber is liable only for t!ie sum . AOri. * (iodin V, 'I'hr l,onilon Assurance Coinpniiy, 1 liur. 489. 7 (in o;orv V. Clirislie, l';iik. 11. * Kins; v. (Jlovrr, 2 Now Roj). 206. 9 Cirantv. rarkinson, Park, 267. Larilaiy v. Cous\^s,2 E^ist'i Rep. 5 14, : served. 294 Of Mercantile Contract for the served, l.st, that the freight oiidit to bo insured eo nomine as fieij;b<, and lliat it will not be covercil i>y an insurance on jroods'; and, 2dly, unless an inchoat, ri.'iht to the freight has commenced, the assured ~,vi'i not be oniitlcd to recover *. By the maritime regulations of most if not all the tradiiig pov,cvs i)i Europe, insr.ranccs upon the wages of seamen are forbidden. In Great Britain, for the ])urpose of making tlie sailors interested in the return of the ship, it is enactee:ike's \. I'. C '?.U. J (irojson V. Gillxrl, i.aster, "^i?. Gen. III. B. Ft. * Rolil V. Parr, Gaililhalt Sittin-s afd-r llil. }790. 5 (;reen V. Crown, '2 Str. lit)-). .Newby v. Uead, Sittings after IMuh. 3 G>o. III. ^ Parks Insurance, 86. -'^Eur. GOi. Uepaiba V. Ludlow, Coin. Rep. 3i:0. coil- 996 Of Mercantile Contrncisfor the condcmrl'ition, the o-svner is entillcd to restitnlion upon stafcd salvnge. In which cases it is to be observed, tliat if the ship be recovered before a demand, the underwrilcr is responsible for the amount only of the loss sustained at the timeof the demand*; and that if he has paid the loss before the recovery, he Avill be entitled to stiuid in the place of ihe assured '. Altliough, by tlie terms of the policy, the underwriters undertake to indemnify the assured against all captures and detentions of princes, yd. it has been hfkl, that any assu- rance made on enemy's properly agaiiu^t liritish cai)ture is illegal and void, and consequently tliat thi^ assured could not recover, even after tlie c; ssation of lior tilities, on a policy of insurance e/Tccted in this country belbrc the commence- jnent of hostilities ^. By Detention oj Princes, &'c. On questions of detention not mucli dilficulty has arif^cn : the underwriter, by express "words, undertakes to indemnify against all dr.mages arising from the arrests, restraints, and detainments of iviiigs, princes, or people. Under these terms in a policy, dj-tent ioii is said to be an arrest or embargo in time of war or peace, laid on by the public antjiovity of the state'. And therefore, in case of an arrest or embargo by a prince, though not an enemy, the insured is entifled to recover against tlie underwriter •*. In case of detemion by a foreign power, who in time of war ri!) V h;'.ve seized a neutral ship, in order to be searched for enemy's property, the costs and cliarges consequent thereon must be lx)ri;e by the underwriter ', ^ ' Park's Insurance, f. » Malynr, I JO. * i? Bur. 69G, ^ Saloiicci V. Johnsnr, Hil. 25 Geo. IH. 15. K. But Conveyance of Goods. — Insurance. 397 Rut a dotoiition fi)r non-payment of customs, or for navi- gating against the laws of those countries where the ship happens to be, shall not fall upon the underwriter '. Where the risk is " at and from," insurers arc liuble for the payment of damage arising by the detention or seiznra of ships before the commenceniciit of the voyage, by t!i« government oftlie country Viheie the ship loads '. But if a party of rioters board a ship, and take part of tlie cargo, the underwriters are not liable, on a cou!:t stating a loss to be hy people to the plaintitfs unknown ; for (he Avord people in the policy means the ruling and supreme power of the country ^ British undervtriters are not liable for damages wliich owners of Ibreign vessels may sustain from endj.irgo laid by the British government on foreign ships *. But -where the assured is a subject of this country, lie may recover against a Britisli underwriter for tlic lobS sustained by the detention of the llritish government \ In all cases of losses by dcteiitio^i, before tiie insnied can recover, he' must abandon to the underwriter whatever claims he may have to the projrei ty insured '\ By Barratry. The derividion of tlie \vord barratry is very doubtful ; it comes most probably from the Itali;in barratrare, to cheat. It may be thus defined : Any act of the master and m.sri- ners of a criminal nature, or which is grossly negligent, tending to their own benefit, to the prejudice of tiie owners of the ship, and without their ponsent ai:d privity ">. But to constitute l>airatry, there must be a breach of ;iou, 4 T. R. 1S3. * Tniitt^nir r. ihiMian!, 3 Bos. and Piil. '291. s l-:iic V. TliDiupson, Guildhall Sltt. afUT Hil. If^Ol. ^ Park's Insurance, 1G9, " ibiJ. 111. S9$ Of Mercantile Contracts for the the master, in respect of li is owners, ^vitll a fraudulent or criminal intent, or ex malcficio ^ . It is not necessary, in order to make the insurers liable, that the loss shouhl happ>"n in tlie very act of barratry ; that is, it is immaterial -whether it take place during ihe. fraydu- lent voyage, or after tlie sliip has returned to the regular course ; for the moment the ship is carried Irora its right track with a fraudulent intention, barratry is committed *. But the loss in consequence of the act of biirratry must happen during the voyage Insured, and wilhin th(; time limited for the expiration of ilie policy, otherwiso the un-» derwriters arc discharged '. Barratry may be committed either by a ^vilful deviation-', in fraud of tlie owner, by smuggling', by running aAvay ■with the ship, by sinking or deserting Iicr, or by defeating or delaying the voyage w ith a criminal iiitcnt ^\ So barratry may be committee], if the master cruizes and captures a prize, in consequence of which the vessel was lost, although he thought he was acting for the benefit of the owners'. So if the master trade "with an enemy, even with a view to the advantage of Iiis owners, it is barratry, if on account of such illc-ral traflic the vessel insured is condemned ^. So if he sail out of port, without paying the port duties, •wliereby (he ship is forfeited, it is barratry '\ . But where a ship sailed a different course from that first intended, uhich alteration was publicly notified before the ship sailed, and where tjio master was to have no benefit by the change, it was held not to be barratry '". • Farlev. Rowrroft, S i:.n?t's R. Vid. '- Lockytr v. Offloy, 1 T. R. 2o'2. 3 Ibid. * Gowp. 143. 5 I T. R. 252. c Sehv. N. P. 9f)!K 7 Moss v. IJjrom, 6 T. R, 370. » Earlp V. Rowcroff, 3 East's Rpp. 120. s Kgi};htv. Canibridgr, 1 Str. 5^1. 1' Stainma V. Bronn, I, Str. 1179. So Conveijance of Goods. — Insurance. 299 So if a ship tuko ;) prize, and iti.stc;ul of pioccccling- oi> her vojage (he captain is forced by the maripers (o return to port ^vi(h his prize, ai2;ainst the orders of his owners, ths captain is justified of necessity ; and it is not bunatry, be- pause not done to defraud liis owners '. Neither is an act, of the captain, \vith the kno';vledi:i^e of the owners of the ship, though \yithout the priyii'y of the owner of the goods, who liapj)eiied to b^' the per-ori insured, barratrj-- : for barratry cannot bo couiinitted by any person except tile master or inaiin'TS, nor agaiiist ivjy person ex- cept the owners of the shin \ And if tiie master of the siiij) be also ow7ier, any act, w li ich in another master would be construed barratry, cannot be sq in him' ; eycn thougli he has n^'.ortguged his ship ■+. It -will be proper also to reniari^ that barratry cannot be pommiited against the owner of the ship with his consent'. Bif Fire. Fire is expressly mentioned in tJK' policy as a loss within ihe perils against which the underwiiters agree to iiidejunily the insurorj. Aiid therefore Avlicrc a ship was se! on fire to prevent her falli'ig into the hands of an eiieniy of sujK'rior force, it was held tl)at tlic underwriters were liable to make good the loas^'. Fire, said Lord Eik'ubprongh, is expressly lueatipiK'xi in the policy, as one of tlie perils a^aiirst which the underwriters undertake to indemnify t.he assiu'cd : and if the ship is destroyed by tire, it is of no consiquence whether this is occasioned by a cotmnon accident or by lightning-, 04" by au act done to the stale'. ' F,lt-ii V. Ci-oi;ilt>n, 2 Str. I'iivJ. ' ^utt V. iiomdifii, 1 T. R. .Tiri. Vallojo v. Wheeh-r, Cowp. 143, •2 11. .ss V. H'.uUtr, 1 T. II. 33: ^ Park's lusunuK-e, Iv'rf. '• S.-hv. .\. P. 9;->. * Ciortlon V. liimiuin^fcn; 1 Camp. N. P. C. l-^'J. ' JViii. So, oOO Of Mercantile Contracts for the So, if a ship be driven a niilc on shore bj a liuniranr, or be burnt in a dry dock while repairing, the insurer is liable '. 7. Partial Losses. A partial loss upon a siiip or goods is snch a proportion of the priir.e cost, as is equal to the diminution in value occasioned by the loss*. By express stipulation in the terms of the London policies, the underwriters declare that they will not be answerable for partial lo.tscs not araounthig to SI. per cent, llowxvor, thougli tliey provide against trifling claims for partial losses, they umlertake to indem- nify against lOiSOo, however inconsic|erable, tliat arise from a general average \ If several articles be insured for one sum, with a.disiinvt valuation on each, as upon ship so much, on cargo so much, and no part of the c:rgo be taken on board, so that the risk on that never attat^hes : if the ship be lost, tiie insured shall recover such a pfjrtion of the sum insured as tlie value of the article lost bore timat-' ing the loss is, to take ilu- value of the commodity at the prime cost or f"air invoice pri( e \ . ' Per Lord Mansti- 1(1, 1 I?tir. 341. ^ Mar,-h.')ll'-^ lii'^tirnncc, 5.'3a. 3 ParW's Insnranrf, J;}j. ■* Anirry v. Kod^t-r-, I lisp. \l. ydT. 5 Dick and another v. Allrn, G>!i!d!ial! Sitl. aft-r Miclt. T. ]7^5. But Convc}jance of Goods. — Insurance. ^i But tliesc ruk's can only apply to cases whore there is a specific description of goods : i\here the property is of various kinds, an account must be taken of the value of the whole, and a proporiion of that as tlie amount of tlie goods lost '. la adjust hig a partial loss on goods arising from sea dainapjc, the calculation is to be made on the diUi^'ience be- iween the respective gross proceeds of the same goods M'lien sound and when damaged, and not on the net proceeds ^ ; for the loss for v/hich the underwrite! is alone responsible, is tlie deterioration of tlie commodity by sea damage, and not for any loss -which m.ay be the consequence of the fluc- tuation of the market, or of ti)e duties or charges to Jje paid after the arrival of the commodity at the place of its de- etination ^. Since tlie I9th of Geo. II. in case of a total loss, the con- stant usage has been to let the valuation in the policy re- main, unless there be proof that the plaintiff had a co- lourable interest oniy, or tliat he has greatly overvalued the goods +. Some goods are of a perishable nature ; agai;'st the losses arising from tiie natural and inherent principle of corrup- tion in them, the underv.rittrs, by the ordinances of most countries, are held to be disc'iarged. Tlie underwriters of London have, indeed, Ijy express \\oids inserted in their policy declared, that they w ill not be asiswerablc for any partial loss happening to corn, Msh, salt, fruit, flour, and geed, unless it arise by way of a general average, or in con- sequence of the ship being stranded ; agaiast a loss by whicli lat{er event, the two insurnjice companies do not un- dcrtalve to be answerable K ' l,e das V. Huglies, KiistT, 21 Cen. HI. B. R. ■= JohiuoH V. Shcd:!on, 2 KaUVRrp. 5ol. reco^r-i^'-d in 3 Bo';. and Pul. ■■' LpwN V. RiH-ker,2iitir. 1!67. < Park's Insaranrf, ll'J 5 3 li'jr. '.35^. On .502 Of Mercantile Contracts for the On this clause it has been hehl that no loss of such com- moililies sliall be dcrmcd a total our, so ii.s \q charge tl«: insarers, as loiii^ as the coinr.iodily sj-jocifically rtir.ains, tliough perliaps wlioily unfit for use. '^h^ ^'*-^^ ^" - ^^''''• 1065. to the contrary lias been .since ovcrrn'cd by that of Mason v. Skurray '; in which it was also held, tiiat the term malt, includes pens, beans, and malt ; though rice has lately been held not to lie so considered -. Neither is salt- petre included within tlic term malt '. The doctrine thai the nnderwri(er is discharged while the commodity specifically remains, though it may be so da- maged as to render it on that account (lie subject of tolal loss, was held with respect to a cargo of wheat, which was partially damaged in a btorm •♦. The same was held whh respect (a a cargo of iish, which tras stinking and of no value when exaniin<'d\ But where a cargo of fruit was so much putrefied from sea diimaije that it was obliged to be thrown overboard, the undeiwriters w ere held liable ^\ S. Of Adjustment » The adjustmeat of a policy is the settling and ascertain- ing of tlie ainouut of the indenmily which the assured, after all allowances and deductions are made, is entitled to receive under the policy, and the fixing of the proportion which pach underwriter is liable to pay". And alter the signing of wliicli, if he refuse to pay, the owner has no occasion to go into the proof of his loss, or any of the circumstances • fiiiih'.ha!! Sin.-nfier Mil. HSO. "^ Mootlv V. Sun-ui^jf, Sitt. after llil. KDS. Srott v. BounliUion, 2 \ew R'-p. '21.S. . 3 .Toiirnu v. llourrrtni, Sitt. .iftor Easft-i, -il (".eo. III. 4 Wilson V. Smith,:} Cur. 15.30. s Co'.-kin- V. fr.isor, ^5 Geo. III. B. R. ' Dystiii V. F^aivcroftj .'} l'>o«. ami Ptil. AH. Ji'Aiulrews v. Vanglian, Giiil.ih.il! Sitf. aftor ^licii. 1191. ' Marshall's liisurance, 529, respecting Conveyance of Goods. — Insurance, oO^ tfspecting it : the adjusfmetit being considered as a note of lumd'. Cut though an adjustment is prima facie evidence against the imderwrittT, yet, if there has been any misconception of the law or fact upon which it hiis been made, (he under- writer is not absohitely concluded by it -; and until lie ac- tually pays the loss, he may avail himself of any defence, either upon the facts or the law of the case ^ So unless there was a full disclosure of tlic circumstances of the case as they really existed, before the luiderwritcr signed, his liability to the assured will be discharged, not- withstanding the adjustment •*. 9. Of Total Losses and Ahandomnent. A total loss is of two kinds ; one, wliore the propeiity in- sured peribhes ; the other, where the property exists, but the voyage is lost, or the expense of pursuing it exceeds the bcneiit arising from it K In the latter case the assured may elect to abandon to the underwriter all right to such part of the property as may be saved ; and having given due notice of his intention to do so, the assured will tlien be entitled to demand a compensation as for a total loss : but if the assured docs not in fiict abandon, or if he omits to give the uiiderwriter notice of his having abandoned, or if, being required by the underwriter to assign over bis in- terest in the property insured, he refuses to do so % he will iiot be entitled to claim as for a total loss''. \Vlien the assured has received intelligence of such a loss as entitles him to abandon, it is incumbent on him tp ' Ilog V. Gouldnoy, GuikihiiU Sitt. after Tihi. 1T45. Beawcs's Lex Merc. 3iq: ^Roiiors V. Majlor, Sitf. after Trh). 17S0. De Garron v. GaUjraith, Sit\ aftiT Trii. 1795. i iU'Yhcvi V. Chnnipinn, 1 Campb- N. P. C. 134. * yhepturd V. Chcwtcr, 1 Campb. N. P. C. 274. sex: U. 4^5. « a T. R. 2Ge. ? Solw. N. p. 974. make 504 Of Mercantile Conlracisfor the make his election to abandon, nnd to o;ive notice thereof io tlie nnderwriiei' %villiin a reasonable liuie alter receipt of flic intelli^rcnce ': otherwise the assured will be coitsiderecl a^. hiH'iiig- waved his right to ab;jndon ; and in case any part of t3;c pro^xTty insured be saved, lie can recover as for a partial loss only '. In the case of Hodgson v. Blackistoji % it was he^ld, lliat a notice of abandonment ^\as necessary, though tiic ship and cargo Iiad been sold and converted into money whea the notice of the hiss was received. But if the insured, hearing t!»at his ship is much disabled and has put into port to re|xiir, express liis desire io the underwriters to abandon, and be dissuaded from it by them, and they ordi r (lie repairK to be made : they are liable to the owner for all Use subsequent damage occasioned by the refusal, ti'.ough it should ainount to tiie whole suni insured*. When an abandonment is mtide^ it muit be a total, not a partial one ; that is, one pait of the property insured shall not be retained, and the other part aband«nef lies upon the person wishing to take advan*- tage of the fcau !. But though fraud will not be presumed unless it be fully and satisfactorily proved, positive and 1 Shirlev v. Wilkinson, B. R. Mich- 2i? Gon. HI. Douj;. SOG, " Barber v. Fletcher, Doug. 292. 3 Fitzherberl v. Matlier, 1 T. R. i2. direct 312 Of Mercantile Contracts for the direct proof is not to be expected : from the nature of the thing, circumstantial evidence is all that can be given'. II. Of Sea-worthiness. In every marine insurance, whether on ship or goods, it is a tacit and implied warranty, that the sliip is, at the tmie of the insurance, able to perform the voyage. Any defect which may ciidaniier the ship, though wholly un- known lO the assured, will vacate the contract, gnd dis^ charge the insurers from their responsibility*. But though the insured ought to know whether she was sea-worthy or not at the time she set out upon her voyage; yet, if it can be shown that the decay to which the loss is attributable, did not cornmciice till a period subsequent to the insurance, the nnderwriter will be liable if she should be lost a few days after her departure^ In Eden v. Parkinson-', Lord Mans- field said, by an implied warranty every ship insured must be tight, staunch, and strong, but it is sufficient if she be so at the time of her sailing. She may cease to be so in twcnty=four hours aficr her departure, and yet the under- writer will continue liable. But if a ship sail upon a voyage, and in a day or two become leaky and founder, or is obliged to return to port without any storm, or visible or adequate cause to produce such au eftect, the jury may presume that she was not sea- worthy when she sailed ^ The sea-woiii»iness of a ship being an implied condition in a policy of insurance, it follows of course, that in en- tering into the engagement, it is not necessary that there should be any previous representation of the condition of the ship ; because, unless it be fit for the performance of the voyage insured, there is no binding contract. But ' Park'-t Insurance, 282. ' Ibib. 288. ' 5 Bur. 2804. 1 Dour. 7.'^. = Munro aii(^ another v. Yandam, Guildhall Sittings After ^li'.h. 1794. ' thougl^ Conveyance of Goods. — Insurance. 313 though a ship must be sea-^vorthy at the time of entering into the policy, no insufficiency of the vessel in a former voyage will vacate tlie policy'. So if the assured has coTicealed no circumstance relative to the sca-^vo^t^liness which he was required to disclose, and did not know, at the time of effecting tiie policy, any fact wliicli rendered her, with reference to the risk insured, otherwise than sea-worthy, , he is entitled to recover -. But the assured cannot recover on a policy of insurance, unless the ship is equipped with every thing necessary to Jier navigation during the voyage ; the ship must be sea- worthy ; properly equipped with sails, rigging, and stores; she must be maimed with a sufficient crew, and have a captain and pilot of competent skill to navigate her for the voyage insureds 12. Of Illegal VoT/ages. AVhenevcr an insurance is made upon a voyage expressly prohibited by the common statute or maritime law of this country, the policy is void. And in such a case, it is im- Uiatcrial whether the underwriter did or did not know that the voyage was illegal ; because the very cpntract is a nul- lity, and a court of justice can never lend its authority to substantiate a claim founded upon a contract in direct contravention of the known and ehtablished laws of the land^. Of tliis opinion is Bynkershoek, who says, that even if it be told to the underwriter that the voyage is illicit, he shall not be bound ; because the contract is null and void ; aiisl where that is the case, the compliance with the terms of it depends upon the will of the contracting parties merely ^ VShoolbrcd v. Niitt, Guildhall Sitt. after Hil. 1782. ■^ Haywood v. Rogers, 4 Easts Hep. 190. 3 Law V. Ilollingwortli, 7 T. R. l()0. Fanner v. Lcgrg, 7 T. R. 186. Wedderburn ct al. V. ivll, 1 Campl). N. P. (\ 1. i Camdfii V. Anderson, 6 T. K. 123. 1 Bos. and Pul. 273. Wilsrn y. Marrjat, 8T. R. 31. I Bos. and Pul. 430. ; (iux-H Jur. Pub. 1. i. c. "^l. In 314 Of Mermnt'ile Contracts for the In the case of Camden v. Anderson, Lord Kenjon said, " If in llie commencement of one entire voyage there be any thing illt'gal, and an insurance be el;ect(d on the latter part of the voj'age, which taken by itself would be legal, such illt^gal commencement will make the whole illegal, and the assured cannot recover upon (he policy." In pursuance of this principle, it his been held that if a ship be insured " at and from A. to B.," and there be any illegality in the traffic during her stay at A., the insured cannot recover on the policy for a loss happening between A. and B.' • But in the same case it was held, that an insurance on the home- ward voyage is not affected by the illegality of the traffic in the outward-bound voyage ; and that goods purchased with the proceeds of a former illegal cargo may be the subject of insurance. If a ship, though neutral, be insured on a voyage pro- hibited by an embargo laid on in time of war, such an in- surance is void *. So an insurance upon a smuggling voyage, prohibited by the revenue laws of this country, is void ; but the rule has never been extended to cases against the revenue laws of a foreign state, because no country takes notice of the revenue laws of another*. We come now to consider how far insurances upon the goods and merchandises of an e:iemy are legal, expedient, or political. By the common law, the insurance of enemy's properly has been sanctioned ; and Lord Hardvvicke,in the case of lienklc v. The Royal Exchange Assurance Com- pany*, observed, that thrre liad been no determination that insurances on enemies' ships during war is unlawful. The legislature have, houever, repeatedly thought it neces- sary to interfere to prevent these insurances' ; the illegality ' Bird V. Appleton, 8 T. R. 562. ' Delmada v. Moltt .:x, Mich. So Geo. IIT. B. R. 3 Planche v. Fl?trher, Doii^. 238. ■» I Yes. 31T. « Stat. 21 Geo. II. c. 4. and 33 Geo. III. c. 'il. and Conveyance of Goods. — Insurance. 315 and inexpediency of which have also l:)een liiially seUled by two unanimous decisions of the Court of King's Bench'. But though an insurance on the properly of an enemy is illegal, yet an insurance effected on the property of an enemy by virtue of a general license to tiade with sucli eneray is valid ^. So a policy lawfully eifectod by a British subject on a ship belonging to an alien, and trading by virtue of a general license of the king, is good, and may Le. enforced by such British subject in a court of law, for the benefit of such alien owner'. But if it be provided in such license that tiie party acting under it shall give bond for the due exportation to the places proposed of the goods intended to be exported to such country, and tliey are exported without sucli bond having been. given, such exportation is illegal, and the owners cannot recover on a policy to protect the goods ^. So an insurance on goods, the property of Frenchmen, shipped in France in time of peace, but exported after the commencement of hostilities, cannot be enforced against the underwriters on the restoration of peace'. An insurance on the goods of a neutral to a neutral and friendly port is valid, although he may be resident in a place occupied by the enemy '^. So a Britisii under writer was held liable to the neutral owner of goods insured in a neutral ship, which was carrj-- ing enemy's property from its owner to the enemy's country, either as for a total loss, if notice of abandonment upon the loss of the voyage be given in due time ; or for an avenige loss, if such notice be given out of time''. ' Brandon v. Nosbilt, 6 T. R. 23. Brittow v. Tovrcrp, 6 T. R. 35. * Potts V. BpU, 8 T. R. 518. 3 K.nsington v. Inj;!!-, in laror, S Easfs R. 273. * Vantlyck v. Whiimoro, 1 East's Rpp. 4'J5. 5 Brandon v. Ciirling, 4 IDasts Rep. 410. * Bromley v. Heseltiiie, I Campb. X. P. C. 75. 7 Barker v. Blakes, 9 £;ist's Rpp. 'iS.'J. Ali- 5H) Of Mercantile Contracts for the A license to export goods to certain places within the in-. fluence of the enemy interdicted to British commerce, granted to H. N. on behalf of himself and other British merchants, &c. is suificient to legalize an insurance on such adventure, if it appear that H. N. was the a^ent employed by the British merchants really interested in it to get the lir cense, though he had no property in the goods himself'. An insurance on ships engaged in trading to the East Indies in contravention of the statute 9 and 10 W. III. c. 44, whereby a monopoly is vested in the East India Company, is illegal ^. No insurance can be made upon a voyage to a be- sieged fort or garrison, with a view of carrying assistance to them; or npon ammunition, warlike stores, or provi- sions ; for these commodities are pro]iil)itcd by the laws of all nations ^ 1.3. Of Prohibited Goods, By the laws of almost all countries, the exportation and importation of certain commodities are declared to be illegal. If the act itself be illegal, the insurance to protect such an act must also be contrary to law ; and therefore void. Agiecabl}- to this principh', all insurances upon commodi- ties the importation or exportation of which is prohibited by law, are void ; and it makes no difference whether the underwriter did or did not know that the subject of the in- surance was a proliibited commodity**. To prevent all such insurances, the stat. 4 and 5 W. and M. c. 15: inflicts a penalty of 500 Z. on any pi'rson who, by A^ay of insurance, shall procure the importation of any uncustomed or proliibited goods, with a like penalty on the insured. Also by the stat. 8 and 9 W. HI. c. SG, the im- portation of any foreign alamode or lustrings, by way of ' RaMlinson ct al. v. J.anson, 12 East's Rep. 223. ' Cariiden v. Anderson, 6 T. R. 723. 3 Parks, liisuraiict-,a-^H, * Ibid. 329. insurance Conveyance of Goods. — Insurance, 517 insurance or otherwise, ■without paying the duties, iis ex- pressly prohibited. Wool being the staple manufacture of this kingdom, it was always deemed a heinous offence to export it out of the realm. But notwithstanding the provisions of numerous statutes, the practice of insuring it tended only to encourage such illicit commerce ; it has therefore been restrained by divers statutes, and all insurances thereon are declared void. For the penalties for exporting wool, see page 164. As to what goods come under the general description of prohibited goods, so as to render an insurance upon them void, it may be laid down as a general proposition, that all insurances upon goods forbidden to be exported or imported, by positive statutes, by the general rules of our municipal law, or by the king's proclamation in time of war; or which, from the nature of the commodity, and by the law of nations, must necessarily be contraband, are absolutely null and void '. But insurances on goods, the exportation or importation of which is forbidden by the revenue laws of other countries, are valid, because the foundation of the contract is not illicit ^ 14. Of Wage?' Policies. An assurance being a contract of indemnity, its object is not to make a positive gain, but to avert a possible loss. Hence a policy Avithout interest is not an assurance, but a mere wager only. Such policy, therefore, is properly de- nominated a wager policy ^ By the law of merchants, these contracts were, till the statute 19 Geo. II. c. 37, legal contracts, provided the words," interest or no interest" were inserted in tiie policy. But it being found that the indulgence given to these fictitious or gambling policies had increased to such an alarming degree as to threaten the very annihilation of that security which it was the original ' Park's Insurance, 335. ' Dou^. 238. 3 Selw. \. P. 1019, in(6nt 'SIS OJ AleVcantile Contracts for the intent of insurance to introduce, it was enacted by stat. 19 Geo. II. c. 37, that insurances made on ships or goods,, interest bx no interest, or without further proof of interest tlian the policy, or by way of gaming or wagering, or witjiout benefit of salvage to the insurer, shall be null and void. The statute, however, contains an exception for in- surances on private ships of war titled out solely to cruize against his majesty's enemies ; and also provides, that any nicrcliandiscs or eiFects from any ports or places in Europe or America, in i\\Q possebsion of the crowns of Spain or Por- tugal, may be insured in such way or manner as if the sta- tute had not been made. The above provision of tiie statute relative to insurances from any ports or ]dac(s in Europe or America, in the pos- session of Spain or Portugal, is founded on the regulations of those states to prohibit illicit trade. But it is loosely worded, and a-lmits of some latitude of interpretation. Upon this section of t!.e act it miiy be observed, that the equitable construction of such contracts of insurance as are protected by it, seems to be, that they may be made ^s ithout interest, since in such instances it is impossible for the person insured to bring any ceitain proof of interest on board '. And, in the conslriiction of the same statute, it has been held that it does not extend to insurances of foreign pro- perty or foreign ships, but that insurances, " interest or no " intt-rest," may be made upon them ^. An insurance on the profits expected to arise from a cargo of molasses, belonging to'the idaintifl's, v/as held to be good, altljough there was a clause declaring, " that in case of loss the profits should be valued at 1000 1, without any other voucher than the policy 5." Proi'its to arise from the sale and disposal of a cargo of goods are an insurable interest. But in such a ca?e it is ne- V Park's Inenrnnre, "68. " T!k Ilason v. Fletcher, Dcug. S15. ••» Grant v. Piirkiiiscm, Miclu 22 Geo. 111. E. K. cessary Convsyance of Goods. — Insurance. 319 cessaiy to show satisfactorily that the loss of the profits arose from a peril insured against, such as j^erils of the st a, &c. not from the state of the market, for which the underwriters are not responsible. In short, it is incumbent on the assured to show, that if there had been no shipwreck, there would have been some profit '. But where not only the profits are an expectation, but the obtaining of a cargo, out of which tiie commission is to arise, is also -da expectaiion, the commission of the consignee is not insurable^. Where a house in Spain, which was indebted to the plain- tiffs, had consigned goods to i^-essrs. Dubois, and indorsed the bill of lading to them, with a letter annexed, directing them to hold a part of the said cargo for the u§e of the plain- tifis, \\ ho upon getting such intdligencc made the insurance in question, although they had given no orders for the goods ; the court held that the plaintiffs, beiiig creditors of the house in Spain, raised a good consideration for the assignment ; and that therefore there could be no doubt that the plaintiffs had a good insurable interest K But all insurances made by persons having no int(;rest in the event about wliicli they insure, or without reference to any property on board, are merely wagers, and are void. Thus, where the defendant, in consideration of 20 /. paid by the plaintiff, imdertook that the ship shoidd save her passage to China that se;)son, or that he would pay 1300 /. within one month after the arrival of the said ship in the river Thames ; the contract was held to be void, although the plaintiff had some goods on board '^. So where the plaintiffs had lent ^6,000 /. on bond to a captain of an East Indiaman, and had insured the ship and ' Barclay v. Cousins, 2 East's R. 544. Ilodson v. Glover, 6 East's R.316. * Knox V. Wonil, Mich. Sitt. at Guildhall, 1808. 3 Hill and another v. Scrretan, 1 Bos. and Pul. 315. 4 Kent V. BirJ, Cowp. 5aa. carffo 320 Of Mercantile Contracts for the cargo to that amount, and " in case of loss no other proof of interest to be required than the exhibition of the said bond," the contract was held to be void '. 13. Of Reassurance and Double Assurance. Reassurance is a contract which the first underwriter enters into, in order to relieve himscll from those risks which he has previously undertaken, by throwing them upon other underwriters who are called reassureis. This is a species of contract still countenanced in most parts of Europe, and was admitted in England till the 19th Geo. II. c. 31. s. 4. declared it to be unlawful to make re- assurance, unless the assurer should be insolvent, become a bankrupt, or^ie; and even in these cases it must be ex- pressed in the policy to be a reassurance, and the reassurance must not exceed the amount of the sum before assured. \iy this statute also reassurance upon foreign ship-s is prohi- bited, unless in the three instances above mentioned ^. In France and other countries it Avas formerly allowed io the insured to insure the solvency of the underwriter ; but this practice is not allowed in England : and though no ex- press notice is taken of it in the above statute, it seems that such a ])olicy would be looked upon a wager policy, and treated accordingly ^ Double assurance, which is totally different from reassu- rance, is where the same man is to receive two sums instead of one ; or the same sum twice over for the same loss, by reason of his having made two assurances for the same pro- perty •♦. The fir,-,t dislinction between these two contracts is, that a reassurance is a contract made by the tirst underwriter, his executors or assigns, to secure himself or his estate: a double » Lr.urv v. BdurdJPii, Dong. 468. ^ Andrr-e v. Ik-tcher, g T. R. 161. 3 Tark's liisirance, Ti.i. * 1 liur. ;96. insurance Conveijance of Goods. — Insurance. S21 Insurance is entered into by the insured. A reassurance, except in the cases provided for by the statute, is absohitely void. A double insurance h not void ; but still tlie insured shall recover only one satisfaction for his loss. This requires explanation. Where a man has made a double insurance, he may recover his loss against which set of the underwriters he pleases, but lie can recover no more than the amount of his loss. This depends upon the nature of an insurance, and the great principles of justice and good failh. An insu- rance is merely a contract of indemnity in case of loss : it follows as a necessary consequence tliat a man shall not re-? Cover more than he has lost, or recover a greater satisfaction than the injury he has sustained '. It being thus settled, that the insured shall recover but one satisfnction,and that, in case of a double insurance, he may fix upon which of the underwriters he vt ill for the payment of his loss, it is a principle of natural justice that the several insu- rers should all of them contribute in their several propor- tion?, to satisfy that loss against which they have all in- sured '. Hut though a double insurance cannot be wholly sup- ported, so as to enable a man to rcct-ver a two-fold satisfac-- tion, yet various persons may insure various interests on ihe sjune thing, and each to the whole value ; as the master for Ivages ; the owner for freight ; one jjerson for goods, and another for bottomry '. If the same man for his own account, though not in his own nartie, insure doubly, it is stitl a double insurance ^ 16. Of CI Lan gin g the Ship, It being necessary, Except in some special cases, to insert ' Park's Insurance, 373. ^ Newby V. Kceil, Sitt. in London ahpr Ea-ter Vac. 1763. 3 Godin ct al. v. the London Ass. Coinp. I Riir. 4S9. J Bl, Rep. 103. * Per Lord Mansfield, nt supra. S22 Of MercanlUe Contracts for the the n;ime ot the ship on which the risk is to bo run in the ]^olicy, it fallows as an implicil roiul'Jion, tliat the insured shall neither snbstUute anoUicr ship ibrtli;;l mentioned in the policy, before the voyage eon5menc<\'^, nor ciutingthc course of the voyage remove the property insured froja one ship to another, witliout consent of the insurer, or -svitliout an un- avoidable necessi<3'. If he do, the implied condition is broken, and he cannot, in case of loss, recover against th? underwriter'. 17. Of Deviation, Deviation is understood to mean a voluntary departure, v,'i(u"ut necessity or any reasonable cause, from the regular and usual course of the specific voyage ensural. \Vhen- ever this happens, even for the shortest space of time, the voyage is determined, and the insurers are discharged from all responsibility. Ncjr is it at all material whether the loss be or be not an actual consequence of the deviation ; for the insurers are in no case answerable for a subsequent loss, in Ti batever place it happen, or to whatever cause it may be attributed. Neither does it make any difference whether the deviation was either witli or without the consent of the as- sured -. The elicct of a deviation is not to avoid the contract ab initio, but only to determine it from the time of the deviation, and to discharge the insurer from all responsibility ^ If ports of call are named in the policy in a successive order, the ship must take them in the same succession in M-hich tliey are named, unless some usage, or some special facts be proved to vary the general rule -*. And if ti»e poris of call are not named in a?iy order in ' Park's Insurance, .'583. » Ibid. 387. 3 C;rpon ^. Youn^, "2 Lord RayDi. 340. Salk.'Jit. 4 Btutson V. llaxVorlh, 6 T. H." a.'il. Mar»dji» v. Keid^ 3 East's Rep. 5T2. the Conveyance of Goods. — Insurance. 523 the policy, they must be taken in the order in which they occur in the usual and most convcuiont and practicable course of the voyage, not according to (he sliortest geogra- phical distance'. A -ship was insured from Lisbon to England, with liberty to call at any one port in Portugal : it ^vas held, that under such a policy tlie party had only a liberty to call at some port in Portugal in the course of the voyage to England*. Liberty given to a merchant ship with a letter of marque, to cha«e, capture, and man prizes, does not justify her in shortening and lying to for the purpose of protecting a prize as a convoy into port K Neither will liberty to a merchant ship to see prizes into port authorise her to stay till they receive necessary repairs, which they could not otherwise procure *. But though the consequences of a voluntary deviation are fiitai to the validity of the contract of insurance, yet whenever the deviation arises from necessity, force, or any just cause, t:lic underwriter still remains liable, although the course of the W)yage is altered ; for a deviation never puts an end to the insurance, unless it be the voluntary act of those who have the management of the ship 5. The circumstances that will operate as a justification for a deviation seem to be these : — To repair the vessel ; to avoid an impending storm ; to escape from an enemy ; or to seek for convoy ^. The first ground of necessity winch justifies a deviation, is that of going into a port to repair. If, therefore, a ship ' Hairdner v. Senliouse, 3 Taunt. 16. ^ IIoo;5v. Hornrr, Mar^halTs Insurance, .^97. * r.awrrnce v. Svdebotliam, 6 Fast's If. 45. * .I.-irrat v. Ward, 1 Campb. N. P- C. 2G3. 5 I.lton V. Broaden, 2 Str. 1265. Scott v. thnmpson, 1 New Rep. 181, * Park's Insurance, 400. Y 2 1 A^St Of Mercantile Contracts for the is decayed, and goes to the nearest port to refit, it is no devi- ation '. The next justification for a deviation is stress of weather. Therefore, tyhenever a ship, in order to escape a storm, goes but of the direct course ; or -when in the due course of the voyage, is driven out of it by strps-s of weatlier, this is no deviation. It has also been held, that if a storm drives a sliip out of the course of tlie voy;i<>-e, and she does theberf ■she can to get to her port of destination, she is not obliged to return to the point from which slie was driven*. When tlie excuse for a deviation in going into a port is a necessity to procure medical absistance for the captain and crew, the assuied must siiov/ that tl'.e ship was supplied with !?uch raeclicincs and iusiruments as were likely to be neces- STiVy in the course of tlie voyage ^ A deviation mny also be justified \o avoid an enemy, or to seek for convoy at th.c usual place of rendezvous, though such place be out of (he direct course of tlie voyage '; Ijecause it is in truth no deviation to go out of the course of the voy- age, in order to avoid danger, or to obtain a protection against it, if in all cases the master of the ship fairly and bona fide act according to the be>,t of his judgement '*. Where a captain justifies a deviation by the usage of a particular trade, there must be a char and established usage; not a few vague instances only. But when the usage has de- clared it lawful in a specific voyage to go to any place, though not in the direct course from the port of loading io that of delivery, it is as much a part of the contract oi in- • Mottpux et a1. v. the London A?smaricc C(im[). i Atk. 545. Guibert \. Ilrads'iaw, Sitt. in LonJ. ilil ^'ar. 1781. ^ Ilairingtoii v. H.-ilkcld, Silt, in London, ]\lich. Vac. IT'S. Dfhuiv V. Stoduart, 1 T. R. 2'?. 3 Wolfe v. Classen, .'J Esp. Rep. 257. 4 Campbell v. BordiiU, 9 Sir. l'ifi5. Bond v. y^n^ CQwp.601. Endciby and'anotlfer v. fletchei', Sitt. In Lond. Trin, Vac. 1780. snrance Cojiveyance of Goods. — Insurance. S2^ surance between the parties, as if it had been particularly mentioned '. In all cases of deviation it may be laid down as a general rule, that whenever a ship does that which is for the general benefit of all parties concerned, the act is as mucli witbin the intention and spirit of tiie policy, and consequently as much protected by it, as if expressed in terms. And, there- fore, in all cases, in order to determine whether a diversion from the direct course of the voyage is such a deviation as in law vacates the policy, it will be proper to attend to trie mo- tives, end, and consequences of the act, as to the true ground of judgement ^. It has b;^en held that if a ship deviate from necessity, the ship must pursue such voyage of necessity in the direct course, and in the shortest time possii3le, otherwise the un- derwriters will be discharged. Ami in such a case nothing more must be done than what the necessity requires \ So also if a ship be insured upon a trading voyage, it is incumbent on the parties insured, to carry on that trade with usual and reasonable expedition, otherv/ise their conduct will amount to a deviation, and discharge the policy •*. But although an actual deviation from the voyage insured is thus fatal to the contract of insurance ; yet a deviation merely intended, but never carried into eflect, is considered as no deviation, and tiic insurer continues liable ^ But if it can be shown that it never v(as intended by tlie parties to sail upon the voyage insured, and if all the ship's papers are made out for a different place tVom that described in the policy, the insurer is discharged from all responsibility, even ' Park's Insurance, 410. ^ Park's Insurance, 411. 3 Lnvahre v. Walter, Dong. 281. 4 llartlcy V. Biiscoin, Mich. 22 Geo. III. &. R. Parkinson v. Collier, SvUinj^^ in B. R. after Mich. n97. J Foster V. 'VYiim.r, 2-Ktr. \ii9, though 326 Of Mercantile Conlructs for the tliougli the loss should happen before the dividing poiJit of the two voyages '. In a fcHll later case the same doctrine was advanced ; namely, that if a ship be insured from a day certain from A to B, and before the day sail on a different voyage from that insured, llie assured cannot recover ; even though slie afterwards fall into llie course of Ihe voyage insured and l^e lost after the day on whicli t!ie policy was to have attached*. It is to be observed also that iji a poHcy on ship and freight, it is not an implied condition lliat Ihe ship shall not trade in the course of lier voyage, if tiiat may be done witliout deviation or delay, or otherwise increasing the risk of the underwriter. Hence wliere a ship was compelled in the course of her voyage to fntcr a port, for the purpose of ob- taining a ncccss;'.vy stock of provisions, which slie could not obtain before in the usu.d course, l)y reason of ascarciiy at ])er loading {^orJs, and during her justifiable stay in tlie port so entered l()r that purpose, slie took on l)oard bullion for freight, no delay having been occasioned thereby, it was held not to avoid the policy '. 17. Of JVarrantics. A warranty in a policy of iusur ince is a condition or a contingency, tliat a certain thing shall be done or !iay)pen ; and unless that is performed, there is no valid contract-*. Every warranty incorporated in the body of tlie policy, or appearing on the fare of th(! instrument, or inserted in any print or writing, wImcIi is by relerence incorponited with the policy, must be strictly and lifer;d!y complied with. It would be endless toenumerate tiie various ki;uisofv/ar- rantics v/hicli aretobclound in policies; because; they must ' WooJdrid,^'- V. Bovdcll, Dov,.-. 16. » Way v. Moili-liani. 2 T. l\. 30. 3 Kaine v. Bell, 9 East's iU-p. 195. i I T. K. 313. fnxpicnlly Conveyance of Goods. — Insurance. 327 frequently, and for the most part, do depend upon tlic par- ticular circumstances of each case. The most usual kinds inserted in policies of warranties, are, 1st, As to the time of sailing ; 2dly, Departing with convoy ; iJdly, That the thing insured is neutral property. Jls io the time of sailing. If a man warrant to sail on a particular day, and be guilty of a breach of that warranty, the underwriter is no longer liable '. A detention by Government, previous to the proposed day of sailing, is no excuse for not complying with the warranty, nor a peril within the terms of the po- licy *. So if a warranty be to sail after a spccitic da}^, and the ship sail before, the policy is equally avoided as ia the former case'. But M hen a ship leaves her port of loading, having a full and complete cargo on board, and having no other view bnt'the safest mode of sailing to her port of delivery, for which purpose she touches ut any particular place of ren- dezvous for convoy, &c. her voyage must be said to com- mence from her departure from that port ; and though she be detained at such place of rendezvous hy an embargo, she has complied widi the v.'arranty ; had her cargo, ho-.vevcr, not been coniplcic, it would not have been a commcnccaient of the voyage **. What shall be a departure from the poitof London, or rather what is the port of I;ondon, remains yet undecided. It seems, however, that GnvisenJ is !he limit of thai ])orf, where vessels receive tlie customhouse cockit, their tijuil clearance en board, and from whence they jnust drpart ou (he day mentioned in the warn\ uty '. ' Don?:; V2 imio^is. ' Horc v. WhUmoif', Cowp.TSJl. 3 Vozian v. Cnmt, at Giiildliail, L'.aiter'Var. 1779. « lioricl V. Nutt, t'owp. (iOl. * Park's Xnsura,n:e, 4'»2. "9S Of Mercantile Contracts for the As to departing uitltout convoy. By the stiitiite 43 Geo. III. c. 57, no ship belongini;- tu any of his majesty's subjects (except, 1, ships not required to be registered ; 2, ships licenced by the lord hii;h admiral to depart witUoi.'t conVoy ; 3, ships proceeding- v/ith due diligence, from tlieir port of clearance outwards, to join convoy appointed to sail from some other port; 4^ ships bound (o or from any place in Ireland ; 5. Ships bonnd from one place in Great Britain to another; 6. Ships bdonging to the East India or Hudson's Bay Company; 7. Ships saiUng from a foreign port or place, in case Ihcfe be no| any convoy appointed, nor persons at such foreign port duly authorized to appoint convoys, or to grant licenses for sail- ing without convo}-,) shall sail from any port or place with- ' put convoy, and entering into a bond, with one surety, i)i the penalty of the value of the ship, conditioned not to sail or depart without convoy, nor to separate without leave, on pain of a departure without convoy, or wilful separation, that the insurance on the same, or if on goods, freight, or other interest, shall be void, ^y s. 3. a penalty is imposed upon the master of 1000/., or, in case tlie cargo be military or naval stores, 1500/. for such wilful sailing without convoy, or separating therefrom. And by s. 4. all persons settling losses upon such insurances shall forfeit 200/. Upon this statute it has been held, that a ship cannot le- gally proceed Avithout convoy from her port of cL-arance to the port of convoy in order to join convoy, unless a bond has been given according to the directions of the act, that she shall not sail without convoy '. And where a ship has been licensed to sail without con- voy, provided she is armed with a certain force, it has been ' Hinckley y, Walton, 3 T:i'4n«. 131. determined Conveyance of Goods, — Insurance' S?9 determined that she mast take that force on board before she breaks ground '. ^Y the term convoy is to be understood a naval force un- der the command of a person appointed by tlie governmer\t of the country to which the ship sails, or by any person authorized by that government. Therefore where a ship put herself under the diiection of a man of war accidentally bound on the same voyage, till she sliould join the convoy, which had left the usual place of rendezvous before she ar- rived there ; it was held nut to be a departure with convoy, although she, in fact, joined, and was afterwards lost in a storm ^. But if tlie course upon a particular voyage has been to have a relay of convoy, to protect the trade from one port |» another ; or if government appoint a convoy to escort the trade of a place to a given latitude and no further, and there be no otiicr convoy oa that station, a vessel taking the advantage of such a convoy, has complied with the warranty to sail with convoy for the voyage^. How far sailing instructions from tlic commander of the convoy arc necessary to the sailing with convoy has not been clearly decided. In point of law it seems to be clear, that a warranty to depart with convoy is not complied with, unless sailing instructions arc obtained before the ship leaves the place of rendezvous, if by due diligence of the master they can be then obtained. In the case of Webb v. Thomson ■^, Mr. Justice Butler said. If the captain from any misfortune, from stress of weather, or other circumstances, he absolutely prevented ' Hinckley v. Walton, 3 Taunt. \?A. - Ilibbert v. Pi2;ou, Easter, 2S Geo. HI. B. R. J Smith V. Ile.idshaw, Londor, Sittiiij^s after Eacter, nSl. De Garay t. Cla^SCtt, London Sittings after Easter, 1795. D'Lquino v, B«wiclic, 2 Hen. B1.551. ^ 1 Bos. and Pnl. 5. from 350 Of Mercantile Contracts for the from ob(aininf^ liis instructions, still it is a (kparturc ^vith coMVO}' : but {\\c\\ he must take the earliest opportiinily to obtain them. GoncraUy speaking unless sailing instructions are obtained, the warranty is not complied with : the cap- tain cannot answer signals ; he does not know the place of rcnder.vous in cuse of a storm ; he does not in ctlcct put himself under the protection of the convoy, and therefore the underwriters are not benefited. Having seen what shall be deemed a convoy, let us pro- ceed to consider what siiall be a departure witli convoy, within the meaning of a warranty " to depart witli convoy." The clause warranted to depart witli convoy, must be con- strued according to the usage among mercliants ; that is, that the ship shall go with convoy from the usual place of rendezvous at which the sliips liave been accustomed to assemble ; as Spithead, or Wo; Dowiis, for the port of Lon- don ; and Bluefields for the ports in Jamaica '. Although the terms of the warranty do not express it, yet it is essentially necessary that the ship should not only depart with convoy for the whole of tlie voyagi*, but also continue with the convoy until the end of the voyage, un- less she be prevented from absolute necessity*. But if a ship is by stress of v/cather separated from her convoy ', or is prevented from joining it at all ^, if she does all in her power to join the couvoy, it will be deea^.ed a suf- ficient compliance with the warranty to sail \yith convoy'. But it is other. vise, if the not joining be; owing to the neg- ligence and di'lay of the captain of tlie insured ship. As where repeated signals for sailing had been made the night before, and continued next d.iy from seven o'clock till twelve. > Lrthillier's raj", ? Sa'k. 4^5. Gord«r, v. Modry, 2 Str. 126,>. IFU)- bert Y Fis;oii, iif Pi'pra- ' Miiri-ke V. Diii.in, Selw. N. V. 1001. 3 Jeffrey V. Ijeji^prAiz, 3 Lev. SiQ. * Vicloiia v. Cli^eve, 2 Str. 1250. not with- Conveyance of Goods. -^Insurance. 331 notwlllistandin:^ wbicli the ship insured did not sail till two hours after; itvas held that the warranty to depart was not complied with, and that the underwriter was discharged *. As to Neiitral Propcrtij. The last species of warranty above mciitioned is tliat of neutrality ; or that tlie sliip and goods insured are neutral property. This condition is very diflerent fioiii either of the two former; for if this warranty be not complied with, the contract is not merely avoided for a breach of the war- ranty, but is absolutely void ab initio, on account of fraud ; bluing a fact at the time of insuring witliin the knowledge of the insurer. Thus in an insurance upon goods, which the insiired warranted to be neutral, the jury expressly find- ing tliat they were not neutral ; the court, although t];e loss happened by storms, and not by capture, declared that the contract was void -. If, however, the ship and property are neutral at llie time when the risk commences, this is a suilicieiit compliance with a warranty of neutral property; because it is impos- sible for the insured to be answciable for t!ie consequences of a war breaking out during the voyage. Tiie insurer tr;kes upon himself the risk of peace or war ; they are pub- lic events, equally kwown to bolli parties ^. But though it is not necessary that a ship warranted neutral should continue neutral during the whole voyage, yet she nm^t not violate her neutrality by the misconduct of the parties on board. Antl, thtTtfore, w^here the matter and crew had, in the course of tlie voyage iivsured broken tlieir neutrality, by forcibly rcscuuig the sliip, which had been seized and car- ' Taylor V. Wnn-lness, SiUins:? at Gnildhnll, Ilil. Vnr. 4r.oo. III. - Woolmcr v. .\hiilnian, .'? I'.in-. 1419. 1 Bl. Rep s"i7. 3 !,urpose oi search, it was held that the assured could not recover '. That a Avarranty of neutrality may be .satisfied, it is ne- cessary that the vessel should be navigated, not only accord- ini;* to the laws of nations, but also in confonnily to tlie particular treaties subsisting between the country to \\hich shi' belongs and the belligerent states -. .If, therefore, a state in amity with a belligerent power has, by treaty, agreed that the ships of their subjects shall only have that cliaracter wlien furnislied with certain docu- ments, wliocver warrants a stiip to be the property of such sub- ject, should provide himself at the time when the ship sails, with those evidences, which have, by the country to \shich he belongs, been agreed to be necessary proofsi of that cha- racter '. And therefore in th.e late case of Steele v. Lacy, M. 5 J Geo. III. C. B. which was an action upon a policy on a ship from a port in Great Britain to Riga and back again ; the ship was not warranted, but only represented to be Ame- rican; and having been met by a British cruiser in flu; course of her voyage, who demanded her passport, whicii she refused, was thereupon brought into port aud con- demned : the court held, that as sl)c was bound to carry a passport, and as she did not produce it when demandedj, it was a good cause of condemnation, and therefore the assured co\ild not recover. So where an American ship, insured here, was captured by a French ship, and condemned in a French court as prize, upoii the express ground !»faied in the sentence of condemnation, that the ship was not properly d(.'cumented • Garrclls v. Kensincfon, 8 T. R. S30. ' .'Jnlw. N, P. 1007. s Barzillav v. L.-,vit,Tri". T. 22 Geo. 111., B. R. llich. v. Pavktr, T. T. R. 70J. according: Conveyance of Goods. — hisibrante. 33^ c1ccordin« to tho existin"^ treaty between France and (lie United States of America ; it was held that tlie assured could not recover their loss against tho Uritihh undiTwriter, although tliere was no warranty or reprosental ion that tJie ship was American ; the neglect of the shipowners them- selves, who are bound at their peril to provide proper na- tional documents for th.eir ship, being' in such a case the efficient cause of their loss. Neither can the ai;ent of the as'^ured, some of whom were also interested in the cargo as well as the ship, recover for the loss of the cargo insured, which was also condemned at the same lime and for the same reason.'; sucli assured of the goods being implicated' ill the same neglect in their character of ship owners. But it is otherwise in the case of a mere assured of goods, wlio is not answerable for the proper documep.ting of tiic ship. without a warranty or representation of lier national cha- racter ^ But it is not necessary, in order to satisfy a warranty of neutrality, that tliC vesh,el should be navigated in confor- mity to an ex parte ordinance m^ade by ojie of the belligerent states, and to wluch the neutral state is not a party *. A neutral sliip may carry enemy's property from its own to the enemy's country, witliout being guilty of a breach of neutrality ; provided that neither the voyage or commerce be of a hostile description, nor otherwise expressly or im- pliedly forbidden by tJie law of this country : although such ship, in consequence of carrying enemy's property^ be liable to detention on byng carried info Briti!;h ports for the pur- pose of search '. * Rell V. Cnrstnirj, 14 East's Rep.,",? 1. •' Pollard V. Kell, ti. T. R. 434. Bird v. Apnlclon. 8 Ibiri, 562. ■■' iiarker v. Blakes, 9 Ea-iVs Rep. 9.^3. i^'. or S5-'i Of ]\ [errant iln Contracts for the ] 8 . Of Return of Prem him. In ;[:^c!icr;il, wlicrc property Ins been Jiisured to a linger amount Ihan t!ic reat value, the overplus prcnuiiin, or, if the:^ooils are insured (o come in certain ships from abroad, but arc not in fact shippct!, the whole preniiiun shall be re- turned, irtlie.ship be arrived before the policy is made, the insiucr being apprized of it, artd the insured being igno- rant of it, the insured is entitled to liave his premium restor- ed, on i\\c ground of fraud. But if both parties are ignorant of tlie arrival, arul the policy be lofct or not lost, it seems the undeaviita- ought to retain it; becau.'-e under such a policy if the ship had been lost at the time of underwrit- ing, he would have been liable to pay the amount of his sub- scription '. Jn Cases where the contract of insurance is void, as on the ground of non-compliance with a warranty, e. g. to sail with convoy, sea-worthiness, or the like, and fraud carmot be imputed to tlie insured, he will be entitled to a return of premium ; because where tlie contract does not attach, there is no risk ^. ^y tlie statute 28 Geo. III. c. 38. s. 47. to prevent insurance on exported wool, if the underwriter informs against the party insuring, he may retain the premium ; but if the insured inform, he shall be entitled to recover it , back. With respect to the retnrn of premium, two general rules have becii establisbxid, which govern almost all cases. The first is, Tliat where the risk not having been run is at- tributable to the fault, will, or pleasure of the insured, or to any otlier cause, the premium shall be returned. And, secondly. That where the contract is entire, whether for a ' Taik^ Iniiir.incp, 503. ' ?, Bur. l«40. Coup. 663. specific Conveya7ice of Goods. — Insurance. 335 spec^Hc time, or for a vojngc, and tlie risk is once com- mcticecl, nud there is no cunliii,";<:iic>on Avhicli (he risk is to "end at any iraniediate })t'riod, there shall be no appoint- ment or return of premisim afterwards. Hence in oases of deviation, thougb the underwriter is disc!iarn:ed from his euii-agement, jet the risk iK^ing once commenced, he is en- titled to retain the premium'. Therefore where tlie premium is entire in a policy on a voyage, and there is no contingency at any period in the coujrse of (he outward and homeward bound voyage, upon the happening or not happening of which the risk is to end, nor anj- usage e^tab!i^5iled upon sucli voyage; al- though there be teveial distinct ports at whicli the ship is to stop, yet the voyage is one, and no part of the premium is recoverable *. So where a ship was insured for twelve months, but was taken within two months, it was held that no part of the premium was to be relumed ; because the contract was en- tire, and the premium being a gross sum stipulated and paid for twelve months '. But if there are tv/o distinct points of time, or, in eflecl, two voyages cither in the contemplation of the parties, or by the usagr, and only one of the voyages was made, the premium shall be returned an (he other, iliough both are contained in one policy. Thns in an insurance ^' at and from London to Halifax, warranted to depart with convoy from Portsmoiith ;" but when the ship had arrived at Portsmouth the convoy was gone ; it was held thu.t the premium for the voynge from Portsmouth to Halifax should be returned-*. ' 3 Eur. 1237. Park's Insurance. 516, 525. ■^ Bermaii v. Vv oodbricljce, Doug. 781. 3JH'rie v. Fletcher, Coup. 66R. Lorain:.* v. Thoailirjson, IbiJ. 5S5. * Steve.iion v. Snow, 3 Bur. 1^257. 1 h\. Hep. iife. S. Ct If 336 Of Moxantile Contracts for the If t!ie jury find an express usage, an apportionment oi ihc premiura shall take place '. Where .1 clause was inserted that 8/. per cent, of the premium should be returned *' if the ship sailed from any of the Mest India islanJs with convoy for tlic voyage and arrived:" it Was held that the arrival of the ship, whctiief with or without convoy, entitled the party to a return of the premium stipulated ^. So also, though there had been a capture and recapture during the voyage insured ^ In all cases where the words " and arrived" follow otlier conditions, these words annex a condition which over- ruk's all the other stipulations ; anci no arrival at any inter- mediate stage will do, unless the vessel arrives at its ulti- mate port of destination ■♦. When. a policy is void being made witi)Out interest, con- trary to the statute of the J9 Geo. If. c- 57, ii" tlie ship has arrived sale, the court will not allow the insured to re- cover back the premium K And upon the authority of Lowry v. Bourdicu, it has been held, tliat an action for money had and received will not lie to recover back the premium of reassurance void by the above statute ^\ Where a policy was made to cover a trading v;ith the enemy, the insurance is void, and the assured cannot re- cover the premium ' . So where the insurance is contrary to tlie navigation laws. For no man can come into a British court of justice' » Per Lord Mansfield, Lon? v. Allen, Easter, 15 Geo. Ill, C. R. ' Simon v. Boydell, Douj. "ibb. 3 Asiuilarand another v. Kclsjcr?-, 7 T. R. 421. ♦ Kellner v. Lc \iesurier,4 East's Rep. 396 s Lowry v. Bouraien, Doug. 463. '^ .\ adrce v. Fletcher, S J. R. $CG. ' Vandyckv. Hewitt, 1 Last's i!cp. 96. ^ , to Conveyance of Goods.— Insurance. S37 to seek the assistance of tlie law, when lie founds liis claun upon a contravention of the British laws '. An insurance having been made on goo.ls at and from a port in Russia to London, by an agent residing here, for a Russian subject abroad, which insurance was in fact made after the commencement of hostilities by Russia against this country, but before the knowledge of it here, and after the ship had sailed, and had been seized and con- fiscated : held that the policy was void in its inception ; but that the agent of the assured was entitled to a return of the premium paid under ignorance of the fiict of such hostilities *. 19. Of Bottomry and Respondentia. Bottomry is a contract by which the owner or under cer- tain circumstances (viz. in the absence of the owners, or in cases of necessity), the master of a ship borrows money to ejiable him to carry on the voyage, and pledges the keel or bottom of the ship, as a security for the repayment. In which case it is understood, that if the ship be lost, the lender loses also his whole money ; but if it returns in safety, then he shall receive back his principal, and also the premium or interest agreed upon, however it may exceed the legal rate of interest. And this is allowed to be a valid contract in all trading nations, for the benefit of commerce, and by reason of the extraordinary hazard run by the lender.^ And in this case the' shij) and tackle if brought home, are answerable (as well as the person of the borrower) for the money lent. But if the loan is not upon the vessel, but upon the goods and merchandise, which must necessa- rily be Sold, or exchanged in the course of the voyage, then • Morck V. Abel, 3 Bos. and Pnl. 35. I-ubbock v. Potts, 7 East's Ke.o.49. ' Oom et ai. t. Bruce, 12 East's Kep. 295, " z only S38 Of Mercantile Contracts for the Only the borrower, peisonally, is bound to answer tl»e con* tract ; ulio tiierctbre in this case is said to take up money ftt ncspondeiitia'. It may be added, that in a loan upon bottomry, the lender riu's no risk thoiiyh the ijoods should Iw lost ; and in respondentia, the lender must be paid the priMcip:d aiid interest, though the ship perish, provided th;; goods are safe. In this consists the chief diflorence b;.>tween bottomry and n^spondentia ; in most other respects they arc ttic same ^. These terms are also applied to contracls for the repay- ment of money borrowed, not on tlie slap and goods only, bnt on liic mere haznrd of the voyage itself; as Avfeen a man lends a merchant 1000/. to be employed in a beneficial trade, wi(h condition to be repaid with extraordinary in- terest, in case a specific voyage named iii the condition be safely performed : which kind of agreement is sometimes called foedus nauticum, and sometimes Ubura maritima. But as this gave an opening for usurious and gaming con- tracts, especially upon long voyages, it was enacted by the statute IQ Geo. II. c. 37. that all moneys lent on bottomry or at respondentia!, on vessels bound to or from the East Indies, shall be expressly lent only upon the ship or upon the nierchaiulise ; that the lender shall have the benefit of salvage ; and that if the borrower has not an intcnst in the ship, or in the effects on board, equal to the value of the sum borrowed, he shall be responsible to the lender for so much of the principal as has not been laid out, with legnl interesf and all ot]:er cliarges, though the ship and mer- cliandise be totally lo-t '. This statute has entirely put an end to that species of contract which arose from a loan upon the mere voyage ' 2 Bl. Com. -157. - Park's In'surancf. r)3«. ^ 9. Bl. Com. 458. itself, C&nveyance of Goods. — Insurance. 339 -itself, as far, at least, as relates to India voyages. But as none other are mentioneJ, and as expressio uiiins est exclu- sio attcrius, these loans may still be made in all other cases, as at common law, except in tlie following instance, which is another statutory proliibilion. This statute (7 Geo. I. c. 21. s. 9.) declares, that all contracts made or entered into by any of his majesty's subjects, or any person in trust for them, for or upon the loan of any moneys by way of bottomry, on any ship or ships in the service of fo- reigners, and bound or designed to trade in the East Indies, or places beyond the Cape of Good Hope (mentioned in the statutes relating to the East India Company), shall be null and void. This act, it should seem, does not extend to prevent Bri- tish subjects from lending money on bottomry on foreign ships trading from their own country to their settlements in the East Indies. The purpose' of t!ie statute was only to pre- vent the people of this country from trading to the British settlements in India under foreign commissions ; and to en- courage the lawful trade thereto '. The contract of bottomry and respondentia seems (o de- duce ils origiji from the custom of pe.-mitting the master, when in a foreign country, to hypothecate the ship and goods, in order to raise money to refit, or for necessaries *. But he cannot do either for any debt of his own ; but merely in cases of necessity, and for completing the voyage-'. And to justify such an act of the master, the the ship must be abroad. Molioy in express terms di-clares, that a master has no power to take up money on bottomry, in places wliere his owners dwell ; other .use he and his es- tate must be liable thereto ■». ' Park's Tnsurancp, 551. -2 Bl. Coin. 457. 3 Rob. AJm. Rpp. ?!0. 1 Salk. 34. » AloUoy,b. 2. c. 2. s. 14. ♦ L<. i!. c. 11. s. 11. ^2 The 340 Of Mercantile Contracts for the The principle upon ^vlllcll bottomry is allowed, is, tJiat the lender runs the risk of losinjr his principal and interest ; and therefore it is not usury to take more than the legal rate '. But if a contract were made under colour of bottomry, in order to evade the statute against usur}/, it would then be usurious^. And as tiie hazard to be run is the very ba- sis and foundation of the contract, it follows, that if the risk be not run, the lender is not cntided to the extraordi- nary premium ^ The risks to wliicli the lender exposes himself are gene- rally mentioned in the condition of tlie bond ; and are nearly the same as those against which the underwriter, in a po- licy of insurance, undertakes to indemnify. It luis been determined that piracy is one of these risks -"; and that if a loss by capture happen, the lender cannot recover against the borrower. But in bottoiury and respondentia a capture does not mean a temporary taking, but it must be such as to occ'asion a total loss. And therefore Avherc a ship was taken and detained for a short time, and yet arrived at the port of destination within the time limited, it was held that the bond was not forfeited, and the obligee might re- cover ^. In the same case it was also settled, that a lender on bottomry, or at respondentia, is neither entitled to the benefit of salvage, nor liable to contribute in case of a ge- neral average ; for which reason the statute 19 Geo. II. c. 31. above-mentioned, contains a positive provision to allow tlie benefit of salvage, in the cases there mentioned. If, however, a man insure respondentia interest on a foreign ship, and be obliged to contribute to an average-loss, by ' Paik"5 Insurance, 558. ^^ I Com. Dip:. 193. 2 Vo«. 146. •' Dc^uildir V. Depoistcr, 1 Veni. 'ifi.S. * liaifon v. M oilifoid,Comb. 5G. 5 Joyce V. \\ illiam.-on, Mich. ','.3 Geo. III. B. 11. the Convey ance of Goods. — Insurance. oil the laws of ber country, English underwriters are bound to indemnify '. The lender is not liable for accidents arising from the misconduct of tlie borrower, or of the captain. If, there- fore, a ship be lost by wilful deviation from the tract of the voj-age, the event has not happened, upon which tiie bor- rower was to be discharged from his obligation ; as she was not lost by a peril to which the lender agreed to make him- self liable -. So as bottomry bonds generally express from what time the risk shall commence ; if a ship receive injury by storm, fire, &c, before the beginning of the voyage, the person borrowing alone runs the hazard ; for the contingency docs not commence till the departure. But if the condition be, *' that if the ship shall not arrive at such a place by such a time, then, &c." in these instances, the contract com- mences from the time of sailing, and a different rule, as to the loss, will necessarily prevail '. Bottomry and respondentia may be insured, provided it be specified in the policy to be such interest. And by statute 19 Geo. 11. c. 37. the lender alone can make such insurance; and the borrower can only insure the surplus value of the goods over and above the money borrowed. But money expended by the captain for the use of tlie ship, and for which respondentia interest is charged, may be recovered under an insurance on goods, specie, and ef- fects, provided it is sanctioned by the usage of trade *, Finally, where a person insures a bottomry interest, and rc- * Walpole V. Ewer, Sitt. after Trin. 1789. » Western V. Wildy, Skin. 152. Holt's Rep. 126. I Eq. Ca. Abr. 372.2. Ch. Cas. l.SO. 3 Beawrs's Lex. Merc. 127. 4 1 Glover v. Black, 3 Bur. 1394. 1 Bl. Rep. 405. Gregory v. Christie, ante, covers 342 Of Mercantile Contracts for the covers upon the bond, he cannot also recover upon the policy '. AVERAGE. Average signifies a mean proportion of loss between the owners of goods thrown overboard in a storm, in order to preserve the remainder, and the proprietors of those that are saved, and of the ve'-sel *. This principle of general contribution is derived from the ancient law of Rhoies, and has been adopted by all commercial natio.is. The rule of the Khodian l.iw is this: ^' If goods are thrown overboard in order to lighten a ship, the loss incurred for the sake of all sliall be made goOvl by the contribution of alP." In order to make the act of throw* ing overboard legal, it mi;st be the effect of deliberate in- tention : for if the gooJs are forced out of the ship by the violence of the waves, or are de'stroyed in the ship, by lightning or tempest, the merchant alone must bear the loss. Th.y must be thrown overboard to lighten the ship : if they are cast overboard by the wanton caprice of the crew or passenge s,they, or th • m:tstc", or the owners of the ship, must make good the loss. The goods must be thrown overi^oard for the sake of all : not b cause the ship is too heavily laclen to prosecute an oidinary course through a tranquil sea, which would be the fiult of those who had sh!!;ped or recuved the groJs ; but, because at a moment of ilistress and danger, their weight, or their presence, pre- vents tlie ext.aordinary exertions required for the general safety ■•. If the jettison (that is the throwing over of the goods) does not save the ship, but she perish in the storm, there ' Park's Insurance, 570. ' B-'awe's's I,px Mrrc. Ifi.?. 3 Dig. 14. 2. i. * Abbott's Law of Merchant Ships, &c. 328. shall Conveyance of Goods. — Average. 343^ shall be no contribution of such goods as may happen to be savvd. Bwi if the ship, beuig" once preserved by suck means, and contiiuiing lici course, should afterwards bft lost, the properly saved from the second accident, shall con- >ribnte to the loss sustained by tliose whose goods were cast Out upon the former occasion '. The vaiious accidents and charges, which will enfille tin* suffering party to call for a contril)iition, cnnnot easily bQ enumerated ; but it may be laid down as a general prin- ciple, that all losses sustained and expenses iucutrcd volun- tarily and deliberately, with a view to prevent the total loss of the ship and cargo, ought to be equally borne by iha ship and her remaining ladiiig-. If goods be put on board a lighter to enable the ship to sail into harbour, and the liii,htcr perish, the owners of the ship and the remaining cargo are to contribute. But if the ship should be lost, and the lighter saved, the owners of the goods preserved are not to contribute to the proprietors of the ship and cargo lost '. It is not only the value of the goods thrown overboard that must be considered in a general average ; but also the value of such as receive any damage by wet, &c. from the jettison of the rest ^. And not only may the loss of goods Ijccome the subject of general contribution, but also in some casQs the expense incurred in relation to them '. Thus if it be necessary to unlade the goods in order to repair the damage done to a sJiip hy tempest, so as lo enable it to prosf-'cute and com- plete the voyage, it seems that the expense of unlading, warehousiug, and reshipping the goods, should be sustained ' Park's Ir.siiranrp, H?. ^ Park's Insurance, 173. 3 2 Mnsens96, \b:i. Mo'iloy, tit. Avprage, s. M. * lipawrs's l.e\ .ViiMT. 148. Molloy, b. y. c. 6. s. 8. 5 The Co))enha<(*i!, 1 Rob. Adm. Jlcfi. V89. Da Costa v. Newhham, 2 T. R. 407. The ^Jr^tUi'.diac.S lU'o iVdm. Ktp. 3.i7. by 344' Of Mercmitile Contracts for the by general contribution, because all persons arc interested in -the execution of the measures necessary to the completion of the voyage '. The term " goods" extends to the ship aiid its furniture, its provisions, guns, boat, or other tackle \ Y^y the law of most of the eoiitiaenlal nations of Europe, the injury done by one ship to another, or to its cargo, by mere misfortune and without fault in the persons belong- ing to either ship, is to be equally borne by the owners of the two vessels ; but by the law of England, in the case of damage happening in this manner, the proprietors of the ship or cargo injured must bear their own loss '. If the ship ride out the storm, and arrive in safety at the port of destination, the captain must, as soon as possible, make regular protests, and must swear, in which oath some of the crew must join, that the goods were cast overboard for no other cause, but for the safety of the ship and the rest of the cargo ■*. If a ship be taken by force, carried into some port, and the crew remain on board to take care of and reclaim her, not only the charges of reclaiming shall be brought into a general average, but the wages and expenses of the ship's company during lier arrest, and from the time of her cap-: ture K But an allowance will not be made under general average for sailors' wages and victuals during performance of a quarantine ^. It seems agreed, that extraordinary wages and victuals expended during a detention by a foreign prijice not at war, may be brought into a general average, so as to charge the underwriter, if such expenses were necessary and una- voidably incurred for the general safety of the; ship and • Abbott's Law of Mprdiant Shipping, 333. "^ Ibid. 3 Bolier v. Fisher, Guil/Jhail Sin., after Mich. T. 40.Geo.' 111. * Bcawes's Lpx Idcrc. 148. iMollov* b.. 2", c, G. s. 2. k Beawes's Lex Merc. 150. 1 Magtns, 67. ^1 Magens, G7. cargo. Conveyance of Goods. — Average. 343 car^o '. As also wages and provisions expended during a detention to repair *. So when a ship is obliged to go into a port for the bene- fit of the whole concern, the charges of loading and un- loading, and tlie wages and provisions of the Avorkmen liired for the repairs, are a general average '. Bj the ancient laws of Rhodes, Oieron, and Wisbuy, the ship and all the remaining goods shall contribute to the loss. Diamonds, jewels, gold, and silver, when a part of the cargo, must contribute according to tiieir value. But ship provisions, the persons of the passengers, Avetiring apparel, and such jewels as merely belong to the person, bottomry or respondentia bonds, and the wages of the sailors, shall not any of them contribute •♦. In order to fix a right sum on Avhich the average or con- tribution may be computed, and w'lich in general is not to be made till the ship's arrival at her port of discharge, it is to be considered, wh.lt the whole ship, freight, and cargo would have produced net, if no jettison had been made: and then the sliip, freight, and cargo are to bear an equal aiid proportionable part of the loss. According to the custom of the merchanls of England, the goods thrown overboird are to be estfmated at the price for which the goods saved were sold, freight and all other charges be- ing first deducted 5. W here goods are shipped on an invoice, an average loss upon a policy must be calculated upon (he invoice price, and not upon the price of the markel at which tJie damaged goods are arrived ^. If sails are blown away, or masts or cables broken by the • 1 Magcns, 67. ' Park's Insurance, 174. 3 Beawes's Lex Mere. 150. 4 .Mnl:o.', b, 2. c. 6. s. 4. 1 Ma^cns,71. 5 1 Ma^ens, 69. MoUoy, tit. Avera?;e, s. 15. ^ Waldron V. Coombe, 3 Taunt. 162. violence 348 Of Mercantile Contracts for the 'violence of the -wind, the owner alone must bear the loss '. But if the master Is compelled to cut away and abandon his masts, sails, or cables, to preserve and lighten his ship, their value must be made good by contribution *. The contribution is in f::eneral not made till the ship ar>» rives at the place of delivery ; but accidents may happen, which may cause a contribution before she reach her de- stined port^. Small or petty averages arc (he next species. These con- sist of such charges as tlie master is obliged to pay by custom for the benefit of the ship and cargo: such as pilotage, towage, light-money, beaconage, anchorage, bridge-toll, quarantine, river-charges, signals, instructions, pasrsage-money by castles, expenses for digging a ship out of the ice, and at Loudon, by custom, the fee paid at Dover pier^. The term is also used for a sm:ill duty which merchants, Avho send goods in the ships of other men, pay to the mas- ter, over and above the freight, for his care and attention for the goods so entrusted to him ^ For these charges the insurers are never answerable ; but one third of the expenses is borne by the ship, and two thirds by the cargo. But in order to discharge the insurer it must appear that the disbursements were usual and cus- : tomary in the voyage : for if they were incurred for any extraordinary purpose, or in order to relieve the ship and -cargo from some impending danger, they shall then be re- puted a general average, and consequently be a charge upon the insurer. In lieu of these petty averages, it lias become usual at some places to pay five per icui. calculated on the freight, and five per cent, more for primage to the captain ^. > WrUwood'; Sea Lan-s,tit. IT. ^ Abbott, S34. 3 Rocciis dp Navib"s, Not. 96. I Ma^PDS, fiO. < 2 Mageni, 189. '■^lii. 5 Parle's lnsuraiic(\ US. . * 1 M.igens, 72. Of Conveyance of Goods. — Salvage. 347 OF SALVAGE. Salvage is an allowance macie for saving a ship or goods, or both, from the dangers of (he seas, fire, pirates, or ene- mies : and it is also sometimes used to signify the thing it- self wliich is saved '. The propriety and jii&tice of such an allowance must be evident to every one ; for nothing can be more reasou- ablethanthat he, who has recovered the property of another from imminent danger by great labour, or perhaps at (he hazard of his life, should be rewarde/l by him, who has been so materially benefited by that labour ^. Accordingly, all foreign codes of maritime l:iw, both ancient and modern, contain provisions and enactments on this head. In some of them the value to be paid is fixed at a certain portion of the article saved, or of their value, according (o tlieir nature and quality, or the circumstances of tlie case. The Jaws of Rhodes fixed tliC r;ites of salvage in several in- stances, sometimes giving for salvage o;ie-fift)i of wliat ■\vas skived ; at other times only a (ent'i ; and at others one- half. The regulations of Oleron left it more unsettled, and declared that the courts of judicature should award to the salvers, such a proportion of the goods saved, as they should think a sufficient recompense for the seiyice per- formed, and the expense incurred '. Almost every state has regulations on this head peculiar to itself; the law of England, like the laws of Oleron, has fixed no positive rule or rate of salvage, but directs only as a general principlCj that a reasonable compensation shall be made '*. When goods have been either abandoned in distress at sea, or cannot be protected and secured, by the common law of England the salvor is entitled to retain the possesion of them, uutil a proper compensation is made to him for ' Bpawes's Lex. Merc. 148. ^ Kaim's Prinr. of Eq. Introd. 6. 3 l,cp;. Hhod. s. 2. art. 45. Les;. Oleron, art 4. * VvVUwood's Sea Laws, tit, 24. bis 318 Of Mercantile Contracts for the for his trouble'. This compensation, if the parties cannot Hgrce upon, may, by the same law, be ascertained by a jury ill an action hruuj^iit by the salvor against the piOinietor of the goods; or the proprietor nsay tender to the salvor such sum of money as he tiiinks suflicient, and upon refusal to deliver the goods, bring an action of detiinieor trover against the salvor ;'and if the jury think the sum tendered suUici.-nt, he will recover his gootfe or their value, and the cosis of his suit. If the salvage is performed at sea, the Court of Ad- miralty has jurisdiction over; the subject, and will fix the sum to be paid, and adjust the proportions, and take care of the property pending the suit ; or if a sale is necessary, direct a sale to be made, and divide the proceeds between the salvors and the proprietors according to reason and equity. And in fixing the rate of salvage, this Court usually has regard not only to the labour and peril incurred by the salvors, but also to the situation in which they may happen to stantl with respect to the property saved, to tlie promptitude and alacrity manifested by them, and to the value of the ship and cargo, as well as the degree of danger from which they were rescued^. In the case of a homeiward bound West India ship, taken by the French near the coast of Jamaica, while proceeding from Savaimah le Mar to Bluefields to join convoy, and re- captured by persons going in boats from the shore, one-* sixth M as allowed for salvage ; and as the voyage home- ward, and consequently the right to freight, had com- menced, and the freight was ultimately earned, th.e sal- vage was paid upon the freight as well as the ship and cargo'. In the case of a slave-ship rescued from insiirgciit slaves ' Harffort v. Jonos, 1 Ld. Ra-yni. 303. Baring and otJicrs v. Day, S Enst's H('p.57. 2 Salk. 3M. " > ^ Th'j V.ir.iam Bet kfnid, .'} Rob. Adni. Ylf\u 355, 3 Thc.Dorothy, 6 Ibid. 88. on ConveyaiKe of Goods. — Salvage. 349 on the coast of Africa, by another vessel employed in the same trade, one-tenth of the vahie was allowed'. In the case of a Danish ship, deserted by its crew on the Etiglish coast, and bronght into Harwich without any considerable danger, two-fifths were decreed for salvage^. In the case of another ship, which having struck upon a rock, lost her rudder, had her bottom beaten in, and been deserted by the crew, was weighed off with great peril by one set of persons, and placed in such a situation as to enable the master to bring oft' some bullion, but which afterwards sunk, and was again weighed up and brought into Harwich by another set of persons, two-thirds were decreed, and the amount dis- tributed among the first and second set of salvors ^ But the Court will not sufter a claim of salvage to be ingrafted on the local ignorance of foreigners, who cannot be expected to be well acquainted with our coast, although a recom- pense must be made for tlie service actually rendered to them *. Neither will merely preventing a ship from enter- ing an enemy's port entitle tlie captors to salvage K Nor is a passenger entitled to make a claim for the ordinary assist- ance he may be enabled to afford to a vessel in distress. A passenger, however, who has rendered any very extraordi- nary services, will be entitled to salvage. A ship bound to the West Indies, struck upon the shoals of Chichester, in a gale of wind, and in that situation was deserted by the master, who took part of the crew witii him. A person who had commanded in the same trade, and was tlien on board as a passenger, took the command of the ship by the desire of the passengers, and with the consent of the mate and the remainder of the crew, and carried her back in • The Trelawnev, 4 Rob. Adm. Rep. 223. 2 The Fortuiia,4 Ibid. )93. 3 The Junge Eastiaan, 5 lljid. 322. « The Vroiuv Margarplhri, 4 Ibid. 103. 5 The frankling, 4 Ibid. 147. safety 550 Of Mercantile Contrnets for' the ^tAy to Ramsofafe harbo'.ir. By the direction of Lord Alvaiil'y, the jury found him entitled to 400^.' We now proccerl to the consideration of salvage payable upon the recapture of thips or goods the piopcrty of th« subjects of this country from the crx-my. It nnay b;; taken as a general proposilion, liable only to one exception, that the ships or goods of the subjects of this country tiken at se-a by an enemy, and afterwards retaken at any indefinite period of time, and whether before or after sentence of condemna(if)n, arc to be restored to the original proprietors upon pnytnent of salvage to the recaptors. By the statutes Vd Geo. II. c. I, 17 Geo. II. c .S4, and 2d Geo. II. c. 34. the legislature fixed and asccrfaim^ tlje rale of sidvage, in case of a recapture, proportioning the amount of the reward to the length of time the ship or goods had been in the possession of the enemy, because the longer they remained in the hands of tlie enemy, so much the less was the hope of recovery. At the same time, however, those statutes fixed a boundary, l^eyond which the allowanc* should not pass : namely, that in no case whatever should tlie recaptors be enlided to more than a moiely of the pro- perty rescued from the; encm3\ But the statute 3"} Geo. III. c. QQ. s. 42. has fixed the rate of salvage at one-eighth lor the royal navy, and at one- sixth for privj^te ships : and in case of recapture by the joint operation of his Majesty's ships and private ships, autliorixed tlie judge of (he Court of Admiralty to order such salvage as he should deem fit and reasonable. But the same statule enacts that recaptured ships, set forth by the enemy as vessels of war, shall AvhoUy belong to the re- captors, and not b;" rcsforetl to the original owners. The same rate of salvage is fixed by the statutes 43 Geo. III. c. 160. s. ^>9 and 41, and 43 Geo. Ml. c. 72. ' Newman v. ^Yal;cr=, ^. »o?. and Put. 612. s. 7, Conveyance vf Goods, — Salvage. 351 5. 7, for his Majesty's hired armed sliips, as for the royal navy. A convoying- ship mny be entitled to salvage for (he re- capture of a vessel which !iad been taken while under its protection'. In this cass Sir William Scott said, The only material question for me to consider is, Avhether there was such a capture made by the enemy as would found a case of recapture. Many c;;ses might be put of the eflect of re- capture, to show, that it is by no means necessary th.ut the posscEsioji by tlie enemy should te long maintained, or at any particular distance from the convoying ship. The question will always be, whether it was an effectual posses- sion, aiid such jis would siis}}end the relation of the convoy- ing ship ; not, whether it is a complete and firm possession, -which, for some pur{)oses is, in contemplation of law, not held to be eiFected till the prize is carried infra prajsidia. The rule of infra pracsidia, however, is certainly not the measure to be applied to questions of this kind : the very clause of the Prize Act alludes to cases of salvage, in which no such complete possession is supposed, since it speaks of vessels being recaptured, and permitted to continue on their original voyage. As little can it be contended that the ves- sel should have been out of sight to found a case of recap- ture ; it will be sufficient if tlicre has been that complete and absolute possession, which supersedes the authority of iht convoying ship. With respect to neutral projjcrty recaptured by the sub- jtKits of this country from the enemy, by tiie ancieiit prize law of Great Britain, it was not subject to salvage. But in consequence of the violent conduct and notorious injustice of France dining the last war, the prize courts of that country having proceeded without any pretence of sanction from the law o{ nations, to conden}n neutral property, it was not ' The Wlgh!, 5 Rob. AAm. Uep. ?15. thouffht 352 Of JSlercantilt Contracts Jor thj thought unreasonable bj neutrals tlicmselvcs, lliat salvage shoiiKl bo paid for deliverance from French capture'. But this deviation from the general rule, viz. iljat neu- tral properly recaptured is not subject U) salvage, is not applied in recaptures from tliose states "^vhich have ahvays adhered to the principles of the prize system Avith its accus- tomed regularity and honour. And therefore, on a recap- ture from a Spanish cruizer of a cargo of naval stores on a destination to ?*ia!ta, on tlie account of the American go- vernment, and for the supply of an American squadron, and not lucrandi causa, or consigned to English possessions and English use, the captors arc not entitled to salvage*. In the case of tlie recapture of the property of allies of this country from a common enemy, by tlie subjects of tliis country, the rule is, that Erjgland restores on salvage to its allies ; but if instances can be given of British property re- taken by them and condemned as prize, the Court of Admi- ralty Avill determine their cases according to their own rule. *' The maritime krw of England," said Sir William Scott % *' having adoptt d a most liberal rule of rcvstitution on salvage, with respect to the recaptured property of its own subjects, gives the beiicfit of that rule to its allies, till it appears that they act towards British property on a less liberal principle ; in such a case it adopts their rule, and treats them accord- ing to their own measure of justice." In conformity to this rule, the San Jago was noi restored to the king of Spain, because retaken from his then enemy the French, under circumstances in which the Spanish Courts had condemned British property retaken by the Spaniards : and shortly afterwards two Portuguese ships were for the same reason condemned ; and several others at the same time restored, » The Two Tricnds, I Rob. Adir. Rep. S71. The Elcoiiora Catharina, 4 Ibid. 150. a The lluatress, 6 Ibid. 104. 3 S.inta Cruz, 1 Rob. Adm. Rep. 63. because Conveyance of Goods. — Salvage. S53 because in the interval between the different captures, an ordinance of the Court of Portugal had altered the rule of restitution in (hut country, and tliey were restored upon payment of the rate of salvage established in Portugal ; viz. one-cighlh to king's ships, and one-fifth to privateers'. OF PARTNERSHIP. 1. Of the Nature of Partnership. IMercantile associations are either public or private, and for the purpose of carrying on lawful trade and commerce, all partnerships are valid, To this rule, however, there is an exception in the case of marine insurances. For by the statute 6 Geo. I. c. 18, all societies and partnerships, ex- cept the Royal Exchange and London Assurance compa- nies, are prohibited from granting, signing, or writing any policy of insurance, or making any contract for assurance, of, or upon, any ship or si)ips, goods or merchandises at sea, or going to sea, and from lending any moneys by way of bottomry. Of public partnerships, some are incorporated by letters patent, or act of parliam_eiit, such as the East India Com- pany, the Bank of England, &c. ; others are not, such as most of the fire and life insurance companies. The laws aflecting these public companies or societies, when not confirmed by public authority, are the same as in common partner.sjiips, the partners being liable for the debts of the compaiiy without any limitation. But when incor- porated by royal cliarter or act of parliament, the merabers are not liable in their individual capacities, on account of the joint trade, but only for their respective shares or interest in the joint stock, their risk being limited by the express provisions of the charter. To constitute a private partnership, the bare consent of • Santa Cruz, 1 Rob. Adru. Ilcp. 63. 2 A the 354 Of Partnership. . the parlies concerned, certified bj acis or contiacts, is suf- ficient nitliout any articles of copartnership or express agree- ment entered into by t!iem, provided they appear ostensibly -to the world as joint traders '. If a person suifers his name to be used in a business, and lioids iiiinsclf out as a j)artncr, he is to be considered, Avhat- cver tneaii;reemei!t may be between him and the other part- ners, and although it was not known at oney knt at ' Grace v. Smitli, 2 Bt. Ftep. 998. « Waugh V. Cirvcr .ind others, 'i Hen. Hi. 235. 3 Conpe V. Kyre, 1 Ibid. 37. * Bf njamin v. Porteus, 2 Ibid. £90. 5 Jestoiis V. Brooke, Cowp. 79.3. 2a2 5/. 33(5 Of Partnership. 51. por cent., together 'svilh a portion of the trade; for 5uch an agreement is coiitrary to tlie priiiriple on -which the partnership contract must be fonncled, viz. reciprocal risks and advantages'. And yet the obligee of such bond will be subject to all the debts accruing from such partner- ship. In all cases of special partnerships, which are formed for a particular concern, or for a single dealing or adventure, though the persons forming them have all the rights, and are subject to a!l the liabilities of partners, yet the relation of copartnership between them ceases with the consummation of such single dealing or adventure, and at no time extends to any of their other concerns. With respect to the division of the profit and loss de- rived from a partnership concern, where the proportion of capital, stock, hibour, and skill of the partners are equal, the division of the gain or loss will be equal ; where they have coi'.tiibuted unequally, the distribution of their respective shares I'll the gain or loss must be regulated according to the stii)ulated proportions, and the different conditions of the partnership. 2. Of the LiahiUties of Partners with reference to each other. As to the interest w hich partners have by law in tlie goods or capital v.liicli they contribute at the commencement of the parliiLrship, or acquire in the course of trade ; it is held by tliC legem rccrcatoriam, that partners are either tenants in common of the partnership effects, or joint tenants with- out benefit of survivorship : for in all undertakings upon hazard of profit or less, the jus accrcsccndi, or benefit of sur- vivorship, is never allowed-. And in wliatever proportion each individual partner may contribute, or whctlier the part- nership be general, or only for a particular adventure, the « Morse V. Wilson, 4T. U. 'ih2. "" Co. Lit. 18?. partners Of Partnership. 357 partners liave all the same species of iiileiesl in the stock in trade. And after an agreement executed between the parties, the stock and effects which are put info partnership become common to all the parties, although they are not delivered, but remain in possession of that ]>aitner who was the sole owner of them before the partnership commenced '. And this community of interest extends not only to such particular stock as may be brought into trade at the time of entering into partnership, but to all such as may at any time arise in the course of the partnership dealings \ But to whatever slmre a partner may be entitled, he has no exclu- sive right to it until a balance of accounts be struck between him and his copartners K How far the acts of one partner are binding upon his co- partners, the general rule of la^v is, that if the act concerns the partnership trade or business, it binds all, unless there. be an express previous dissent ; but if such act do not con^- cern the partnership trade, or be not in the usual course of trade, as signing a deed, ^c. it shall not be binding on the J-est, but by their assent express or implied ^. As to the power of transferring any house or real estate held for the purposes of partnership business, no partner can dispose of more than his own share in such property. Neither will a general partnership agieement, tliotigli under seal, authorize partners to execute deeds for each other, unless a particular power be given for that purpose '. B.jtwith regard to all effects contributed, manufactured, or purcJiased, to be sold for the benefit of" the parlnership, a s Je thrrtof by one of several copartners is equ;d!y valid as if I hey liad ail been present at the time the bargain was made, and had given their assent to it, provided there was no collusion on ' Domat. Edit. 1TT2, b. 1. tit. 8. s. 3. « Skipp V. Harwood, 1 Vos. '<;42. 3 Saavfli v. De Svlva, Cow). -171. 4 1 .^;alk. 126. 4 T. R. 31'5. 6 Vcs. Jun. 60^." 7 Ea<;t's Reo.210. 10 Ibid. 2G4. 7 T. R. 207. 5 Hanibon v. Jackson, 7 T. R. 207. the 358 Of Partnership, the part of the vendee. So although one partner cannot bind his copartners by deed, -vvilhout an authority by deed, 3'et, in the course of mercantile transactions, one partner may, by drawing-, accepting, or indorsing bills of exchange or promissory notes, in the name, or as on the behalf of the firm, bind the rest even without their knowledge or assent'. A new partner, however, cannot be bound in this manner for an old debt incurred by the other partners before the new partner was taken into the firm *. A secret act of bankruptcy committed by one partner docs not take away the power of the others to dispose bona fide of the goods which belonged to them. Thus, in the case of Fox V. Hanbury, it was held, that if one of two partners become bankrupt, the solvent partner may, if for a valuable consideration and without fraud, dispose of the partnership effects : and that if he afterwards fail, tiic assignees, under a joint commission against both, cannot maintain trover against the bona fide vendee of such partnership effec's '. The property in partnership effects may be transferred not only by the acts of the partners, but by operation of law. This happens either by means of bankruptcy or by the effect of legal process directed against the goods of partners in a civil action. Where there is execution against one of several partners, the sheriff must seize all the goods, and sell a moiety thereof undivided *. And, there- fore, though the creditor of any one partner may take in execution the partner's interest in all the tangible property of the partnersliip, yd an account must be taken before the fruits of an e^cecution upon the partnership effects can be reai>ed K But it is in equity only that relief can be obtained in • Swan V. SteHp, 7 East's Rpp. 210. Ex parte Bonbonns, 8 Ves. Jan. 542. ' ShrriflFv. Wilks, 1 East's Rrp. 48. 3 Cowp. 445. * Heydon v Hejdon, 1 Salk..S92. Jackcy v. Butler, 2 Ld. Raym. 871, •' lA>lor V. Field, 4 Ves. Jun. 396. sucl^ Of Partnership. 359 8Uc.li Cijscs. A court of law has no right to ivstrain against pavtner.>]iip cfTccts, or to direct an inquiry into the i:itercst of the partner who is sued, as also of the several claims. vpon the partnership property. If the other partners therefore are desirous to remove the inconvenience of the execution and prevent the sherifl" from disposing of iln-. property seized under it, they must file a bill in equity against the vendee of the sheriff '. As to the coutioul of partners over the partnership pro- party, it depends upon the articles of partnership, iliit if there has been no express stipulation between them, the ma- jority must decide-as to the disposition and management of the partnersijip concerns. Siiips are, however, an exception to tliC rule, that the consent of all parties is necessary to part- nership ; ibr one part-owner may, at any time, against tiie will of the rest, sell or assign his share of the ship, and clothe the assignee wit hall the rights and privileges which he himself en- joyed *. But where the several parties became parl-^owners in a ship under a fixed contract for the employment of it ; or where, by common consent, they delegate the manage- ment of it to one of them, who, by a very intelligible figure of speech, is called the husband of tho ship ; then the com- pact or agreement Ijctween the parties may be enforced by the law of the state, according to its own mode of adminis- tering justice in analogous cases. It is only when the ca- jpymqut of the property has not been thus settled by the par- ties that it becomes necessary to inquire what mode the laAv of the country has prescribed for the regulation of it. But while it authorizes the majority in value to employ the ship upon any probable design, it takes care to secure the interest of the dissentient minority from being lost in an employment they disapprove. For this purpose it has been the practice » Parker v. Parker, 3 Bns. anl Pal. 288. Chapman v. Koops,Ibid. IH^. ' IJcawes's Lex Mercatoria,53. Mollov rte .] ure Maritimo, 310, of S60 Of Partnership, of the court of admiralty, from very rertiote times, t6 take k stipulilion from those Avho desire to send the ship on a voy- age, in a sum equal to the value of the shares of those "who disapprove of the adventure, either to bring back and re- store to them the ship within a limited time, or to pay them the value of their shares. When this is done, ihe dissentient part-owners bear no proportion of the expenses of tlie outfit, and are not entitled to a sliare in the pioiits of the under- taking, but the ship sails wholly at the charge and risk, and for the profit, of the others. This security may be taken upon a warrant obtained by the minority to arrest the ship ; and it is incumbent upon the minority to have xe* course to such proceedings, as the best means of protecting their interest ; or, if they forbear to do so, they should at all events expressly notify their dissent to the others, and if possible to the merchants also who freight the ship ; for the general rule of law is, that where one tenant in conimoA does not destroy the common property, but only takes it out of the possession of another, and carries it away, no action lies ag^iinst him ; but if he destroys the common property, he is liable to be sued by his companion. And it has also been decided in equity, that one part-owner cannot have redress against another for the loss of a ship sent to sea with- out his assent'. But if a part-owner expressly notify his dissent, the court of chancery will not compel him to contribute to a loss ^ If the minority happen to have the possession, and refuse to emp'oy the ship, the majority also may, by a similar warrant, obtain possession of it, and send it to sea upon givi ig such s<^curity '. And whatever doubts may have been entertained, whether ' Abbot's Law of Alerchant Ships and Seamen, part I. c. 3. s. 4. » Horn V. Gilpin, Ambl.255. 3 Ouston v. Hebden, 1 Wils. 101. this Of Partnership. 561 th^s practice ©f the court of admiralty was an unfounded assumption of jurisdictioa in a matter not within its cogni- zance, several late decif^ions have recognised and confirmed it, both as to taking such security, and enforcing the per- formance of the stipulation upi)n the loss of a ship'. In the case of Onston v. Hebden above cited, lord chief justice Lee said, I have no doubt but the admiralty has a power in this case to compel a security, and this jurisdiction has been alio \ed to that court for the public gciod. Indeed, the ad- miralty has no jurisdiction to compel a sale; and if they siiould do (hat, you nun against selling, or compelling the pa'ty to sell, or to buy the shares of others. But tlough the part-owners of a ship are tenants in com- ftiou W'th eacli other of their respective shares ; jci if, upon Cntrring into partnership, a ship is brought in as part of the stock in ttade, or is aft r purcliasetl out of the partnership funds, it is necessary there should be a new register in tlie names of all the partners, otherwise the sliip will be consi- dered as the separate property of that one whose name is ex- clusively on the register ^. As to the rights which partners acquire between them- selves, it is to be observed, that each partner is not only entitled to his proportion of the partnership estate accord- ing to express agreement or what he originally contributed, but he has a lien upon it for any sums of money advanced by him to, or owing to liim from, the partnership. And this extends even to property in sln'ps ; for in the case of Doddington v. Hallet, lord chancellor Hardwicke held, that part-owners have a specific lien on the shares of each other for what they have paid, or are liable to pay, for build- ing and equipping the ship '. ' 1 Ld. Raym. 223, 2.'55. 6 Mod. 162. 2 Ld. R.iym. 1285. 2 Str. 890, '' Curtis v.Pcn-y,6 Ves.Jun. T39. 3 j Yes. 497. 562 Of Partnership, If one partner pays a debt arising out of a legal contract, for Avliich the partnersliip was liable, he lias an action against the others for a contribution. But if partners should be engaged in any thing malum in se, one of them can- not acquire a right of action by paying a sum of money which they liad jointly promised to a third person in the course of their immoral transactions. Although these two points "have always been considered perfectly clear, consi- derable uncertainty seems for some time to have prevailed in cases where the debt arose out of a transaction being not malum in se, but only malum prohibitum. In Faikney V. Reynous, it was held, that a bond to reimburse a person who had compounded the difiVrcnce of stocks, half of what he had paid for himself and a person jointly concerned in the contracts compounded, is not void'. For though tiie statute 7 Geo. II. c. 8. s. 5., prohibits the compounding or iriaking up difterences for stocks or other public securities, without specially executing the contract, and actually deli- vering the stock ; yet it does not prohibit the recovery of money paid by one of two partners on account of the other, for which a bond had been given to secure the re-payment. A distinction, however, has been taken between a debt arising out of a prohibited transaction paid by one partner, with or without the consent of tlie other. And therefore when the contract is not morally bad, its illegality aris- ing only from its being prohibited by a positive statute, it has been held, that a debt paid by one partner with the conseitt and direction of tlie other who has jointly contracted, . is recoverable in an action for money paid to the ollier's use. Accordingly, two persons having jointly engaged in a stock-, jobbing transaction, and incurred losses, one of them hav-,; ing repaid the broker, employed the whole difi'erences with., the privity and consent of the other, was, notwithstanding » Eur. 2069. the Of Partnership, 563 the statute 7 Geo. II., allowed to recover a moiety from that other'. But the authority of these two cases has been in some mea- sure shaken by subsequent decisions. For it has been de- termined that no implied promise can arise directly out of an illegal proceedinc^, so as to be the foundation of an ac- tion, whatever the law may be, where the parties are a step removed from the illegal transaction itself, or one acts by the direction of the' oihcr. In Mitchel and others v. Cockburne ^, it was held, that if A and B are engaged in an illegal partnership for the insurance of ships, and A pays the whole of the losses incurred, he cannot maintain an ac- tion against B to recover a share of the money that has been so pa'd. And this decision has been fully confirmed in the case of Aubert v. Maize' ; in which an arbitrator having awarded a sum to be paid by one partner to another, on ac- coutit of money paid by the latter lor losses incurred by them on partnership insurances, that part of the award wa& set aside. And of such contracts, which are not immoral in them- selves, but are prohibited by statute, a specific executioo will not be decreed in equity ^. 3. Of the Lialilities of Partners luith reference to third Persons. The transactions of partners, in which they all severally jind respectively join, ditler in nothing as to legal conse- quences from transactions in which they are concerned in- dividually ; for although the general rule of law is, that no one is liable upon any contract, except such as are privy to it, the liability of partners under contract is commensurate and co-extensive with their rights, and arises from their • Petrie v Ilannav, 3 T. R. 418. ' ? Hen. Bl 379- ? 2 Bos. and PiO. 371. « K.n«wle5 v- Ilougbten, 11 Ves. Jun. 168. beiniT 364; Of "Partner sliip. being considered as virtually present at and sanctioning the proceedings they singly enter into in the course of trade'. This responsibility of partners for the acts of each other in the course of trade cannot be limited by any agreement, co- venants, or provisos, in the articles by which the partnerships are constituted ; it is not merely the sum which they bring into the partnership fund that is risked, but they are answer- able to the last shilling of their fortunes ^. But though the act of one partner binds the otliers, yet if they can show a disclaimer, they will be relieved from such, responsibility. And it should seem that even during the subsistence of the partnership, and in the established course of trade, one partner may, to a certain degree, limit his re- sponsibilif}^, by giving distinct notice to those with whom his copartners are about to contract, of his dissent to such contracts When a dormant partner is discovered, he is equally li- able as if his name had appeared in the firm ; and it will be no security to him that he stipulated that his copartner should carry on the trade at his own separate risk, and that h.e should not be answerable for any of the other's debts and engagements ■*. This appears from the case of Stracey, Ross, and others v. Deey, London Sittings after Mich. 1789. The plaintifls jointly carried on trade as grocers, but Ross was the only ostensible person engaged in the business, and appeared to the world as solely interested therein. By the terms of the partnei"ship, Ross was to be the apparent trader, and the others were to remain mere sleeping partners. The de- fendant was a policy broker, and being indebted for grocery (as he conceived) to Ross, lieefliscted insurances and paid premiums on account of Ross solely, to the amount of his ' 1 Falk. 292. ' 5 T. R. 601. 3 Watson on rarlnership, 194. 4 Hubert v. Nelson, Davies, B. L, p. 8. debt, Of Partnership. 365 debt, under the idea that one demand might be set off against the other. Rois's affairs bei:iQ: macU deraiiged, payment of the money due from tiie defendant u as demand(d by the firm, and was refused by him on the ground of his having been deceived by the other partners keeping back, ajid hold- ing out Ross as the only person concerned in the trade. Lord Kenyon, C. J. was of opinion, that as the defendant had a good defence by way of set off, as against Ross, and had been hy 'he coiukict of the plaintiffs led to believe that Ross was the only person he contracted with ; they could not now pull off the mask and claim payments of debts supposed to be due to Ross alone, without allowing the defendant the same advantages and equities in his defence that he would have had in actions brought by Ross. Neither can they excuse tliemsclves from the liability of a debt fraudulently contracted by their copariners in the course of business, and to which they were not privy ; for by the formation of the partnership each partner has im- pliedly undertaken to he responsible for what his copartners shall respectively do within the compass of the partnership concerns ' . But unless the debt relates to, and has been confrn.cted in the course of the partnership concerns, no joint liability arises, but tliat partner only will be bound who contracts it. It is only to act in the course of their purticular trade, or line of business, that an authority is delegated by partners to each other ; and it is only in such transactions that strangers have a right to go upori the credit of the partnership con- cerns *. Still less can d bts contracted by one partner l)efore the commencement of the partnership constitute a joint demand upon the firm, unless there were an express agreement to bc- • Willct V. Chambers, Cowp. HM, ■» Yin. Abr. v. IG. p. 2i'2. come 566 Of Partnership. coinc responsible for siicli debts, and then perhaps equity ■would ciirorce the payment of them '. Altbough slight circumstances might be sufficient to in- duce courts of equity to render a person liable who was not a partner at the time of the original transaction, but had aftcrwarJs acquired all the benefit of a partner in such trans- action ; yet if it clearly appi^ars that no partnership actually existed at the time the contract was entered into, no .subse- quent act or acknowledgement will create the responsibility arising from partnership *. The power of one partner to bind his copartners in draw- ing bills of exchange, indorsing such as are payable to the iirm, and making and indorsing promissory notes, has ne- ver been doubted, if such bills, &c. concern t'je joint traded But it is otherwise if they concern the acceptor only in a distinct interest and respect, and tlie holder of the bill, at the time he became so, was aware of that f.ct-*. And in Sheriff V. Wilks 5 it was held that two of three partners who had contracted a debt, prior to the admission of the third partner into the firm, cannot bind hi;n with- out his assent, by accepting a bill drawn by the creditor upon the firm in their joint names. When a partner for his own accommodation pledges tlie partnership property, if the party advancing the money can be considered as being advertised that it was not intend- ed to be a partnership proceeding, but for tlie separate ac- count of the single partner alone, prima facie the partner- ship is not liable ; unless a previous authority or subsequent approbation is shown'''. ' Ex parte Perlc, 6 Vcs. Jun. 603. » Saville V. Robertson and Hutchinson, 4 T. R. 720. 3 Fi;ikncy V. liall, 1 Salk. 126. « Arden v. Sharpa^od another, 2 Esp. N. P. C. 593. . 5 1 East's Rep. 48. ® Ex parte Ik-nbonus, 8 Ves. Jun. 5A0.. - So, Of Fartnership. 367 So, if a creditor of one of several partners collude with him to take payment or security for his individual debt out of the partnership funds, kno\viiig at the time that it Avas with- out the consent of the other partner, it is fraudulent and void ; but if taken bona fide without such knowledge at the time, no subsequently acquired knowledge of the miscon- duct of the partner in giving- such security will prevent the holder fiom recovering against all the partners '. But the power of one partner to bind the firm by a nego- tiable instrument ceases with the existence of the partner- ship. And therefore wiien the partnership is dissolved, a power to receive and pay all debts due to and from the jiart- ncrship will not authorize one of the late partners to in- dorse a bill of exchange in the name of the partnership, though drawn by him in that name, and accepted by a debtor of the partnership after the dissolution ^. And in Abel v. Sutton ^ it was determined, that after the dissolution of a partnership, one of the persons who com- posed the firm cannot put the partnership name to a nego- tiable security so as to charge the others, even though it existed prior to the dissolution of the partnership, or w ere for the purpose of liquidating the partnership debts ; not- ■withstanding such partner may have had authority to settle the partnership aiFaits : to render such security negotiable all tlie partners must join. We have seen that one partner cannot by deed bring any fresh bur(hen upon his copartner ; he can, however, bar him o[ a right w iiich they possess jointly. For where there is a promise to several jointly, or where there are several joint obligees or covenantees, a release by one binds all. In cases, however, of gross collusion with creditors, relief would probably be granted in a court of equity ''. ' Swan V. steel, 7 East's Rep. 210. ' KilgourT. Finlyson, I ilen. HI. Ibb. . '3 Esp. N. P. C. 108. * J it. Rek^use, Com. Dig. and Bac. Abr. But 3(i8 Of Partnership. But it will always be consiclcjcJ in what right a release is i^-iveii by a joint obligee. IHic releases all actions in a representative ca])acity, a joint bond in liis own right is not discharged, and so vice versa '. ' To compensate, however, for any hardship which may arise from the operation of a release by one of several part' ners, the law considers a release to one as enuring to the benefit of all *. If two or more are jointly and severally bound in a bond, a release to one discharges the other ; and in such case the joint remedy being gone, the several is so likewise. Even if the release were lo one, proviso that the other shall not take advantage of it, the proviso would be void and the release would discharge both K A release will have operation upon a debt due from a partnership by simple contract as well as by specialty. Where a creditor receives anly part of his demand from one partner upon a bill of exchange or for goods sold, lie may come upon the others for the residue ; but if he seals a release to one, whatever sum may still be due to him, he is barred as against each and all of them : Tiiougli the debt may not be extinguished, lie has for ever parted with his remedy ^. With regard to tlie liability of part-owners for the re- pairs of a ship and other necessaries for the employment of it, one part-owner may in general, by ordering these things on credit, render his companions liable to be sued for the price of them '. Yet, if the person who gives the credit does not at the time know that there are other part- owners, he may sue him alone from whom he receives the orders ''. But o:!e part-owner c.muot, by ordering an in- surance of the ship without authority from another, charge » stokes V. Stokes, Vent. S5. 2 Keb. 530. ^ Co. Lit. 232. 3 Lit. Rep. ISO. 4 WVitson on Partnership, 2'-27. 5 Wri.^iit V. Hyntor, 1 Kast's flep. 20. 6 Doo V. Ch^ppenden, at Westm. Sitt. il. T. 1790, the Of Partnership. 369 the other with any part of the premium, unless the other afterwards assent to the insurance '. It is a general rule, that the owners are bound by every lawful contract made by the master of the ship relative to the usual employment of such ship *. And to constitute such a contract for the owners and on their behalf, the course of the usual employment of the ship is evidence of authority given by the owners to the master. But one part-owner, who dissents from a particular voyage in the manner mentioned at page 360, is not bound, because he does not employ the ship on that voyage, nor derive any profit from it '. So if the master make a particular engagement or war- ranty relating to the conveyance of merchandise according to the usual employment of the ship, the owners will be bound by such engngcment or warranty, although made without their knowledge, and must answer for a breach of it \ As to the extent of the responsibility of part-owners, much difference has prevailed among mercantile nations. In England, formerly, part-owners were answerable to the merchant for the loss or damage of his goods up to the full extent of the amount of such loss or damage. But this proving a great discouragement to trade, it was cnacied by the statute 7 Geo. II. c. IS. that no owner or owners of any ship or vessel, shall be liable for any goods or merchandise of any kind shipped on board any vessel, or for any act, damage, or forfeiture done, occasioned or incurred by the master or mariners, without the privity ' Ogle and another v. AVran^ham, et nl. Guildliall Sift. IT. T. 1793. ^ Mollov tie Jure ISlaritimojih. 2. t. ^2. s. 14. « T. II. 531. 3 Lev. 258. 3 Mod. S2\. 1 Show. '29, 101. 3 Boston V. Sandford,Carfh. 58. * Ringui^t V. Ditcheli, Cluildhall Sitt. after Mjch. Terra, 40 III. ^ B and 370 Of Partnership. and knowlc(%e of such owner or owner?, further than the value of (he ship or vessel, witli nil her appurtenances, and the full amount of the frcic^hf, due or (o grow due for and during (he voyage Avherein such embezzlenien(, &c. shall be commi(ted, &c. i\nd by section 2. where (he ship or vessel, appurtenances, and freigh( are no( suHicient to make full compensu(ion (o all (he freighters or proprietors, they shall receive their satisfaction (hereout in average, in pro- portion to their respective losses or damages ; and in every such case, it may be lawful for such freighters or proprie(ors, or for the owners, or any of them, on behalf of himself, and all the res(, (o exhibit a bill in any court of equi(y for (he discovery of (he (olal amount of such losses or damages, and also of (he value of the ship or vessel, and for an equal dis(ribulion and payment (hereof amongst such freighters or proprie(ors, in proportion to their respective losses or damages, according to (he rules of equi(y. Pro- vided (sec(. 3.) (hat the plaintifl'or plaintiffs shall annex an affidavit to such bill or bills, that he or they do not col- lude with any of the defendants thereto ; and shall ofler to pay the value of such ship or vessel, appurtenances and freight, as such court shall direct. Provided also (sect. 3.) that nothing in the present act shall extend, or be cons(rued to ex(cnd (o (akc away any remedy which any person or persons had^ betbre the making of tliis act, against the mas- ter and mariners respectively, in resp.-ct of any fraud, abuse, or malversation. By the 26th Geo. III. c. 86. s. 1. the same limits to the responsibility of tiie owners in the several case si mentioned in the preceding statute were fixed, and also in the case of robbery, " althougli the master or mariner shall not be in any wise concerned in, or privy (o, such robbery, embezzle- ment, secreting, or making away with." This statute also contains Of Partnership. 371 contains the same provisions as the preceding act, for re- medy against the master and mariners, and has entirely taken away the responsibility of the owners in the case of loss or damage by fire. 4. Of the Liabilities' of Partners for the Torts or Wrongs committed ly a Partner. Though partners are in general bound by the con- tracts, they are not answerable for the wrongs of each other. If they all join in one trespass or tort, of course they all may Ije sued, and compelled to make compensation for the injury they have committed. Bat this action arises from their personal misconduct, and not from the relation of partnership which subsists between them. With regard to matters quite unconnectc^d with the partnership, trade, or business, there can be no question ; and, in gene- ral, acts or omissions in the course of the partnership, trade, or business, in violation of law, will only implicate those "who are guilty of them. If one of two bankers in part- nership should commit usury in discounting bills ; if one of two attorneys in partnership should practise without a certificate ; if one of two surgeons in partnership should wantonly ill-treat a patient, the innocent partners cer- tainly could not be liable to an action for penalties or da- mages '. However, this rule admits of exceptions. Partners, like individuals, are responsible for the negligence of their ser- vants upon the maxim of qui facit per aliura facit per se ; and if one of the partners acts, he is considered in this in- stance as the servant of the rest. In these cases the tort is looked upon as the joint and several tort of all the partners; so that they may either be proceeded against in a body, or ' Watson's Law of Partnership, 235. 2 B 2 one 372 Of Partnership. one may be singltd out and sued alone for the whole of the damai^e done. This happens not unusually in actions for driving against carriages, running down ships, &c. ' Of the liability of partners as to smuggling, it appears that if one of the several partners engages in transac- tions of this kind with the consent or privity of the others, lie alone is liable to be prosecuted for tiie penaUies imposed by . N. P. C. 513. J Lepsv. Smith,? T. R. 3.{^. * Upon tlie oiithnvry or altaindcr the share of the outlaw or convirt, ns also all the partnership clViTts are forfeited to the cronn ; for it is unbe- coming tlie dij^nity of thecro.vn to be joint (enant, or tenant in common, with another person. (2 Bl. Com. -i09.) But upon an '^xtent against one partner, the cro^^'n ran only take the sepa- rate interest of the partner, and that liable to the partnership debts. (The King V. Sanderson, V\ ightw. llcp. 50.) I. By 374 Of Partficrship. First J By the Act of the Parties. Where the partnership is formed for a single dealing oi transaction, as soon as tliat is coniplefed the partnership is at an end of course. But wliere a general partnership is en- tered into for an unlimited time, it may be put an end to at any time by either of the partners ; so that he acts bona fide, Tamdiii socirtas durat, quamdiu consensus partium ir)teger perseverat'. Therefore, if either of the partners should think proper to relinquish the partnership, he may do so ; provided he does not b-cak off witli some sinister view, or does not quit after some particular business is begun, or at an unseasonable time, which might occasion loss and damage to the partnership^. But it almost always happens, that by articles of partner- ship a precise term is fixed for the duration of the contract, Irt that case tlie partnership is regularly dissolved by the effluxion or expiration of tl.at time for ^vhich it was origi- nally agreed between the parties to continue their portion, for the purpose of carrying on the joint trade with a view to their mutual benefit. If the business should still be con- ducted after that period by all the partners, without any new arrarigemcnt of the concern, it would probably be held, in analogy to the law of landlord and tenant, that the part- nership continued under the conditions and covenants con- tained in tiie original articles, with a power to either parfy to put an end to it at pleasured A partnership for a term of years cannot Ije dissolved by the will of one, or of any number of the partners short of the whole of them ; but of course, if they all agree upon scpa- yating, they may do so at any time-*. If one partner grossly misconducts himself, and seems dis- • 1 n'lir. lib. xvii. tit. 2. ' Watson's Law of Partnership, 3S1. 3 Ibid, * Ibid.. posed Of Partnership. S75 posed to involve his copartners in ruin, a court of equity will interfere, and dissolve the partnership before it has come to its natural termination. Where the purposes for which a contract was entered into can be no lona^er served, the contract may be disan- nulled. Therefore, it should seem that a partnership may be dissolved by the insanity of any one of the partners, pro- vided the malady be not of a temporary nature, but such as to render him incapable of conducting the business for a length of time, according to the articles of partriership ' . A partnership may likewise be dissolved by the award of arbitrators. It is customary in regular partnerships to insert a clause in. the articles, by which the partners covenant to submit io arbitration any mutter or thing which may become t!ie sub- ject of controversy or dispute between them. And although in such cases the arbitrators are usually judges of the parties' own choosing, and proceed in a summary way ; yet, if duly authorised, their award is considered final, (as well as where a settlement of accounts is referred to their decision*) aiul consequently binding upon the parties, unless there should appear just grounds, either at law, or in equity, to set it aside. In order to empower the arbitrators to proceed to thje dis- solution of a partnership, it is not necessary for the parties submitting to arbitration, to authoris.^ the arbitrators to dis- solve the purtnersliip ; for if two partners refer all matters in difference between them, the arbitrators have clearly a right to dissolve the partnership'. Articles of partnership frequently contain a provision for a dissolution, upon notice to be given by any one of the ' Savor V. Bennett, at the Rolls, 1st Pec. 1785. » Rouih V. Hearh, Anst. Cas. Exch. 319. 3 Groeu v. Waring, I HI. li. 475. partners. 376 Of Partnership. partners. In such case the mode of proceeding pointed out must be strictly pursued, and a regard to good faith must govern the conduct of the partner who withdraws, in the same manner ^s a partner withdrawing from a partnership for an inilefinite time'. The ciiect of marriage of a feme sole partner has never been expressly decided, but it would probably l)e held io operate as a dissolution of the partnership. However wo- men are not unfrequently entitled to shares in banking-houses and other mercantile concerns, under positive covenants : when this happens, their husbands are entitled to such shares, and become partners in their stead \ A partnership may be dissolved as between the partners themselves, and still subsist as between them and the rest of the world. From this liability of partners to answer for the acts of each other, it is necessary that after the dissolution of their connections, to avoid continuing liable to each other's creditors after they have ceased to have dealing together, -on's Law of Partnership, 384. '- Ibid. 3 Gorham V. Thompson, Peake's N.P. C. 42. « Graham v. Hopo, Ibid. 254. cases Of Partnership. 377 eases the partner coming in or retiring generally pays or receives a sum of money in proportion to his share in the concern. If the business is to be given up, or the ])artncrs cannot arrive at any amicable arrangement, then the part- nership eft'ecfs are all to be reduced into money, and the produce, together with omise B.', that in conhideration of liis doing a particular act, C. would pay him such a sum ; or that if C. do not pay him such a sum, he, A. will pay the same ; this is no collateral promise, unless C. was privy to the con- tract, and recognised himself as a debtor also; but other- wise A. is the sole debtor, and the statute is out of the case. A promise in writing of a third person to be answerable for the debt, default, or miscarriage of another, will be valid as well where the promise is made previous to or at the time of the sale of the goods, or other credit given to, or liability incurred by the original debtor or defaulter % as where such debt, default, &c. has been contracted prior to the promise'. But though the statute requires the promise 6f the gua- rantor to be in writing, so as to render him liaijle for the debtor default to which the originil debtor or defaulter is already subject, yei^ if the guarantee had possession of the property of his debtor, and was induced to part with it o\i the promise of the guaranlor, no note in writing is neces- sary (o bring the guarantor within the statute. Thus in Catling v. Aubert-*, the plaintiff", a broker, having a lien upon certain policies of insurance in his hands, on account of acceptances he was under for his principal, was applied to by the defendant to give up such policies, in order (o enable him to recover against tiie underwriters ; ' FitZRibbon, .S02. ■» Matson v. AVhamin, 2 T. R. 80. ^ Fish V. lIutcliinsoD, 2 VVils. 94. * 2 Kasfs Rep. 325. which 582 Of Mer candle Guarantees. wbicli ihe plain! ifT did npon (ho dofondant's verbal uri(]fr- takinij to pay a certain sum for the debt and costs incurred upon one of those acceptances. This sum not being- paid, on an action brought, the case was held not to be within the statute. 2. Of the Extent and Construction of Guarantees. As to the extent atid construction of an engagement io guarantee, it is a general rule that the surety shall not be bound beyond the extent of the express words of the en- gagcnunt into which he has entered. And, therefore, if a person engages for the due performance of a trust for a spe- cific time, as in the case of tlie Liverpool Water Works Company' for twelve months, and in that of Lotd Arling- ton V. Merrieke for six months^, tlic responsibility of the surety is restrained to the time specified, and he will not be liable if his principal makes default in the execution of such trust after the time conditioned. So, even though no specific time is limited, yet if the office executed by the princi])al is an annual office, and he continues in that office over the year, the security enteral into for his faithful discharge of the same during the first year is at an end at the ex[)iration of that year^ But notwithstanding a surety is not to be charged beyond the express words of the bond into which he has entered, yet if he does not limit his responsibility, his undertaking will be construed a continuing or standing guarantee to the specified amount. Thus M'here the defendant engaged in writing to guaran- tee the plaiutiif " for any guoJs he hath or may supply my brother W. P. with to the amount of 100/." It ap- peared that the plaintiff after this guarantee had furnished • 6 East's Rep. 507. ' 2 Saund. 403. 3 Warden of St. Saviours's Southw;u-k v. Bostock, 2 New Rep. 175. goods Of Mercantile Guarantees. S83 j^oods to the amount of lOOZ., for which he liad been regu- larly paid ; and (hat the sum now in dispute was for a fur- ther supply of goods to W. P. The question was, whe- ther this was a continuing- contract for guaranteeing the supply of goods at any time afterwards furnished as long as the parties continued to deal together ; or whether it was confined to the first hundred pound's worth of goods fur- nished. Held that it was a continuing or standing guaran- tee to the extent of 100/. which might at any time become due for goods supplied until the credit was recalled '. And if the surely has been once called upon to pay a sura, and having paid it, docs revoke his security, it is not sufficient that he write to the obligee, cautioning him against giving any further credit to the party, for whose payments or integrity, he is security ; but he will still re- main liable, at least, to the amount of the difference be- twcen what he has already paid and the whole sum se- cured *. Where a party is surety for any particular debt, and after the incurring of that debt, transactions continue be- tween the debtor and creditor for whom he is surety, in the course of which the latter makes payments generally, the creditor may apply such payments in discharge of the sub- sequent transactions, and still hold the surety liable for the original debt '. Neither will a variation in (he terms of the agreement, as where the sum secured was conditioned to be paid at a fu- ture day, but part thereof was paid down, and the residue was to be paid at a future day, release the surety from his obligation, unless such variation increases his risk '' , • Mason v. Pritc'aard, 12 East's Rep. 127. Merle v. Wells, 2 Camu. N. P. R. 413. ' Shepherd v. Beeclier, 2 P. Wms. 288. 3 Hutchinson V. BcII, lT;iunt. Rep. TjSS. ♦ Turnes v-.^ PWSUiis, \ Rol. Abr, SO. pi. i4. 581 Of Mercantile Guarantees. It ri'inains to consiiler how the responsibility of a surety is aii'ecled by any change in the parties constituting a part- ncrslii}) /inn. Tiiough all traiisactioMs in the course of partnership deal-* ings are considered as for the benefit of all tlie members composing it, yet it has no conlirmance independent of the particular Individuals of whom it is composed : rights are not vested in it, but in them ; so that there is no transmis- sion of rights to successions in a mercantile house, and all running agreements \\i(h a partnership cease Mhcn any change takes place by death, the retiring of cue partner, or the admission of another in tlie set of partners existing at the time when the agreements were concluded or the se- curities were entered into. And, therefore, it has been de- cided, that an indemnity bond does not remain in force after a change has taken place in the tlrm with which it was originally entered into ; for from the moment of the admission of the new partner the liability of the surety ceases '; unless the undertaking is renewed, or that a con- dition was in!-erted in the bond that the obligor should be ans^verable not only to the present but to all future partners in the house*. Neither will a promise given in writing to three part- ners to pay for goods to be furnished by them to a third person, extend to goods furnished by two of them after the third had wit!)drawn from the partnership ^ Nor will a bond for payment to three partners, of all sums of money advanced by them to a third person, be binding after the death of one of them, so as to cover sub- sequent advances made after another partner had been taken into the firm ^. ' Wright V. Ru5sel,9 PI. Rep. P31. 3 Wil=. ^j^2. ' I'pr Lawrence, J. in l-tran^'C v. Lee, 3 East's Rep. 391. 3 Myers V. Edge, 7 T. R. 23-i. « Strange v. Lee, 3 East's Rep. 391. But Of Mercantile Guarantees. - S85 But where the security is given to the house, as a bank'tfig house for instance, for the fiddUy of a clerk in the shop and counting house, and not to particular persons, no change of partners will discharge the surety from his liability '. So a surety will continue liable on his bond given to trus- tees of a united company, (e.g. The Globe Insurance Com- pany), although not incorporated by charter, for a breach oi faithful service by a clerk committed at any time during his contirmance in the service of the actual existing body of persons carrying on the same business under the same name, notwithstanding any intermediate change of the original holders of the shares by death or transfer ; the intention of the parties to the instrument being apparent to contract for such service to be performed to the company as a fluctuat- ing body ; and the intervention of the trustees removing all legal and technical diliiculties to such a contract made w ith, or suit instituted by, the company themselves as a natural body *. 3. How a Promise of Guarantee may be discharged. A promise of guarantee may be vacated by any act of the promisee, which tends to increase the risk of (he pro- miser, or to defeat his remeJy. And, therefore, if a guaran- tee gives time to the principal debtor, without the know- ledge or concurrence of the surety ', or otherwise changes the nature of the security and the credit, as if a bond is conditioned for (he payment of money by instalments at difl'erent periods, and the obligee agrees with the principal to take notes at distinct periods different from the dates of • Lucas V. Barclay,! T. R. ?91. n. (a) » Metcalf Barf. v. Bruin, 12 East's Hep. 400. ' NUbitt v..S.irub, tittd in 6 Vcs. Jun.«09. 2 c the. S86 Of Mercantile Guarantees. the iiistaln^ents ', in both cases t'le surety will be released from bis engagement. So if a creditor parts Avidi a lien which he may have in his powhcre the surety would not have had tlie same benefit that tiie creditor would. But in Jate cases, provided there was no risk, delay, or expense, the surety has a right to call upon the creditor, to do the most he can for his benefit ; and the latter cases have gone further. It is now clear, that, if the surety deposits the money, and agrees that the creditor shall be at no expense, lie may compel the creditor to prove under a commission of bankruptcy, and give the benefit of an assignment in that wy. But a surety cannot compel a creditor to assign a bond, either upon a tender of payment, or upon actual payment*. 5. The Surety's Remedy against his Principal. Formerly it was held, tliat a surety who had paid the debt of his principal, could not maintain an action, unless he had taken a counter security. But by more modern decisions it has been established, that if the surety has beea • 6 Ves. .Tun. 734. » Gammon v. Stone, I Ves. 339. Robinson v. Gee, 6 Ves. Jun. 734. damnified, Of Mercantile Guarantees. S89' damnified, he may maintain an action against liis principal, whether he has taken a counter security or not '. But vvheiher a surety who, Avhen called upon for pa}'- ment, gives, in lieu thereof, a security to the creditor, can recover against the piincipal as for money paid to his use, before a'tual p 'y. icnt, does not appear quite char. In the case of B.iiclay v. Gooch ^, wlure the surety liad given a promissory note payaMe with interest, and wiiich the cre- ditor had accepted as payment of the dibt of the principal, it was decided, that such an action might be supported. But in the subsequent case of Taylor v. Higgins ', a bond and warrant of attorney given by the surety to the crwlitor, and accepted by him as payment and satisfaction, was not held a sufficient payment to entitle the surety to maintain such action. Mr. Fell, p. 169, in commenting upon these two cases, says, " Certainly it seems impossible that these two deci- sions can stand together : for a promissory note, till pay- ment, is but a security ; and, however it may pass as the current representative of money, that will not bind its legal operation ; and, if the giving a security of a higher nature cannot be the ground of an action for money paid, till ac- tual discharge, a fortiori, one of a loweh" nature cannot. Besides, the creditor taking such security from a surety, does not discharge the principal, who might, therefore, have two actions brought against him by two different persons for the same debt. But if ihe surety take a counter security, as a bond, he cannot, on his being obliged to j/ay, proceed against his principal, but mubt resort to such counter-security *. Wliere a party has become bound for the debt of an- ' Laver V. Nelson, 1 Vcrn. 456. Toassainf v. Martinnant, 2 T. R. 100, ' 2 Ksp. N. P. C. 57 1, -i S Kast's Rep. 169. * Toussaint v. iMaitiniiant, 2 T. R. 100. other, S90 Of Mercantile Guarantees. other, and the money is due upon the bond, the cmirt of Chancery Avill, on application, decree the principal to dis- cbarge the debt'. So if the principal absent Wmself, the surety may, by ap- plication to that co\irt, be equitably relieved oat of the pro- perty of the principal ^. And if the principal has given bail in an action of debt with surety, the surety, alter payment of the debt, has pre- cisely the same right against the bail as against the prin- cipal ^ If the principal becomes bankrupt, and at t!ie time the surety has in his possession, or under a control equivalent to possession, properly of the principal, as agent, bailee, or otherwise, he has a lien upon it to the amount of the suni for which he was security •*. G. Of Co-sureties. Where tliere are more sureties than one, and one alone is obliged to pay, his co-sureties, or their representatives, must contribute a proportional part of the payment to which they were originally liable ^ And where there are more than t\\o sureties, and some of them b come insolvent, the party, or parties, paying the insolvents' share, shall, in equity, have equal contribution of such share ajjainst such of the other sureties as remain sol- vent ^. Neither is the principle of contribution affected by their being bound by separate instruments ; but they will be liable to contribute in proportion to the sums for which they had respectively made themselves liable". ' Lord Ranelagh v. I{ayps, 1 Vern. 189. ' Wiijht V. Morlcv, U Vf>s. Jiin.23. 3 Parsons v. Briddork, 2 Vern. 60tJ. 4 Drill lew ater V. Goodwin, Cowp. '231. 5 Cowcll V. !d wards, -2 Bos. Ik PmI. ii68. Primrose v. Bromley, 1 Atk. 89. « Peter v. Rich, 5 ('. 1 Ch. K. .-^5. ■^ Ware v. Horwood, 14 Vis. J up. 28, But Of Principal and Agent. — The Appointment. S91 But where a party is bound as a further security, in case those already g-iven hhonld be iusuflicient, there lie shall not be called upon, by the tbrnier sureties, to contribute, for in such case he is nut a surety '. CHAPTER IX. OF PRINCIPAL AND AGENT. Of the Relation of Principal and Age7it. Jt is a general rule of law, that where a person has power as owner to do any thin£>-, he may, as incident to his light, authorise another to do it. Hence arises the authoiity of agents to do acts, and make enjjaijements in the names of their principals. And as the ollice of an agent is merely ministerial, infants, feme-coverts, persons attainted, out- lawed, excommunicated, aliens, and others, though dis- qualitied trom acting in their own capacity, so as to bind themselves, may yet act as agents for others ^. We shall consider this division of our subject, first, witii. respect to tlie appointment and authority of an agent ; se- condly, the rights and liabilities of principal and agent with reference to each other; and thirdly, the rights and liabili- ties of principal and agent with reference to third persons. SECTION I. OP THE APPOINTMENT AND AUTHORITY OF AN AGENT. 1. Of the Appointment of nn Agent. The appointment of an agent may be by deed, or by pa- rol. It lias been said, that an appointment or authority to do an act for another, or to make engagements in his name, must be by deed ^ ; but this is by no means the case •*, for in ' Craythornp v. Swinburrir, 14 Ves. Jun. 161. '^ Co. Lit. 5'^. a. 3 Beawes's Lex Merc, pi 86. « 2 Kol. Abr. 8. commercial 392 Of Principal and Jgent. — The appointment. commercial Iransactions agcnfs are most usually appointed by a letter of orders, or simply by a retainer '. An appoint- ment by deed is only necessary where the principal is bound by articles under seal ; and then in order to bind the prin- cipal by the agent's execution of such deed, the agent must be empowered by an authority of as high a nature ^ Au authority to make or sign a promissory note ', or to indorse, draw, or accept a bill of exchange *, may be, and indeed most usually is, by a parol. And it is not necessary that the authority of an agent to contract for the sale of goods to the value of ten pounds and upwards, according to the provisions of the seventeenth section of the statute of frauds, should be in writing. Besides these express modes, viz. by deed or by parol, of creating an authority, an authority may, in some cases, be implied or inferred from the conduct of the principal in sanctioning the acts of his agents It has also been de- cided, that the subsequent assent or acquiescence will make the act of an agent binding on (he principal''. And if a principal once adopts tlie acts of his agent, he cannot after- wards discharge himself from his responsibility ''. Neither can he adopt one part of the act of his agent and disavow the rest ; for an adoption of one part of the transaction will operate as an adoption of the Avhole act ^. And a principal Avill remain liable for the acts of his agent even after the agency has ceased, unless the parties giving the credit have had notice of the determination of such authority, or from length of time and othe^f circumstances ought to have in- ' Palev's Law* of Principal and Asenf, 118. » Harrison v. .larkson, 7 T. II. '209. ' v'^tat. 3 and 4 Anne, c 9. ■» Anon. 12 Mod. 364. Harrison v. .Tarkson, 7 T. R. 209. 5 IVawes, pi. 86. Barber v. Gingpll, 3 Esp. N- P. ('.60. e W ard V. Evans, 2 Lord Raym. 930. Salk. 444. 8. C. Boulton v. Hil- Jesd.n, Comb. 450. 7 ibid. ? Wilson V. Poulter, 2 Str. 859. ferred Of Principal and Agent.— Extent of Authority. 393 ferret! that it did not continue '. On the dissolution, there- fore, of the rehition of principal and agent, it is indispen- sably necessary th;it express notice thereof should be given to all the principal's correspondents individually : notice in the Gazette will affect a former customer *. 2. Of the Extent of the Authority, The extent of an agent's authority is either general or special. A general agent is uhcre a man appoints another to transact ail his business of a particular kind, or to do all acts connected with a particular employment. A special agent is where one is constituted for a particular purpose, or is employed about one specific act, or certain specific acts only. By a general aulhorily or delegation the prin- cipal is bound by all the acts of his agent, whicli are not inconsistent with tlie nature of his employment, and which have been bona fide entered into with the parties dealing, however disadvantageous the terms of the contract may be to the principal. And therefore, if a factor without fraud or collusion sells for a less price than his commission directs, the sale is nevertheless valid, and may be enforced against his priucipaP. But no acts of a special agent beyond the scope of his authority m ill biud the principal. Therefore, if a broker is employed to purchase goods of a particular description, and at a specified price, and he does not com- ply with his instructions, the principal is not bound by his contract ■* ; but he is liable himself to fulfil the bargain '. Had, however, the contract, in this case been entered into by a factor or general broker, the contract would have been enforced against the principal''. And such general power ' V. Harrison, 19 Mod. 346. Beawes, pi. 231. "^ Gorham v. Thompson, Peake's N. P. C. 42. 3 Daniel v. Adams, Ambl.498. * Kast India Company V. Henlcv, 1 E^p. N. P. C. 111. 5 Per T. Srwpll in Daniel v. AdaiKS, Ambl. 498. • Last India Company v. Henley, I Esp. N. P. C. Ml. Petlies v Soamc, |3Vin. Abr. 6. caimot 394 Of Principal and Jgent. -^Extent of Autliorily, cannot be limited by any private instructions to the agent, not known at the time to (he part}' dealing. As the authority of a special or particular agent must be strictly pursued, if there is any restriction annexed to the commission, it is incumbent on tlie party dealing to observe It, or the principal >v ill be discharged from his liability. Therefore, where a special agent was employed to negotiate a bill of exchange, and expressly directed not to indorse it for his principals, it was held that he could not bind them by indorsing it '. Yet where a particular agent Avas commissioned to get a bill discoiyited, and no express direc- tions were given him not to indorse it, his principals were held to be bound by his havuig done so ^ And though an a^ent, acting under a limited autliority, exceeds the price specified in his instructions, yet if he understood that he had a discretionary power so to do, his principal will be bound by the contract : for t!:e limitation should be express and positive, and not subject to the agent's discretion ^ The extent of an agent's authority depends on the usages of trade. In the absence of particular instructions, a general power to sell implies a power to sell in the usual way ; and therefore a commission to a factor to sell, entitles him to sell upon credit in those trades where that is the usual mode of dealing ■*; provided that the vendee is not insolvent, or noto- riously discredited at the time of sale, and that that circum- stance is not known to the factor K But if there is no such usa^e, and the factor upon thegejieral authority to sell, sells upon trust, the factor is only chargeable ; for in (hat case the factor having gone beyond his authority, there is no contract created between the vendee and the lactoi's principal, and such sa'e is a conversion in the factor ; and if it be not in ' Fenn v. Harrison, 3 T- R. 757. "^ Ibid. 4 T. R. 177. 3 Hifks V. Hankin,4 Fsp. N^. P. C. 116. * Sroit V. Surman, Wilt, s, 406. Houghton v. Matthews, 3 Bos. & Pul. 489. 5 fcadock V. liurton, Yelv. 'zfyZ. market Of Principal and Agent .—Extent of Authmily. 395 market overt, no property is thereby altered, but trover will lie against the vendee : so likewise if it be in market overt, and the vendee knows the f-ictor to sell as factor '. And as this authority is referred to universal usage, no such autho- rity will be implied, unless it appears that it was the usual manner of dealing with reference to t!ie thing sold. There- fore, on the transfer of stock, which is usually sold for ready money only, a sale of it upon credit will not bind the prin- cipal, unless the broker was specially authorised so to do, although he acted boia fide, and with a view to the benefit of his principal, and that there was no possibility of making a transfer of the stock in questio.), until the expiration of the time of credit given ^. The employment of a factor or broker being merely to sell, he cannot dispose of them in any other manner. There- fore it has been decided, t!)at if a factor or broker pledge the goods of his principal, the latler may recover the value of them in tt over against the pawnee ', on tendering to the f:ictor what is due to him, without any tender to the pawnee''. And (his rule holds equally good wliere the pawnee is wholly ignorant of the factor's not being the owner K Pseither can a factor, by way of pledge, transfer a bill of lading'', although by way of sale he may, by indorsement of a bill of lading to a bona fide assignee, divest the principafs right to stop in transitu". And even thougl; the factor may have a lieu upon the goods pledged for his balance due at the time of the pledge, the pawnee cannot retain the goods against the owner; lor liens being a pergonal right, cainiot be trans- ferred to the pledgee, so as to give him a title even to the • Per Holt, C.J. Anon. 12 Mod. 514. " Wiltshiri- V. '^ims, I Camp. N.P. C 258. 3 Patorson v. Tash, 2 Str. 1 182. 4 Daul)i2;ny v. Duval, 7 T. II. 006. jMH'ombie v. D iviog, 6 East, 538. 5 Nevvsom v. 'I'hornton, 6 hlast's I'cp. 17. * ibid. 7 Wright V. Campbell, Eur. '^051. amount 396 Of Principal and Agent. — Extent of Authority. amount of the lien ' . But where the broker does not pledge the goods as his own, but delivers them over to the pledgee as a security, and wilh a notice oi^ the lien, the pledgee may retain them against the owner for the balance due to the broker *. So as the riirhl of properly, in bills of exchange, and other negotiable instruments of a like nature, passes by delivery alone, it has been held, that if a banker pledges in- dorsed bills, which had been deposited with him, for the purpose of being received when due, for his own debt, the owner cannot follow them into the hands of a bona fide pledgee'. Where several merchants employ the same factor in the same transaction, they must run the joint risk of his ac- tions, although they are strangers to each other. Thus, if four or five merchants remit to one factor distinct parcels of goods, which he disposcsof jointly to one person, who pays- a moiety down, and contracts for the rest at the end of six months ; if the vendee fails before the second payment, the principals must share the loss proportionally among them *». As to an agent's autliority to discharge, compound, or release debts : in the cat^e of an agent who has a general au- thority to receive payments, if he receives them according to the usual course of transacting business, he will not be li- able for any loss Avhich his principal may sustain thereby. And therefore, where an agent received a check in pay- ment of a debt, the debtor was held to be discharged, as this is a mode of receiving payment warranted by the usual course ofstrade ^ But an agent specially employed to re- ceive money, will be considered to have departed from his authority if he should take a bill in payment '''. An agent ' Daubigny v. Duval, 5 T. R. 604. ' jMTombie v. Daviis, 1 Fast's Rep. 5. 3 Collins V. Martin, 1 Bos. 6c Pul. 649. 4 Malyne, 81. 2 Mollov,328. s Thorald v. Smith, 11 Mod. 88. « Ward V. Evans, 2 Lord Raym, 930. without Of Principal and Agent . — Execution of Authority. 397 without ail expr€Ss authority caiinot compound or release a debt. 3. Of the Execution of the Authority. As to the execution of a dclegited aulhorilj-, as tlie con- fidence is merely personal, the power can be exi cuteJ by the person only to whom it is given ; and therefore a com- mission to contract will not autlijorise an agent to depute that power to a clerk or underagent, notwithstanding any usage of trade, unless the principal's assent has been ex- pressly obtained for that purpose'. In the execution of a delegated authority, it is also an established rule, that where the power is to be executed by virtue of a deed or power of attorney, the act must be executed in the name of the prin- cipal, and not in that of the agent^ . The form of the words in the execution is not material, for in somp cases an in- formal mode of executing the authority will not vitiate'. The safest way, however, is for it to be stated to be done by the agent for, or in behalf of, the principal : thus, A B., (principal) by C. D., (agent-*.) In tlie case of an agent's drawing, accepting, or indorsing a bill for his principal, he should either write the name of his principal, or state in writing that he draws as agent: for if he draws in his own name, without stating that he acts as agent, his principal will not be bound, but the agent himself will be personally liable 5. But an agent effecting a policy of insurance ^\ or contracting on thebehalf of government ", need not state his authority. ' rol<>s V. Trecothic, 9 Ves. Jun. 2^1. » Combe's Case, 9 C). 76. s Coles V. Davis, 1 Camp. N. P. C. 485. Mason v. Rurasey, Ibid. 384. * For Grose, J. 2 East's Rop. 144. 5 Tlioinas v. Bishop, 2 St^.955. Applelou V. Biiiks, 5 East's Rep, 148. * De Viifnipr v. Sanson, Park's Insurance, 19. ? ii.'itkbeath v. Haldiuian.l, I T. 11. 172. 4, Of 398 Of Principal and Agent. — Agent's Duties. 4. Of the Determination of the Authority. The manner in which the power of an agent may be determined is either by fulfilment of the commission the agent was to execute ', or by the death ot^ the principal*, or by the principal's countermanding the authority which he had given. The authority of a broker may be countermanded at any time before a memorandum of the contract of sale is written and signed by him pursuant to the statute of frauds, al- though he has previously entered into a verbal agreement to sell the goods '. All acts bona, fide done by the agent before he knows of the revocation of his authority will bind his principal •*; and all his transactions with those who havel>een accustomed to deal with him in that character, will be valid against his principal, until they have notice of the determination of his authority ^, or until that fact has become notorious.^. SECTION II. OF THE RIGHTS AND LIABILITIES OF PRIXCIPAL AND AGENT AS BETWEEN EACH OTHER. First, The Agent's Rights and Lialilities with Reference to his Principal. I. His Duties. It is the duty of an agent intrusted with the disposal and manfjgement of his principal's property to use the utmost diligence and care, and possess a competent skill and know- • Setonv. Slade,7 Ves. Jun. 276. * 1 Bac. Abr. tit. Authority, E. 3 Fanner v. Robinson, 2 Ciimp. N. P. C. 399, n. 4 Salte V. Field, 5 T. R. 215. * Hazard v. Treadwell, Str. 506. * \'^ Alod. Ui}'. ledsre Of Principal and Agent. — Agent's Duties. S99 ledge ill the execution of the service he has undertaken ' ; for if in the purchase of goods he give considerably more than they are worth, he will be ansv\erable for the over- value himself*. In the absence of particular instructions, he should follow the rognilar and and accustomed course of transacting the business in which he is employed. When the contracts entered into by him in behalf of his princi[)al arc concluded, he ought to apprise his principal with a'l convenient expeditioii : for any culpable delay in this re- spect on the part of the agent whereby the pi iiicii)al is damnified, as where the vendee becomes iiisolvent, the fitctor will be responsible '. U he sells upon credit or takes se- curity, it is inciuiibcnt on him in the first case to take care that the security is good, and in the second that ihe time of credit given is reasonable, and according to the usual course of the trade in which he is employed •♦. If no price is specified in his instructions, be is bound to obtain the real value of the thing sold'. If the price h fixed, he cannot sell for less ^. And it is his duty to keep clear and regular accounts of his transactions on beJialf of his prin- cipal, and communicate the result thereof at proper oppor- tunities 7. V\ here a factor has been accustomed to effect insurances on behalf of his principal, whether at the time of receiving the order he has effects or not of his principal in his hands, lie is bound to comply with the order ^. And if he neglects to efl^ect an insurance, or does not effect a:i available one, he is responsible to his principal in the event of loss**. But if he exerts all his endeavours to effect aii insurance, but does ' RusfpI v. Palmer, 2 Wills. 325. * Rol. Abr. 195. 3 Beawes, 43, 4.S1. 4 Barton v. SaiUiocks, Balsf. 104. 5 Beawes, <13. 6 Bexw.-ll v. Christie, Cowp. 395. 7 Lord Chedworth v. Edwards, 8 Ves. Jun. 49- • Smith V. Lascclles, y T, R. 1»9. 9 Wallace v. Tellfair, in 2 T. R. ISS. is. not 400 Of Principal and Agent. — Agent's Liabilities. not succeed, he ^\ill not be liable for any loss that muy occur '. In an action against an agent for not eflecting an insurance, he may justify his default on the ground of the illegality of the intended insurance, fraud, deviation, non- compliance with the warranty, &c,^, or of deviation in the voyage ^. In the case of a gratuitous or voluntary agent, though he is not like a hired agent chargeable for ignorance in the exe- cution of his duty ■*, or responsible for neglecting to pro- ceed at all in his undertaking ', yet he is liable for gross negligence or fraud ^', or for not exerting that knowledge in the execution of the trust he has undertaken, which from his situation or profession he may be presumed to possess. And therefore if a ship-broker or clerk in the custom house undertakes to enter goods, a wrong entry by them will be gross negligence, because their situation and employment necessarily imply a competent degree of knowledge in mak- ing such entries ; but where the entry is made by d mer- chant, without any compensation for his trouble, and from an erroneous entry the-goods are forfeited, if the merchant has acted bona fide, and to the best of his knowledge, he will not be chargeable for the lofcs occasioned thereby to the 6uner of the goods ". 2. His Liabilities, In mercantile affairs, w hen goods hare been intrusted to the dispofial and mana;^ement of an agent, the law imposes no hi;:;lier obligation upon him in regard to their safety and preservation than a prudent man would bestow in the ' Smith V, Cado2;an, 2 T. R. 188. n. 2 Webster v. l>e Tastet, 7 T. R. 157. -3 Delany v. Stoildart, I T . R. Vi. Park, 404. n. 4 Shiells Y. Bla-'kblr^n.^ 1 Hen. Bl. 161. 5 l.lsec V. Gat\vard,5 T. R. 14*^}. fogtrs t. Barnard, 2 Ld. Raym. 909. 6 Wilkinson v. Coverdale, 1 tsp. N. P. C. 75. Cogga v. Barnard, 2 Ld, Raym. 909. 7 Shiells V. Blackburae, 1 Hen. Bl. 16-2. care Of Principal and Agent .-^ Agent' s Liabilities. 401 Care of his own property '. Therefore, if any loss arises to the g'oods of his principal while in his possession, from robbery, lire, lightning, or any other accidental damage not occasioned by his default, or improper delay in the re* moval of the property, he is not answerable for the conse- quence ^. Neither is an agent with unlimited authority answerable for any lessor fraud arising fiom the conduct of a person to whom he lias given credit pursuant to the re- <5ular and accustomed course of transacting business. Thus, if a banker -vvho has received bills from his correspondent to procure payment, instead of payment, takes the ac- ceptor's check, wliicli is afterwards dishonoured, as such a practice is according to tiie usual course of banking busi- ness, tlie banker will be discharged fiom ail responsibility *, So if it is the usual way of transacting business to remit mo- ney or bills by the post, an agent is released from responsi- bility for money so remitted, if lost ; and a fortiori if re- mitted in this manner by (lie express directions of the prin- cipal ^. Neitlier is an agent liai)le fjr a breach of his in- structions, where a compliance with them would have been a fraud upon the purchasers ; as where an agent had se- cret instructions not to sell under a limited sum, notwith- standing which he sold for the higliest sum offered, though less than the limited price K Nor is an agent liable for tlie neglect of an act Avhicl), when performed, the princi- pal could not have enforced. Thus, if the principal directs his agent to effect an insurance on a subject which cannot legally be insured, he cannot, in case of loss, recover the value thereof against his agent for negligence in not pro- curing an insurance ^'. * Vere v. Smith, 1 Venf. 121. Co%^i v. Barnard, 2 Ld. Rayin. 917. " Co. Lit. 88 b. Bro. tit Account, 10. CaQrey v. Darby, 6 Ve^. Jun. 496, 3 Hus.«>l V. Hankoy, 6 T. R. I'i. * Warwick V. Noakej, Poake'i N. P. C. 6S. 5 Ce.xwell V. Christie, Cowp. 395. * Webster v. De Tastet, 7 T. R. 157. 2d But 402 Of Principal and Agent. — Agent's Liabilities. Bui if an agent by a disposal or adventure of the princi- pal's property not authorised by the usage of trade, or the terms of his eniploymcnt, and wilhout the express consent of tlie princip;il, occasions any lohs to the principal, though intended for his benefit, he is answerable for the conse- quence to the ani;nmt of the damage sustained '. But though an agent by an unauthorised disposition of his principal's property, subjects himself to any loss or damage that may be occasioned thereby, yet he may be exempted from his liability by the subsequent conduct of his princi- pal, by -whieh he assented to such disposition. Thus, where an agent puts out his principal's money to interest, the ac- ceptance of interest by the principal, was held to be an af- firmance of the transaction, and to have discharged him from all liability on the borrower's becoming insolvent, al- though the original transaction was executed without the principal's knowledge or authority ^. If an agent deals or speculates with his principal's eflccts, whatever profit or advantage he derives from this indirect dealing, is the pro- perty of the latter, to Avhom he is accountable by bill filed in equity, notwithstanding that he bore the risk (if any) of failure'. So if an agent purcliases goods according to the order of his princip d, and appropriates the gain to him- self, he is accountable to his enijjloyer for the profits, that is, for the surplus gained above the prime costof the goods, though the principal could not have procured the goods of any other merchant for a less sum than that for which the agent sold the goods •*. And as tlie principal is entitled to all the increase raatle upon his property, if any interest > 2 i\Io!!oy, 327. Lewson v. Kirk, Cro. Jar. '265. " Ctarke V. Perrlf, Eq. Cas. Abr. 708 Biaumont v. Boultbce, 11 Vfs, Jun.559. 3 East India Company v. Henchman, 1 Vos. Juti. 289. Russel v. Palnvpr, 2 W'ils. 325. B. awes, 48. * Massey v. Davics, 2 Vcs. Jun. 317. Beawes, 48. Las Of Principal and Ageht. — Agent's Lialilities. 403 has been made upon a balance in an agent's hand, the prin- cipal is entitled to the benefit of it, unless waved by the ex- press or implied consent of the principal '. Where how- tver the agent has, at the principars desire, kept a balance by him *, and it has lain unemployed in his hands % in-" terest has been denied. If an agent places his principal's money to his own ac- count in the hands of his banker, and without specifying it to be the property of his employer, in case of the fdlure of the banker, the agent will be liable to make good the loss *. And it is a settled rule, applicable to both sales and pur- chases, that an agent employed to sell, cannot be the pur- chaser 5; nor, if employed to purchase, Can he be himself the seller '', unless by the express consent of his employer '^ knd that it clearly appears, ihat he furnished his employer with all the knowledge which he possessed himself^. If a principal directs his agent to pay over his property to a party authorised to receive it, it is incumbent on the agent to examine wiiether such authority is genuine; for, if it sliould be forged, the payments made by virtue of it will not be protected'^. Jf a factor makes a false entry at the custom house df goods remitted to him, or lands them without entering, whereby they incur seizure or forfeiture, he is responsible fot the damage or injury his principal may sustain. But if the factor makes his entry according to the invoice, or his letters of advice, and it happens that these are erroneous, ' Rojere V. Boehni, 2 Ksp. N. P. C. 701. ' Lord Ciiedworth v. Edwards, 8 Ves. Jun. 48o 3 Uogers V. Boebm, 2 lisp. N. P. C. 704. ♦ Wren v. Kifton, 1 1 Vf s. Jnn. 382. 5 Lowtherv. Lowtlior, l.'3 Ve«. Jun. 103. 6 IMiigsey V. Davi.s,« Ibid. 317. ' Ibid. 3 Wreh V. Kirton, 8 Ibid. 50^?. ? Foster v. Clenientf,2 Camp. N. P. C. IT. 9 I) 2 the 404 Of Principal and Jgent.^Jgent's Liahilities. tju; factor is discharged from all liability, in case the goods arc lost'. . And if a factor enters into a chartcrpartj of frcijilitmcnt ■\villi a mastef, be is liable lor the frcii;ht ; but if ho lades the goods aboard generally, the merchant and the lading arc made liable for Xhv fn-ii^ht. and not the fa(tor\ A factor is not liable to make good a loss arising from a cominoJity'fi brcomiiig daninicd after the purchase ^ If a merchant directs his agent to ship him a sum of money, when exportation is prohibited, and the money is. seized in endcavoiningto ship it, the merchant must sustain the loss ^. And if an a^^erit takes in payment money Mhich is afterwards depreciated i)y edict, or proclamation, he is not liable to make good the loss : but it is otherwise if he takes bad money in payment'. "SA'here an agent delegates the trust he has undertaken to another, he is responsible to his employer for the due execu- ti )n of it by such sul)-ag(>nt, and is his surety ^\ But as the trust reposed in an agent is personal, the principal cannot compel such inferior agent to account to him : he is liable only to his immediate employer '. Where an agent is limited by instructions it is incuuibent on him to adhere punctually to them^; for if, in the execu- tion of a commission to purcliase, he deviates from his or- ders in price, quality, or kind, or if, after t!icy are bought, he sends them to a place difierent from his directions, the principal is not bound to adopt the contract, and accept the gooils ; but the factor is responsible for the consecpience of hisacf^. And for a breach of duty, not only the agent, but the merchant who knowingly forms an illegal contract ' Leviron V. Kirko, Lane's Rpp. 65. Bcawcs, 47. "^ P.caT\es, 48. 3 Malyiie,H^l. ♦Ibid. 5 I\i()lloy,42l. ' Lord N'nrthVCase, Dyfr, IGK 7 CarUvrlsiit v. llateley, 1 Vt<. Jiin.'?!.>2. * Malync, 131. 9 IJcawcs, 48. with Of Principal and Agent, — Agent's Liabilities. 405 witli him, is li 'ble to iiidnnnify the principal for iiiiy loss or damage he may liavv siistaiiieil '. Also, by a nei>'lect of any precaution pr<.'scdl)eJ by the ordinary couiso of busi- ness, though not expresjly included in his insti uctions, tin ai^ent is cliargL'able *. Bit from tlic case of Wilson v. Cornwall % it seems, tliat if an a^ni exceeds tiie j5rice li- mited by his instructions, but c.Tects an equal saving in some other respect in the same transaction, the principal is bound to adopt his act. Thus, where a factor commissioned to purchase lierap at a certain price, gave a higher price for the hemp than he Avas directed by his orders, in order to save in the freight, then low, but which was rising in price much faster than the hemp was falling, the principal was held bound by the factor's contract, as the saving in tlie freight exceeded the excess of the stipulated price. An agent is not liai)leto account with his principal until be has actually received payment from the vendee. Tlu>re- fore, if an agent receives part only of the value of the goods sold, it has been held that he is not compellable to account to his principal until he has received the final payment ; unless he has sold contrary to the usual course of trade, or express instructions, or that the delay has 1)een occasioned by his neglect •*. And though the agent may have debited himself with the amount in his accotmt with the vendee, the principal cannot sue for it uiitil actnrd payment '. But an aiicnt actinjr under a del credere commission is answerable for the produce of any contract made by him, whether he has received payment or not^'. The commission called del credere is '\\here a factor un- dertakes for an additional premium beyond the usual coni- ' Ea=t India Company v. Henchman, I Ves. Jiiii. 2S9. » 3 V'os. Jun. :Wi. ' 3 i Ves. 509. ♦ Vardenv. Parker, y Esp. N. P. C. 710. s Taylor V. Leiidie, 9 l-aiit's Rep. 12. « Grove V. Dubois, I T. Ji. 112. mission. 406 Of Principal and Agent. — Agent's Rights. mission, not only to be responsible for the solvency qf the purchaser, but aUo for the absolute payment of the price '. Joint agents, although residing in different places, are liable for each other's contracts as ug<'nts, notwithstanding any private agreement between them that each shall bcUable for his own acts or losses *. And it is no discharge of one of two joint factors, that the businei>s y/as w holly trani,- acted by the other with the knowledge of the principal'. But a discharge of one joint factor is a release of the other •♦, 3. His Eights. Besides their commission, wliich is cither regulated by express contract, or depends on the usage of trade, agents are allowed all disbursements, such as premiums, duties, charges for postage, warehouse room, &c. made by thera in the execution of their employment ', and according to the regular course of transacting business. And if an agent has been limited by his instructions as to his advances, but exceeds them, his principal will be bound by the contract, if he accepts the goods, or does not on the receipt of them object to receiving them on his own account, or does any other act from Avhich a subsequent acquiescence can be in- ferred ^. So if an agent acting for the advantage of his principal ensures a cargo on account of the lateness of the season, or other good cause, he will be entitled to ci^arge his principal with the premium ^ But where an agent is appointed the husband of a ship, » M'Kcnziev. Scott,6 Bro. p. C. 287. Beawes,429. » "Wau^^h V. Carver, 2 Hen. Bl. 235. 3 Goore v. Daubeny, 2 Leon. 73. 4 Bro. tit. Charge, 49. * 1 Rol. Abr. 124, 8 Wilson V. Cornwall,! Ves. 510, 7 Wolfe V. Horncastle,! Bos.and Pul. 323. althougl^ Of Principal and Jgent, — Agent's Rights. 407 although it is usual for the owners liluirst J. in Tooke v. Hoirm^^worth, h IbiJ. 228. I Ilougliton V. Matthews, 3 iios. and I'ul. 185. livery 410 Of Principal and A gent. --^ Agent's Rights. livery of the person to whom he has transrericd the pro^ perty in (hern, the factor can have no lien upon them for advances made to the owner'. And if a factor comes into possession of goods in conse- quence of an agreement commnnicated to him, that they should be sold for the benefit of a creditor, the factor can- not retain them on account of any other claim he may have against the owner of the goods. For the lien which a factor has upon the goods ot his principal arises from an agreement uhlch the law implies; but where there is an express stipulation to the contrary, it puts an end to the rule of law *. The right which iactors have to retain for a general ba- lance, or for advances made by them, may also be lost l)y parting with the possession of the goods, either by de- livering them up to their employers ', pr shipping them to their order **. But from the case of Whitehead v. Vaughan 'j it seems that if the goods return into the factor's possession in the course of dealing, the lien will be restored. And if a factor procures goods on his own credit, and ships thcui to his principal ^, or if he ships goods to his own order", he has a suflicient lien upon them, so as to entitle him to stop them in transitu. Where an agent employs another to execute the com- mission of his principal, i^uch inferior agent has no lien on the property of the principal, for any claim he may be en- tilled to agjiinst the person immediately employing him, if he was informed of the nature of the transaction ^. But * Hoiishton V. Matthews, 3 P.os. and Piil. 485. ' Waliier v. liircii, 6 T. il. 25S. Weymouth v. Boypr, 1 Ves. Jun. 416. 3 Knigprv. Wilcox, 4 iiiir. 2221. * Sweet v. Pym, I East's Hep- 4. 5 Cooke's B.-ink. Laws, 519. * Feize v. Wray, J East's Hep. 93. 7 Sweet V. Pym, 1 Ibiil. 4. • Maanss v. Henderson, I East's Rep. 33 4. \yhere Of Principal and Agent. — Principal's Rights, &c. 411 where the agent Avas a creditor of the prhicipal and a debtor of the sub-agent, the sub-agent was held entitled to retain the property of the principal which wi^s in his handjs until the agent's claim was satisfied '. Where an agent cannot safely deliver up his principal's property lo him from a bona tide apprehension of conflict- ing claims, if sued for the same, he should make applica- tion to the court of Chancery, or the court in which the ac- tion is brought, for leave to pay the money into court ^. Secondly, The Principal's Rights and Liabilities with reference to his Agent. From what has been already said it will appear, that if an agent makes a wrongful and unwarrantable disposition of the property of his principal, he is liable to account for the damage sustiiined. But, in genera!, the death of an agent puts an end to personal remedies for Jiis misconduct, unless he has been guilty of fraud in selling his principal's goods at a price less than his orders, or under their value ; and then his estate will in equity be liable ^ So a principal may recover money paid into an agent's hands on an illegal contract ; although the principal could not have recovered it from the person by whom it was paid. Thus, a principal was held entitled to recover the amount of the loss received by his broker on an insurance contrary to the provisions of the statute 7 Geo. I. st. 1. c. !^J. s. 2 .•» So an agent was held liable to account to his prin- cipal for the price of counterfeit coin received by him from the purchaser ^ The court holding in both cases, that the liability of an agent arises solely from the fact of » Man. V. Shiffner, 2 East's Rep. 522. » Lang:ston v. Boylston,2 Vcs. Jiin. 101. Edwards v. MincU, ITarinl. ICl, ' Lord Hardwicke v. V>rnon,4 Ves. Jim. 418. ♦ Tenant V. Elliott, I Bos. and Pui. 3. 5 farmer v. Russel, Ibid. 296. havinof 412 Of Principal and J gent, — Principal's Rights, is'c, having received money for the use of his principal, and ction forming no part of such an im- plied contract, wlien the original transiiction is at an end, its iUfgality will furnish no ground of defence to the ag-ent toresl-t his principal's cl.drn, if the agent has received no notice from the peison by Avliom tlie money was paid to retain it '. And as long as money deposited with an agent, for an il- legal purpose, remains unemployed, or if the purpose is countermanded bv tlie principil, before application, it is recoverable from (he agent ^. But where an agent has ac- tually applied money to the purpose for which it was dc- posiled with him, it is not recoverable by the principal '. But a principal cannot recover from his agent (he profits obtained on illegal stockjobiungtransa< (ions *. Nor can he recover from him 97. 3 I'er Lord Ki nyon, in Tooke v. Hollinqsworth, 5 T. R. 'ivT- ♦ \\ iiitecomb v.Jacob, 1 Salk. 100. and 414 Of Principal and Jgent. — PrincipaVs Rights, ^c. and (ook the slock in his own name, but entered itinhisac- count book as bought for .1. S., it was held that the stock did not pass by liis bankruptcy '. But Avhere money arising from the sale of the principal's ^oods has been mixed by the factor willi liis own funds, the prirjcipal cannot reclaim it, but must come in ratenbly with ihe other creditors under (he commission *. And the law is iliesamc if the factor negotiates the securities of his principal wliich may be in his hands ^, or does not apply money in- trusted to him to pay over, but mixes tlie produce of the securities or llie money so intrusted with his own funds *. If a factor sells his principal's goods upon credit ', (# receives bills or notes for the amount^, the principal is en- titled to the payment of the pi ice or the bills or notes as the case may l)c, and not the assignees. ' So if bills or notes are deposited with an agent or banker, for any special purpose, as for answering other specific bills; or for being presented for payment, such bilh or notes, if they remain in (he possession of the agent or banker at (he time of his bankrnptey, will not pass by the cOmm-issioners' assignment to tlie assignees, but are recoverable by (he owner'. And it does not alter the case that the banker has credited iiis cusfomcr, as for cash, for the amount of bills deposited for any specific purpose, charging interest fat the time they have to run, if it was his cu^tom so to do, and provided (he balance of his cash account, independent of such bills, was in favour of the customer at the time of his bankruptcy ^. But unless they are specifically a])propriatcd for some particular purpose, but are paid in from time to time, on k ' Kx part? Chion, 3 P. Wms. 186. n. = Scott v. Sminan, Willrs, 401. 3 Ex parte Dumas, ^ Vcs. oSJ. < Cooke's 8. L. ^80 (o .'>94. 5 Garratt v. Culliiin, Bui. N. P. 142. '^ Scoit v. Surman, Willes, 400. 7 Elf parte Diimas, 1 Atk. 2:J2. Zinrk v. Waller, 2 Bl. Rop. 1156. Ex parte Oursel!, Ambl. 297. ilasjall v. Smithers, 12 Ves. JuD. 119, 8 GHcoV. i crkins, 9 East's Hep. 12. general Of Principal and Agent, — Principal's Rights, ^c.-415' general running ticcounf, and as an item in (he account, they are not rechiimablc by the owner, but \vill pass under the assignment '. And (hough iicgotiable securities deposited for a special purpose in nn agent's or banker's Iiands are reclaimable while in his possession ; yet if he has parted with them, they cannot, if they were indorsed, be followed into other hands to which they may have come by the banker's as- signment *. If a factor under a del credere commission sells his prin- cipal's goods as his own, the purchaser may set off any demand he may have on the factor against the demand for the goods made by the principal, if the transaction was bona fide entered into without any knowledge on the part of (he purchaser that the goods were (he property of the principal '. So if a factor at the time of the sale agrees to set off for the price of the goods a debt of liis own due to the pur- chaser, (he principal cannot recover (he value from the pur- chaser.^ but must come in rateably ^itli the other creditors under the factors bankruptcy "♦. It is to be observed, that in all cases where a principal is entitled to reclaim liis property in the event of his factor becoming, bankrupt, he can only reclaim such property subject to a lien for every thing for which he is a debtor to the agent's estate K In the event of an agent's death, the amount of goods sold upon credit, if unpaid at the time of his death, is the property of the principal, but subject to a lien for what- ever the principal is indebted to his agent's estate ^. But » Bent V. Puller, 5 T. R. 491. Ex Darte Oursrll, Ambl. '^97. » Collins V. Martin, 1 Bos. and Pul.'Oib. Bulton v. Ful, Ibid. .539. 3 Georfce v. Claggett, 7 T. R. 359. Ex partt; Murray, Cooke's B. L. 400. * Scott V. Sunnan, Wiiles, 400. • . s Ziiirk V. Waller, 2 lil. Rrp. 1156. llx parte Dumas, 8" Ves, 582. « BurdKtt V. Willeit, 2 Vorn. GiiS. " . ' money 416 Of Pr'mdpal atid Jgeni. — Principal's Rigfds, Mc. tiioncy uncTnploycd in an aii^iit's liaiuls at the time of liis clealli, and not kept separate from his own funds, is a debt due from his estate, as to >vhic!i tlie principal will be postponed to debtors of a liigher class '. If an agent Avith a linuted commission exceeds his au- thority, eitlier as to price, quality, or kind, his princi])al is not bound to adopt the contract, or return the goods into his agent's hands, but may dispose of them as agcnit for tlic latter ^. But in so doing, he must, at first, decisively re- ject the contract ; for if he ships the goods on a new risk, with the hopes of deriving a benefit thereby, he cannot re- turn them on the factor's hands, but must account for tlie whole price '. SECTION III. OF THE nlGllTS AND LIABILITIES OF PRINCIPAL AND AGENT WITH llESPECT TO TIllUJ) PERSONS. First, The PrincipoVs Rights and Liabilities with reference to third Persons. 1. His Liabilities. A PRINCIPAL is not onh bound by the contract itself en- tered into by his authorised agent, but is affected by his rc- prcsentalioiis or admissions, ^vhether true or fal;-e, or by his knowledge, from whatever charnul it may happen to be known to t!ie agent ; for Vac declarations of an agent arc eqnivident in eliect to those of the principal ■*. But to produce this effect, the representation or admission of the agent must l>e made at the tijnc of sale', or iu the ' ^Inr'.in v. Crorrp'', 1 Ld. Raym. SIO. ^ rnrnwall V. Wiisnii,! Ves. 509. 3 Kfiiij) V. Prior, 7 Ves. Jui).240. * -Mnosfrrs v. Abraham, 1 I's-p.' X. P. C. S'T5. •= IJrIvcar V. IJawke, 5 ll)id. 7^. courb* Of Principal and Agent . — Principal's Liabilities. 417 course of the execution of the particular transaction about ^vhicli he is employed '. And in ordtr that the laKAvledge of a fact in respect to a contract coiicliideJ by the interpo- sition of an agent, should affect liis principal, the know- ledge must have been obtained by the ngcnt in the execution of the identical transaction, and must have taken pl>ce be- tween the same parties*. Neither will a knowledge of a fact obtained by one who was merely employed to carry proposals from one side to the other, but who was not em- powered to treat, operate as a notice to the principal K In contracts of insurance, the mistate;nent or su{)pression of any fact within the knowledge of tlie agent at the time of effecting the policy, from whatever source such know- ledge may be derived, will invalidate the principal's right to the benefit of the insurance in case of loss •*. Nor will it alter the case that the principal has made a full disclosure of all the facts within his knowledge, with tlie intention that they should be communicated to the insurers, if the agent has concealed any material part of that intelligence'. A principal is likewise responsible for the nt^g!ig(>nce, fraud, or tortious acts of his agent while acting within the scope of his employment ^\ Thus the East India Company Avere held liable to the owner for the value of a ship and cargo v\ hicL their ngcnt had purchased for them from the master, but wlio had no power to sell, notwithstanding the contract was entered into without their privity''. Nor is the principal re'eased from this responsibiliiy ' P<'to V. Ila^Uf, 1 Esp. N. P. C. 375. * Warrick v. Warrick, 3 Alk, 'i9!. Worsley t. Earl of lSc:irboroi;^h, Ibid. 39-i. -» SheU)orne V. Inrhiquin, 1 i'ro. C C 351, * Seaman v. FoiiivTeau/i Str. 118J. 5 Ibid Fitzherb rt v. Matii-r, I T. R. 12, ^ Tubervillf v. St:impe, 1 Ld- Itav-n. 2d-i. Middleton v. Fowlc r, I Satk. 282, Oraimnar V. Ni\oii, 1 Stri €31. 1 EJtins V. East India Company, 1 P. Wins. 39i5. 2 E where 418 Of Principal and Agent. -^Principal's Liabilities. where the agent employs another to execute the coiitracf, but he is answerable for the wrongful acts of such inferior or sub-agent '. If a principal employs an agent in the commission of a fraud, he is responsible for the consequences of it. Thus, where a merchant consigned counterfeit jewels to his factor abroad, knowing them to be counterfeit, and the factor pro- cured a person to sell them as real jewels, who was im- prisoned by the laws of the country for (he deceit, (he mer- chant was held liable to damages for the injury arising from the imprisonment *. Principals are responsible for all contracts entered into with their authorised agents, without any regard to the state of the accounts between them '. Therefore a vendee by paying his own broker the price of the goods does not discharge himself from the demand of the vendor ; unless, when the goods are sold for a lirailed credit, the vendor al- lows the day of payment to pass without making any de- mand upon the vendee •*. And no private agreement between the pri-ncipal and agent, that the latter only is to be ans^verable to the seller, will affect the vendor's right of claiming payment from the principal^', unle-s (he vendor had notice of such agreement, and in consequence gave credit to the agent individually as the responsible person ^. An acknowledgement ' or promise ^ of an agent who has usually transacted the business in reference to which the acknowledgement or promise was made, will prevent the statute of limitations from operating in favour of his prin- cipal. •» Bu;h V. Steinnian, 1 Bos. and Pul. 409. ° Southern v. How, Bridgman, 126. 3 Waring V. Favcnr, 1 Camp. N. P. C. 85. * Kvmer V. Suwrcropp, Ibid. 109. 5 Rich v. Coe, Cowp. 636. s Ibid. 7 Burtv. Palmer, 5 Esp. N. P. C 145, * Palethorp v. Furnish, 2 Ibid. 211. The Of Principal and Agent . — Principal's Rights, &c. 419 The principal is bound by the delivery of goods to his accretKted agent in the course of liis employment, and is liable to account to the vendor of the goods for their value, notwithstanding he never received them from the agent '. So if a purchaser of goods has paid tlie amount of the purchase to tli€ agent, and the agent has not p.iid it over to his principal, the principal cannot recover it again from the purchaser*. A receipt given by a creditor to an agent does not ne» cesssarily of itself operate as a discharge to the principal % unless the principal has allowed it in his agent's ac- count, or that he has given him faitlier credit oa the faith of it *. 2. His Fiighls. As a principal is bound by tlie contracts and acts of his agent while acting witiiin the scope of his authority, it fol- lov/s as a consequence, that those who deal with an agent authorised to bind his employer by his contracts, are liable to the principal for the completion of such contracts, un- less the agent has acted with fraud, misrepresentation, or concealment in the execution K And this liability of tlie buyer to the principal is not altered by the circ:imstaiice of the agent's acting under a del credere commission ". If an agent sells his principal's goods on credit, where his instructions or the usual course of trade authorise him to sell for ready money only"; or if he pledges or ex- changes goods which he was employed only to sell^; as no ' Mead v. Hamond, 1 Str. 505. « Corey V. Wtbsfcr, 1 Ibid. 480. 3 Wyatt V. Marquis of Hertford, 3 East's Rep. 147. * Ibid. 5 Petov. Hague, 5 Ksp. N. P. C. 134. fi Grove v. Dubois, I T. U. 1 1.'?. 7 Hicks'.',HJiiikin,4 };«p. N.P. C. 116. ' Newfon v. Thornton, 6 East's Rep. 17. 2 E 2 contract 420 Of Principal and Agent. — Principal's Rights, &c. contract is tlien^by created between the principal arxd the yendce, the former is not bound by his agent's act, but may reclaim his goods or recover their valup from the latter. The principtil may recover back money paid by his agent, if the party witli whom the contract is mude fails to fulfil tiic bargain ', or if paid by mistake *, or illegally extorted from his agent % or if fraudulently applied by the agent to an illegal purpose, provided its identity can be traced and ascertained -*. If an agent enters into contrf\cts in behalf of his princi-r p:il without his privity or directions, it is optional to the principal either to reject or affirm them. But he cannot adopt the agency in one part which is beneficial, and re- ject the remainder : he must either affirm or reject alto- gether ^ As to payments and receipts by agents, if the money is due on a written security, it is incumbent upon the debtor, if the payment is demanded by an agent, to see that he is in pos- session of the security, or of a special authority from the ob- ligee, otherwise he is not discharged from his responsibility to the obligee, but must pay it over again to him ^. Nor is he discharged by a payment to an agent, though the money may have been borrowed through his medium, or that he is usu- ally employed toreceive his principal's money, if the security is not in the agent's possession at the time of payment '' . But where a debtor has made a payment to an agent in possession of the security underwhich the payment isclaimed.he is not liable to repay il to the principal although he never re- ceived it from his agent by reason of his bankruptcy ". » Duke of Norfolk V. Wortliey, 1 Camp. N. P. C, 337. * Arrher V. Bank of Kiifrland, Don^. 419 3 .Stf'v^nson v. Mortimer, Cowp. 805. ♦ Clarke v. Shce, Cowp. 197. s W ilson V. Poulter,2 Str. 8j9. *" Duchess of Cleveland v. Dashwood, 2 F.q. Ca. Ahr. 709. T Ibid. ? Abington v. Oroie, 1 Ibid. 145. • Of Principal and Agent. — Principal's Rights j ^c. 421 i^ut as to payment of debts not arising upon written se- curities, payment to an agent properly authorised, and kn^jvvn to act as the representative of his principal, is equi- valent to payment to the principal, and will discharge the debtor, if the usual mode of transacting business warrants such payments, and tile debtor has received no notice from the jmncipalto withhold payment from the agent '. And even after notice, and notwithstanding the purchaser was aware of the representative character of the agent, he may safely pay the price to him, if tlie principal on the general balance of the account is indebted to tlie factolr '. So if a purchaser deals with a factor or broker wholly in his own name, and not apprized at tlie time that he was dealing with him in a representative capacity, or that there was any other party to the contract, he is discharged by payment to him '; and if payment has not already been made, he may, in an action brought against him for the value of the goods-, set off any claim he may have against the factor in answer to the demand of the principal 4; pro- vided there was no collusion between him and the factor, as that the insolvency of the factor was known at the time of the contract to the purchaser ^; or that, before tlie con- tract was completed by the delivery of all the goods, he w^s not apprized that the contrat;t was made in behalf of the principal ^. Neither will the circumstance of its being known to the purchaser, that the seller was a general factor, deprive him of the benefit of set-off in an action brought against him by the owner of the goods, unless he had express kriowledo-e • 7 Ves. Jun. 470. Drinkwatcr v. Goodwin, Cowp. 256. Scrimshire V. Aldnrtoi), 2 Sir. 1182. ' Drinkwater v. (ioadwin, Cowp. 25!. 3 Coat^s V. F.nwcs, I Camp. N. P. C. 444. « Georj^e v. Chig^et, 7 P. R. 359. * Estcott v. Milward, T T. R. 361. a. * Moore V. Cleuiciitson,2 C;irap. N. P. C.24. tJaat 422 OfTiincipalandJgent. — Agent's Rights. that be acted as agent in that particular transaction Avliich is t!ic ground of the action '. Nor can a rcpajment of money paid to a faclor acting; under a del credere commission, be enforced by the prin- ci])al against the purchaser -. We have seen tliat the receipt of an authorised agent is equivalent to tliat of the principal. But if an agent gives a receipt without having received the money, the principal is not tliereby excluded Irom maintaining his claim against the vendee '. So a demand by a known agent, or one suflieiently au- thorised to receive the thing demanded, is equivalent to that of the principal *, But to give this effect to the demand of an agent, he must produce his authority if required '. This appears from wh;it was said by Lord Kenyon in the caj^e of Solomons C Dawes ^\ U (said his lordship) the de- mand of the things for uhich the action is brought, is not made by the plaintiff himsell", who is the owner, but by another person on his account, and tiie defendant refuses to deliver tliem, on the ground that he does not know to whom they belong, and Ihercfoie keeps them till that is ascertained ; or tljat t!ic person wiio applies is not properly empowered to receive them ; or until he is satisfied by what authority he a]:)plics : that shall not be deemed such a refusal as shall be evidence of a conversion. Sccojidly, The Agent's Rights and Liabilities with reference to Third Perso?is. 1. His Rights. It is an acknowledged principle of law, that on all con- tracts entered into by an agent, whether on his own credit^ > iVIoorpv. Cleinontsor,2 Camp. N. P. C. 24. » e^crimshire v. Alderton, S Str. 1 18^^ 3 DocJor and Slud. 286. 4 Bohi!in»;k v. Indis, 3 East s Rep. 3Sl. 5 jtoe v. Davis, 7 Ibid. S63. «* 1 Esp. N. r. C^ S3. or Of Principal and Ag^i.—- urgent' s Liabilities. 423 or under a del credere commission, or as the known repre- sentative of another, it is a right incident to his em- ployment, to enforce the completion of them by maintain- ing an action -in his own name '. And after notice and tender of indemnity by the factor to the vendee of goods, the latter may, in opposition to the claim of the principal, compel the payment of the price of the goods to himself, if he has a lien on such goods for sums advanced to his principal, or for the general balance of his account ^. 2. His Lialnlities. It is also an admitted principle of law, that where a man is known to act merely as an agent, under a proper authority, for a known responsible principal, he is not personally re- sponsible on the contract ^ But although it is known that the agent acts in a representative character, yet if the prin- cipal is not known or notified at the time of making of the contract ■♦jor the agent becomes expressly liable by any un- dertaking of his own ^; or that there is no responsible prin- cipal to resort to ^', the agent is liable in his individual ca- pacity ; unless some subsequent act is dbne to show that the vendor waved the liability of the agent, and relied upon the principal ''. These positions receive illustration from the judgement of LordKenyon in the case of Owen v. Gooch^. The mere act of ordering goods, said his lordship, does not make the • Bui. N. P. !30. Per Cliambre, J. in 3 Bos. and Pul. 49. ' Diinkwater v. Goodwin, Cowp, ^56. Atkyns v. Amber,2 Esp. N. P. C. 493. 3 Ex parte Hartop,l2 Ves. Jiin. 359. Johnson v. Ogilbv, 3 P. Wms. 279. 4 Hanson v. Rnbcrileaii, Peake, 120. Milrhinson v. Ilewson, 7 T, R. 350. 5 Stevens v. Hiii, 5 Ksp. N. P. C. 217. 1 T. 11, 181. «• Horsely v. lidl, Ambl. 7f 0. Hardr. 20.j. ' Morgan v. Corder, Guildhall Sittingf af*er E T. 1809. " 2 Esp. N. P. C. 567, 424 Of Principal and jigent.-^AgenVs Liabilities. party o.dt'rinq; liable. If a party orders goods from a tralesmaii, thougli in fact tlicy are for anallicr, if the tradesman was not informed at the time that they were for the use of another, he who ordered them is certainly liable ; for the tradesman mast be presumed to have looked to his cndit o;ily. So if !hey were ordered for another person, and the tiadesman refuses to deliver them to that person's cn-dit, but to \\\> credit only who orders them, there is then no {)rete\t tor charL,iiigsuch third person ; or if goods are onicred to be delivered on account of another, and after delivery the person who gave the order refuses to inform the tradesman who the person is, in order that he may sue him, 'under such circumstances he is himbclf liable. But wherever an order is given by one ])ei son for another, and lie informs the tradesmaji who that person is lor whose use tlie goods are ordend, he thereby declares himself to be merely an agent, and there is no foundation for holding him to l)e liable. ]f an agent undertakes to deal with the goods of his prin- cipal as if he were principal himself, the party dealing with him is entitled to the same rights against him as if he were in fact the principal, if ho was not aware of his representative character'. So, if a special agent under a limited authority not to warrant g(jo:ls as to soundness or the like, transgresses his instructions, he is personally responsible to the purchaser *. But a v>arrai;ty by a known agent or broker, in pursuance of his authority, will not render him personally responsible to the purchaser, unless from the terms of the Warranty it a])pcais that he has pledged his own responsibility '. ••So if a special agent exceeds his instructions in the pur- » Ante. •» Fenn v. Harrison, 3 T. R. 761. 3 iDiX chase Of Principal and Jgent; — Agent's Liabilities. 425 chase of goods, he is liable to the sellers* for all loss which may be occasioned thereby '. An agent is also personally responsible for the repayment of money deposited with him for an ille^^al purpose (as to induce a creditor of his principal to sign his certificate ^), as long as the money has not been paid over by the agent, and that he has not given his principal fresh credit ou the faifhofit'. Payment over by an agent, after he lias received notice to withhold the money, will subject him to answer personally for the amount to the person from whom he received the money •♦. If an agent borrows money ', or undertakes to pay money for his principal '\ without being authorised to that effect, he only is personally liable. But to the general rule of law, that agents properly au- thorised, contracting for a known principal, are not person- ally responsible on their contracts, masters of ships are an exception ; for unless they expressly provide to the contrary, it has been held that they are personally responsible on all contracts made bj' them for repairs, &c. notwithstanding it was known to the parties executing the contract who the owners were ''. Agents are personally liable for any tortious act com- mitted by them in the course of their euiployrneiit, notwith- standing it was committed in submission to the authority of their enaployers ^. But an agent is not answerable for the negligence or mis- conduct of those whom he has retained for the service of his ' Last India Company v. Ilensley, 1 Esp. N. P. C. 112. * Smith V. Bromley, Don;. G70. ^ Buller v. Harrison, Cowp. 565. '^ llariacre v. Stpuari,5 Esp. N. P. C. 103. * V Kq. Ca. Abr. :JOS. 6 .>,.hnson V. Osilbv, 3 \\ Wms. 277. 7 lUch v. Coe, Cowp. 636. •^ Perkins V. Smith, 1 Wils. 323. principal, •i26 Of Bills of Exchange, ^c, principal, unless the act from Svliich tiie damage arises was Str. 937. A per- 430 Of Bills of Exchange, -^Of the Parties, A person may become a party to a bill of exchange, not only by his own act, but also by that of his agent or part- ner ; in which case he is said to draw, accept, or indorse by procuration'. Bills of exchange may be drawn by a party's agent or attorney, who may be constituted by parol*. But in such case it is incumbent on (he agent, if required, to produce his authority to the holder ; and if he does not, tiie owner may treat the bill as dishonoured^. When a person draws, accepts, or indorses a bill as agent'', unless he states that he draws, &c. as agent, his principal will not be bound '. Besides, should an agent draw, accept, or indorse a bill in his own name, which was directed to him personally, and not to his principal, he will be person* ally liable, although such direction described him in his official character, unless he states that he acts as agent '^'. An agent, however, contracting on the behalf of govern- ment need not describe hijoself as agent '. Where there are joint traders, and one of them, during the existence of tlie partnership, draws, accepts, or indorses a bill or note, in the name, or as on the behalf of the firm, such acceptance, indorsement, &c. will render the other partners liable, although they were ignorant that the bill was negotiated by such partner for his own individual benefit ; and no subsequently acquired knowledge by the creditor taking the bill, that such acceptance, &c. was made with- out the consent or concurrence of the other partniTS, will defeat his claim against the whole partnership concern^. But the acceptance, &c. of one of several partners, on behalf ' Beawes, pi. 83. » 7 T. R. 209. 3 Rcawes, pi. 87. 4 Th:- fl ty of an a<>;rnt praplo-tol in the negotiation of billsof exchange is, first, to endeavour tn procure acct-pfanre ; secondly, on r<>f:isai,to protest for ao.i-aereptan-e; thirdly, to advis;- the remitter of the receipt, acceptance, or protestina; ; and fourthly, to advi?e any third person that is concerned ; and all this without any delay (B-awes). 5 p.arlow V. Bisiiop, I last's Rep. 431. ^ Applefon V. liinks, 5 Ibid. M.'}. ' Rice v. Chute, 1 Ibid. 579. 'Swan V, Steele, 7 East's Rep. 210. of Of Bills of Exchange. — Of the Requisites. 431 of himself and copartners, will not bind the others if it be given for his hulividual debt, and the holder of the bill at the time he became so was aware of that circumstance'. And after a dissolution of a partnership by agreement, an express authority given to one of the persons who composed tlic firm to settle .the partnership aQairs, as to receive all debts owing to, and to pay those due froin the partnership previous to i(s dissolution, will not authorise him to draw, accept, or indorse a bill of excliange in tlic partnership name, even for a debt that existed prior to the dissolution ; it being a principle of law, that the moment the partnership ceases, the partners are distinct persons, and from that time tenants in common of the partnership property*. On the same principle, after an act of bankruptcy by one of several copartners, the bankrupt partner cannot binrl the partnership by any bill or note which may be issued by him after that event'. It is not necessary that a partner when he draws, accepts, or indorses a bill on behalf of the partnership, should ex- press the name of the firm, or all the partncr.>hip names ; it will be sufficient to bind the firm if lie subscribes his own name only*. If the members of a copartnership, each in his individual capacity, employ one factor, and one of tliem aca'pts a bill drawn upon all by the factor, the acceptance will not bind the rest'. S. Of the Requisites of a Bill of Exchange. In order to constitute a bill of exchange or promissory note, no particular form or precise words are requisite^' : an ' Sheriff v. "VVilkes, 1 East's Rop. 48. Henderson v. Wild, 2 Camp. N. P. C. 5G1. ' Kilgour V. Finlyson, 1 Hen. BI. 155. Abel v. Sulton, 3 Esp. N.P.C, 108. 3 Thom.ison v. Frcre, 10 East's Rop. 418. « Mason v. Rumsey, 1 Camp. 381. S Bcawcs, pi. 228. « Com. Dig. lit. Obligation, B. 1,2, order 439 Of Bills of Exchange.^Of the Requisites. order or projnise 17. 9 Maclecd v. Snell, 2 Str. 76'2. 2 F stamped, 43i Of Bills of Exchange. — Of the Requisites. stamped, and that not only with a stamp of (he proper value ' , but also of the proper denomination, it cannot be reitd in evidence, nor can it be in any way available*. Secondly, Tliat the date ought to be clearly expressed. If, however, no date be expressed, it Avill be intended to bear date on t!ie day on which it was issued ^ Thirdly, That every bill of exchange oujjjht to \yc given for a good and valuable consid{Tation. But no evidence of Avant of consideration, or insutlicicncy of the amount thereof, will impeach the validity of a bill, as between the acceptor or drawer and a third person holding* the bill for value given, although the holder knew at the time of his Ixicom- ing so that no consideration had been given for the bill^. Between the drawer and acceptor, the drawee, the payee and his agent, and the indorsee and his immediate indorscr, however, no bill will be invalidated for the want of consi- deration*, or the original insufficiency of the amount^. 80, if at the tune a person became holder of a bill, he knew that at its inception it was founded on an illegal trans- action" ; or that he became holder of it by transfer jifter it became due^, he cannot in either case recover on it. So, if the holder of an accoraraodation bill has given value only for a part of the amount, he cannot recover bryond the sum he has given '^ But it is otherwise where a bill has been given for money really due from the drawee to tlie drawer ; for there tin? indorser, although he has given only a part ' By the statute 43 Geo. ITT. c. 127. s. fi. it is, hoAvever, enacted, tb.it iT any iiijtrumpnt is stamped willi a stamp of srreater value than that n quir* d by law, it shall be valid, provided such stamp be of the proper deiiomiDUtion required bv l;nv. ■' Bavlev's Summary, 20. n. 6. 43 Geo. III. c. 27. 44 Geo. III. c. 98. 48 Geo! III. c. 119. 3 Hague V. French, ^ Bos. and Pul, 173. * CoHinsv. Martin, I Bos.and Pul. 0)1. Simmond«fv. Parminstcr, I AVils. 187. s Jefferics v. Austin, Str. P'4. * Barber v. Backhouse, Peakc's X. P.C. r»l. ' Steers v. Lashlev, 6 T. R. 61, » Brown v. Tinner, 7 Ibid. 6W. 9 Bacon V. Searle^, I Hen. Bl. 88. value Of Bills of Exchange. — Of the Delivery, 435 value for the bill, may recover the whole sum payable, hold- ing the overplus beyond his own demand as trustee for the use of the party entitled to receive it'. Illegality of consideration is another objection to thfe va- lidity of a bill. In those cases in which the legislature has declared, that the illegality of the contract or consideration shall make the bill or note void, the holder, notwithstanding he took tlie bill bona fide, and gave a valuable consideration for it, can only resort to the party from whom he received it, and from whom he can recover only on the original con- sideration^. But where tlie illegality of the bill does not fall within any statutory prohibition, the holder cannot be affj cted with tlie transaction between the original parties, unless he had either notice of the illegality', or obtained the bill after it became due from a person who had notice of the illegal con- sideration for which it had been given'*. And in general, where the bill is fair and legal in its in- ception, a subsequent illegal contract or consider ;tion taking place on the indorsement, &c. will not invalidate it in the hands of a bona fide holder^. S. Of the Effect of Delivery of a Bill. If a bill of exchanofe is given in satisfaction of a debt^', or ft)rthe amount of goods sokP, the drawer cannot be sued for X\\i', original debt before the biU is due, neither can he go into evidence to impeach the charges on which the debt arose. But if the person delivering the bill knew that it ' WifiVn V. PwobertE, 1 Esp. N.P. C. 9. Barber v. Backhouse, Pcake's N.P.C. 6!. J" Bowjerv. Eampton, Str. 1135. 'VVithain v. Lee, 4 Esp. N.P.C 264. V/fbb V. Brooltp, S i ai:nf. 6. 3 Wyatt V. Buliner, '2 T.sp. N.P. C 338. * l'>n>v/n V. Turner, 7 T. K. G30. s i'arr v. Eliason, 1 East s Rep. 92. * Kearslake v. ilorgan, 5 T. II. 513. 7 Knox V. Whalley, 1 Esp. N.P.C. 159. 2 F 2 was 4 C6 Of Bills of Exchange.— Of tfie AUeration. was of no value, the holder may immediafely sue him on his original liabilily'. Tlu' circumstance, ho'vxevcr, of the bill Ixiui^ on a wrorii:^ stamp will not entitle the holder to sue the party before it becomes due, unless he refuses on re- quest to give a proper bill *. And where a bill ddivercd under the above circumstances has been dishonoured, if the holder has not been guilty of neglect, but has used due diligence in giving the acceptor notice thereof; the original consideration revives against his debtor, from whom he may recover the amount of the debt K 4. Of the Effect of AUeration of a Bill. If a bill, &c. after it has been drawn, accepted, or in- dorsed, be altered in any material respect, as for instance in the date or sum, Avithout the consent of the parties there- to, it will discharge those parties who were not privy to such alleration, from all liability thereon, though the bill may afterwards come into the hands of an indorsee not aware of the alteration •♦ ; and such alteration w ill have the same effect as to the drawer's liability on the original considera- tion, if there was no privity between him and the holder ^ But a mere corrcciion of a mistake, as by inserting the words " or order ^'," or the alleration of the place where the bill is to be presented for payment ', will not vitiate a bill, or render a new stamp necessary, if the .insertion or alteration is made with the consent of all tlie parties, and before the bill is issued, or before the time when it is to be payable **. In general, if a bill has been altered, or any insertion becu ' Puckford V. Maxwrll, 6 T. R. 52. ' Swears v. Wells, I J.sp. N. P. C. 317. 3 Bolton V. Richard, 6 J'. R. 139. « Master v. JViill.T, 4 T. R. 3S0. s ibid. ^ Kerstraw v. Cox, 3 Esp. IS'. P. C. 21t). > Trapp v. Spearman, Ibid. 57. » Kiiill f, William?, 10 Last's Rep. 435. Cardv.tllv. Martin, 9 Ibi.l. 190. made, Of Bills of Exchange. — Loss, of a JiUL 451 made, before acceptance or indorsement, the acceptor or indorser cannot take any advantage of the alteration, for by acquiescing: in such aK'-ration lie has given validity to Hie bill'. The effect is the same, if, on presentment of a bill for accept I nee, the acceptor ahers it as to the time of payment, and the holder acquiesces in such alteration and acceptance - ; although, as between the drawer and prior indorscvs and the bolder the bill is thereby vacated '. 5. Of the Loss of a Bill. In case of tlie loss of a bill *, &c. transferable by mere de- livery, any person who has previouslj' to its becoming due given a bona fide consideration for it, may enforce payment against the acceptor and the olher parties, notwithstanding he derived his interest in the bill from the person who found or stole it^ And if a lost or stolen bill, t.ansferable by mere delivery, and for which no consideration has been given, is presented to the drawer at the time of its becoming due, and he pays it before he lias notice of the loss or robbery, he will not be liable to pay it over again to the real owner''. But when a bill transferable only by indorsement, and not indorsed, is lost by the person entitled to indorse, no person getting possession of it by a forged indorsement will acquire any interest in it, although he gave a sufficient con- sideratio)!, and was not aware of the forgery ; but will be liable to repay the bill to the original holder when he has regained possession of it^. ' BeavTs, pi. l^A. - Patoii v. Winter, 1 TawrK. Rep. 420. 3 Master v. Miller^ 4 T. R. .^^..O. * In the case ()t'foroi;;n hills it is usual to make three of the same tenor and date, (called a set, each ot" wiiich contains a condition, thu itsfiall be paid provided the others arc not,") in order that the hearer, having lost one, may receive his money on the other. And if the dra-Acr only gives one, he will, if it should be lost, be obliged to j;ive another of the same tenor to the loser. Potb. pi. .S9. s Sir John Lawson v. Weston, 4 Esp. N. P. C. 56. Grant v. Vau(;han, B'.ir. 1516. ■ 6 Ibid. ' Cheap V. Harlcv and Drummond, cited in Allen v. Dundas, 3 T, R. 28. Mead v. Young, 4"lbid. '28. In 438 Of Sills of Exchange. ^Lossdf A Bill In case of the loss of a bill, to entitle the holder to reco- ver, he should immediately give notice thereof to been Of Bills of Exchange. — Lialillly of the Drawer. 4S9 been only specially indorsed ' ; or tliat it ^vas lost after .it was due^ A court of equity will, however, in all cases of the loss of a bill, compel payment, or a new bill to be given, on proper indemnity being given by the loser^ to pro- tect the defendant from being compelled to pay the bill over again to a bona fide holder^. yVnd if sucli indemnity has' been tendered, the defendant will in general have to pay the costs in equity. C. Of the Liability of the Drawer, If the drawee refuses to accept or to pay the bill, on such refusal the drawer is immediately liable to an action for the amount thereof, the payee or holder of the bill not being obliged to wait until the time arrives which is specified for payment in the bilM. But if abilldrawn by a person abroad on ar.other in this country be refused acceptance or payment, the drawer will, if discharged by the loreign law, be discharged in this country'. Where a bill has been accepted for accommodation, if the acceptor sustains any loss in consequence of such accept- ance, the drawer must indemnify him^'. 7. Of the Presentment of a Bill for Acceptance, When a bill is drawn within a certain time after sight, in order to fix the time when the bill is to be paid, it must be presented to the drawee for acceptance". Afid in all ca.ses where it is necessary for the holder to present a bill for acceptance, due diligence must be used that the bill be pre- sented within a reasonable time**; the neglect of doing which can ojily be excused by proving that the drawer or » Long V. Bailie, 2 Camp. N. P. C. 214. n. ' J infon V. Fniiicis, I Ibid. 19. 3 Mobsop v. Eadon, 10 Yes. Jun. 430. * Mrllisli V. Simeon, 2 Hen. bl. 379. s Cook V. Tower, I Taunt. Rep 372. l»orU r v. L'rown, 5 East's Rep. 121. •Poth.pl. 97. "' .Niuilojan v, D'Egiiiiio, 2 Ileii. Bl. J6.). ** ibid. Oilier 410 Of Bills 6f Exchange. — Acceptance, other person insisting on it as a detence, had no effects in the hands of the drawee, or had given no consideration for the hill'. Illness, or any other reasonable cause not attri- butable to the misconduct of the holder, will also excuse a presentment witliin a reasonable time *. On the presentment of a bill the drawee is entitled to keep it twenty-four Lours in his possession after the presentment, for the purpose of examiiiing whether he has any eflects of the drawer's in his hands'. But if he should require further tim.e, the holder should give immediate notice to the indorsers and drawer of the circumstance-'. In all cases of presentment for acceptance, or payment, of a bill, it is incumbent on the holder to present it at the house of the drawee '. If he has removed, the holder must use every reasonable endeavour to find out where he has re- moved, and make presentment there ^. In case of his de- cease, presentment must be made to his personal represen- tative, if he lives within a reasonable distance ". But if, on ipquiry, it appears that De Brrdt V. Atkinson, 2 Hrn. Bl. 336. ^ ^cc post, Dishonour ot a Bill by >'on-arcep Bivl. N. P. '270. '^ Moor v. Whitby, Bur. i'it3;5. 1 Cul. N. P. 270. 1 Pillaiis V. Van .Mierop, Bur: 1 6(3'}. 8 |^;|^,'k. v. Cock, 4 East's Rep. 70. 9 Wvniic V. Raikes, 5 Ibid. 5 14. '" Jackson V. Pi.^'ott, Carth. 45ii. Ld. Ravm. iOl. Salk. 1-27. " .Mitford V. AValcott, 12 Mod. iiO, '- Powell v. Motinier, 1 \(k. Gil. ti JB;i>ley, 4S. n. a. But 442 Of Bills of Exchange.-^Acceptance, But a promise to accept a bill not in existence at the tirne tlic promise to accept was given, but which was to be drawn at a future time, has been held not to amount to an accept- ance, unless it influences some person to take or retain the bill'. And by the usage of trade in London, a banker may re- tain a check drawn on him, till five o'clock in the afternoon of the day on which it was presented lor payment ; and such retention of the bill will not be considered as equivalent to an acceptance, although it may have been cancelled by mistake^. JNcifher will the expression " There is your I)ill, all is right," amount to an acceptance, unless intended to induce the holder to conceive it as such K Nor will the entry of a bill in the drawee's bill-book, and the minuting upon it the day of the month, constitute an acceptance, if it appears to be the drawee's practice to enter all his bills, whether he meant to accept them or not ■*. A qualified acceptance is when the drawee undertakes to pay the bill in any other manner than according to the tenor and eliect thereof. This species of acceptance, if qualified with a condition, is called a conditional acceptance. The holder of the bill may consider a qualified acceptance as a nullity, and protest the bill for non-acceptance ' ; but if he does receive it, he should, in order to bind the other parties to the bill, give immediate notice of the nature of the accept- ance oilered ''. Any act which evinces an intention not to be bound, un- less upon a certain event, is a conditional acceptance. Thus, an acceptance by ihe drawee of a bill, to pay, " when goods ' Johiisoa V. Collings, 1 tast's Rep. 98. Castling v. Aubert ,2 East's Rep. 325. ' PVrnaiidez V. (ilvnii, 1 Camp. 426. 3 PowpI y. Joncs/l Esp. N. P. C. 17. 4 V'owrll V. Mounier, 1 Atk. 61 1. 5 Selw. N. P. 350. ^ Gliitty, 155. consigned Of Bills of Exchange. — Acceptance. 443 consigned to him were sold '," or, "as remitted for*," have been held to be a conclitioaal acceptance, and not to render the acceptor liable to the paynieat of the bill until the con- tingency has taken place, when such conditional acceptance will become as binding as an absolute one'. An acceptance may also be partial ; as when the drawee nndertakes to pay part of the sum for which the bill is drawn, or to pay at a different time or place -*. But in all cases of a conditional or partial acceptance, the holder should, if he means to resort to the otlur parties to the bill, in default of payment, give notice to them of such con;li- tional or partial acceptance ^. And in the likt; circumstances the acceptor should be careful to express in the acceptance the condition he may think proper to annex ; for, if the con- dition is not expressed in a written acceptance, he will not be entitled to avail himself of it against any subsequent party between him and the person to whom the acceptance was given, who took the bill without notice of the condition, and gave a valuable consideration for it. But if the agree- ment to accept is conditional, and a third person takes the bill, knowing of the conditions annexed to the agreement, he takes it subject to those conditions '\ If a bill be accepted payable at the house of the acceptor's banker, the party taking such special acceptance must pre- sent it for payment within the usual banking hours (which in London do not extend beyond five o'clock), at the place Vi here it is made payable '. In case of the failure of the drawer, the drawee ought not to accept bills after he is aware of that circumstance". But if the drawee accept a bill drawn upon him after the bank- ' Smith V. Abbot, 2 Str. 1152. ^ Banbury v. Lis5et,2 Str. 1212. 3 1 T. R. 182. Str. 1212. * Mar. 68. 81. Molloy, 28.?. s Ibid. * Per Ld. Mansfield in Mason v. Hunt, Doug. 299. ' Parker v. Gordon, 7 T. R. .'iHS. » Piiikerton v. Marshall, 2 Hen. Bl. 334. ruptcy 4i4 Of BilU of Exchange.' — Acceptance, rnptcy of the drawer, he will, by the statute 1 Jac. I. c. V&. be justified in paying his acceptance, if he had no know- ledge of such bankruptcy at the time of his accepting the bill'. On refusal of acceptance, cither ^^holly or partially, th© holder may insist on immediate payment by all the parties whose names appear upon the bill *. 9. Of the LialUity and Discharge of the Acceptor. It has already been observed, that an acceptor will not be released from his liability to discliarge a bill, on the ground that he has not received a consideration, although that cir- cumstance was known to the holder. His responsibility is also in general irrevocable ; for from the current of cases it a];pears, that if the drawee of a bill puts his name upon it as acceptor, he cannot afterwards, even before it has been de- liveied to the payee, discharge his acceptance by erasing his name, unless such acceptance has been made by mistake ^ The responsibility of the acceptor cannot be discharged but by payment, express release, or by the statute of limi- tations •*. No indulgence granted to the acceptor or drawer will have that eifccf. Neither will the receiving a part of the amount of the bill from the drawer, and granting an en- larged time for the payment of the residue, discharge the accepior's liability '. And an alteration by the holder of a partial into an absolute acceptance, Avill not release the ac- ceptor from his liability under his partial acceptance ^\ Eut an acceptor is discharged by the alteration of the > WUkins V. Caspy, 7 T. R. 7 11 . - Ballingalls V. (iloster, 3 East's Rep. 481. Tuckford v. Maxwell, 6 T. R. b-i. 3 Tnmmor v. Oddy, Guildli;ill Sittings, July 12, 1800. Thornton v. Dick, 4 I'.sp. N P. C. 70. ISenliiif k v. Doricn, G Last's Rep. 199. « Din^'w .-i!T v. Dnnstcr, Doutf. 2 !7. 5 Ellb V. Gallin:lo, Ibid. 250. ii. • Master v. Miller, 4 T. R. 336. bill, Of Bills of Exchange, — Indorsement. 445 bin ', or of his acceptance*, if made without his privity. So, if a bill is made payable at a banker's, and it is not presented there, the acceptor is discharged from Ids liability, if he can prove that he has sustained thunage in cons; quence of the holder's laches ^ In case of an accommodation-acceptance, the acceptor w ill be discharged, if tlie holder, after notice that the bill had been accepted for the accommodation of the drawer, gives time to the drawer without tlie acceptor's concurrence*. Or if, upon an offer of a conditional or par- tial acceptance by the drawee, the holder gives a general notice of non-acceptance, omitting to state sucli condi- tional or partial acceptance, the drawee will be released from all responsibility K In cases of accommodation-acceptances, it is advisable to have a written undertaking, or a counter- bill or note, from the drawer, in order to indemnity the acceptor. If the un- dertaking is for a sum above 20/., it nuist be stamped as an agreement. Where the accommodation-acceptor is in- debted to, or has any property of the drawer in his hands, in case of the insolvency of the drawer, or where there is any ground of apprehending such an event, he may retain the same for the payment of the bill until it is delivered up to him, or he is indemnifted against his liability as acceptor ^'-. 10. Of the Indorsement and Transfer. An indorsement of a bill or note is usually made upon the back of the bill, and must be in writing : but no set form of words is necessary fl)r this purpose ; and therefore, if a man writes his name upon the back, or any otlier part of a bill of exchange, or "This is to be paid to J.S.," or, " Pay ' Master v. Miller, 4 T. R. 336. ' Long v. Moore, 3 Esp. N. P. C. 155. 3 Bishop V. Chitu , Str. ] 198. ■» Laxton v. Pc.il, 2 Camp. N. P. C. 1^5. the s Sproat V, Mnttficws, 1 T. il. \Si. * Wilkin* V. Casey, 7 T.R.711. Madden v. Kcmpstcr,! Camp.N.P. C.12 416 Of Bills of Exchange.' — Indorsement. the contents to J. S.," and signs his name to it, it will be a good indorsement ' . But by the I7th Geo. III. c. 30. s. 1. the indorsement of a bill or note for the payment of less than five pounds must mention the name and pla^e of abode of the indorsee, and bear date at or before the time of making it ; and must be attested by one subscribing v, itness. If a person authorises another to indorse for him, the agent must merely wrile the name of liis principal, or indorsee, as " Per procuration G. H. A, B." otherwise the indorsement will be inoperative ^ Indorsements are of two kinds, in blank or in full. An indorsement in blank, which is tlie most common, is made by writing the indorser's name upon the back of the bill, without any mention of the name of the person in ^vhose favonr the indorsement is made. A full or special indorse- ment is where the name of the indorsee, in Avhose iavour the indorsement is made, is mentioned, as thus, " Pay the con- tents to A. B. or order," and is subscribed with the name of the indorser. The negotiability of a bill originally transferable may be restrained by express restrictive words ; for, the payee or the indorsee having the absolute property in the bill, he miiy by express words reslrict its currency, by indorsing it " Payable to J. S. only," or, " To J. S. for his use ;" or any other words clearly demonstrating his intention to make a restrictive and limited indorsement ^ An indorsement of a bill of exchange may be made at any time, either before it is complete, or after the time appointed for the payment of it. If it is indorsed before it is complete, as if a man indorse his name upon a blank stamped piece of paper, it will have the effect of binding the indorser to the amount of any sum which may be inserted, consistent with » 3 >V\v -Ahr. GI3. » Wilks v. Rack, 2 Cast's Rep. 144. 3 iidit v.tkc last India Company, Bur. 1216. the Of Bills of Exchange. — Indorsements 447 the stamp, and made payable at any (late '. If the indorse- ment takes place after the time of the bill's becoming due, in order to make the transfer valid, the hill must remain unpaid by some of tlie parties ^ And if a bill is indorsed before the day on which it bears date, and the payee dies before the day of payment, such indorsement is valid*. Bnt bills drawn for less than five pounds cannot by the statute 17 Geo. 111. c. 30. s. 1. be indorsed after the time of their becoming due. With respect to a transfer made before a bill is due, and one made after it is over-due, there is a material distinction. In tlie former case the assignee is not bound to inquire into any circumstances existing between the assignor an;] any of the previous parlies to tlie bill, as he will not be affected by them •*. But in the latter, whether the transfer has been made by indorsement or mere delivery, it is incumbent on the indorsee \o satisfy himself that the note is a good one ; and ir he omits so to do, he takes it on the credit of the indorser,aiid must stand in the situation of the person who was holder at the time of its becoming due K Bills payable to order, or to bearer, are equally negotiable from hand to hand ad inrniitum. But, in general, unless th<; operative words of transfer, viz. or " order " or " bearer," or some other words autiio- rising tlie payee to assign it, be inserted t!u*rein, it cannot be transferred so as to give the assignee a right of action against any of the parties except the indorscr himself'"; unless the negotiable words were omitted by mistake ". The omission, however, of negotiable words will not aflcct t!ie validity of a bill ^. And in all cases, thougli no operative • Doplim V. S(irlin?, 7 T. R. 4.'^0. ^ R.uon v. Scarlcs. I II<-n. Bl. 88. ^ Pasinore v i\«rtb, (iuililliall Riuinp after Uil. IVrm, 1811, K. IJ. • Browu V. Davis, ?, T. K. H-t. 5 Ibid. 80. Tinson v. Vrrincis, I Camp. N. P. f. 19. « Hill V. Lewis, I S;.l!c.l.'JJ. 7 K, rsliaw v. Cox, 3 I'sp. X. P. C 246. • .Smitii V. Kendall, 6 T. li. 123. words ^4S Of Bills . of Exchange, — Indorsement, words of transfer are inserted in a bill, yet it \vill always have the same operation against the party making the trans- fer as if he had had power to assign '. A transfer by delivery, without a?iy indorsementj when made on account of a preexisting debt, or for goods sold at the time of the assignracnt, imposes an obligation on the assignor in favour of the assigned', similar to that of a trans- fer by indorsement ; and in default of payment by the drawee, the assignee may maintain an action against the assignor on the consideration of the transfer *; unless it was expressly agreed at tlie time of the transfer, that the as- signee should take the bill assigned as payment, and run the risk of its being paid ', or that he has been guilty of la dies. As to the capacity of transferring a bill of exchange, it may be said in general, that a valid transfer may be made fey all persons Avho have an ab.solutc property in it. And if indorsed bills be delivered to a b -.inker, to be received when dne-», or to an agent for a particular purpose 5, and they negotiate them on their own account, the holder will be entitled to n'tain the bills, however fmudulent the con- duct of the agent or b;mker, if lie has gircn a valuable con- sideration for them, and was not acquainted with the trust on which they were deposited. If an indorsement is made in favour of an infant, and he indorses it in favour of another, no recovery can be had on that indorsement against the infant, because he cannot ren- der himself liable on his contract : yet as it is to be pre- sumed, unless the contrary appears on the face of the in- dorsement, that every indorsee has given a valuable con- ' Ilndir'-FV.St'i'Tiarf, 1 Sglk. 125. Bnllin-jalls v. Glosfc^S F-apf's Rep.-'!R2. ' .Moore V. Warrcii, I Str 415. Owensoi! v. lMor>;r,7 T. K. 65. Ex parte BlackburiiP, 10 Vcs. Jun. '201. 3 T T. R. 65. ♦ Collins v. Martin, I Bo.s. and Tul. C J8. s HoUon V. Puller, ibii. 5iC. sideration. Of Bills of Exchange. — Indorsement. 449 sideratioii, the iiif;inl's indorsement cannot be considered as such a restraint upon the negoliabilitj of the bill as to pre- vent the indorsee's recovery aii^ainst the acceptor or drawer, or any of the other endorsers '. Where a bill has been made to a feme covert *, or to a ferae sole Avho afterwards marries', the right of transfef vests in her husband, and the indorsement must be in his name. And in the case of bankruptcy, the right of transfer of a bill or note is vested in the assignees from ihe time of the act of bankruptcy •*. But if a trader delivers a bill for a valuable consideration previously to an act of bankruptcy, ■without indorsing it, it has been held that he may indorse it after Iiis bankruptcy ^ As to the effect of a transfer by indorsement, it vests in the holder a right of action against all the precedent par- ties wliose names are on the bill; and he may recover judgement against all, if satisfaction be not made by the payment of the money before judgement obtained against all; and proceedings will not be stayed in any one action but on payment of di;bts and costs in that actiouj and the costs in all the others in which the holder has obtained judgement ^'. But unless the payee, or the drawer, when the bill was payable to his order, has first indorsed it, a party wlio be- comes possessed of it can sue the person only from whom he obtained it '. ' Taylor v. Crokcr, 4 Esp. N. P. C. 187. ' Barlow v. Bishop, 1 Lasts Kop. 43-2. 3 Hatchet V. Baddi-lev/^ Bl. Rep. lOSi. * Vink rlon v. TviarsluilIvS Hen. Bl. :il-5. 5 Smith V. Pickering, Pi ake's N. P. (', 53. * Alilh-r V. Hare, Bur. 45-2. Grant v. Vaughan, Ibid. ITilG- 7 Peacock V. Ilhodcs, Doug. 6^3. 2g 11.0/ 450 Of Bills of Exchange, — Presentment for Vaymeni. 11. Of F resentment for Payment. When a time of payment is specified in a bill of ex- change, the holder, or his authorised agent \ must present it to the drawee for payment at the time when due ; and when no time is expressed, within a reasonable period after receipt of the bill -; or otherwise the drawer and indorseis will be exonerated from their liiibility. And it has lx;en held that even the bankruptcy, insolvency, or death of the acceptor will not excuse a neglect to make presentment. \n the first case prei^eritmcnt should be made to the bankrupt or his assignees ; and in the latter to the personal representa- tive of tlie deceased, or, in case there should not be a per- sonal representative, at the house of the deceased '. Neither will the insutliciency of the bill in any respect excuse the omission of presentment ^. But by the custom of merchants recognised by law, a bill drawn payable at usance, or at a certain time after date or sight 5, or after demand, is not payable on the day of its becoming due ; a further time of three days is allowed, called days of grace. In the case of foreign bills, if pay- ment is not made on the last of the three days before the hours of business are expired ^', a protest should imme- diately be made, so as to be sent, if possible, by post on • that day. But as to inland bills, it seems that the acceptor has the whole of the third day of grace for payment with- out regard to banking hours ; and therefore notice of non- ' Coore V. Callaway, 1 Esp. N. P. C. 1 13. '^ Cowley V. Uuiilo|)", 7 T. K. 581. 3 Esriaile v. Sowrrljy, 11 East's Rep. 117. * €hambeiivn v. Delarive, 2 Wils. '<5.-{. 5 When bills are made payable at one, two, or more months after Hate, the computation of the time when they vvill become due mast be by calen- dar months, (lieawes, pi. 25;J.) And when a bill is payable a certain num- ber of days after sight, the days are computed from the day the bill was accepterl, exclusiv>-ly thereof. (Campbell v. French, 6 T. II. "iVl.) *» Parker v. Gordon, 7 East's Rep. ci85. payment Of Bills of Exchange. — Presentment for Faymcnt. 45 1 payment need not be given before the following morning '. For it has br;en held, that if a second presentment bemads alter banking hours on thclastvday of gni.ce, and the acccp- tor offers (o pay tlie bilfon such second presentment^ he is not liable for the fees of noting or protest! n-;-^. If however, by the known custom of any particular place, bills are payable only within limited hours, or at any paiticulur place, a pre- sentment out of tliose hours, or not at that place, would be invalid K So if a bill is payable at a banker's, presentment after the usual hours of business, viz. five o'clock, will re- lease the drawer and in:]orsers from their liability -♦. But as the contract of the acceptor is absoluie. he is pri- marily liable, and cannot in grncral take advantage of non- presentment of a bill at the precise time when due^; unless he has, by his acceptance, undci taken to pay within a cer- tain period after demand, and then he may insist on the want of presentment ^\ So, if he appoints payment to be made at Jiis banker's, if he is really prejudiced, as if the banker fails, having property belonging to the acceptor in his hands, he will be discharged from his liability, if the bill has not been properly presented at such banker's ". Whether a presentment to the acceptor is first necessary, before an action is commeucc'd against him for ihe dis- honour of a bill, the courts of King's Bench and Common Pleas adopt difibrent rules. In the court of King's Bench, it has been held, that where a bill of exchange or promissory note is made payable at a bunker's or asiy other particular place, there is no necessity for prejentment to tiie acceptor ' Leftley v. Mills, 4 T. R. 170. Hayncs v. Birks, 3 Bos. antl Pul. 602. ' 4 T. \i. no. 3 Parker V. Gordon, 7 Ila'^t's Rep. .'385. Sa.U!Kierson v. Jiulj;e, 2 lien. BL 509. •« Ibid. I5arclay v. BiiiLcv, 2 Caiwp. N. 1'. C. b'il. Jameson v. Svvinion, 2Taunt.2'J-l. 5 Dingwall v. Dunster, Doug. 247'. s The D;iko of Norfolk v. Kov/ard, 2 Sho-.v. "i^S. ' Bishop V. Chit:y,'2 Str. 1195. 2 G 2 of 452 Of Bills of Excha?)g€. — Presentment for Payment. of a bill or (he maker of a note for payment before the comnieiicement of (he action, the bringing of the action being a siilhcient demand '. But in the court of Common Pleas, a presentment is required to be made to them before an action Cctn be commenced against them*. The causes which excuse a neglect to present for payment being the same as (hose which do away a negh ct (o present for acceptance, it would be repetition (o mention (hem in this place : we therefore refer the re;ider (o that head. If the political state of the country where the bill is due, renders a presentment for payment in due time impossible, presentment as soon as it is practicable willen(i(le the holder to recover ^ In all cnscs of bills of exchange, &c. whether foreign or inland, if the last day of grace fdlson a Sunday, Christmas- day, or Good Friday, the holder ought to demand payment on the second day, and, if it is not then paid, treat the bill as dishonoured *. In the case of bank post bills', bills payable on demand, or when no time of payment is expressed^, no days of grace are allowed, but they are payable instantly on pre- sentment. Bills payable at sight seem entitled to (he al- lowance of the usual days of grace". On bills payable to the excise, six days beyond the three days of grace are al- lowed, if required by the acceptor. The number of the days of grace allowed on a bill of exchange vari(s according to the custom of different coun- tries, and is computed according to the law of the country 3^ here the bill becomes due. ' Nicholls V. Bowc?, 2 Camp. N. P. C. 498. Fenton v. Goiindry, Ibid. fi5R. Lyon v. Suiidius, 1 Ibid. i'ZS. ' Caliingham V. A-yhtt, 2 ibid- 549. 3 Patieiif-e v. Townly, 2 Smith's Rpp. 22.S. « Mar. 95. 5 J.ovelass,247. ''' C\uU\.222. ' Dehers V. IlaYriot, 1 Show. 16J. CoKinan v. Sayer, Barnard, 303' In Of Bills of Exchange. — V resentment for Paijment. 453 In the dominions of Great Britain, Bergamo, and -Vienna, three days are allowed; at Frankfort, out of the fair time, four ; at Leipsick, Naumberg-, and Augsburgh, five ; at Venice, Amsterdam, Rotterdam, Middleburg, Antwerp, Cologri, Breslau, Nuremburg, Lisbon, and Portugal, six ; at Naples, eight ; at Dantzic, Koningsburg, and France, ten ; at Hamburgh and Stockholm, twelve ; in Spain, fourteen ; at Rome, fifteen; at Genoa, thirty. At Leghorn, Milan, and some other places in Italy, there is no fixed time '. Sundays and holidays are always included in these days of grace in Great Britain, Ireland, France, Naples, Amsterdam, Rotterdam, Antwerp, Middleburg, Dantzic, and Koningsburg ; but hot so at Venice, Cologn, Breslau, and Nuremburg. At Hamburgli, and in France, the day on which the bill falls due makes one of the days of grace; but no v/here else^. . Instead of an express limitation by months or days, fo- reign bills are usually drawn payable at one, two, or more usances ; a term which signifies (he time which it is the usage of the countries between which the bills are drawn to appoint for payment. Double or treble usance is double or treble the usual time ; an half usance is half that time, and consists of fifteen days notwithstanding the inequality of the length of the months '. Usance between London and any part of France is thirty days alter the date of the bill. Between London and the following places, viz. Hamburgh, Amsterdam, Rotterdam, Middleburg, Antwerp, Brabant, Zealand, and Flanders, one calendar month. Between London and Spain and Por- tugal, two calendar months. Between London and Genoa, Leghorn, Milan, Venice, and Rome, three calendar months. Ttc usance of Amsterdam on Italy, Spain, and Portugal, ' Kvd,9 Beawes, pl.^ifiO. Poth pi, 139. « Beawes,p!. 474. 3 Potb. ^I. 15. Mar. 93. is 454 Of Bills of Exchmige. — P resentment for Payment. is two nio?)(li,s. On France, I'landers, Brabant, and on any place in Holland or Zealand, is one month. On P'rankfoit, Nuremburi^, Vieniia, and other places in Germany, on Hamburgh, and Breslan, fl. Rep. 115^. Giles v. Peikin5,9 East's Rep. 12. ^ (iould V. Robson, 8 F.as('s lU'i). '>S0. -3 V\ parte V. il-on, 11 Vis. Jun. 410. « Clark V. Devlin, 3 ]!os. and Pul. ^65. 5 l.\ parte Wilson, 11 Ves. Jun. 410. '•' The Kinj; v. tti»" Sheriff of Surry, 1 Taunt. 159. 7 Claxtoii V. SMift, ti Mod. b7. . • Goulo V. Robfon, 8 I'-ast's Rep. 580. 9 Per Lord Lldon, in AViiglit v. Siin|»son, C V'cs. Jun. 734. defendant Of Bills of Exchange. — Payment. 457 'defendant lent his indorsement on a promissory note to the drawer, which nole was payable on demand, for the pur- pose of enabling him to raise money on that security from the plaintiffs, his bankers, who agreed to make advances thereon ; it was held that the bankers, who had renewed their advances at the end of the six months, without the knowledge or consent of the defendant, could not recover upon, the note thus indorsed by him, without proof of a de- mand on the drawer, and regular notice of the dishcmour to the defendant'. Similar indulgence to a drawer or prior indorser will also discharge all sul'sequent parties ^. But though the giving time to, or taking a fresh security from, an acceptor, indorser or drawer,will in general discharge all subsequent parties who would be entitled to resort to the party indulged, yi^t such subsequent parties will not be dis- cliarged by the holder's granting the above indulgences, if they had no effects in the hands of the party to whom the indulgence was given' ; or that the drawer, &c. had given his j'.ssent to the fresh security being taken from the accep- tor •♦ ; or that no furtlier time was given by such fresh secu- rity^. If a bill of exchange is remitted by the po->t, if this is the customary mode of remittance, or has been done by the ex- press direction of the creditor, it will amount to payment of the debt, and discliarge the debtor^'; provided the letter containing the bill has been put into the General Post Of- fice in Lombard-street, or a receiving house appointed by « Smith V. Bocket, 13 East's Rep. 187. •^ Gould V. Robson, 8 East's Hep. 580. 3 1 Ii.)s. and Pu!. 65-'. 8 East's Rt-p. 5TS. •» riai Icp V. Devlin, 3 Bos. and Pul. 363. V.ithall v. Masterman, 2 Camp. N. P.C. 179. i Avrev V. Davenport, 2 New Rep. 474. » Warwick V. Noakes, Peake's N.P. C. 67. that 458 Of Bills of Exchange. — -Payment. t!ial office ; but a delivery to a bellman in the street -will not liavc that effect ' . Payment of a bill, -whether foreign or inland, being re- fused, any third person not patty to the bill may pay it for the honour of the ilrawcr or any of the indorsers ; and he tliereby acquires all the same rights that the holder of thc^ bill had, although no regular transfer of the bill was made lo liim*. Tills payment, as it is always made after pro- test for non-payment, and in prudence should not be made before', is called payment supra protest. But the acceptor, if he has previously made a simple acceptance, cannot ])ay in lionour of au iiidorser unless he has made such acceptance without having effects of the drawer in his hands ; because he is already bound as acceptor •♦. If the acceptor supra protest for the honour of the drawer or indorscr receives his approbation of the acceptance, he may pay the bill without any protest for non-payment'. In all cases on payment of a bill or note, a receipt should be written upon the back of the bill. This receipt is de- mandable by virtue of the act 46 Geo. III. c. 12G. s. 5. and should state by whom the payment has been made'''. If part only has been paid the same should be acknowledged upon the bill, or the party paying may be liable to pny the amount over again to a bona fide indorsee". If a promissory note of twenty years date be unaccounted for, it aftbids a presumption of payment unless the contrary appears*'. ' IIuHkins T. Run, Peace's N. P. C IS5. ' Mertens v. Winningtoii, 1 lisp. N.l'.C 112. 3 Bcawes, pi. 50. < ibi'l. pi. 51. 5 11,)d. « fScholey v. W alsby, Peakc's N". P. C. 2.5. * Cooper V. Davics, I Ksp. N'. P.C. 465. ' Oitliirld V. Civefl, h Ibid. 5'^ 13. Of Of Bills of Exchange. — Dishonour and Notice. 459 13. Of the Dishonour of a Bill by Non-acceptance or Non- payment ; and Notice thereof. If a bill is presented, and an acceptance is refused, or only a qualified acceptance oiFercd, or any other default ni;\de, after notino- or protest, immediate notice must be given to all the parties to whom the lioldc-r means to resort for payment ; or they wiil be discharged from their respec- tive liabilities' ; unless the holder can prove that the party insisting on the want of notice has not sustained any damage by the omission of it, as that he had no effects in the hands of the drawee, or that he had given no considera- tion for the bill ; or he must give in evidence such facts as ■will throw the onus proband! the actual damage on the defendant^. So if, on presentment of a bill, the dnwee refuses to pay the amount, or makes default of payment, in case the bill is foreign it is incumbent oa the holder to protest it, and whe- ther foreign or inland to use due diligence in giving imme- diate notice of the dishonour to those parties to whom Jie means to resort for payment, or they will be discharged from their respective obligations'. The rule which requires notice to be given within a rea- sonable time by the holder of a bill of exchar»ge to the drawer, of the drawee's refusal to accept, is calculated for the benefit of (he drawer, to enable him to withdraw his effects out of the h;mds of the drawee. But though the neglect on the part of the holder to give immediate notice of the dishonour of a bill, discharges the parlii's entitled to insist on the want of it froin their respec- tive liabilities ; yet the consequences of such a neglect may ' Roscoe V. Hardy, 12 East's Rep. 43}. ' De Berdt v. Atkinson, 2 Hen. lil. 3JG. Bickcrdike v. Bollman, I T. R. 406. 3 Gale V. VValsli, 5 t. R. 239. be 460 Of Bills of Exchange. — Dishonour and Notice. be done away by otlur circumstances. The absconding or absence of the drawer or indorser may excuse the neglect to advise hiin ' ; and the sudden illness or death of the holder, or of ills agent, will dispense with notice to any of the par- ties,' provided it has been given as soon as possible after the impediment was removed *. It has also been held, that a payment of part, without objcclion to (he want of notice, Avill dispense with proof of notice, and in the case of a fo- reign bill also of protest for non-payment K A promise lo pay the whole, or to see it paid, or an acknowledgement that it must be paid, made by the person insisting on the want of notice, amounts to a waiver of i\ui consequence of the laches, and admits tlie holder's right to action ■*. So if the day on which the notice should be given is a public festival ^, or that the holder is unacquainted with the indorser's place of residence "^j an omission to give notice of the dishonour of a bill is dispensed with. But the death, bankruptcy, in- solvency of the acceptor, or his being in prison'', or the in- solvency or bankruptcy of both the drawer and acceptor, will not dispense with the necessity of notice of the dishonour of a bill, although those facts are fully known to the parties^. Neither will the mere offer of t!ie drawer or indorser, after arrest, to give a bill by way of compromise for the sum de- manded, without acknowledging his liability, dispense with the' necessity of proving notice '^. Nor w ill the giving of a second bill as security for the payment of a bill overdue and dishonoured, discharge the holder from giving notice 1 \V:,lwyn v. St. 0"ii)tin, 2 Esp. N. P. C. 316. ■^ Jlilton V. Shepliiid, () Last's Rep. 16. 3 Taylor V. Jones, i Camp. N. P. C. lOJ. * Chitty, 192. 5 LiJido V. Unsworfh, 2 Camp. N. P. C. 602. " B.itfnian v. Jost-pli, 12 I'.ast'.s Rt>p. 433. ~ lix parte Wilson, 11 Ves. Jiin. 412. Whitfield v. Savage, 2 Bos. and Pill. 279- Ilaynis V. Birks, 3 Ibid. 001. 8 Nicliolbon V. Gouthil, 2 Hen. Bl. 612. Esdaile v. Sowcrby, 11 East's PapH-1- B rumniing v. French, 2 Camp. 106, of Of Bills of Exchange. — Dishonour and Notice. 461. ©f the dishonour of the second : by ihe hohler'.s Inches, tlie drawee is discharged from all liabil, ty on both bills '. Nor is the holder of a bill lxcuscJ from giving; notice of the dis- honour where a drawer has eflects in tlie liantls of the drawee, although tlie drawee vcvwy have appropriated sucli effects to the satisfaction of ids own debt^. Nor is a notice dispensed with where the drawer has no effects in the hands of the drawee at the time of drawing the bill, if he has con- signed effects to him to answer the bill ^ So if the drawer has effects in the hands of the drawee at the time of drawing the bill, though il does not appear to what amount, and though such effects are withdrawn before the bill can be pre- sented, the circumstance of ihcfe, not being effects in tlie hands of the drawee at the time when the bill is presented for acceptance, and refused, will not supersede the necessity of notice ; for it would be very dangerous and inconvenient, merely on account of the sl)ifting of imbalance, to hold notice not to be necessary 4. In Walwyn v. St. Quintin % Eyre C. J. said, " Perhaps, indeed, notice ought never to be dis- pensed with, since it is a part of the same custom of merchants which creates the duty; especially as the grounds for dis- pensing with it are such as cannot influence the conduct of the holder of the bill at the time when he is to determine whether he will or Avill not give notice ; for ninety-nine times in a hundred he camiot know whether the drawer have or have not effects in the hands of the acceptor, or of him for whose accommodation the bill was drawn. Il hass, how- ever, been resolved in many cases, that where the drawer h;is had no effects in the hands of the acceptor, notice might be dispensed with. But it may be proper to caution bill- « Brickes v. Brrrv, 3 Tnuiit. 130. ' filackiin V. DonMi, 2 Camp. N. P. C. 503'. 3 Lea;.°;e V. I horpe, 1'2 East's Rep. KJ. ♦ Oir V. ^taicinnis, 7 East's Rep. 359. 5 1 Bos. and Ful. 632. holders 462 Of Bills of Exchange, — Dishonour and Notice. holders not to rely on it as a general rule, that if the drawer have no effects in tlic acceptor's hands notice is not neces- sary ; the cases of acceptances on the faitli of comignmetUs from the drawer not come to hand, and the case of accept- ances on the ground of fair mercantile agreements, may be stated as exceptions, and there may possibly be many others. But though the want of effects in the drawee at the time of drawing the bill will supersede the necessity of notice of the dishonour of the bill to the drawer, yet the omission of giving such notice to bona tide iiidorsers is not excused because the acceptor had no effects of the drawer in his hands '. If the parly entidcd to notice be a bankrupt, notice of the dishonour should be given to him or liis assignees ; if dead, to his executor or administrator ^ ; if he has absconded, tliat circumstance will excuse the not making of any furtiier inquiries ' ; if abroad, a demand at his residence, or of his agent in this country, will be sufficient 4. "VVIicre the holder is ignorant of the place of residence of tlie party en- titled to notice, if he uses reasonable diligence to discover it, it will be sufficient K What is to be deemed due diligence in giving notice of the dishonour of a bill is a question of law dependent upon facts, viz. the situation of the parties, the distance at which tJiey live, and tlje facility of communication between them '\ In case of a foreign bill notice should be given on the day of the refusal to accept, if atiy post or Oixlinar}'- conveyance sets out on that day '• ; and if not, by the next ordinary con- veyance. ' Wlikps V. Jnrks, Peakp's N. P. C. 202. * Cooke's Bank. Laws, 178. 3 Lord Raym. 743. * Crop.iwell V. Hynson, 'i Esp. N. P. C. 511. 5 Batenian v. Joseph, 12 East's Rep. 4Jj. Sturges v. Derrick, Wis^Iit- wJck's Itep. 76. ^ Darbishire v. Parker, 6 East's Rep. ?j. ' Leftley v. Mills, 4 T. R. 174. Thus, Of Bills of Exchange. — Dishonour and Notice. 465 Thus, in Muilnuin v. D'Eguino', >ybicii was the case of a foreign bill of exchange drawn in the East Indies, a cer- tain time after sight; it Vr'as held that it was not necessary to send notice of the dishonour by an accidental foreign ship which sailed fioin thence not direct for England, but that it was sufficient to have sent notice by the fust regular English, ship which sailed for England. In regard to the precise time when notice of the disho- nour of inland bills siiould be given, there is no settled rule. It is however certain, that it is in no case necessary iii y.land bills to give such notice on the day of refusal^. The gene- ral rule, as may be collected from Tindal v. Brown ^ and otlier cases, seems to be, with respect to persons living in the same town, that the notice shall be sent by the post suffi- ciently early in the morning after tlie day on which the bill has been dishonoure;!, or on which the party hitnself has received the notice, that the person to whom the letter con- taining the notice is addressed, may receive the letter on that day*. But where parties live in different pjaces, it will be sufficient that each party gives notice to his immediate in- dorser by the next practicable po.t after he has himself re- ceived notice 5. And if in any particular place the post should go out so early after the receipt of the intelligence, as that it would be inconvenient to send notice by the next post, then, with respect to a case so circumstanced, if notice is sent by the second post it will be valid ^\ I f the parties live in London or within the limits of the twoj)e:>!]y post, the time of sending notice of the dishonour of a bill is to be re- gulated by the directions given in the first case ; but if they ' 2 Hen. Bl. 565. ^ Russcl V. Langstaffe, Doii^. 515. Miiilman v. D'Eguino, 2 Hnn. Bl. 563. 3 1 T. R. 167. ♦ Marsh v. Maxwell, 2 Cnmp. N. P. C. Jamcsow v. Sainton, Ibid. 374, Smith V. INhiHef, Ibid. 208. Hilton v. Falrcloiigh, Ibid. 633. s Darbishirc v. I'-irkcr, 6 East's Hep. 3. '' I'tr 3ir. Justice Lawrence, Ibid. reside 464 Of Bills of Exchange, — Dishonour and Notice. reside out of London, then notice bj the next practicable post after the party has received liotice hini^lf will suffice. In Hajncs v. Birks', wliere the bill, which was put by the plaintiff in the hands of his, banker to present for pay- ment, having been dishonoured in London about twooVIock on Saturday, and pres(Mited a,. and Pu). 599. * Pearson v. Crallan, 2 Smith's Rep. 404. sHawkinsv. RuU, Peake'sN.P. C. 186. * Stewart v. Kejinet, 2 Camp. N. P. C. 177. 2 H son 466 Of Bills of .Exchange. — Protest. son who has a right of action on the bill, it is not ncciessary that he should receive a notice from a subsequent indorser'. When a bill is dishonoured, thfc only expe>\se the holder or other party can demand is the charge for noting and pro- testing it, notwithstanding any very extraordinary loss he may have been put to by travelling, &c. if not necessarily incidental *. Re-exchange, postage, commission, and pro- vision, are other charges to which the parties to a bill are subject. Re-exchange is the expense incurred by the bill being dishonoured in a foreign country, where it was pay- able, and returned to that in which it was made or indorsed, and there taken up : the amount of it is regulated by the course of the exchange between tlie courrtries through which the bill has been negotiated'. But the liability to pay re-exchange does not extend to the acceptor of a bill ; he is only liable for the principal sum, together with interest, according to the legal rate of the interest where the bill is payable^. 14. Of the Protest of a BUI. If on presentment of a bill for acceptance or payment, the drawee refuse to pay or accept, (as tiie case may be,) it is incumbent on the hoklcr, or, if he be ill or absent, on some other person for him, if the bill is foreign, iri\ mediately to protest it, and whether foreign or inland to give notice of the dishonour to all those parties to wliom he means to re- sort for payment ' ; the neglect to do which can only be ex- cused by proof that the drawer had no effects in the hands of the drawee from the time of drawing the bill to the » Jameson v. Swinton, 2 Camp. N. P. C. 513. ^ Ciillen's Bank. Laws, 10'^. ^ Auriol V. Thomas, 2 T. H. 52. 4 Woolsey v. Crawford, 2 (ami). 'I'^S. 5 llogers V. Stephens, 2 T. 11. 713. Gale v. Walsh, 5 Ibid. 239. timd Of Bills of Exchange. ^Protest. 467 lime of the non-acceptance or non-payment, as the case may be'. In foreign bilk certain formalities are required : if the person to whom the bill is addressed, on presentment, will not accept or p:iy it, (as the case may be,) the holder is to carry it to a notary public, who (on the same day, viz. the last day of grace*,) is to present it again to the drawee, and demand acceptance or payment ; which if refused, he is to make a minute upon the bill itself, consisting of his initials, the month, the day, and the year, together with his charges for the same. He must afterwards draw up a protest, signifying that the bill has been presented for ac- ceptance or payment, which was refused, and that the holder intends to recover all damages which he or any other party to the bill may susta;in on account of the dis- honour ^ If, however, no public notary should be at the place where the bill is dishonouredj the protest may be exe- cuted by any substantial person of that place in the presence of two or more credible witnesses. In the case of foreign bills, the protest is by the custom of merchants indispensably necessary. The noting which constitutes the minute above njentioned is unknown in the law, and is merely a preliminary step to the protest, the want of whiph it will not in any case supply ^. The protest must be written upon a proper stamp % and be made within the regular I)ours of business '', on the day on which the bill is dishonoured ''; the neglect to do which can only be excused by the illness of the holder, or cir- cumstances of a like nature ^. In practice, however, if the bill is noted on the day of its dishonour, the protest ' Orr V. Maginnis, 7 East's Rep. 359. ^Tassel v. Lee, I Ld. Ravm. 74:3. s Mar. 16. ♦IT. R. 175. Ml Geo, III. c. 98. 48 Geo. III. c. 49. ^ War. 1 12. ■ Lcftley v. Mills, 4 T. R. 175.^ ^ Fotb. pi. 144. 2 H 2 may 468 Of Bills of Exchange. — Protest. may be drawn up any day afterwards, and bear the date of i\xe day on which the noting was made'. In the case of iiil;incl bills, the protest for non-payment, or non-acceptance, is by no means necessary*; aud the omission of it will not, if due notice of the dishonour has been given, afl'ect the holder's riglit to the principal sum, as it would in the case of a foreign bill of exchange ^: the only benefit arising from il. Is to entitle the holder to the accumulative advantage of interest, damages, and costs •♦; toclaim which, the holder must by the fifth section of 3 and 4 Anne, c. 9. send the protest or notice thereof within four- teen days after the same has been made. If the bill is under the amount of twenty pounds, by the statute 9 and 10 Wil. III. c. 17. s. 6. it appears that the holder will be entitled to the accumulative remedy, though no protest is made. Besides the protest for non-acceptance, and non-payment, there may also be a protest for better security. This is usual when the drawee absconds or becomes insolvent before the bill is due, or when the holder has any reason to suppose it will not be paid '. But though the holder is entitled to make this protest, the drawer or indorsers are not compella- ble to give this security ; and therefore, before the holder can sue them, he must wait until the bill becomes due ^'. If the drawee does not choose to accept on the account of him in whose favour the bill is drawn, he may accept it supra protest^ which is adled an acceptance for the honour of the person on whose behalf it is made ". And if the drawee refuses to accept the bill, or absconds, or is incapa- ' Chaters v. Bell, 4 Ksp. N. P- C. 48. ^ If an inland bill is protestfd, it must not be done till the day after the third day of grace. (Leftlev v. Mills,! T. R. HO.) 3 Broiighv. Parkins, U\. Ravm. 993. < Boulager v. Tallevrand, y j.sp. N. P. C. 550. 5 K^ d, 139. « Eca\ves,pl. 22. 26. 7 Bcawcs, pi. U. ble Of Bills of Exchavge. —-Promissory Notes. 469 bio of making a contract, any other person may, without the consent of the drawer or intlorsers, accept it for the honour of the bil!, or of the drawer, or of any particular indorser '; and he thereby acquires a right of action against all those parties for whom he pays such acceptance *. 1'5. Of Promissory Notes^ Bonk Notes, Bankers' Notes, and Checks or Drafts on Bankers. Promissory Notes '. A promissory note may be defined to be a written promise to pay a sum specified at a time therein limited, or on demand to a person therein named, or his order, or to the bearer. The validity of these notes having beeu mucli questioned, as they were considered ouly as a written evidence of the debt, and not assignable or indorsable over, within the cus- tom of merchants, to any other person, by him to whom they were made payable ; and that if they had been in- dorsed or assigned over, the person to whom they were in- dorsed or assigned could not maintain an action, within (he custom, against the person who drew and subscribed the jiote ; and that within the same custom, even the person to whom it was made payable could not maintain such ac- tion •*; it was, for the purpose of encouraging trade and commerce, enacted by the statutes 3 and 4 Anne^ c. 9. s. 1. (made perpetual by the 7th Anne, c. 25. s. S.) " That all notes in writing, made and signed by any person or persons, body politic or corporate, or by the servant or agent of any corporation, banker, goldsmith, mercliant, or trader, usually intrusted by them to sign such notes for them, whereby » Beawes, pi. 38. Mar. 125. = Mertcns v. Winnin;;toii, 1 Esp. N. P. C. 112. 3 The indorser of a note corresponds to the drawer of a bill; the maker to the drawee or acceptor ; and the indorsee to tiie payee, or party to whom the bill is made payable. (Per Lord PiJansficld, in Ileylrn v. Adamson, 1 Bur. 676.) < Clerke v. Martin, 2 Ld. Raym. 758. Bulkr v. Crips, 6 Mod, 29, such 470 Of Bills of Exchange.— Promissory Notes. such person^ &c. or their servant or agent, promise to pay to any other person or persons, body politic and corporate, or order, or bearer, the money mentioned in such note, shall be constrjjed to be, by virtue thereof, due and payable to such person, &c. to whom the same is made payable ; and also such note, payable to any person, &c. or order, shall be assignable or indorseable over in the same manner as in- land bills of exchange are, or may be, by the custom of merchants ; and that the person, &c. (o whom the money is payable, may maintain an action for the same in such man- ner as he might do upon any inland bill of exchange made according to the custom of merchants ; and that the person, &c. to whom such note is indorsed or assigned, may main- tain an action, either against the person, &c. who or whose servant or agent signed such note, or against any of the persons who indorsed the same, as in cases of inland bills of exchange ; and that the plaintiff shall recover damages and coftts of suit ; and in case of nonsuit or verdict against the plaintiff, the defendant shall recover costs." By this statute, promissory notes arc pl'aced upon the same footing as bills of exchange, and consequently have a similar e^rct with them, the decisions and rules relating to the one being in general applicable to the other '. And therefore, wheii a promissory note is payable at a stated time, dayi; of grace are allowable ^. No particular words are essential to the validity of this kind of instrument ; any ordsr or promise, which from the time of making it cannot be complied with or performed without the payment of money, will, as was said before, have that effect ^ Neither is it necessary that it should contain any words rendering it negotiable •*. A note merely promising to account with another, or to his or.ltr, is suffi- » Brownv. Harradin,4T. R. 152. •" ri>i'!. 3 Colehaa v. Cooke, Wnies,39(>. ■• t?;nitli v. Kcmlal, 6 T. R. 23. ciently Of Bills of Exchange, — Promissory Notes-. 471 cicnlly valid, tliough it contains no formal promise to \}ay '. To render such notes valid, however, they must be made paj-able at all events, and not dependent on a contingency for payment. They must not l^e payable out of a particular fund ; and, to be valid^ must be for the payment of money only, and not for the payment of money and performance of some other act, or in the alternative *. But the mere acknowledgement of a debt cannot amount to a promissory note, unless there appear some words from whence a promise to pay money can be reasonably inferred. Hence the common memorandum of I O U can be con- sidered only as evidence of an account stated and settled between the parties, and a balance due from one party to the other ', It has been a point much agitated, whether it was neces- sary that a bill or note should import to have been given for value received ; but that question was settled in the ne- gative in the case of White v. Ladwick •♦. To entitle, however, the holder of a bill for the payment of 201. or upwards, to recover interest and damages against the drawer and indorser in default of acceptance, a bill must, by the statutes 9 and 10 W. III.c. 17. and Sand 4 Anne, c. 9. s. 4. contain words to that effect. The inserting of these words is therefore in all cases ad v iseable '. A promissory note requires no protesting, though it may have been indorsed over by a variety of people ; for, as there is no drawee, there can be no protest either for non- acceptance or for non-payment. The law considcis a pro- missory note in the light of a bill drawn by a man upon himself, and accepted at th*^ time of drawing; and therefore, in cases of non-payment, the person hoUiing the note has his ' Morrisv. Lep,2 Ld. Raym. 1396. - « Sv-e pa^e 43'] ante. 3 Fisher v. Leslie, 1 Esp. N. I'. C. 426. ■» li. II. Hil. 25 Geo. III. 6 Pishop V. Young, 2 iJos. and Pul. 81, remedy 472 Of Bills of Excha?ige. — Bank Noles, remedy against the drawer at any distance of time withiFl the period of six j-ears, although lie has neglected to give advice of its dishonour. This is an advantage to which the holder of a promissory note is entitled, but which docs not extend, to the holder of a check or draft. Bank Noles, These notes are payable on demand, and, by the general consent of mankind, are treated as money in the ordinary course and transactions of business '. But a tender of them is not sufficient, if objected to at the time of the of- fer ^; though, after such a tender, a creditor cannot arrest his debtor'. They cannot be recovered by the legal owners from a bona fide holder for a valuable consideration, and who obtained possession of them without notice of the true owners ^i for the holder of a bank note is prima facie entifled to prompt payment of it, and cannot be affected by the previous fraud of any former holder in obtaining it, unless evidence be given to bring it home to his privity '. And as possession is prima facie evidence of property in nego- tiable instruments ; in trover for the recovery of a lost note, the defendant will not be called upon to show his title to the note, without evidence from the other side that he got pos- session of it mala fide or Avithout consideration ^. Bankers' Notes. Bankers' cash-notes, or goldsmiths' notes, as they were formerly called, are promissory notes payable to order or bearer on demand, and are transferable by delivery. They may however be negotiated by indorsement, in which case ' Miller T. Race, 1 Bur. 457. ^ Wriaiht v. Reed, 3 T. R. 554. » 38 Geo. III. c. 1. s. 8. 43 Geo. III. c. 18. s. 2. * Lowndes etal. V. Anderson, et al. 13 East's Rep. 130. 5 Solomons V. Bank of England, 13 I'.ast's Rep. 135. 6 King V. Milsom, 2 Camp. N. P. C. 5. the Of Bills of Exchange.-^Checks or Drafts. 473 the act of indorsing will operate as the making of a bill of exchange. On account of their being payable on demand, they arc considered as cash, whctlier payabFe to order or not ; but if presented in due time, and dishonoured, they will not amount io payment'. At present cash-notes are seldom made, except by country bankers, their use having been superseded by the introduction of checks-. Checks or Drafts on Bankers. A check or draft is as negotiable as a bill of exchange'. In case of default of payment by the drawee, the assignee may maintain an action against the assignor on the consi- deration of the transfer, unless it was expressly agreed at the time of the transfer that the assignee should take the instru- ment assigned as payment, and run the risk of its being paid, or that he has not used due diligence ; in which cases it will amount to payment, and in there is no otlier settled rule than that (he pre- sentment muat be made within a reasonable time, which, as observed by Lord Elh'uborongli, must be accommodated to other business and affairs of life, and the party, is not bound io neglect every other transaction in order to present the check on the same day that he receives it*. Checks received by bankers in the course of one d;iy, if presented for pnynicnt on the following day, such present- ment will be Valid K Payment of a check or draft before it is due is contrary to the usual course of business. And therefore, where a banker paid a check before it bore dafe, which bad been lost by the payee, he was held liable to pay the amount over again to the loser •*. So, if bankers pay a ciuicelleJ check under circumstances ■wliich ought to have excited their suspicion, and induced ihem to make inquiries before paying it, they cannot take credit for the amuunt in their customer's account K When payment of a bill or note is made by the drawee's giving a draft or check upon a baiiker, it is not adviscable to give up the bill until the draft is paid^. I'l the holder of a draft on a banker receives payment thereof in tlie banker's notes instead of cash, and the banker fails, the drawer of the check will be discharged '. By the statute U Geo. IJI. c. 98. sched. A. draffs or checks for the paj-ment of money to the bearer on demand, bearing date on or before the day on w hich they are issued. ' F.n^f India Company v. Cliitly, S Sir. 1H5. ^ f3;irl>Miire v t'aik(-r, 6 I atts K^p. S. s RuckForcl V. Riilse, 2 (amp. 537. * Da Sylva V. Fulifr, ChiU^, liiT. 8 Sch;)lf y v. Riimsbottoin, '^ <.'arDp. N.P.C. 48&. ? Aiar. 2i. ' Vernon v. Bovcric, 2 Sho',\'. 29G. and Of Bills of Exchange. — Usury. 4T5 and at the place where t!ie same are made, and drawn on a banker residing, or transacting the business of a banker, within ten miles of the place at which such drafts or orders are drawn or given, are exempt from stamp duties, provided that the place where the check Avas drawn is truly expressed in or upon such drafts or checks. In the construction of this act, it has been determined that the person on whom the draft or check is drawn muit be bona tide a banker', and that if post dated and not stamped, it will be invalid \ 16. Of Usury on Bills, Notes, &c. As by the statute 12 Anne, st. 2. c. 16. all securities given for an illegal consideration are declared to be invalid ; if a bill of exchange, or note, therefore, is given in consequence of a contract usurious in its inception ', or of a subsequent usurious agreement on the indorsement^, or the discounting of it', it is absolutely void. And should it be in the hands of a bona fide holder, who may have taken it in the fair and regular course of busuiess without any notice of the usury, he can only recover the amount fiora the person from m horn he received it ; and moreover only on the original consi- deration^. So if a bill of exchange is drawn upon an agreement be- tween one of the original parties to it, and a person not a party to it, that the latter shall get it discounted by another person likewise not a party to the bill, upon usurious terms, and it is so discounted accordingly, the bill is void for the usury in the hands of an innocent indorsee". » Ruff v. Webb, 1 Esp. N.P. C. 128. * Allen V. Keeves, 1 Kast's Rep. 4.S5. 3 Lowe v. "Waller, Doug, 735. 4 Daniel v. Cartony, 1 Esp. N. P. C. 274. 5 Acland v. Pearce, 2 Camp. N. P. C 599. 5 Ibid. Bowyer V. Bampton, Str. 1155. 7 Young V. Wright, 1 Camp. N.F.C. 139. But 476 Of Bills of Exchange^ — Usury. Biit if a new security is given, in lieu of a prior one, which was void in respect of the usurious consideration on which it was foundedj it will not be invalid in the hands of a bona fide holder for a valuable consideration, and without notice of the usury ', though it would be otherwise in the hands of the party to the first illegal transaction *. Neither is a fresh promise or security given by the bor- rower to repay the principal and legal interest, and founded on a sufficient consideration, invalid, the original usurious securities having been destroyed by the consent of both, parties '. §o if a credifor takes the joint security of his debtor and another person in satisfaction of his debt, it is not avoided by a plea tiiat it was made upon an usurious contract be- tween the obligors, provided the obligee was not privy to the usurious transaction "♦. But a contract reserving to the lender a greater advantage than is allowed by the statute, is usurious, and therefore void ; for no colour, however specious, will exempt an usu- rious transaction from i\\Q danger of the statutes against usury. Therefore, if on discounting a bill or note the party requires the borrower to take goods in part, which are above the value which they would fetch on a resale, the transaction will be within the meaning of the statute ^ And this decision receives further authority from the case of Davis v..Hardacre^, in which Lord Ellenborough said, "If goods are forced upon a borrower, I must have proof that they were estimated at a sum for which he could render them available upon a resale, not at what might possibly be a fair price to charge to a purchaser who stood in need of them." ' Cuthbert v. Haley, 8 T. R. 390. "^ Witlmm V. Lee, 4 l.sp. N.P. C. 264. 3 Barnes v. IJedley, 2 Taunt. ISl. * Kllis V. Warnes, Cro. /ar. .S3. 5 Coombe V. Miles, 2 Camp. N. P. C. 553. « Ibid. 575. But Of Bills of Exchange. — JJsury, 477 But frohi the above case of Coombe v. Miles, if it appears that the borrower voluntarily acceded to such mode of dis- count as advantageous to him, the plaintiff is not bound to prove that the goods were fairly charged, but the burden of the proof lies upon the defendant. It is not usury for an acceptor to discount his own ac- ceptance at a premium. Thus the acceptor cf a bill dated 4th of July, and due the 7th of September, taking a pre- mium of sixpence in the pound from the indorsee and holder for payment of the bill on the 20th of August following, before it was due, was held not to be guilty of usury, tliere being no loan or forbearance. Lord EUenborough said, that to constitute usury there must be a direct loan, and a taking of more than legal interest for the forbearance of repayment; or there must be some scheme contrived for the purpose of concealing or evading the appearance of a loan and for- bearance when in truth it was such. But here v/as no loan or forbearance, only an anticipation of the payment of a debt by the party before the time when by law he could be called Upon for it. He admitted that the defendant had been guilty of a very improper practice, but not of usury '. If a bill or note is payable at a short date, it has been ad- judged not to be illegal to deduct the discount^. And it has been decided, that bankers, in discounting bills, may not only deduct five per cent, but also a reasonable sum agreeable to the usage of the trade, as commission for their trouble and risk in remitdng the bill or note for payment, and for other necessary and incidental expenses'. But if a banker deducts the discount of five per cent, upon a bill for the whole time it has to run, and, instead of paying money for the bill, gives a draft even at a short date, this has been held ' Barclay v. Walmsley, 4 East's Rep, 55. ^ l>loyd V. Williains, 2 Bl. Rep. 792. 5 Winch V. Fenn, cited iti '2 J'. II. 52. to 478 Of Bills of Exchange. -^Usurij. to be usury ; for lie not only gains five per cmi. but aW the further benefit of the money till that draft is paid '. Had it, however, been done at tlic request or for the convenience of the holder, who might have had cash instead of such bills, it would not amount to usury *. Bankers cannot charge compound interest without an express conti^ct for that purpose'. Bni it has been de- cided, that they may strike a balance in their accoiints, and legally charge interest on that balance, if not done too frequently, and out of the ordinary course of business ■♦. If a person discounts a bill for the drawer upon the terms that he shall receive five per cent, discount, and an addi- tional suin for guarantying the payment of the bill by the acceptor, he having no doubt of the acceptor's solvency, this is an usurious contract K So if a factor' advances money to purchase goods, and he receives, besides legal interest, a higher commission on these purchases than he would have been contented to take had he not advanced, the transaction is usurious, and a bill given for the same will be invalid ^. But if a broker gets bills discounted by another person at legal interest, the transaction is not usurious, and will not affect the valiuity of the bills in the hands of a bona fide indorsee, however large a commission the broker may have received himself, and although he is liable to the penalties of the statute'. Where a check is given on an usurious transaction, with- out a special agreement to consider the check as cash, it " Matthews V. Griffiths, Peakc's N. P. C, 200. ' Sir B. Hammrt v. Sir W. Yea, \ Bo«. and Pul. 141. 3 DriM-es V. FinniT, 2 V^my,. N. P. C 486. n. 4 Caliot V V. alker, I Anstr. 595. s Lee v. Cass, I Taunt. 511. 6 Hani? v. Dost^^n, 2 Camp. N. P. C. 348. 7 Uagnall v. Vv igley, 1 1 East's Rep. 43. 2 Camp. N. P. C. 33. S. C. cannot Of Bills of Exchange. — Interest . 479 cannot be deemed an advance of money within the statute of usury, until cash has been actually received for it'. In all cases where a bill is in its origin illegal and usuri- ous, or where the holder has becotne a party to the usury, no action can be sustained for even the principal and lawful interest *. But thong-h all securities given on an usurious consideration are immediately void, yet the penalty imposed by the statute J 2th Anne is not incurred till more than legal interest is actually paid ^ 17. Of Interest on Bills, &c. As interest is generally payable on all liquidated sums, payable at a certain time ^, it is recoverable on bills and notes payable at a day certain ^, for money lent '', and for money paid "^ ; but it is not recoverable on a debt for goods sold, even on limited credit ^, or for work and labour done^. The time when interest begins to run upon a bill or note is from the time of making the protest '°; and when it stops is when final judgement is signed". If it is expressed in the instrument itself that interest is to be payable, the time of its payment will then depend upon the conditions specified. When bills or notes are payal)le on denjand, interest is recoverable from the time of the demand proved '*. When a note is pnyable by instalments, and on failure of » Brooke v, Middleton, 1 Camp. N. P. C 445. EorrodaUe v.Middlelon, 2 Ibid. 53. ' Benfi*!d v. Solomons, 9 Vf-s. Jun. 84. 3 Fisher V. Bpa«!cx, Doup-. ->i3. 4 Blaney V. tlmdrirk.a Bl R.>p.7Gl. Robinson v. Eland, 2 Bur. 10b5. 5 Upton V. Lord Ferrers, 5 V 'S. .Jun. 803. « Robinson v. Bland, '? Bur. 1085. 7 Trelawn* v. Th'):'ias, I Hen Bl. S05. 8 Gordon V. Swan, '•sJ East's Rep. 119. 9 Blaneyv Hendrirk,2Bl Rop. 781. *" Louviere V. Lai'bray, 10 Wo'l. S8. " Robinson v. B!ard,".i Bur. 1085. ^- Farquhar v. i\iorriS, 7 T. R. l'J-1. payment 480 OfBankrupiaj, payment of any instalnicnt the ^vliole is to become dii?, the interest is to be Ciilcuhited on the whole sum remaining un- paid on default of any instalment, and not on the respective instalments at the respective times when they would becomd payable '. And when goods arc sold to be paid for by a bill of exchange, and the purchaser does not give the bill accord- ingly, the vendor is entitled to interest from the time the bill, if given, Avonld have become due % whether the defendant has or has not accepted the goods ^ To entitle a holder of an inland bill or note for the pay- ment of 20 1, or upwards to recover interest, &c. protest of the dislionour must have l>een made by virtue of the statiites 9 and JO Will. III. c. 17. and 3 and i Anne, c» 9. CHAPTER XI. OF BANKRUPTCY. 1 . What Persons are liable to the Bankrupt Laws* All persons, whether natural born subjects, aliens, or denizens, being in trade, and capable of making binding contracts, by virtue of the statutes 13 Eliz. c. 7. s. L I Jac. I. c. 15. s. 2, and 21 Jac. I. c. 19. s. 15. are liable to the bankrupt laws. Clergymen ^, and persons having privilege of parliament, whether peers or commoners ^j are subject to the operation of the bankrupt laws. But infants ** and married women ' cannot be made bankrupts. And if a feme sole, being a trader, marries, a commission issued after the marriage cannot be supported ^. To these ' Blakf V. Lai^rence, 4 Esp. X. P. C. 147. - Porter v. Palsgrave, 2 Camp. N. P. C. 480. Bcecher v. Jones, Ibid. •128. n. 3 Boyce v. Warburton, Ibid. 480. < Hankey v. Jones, Gowp. 7-J5. ^ 4 Geo. III. c. 33, 45 Geo, III. c, 124, s, 1. Ex parte Meymot, 1 Atk. 200. « i:x parte Sydebofhani, Ibid. 146. 7 Co. B, L. S9. * Jix parte Mcarand W'if<-, 2 Bro. C. C 266. — ' positions Of Bankruptcy,— Of Acts of Trading, 481 positions there are however exceptions. For a feme covert, being a sole trader, according to the custom of London, is subject to the bankrupt laws with respect to her separate effects in trade ' . So where the husband has abjured the realm, become an exile, been transported, is divorced a vinculo matrimonii, or the like, and the wife has become liable on her contracts so as to be sued at law and charged in execution, she is liable to a commission of bankruptcy *. And in ex parte Watson ^, an infant who had held him- self forth to the world as an adult, and sui juris, and had traded in that character for two years, was held liable to the bankrupt laws. In the case of partnerships, all the partners may become bankrupts together ; or one only may become bankrupt, even in respect of a joint debt due from all the partners, while the others remain solvent •*. 2. What constitutes a Trading within the Bankrupt Laws Any merchant or other person using the trade of mer- cliandisc, by way of bargaining, exchange, bartering, che- risance, or otherwise, in gross, or by retail, or seeking his trade of living by buying and selling, is subject to the bankrupt laws \ Also bankers, brokers, factors ^, dealers in coals, scriveners', vintners, brickmakers ^, butchers 9, manufacturers of every description who purchase commo- dities, and manufacture tlicni into articles for sale, as clothiers, locksmhhs, brewers '°, goldsmiths", plumjjers '*, smiths'^, shoe-makers '"^, nailors ", tanners '^', bakers'", railU- ' Ex parte Carrin>?ton, 1 Atk. 200. ^ Corbet v. Poelnitz, 1 T. R. 5. 3 J 6 Ves. Jun. t>65. ■• Crisp v. Perritt, Willi-g, 467. s 13 Eliz.c. 7 ; n .Trie. I.e. 19. s. 2. 6 5 Geo. II. c. 30. s. 39. ' Ex pjirte Pjiinhaii, 1 Atk. 111. * Ex parte II;lrri^on, I Br». C. C. 173. 9 Dally V. Smith. 4 Bur. 2148. '0 I Ld.'Raym. 610. " Stone, 120. " Hut 46. • '3 2 Bl. Com. 476. •* Criinipe v. Rarne, Cro. Car. ."^l. '5 Goodinge, 12. »* Newton v, Trigg. 3 Mod. 33U. '' Bcawes, Lex Merc. 488. 2 I ners. 482 Of Bankruptcy. — Of Acts of Trading, ners, dyers ', pawnbrokers *, smugglers ', and carpenters wlio buy materials for the use of their trade ■♦, are liable to a commission of bankrupt. 'But contractors for victualling the royal navy K drovers of cattle, farmers, graziers'', innkeepers % alehouse keepers or victuallers^, receivers general of the parliamentary taxes', and the holders of stock in the Bank of England, in the East India, South Sea, Guinea, London Assurance, Royal Exchange, and English Linen Companies, and ad- venturers in the Royal Fishing Trade, are not, in respect of such stock, liable to the bankrupt laws. Neither is it a trading sufficient to subject the party to be made a bankrupt, if the owner of a mine buys candles and sells them to his workmen'"; or if a schoolmaster buys books and shoes and sells them at a profit to his scholars ". Nor is a maker of alum '% or an underwriter, merely as such, within the statute '^ Neither is an innkeeper or a victualler subject to the bank- rupt laws while he confines himself to supplying his guests with necessaries, or selling liquors out of his house in small retail quantities. But if he deals in liquors as a distinct bushiess, and sells them to all persons who apply for them, he may be made a bankrupt ■'♦. So if a farmer buys horses for the express purpose of selling Etgain at a profit '', or buys potatoes, and sells them with others raised upon his own land '^, he may be a bank- rupt upon such trading. ' Port V. Turton, 2 Wils. Ifi9. ^ Ilighmore v. Molloy, 1 Atk. 205. ' 3 Exvartp Mrymott, Ibid. lOO. 4 Chapman v. Lamphirc, 3 Mod. 155. 5 i Vent. 270. • 5 Geo. II. c. 30. s. -10. ^ 3 Lev. 310. » 4 Bar. 2064. 9 5 Geo. II. c, 30. s. 40. '» Cooke, B. L. 58. " Valentine v. Vaughan, Peake, N. P. C. 76. »» Cooke, B. L. 60. »3 l-x parte Bell, 15 Ves. Jun S.'i.'i. »« Patinan ▼. Vaiishan, 1 T. R. 572. Holme and Wilson v, Beugb, cited inlSel«. N. P. liJ9. '5 Bartholomew V. Sherwood, 1 T. R. 573. >' Alajov. Archer,! Str. 513. But Of Bankruptcy. ^Of Acts of Trading. 483 But in Stewart v. Ball ', it was held tliat a farmer, who occasionally bought hay, corn, horses, pigs, &c. with a view to sell again for profit, did not thereby make himself a trader within the bankrupt laws, because these commodi- ties are incident to the occupation of a farmer. A farmer and grazier exercising also the business of a drover, by buying and selling cattle from time to time, be- yond the occasions of his farm, is exempted from the opera- tion of the bankrupt laws, by stat. 5 Geo. II. c. 30. s. 40. And the purchase of hay for the support of his cattle, and the sale of part of it again, because it was more than was required for their consumption, will not ma'ke him a trader ^ And though a brickmaker is within the statute, yet a distinction subsists where the business is carried on only as a mode of enjoying the profits of a real estate, and when it is carried on substantially, and independently as a trade. Thus, where a devisee for life of an estate, part of which consisted of brick ground, made bricks there for sale gene- rally, with a view to profit, he was held not to be a trader within the meaning of the bankrupt laws, though he pur- chased the coals and some of the wood used in burning the bricks, and had, before the estate came to him by devise, occupied the same ground as a brickmaker for general sale '. If a man buys a coal-mine, works it, and sells the coals, he is not a trader within the meaning of the bankrupt laws *. But if he sells the coal from the mine, together with others which he bought at market, then he becomes a trader with- in the statutes 5. A builder who buys timber which he works into the > 2 New Rep. 78. ' Bolton v. Sowerby, U East's Rep. 274- i Sutton V. Weelev, 7 East's Rep. 442. « Port V. Turton,2 Wils. 169. 5 Ibid. 170. S I :2 liouses 484 Of Ba7ikriiptcy.—0f Acts of Trading, houses which he builds, and sells the houses when built, is nof a trader -within the statute '. Neither is the building of a ;tying for their being dis- counted, besides interest, and borrowing accommo:la(ion notes in exchange for his own to the same amount, will not make a man an object of the bankrupt laws '• And the statutes relating to exchequer bills expressly provide that a party circulating the same shall not be deemed a trader within the bankrupt laws^. A trader having retired from business, may become a bankrupt in respect of debts contracted during the period of iiis tiadinc:'. One single act of buying and selling will not make a man *t trader, nor will buying only or selling only ; but it must be a repeated practice both of buying and s( lling in order to giii a livefihood^. Therefore a mere artisan or handicraftsman. ' Clirke V. Wisdom, 5 Fsp. N. P. C. 1-17. '" Wiiliams v. Stevens, 2 lamp. N. P. C. .'{00. ^ Kx parte Bowf;:, A Ves. .Jnn. 168- I Ve:it. 29. * K'ich;trd5.on V. Bradshaw, I Atk. V2S. ^ llaiikev V. Jones,, Cowp. I'b. ° Co. B. L. 67. ^ 1 Vent. 5. " '2 lil. Colli. iTG. ) Com. Dig. b22. Holroyd v. Gwjnne, 2 Taunt. ITC. who Of Bankruptcy.— Of Jcis of Bankruptcy. 485 who obtains his liviii. 6 Alexander v. Vaiighan, Cowp. 398. ' Dodsworth v. Anderson, Raym. Rep. 315. * Alexander v. Vaughan, Cowp. 398. Inglis v. Grant, 6 T. R. 350. England J 486 Of Bankrupt cy.-^Of Acts of Bankruptcy. England, and commits an act of bankruptcy, he is subject to the bankrupt laws '. So if one of two partners in a house in Dublin purchase goods in England, in the joint name of himself and partner, it has been determined that the debt so created made the partner resident in Dublin subject to the bankrupt laws *. With respect to the act of bankruptcy, stopping pay- ment, or refusing payment, does not amount to an act of bankruptcy, if the party appears in his business'. But by the statutes ISEliz. c. 7. s. 1. and IJac. I. c. 15. s. 2. it is enacted, that the following acts committed by any person using the trade of merchandise, &c. shall be acts of bank- ruptcy. " Depart the Realm.'* This must be done with an intention to defraud or delay creditors ; for delay without such intention will not be an act of bankruptcy •*. But an intention to delay creditors, although no delay takes place, is an act of bankruptcy ^ " Or begi?i to keep House. ^^ To constitute an act of bankruptcy, (he beginning to keep house must be done with an intent to defraud or delay cre- ditors ; which intent is evidenced by being actually denied to a creditor^. But an order to be denied is not sufficient without an actual deniaP. And the denial must be to a creditor who has a debt due to demand. A denial, therefore, to the holder of a security payable at a future day will not be sufficient, although the security be such as may by the statute 7 Geo. I. c. 31. s. 1, 2. be proved under the com- mission^. But a denial to the holder of a bill, or his clerk, » Williams v.Nunn, I Taunt. 270. ' Ibid. 3 Cullen's B. L. 65. « Fowler V. Padget, 7 T. R. 509. Ex parte Mutrie, 6 Ves. Jun. 576. 5 Robertson v. LiddcU, 9 East's Rep. 487. * Garratt v. Moule, 5 T. R. 575. ' Hawkesv. Saunders, Cooke, B. L. 74. s Ex parte Levj, 7 Via. Abr. 6. pi. 14. on Of Bankruptcy ,— Of Acts of Bankruptcy , 487 on the morning of (lie day on wliich it becomes due is suffi- cient, and cannot be avoidid by aflcrwirds appeiriag in public, and paying the bill before five o'clock of tliat day'. So in the case of Jeffs v. Smith, 2 Taunt. 401. it was held that a denial by tlie express order of the trader to a tax- gatherer who called for the taxes, was an act of bankruptcy. A denial by order of a trader to a creditor is liot of itself an act of bankruptcy, but only evidence of it, and therefore open to explanation. Being denied when sick, engaged in company, particular business, or owing to the lateness of the hour, are not acts of bankruptcy*. On the other hand it is not necessary, in order to consti- tute a denial an act of bankruptcy, that the bankrupt should have given orders to deny any particular creditor ; for a general order of denial, followed by an actual denial, is suf- jScient^ It is not absolutely necessary that the denial should be to the creditor personally '* ; a denial to his clerk ^, or to his servant^, is sufficient. In a case where it appeared that the creditor, to whom the denial was supposed to have been given by the plaintiff's clerk, had only demanded payment of the debt, but had not asked to see the plaintiff personally, and that the clerk sup- posed to give the denial had no specific directions for giving it, it was held that such denial did not amount to an act of bankruptcy '. A denial to avoid an attachment for non-delivery of goods, ' Colkett V. Freeman, 2 T. R. 59. Mucklow v. Mav, 1 Taunt. 479. * Ex parte Hall, 1 Atk. 201. Worseley v. Ue Mattos, 1 Bur. 484. Bui. N. P. 38. 3 Round V. Byde, Cooke, B, L. 94. Mucklow V. May, I Taunt. 479. * Bramley v. Mundee, Bui. N. P. 39. s Colkett V. Freeman, 2 T. R. &9. * tx parte Bamfoinl, 15 Ve?. Jun. 449. "i Dudley T. Vaughan, 1 Camp. N. P, C. 271. as 488 Of Bankruptcy . — Of Acts of Bankruptcy. as it is only to evac^e doini^ a duty, does not amount to an act of bankruptcy'. But a denial to a creditor to avoid service out of chancery, upon a decree for payment of a debt, is otherwise^. A conceited act of b;inkruptcy will not support a com- mission : and therefore, if a creditor calls upon the bank- rupt, by aii^reement, thit he may deny himself, or otherwise concerts an act of bankrnptcy wltli the bankrupt, the com- mission cannot be supported upon such concerted act^ If, however, a creditor not privy to the agreement calls upon the bankrupt, and he is denied, the denial will be good evidence of an act of bankruptcy •♦. " Or alsent himself." This if done with a view to delay creditors is an act of bankruptcy, although no creditor has been thereby de- layed '. But it is not an act of bankruptcy if he absent himself for any other purpose than to defraud or delay hig creditors : as if to avoid an arrest upon an excommunicato capiendo '^, or the service of process to enforce a decree in chancery, or an attachment on an award for non-delivery of goods pursuant to the award • ; for these are not debts, but duties only. *' Or willingly and fraudulently procure himself to he ar- rested or yield himself to prison." This, if done for a fictitious debt, is deemed an attempt tp defraud creditors, and cons( quently an act of bankruptcy. And even where a man yields himself to prison for a just debt, if done with an intent to delay or defraud creditors, ' Linirwood v. Eade, 1 Atk. 196. "^ 2 Com. Dig. 5. 3 BrHmley v.Mundee, Bill. N.P.,^9. Ex parte Bourne, 16 V^es.Jun. 145. 4 hx parte Edmonson, 7 Ibid. 30.S. Ex parte Bourne, 16 Ibid. 1-15. 5 Bistg V. Spooner, 2 Esp. IS. P. C. 651, Judine v. Da Cosbcns, I New Rep. '234. « I Com. Dig. 521. ' Davis's B. L. 45. anc^ Of Bankruptcy . — Of Acts of Bankruptcy. 489 and the party lies in prison two months, it is an act of bank- ruptcy '. The act of bankruptcy by lyin:^ in prison two months, relates to the first day of the surrender*. But where bail is really put in, the bankruptcy takes its operation from the time of the surrender '. In case of mere formal bail, how- ever, the l)ankruptcy relates to the time of the first arrest^. *' Or willingly or fraudulently procure his Goods, Money, or Chattels to be attached or sequestrated.'' The attachment meant by the legislature, is that by which suits are commenced in Loudon, Bristol, and other towns, where that species of process is made use of. Hence, where a person executes a bond an 1 warrar.t of attorney to confess judgement, either for a boiia tide debt % or for a larger sura than is really due ^, and judgement is entered up accord- ingly, and the debtor's goods taken in execution, such exe- cution is not an attachment, and consequently is not an act of bankruptcy within the meaning of this clause. Neither is an adverse attachment or sequestration within the meaning of the statute : to produce this effect, it must be by the party's procuring, with an intent to delay cre- ditors ^ *^ Or depart from his Dwelling- house." To constitute this an act of basikruptcy, the bankrupt ''s intention to delay his creditor, by departing from his dwell- ing-house, is sufficient ^ But the motive of the party may be explained by circumstances which will negative the ap- parent intent '^. A. compulsory absence, as in the case of being arrested, will not be an act of bankruptcy '°. Nor an ' 13 Eliz.c.T. l.Tac. I.e. 5. Ex parte Tlarton, 7 Yin. Abr. 61, 62, pi. 15. * King V. Leith, 2T. R. 141. ' 3 Hose v. Green, i Bur. 4:>7. * Ibid. 5 Harwood v. Spottiswood, Cooke, B. L. 100. * Cianey v.Hayley, Cowp. 427. 7 2 Com. Dig. 6. * Hammond v.Hinks, 5 Lsp. N. P. C. 139. ^ Fowler v. Padget, 7 T. R. 509. '" Green, 63- absence 490 Of Bankruptcy. — Of Acts of Bankruptcy . absence to avoid an attachment for not performing an award for ttie delivery of j^oods ' : but it is otherwise if for the payment of a sum of money. *^ Or suffer himself to Is outlawed.** An outlawry suffered must be with an intent to defraud creditors, otherwise it is not an act of bankruptcy *. *' Or make or cause to he made any fraudulent Grant or Con- veyance of his Lands, Tenements, Goods, or Chattels.** If a trader in contemplation of bankruptcy, in order to pay even a just and bona fide creditor, or one who by pos- sibility may become a creditor {viz. a surety), assigns by deed all, or even a part of his effects to such creditor, the deed is fraudulent, and consequently an act of bankruptcy, whether possession was delivered to the creditor or not ^. And the same rule holds if the assignment be to some cre- ditors, but in total exclusion of others ; or if the deed is exe- cuted in concert Avith several creditors, upon trust to pay all, and is afterwards abandoned by the creditors '♦. An assign- ment of all a trader's effects for the benefit of all his creditors, unless every creditor has concurred, is an act of bankruptcy ^ But those who execute the deed cannot set it up as an act of bankruptcy^. And an assignment of part of a trader's estate and effects, if made in contemplation of bankruptcy, will be fraudulent, and of course an act of bankruptcy ". But if a trader exe- cutes an assignment by deed of part of his effects, and de- livers possession, or a nominal possession, and it does not * Lingwood v. Eade, 1 Atk. 196. - 2 Sid. 69. 3 Worselcy v. Demattos, 1 Bur. 467. Wilson v. Day, 2 Bur. S27. Has- sel V. Simpson, Dnug. 88. n. * Tappcnden v. Burgess, -1 East's Rep. 230. 5 Kettle V. Hammond, Bui. N. P. 40. * Bamford v. Baron, cited in 2 T. R. 594. ' Linton v. Bartlet, 3 Wils. 47. Devon v. Watts, Doug. 86. appear Of Bankrupt C1J. — Of Acts of Banknipfcr/. 491 appear that he had his bankruptcy in contemplation, the assignment will be good, and not an act of bankruptcy '. In the conveyance of the whole or part of a bankrupt's estate, the circumstance of his being, at the time of the con- veyance, under arrest at the suit of the creditor to y/hom the conveyance is made, will not give validity to the transac- tion *. A conveyance of the whole or part of a trader's effects must be by deed to be valid. Therefore a fraudulent con- veyance not by deed is not an act of bankruptcy K But such conveyance, tliough it does not amount to an act pf bank- ruptcy, will be void by reason of the fraud •♦. Having stated the decisions which have been made upqn the several acts of bankruptcy enumerated in the 13 Eliz. c. 7. and 1 Jac. I. c. 15. we shall proceed to the con- sideration of such acts as are mentioned in 21 Jac. I. c. 19. s. 2. " Procuring or obtaining any Protection, not leing law^ fully protected by Privilege of Parliament." By the statute 7 Anne, c. 12. s. 5. traders are declared not to be entitled to the protection given by that act to ambas- sadors and their servants. " Or being arrested fur Debt, shall, after his Arrest, lie in Prison two Months or more, tipon that or any other Arrest or Detention i?i Prison for Debt." In the construction of the act it has been determined, that lying in prison two lunar months will make the party a bankrupt from the first arrest ; and that in computing the time, the day of the arrest is to be included K But if there is not a continuing imprisonment from the time of the arrest, > Jacob V. Shepherd, 1 Bur- 478. • Manton v. Moore, 7 T. R. 67, » Newton v. Chantler, 7 East's l?ep. 138. 3 Martin v. Pewtress, 4 Bnr. 2477. Rust v. Cooper, Cowp. 629. * Ibid. s GlassingtoD v. Rawlins, 3 East's Rep. 407. then 492 , Of Bankruptcy . — Of Acts of Bankruptcy. then the intention of the legislature appears to have been, that the two mouths should run only from the time of the party's going to prison, and not from the arrest '. Where bail is really put in, the bankruptcy only relates to the time of the surrender*. " Qr he'ing arrested for 100 I. or more of just Debts, shall at amj time ajter such Arrest escape out of Prison." This must be an escape against the v/ill of the sheriff, and such as shows that he intends to run away '. The last mode by which an act of bankruptcy may arise depends on the statute 4 Geo. III. c. 33. which enacts, " That the creditors to a certain value, viz. one creditor, or two, being partners, to the amount of 100/. two creditors to the amount of 150/. and three to the amount of ^0/. of any trader within the description of the bankrupt laws, having privilege of parliament, may (upon affidavit of the debt, and trading of the debtor, filed of record in any of the courts at Westmmster,) sue out a summons, or original bill and summons, against such trader, and serve him with a copy; and if he shall not, within two months aflxr personal service thereof, pay, secure, or compound the debt, or enter into a bond in such sum, and with such sureties as the court shall approve of, to pay such sum as shall be recovered in such action, with costs, he shall be adjudged a bankrupt from the time of the service of such summons." This provision of the legislature, as Mr. Selwyn observes 4, was salutary ; but having, on some occasions where bonds had been given in pursuance tiiereof, been rendercvl nuga- tory by the difficulty, and sometimes by the impossibility, of enforcing the entering of appearances in the actions, for the payment of the sums to be recovered, in which such ' Barnard V. Palmer, \ Camp. N.P.C. 509, ' Bui. N. P. 39. Tribe v. Webber, Willos, 464. 3 Rose V. Green, 1 Bur. 437. •» >'. P. ^06. bonds Of Bankruptcy . — Of the Petitioning Creditor's Delt. 493 bonds had been given, it was enacted by the statute 45 Geo. III. c. 124. s. 1. " that every person, deemed a mer- chant, bankc^r, broker, l^ictor, scrivener, or trader, having privjlog-eof parliament, shall be adjudged a bankrupt, unless he shall, within two months after being served with the pro- cess, enter a common appearance in the court in which the action is brought. And it has been determined, that by vir- tue of this statute, if such ])rivileged trader does not obey an order of the court of Chancery or Exchequer to pay money, lie thereby commits an act of bankruptcy, and may be de- clared a bankrupt accordingly". Each of the acts of bankruptcy which have been specified must be committed during trading, or subsequent thereto, and during the existence of a debt contracted when in trade ^ To support a joint commission against all the individuals of partnersiiip, each of the partners must liave committed an act of bankruptcy '. As to the effect of an act of bankruptcy, a plain direct act of bankruptcy, once committed, cjnnot be purged or explained away, as a dubious equivocal act may, even though the party continues to carry on a great trade*. But where the act is in itself doubtful, it may be explained ^, 4. Of the Petitioning Creditor's Delt. The petitioning creditor must have a legal demand to tJie amount of 100/, ; and if two creditors join in petitioning for a commission, their debts must be 150 1. ; if three or more join, they must be creditors for 200 1. ^' But a debt in equity will in no circumstance support a commission ; as in the ' Read v. Philips, 16 Ves. .fun. 4.S7. " Ex parte B;imfoii1, l.'> Ves. .Tun. 449. Ex parte Dewdncy, Ibid 495 3 B^asley v. Bea'.lpy, I Atk. 97. ♦ VVor^eiey V. Demattos, 1 Rr.r. 484. Hopkins v, Ellis, S.ilk. 110, s Colkett V. Freeman, 2 T. R. 59. ** r. Geo. II. c. aO. s. -23. ca.se 494 Of Bankruptcy. — Of the Petitioning Creditor*s Delt„ case of an assignee of a bond, the assignee cannot be a pe- titioning creditor '. Before the statute 5 Geo. II. c. 30. it was considered that it did not alter the case wliether the petitioning creditor's debt was contracted before or after the act of bankruptcy ; but since that statute it has been decided, that it must be contracted before the act of bankruptcy ^ And as it often happened, that after a commission had been issued upon a clear act of bankruptcy, and a good petitioning creditor's debt, a secret act of bankruptcy was proved to have been committed, prior to the petitioning creditor's debt being con- tracted, wliereby considerable confusion and inconvenience arose in the administration of the bankrupt's affairs ; it was provided by the statute 46 Geo. III. c. 135. s. 5. that no commission of bankrupt thereafter issued, should be avoided or defeated by reason of any act of bankruptcy having been committed by the bankrupt prior to the petitioning cre- ditor's debt being contracted, if such petitioning creditor had not any notice of such act of bankruptcy at the time when the debt was to him contracted. So much of til is act as made the striking of a docket notice of a prior act of bankruptcy is repealed by the sta- tute 49 Geo. III. c. 121. The statute 5 Geo. II. c. 30. s. 22. enables creditors by bills, bonds, promissory notes, and other personal securities, payable at a future day, and drawn and issued before an act of bankruptcy, to sue out, or join in suing out, a commis- sion of bankrupt, before they actually become due and pay- able ; and by the 7th Geo. I. c. SI . they may prove the same under the commission, deducting a rebate of five per cent, for the time the bill iias to run. And on the construction of this statute it has been held, that a bill of exchange for 100/. ' F.x parte IlvUianJ, 1 Atk. 146. ? Ves. 40T, ■" r,x parte Wahiman, Cooke, B. L. ?3. Of Bankruptcy .-^Of the Petitioning Creditor's Debt. 495 is sufficient to found a petition for a commission of bankrupt, though allowing a rebate of interest for the time it had to run after the issuing of the commission, would dimmish the debt below 100/. at the time of the act of bankruptcy'. But goods sold and delivered on an agreement, to be paid for by a present bill payable at a future day, does not create a present debt on which to found a commission of bankrupt, if no such bill be actually given ; for the intention of the legislature plainly confines the power of petitioning to such creditors as have written securities *. If, however, a creditor for goods sold receive in pay- ment a bill of exchange payable at a future day, and he negotiate it before the bankruptcy of the debtor, and is obliged to take it up upon its being dishonoured after his bankruptcy, he may sue out a commission upon his debt'. If, after committing a secret act of bankruptcy, a trader gives his creditor a bond for a debt due on simple contract before the act of bankruptcy, it does not deprive the credi- tor of his right to petition ^, And if a creditor, knowing that his debtor has committed an act of bankruptcy, receive part of his debt, as the pay- ment is void, he may support a commission on the original debt 5. A creditor for a debt after the party quitted trade, cannot sue out a commission ^ ; but a creditor before he entered into trade, whose debt subsisted during the trading, may^. If the debt is contracted before leaving oft' trade, and the act of bankruptcy is committed after leaving off trade, the creditor may take out a commission*. ' Brett V. Lovell, J3 East's Rep. 213. » Hoskins v. Duperoy, 9 East's Rep. 498. Cothay v. Murray, 1 Camp. N. P. C. 335. ' Ex parte Marsden, 4 Mont. B, L. App.T. « Ambrose v. Clendon, 2 Str. 1043. s Man v. Shepherd, 6 T. R. 79. • Daw V. Iloldsworth, Peake's N. P. C. Gl. ^ Butcher v, Easto, Doug. 295. ' £z parte Bamford, 15 Vei. Jun. 419. But 4.96 Of Bankmptcy . — Of the Petitioning Creditor's Debt. But a debt arising by way of damages due upon a judge- ment after it is entered uj), is not a sufficient debt in law, wliercon to found a commission of baniaakrupt ; for by suing out the commission he has de- termined his election, and is precluded from proceeding at law even for a debt distinct from the one he proved *. And by stat. 49 Geo. III. c. 121. s. 14. it is enacted, that prov- ing or claiming a debt mider a commission of bankrupt shall be deemed an election by such creditor to take the benefit of sucli commission with respect to the debt so proved and claimed. Any objeclion that would preclude a creditor from reco- vering at law, or in equity, will equally preclude him from suing out a commission of bankruptcy. And therefore if a debt cannot be recovered at law, the statute of limitations having incurred, nor in equity by analogy to it, it will not be a sufficient petitioning creditor's debt ; neither is such a debt proveable under a commission ^ A commission sued out upon a debt due jointly to a per- son residing in England, and others residing abroad in an enemy's country for the purposes of trade, although British subjects-*; or if sued out upon the petition of only one of two partners to whom a joint debt is due ^ ; cannot be sup- ported, for all the parties must join in the petition. But in the case of partners, the ailidavit of one that ihe debt is due to himself and partners is sufficient ^. ' Tn re CliarVs, 14 East's Rep. 197. ^ Ex parte Callow, .'i \c^. .lun. 1. Ex partn AVard, i Atk. 15.3. 3 Ex parte Di^wdneyjo Vis..)ui). 193. Fowler v. Brov.n, Cooke, B. L. 13. SwavJie V. Wnlliiiger, V Str. 746. coiiira. * iiucklanit v. N^wsame, 1 Taunt. 177. 5 .M'Connr!! v. Hector, 3 Bos. and i\\\, 113. ^ 2 Cooke, B. L. 1. 5. Of Of Bankruptcy. — Of the Commission. 497 5. Of the Commission. Of issuing the Commission, By the statutes concerning bankrupts, the power of issuing commissions being vested in the Lord Chancellor, Lord Keeper, or Lord Commissioners of the Great Seal, when a creditor finds himself under the necessity of obtain- ing such a commission, if he resides in town he must make an affidavit of his debt before a Master in Chancery, if in the country before a Master Extraordinary, and execute a bond to the Great Seal ' ; and upon such affidavit and bond being presented and answered by the Lord Chancellor, the creditor is said to have struck a docket. But unless the party striking the docket seals the commission in four days exclusive of the day of striking the docket, or orders the commission to be sealed at the next public seal, in case there shall be a public seal within seven days next after such docket shall be struck, or by a private seal within eight days after the striking of such docket, then any other cre- ditor may strike a new docket, and sue out a commission^. After the commission is sealed, the creditor is allowed fourteen days if it is to be executed in London, and twenty- eight days if the bankrupt resides forty miles from London, to prosecute such commission ; and at the expiration of such limited times the commission is supersedable, if not duly prosecuted ^ Ofopejiing the Comtnissionj and declaring the Party Bank- rupt. When a commission has been sealed, one of the mes- sengers in bankruptcy is to summon three of the commis- sioners to attend a private meeting, for the purpose of open- ' Wvdown's Case, 14 Ves. Jtin. 80. » General Orders, l?th Feb. 1774; g9th Dec. 1806. » General Order, 26th June 1793. 2k mg 498 Of Bankruptcy . — Of the Covimission. ingthe connnission ; \vbo, after having qualified themselves by personally aclministcrin;i' to each other the oath directed by the statute, proceed to receive prot)f of the petitioning creditor's debt, the tradin^:, and the act of bankruptcy. My a ecnenil order, Suth Nov. 1798, Wxe petitioning credi- tor or creditors must appear before the commissioners for the puq)0se of proving his or their debts. And this order is to be so strictly adhered to, that tlie commissioners ought not to depart from it without the special order of the Lord Chancellor, even in cases where it is impossible for the cre- dilor to attend. Witnesses must also be produced and ex- amined bcfiire the commissioners to prove the trading and the act of bankruptcy '. Of the Power of the Commissioners to seize the Bankrupt's Property. Upon the parly's being declared bankrupt, the commis- sioners are by the statutes 21Jac. I. c. 19. s. S.and 5 Geo.II. c. SO. s. 14. empowered to issue a Marrant under their hands ai)d seals for the seizure of the bankrupt's effects, books, pnpers, or writings in his custody cr possession, and to break open the houses or places belonging to the bankrupt, in case of resistance, or not having the key of any door or lock, where any of his goods, &c. are, or are suspected to be. , But they cannot break open any but the bankrupt's bouse to search for his goods, &c.* When goods have been sent by the bankrupt on board a ship to be conveyed to his correspondent abroad, the com- missioners caimot seize and take them away without paying the freight, and indemnifying the master of the vessel against a bill of lading sent to the consignee^. But sliould the messenger proceed to make a seizure, even though such ' Cooke, B. L. 105. » Anon. Show. 24T. 3 Mollo>, 2J3. 2 Eq. Ca.Abr. 98. seizure Of Bankruptcy. — Of the Commission. 499 seizure may be illegal, the forcibly (urning him out of pos- session- cannot be justified, but may be the ground of an attachment against the party using such force '. Of the Power of the Commissioners over the Bankrupt. The commissioners, if they have reason to apprehend that the bankrupt is making away with and concealing liis effects, or preparing to depart the kingdom, to avoid sur- rendering, may summon him to appear before them to be examined immediately * ; and in case he disobeys their sum- mons, it is enacted by the statute 5 Geo. II. c. 30. s. 14. that upon certificate under their hands and seals that a com- mission is issued, and the person proved before (hem to be a bankrupt, any judge or justice of the peace in England or Wales is empowered to grant a warrant under his hand and. seal to apprehend and commit him to the common gaol of the county where he-is taken ; there to remain till he is removed by order of the commissioners, or the major part of tliem, by warrant under their hands and seals. But it is provided by the 15th section of the same statute, that if a bankrupt taken under such certificate, and thcAvar- rant thereon, shall within the time allowed by the sta- tute submit to be examined, and in all things conform as if he had surrendered, such bankrupt shall have the benefit of the statute as if he Lad voluntarily surrendered. If a bankrupt does not answer the questions put to him by the commissioners, to their satisfaction, they may com- mit him until he does comply ^ Formerly, if the bankrupt was in execution, the commis- sioners were obliged to attend him in prison to take his ex- amination ; but by the statute 49 Geo. III. c. 121. s. 13. " Ex parte TUner, 1 Atk. 136. Ex parte Dixon, S Ves- 104. ' Ex parte Lingood, 1 Atk. 240. ' Ex parte Ncian, llVes. Jun,511. 2 K 2 the 500 Of Bankruptcy. — Of the Commission. the goaler or the keeper of the prison must, on the warrant of the commissioners, l)riiig up a prisoner charged in exe- cution, to be examined by them, in the same manner as is practised with respect to bankrupts in custody on mesne process. Of the Poiuer of the Commissioners over other Persons. By the statute 1 Jac. I. c. 15. the commissioners are em- powered to commit persons refusing to be sworn and make answer touchirjg the bankrupt's estate and effects ; and tliis power is adopted by the statute 5 Geo. II. c. SO. which further requires the party so examined to sign his examina- tion taken before the commissioners. But tliere does not appear to be any power to commit, in case a witness refuses to obey the commissioners' summons to prove the act of bankruptcy or the trading '. The de- fect, tlierefore, must be remedied by an application to the Great Seal *. If a witness is prevented from attending the commis- sioners according to their summons, he must make it known to them, and obtain their allowance for the excuse, and must attend the next meeting of v,hich he has notice'. In the case of Dyer v. Missing •*, it- was held, that the commissioners had no power or authority to •ommit one suspected of detaining the bankrupt's effects, for not at- tending to be examiiied on the first summons : but this case has been since overruled in the court of Pving's Bench, in the case of Battle v. Greslcy and others, in which it was field , that a warrant for the arrest of the vitness, in order to examine him, may issue after his disokedicuce to the first summons '. » Cooke, B. I,. ' F.x part'- Ki^^ins, H V^s. Jiin. 8. 9 1 Jac. 1. c. \b. s. 10. •« ii Bl. 10o5. 5 8 Last's Rep. SIS. No Of Bankruptcy . — Of the Commission. 501 No aclion will lie against commissioners for a commit- ment bad in consequence only of a formal defect in the warrant '. But an action of trespass will lie against them for committing a person for not answering iiiiproper ques- tions, or for not acquiescing in a proper answer *. The wife of the bankrupt cannot be examined against her husband touching his bankruptcy, or whether he had com- mitted any act of bankruptcy, or how or when he became a bankrupt ^ But the statute 21 Jac. I. authorizes com- missioners to examine the wife touching any concealments of the goods, effects, or estate of the bankrupt. The commissioners of bankrupt may issue process of contempt to compel an answer. They are a court of justice sufficient for the purpose of having their witnesses protected during their attendance eundo et redeundo *. This privi- lege also extends to persons who attend voluntarily, as to prove their debts, or the like '. Witnesses attending commissions of bankrupt are entitled to such costs and charges out of the bankrupt's estate as the commissioners in their discretion shall think fit ^. But a witness is bound to attend the summons of the commis- sioners, althougli he has not been tendered the expenses of the journey, unless he can prove that he was unable to bear the expenses of if. A witness is bound to give an account of what he knew of the bankrupt's effects, as well before as after the bank- ruptcy ^. But a person examined before commissioners is not bound to answer any thing which tends to criminate himself 9. • Bray's Case, Comb. 391. » Miller v. Seare,2 Bl. Rep. 1 141. 3 Ex parte James, 1 P. Wms. 610. * Ex parte Stow, 2 Bl. Rep. 1142. s Arding v. Fowler, 8 T. R. 534, Ex parte King, 7 Ves. Jun. 315. « 1 Jac. I. c. 15. B. 1 1. 7 Baltic v. Greslev, 8 East's Rep. 318. « Bracy'i Case, 1 Ld. Rayin.99. " 9 Comb. 391. The 502 Of Bankruptcy* — Of the Commission. The commissioners are also empowered by the 19th chap- ter, s. .9. of the 21st Jac. I., to examine upon oath, or by any other ways and means as to them shall seem meet, any person for the discovery of the truth and certainty of tlie several debts due to the creditors seeking relief under the commission. Of the Effect of the Commission, A commission of b-mkrupt has the effect of immediately vesting all the rights and possibilities of the bankrupt under the administration of the Lord Chancellor in bankruptcy; and when it has issued, and the party is declared a bankrupt, his death will not prevent the further execution of it'. Of the Costs of issuing out a Commission, By the statute 3 Geo. II. c. 20. s. 25. the petitioning creditor is directed at his own costs to prosecute the com- mission till assignees shall be chosen ; and the commis- sioners at the meeting appointed for the choice of assignees are to ascertain such costs, and by writing under their hands to order the assignees to repay the same out of the first money or effects received or collected by them under the commission. Of the Remedy for maliciously suing out a Commission. If the commission appears to have been fraudulently or maliciously taken out, the Lord Chancellor, on petition of the party grieved, is empowered by the statute 5 Geo. II. c. 30. s. 25. to examine into the same, and assign to such person the whole or part of the penalty conditioned in the bond of the petitioning creditor, w ho may sue for the same * 1 Jac. I. c. 15. s. 17. Backwell's Case, 1 Vern. 153. Ex parte Dewd- Bpy, 15 Ves. Jun.491. in Of Bankniptcy . — Of the Commission. 503 in his name. Or if the bankruptcy is a di)ul)tf(il case, and the commission superseded, the Lord Chancellor may either direct an inquiry before a master of the damages sustained by the bankrupt, or a quantum indemnifiratus upon an issue at law ; and after the damages are settled, the court may, for the better recovery thi'n of, order the bond to be assigned '. But where a case is attended witli any flagrant circumstances, the bond will be assigned with- out further inquiry. And it is competent to the Lord Chancellor, to order the petitioning creditor to pay the costs of suing out the commission, with the costs of the ap- plication *. But notwithstanding a remedy is provided against mali- ciously suing out a commission by enabling the Lord Chan- cellor to assign the bond, or award a specific sum by way of damages, it has been held, that the bankrupt is not de- prived of his remedy at common law by an action for da- mages, but may proceed by an action at law to obtain such redress for the injury he has sustained as a jury may think hira entitled to^ Of the Evidence to support a Commission. The bankrupt cannot be a witness to support the com- mission, either by proving the petitioning creditor's debt, the trading, or the act of bankruptcy '♦. And no release will have that effect '. Neither can a bankrupt be evidence to prove property in himself, or a debt due to his estate, unless he has ob- tained his certificate, and given a release to the assignees of his share in the surplus and the dividends ^. But he may ' Ex parte Oayter, 1 A«k. 144. ' Smithey v, Edmonson, 3 East's Rep. 22. Smith v. Broomhead, 7 T. R. 300. ' Brown v. Chapman, 3 Bur. 1418. * Cross V. For, 2 Hen. Bl. '<;79. Ewens v. Gold, Bnl. N. P. 40. s Field V. Curtis, 2 Str. 829. « Russel v. Russel, 1 Bro. C. C. 269. be 504 Of Bankruptcy. — Of the Commission. be evidence against tlie assignees, to prove property in, or a debt due from another ; for it is against his interest to di- minish the estate '. A bankrupt having obtained his certificate under a se- cond commission even with a release, is not a competent witness to enlarge the fund ; for in the event of his not pay- ing 155. in the pound under the second commission his future effects are liable *. Declarations made by the bankrupt at the time of his bankruptcy in explanation of his own act may be received in evidence. An admission by him before his bankruptcy, of a debt due to another, is sutficient to charge his estate. If he has been absent from home, an admission by him that he had been abroad to avoid his creditors, is good evidence. Whatever he says before his bankruptcy is evidence expla- natory of the act done by him '. Creditors being obviously interested in the increase of the bankrupt's property, cannot, during the continuance of that interest, be admitted witnesses to enlarge the divisible fund '*. They are therefore incompetent witnesses to increase the bankrupt's estate, unless they release their debt to the assignees K But from the case of Williams v. Stevens ^, it appears that a creditor who has not proved his debt under the commission is a competent witness to support the commission, by prov- ing the trading and the act of bankruptcy. So if a creditor has sold his debt, after proving it, he is a competent witness to support the commission, his interest being gone ''. * Ewons V. Gold, Biil. N. P. 43. Butler v. Cooke, Cowp. 70. ' Kennett v. GreenwQllers, Feake, N. P. C. 3. 3 5 T, R. 512. Bui. N. P. 40. I Esp. N. P. R. 334. Cas. temp. Hard- •wicke, 267. * Egglesham v. Lefevre, 2 Vin. 11. s Koopes V. Chapnaan, Peake, N. P. C. 19. Ambrose v. Clendon, Cas. temp. Hardvvicke, 267. * 2 Camp. N. P. C. 300. ' Granger v. Furlong, 2 Bl. Rep. 1273. Of Of Bankruptcy^ — Of the Commission. 505 Of a renewed Commission. If by the death of more than two of llie comniLssioners, or any other cause, there are not a suiBcicnt number to execute the commission, it must be renewed ; upon which renewal only hah" the fees usually paid for granting a com- mission are payable '. And the commissioners under a re- newed commission proceed from the stage which was left incomplete by the former*. 6. Of a Joint Commission. It was formerly the ])ractice, where there were several partners, to take out a joint commission against all and se- parate commissions against each at the same time ; but this practice being found to be attended with double expense, and to occasion confusion with respect to the effects, it has been since discountenanced. Therefore, where parties have been declared bankrupts under separate commissions, if it can be shown that the joint effects would be disposed of to better advantage, or that the bankrupt's estate would be benefited by prosecuting a joint commision, the Chancellor will, on petition, supersede the prior separate one '. Where a joint commission issues, and there appear dif- ferent sets of creditors, by a general order of the 8tli March 1794, the commissioners are directed to cause di- stinct accounts to be kept of the joint and separate estates, and that each estate shall be applied exclusively in the first instance to the payment of its own respective debts, aud that neither the joint creditors shall come upon the se- parate estate, nor the separate upon the joint : Ijut should there be a surplus of cither estate after paying its own re- » 5 Gen II. c. 30. s. 44. ' Cooke, B. L. 13. 3 Lx parte llardcastle, Cooke, B. L. 9- spective 506 Of Bankruptcy, — Of the Commission. spective creditors, then such surplus shall be appropriated io the payment of the other set of creditors. But as the assignment under a joint commission is of the whole estate of the partners, both separate and joint, the separate cre- ditors are by the same order allowed to prove under a joint commission, for the purpose of receiving dividends from the surplus, if any, of the joint estate after the joint credi- tors are satisfied '. Where there have been different partnerships, and a joint commission issues against the firm including all the part- ners, the creditors of each of the firms and of each partner must be paid out of the respective funds belonging to the estate which th;'y have trusted ; and the surplus, if any, of either of the estates must be applied to some deficient fund ». All the partners in a firm may become bankrupt toge- ther ; or one or more may become bankrupt while the others remain solvent. In the former case a joint commission issues ; in the latter, separate commissions againt each indi- vidually'. Where a joint commission issues, all the partners must be included. And therefore, if under a joint com- mission only two or more of a partnership consisting of a greater number are found to have committed acts of bank- ruptcy, the commission is invalid •*. Neitlier can a joint commission be supported where one of the partners is an infant % or a lunatic ^. But it is only the ostensible partners who are required to be included in a joint commission. Therefore, if a commis- sion issues against the whole of an ostensible firm, the com- » Sep Hankey r. Garrett, 3 Bro. C C 457. Ex parte Taitl, 16 Ves. Jun. 193. ' Watson on Partnership, 277. 3 Cullen, B. L. * Allen V. Downr-*, Wille?, 474. n. 5 Ex parte Henderson, 4 Ves. Jun. 163. * Ex parte Layton, 6 Ibid. 431. mission Of Bankruptcy, — Of the Commission. 507 mission cannot be invalidated by proving the existence of a secret and dormant partner ', unless the creditor had means of asccrtainins: his connexion with the firm '. Where the general word " Company " is part of the title of a firm, it is incumbent on the creditor to ascertain the members who constitute the partnership ^ To support a joint commission each of the partners must have committed an act of bankruptcy, and must be found a bankrupt *. If, after a joint commission is issued against two or more partners, one of them should die, the commission may still proceed. But if one of the joint traders is dead at the time of taking out the commission, it abates and is absolutely void, because they must each be found bankrupt K 7. Of superseding a Commission, By tlie statute 5 Geo. II. c. SO. s. 21. if any bankrupt, after the issuing of the commission against him, pay to the person who sued out the same, or otherwise give or deliver to such person, goods or other satLsfaction or security for his debt, whereby such person suing out such commission shall privately have and receive more in the pound in respect of his debt than the other creditors ; such payment of money, delivery of goods, or giving greater or other security or satisfaction, shall be deemed to be an act of bankruptcy, whereby, on good proof thereof, such commission shall be superseded. There are many grounds on which a commission may be superseded. It may be superseded if taken out at tiie in- stance of the bankrupt ^' ; or if there is not a good petition- ' Ex parte Benfield, 5 Ves. Jun. 421. "^ Kx parte Layton,6 Ibid. 434. » Ibid. * Allan V. Hartley, Cooke, R. I,. 7. 5 ■\Varrinj;ton v. Norton, T'orrest, 184. ^ Ex parte Moule, 14 Vcs. Jun. 602, ing 508 Of Bankruptcy . — Of superseding a Commission. ing creditor's debt' ; or if the petifioning creditor is an in- fant*; or if there is not a suiTicient act of trading or of bankruptcy' ; or if the bankrupt is an infant* ; or that all the trading took place during infancy '; or if taken out against a feme covert upon a trading prior to her mar- riage^ ; or if not opened until a considerable time after it has been issued"'. In the case of a copartnership, a commission may be su- perseded if one of the partners was dead at the time of issu- ing the commission against the firm ; or if the joint commis- sion cannot be supported as to any one of those against whom it is sued out^. A commission may also be superseded by the agreement and consent of all the creditors of a bankrupt -vvho have proved their debts^. But the bankrupt liimself will not be permitted f6, ' thouirh 518 Of Bankruptcy , — Of ike Effect of the Aisignmtnt. tbough he pajs him the tvhole value in advance, and tlic other proceeds to execute the order ; but befpre the chattel is delivered it is taken under an exectition, the assignee* of the btiyer cannot recover it in trover against the ;^hcrift'; for a bujer acquires uo property ia a chattel till it is finished and delivered'. If after a*sif]^nment of a bankrupt's estate, a creditor knowing it, and ret^iding in England, should attach the mo- Jjey of the bankrupt abroad, the assignees may recover it in an action for money received to their use^ ^ui Mhero the attachment is complete before the act of bankruptcy, the creditor attaching is entitled to hold the property at- tached against the assignees in diminution pf his debt, and to prove for the residue under the commission ^ Effect of the Assignment upon Property in Possession of the Bankrupt, but belongings by Cpnveya^ice, to third Persons. In the construction of the act 21 Jac. I. c. 19. s. 1 1. it has been repeatedly decided, that unless possession accom- panies and follows an absolute conveyance of personal chat- tels, such conveyance is fraudulent and void ■♦. The statute enacts, that wherever any trader makes a conveyance of liis goods upon good consideration to another, and yd is left in the possession, order, and disposition of them, by the con- sent and permission of such other person, in tlie event of the insolvency of such trader, the goods so conveyed, but left in the possession, order, and disposition of tlip bankrupt, arc assignable by the commissioners for the benefit of the creditors. But a distinction Exists between mortgages pf real estates * Mucklow V. Mangle?, 1 Taunt. 318. ' Sin V. Worswick, 1 T. R. 694. Itnnfer v. Potts, 4 1. ft. 182. 3 tjx parte Le Mcsurier, 8 Ves. .THn. 8'?. * Edwards v. Harbpn, 2 T. R. 587. Bamford v. Baron, Ibid. 594. ft. Jacfcon V. Irving, 2 Camp. N. P. C. 48, and Of Bajikruptcy .^-^Of the Effect of the Assignment. 519 and chUtel interests in Liuds, and goods and other person £d chattels. The possession and powe'" of disposing oi goods and personal chattels arc the only evidencts of ownership to Vvhich persons dealing ^vith traders look ; and ther fore the statute is particularly directed to remedy the misc'iief aris^ ing from a trader's holding out a d;lusive responsibility to tlic world : but as to real estates, possession is not such an evidence as to induce creditors to rely '. - ' Where the property could not be absolutely delivel-ed at the time of the contract, but the best delivery has been given that the circumstances and nature of the property would admit, it has been held, that th6 bankrupt had not such a possession of the goods as to entitle his assignees to them *. Thus, in the case of ships at sea and their cargoes, it has been held, that a delivery of their proper documents and iTiahimcnts, so as to enable the purchaser to teduce the pro- perty into possession upon the arrival of the ship iii port, is a sufficient compliance with the statute ^ But to render this effectual as a delivery within the statute, possession must be taken immediately on the arrital of the i)hip ■*. U a trader adversely retains possession of goods, so that the party entitled to them is obliged to sue liim in a court of justide to obtain the possession, or to restnin him from disposing of the goods, in the event of liis bankruptcy ; sach possession is not within the meaning of the statute, as it is clearly not with the consent and permission of the owner of tlie goods K * Rval V. RowIps, 1 Atk. 16S. Gordon v. F,a?t India Comp. 7 T. R. 528. ' Manlon v. >Joorp, 1 T. R. 67. 3 Brown v. Heathcote, 1 Atk. 160. * Jonrs V. Gibbons, 9 Ves. Jun. 410. * West. V, Skip, 1 Ves. Jun. 243. Effect 520 Of Bankruptcy , — Of, the Effect of the Assignment. Effect of the Assignment upon the Property of others in the Possession of the Bankrupt. Where tbe bankrupt is in possession of the goods of an- other at the time of his bankruptcy, his possession of them will not amount to a possession within tbe statute 21 Jac. I. unless it is accompanied with a power to sell or dispose of them, or that the owner has been guilty of laches in letting them remain in the bankrupt's possession, so as to gain him a false credit from being reputed the owner '. Where money, goods, or bills and notes have been depo- sited in a trader's hands, to be appropriated to a particular purpose, as money to pay over, goods until an opportunity offers for sale ^, or a remittance of bills of exchange or pro- missory notes, to answer acceptances', or to present for pay- ment +, and and the trader becomes a bankrupt with such money, goods, or bills in his possession, and unapplied to the purpose for which tliey were deposited, they are not dis- tributable under a commission of bankruptcy'. And the proceeds of goods or hills and notes deposited for a specific purpose, are also not subject to the assignment, while they can be identified from the general mass of the bankrupt's property ^. As to tlie effect of the assignment upon property in the possession of the bankrupt, as factor, see title Principal and Agent, ante. AVhen a trader is a trustee \ executor^, or administrator *>, and becomes bankrupt, and at the time of his bankruptcy ' West V. Skip, I Vcs. 243. 2 Ex parte Flyn, 1 Atk. 185, Collins v. Forbes, 3 T.R. 316. 3 Hassel v. Sniithers, »'2 Ves. Jun. 119. 4 E\ parte Oursel, Ambl. 297. s Cooke, B. L. 380. fi Tooke V. Hollin^worth, 5 T. R. 22T. 7 Copeman v. Gallant, 1 P. Wins. 314. » Ex parte Marsh, 1 Atk. 159. 9 Ex parte Llewellyn, Cooke, B. L. 137. has Of Bankruptcy . — Of the Effect of the Assignment. b2\ has any property belonging to his cestui que trust or testator in his possession, which can be distinguished from the ge- neral mass of liis own property, it will not pass to the assig- nees. And should the assiguccs have possessed themselves of such property, on an application of the creditors of the tes- tator, the court will appoint a receiver for receiving and se- curing the testator's effects '. Effect of the Assignment on Property fraudulently delivered ly the Bankrupt in Contemplation of Bankruptcy. Every disposition of property made by a bankrupt in con- templation of bankruptcy, to prefer a particular creditor, is fraudulent and void. Each case, however, must be de- termined on its own circumstances. But all questions of preference turn upon the act being complete before an act of bankruptcy committed, for then the property is trans- ferred ; otherwise an act of bankruptcy intervening, vests the property in the hands and disposal of the law ^. But where a trader under a threat or apprehension of legal process, or from the importunity of his creditor, delivers property to him, or gives him a power to receive it, the transaction is valid, even though tlie trader knew himself to be insolvent'. . But to render suc'i a transaction valid, the act must have redeemed the trader from some present difficulty. For where a trader, being pressed for payment or security, gave his creditor a bill of sale of apparently the whole of his stock, and immediately absented himself, it was held to be a preference of a particular creditor in contemplation of bankruptcy '*. ' Fjx parte Ellis, I Atk. 101. ' TIarman v. Fisher, Cowp. 1^23. Rust v. Cooper, Ibid. 699. IMarlin V. Pcwtress, 4 Bur. 2477. Alderson v. Temple, Ibid. 2235. Singleton V. Howel, 2 Bos. and Piil. 283- 3 Cosser v. Gou^li, I T. R. 1.56. Crosby v. Crouch, 2 Camp. N. P.C. 16G. 4 Thornton v. Ilargreavcs, 7 East's Hep. 5 14. Effect 5^ Of Bankruptcy .—Of the EJJ^ect (flhe Assignment Effect of the Assignment iipon the Estate of the Wife. The assiijnccs of a bankrupt are entitled to the same in- terest in the property of the wife as the bankrupt himself; and whatever proper! j vested in the bankrupt, which lie could himself assign or release, the assignees become en- titled to by the coninii&sioners' assignment. Debts due to the wife dum sola ', or stock in the public funds*, or a chose in action', or a mortgage to which the Avife was entitled before her marriage '», are assignable by the commissioners under the cotiimission. But the necessary apparel of the wife and her children ', or a vested legncy not reduced into possession by the hus- band in his liletime^', or the property of a feme covert, sole trader according to the custom of London', of property given to the wife for her sole and separate use ^, or if the wife is entitled to dower ', or if the bankrupt is considered as trustee of an estate settled to the separate use of the wife during life '", these will not pass by the commissioners' as- signment. And if the wife's property cannot be possessed by the as- signees, without the intervention of a court of equity, the court will compel them to make a competent settlement upon lier, before it will permit them to get possession of the pro- perty, unless the wife be previously properly provided for out of it". And when a setllcment has been made, previous io the marriage, of part of a wife's property io her separate use, it » Miirs V. Williams, 1 P. AVms. 218. ' Pringle v. Hodgson, 3 Vcs. fill. 3 Tudor V. Samyne, 2 Vcrn. 270. ,4 Bofvil V. Brander, 1 P. Wni^. 458. s 5 Geo. Tl. c.?,0. s. 1. * Gaynerv, Wilkinson, 2 Dirk, -101. 7 Lavie v. Phillips, .S Bur. 1776. ** Vandenanker V. UeshrouBil), 2 \rni..9G. 9 Stone, Ifi^- «" Tjrrcl V. Hope, 2. Atk. bbl. Bcnnet v. Davi?, 2 P. Wms. 31G. Lock- yet V. J>3vaj5P, 2 Str. 946. " Jacobson v. Williams, 1 P. Wms. 382. Lumb v. Milnes, 5 Ves. JuD. 517. docs Of Bankruptcy . — Of the Effect of the Assignment , 3S,^ does not bar her claim to a further settlement out of newly acquired property'. If a trader previous to his marriage covenant to settle specific lands upon his wife, and he becomes a bankrupt, and dies without performing the covenant, the court will compel the assignees of the husband io carry the settlement ^nto execution ^. Of the Effect of the Assignment upon Partnership Property, In the case of a joint commission, all the estate, both se- parate and joint, of the bankrupt partners, vests, by virtue of the assignment, in the assignees '. Therefore if a partner in contemplation of bankruptcy deposit goods, as if purchased, witlj a third person for a creditor of the firm, such deposit being fraudulent, the goods will pass to the assignees under a commission against all the pArtners '*, But a disposition of partnership eflbcts in the course of trade, for a valuable consideration and without fraud, by a solvent partner, after an act of bankruptcy by his copartner, but which was unknown to him, is valid ; and if the solvent partner afterwards fail, the assignees cannot recover such effects from the vendee '. Where only one partner of a copartnership is declared a bankrupt, the assignees of the bankrupt partner take all the separate property of the bankrupt ''', and, from the time of the act of bankruptcy committed, become tenants in com- mon with the solvent partners of all his interest in the part- * Biirdon V. Dran, 5 Vps. Jun. 60T. * Jordan v. Savage, 'i Kq. Ca. Ahr. IflS. 3 BoWon V. PiTller, 1 Bos. and Fnl. 539. * Hague V. Rolleston, 4 Bur. 217 C. 5 Fox V. HanburvjCowp. 415. « Jix parte Cobhnm, 1 Bfo. C. C 576. nership 524 Of Bankruptcy . — Of the Effect of the Assignment. nership effects '. The assignees however take the share or interest of the bankrupt partner in the joint property, sub- ject to all the riijhts of his copartners, and to the account to be taken between them as partners S Where one of three partners became a bankrupt, and the partnersl)ip consequent!/ dissolved, and the solvent partners continued to carry on the trade with the capital as consti- tuted at the time of the bankruptcy ; the assignees of the bankrupt were held entitled, beyond an account and distri- bution of the stock, &c. to a participation of subsequent profits made by tlie solvent partners carrying on the trade with such capital ' . And as the assignees of a bankrupt partner take by the assignment the same interest as the bankrupt himself was entitled to at the time he became bankrupt ; where one partner advanced part of his share of the expense of an adventure, and gave his notes for the remainder, which did not become due till after he had become bankrupt ; it was held that the assignees were entitled to his full share of the profits of the adventure, although the note creditors re- ceived only a dividend under the commission, and that it was uncertain at the time of the bankruptcy whether the adventure would be attended with profit or loss ■♦. But if one of the partners embezzles part of the part- nership effects, and becomes a bankrupt, the assignees arc entitled only to the balance of the account after the part- nership debts are paid, and the amount of the embezzlement has been deducted K Neither are the assignees under a separate commission of ' Ex parte Hodgson, 2 Bro. C. C. 5. Ex parte Smith, 5 Ves. Jnn. 295. Smith V. Oriell, I East's Rep. 368. Barker v. Goodair, 1 1 Ves. 78. . » Whitm. B. L. 226. 3 Crawshay v. Collins, 13. Ves. Jun. 218. < Smith V. De Sylva, Cowp. 469. 5 Richardson v. Gooding, 2 Vern. 293. bankruptcy Qf Bankruptcy. — Of the Effect of the Assignment. 525 bankruptcy entitled to the elFects of a solvent partner in the hands of third persons against hi^ consent'. Nor are the assignees under a commission of bankruptcy against one of two partners entitled to theell'ects of the other, where two persons engaged in different trades entered into partnership in their respective trades, but on a dissolution of the partnership mutiwl releases of all demands were given by each partner, who took upon himself the payment of the debts due from his own trade *. If upon a fair and open dissolution of the partnersliip, the retiring partner bona tide transfers his interest in the partnership effects to the contiiming partners, who carry on the trade, and against whom a commission afterwards issues before all the joint creditors have been paid, all the effects of the old partnership found in specie amongst the property seized under the commission vest absolutely in the as- signees ; and even though there should be outstanding debts of the former firm unsatisfied, these effects so found in specie will not be considered as the joint estate of the former firm, either for the benefit of joint creditors, or the partner who has withdrawn ^ And in ex parte Fell '*, where an outgoing partner as- signed by deed his share of the stock to the remaining partners, and they and a surety covenanted that they would in due time discharge all the partnership debts, and in- demnify the outgoing partner, and upon the bankruptcy of the remaining partners the outgoing partner was arrested by the creditors of the old partnership ; upon petition he was held not to be entitled to have .the specific stock and debts of the old partnership applied in satisfaction of tlie creditors of that partnership, in preference of the creditors of the new firm. ' West V. Skip, 1 Ves. 242. ^ Ex-ijarte Titner, 1 Atk. IJ6. 3 Ex parte RufBn, G Ves. Jun. 119. * 10 Ibid. 347. Of 526 Of Bankruptcy. — Of the general Effect ofBankrtiptcjj. Of the general Effect of Bankruptcy on the Property of the Bankrupt^ and of others. hy the act of banki-uptcy, all the real and personal estate of the bankrupt is vested in the assignees^ by relation, from the time of the act committed ; so that the transactions of the bankrupt from that time are void, except ia the cases- provided ft)r in the following statutes. By the statute 1 Jac. I. c. 15. s. I L it is provided, that no debtor of the bankrupt shall be endangered for the pay- ment of his debt trul}'^ and bona fide made to any such bankrupt, before such time as he shall understand and know he has tecorae a bankrupt. By the statute 19 Geo. II. c. o2. it is provided, that no creditor of a bankrupt for goods sold, or upon bills of ex- change, shall be liable to refund to the assignees any mo^ ney received by him of the bankrupt upon such account, in the usual and ordinary course of trade and dealing, be- fore such creditor knew, understood, or had notice, that he had become a bankrupt, or was in insolvent circumstances. By the statute 21 Jac. I. c. 19. s. 14. it is provided, th?it no purchaser for a good and valuable consideration shall be affected by the bankruptcy of the vendor, unless the com- mission is sued out within five years after he ihall have be- come a bankrupt. And by the statute 46 Geo. III. c. 135. s. 1. it is enacted, tliat all conveyances by, all payments by and to, and c:i contracts and dealings by and with, any bankrupt, bona, iide made and entered into more than two calendar months before the date of the commission, shall be valid, notwith- standing any prior act of bankruptcy, provided the person so dealing with the bankrupt had not at the time of such conveyance, &c. any notice of any prior act of bankruptcy, or that the bankrupt was insolvent or had slopped payment. The Of Bankruptcy .^ — Of the general ^ff'ect of Bankruptcy . 537 The third section pf the net also declares, that the issuing of a comnjission, or the striking of a docket for that pur- pose, ^vhethcr any cornmission actually issues t!iereon or not, is to be deemed a notice of a prior act of bankruptcy for the purposes of the act, provided it shall appear that an act of bankruptcy had been actually committed at the time of issuing such commission, or i:triking such docket. But by the statute 49 Geo. III. c. 1^1. s. 1. so much of tlie 46 Geo. HI. as makes the striking of a docket notice of a prior act of bankruptcy is repealed. In the construction of tiic 19 Geo. II. c. 32. it has been determined, that to bring pajments made by a bankrupt, within the protection of the statute, they must be made in respect of goods sold, or bills drawn, &c. in the ordinary course of trade, as also without notice of an act of bank- ruptcy, and before the issuing of a commission. And therefore, in the construction of this act, it has been helil, where money had been paid by a trader, after a secret act of bankruptcy, to a carrier, for the carriage of the trader's goods, that the payment was not within the statute, which was confined to payments made for goods, and payments of bills of exchange '. So where A. recovered a verdict for a sum of money against B., who afterwards committed an act of bankruptcy ; A., instead of entering up judgement and taking out execution, consented to take a bill for the amount drawn by B. on C. his debtor, which bill when it became due was duly paid by C. : it was held that this payment was nt»t protected by the statute *. But if a payment is made by a trader under an arreat, it has been held to be a payment in the usual antl ortlinary course of trade and dealing, and cuusequenlly witliin the ' Bradlev v. Clark, T) T. R. 197. "* Pinkerton v. Marshall, 2 iien. Bl. 334. protection 528 Of Bankruptcy . — Of the general Effect ofBankniptviJ. protection of the statute, although siicli payment was' made after he had committed a secret Ziti of bankruptcy '. And so wil! a payment made immediately to a creditor, >vho brings an officer with a writ into the trader's shop ^ But it ap})cars that the act extends only to payments made by the bankrupt himsdr, or his authorifced agent ; and not to pnyments made by a third person upon com- pulsory process, or for the accommodation of the bankrupt. And tlierefore payment by a garnishee of money attached in his hands, is not protected l)y the statute ^ As to the efftict of bankruptcy on bills of exchange and promissory notes, it has been held, that if a bankrupt, be- fore, liis bankruptcy, assign to a creditor a debt or bill of exchange or note, for a valuable considerati(m, the assign- ment is protected by the statute of the 19th George the Second-*. So if a trader, after a secret act of bankruptcy, indorse a bill of exchange to a creditor, payment of such bill before a commission is issued against the trader is within the statute '. And if a bill or note be not capable of de- livery at the time, a transfer of it without delivery will be binding upon the assignees, provided notice of the assign- ment be given to the debtor ^. But to render this effectual as a payment in the usual course of trade within the statute, the bill, &c. must, as soon as it is capable of a de- livery, be delivered ; otherwise, if it remains in the hands of the bankrupt, his assignees will be entitled to it'. But if the holder of a bill of exchanjre give time to the acceptor, upon condition of receiving interest:; payment of the bill after a secret act of bankruptcy has been de- cided not to be stjch a payment in the ordinary course of business as to come v.ithin the meaning of the statute*. ' Holmes v. ^Vinni^s:ton, cited in 2 Bo?, and Piil. 398. ^ Jones V. l.ing^aid. Ibid. 3 Hovil v. Browning,? East's Rep. 134, « Graffe v. Greffiilhe, 1 Camp. N. P. C. 89. s Hawkins v. Penfold,2 Ves.550. <= CiiUe*), B. L. 189. " Jones V. Gibbons, 9 Ves. Jun. 410. « Vernon v. Hall,'2 T. R.648. So Of Banhiiptcy . — Of the general Effect of Bankruptcy . 529 So where bankers having accepted bills for the accommo- dation ot" a trader, who after committing an act of bank- ruptcy, bnt before a commission was sued out, lodged money with them to take up the bills, which did not be- come due till after the commission was sued out, and then were rcge.larly paid by the acceptors ; it was held they were bound to refund tlie money which the bankrupt had lodged with them, and that they neither had a right of set-off under the 5th Geo. II. c SO. nor could they protect thon- sclves under the 19th Geo. if. c. 32. as having received the money in payment of bills of exchange in the ordinary course of trade '. And if a banker, after notice of an act of bankruptcy committed by his customer, pays his draft ^, or pays over any money to the bankrupt himself^, the assignees may recover the money ; and he cannot set off such payment, nor be allowed to receive a dividend under the commission in the place of tlie creditor whose debt lie paid, although such creditor's debt M'ould have been proveablj under the commission •*. As to payments made to a bankrupt, it has been decided, that if a trader after a secret act of bankruptcy consign goods to a factor, who agrees to advance money theieon, and accordingly accepts and pays bills drawn on him by the trader for their amount ; the assignees of the bankrupt may recover from the factor the value of the goods j because the accepting and payment of the bills is not a payment of goods sold widiin the meaning of the statute '. So if a broker, liaving goods of a trader under arrest in liis possession for the purpose of sale, receives notice from the attorney of the future assignees not to sell ,them, as a ' Tamplin v. Di!iirins,'2 Camp. N. i^. C 312. ' Vernon 7. Huniioy, 2 T. !{. Cooke, B. L. 151. s 49 Geo. III. c. 121. s. 2. order Of Banlmiptcy.—Of Proof of Belts: 537 otder for the sale of; after v»hich he may be aduiitted to prove for the deficiency '. So if a creditor abroad has by attachment or other process obtained a priority of payment out of the bankrupt's effects there, before he can be admitted to prove, he must abandon the priority lie has obtained ^. And if a creditor by a demand partly proveable, and partly not proveable, as from having been paid after the bank- ruptcy, has a security, he may apply it to the demand not proveable under the commission, and may be admitted a creditor for the proveable demand K But if a creditor has a joint security fn>m the bankrupt and another person, he is not obliged to deliver up the se- curity ; but is entitled to receive dividends under tiie com- mission for such part as he may not have recovered from the co-security, provided that he does not receive more than twenty shillings in the pound upon the whole debt ^. A creditor who has a mortgage, or a pledge, if he is ap- prehensive that the security is not equal to the payment of his debt, may have the pledge sold. But the commissioners cannot order the property mortgaged or pledged to be sold, but upon an application of the creditor ; for they have no power to dispose of a creditor's security without his con- sent. If a security is deposited by a debtor generally to indem- nify his creditor for a balance then due, and tor such sums of money as shall be advanced to him, and at the time of the bankruptcy of the debtor the creditor has two demands, the one proveable under the commission, and the other not; he may apply his security, in the fiist place, to reduce that demand which is not proveable under the commis- sion K ' Ex parte Trowfon, Cook^, B. L, 124. * Ex parte Lc Mesurier, 8 Yes Juii.8i. s Ex parte Htin.er, 6 Yes. Jun. 94. -* Ex parte Bennct, 2 Atk. 527. 5 Ex parte iluntcr, 6 Yes. Jun. 9-i. Of 538 Of Bankruptcy. -^OfVroof of Delis. Of Creditors by Annuities, 15y the statute 49 Geo. III. c. 121. s. 17. it is enacted, that it shall be competent to any annuity creditor of any per- son against whom a commission of bankruptcy shall issue after the passing of this actjwhetJier the annuity shall be se- cured by bond or covenant, or bond and covenant, or by what- ever assurance or assurances the same shall be secured, or whe- ther there shall or shall not be or have been any arrears of such aimnity at or before the time of the bankruptcy, to prove un- der such commission as a creditor for the value of such an- nuity, which value the commissioners shall have power and are hereby required to ascertain ; and the certificate of every bankrupt under whose commission such proof shall be or might have been made, shall be a discharge of such bank- rupt against all demands whatever in respect of such an- nuity, and the arrears and future payments thereof, in the same maimer as such certificate would discharge the bank- rupt with respect to any other debt proved, or which might liave been proved, under the commission. Of Creditors hy Partner skip. As all the s'ock and effects of the partnership are vested in all the partners, subject to their respective rights against each other, each partner is to be allowed against the other whatever he has advanced or brought into the partnership, and to charge his copartners with what they have not brought into, or have drawn out of the partnership funds beyond what they were entitled to. l^herefore, where one partner is indebted to the firm of which he is a member, there is no doubt but that, if the firm continues solvent, they, or in case of their insolvency their assignees, may prove under a sepa- rate coniniission against their copartner a debt due to them by Of Bankrvptcy.—Of Proof of Belts. 339 by him'. But if the firm is called upon, after the bank- ruptcy of their copartner, to pay more than their share of the partnership debts, they cannot prove such debt under the commission ^ Where, hou ever, tlie firm is indebted to one of the part- ners, he cannot be a creditor upon the same footing and in competition witli tlie joint creditors ; he can only have sa- tisfaction out of (he surphis which shall remain after the joint creditors arc paid K And in case of such partner's insol- vency, the law is the same with respect to the assignees ; they can be admitted to prove on the surplus only 4. If money is paid by a solvent partner to another, who afterwards becomes a bankrupt, for the purpose of being paid over to creditors as his liquidated share of the joint debts, arid the bankrupt partner does not apply the same for that purpose, the solvent partner may prove the amount under the commission against his bankrupt partner ; and that al- though the solvent partner did not pay tiie debts to the joint creditors until after thi; bankruptcy ^. Where one partner has, either with or without the con- sent of his copartner, taken more than his share out of the partnership funds, the joint creditors cannpt be admitted to prove against the separate estate of the partner who drew out the money, until his separate creditors are satisfied ; unless it can be shown thiit such partner took the joint property with a fraudulent intent to augment his separate estate ^\ Where there are several partners constituting one firm, and some of them carry on a distinct trade, and in such character deal with and become creditors of the other firm, • Craven v. Knight, 2 Chan. Rep. 926. " Wright V. Hunter, 1 Iiasl'.s Kep. 20. s Ex parte Hunter, I Atk. 227. ^ Ex parte Burrell, Jan. 29d, 17S3 s .5 Ves. Jun. 79i;. « Lx parte Batson, Cooke, IJ.L. 334. Ex parte Cust, Ibid. 535. and 5 40 Of Bankruptcy.— Of Proof of DehLs. and a joint commission issues, proof may be made of such debt as if they dealt with strangers'. But if the concern carried on by one partner is merely a branch of the joint concern, proof will not be per- mitted \ Of Apprentices. An apprentice is only entitled to come in as a creditor under the commission for the residue of the premium paid to his master, after deducting a proportionate part for the time he lived with the bankrupt '. Of Creditors by Award, Bonds, Bills of Exchange and Promissory Notes, or Delts payable at a future Day. If an award be made before bankruptcy, it creates a debt at law which may be proved under the commission -*. A cj-editor by bond is entitled io prove liis demand against all the parties to it, and io receive dividends upon the whole Slim from each estate, until he receives twenty shillings in the pound. But if he has received any part of the debt before he proves under the commission, he can only prove and receive dividends for the residue due to him ^ By the statute 7 Geo. I. c. SI. s. 1. bills of exchange and promissory notes,'although not due and payable at the time of issuing a cormnission, are proveable und<.r it, de- ducting a rebate of interest after the rate of five per cent, per ann. for what the creditor shall receive, to be computed from the actual payment io the time such bills, &c. would have become due and payable. But bills founded on an usurious or other illeg il conside- • Ex parte Jolms Cook'^, B. L. 538. Ex parte St. Baibe, 11 Ves. Jun. 413. » Ex parte St. r.nrbe, 11 Ves. Jun. 413. 3 Ex parte !?;inlh/, 1 Atk. 149. •» Bakers case, 2 Str. 1152. 5 Ex parte V. ilJman, 1 Atk. 109. ration, Of Bankruptcy, — Of Proof of Belts. 541 ration ', or on an illegal contract^, if defective us to form% or invalid as to the mode of acceptance or transfer ■♦, are not provcahle under a commission. So if the liold<'r of a bill has been guilty of such laches or conduct as would have discharoed the party at law if he had continued solvent ^, or that the statute of limitations has begun to operate on the bill '^, he is equally precluded from proving under a commission. But where the consideration of a bill is partly ba:d and partly good, the bill to the extent of the good consideration may be proved under a commission ". And where a bill ffiven for an antecedent debt is invalid on account of iisury, or otherwise, the antecedent debt may be proved under a commission^. Where there are several parties to a bill of exchange or promissory note, the holder is entitled to prove against all the parties to it under their respective commissions, and to receive dividends under eacli commission upon the whole amount, until he has received twenty shillings inthepound^; or such holder may prove it under one or more commis- sions against some x)f the parties, and proceed at law against the others •°. And if the holder, after having proved the whole amount of the bill, receives a part of the amount from any one of the parties to it, he is nevertheless entitled to re- ceive dividends upon tlie whole bill from the estates of the other parties, provided such dividends do not exceed twenty shillings in the pound upon the remainder of the bill". But if he has received any payment or composition pre- * Ex parte Skip, 2 Ves. Jnn. -189. Ex parte Mather, ?? Thid. 37'?, * Ex parte l}iilnifr, l.> Ibid. '?>\:i. * Ex parte Adney, Cowp. 460. l 74. » Ex part,- Marsh, I Atk. 158. 3 I Soh, and l.( f. Rep. Wi. Ss Of 546 ^ Of Bankruptcy.— Of Proof of Dells. Of Creditors by Joint Debts. It is an establislied rule, that a cndilor cannot prove against the joint estate of two bankrupt partners, and also against the separate estate of one of them, although he has distinct securities'. But he must make an election against Tvhich estate he ^vill come in upon in preference ; for he cannot prove against both estates so as to receive dividends at the same time'. When however he has made his elec- tion, if there should be a s'arplus from the estate wliich he rejected, he may come in upon that surplus^. But though a creditor having distinct securities is obliged to make an election against which estate he will prove in preference, yet he is entitled to a sufficient time to examine the state of the different funds'*; and may defer such election until a dividend is declared ^ And even if he has received a dividend, the court will permit him to change his proof on refunding the dividend received''. But if the creditor has elected to proye under one estate, and a divi- dend has been made upon the otiier, the court will not per^ mit the dividend to be disturbed'. When the credit has been joint, the creditor may be ad- mitted to prove under a commission against the joint estate, notwithstanding he has taken a separate security^. And if money is lent on th6 separate notes or bills of dif- ferent partners in the same firm, and is applied to the use of the partnership, the creditor may be admitted to prove against the joint estate, if the firm, when solvent, agrees to ' Ex parte Boiibonus, 8 Vcs. .Tun. 542. « Ex parte Banks, 1 Atk. 107. ? Ex parte Rowlandson, 3 P. Wms. 405. Ex parte Hay, J5 Ves. Jiin. 4. * Ihid. * Ex parte Clowes, 2 IJro. CiC. .'iQS. ^ Ex parte Rowlandson, 3 P. AVms. 405. 7 Ex parte Beilby, 13 Ves. Jun. 70. * Ex parte Brown, cited in Ex parte Hunter, 1 Atk. 225. consolidate Of Bankruptcy. -^Of Proof of Belts. 547 consolidate tlie debts, aud to consider tlicm us partnership debts'. So, on the other hand, v/lien the credit lias been separate, the creditor may be admitted to prove against tlie separate estate, notwitlistanding he has taken a joint security ^ Where new partners are admitted into a firm, and the debts of the old firm are, with the consent of the new part- ners, acknowledged to be the debts of the new firm, on the bankruptcy of the new partnership the creditors of the old firm may prove as joint creditors of the new^. If a partner, with the privily or consent of his copartners, apply to the purposes of the partnership money with which he is separately intrusted, (as money intrusted to him as aa assignee under a commission of bankruptcy,) the debt may be proved against the joint estate, under a commission after- wards issued against the firm. But if money so separately intrusted has been applied to the purposes of the partner- ship without the consent or privity of the copartners, the debt can be proved only against the separate estate^. If a partner signs the partnership signature to an instru- ment for his own private use, and the party taking it is aware of the transaction, he can only prove against the separate estate of such partner, unless his copartners adopt his act by a subsequent approbation'. When the same partners are concerned iti different trades, and the paper of one firm is given to t!ie creditors of the other, such creditors have been permitted to take dividends from both estates^. ' Kx parte Clowes, 2 Bro. C. C. 595, ' Ex parte Lobb, 7 Ves. Jun. 59^. , 3 In re Staples and Co. Cook*-, C. L. 5S3. « Kx parte Apsev, 3 Bro. C. C. y65. » 8 Ves. Jun. 540. • Ibid. 2 N 2 Of 5i8 Of Bankruptcy .^Of Proof of Belts. Of Creditors by Marriage Articles. In questions whether the wife of a bankrupt, or her trus- tees, shall be admitted to prove money settled by marriage articles under a commission against the husband, it has been held, that if the debt was from its nature contingent and uncertain, and the contingency Iiad not taken place at the lime of the bankruptcy, it cannot be proved under the commission. Therefore, wliere a husband, by articles pre- vious to marriage, covenanted, in consideration of marriage and a portion, to leave his wife a sura of money in case she survived him, and he became a bankrupt, it was decided that such a debt was not proveable under the commission '. And where the contingency, as the death of the husband, has taken place after the bankruptcy, but before any distri- bution made of his estate, the wife or hrr trustees are not entitled to a dividend. In cases however of this nature, the €Ourt generally recommends the creditors to make some pro- vision for the wife*. Of Creditors ly Rent. "While the goods remain upon the^remises a landlord is entitled, notwithstanding a tenant becomes a bankrupt, to distrain for the whole arrears of the rent due to hi^i. And though the messenger is in possession, if no assignment is raade ' ; or if the assignment is made, and the assignees are in possession, the landlord's right to distrain still exists while the goods are on the premises ■♦. And even after assignment and sale by the assignees, if the goods are not removed, the landlord may distrain for his whole rent \ But if the goods have been sold by the assignees, and ' Ex parte Croome, 1 Atk. \\^. ^ Ex parte Grecnaway, 1 Atk. 113. 3 Ex parte Jacques, cited in Ex parte Pluintner, 1 Atk. 101. ♦ Ex parte Dillon, Ibid. 5 Kx parte Plsnimcr, 1 Atk. 103. taken Of Bankruptcy. ^Of Proof of Belts. 549 taken off the premises, the landlord loses his remedy by di- stress, and can only come in under the commission pro rata, with the rest of the creditors '. If a landlord distrains for arrears of rent, and also proves his debt under the commission, he must be put to his elec- tion to waive his proof or distress ^. But whether a land- lord's rig-ht to distrain for arrears of rent is barred by prov- \ng the debt under the commission, has not been deter- mined, altiioug-h the worclsof the shitulc 49 Geo. III. c. 121. •earn sufficiently comprehensive for Ihat purpose. Of Sureties. As to the proof by a surety \v!io has no counter security to indemnify him, it is provided l>y the statute 49 Geo. III. c. 121. s. 8. that " in all cases of commissions of bankrupt already issued, under wiiich no dividend has yet been made, or under wliich the creditors, who have not proved, can re- ceive a dividend equally in proportion to their respective debts without disturbing' any (iividcnd already made, and in all cases of commissions oi" bankriipfs licreafter to be issued, where at the time of issuing the commission any person shall be surety for, or be liable for any debt of the baidcrupt, it shall be lawlnl for such surety or person liable, if he sliall have paid the debt, or any part thereof in discharge of the whole debt, although he may have paid the same after the com- mission shall have issued, and the creditor shall have proved his debt under t!ie commission, to stand in the place of the creditor as to the dividends upon such proof; and when the creditor shall not liave provetl under tlie commission, it shall be lawful for such surety, orpersoii liable^ to prove his demand in respect of such payiuenl as a debt uiider the commission, not disturbing the tbrmer dividends, and to receive a divi- * Ex parte Descharmes, 1 Atk. 103. ' Ex parte Grove, Ibid- lO?, deud 550 Of Bankruptcy .—Of Proof of Belts, liend or dividends proporlionably with the other creditors taking the benefit of such commission, notwithstanding such person may have become surety or liable for the debt of the bankrupt after an act of bankruptcy had been commided by such bankrupt, providecl that such person liad not at the time when he became such surety, or when he so be- came liable for the debt of such bankrupt, notice of any act of bankrupfcy by such bankrupt committed, or that he was insolvesit, or had stopped payment ; provided always, that the issuing a commission of bankrupt, although such com- mission shall afferwards be superseded, shall be deemed such notice ; and every person against whom any such com- mission of bankrupt has been or ijhall beaAvarded, and who has obtained or shall obtain his certificate, shall be dis- charged of all demands at the suit of every such person hav- ing so paid, or being hereby enabled to prove as aforesaid, or to stand in the place of such creditor as aforesaid, with regard to his debt ifi respect of such suretyship or liability, in like manner to «i!l intents and purposes as if such person had been a creditor before the bankruptcy of the bankrupt for the whole of the debt in respect of which he was surety, or was so liable as aforesaid." And if a creditor has proved tlie wliole debt before he called upon the surety, the surety, or (in case he too has become a bankrupt, and his estate has paid dividends on account of the principal,) his assignees are entitled to have the benefit of his proof, and to receive dividends upon it '. And to enable the surety to have the benefit of the statute, on his bringing tlie money into court, he may on a bill filed for thai purpose compel the creditor to prove for his benefit^ ; which if the creditor should refuse to do, the court will stay hb proceedings against the surety until he complies '. • Ex parte RyKwirhe,2 P. Wins. 89. Ex parJi* 'I'rrncr, ,'i Ves. Jim. 2'13. ^ W right V. Simpson, 6 ibid. 134. 3 Phiilips v. Smith, CooJco, Bi L. 21 1 . But Of Bankruptaj .— Of Proof of Dehts. 551 But fhis equity of the surety to stand in the place of the principal crerlilor, will not be permitted to operate to such creditor's prejudice : and therefore, -where such creditor has any other distinct demand upon tlie bankrupt's estate, it has been held, that any diminution of his dividends upon such debt, occasioned by the surety's standing- in his place and receiving dividends upon his proof, shall be made good to him by tlie surety out of such dividends '. If the payment of the surety be after the bankruptcy of the principal, and before the creditor has proved his debt, it cannot be proved either by the creditor or by the surety ; for the creditor cannot prove, because he cannot swear to any existing debt ; and the surety cannot prove, because his payment is after the bankruptcy *. Of Friendly Societies. For the encouragement and relief of friendly societies it is provided, by the statute oo Geo. 111. c. 54. s. 10. that if any person appointed to any office by any society regu- lated according to the provisions of this act, or being in- trusted with, or having in his hands or possession, any njo- neys or eflects belonging to such society, or any securities relating to the same, shall become a bankrupt, or insolyent, his assignees must, witliin forty da}s after demand made by the order of any such society, or the major part of them as- seml>Ied at any meeting thereof, deliver over all things be- longing to such society, to such person or persons as such society shall appoint, and pay out of the assets or effects of such person ail sucli suuis of money remaining due, which such person received by virtue of his said office, before any of his other debts are paid or satisfied. But this provision of the legislature, in preferring the ' Palcy V, Field, 1! Yes. Jun. A^d. ' Cooler, V>. L, 152. claim 532 Of Bunh upicy.^~0/ Proof of Debts. claim of fiicnilly societies to the claiin of all olhcr credKors, IS not favoured ' : for upon the construction of tlii.s act it has been decided, that the clause is confined to persons duly and formally a ppoinud oiliccrs ; and that it does not extend to a person to ^vhom fhe money of the society has been paid as a banker, or to whom money has l)cen lent l)y them upon security, bearing interest ^. And in ex y.nrie Stamford Friendly Society^ it was held, that tlic jjreference given to frirndly societies by the statute of the JJd Geo. III. over other creditors was confined to debts in respect of money in the l-.ands of their officers, by virtue of their offices, and in- deper.deut of contract; and that therefore money lent to a tre:-.surer duly np])oiutecl, upon the security of his promis- sory note, payable with interest on demand, is not within the operation of the act, and therefore not entitled to a pre- ference. Of Interest. With respect to the proof of interest under a commission, it has been d< teiminecl, th.at where by the custom of a trade, after accounts settled, interest is payable after a certain cre-r dit, such interest is provcable under a commission against the de'jtor '. But it is a rule for the commissioners never, in any case, to compute interest upon debts lower than the date of the commission K And where the act of bankruptcy to which (he commission relates is ascertained, no interest is •allowed after that act^'. Where joioi and separate commissions have been issued, • Ex parte Ross, 6 Vcs. Jiin. 804. ' !x paiarte .-VDiicablp SociK-lv of Lancastrr, Ibid. 9y. ■5 J.T Ibid. 280. ♦ Ex parte Champion, 3 Bro. C. C. 436. F.x parte Kankey, 3 Bro. C. C, 501. Ex pane iMills. 2 Ves. Jim. 295. 5 Ex parte Brnnt-t, 2 Alk. 5^7. Butcher v. ChurchilJ, )4 Ves. Jun. 573. 6 Ex parte Moore, 2 Bro. C. C. 597. p.nd Of Bankruptcy. — Of Costs and Damages. 553 and an order oblained for keeping distinct accounts, neither set of creditors will be entitled to interest upon their debts out of the surplus, until the other set have received 20^. in the pound '. It has been decided, that note creditors arc not entitled io prove interest upon them, unless it has been expressly re- served in the body of the note, or that there is a special con- tract or agreement between the parties to that effect, or that it is the known and established cnstom to allow it^. But in all cases wlierc the bankrupt is entitled to a sur- plus, if there is an actual contract for intei'est appearing ei- ther on the face of the security, or by evidence, creditors will be entitled to it, up to the actual time of payment, without regard to the date of the commission ^ The difference upon the re-exchange of bills protested, and redrawn before the bankruptcy, or the costs and charges of protesting bills incurred before the bankruptcy, are prove- able uud^r a comu)ission'^. 13ut if incurred after the bankr ruptcy, they cannot in either case be proved, unless they are fixed at a particular rate, by express stipulation, or by the particular law of the country from which the bill is drawn \ Of Costs and Damages. From the cases on this head, it appears, that if a verdict has been obtained before a commission is issued, though judgement is not signed till after, the costs incurred in such action are provcable under the commission ^. • Ex parfp Riardman, Conke, B. L. \8\. ^ Kx parte Chaniiiion, .'J Bro. C. C. isd. Kx parte Jlankry, Thid. 504. E:? parte MiMs, '2 \ ls. Jun. 295. And see Parker v. Hutchinson, 3 Vcs. Jon. 134. 3 Kx parte Hankey, .3 Bro. C. C. 501. Ex parte Goring, I Ves. Jim. 170. And see Ex parte Hill, 11 Ibid. 654. Butcher v. Churchill, 14 Ibid. 373. * CuUen, B. L. 101, 102. 5 n,id, « 2 Bl. Rep. 1317. 1 Hen. Rl. 20. 3 Bro. C C, 46. 5 T. R. 365. 6 Ibid. -2b2. I Bos. and Pul. 131. But 554 Of Bankrnptaj,—Of Mutual Credit mid Set- off. But if a verdict and judgement be obtained after the bank- ruptcy, the costs cannot be proved as a debt under the com- mission'. If a demand in the nature of damages be capable of being liquidated and ascertained at the time of the bankruptcy taking place, so that a creditor can swear to the amount, he may prove it as a debt under the commission*. But if the damages be contingent and uncertain, as in cases of torts, and in many cases of demands founded upon contracts, whicli are unccitidu both as to their amount, and whether a jury will sfive any damages, they cannot be proved under a commission ^ 11. Of Mutual Credit and Set-off. By the statute 5 Geo. II. c. SO. s. 28. it is enacted, that where it shall appear to the commissioners, that there has been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners, or the major part of them, or the assignees of such bankrupt's estate, shall state the account between them, and one debt may be set against another ; and what shall appear to be due on either side on the ba- lance of such account, and on setting such debts against one another, and no more, shall be claimed or paid on either side respectively. And by the statute 46 Geo. III. c. 135. s. .?. it is enacted, that in all cases where there has been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, one debt or demand may be set off against another, notwithstanding any prior act of bankruptcy committed by such bankrupt before the credit * Ex parte Hill, 11 Ves. .Tun. 64fi. » Johnson v. Spilter, Doiig. 167. 3 3 Wih.272. Doug. Se-i. 6 T. R. 695. Ibid. 483. 1 H. Bl.'iG. was Of Banktuptcy.— Of Mutual Credit and Set-off. 555 Tvas given to, or the debt was contraclej by such bankrupt, in like maTiuer as if no such prior act of bankruptcy had been committed : provided such cr*^dit was given to tlie bankrupt two CMlendar months before the date and suing forth of sucli commission, andprovided the person claiming the benefit of such sot-ofi' hfid nut, at the time of givincr such credit, any notice of aiiy prior act of bankruptcy by such bankrupt committed, or that he was insolvent, or had stop- ped, payment. It has been htld, that the statute 5 Geo. II. relates not only to mutual debts, but also to mutual credits. And in the construction of tliis act, as aiso the 46th Geo. III. it has heea determined, that no debt or credit can be set against another by way of set-ofF, unless both respectively accrued or were given before thebardiruptcy, or two calendar months before the commission where there has been a second act of bankruptcy '. Thus where bankers having accepted bills tor the accommodation of a trader, who afjer commitlingan act of bankrupty, but before a commission was sued out, lodged money with them to take up the bills whiclj did not become due till after a connnission was sued out, and were then regu^ larly paid by the acceptors ; it was held that the bills coidd not be set off under the statute, but that the acceptors were bound to refund the money to the assignees \ Neither can a debt contracted after notice of an act of bankruptcy be set off"^ Nor can a bill or note inJ.orsed to the claimant after the bankruptcy •♦. Jkit a creditor on a bill or nole of the bankrupt's indorsed to him before the bankru[)tcy, may set itolf against a debt due from him to the banla-ipt for goods bought after the indorsement, aiul also before die bank-; ruptcy '. So an accommodation acceptor, who has been ob- ' (ullrp, l')7. 2 Tainplin v. Digi?.-ng, 2 Camp. iS. P.C. 313. 3 Ua« kin^ V. I'rnfiilii, 2 Ves. .hill. 5."iO. * Dkiiion V. Kvan.^, 6 T. R. 5". ^ IlanLev v. Smith, 3 T. R. 507. liyed 5j6 Of Bankruptcy,' — Of the Dividend, liged to pay his accoptKince after the bankruptcy of the party :\vhoni he accommoda Ex partp Stilps and Pickart, 1 Atk. 208. • Cooke, Ekpt. Laws, 521. ^ 3 Geo. II. c 30. s. 2, Bat 560 Of Bankruptcy, — Of the Conduct (ftlie Bankrupt. But by the third section of the same statute, the Lord Chancellor, or the person hoUling the great sea!, may en- Luge the ixmt for the surrenth'r, &c. for any term not ex- ceeding fiOy days from the expiration of the said forty-two days, by an order made at least six days before the time on Mliich (he bankrupt was to surrender. The omission to surrender must be \vilful, to make it felony'. And therefore if the bnnkriipt is prevented from surrendering by illness ^, or makes an at/empt fo surrender % it M'ill be a goocl defence if he shouKl be tried for felony . Where tlierc does not appear any intention in the bank- rupt of defrauding his creditors by not appearing within the time appointed, and when his absence proceeds rather from an ignorance of the consequence, or from accident, the Lord Chancellor Mill supersede a commission to prevent a prosecution for felony in not surrendering •*. After Ills surrender he is required by the statute 5 Geo. IL c. 50. s. IG. to attend the commissioners at all times till his affairs are finislied, (o be examined touching all matters relating to his trade, dealings, estate, and effects. The fourth section of the same statute also compels liim to attend the assignees upon every reasonable notice in writing f )r that purpose given by such assignees, or left for him at his house or place of abode, in order to assist snch assignees in making up, adjusting, or settling, any ac- count or accounts between such bankrupt and any debtor lo or creditor of his estate. He is moreover obliged to at- tend any court of record in order to be examined touching the same, or for such other business which such assignee shall adjudge necessary for getting in the bankrupt's estate for the benefit of his creditors. And in case of contumacy " F.x parte Rofrrrs, Amhl. 307. " Kx nnrlp Rickctts, 6 Vrs. .Jiin. 415. 3 Ex purte Cirey, 1 Ves. Jun. 195. ])x parte llijrginson, I'J ibid. 496. * lix parte Wood, 1 Atk. 2-22. or Of Bankruptcy . — Of the Bankrupt's Priuilege. 561 or that the bankrupt neglects or refuses to attend, or on such attendance shall refuse to assist in such discovery, "without good and sufficient cause to be shown to the com- missioners for such neglect or refusal, to be by thern allowed as sufficient ; the commissioners are empowered to commit the bankrupt until he sliall conform to their satisfaction '. After the time allowed to the bankrupt for the discovery of his property is expired, any person who shall voluntarily discover any part of the bankrupt's estate not before known to the assignees, either to the assignees or to the com- missioners, shall be allowed hi. per cent, upon the pro- perty discovered, and such further reward as the assignees and major part of the creditors at the next meeting shall think fit. And any trustee, wilfully concealing the real or personal estate of the bankrupt, who does not within forty-two days after the issuing of the commission, and notice given in the Gazette, disclose his trust aud estate in writing to one of the commissioners or assignees, shall forfeit 100/. and double the value of the property concealed, to be recovered by action of debt in the name of the assignees *. His Privilege from Arrest. A bankrupt is free from all arrests, restraints, or impri- sonment of any of his creditors in coming to surrender, and from his actual surrender to the commissioners, for and during the forty-two days, or the further time for finishing his examination, provided he was not already in custody at the time of his surrender and submission to be examined ; and if when coming to surrender he is arrested for debt or on an escape warrant, or if after his surrender he is so arrested within the time before mentioned, then en provlu- 1 Sect. 36. "^ 5 no<-. II. r. 30. s. ?0,2'. 2 o cing 562 Of "Bankruptcy, — Of the Bankrupt's Examination. cing the notice or summons under the hands of the com- missioners or assignees, and making it appear to the officer that such notice is signed bj the commissioners or assignee?, and giving him a copy thereof, he shall be immediately discharg-ed. In case the officer shall, after such production and notification, defcun the bankrupt, he is liable to a \)€- nalty of ol. for every day's detention '. And if, after the bankrupt has passed his final examina- tion, he is summoned by the commissioners to attend them on declaring a dividend, he is entitled to the privilege ^. But he is not privileged from arrest by virtue of an ex- tent, even Avhilst under examination, for the crown is not bound by the bankrupt laws ^ Neither is he entitled to the privilege, if taken by his bail while ur.der examination; for the statute 5 Geo. II. c. 30. E. 5. expressly excepts the case where a bankrupt is in custody at the time of his surrender and submission •*. A bankrupt is entitled to the privilege, although the debt upon which he is arrested is not proveabie under the com- mission K And every mode by v/hich a creditor can arrest a bankrupt for a debt, whether in law or equity, comes within the protection of the bankrupt laws'". Of his Examination. By the statute 5 Geo. II. c, oO. in conjunctioTi with the statute 1 Jac. I. c. 15. the commissioners are empowered to examine tiie bankrupt on oatli, (or if a quaker on af- firmation,) as well by word of mouth as on interrogatories in writing, touching all matters relating to the trade, deal- ings, estate, books of account, effects, and such other things of the bankrupt, as may tend to disclose his estate or > 5 Geo. II. c. 30. s. 5. ' Arding v. Flower, 8 T. R. 534. 3 Ex parte Oick, cited 2 Bl. R. 1 112. * Kx parte (Uhbons, 1 Aik. 238. 5 Darby v, B4ughan,5 T. K- 209, ^ \ Sch. and Let Rep. 169. transactions, Of Bankruptcy , — Of the Bankrupt* ^ Examination. 563 trausactions, as they think fit. By virtue of (he same sta- tutes tliey may lake down or reduce into writing the verbal cxainijwition of th<; bankrupt; which examination so taken down or reduced into wriling-, the bankrupt must siTi;m\cy v. Goodhfrr, 1 Atk. 15. / C^ippf-ndiile v. Tomlinton, Cooke, B. L, 4.31. « Silk V. Osborn, 1 i.sp. N. P. C. 140. ' Fo^lrr y. Down, 1 Hos. and Pul. 44. » Evans V. iirown, 1 Lip. M. P. C. HO. If Of Bankruptcy .— Of the Bankrupt's Rights. 567 If an uncertificated bankrupt assign after acquired pro- perty in trust for a valuable consideration, and a creditor of the bankrupt seize it in execution, the trustee may main- tain trover against him '. But if an jnicertificatcd bankrupt carries on trade, cither by himself or in partnership, the creditors under the first commission will be entitled to all the property he acquires until he obtains his certificate *. And therefore where an uncertificated bankrupt entered into trade in partnership with another person, and a joint commission issued against them, it was decreed that the creditors of the partnership bad no equity against the assignees under the first commis- sion, for an account, and application to their debts, of the property used or acquired in tliat partnership K Of the Lial'ility of the Bankrupt on a new Contract or Promise. Though a bankrupt is discharged by his certificate from all debts due at the time of the commission, yet he may make himself liable on a new promise, or fresh contract en- tered into bona fide without fraud or imposition, after aij. act of bankruptcy, even before •♦ or after he has obtained his certificate' ; and such new contract or promise will be valid and binvHng, though there should not be any new cou- sideration''. But a promise made by the bankrupt subsequent to ob- taining liis certificate, will not revive the old debt, if the con- sideration of the debt is fraudulent ; as where the bankrupt promises to pay the creditor a certain sum in consideratioa that he will not come under the commission " ; or where the ' Larocho V. Wakoman, Po.ike's N. P. C. 140. ^ \.x part? Proiidf.Mif, 1 Atk. •Q^\. Kx pane Crew, 16 Ves. Jun, 236. 3 Fvpn tt V. Uarkhousp, 10 ibid. 94. * Truotnnn v. Fent;>n, Ccvvp T's''!. ' Ibid. « Cullcn, B. L. 3«6. ? Colls v. Lovell, I Esp. N.P.C 282. bankrupt, teS Of Bavkrtiptcy .—Of the Certifcate. bankiupf, to induce his creditor to sij^n a composition deed, gave liim a promissory note for the residue of the demand '. IS. Of the Cerlficaie. Of the Signing of the Certificate. By tlie fctatutc 49 Geo. III. c. 121. s. 18. it is enacfc'd, timt '' in all cases of commissions of bankrupt heretofore issued, and in wliich the bankrupts have not obtained their rerlific;;tesj ami in all cases in which commissions of bankrupt shall liereaftcr be sued forth, the signature and consent of three j)ar(s in five in number and value of the cre- difois of tlie bankrii])t or bankrupts, who shall be creditors for not less than 20/. rcspedively, and who shall have duly proved their debts under the commission, or some other per- son by them duly authorized thereunto, to the allowance and certificate and discharge of the bankrupt or bankrupts, sliall be, to all intents and purposes, as available for the be- nefit of the baidirnpt or bankrupts as before the passing of this act the signature and consent of four parts in five in number and value of such persons would have been available, a: id such signature and consent of three parts in number and value of such persons shall be sufficient to authorize all acts to be done by the lord chancellor, lord keeper, and lords commissioners of tlie great seal, and the commissioners in such commissions of bankruptcy, and all others, for the be- nefit of the bankrupt or bankrupts, which under any prior act or acts of parliament would have been authorized by the signature and consent of four parts in live in nujuber and value of such persons." Creditors were formerly entitled to proceed at law for their debts, and to prove under the commission for the purpose of assenting to or dissenting from the certificate. JBiit by • CockihoU V. Beirnet, 2 T. R. 763. the Of Bankruptcy. — Of the Certificate, 569 the fourteenlli section of the above statute, a creditor prov- ing a deot under a commission for any purpose whatever, or liavmg a claim of a debt entered upon the proceedings, is to be deemed an election by the creditor to take the be- nefit of the commission with respect to the debt so proved or claimed by him. By the statute 5 Geo. II. c. SO. s. 7. if theplaintiif in am action against the bankrupt can prove the certificate was obtahied unfairly and by fraud, or that any concealment has been made by the bankrupt to the value of 10/., the cer- tificate will be of no avail to the bankrupt in such action ; and by sect. 1 1. every bond, bill, note, contract, agreement, or other security whatsoever, made or given by any bank- rupt, or by any other person, unto or to the use of, or in trust for any creditor or creditors, or for the security of the payment of any debt or sum of rnoney due from such bank- rupt at the time of his becoming bankrupt, or any part thereof, between the time of his becoming bankrupt and such bankrupt's discharge, as a consideration, or to the in- tent to persuade him, her, or tljem to consent to or sign any allowance or certificate, is void ; and the moneys thereby secured, or agreed to be paid, are not recoverable. Upon this act it has been decided, that an agreement made by the friend of the bankrupt, to induce creditors to sign his certificate, is void ' ; and that if money is actually paid by a third person to induce a creditor to sign a bankrupt's certificate, it may be recovered back in an action for money had and received ^. If such agreement should be made with the bankru})t's privity before the actual allowance of the certificate, the certificate will be void '. By the 10th section of 5 Geo. II. a bankrupt is not en- titled to the benefit of the certificate, unless before its allow- ' Holland v.Pal.-ncr, I Bos. and Pul. 95. " Smith V. Bromlev, Dou^. G9fi. J E.\ parte Butt, 10 Yes. Jun. 359. ance 570 Of Bankruptcy .^Of the Certificate. Since he m;\ke oath, or, if a Quaker, solemn affirmation, \ii wriiin^, that euch ccrtilicatc and consent of the crcditorB thereunto were fairly obtained and without fraud. By the statute 24 Geo. III. c. 57. s. 9. " If any person sliall fraudulent ly swear or depose, or, being of the people called Quakers, afiirni, before the major part of the commis- sioners named in any commission of bankruptcy, or by affi- davit or aflirmation exhibited to them, that a sura of money is due to him or her from any bankrupt or bankrupts, which shall ill fact not be really and truly so dnc or owing ; and shall, in respect of such fictitious and pretended debts, sign his or her consent to the certificate for such bankrupt's dis- charge ftora his debts ; in every such case, unless such bankrupt shall, before such lime as the major part of the said commissioners shall have signed such certificate, by writing by him to be signed and delivered to one or more of the said commissioners, or to one or more of the assignees of his estate and elfects under sucli commissioners, disclose the said fraud, and object to the reality of such debt, such certificate shall be null and void to all intents and purposes, and such bankrupt shall not in that case be entitled to be dis- charged from his debts, or to have or receive any of the be- nefits or allowances given or allowed to bankrupts. 0/ the Effect of the Certificate. The certificate of a bankrupt discharges him from all debts proved or proveable under the commission ', and that w he- tlu^r jijint or separate ^. But a bankrupt's certificate does not discharge him fiom a debt due to the crown ^ ; nor from an express collateral covenant, which does not run with the land-*; nor from a covenant or agreement for non-payment of rent, or for ar- ' 5 r,co. II. r.SO. 46f;eo. III. C.S5. 49 Geo. III. c. 121. 2 Ex parte Yale, 3 P. Wnis. 9,b. i I Atk. 'IQi. * Mayer v. bitcward, i Bur. 2446. rears Of Bankruptcy.— Of the Certificate. bll rears accrued since the ban^ruplcy ' ; nor from an agreement for the support of an illegitimate child *. Neilhor will the certificate discharge a bankrupt wlierc it is in the power of the creditor to convert his demand into a tort. Thus if a bankrupt, to whom a bill has been delivered for the purpose of remitting the payment, when obtained, to his employer, discounts it at a loss before it is due, and embezzles the money, his certificate will be no bar to an action for the amount'. So if bills are deposited merely as a pledge, if the bank- rupt j)ledges Ihem as his own, he will, notwithstanding liis cettificale, continue liable for this tort'*. Neither is a certificate obtained abroad a bar to an action in this country, although at the time of making the contract the bankrupt resided a'broad in the country where he ob- tained his certificate, if the cause of action accrued here, and w:is to be executed in this country ^ But where the cause of action accrued abroad, and the contract M'as made there, a certificate obtained in the country ill which the cause of action accrued, or the contract was made, will be a bar to any action in this country''. The certificate of a bankrupt partner will not discharge his copartner ; but such copartner stands chargeable with and liable to pay the partner hip debts, and to perform the joint contracts, as if the bankrupt had not been discharged from them". The certificate, however, of such bankrupt partner will not bar his copartner who has been obliged to pay the partnership debts out of his own estate, from bring- ing an action against the bankrupt \o enforce payment of his proportion, even after he has obtained iiis certificated • Mills V. AurioU 4 T. R. 91. Bi)o» v. Wilson. 8 East's Rep. 311. ' MHIer V. Whiitpiibury, 1 Camp. N. P. C 4-.;B. 3 Parker v. Norton, 6 T. It. (iH,-). 4 Joliii>on ». Spiller, Dong. 167. * (^'••iii v. Korfe, 2 Hen. I?I. 553. * Potter V. I'nnvii, 5 l.astV R, jj. I'?t. 7 Jo Anne, c. 15. s.3. ' Wiight V. liuiiter, J Last's Tlep. isJO. By- 572 Of Bankruptcy.— Of the Certificate. By the sfatiilc 5 Geo. II. c. 30. s. 9. if any com- mission s]iall issue a|j;ainst any person who has been before discharged by virtue of the act, or compounded with his creditors, or delivered to ld, tliat the clause in the act being penal, it ought . -, of the commission, , of the assignees, 509. -, of the assigmiient, 515. -, of the general effect ot bankruptcy on the property of tiie bankrupt, and of others, 526. -, of the proof of debts under a commission of bank- ruptcy, 531. Barratry, 297. Bills of Exchan'oh:, — :"; , tlie nature and pro- perti. s of, 426. ■ ■ , the parties to, i'tS. -, the effect of deli- Vjcry of, 435. t.onof, 436. draw (,r, 439. -, the effect of altera- -, the ](jss of, 437. -, the liability of the ). -, the presentment for acceptance, 4i59. ■ , tlie acc;ptance, 410. , the liability and discharge of the acceptor, 444. -, the indorsement and transfer, 445. , j)resentmcnt for payment, 450. , payment o*", 454. , dishonour of a bill by noh-acccptance or non-pay- ment, and notice thereof, 459. ■ — , protest ot", 466. -, usmy upon, 475. -, interest upon, 479. -, etfect of bankrupt- cy npf)n,540. Bills of larlinu, 266. Bdls of sale, •■J.27. Blockade, 144. Bottomry and respondentia, 337. By-laws, 153. Capture, 137. , ill cases of insurance, ^95. Carri.^gk of Gooiis, , by land, 233. , by water, 238. , duty of the owner and master during the prepara- tion for, and tfie commence- ment of tlie voyage, 238. , duty of the owner and masterduring the course of the voyage, '239. , duty of the owner and master on the completion of the voyage, '240. , of tiie causes wliirh excu.se the owner and master,'24 1 . of the limitation and responsibility of the owner and master, M43. , of r.ie dissolution of contracts for the, 259. Ceutiuc.vi'e of Bankrupts, signing of, 568. , elFect of, 570. , itivuiidating, 573. Changing the ship, effect of^ in cases of insurance, 321. Charge upon trade, 16 1 Charges, in cases of agency, 406, Cheating, 171. Checks, 473. ClIASlTEU PARTIES OF AFFREIGHT- MENT. . the nature of, 260. , by wiiom they mav be executed, 261. ,of the Ubuul stipu- lations, 261 « P 578 INDEX. Charterparties of Affreightment, of die construction, 202. ■ , when tliey take their tfFtct and operation, '26S. -, of the rii;hts and duty of the charterer, 263. Clainiinii debts under a commis- sion of bankruptcy, 532. Combinations among artificers and victuallers, 175. Commencement of risk in insur- ance5t, 4;;8. ,nn iion-arccptancc, 440. • , on uon-puyinent, -134. , excused iiivint; imme- diate notice iu case of illness, 440. Hostilities, a suspension of all le- gal renudifs dui ini:;, 119. Ilushand, when liable for his wife's debts or contracts, 180 — 186. Idiot, lunatics, persons insensible, under duress, or attainted, con- tracts by, 186. Illegal voyages, ol3. contracts, 195—198. tradiuj^, 10.3. Immoral contracts, 199. Importation, 69. Indorsement ol' bills of exchange, 445. Indorsee, 4'2n. ludorser, 4i3. Indnltience, cjfcct of, in cases of bills of exchaoiie, 4-14. Infant, when his contracts are binding, 187. Ingrossioii, 173. Insolvency, effect of. in cases of bills of exchange, 5iO. IXSURANCE, , of the policy, 276. -, of the requisites of, ii77. 285. -, of the coustrnclion, — , what persons may be insured, 291. , what tilings may be insured, '293. , of losses, 294. • , of losses partial, ?>00 • , of losses total, '6Vo. Insurance, of adjustment, 302. , of abandonment, 303. — , of fraud, 306. , of seaworthiness, 3 12. -, of illegal voyages. 3 1 ti. , of prohibited goods, 316. , of wacrM- policies, 317. , of reas>-nrance and double assurance, 320. , of changing the slnp, 321. — , of deviation, 322. , of warrairtie?, SI'G. , of return of premium, 334. - ■ , of bottomry iind re- spondentia. 337. Intert'st, when allowed for tlie \ a- lue of t^oods sold, 1-21. , in cases of bills of ex- change, 479. • ,in cases of bankru))frv,55'2 , what insurable, 279. International law, 86. Joint commission, 505. debts, proof of, 5.J6. Judgements, eiFt-ct of, in relation to the act of bankruptcy, 531. Laches, in ca-es of bills of ex- change, 4S9, 462. - Lading, bill of, 2t;6. Landlord, his right in respect of rent under a commission, 548. Letieis, when a sufficient niem82 1 N D E X. Passage of mcrchanriize, 93. Payment of" ijoods, a 18. , when it may be dcmaiui- ed, 218. , in cases of agency, 420. , iu cases of guaraiueet>, 383. , in cases of barikruptcv, 526—530. — — , in cases of bills of ex- change, 454-. rerjury, under a commission of bankruptcy, 570. Perils of the sea, what, ?R0. Perfjiniance of a contract, what, 218. Petitions in cases of bankruptcy, 503. Petitioning:; creditor, 493. Petty avcraue, 346. Pirates, 280 Policy of insurance, 276. Post, reniittwjg or sending notice by, 457. Premium of insurance, 334. Preference of creditors, 49 1 — 521. PRTNCir.VL AND y\GENT. . , relation of, 391. , ajipouilment of an ai:enl, 391. -, extent of ijis au- thority, 393. , execution of his authority, 397 , dclermination of his authority, 398. -, his duties with re- ference to iiis principal, 398. -, his liabihties with reference to his principal, 400. — • , his rights wi'h re- ference to his prificipal, 406. , principal's nuhts and liabilities with reference to his agent, 411. jjrincipal's liabili- ties with reference to third per- sons, 416. i , principal's rights with reference to third persons, 419. aiicnt's rijihts with reference to third persons, 422. Principal and agent's liabilities with reference to third persons, 423. Principal and surety, 379. Procuration, authority to draw, ac- cept or indorse a bill or note, 430, 446, Prohihited goods, 153—155. 3 16. Promissory notes, 469. Presentment of Bills op Ex- change. for acceptance, 439. for payment, 450. Proof of debts under a commis- sion of bankruptcy, 531. of tiie time of proof, 532. of cLdiniii;: a debt, 532. of the mode of proof, 533. of the creditor's election, whether he will proceed at law, or prove under the conmrfssion, 534. of reducing and expunging proof of debts, 536. of costs and damages, 552. Protection of a bankrupt from ar- rest, 561. Protest of Bills of Exchavge. fornon-acceptance,467. — — — — for non-payment, 467. for better security, 468. Provisions, whpn contraband, 121. Provisional assignee, .^09. Provisional absignment, 509. Rc-a-^su ranee, 320. R« capture, 137. Receipt, given by ascnts, 419,420. — , wiietiier dcmandabie on payment of bills and notes, 458. Reducinsr proofs, 536. Re-exchaiiiie, 466. Regrating, 173. Release, -156, 459. Removal of assignees, 514. Remitting inoney by post, 457. Rem, under a commission of bank- ruptcy, 548. Renewe»i commission, 505. Requisites of a policy, 277. INDEX. 58S Reprisals, 14?. Kescinding contracts, 222. Respondentia, 337. 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