BOUGHT WITH THE INCOME FROM THE SAGE ENDOWMENT FUND THE GIFT OF Henrg HI. Sage 1891 A..MSH-'TILE CONTRACTS. Sect. 1. Who may be Parties to Mercantile Contracts . . .16 2. Of Infants 17 3. Of Married Women 20 CHAPTER IV. OP agreement and assent. • Sect. 1. Of tlie Legal Meaning of Agreement 26 2. What is an Assent 28 3. Of Offers giving Time 29 4. Of a Bargain by Correspondence 30 •5. What Evidence 'may be received in reference to a Written Contract 32 6. Of Custom, or Usage 34 CHAPTER V. OP consideration. Sect. 1. Of the Need of a Consideration . . . . . .38 2. What are Sufficient Considerations 39 3. Of Illegal Considerations . . . . . . ,42 4. Of Impossible Considerations ...... 42 5. Of Failure of Consideration 43 6. Of the Eights of one who is a Stranger to the Consideration 46 7. Of the Consideration arising from Discharging the Debt of another . . . , 46 iv CONTENTS. CHAPTER VI. OF SALES OP PERSONAL PKOPEKTY. Skct. 1. What constitutes a Sale . . . _ . . . .48 2. Of the Rights of Property and of Possession . . . 50 3. Of Delivery and its Incidents . . . . . ' . 55 4. , Of Contracts void for Illegality of Fraud . . . 60 5. Of Sales with Warranty . . . . . • .62 6. Of the Sale of one's Business 66 CHAPTER VIL OP STOPPAGE m TRAXSITV . . . . . . . . 67 CHAPTER VIII. OP GUARANTY . . . . . . . . . . .71 CHAPTER IX. OP THE STATUTE OP FRAUDS. Sect. 1. Of its Purpose and General Provisions . . . .75 2. Of a Promise to pay the Debt of another .... 76 3. Of an Agreement not to be performed wifhin a Year . .79 4. Of the Acceptance of a Thing sold . . ... .80 5. Of the Form and Subject-matter of the Agreement . . 81 CHAPTER X. OP PAYMENT. Sect. 1. How Paj-ment may be made 83 2. Of Appropriation of Payment 84 CHAPTER XI. OP negotiable paper; or notes op hand AND BILLS OP EXCHANGE. Sect. 1. Of the Purpose of, and Parties to. Bills and Notes . . 86 2. What is essential to a Negotiable Note or Bill . : . 89 3. Of the Consideration of Negotiable Paper . . . . 98 4. Of the Rights and Duties of the Maker . . . . 100 5. Of the Rights and Duties of the Holder of Negotiable Paper 101 6. Of the Rights and Duties of the Indorser . . . 116 7. Of the Rights and Duties of the Acceptor . . . .122, 8. Of Acceptance, or Payment, for Honor . . . . 125 CHAPTER XH. OP AGENCY. Sect. 1. Of Agency in General ' ., . ... . . . 126 2. How Authority may be given to an Agent . . . 127 3. Extent and Du^tion of Authority ... , . . 131 CONTENTS. V Sect. 4. Of the Execution of Authority 133 5. Of the Liability of an Agent 134 6. Of the Kiehts of Action growing out of Agency . . 135 7. How a Principal is affected by the Acts of his Agent . .137 8. Of the Mutual Rights and Diities of Principal and Agent 139 9. Of Factors and Brokers . 142 CHAPTER Xm. PARTNERSHIP. Sect. 1. What a Partnership is . 146 2. How a Partnership may be fcrmed 146 3. How a Partnership may be dissolved ..... 149 4. Of the Property of the Partnership . . . . 151 5. Of the Authority, of each Partner, and the Joint Liability of the Partnership . . . . . . . 152 6. Of the Remedies of Partners against each other . . .157 7. Of the Rights of the Firm against Third Parties . . 169 8. Of the Rights of Creditors in Respect to Funds . . . 160 9. Of the Effects of Dissolution . . . . . . 162 10. Of Limited Partnerships ... . . • . .164 CHAPTER XIV. OF ARBITRATION. Sect. 1. Of the Submission and Award . . . . . . 166 2. Of the Revocation of a Submission to Arbitrators . . 173 CHAPTER XV. OP THE CARRIAGE OF GOODS AND PASSENGERS. Sect. 1. Of a Private Carrier 175 2. Of the Common Carrier 177 3. Of the Obligation of the Common Carrier to receive and carry Goods or Passengers 180 , 4. Of the Lien of the Common Carrier . . . . 190 5. ■ Of the Liability of tlje Common Carrier . . . .191 6. Of the Carrier of Passengers . . . . . . 195 7. Of a Notice by the Carrier, respecting his Liability . .196 8. Of the Carrier's Liability for Goods carried by Passengers 198 CHAPTER XVI. OF LIMITATIONS. Sect. 1. Of the Statute of Limitations 203 2. Construction of the Statute . . . . ' . . 204 3. Of the New Promise . . . ' 206 4. Of PartPayment .208 5. Of the Promise of one of SeveralJoint Debtors'. . . 209 6. To whom the New Promise should be made . . • 210 7. Of Accounts between Merchants . . . . . .211. VI CONTENTS. 8. Of the other. Statutory Exceptions . .... 212 , 9. When the Period of Limitation begins .... 215 10. That the Statute does not affect Collateral Security . . 21 7 CHAPTER XVn, OF INTEREST ASD USURY. Sect. 1. What Interest is, and when it is due . . . . . 218 2. Of Money 219 3. Of a Charge for Risk or for Service 226 4. Of the Sale of Notes . 227 5. Of Compound Interest 231 CHAPTER XVHI. OF BANKRUPTCY AND INSOLVENCY. Sect. 1. Of the History of the Law of Bankruptcy . . .233 2. Of the Difference between Bankruptcy and Insolvency . 236 3. Ofthe Tribunal and Jurisdiction . . . . .239 4. Who may be Insolvent^ 242 5. Ofthe Proof of Debts . . . . . . .243 6. Ofthe Assignee , . . . . . . .248 7. What Property the Assignee takes . . . . . 250 8. Of the Discharge of the Insolvent 254 9. Of Foreign Bankruptcy or Insolvency .... 256 CHAPTER XIX. OF THE LAW OF PLACE. Sect. 1. What is embraced within the Law of Place . . . 261 2. Of the General Principles of the Law of Place . . 261 3. Of its Effect upon the Capacity of Persons to contract . 26S 4. Of the Place of the Contract . . . . . . 264 5. Of Domicile -. . . . . . . . . 267 CHAPTER XX. OF THE LAW OF SHIPPING. Sect. 1. Of the Ownership and Transfer of Ships .... 270 ) 2. Of the Transfer of Property in a Ship . . . . 273 3. Of Part-Owners 4. Of the Liability of Mortgagees 5. Of the Contract of Bottomry 6. Of the Employment of a Ship by the Owner 7. 0£ Charter-Parties 8. Of General Average .... 9. Of Salvage . . . ■• . 10. Of the Navigation of the Ship 11. Of the Seamen ...... 12.' Of Pilots ...:... 13. Of Material Men . . . 313 276 278 279 231 290 295 301 304 309 312 CONTENTS. Tli CHAPTER XXI. OF MAUINE INSURANCE. Sect. 1. How the Contract of Insurance is made . . . .315 2. Of the Interest of the Insured 318 3. Of the Interest which may be insured .... 820 4. Of Prior Insurance . 324 5. Of Double Insurance and Reinsurance . . . .325 6. Of the Memorandum . . . . '. . .325 7. Of Warranties . .326 8. Of Implied Warranties ....... 328 9. Of Representation and Concealment 331 10. What Things should be communicated . . . . 332 11. Of the Premium 334 12. Of the Description of the Property insured . . . 336 13. Of the'Perils covered by the Policy 337 14. Of Perils of the Sea 339 15. Of Collision 341 16. Of Fire . . . . 342 17. Of Piracy, Robbery, or Theft . . . . . .343 18. Of Barratry . . ' 343 19. Of Capture, Arrest, and Detention . . . . . 345 20. Of the General Clause . 345 i21. Of Prohibited Trade . . . . . . . .346 22. Of Deviation - 847 23. Of the Termini of the Voyage, and of the Risk . . .350 24. Of Total Loss and Abandonment . . . . 353 25- Of Revocation of Abandonment 362 26. Of General Average ....*... 363 27. Of Partial Loss . . '. . . . . . . .864 28. Of Adjustment 366 CHAPTER XXII. OF riBE INSUEANCE. Sect. 1. Of the usual Subject and Form of this Insurance 2. Of the Construction of Policies against Fire . 3. Of the Interest of the Insured . 4. Of Reinsurance 5. Of Double Insurance .... 6. Of Warranty and Representation . 7. Of the Risk incurred by the Insurers 8. Of Valuation ... 9. Of Alienation . ... 10. Of Notice and Proof .... 11. Of Adjustment and Loss .... 368 372 880 384 385 387 392 395 896 399 401 CHAPTER XXIIL OF LIFE INSURANCE. Sect. 1. Of the Purpose and Method of Life Insurance ... . 404 2. Of the Premium . . . . . ... 405 3. Of the Restrictions and Exceptions in Life Policies . . 406 Vm CONTENTS. Sect. 4. Of the Interest of the Insured > . . . . 409 5. Of the Assignment of a Life Policy . . . .. . 411 6. Of Warranty, Representation, and Concealment . : . " 412 7. Of Insurance against Disease, and against Dishonesty of Servants . 416 CHAPTER XXIV. OF DEEDS CONVEYLNG LAND. Sect. 1. What is essential to such Deeds .417 2. Of the usual Clauses in Deeds 423 CHAPTER XXy. OF MORTGAGES. Sect. 1. Of Mortgages of Real Estate 428 2. Of Mortgages of Personal Property . . . . 431 3. Of the Pledge of Personal Property 432 CHAPTER XXVI. OF LEASES ........... 434 CHAPTER XXvil. OF THE DISPOSAL OF PHOPEHTY BY WILI,. Sect. 1. Of Wills . . 439 2. Of Codicils . 442 3. Of the Revocation of Wills 442 CHAPTER XXVin. STATUTES FOR THE KECOVEKY AND COLLECTIOST OF DEBTS . . 444 APPENDIX. Of Contracts, and Mercantile Instruments generally, and of Bonds, Deeds, Leases, Wills, &c., -with Forms for the same .' . . 451 Index , . . . , . 479 THE LAWS OF BUSINESS BUSINESS MEN. CHAPTER I. OP THE PUEPOSB AND USE OP THIS BOOK. The title of this work indicates, to some extent, its purpose and character; but, as they are in certain respects peculiar, it is thouglit that some remarks respecting them may make the volume more useful. Eight years ago, I accepted the oifice of Dane Professor in the Law School of Harvard University. I have employed whatever leisure the duties of that office have left me, in pre- paring a series of text-books on Commercial Law. I have already published three volumes, and I have others in prepa- ration ; and the manner in which those I have published have beeii received by my brethren, calls for my most grateful ac- knowledgments. The last of those works was entitled " The Elements of Mercantile Law," and was intended as a general epitome of all Commercial Law. I began it mainly for the use of lawyers, but at the same time hoping that it might be so written as to be iiseful to merchants. Before I had made much progress in it, the hope that one book could answer these two purposes faded away ; and I finally made that work almost exclusively for lawyers. Biit the circumstance that many per- sons who were not lawyers, and did not intend to be, have bought my works, — the remarks that have reached me in re- lation to them, and particularly in reference to the last, from 1 2 THE LAWS OP BUSINESS FOR BUSINESS MEN. siicli persons, — and many other kindred facts, — hare given additional strength to a belief that lias led me to prepare this volume, for the use of the mercantile community. That belief is, that there is a strong and growing disposition, among the men of business of this country, to understand the laws of business. I have much evidence that this desire exists very generally ; and it seems to me a natural and reasonable desire, and one that is capable of gratification, and one that deserves that ear- nest endeavors should be made for its gratification. Indeed, this may be deemed only a further step in the same direction in which society has been advancing since the days of the Ro- mans. With them, the formulas Of the law, in accordance with which all legal proceedings were' conducted, were a state mystery, or rather the exclusive possession of the Patricians, until, as Gicero tells iis, the secretary of a Tribune stole a copy and made thein known to the public. Since that time there has been no desire to keep the people in ignorance ; but the abstruse and difficult technicalities of the law had for- merly the same effect in England ; and a great step was taken there when Blackstone piiblished his Commentaries. He en^ deavored, in that excellent work, to diffuse a knowledge of the law, so far, at least, as to bring its general principles Avithin the reach of all educated and studious men. Multitudes bought it, and many do still buy and read it, who are not, and do not expect to become, lawyers. But this book has proved, I think, that a book which is very good for lawyers cannot be a very good book for those also who are not lawyers. *The Commentaries were written for both classes; and is a good book for both; but would have been better for either class, if it had been written for that class alone. Blackstone gave a new impulse to the desire for a knowledge of the law; ^and tliis desire, and the actual diffusion of this knowledge, have both gone on, and I believe coiild not have been arrested ; for this progress is one element of advancing ;and improving civilization. For the same reason, I think, this progress cannot now be arrested. And I would ask, who should wish to arrest it ? •Certainly not the lawyer who is worthy of the name ; for he OF THE PURPOSE AND USE OF THIS BOOK. 3 must know better than others, that, until society is recon- structed upon principles not yet imagined, there must al- ways be a class of men who prepare themselves by earnest study for the special employment of solving those questions, and maintaining the rights and interests involved in the qiies- tions, which must ever continue to grow out of the conflicts of life, and the ever-changing and ever-developing phases of Imman relations. This is the proper work of the lawyer ; and there will always be enough of this work to task his high- est powers and most devoted indiistry, and to repay his efforts by abundant and well-merited compensations. Tlie institutions and characteristics of this country have their bearing upon this question. We have no sovereign but the law ; or rather tlie people is the sovereign, and the law is their only utterance. It is a sense of this that has here trans- ferred, in some degree at least, the loyalty which in the king- doms of the Old World attaches to a person, to the law itself, using this -word in its most comprehensive sense. Tliis is a good thing ; not because the law is always wise and good, but l^ecause it will most probably become wise and good, if tlio whole community recognize it as entitled to obedience, and therefore entitled to their constant, earnest, and vigorous en- deavors to cure its defects, and bring it into harmony with those principles of truth and justice of which it should be the expression. This great duty rests upon us witli the stronger obligation because of our greater intelligence and activity of mind, our more general education and wider extent of common knowledge; all which are none the less facts, although they are sometimes used as mere nutriment for vanity, or as topics for adulation. And all these things together seem to lead to the conclusion, that here and now proper efforts should be made to supply all of the community who ask for it with accurate and practical information concerning those laws which are of the most inimediate concern to them. Whatever may be the measiire in which the public elsewhere may usefully endeavor to learn the law under which they live, it must certainly be true that in this country, and at this time, the standard should be higher than before or elsewhere. Nor is there any obvious and natural boundary to the knowledge of 4 • THE LAWS OF BUSINESS FOE BUSINESS MEN. the law which may be acquired hy business men, other than the somewhat undefined limit which would embrace within it the_general principles and what may be called the elements of the law, but would leave a further study and a more minute acquaintance with details, questions, and precedents to the legal profession. So fa,r as concerns the people, their wish, if expressed in the simplest terms, would undoubtedly be, to know the laws -vv^hich must regulate their conduct and determine their rights. This wish admits of but one question; it is, How far is this thing practicable? for so far as it is, its propriety and expediency can hardly be denied or doubted. Indeed, they who would most strenuously oppose any effort to teach the people the law, would do so only on the ground that it is impossible to give to the public any knowledge of this kind which would be wide enough and accurate enough for use. They would think that the very endeavor to learn the law, by persons the main busi- ness of whose lives must be of a very different kind, woxild lead only to a superficial and erroneous view of the subject; and tliis, under the name of knowledge, is only the most danger- ous ignorance. We should, however, remember, that the people generally, here and elsewhere, must necessarily know a certain amount of law, for without this they cannot live safely in society. For example, men in business miist know something of the most general laws of business ; as how to conduct their sales, how to make notes, how to collect them, and the like ; and all men must know so much of ordinary law as protects and de- fines their common and imiversal rights. Moreover, it will probably be admitted that important mistakes, leading to much loss and difficulty, are every day made, because many do not knoT^ those general principles or rules of law which some do know, and which every man in business might know. "The ' question, therefore, can only be, how much of law it is possible and desirable for men in business to learii ; and what is their best way of learning it. Here le^ me remark, that few persons, who have not had occasion to study and to teach Commercial Law as a whole, are aware of that unity and harmony of its principles, which make OF THE PUEPOSE AND USE OP THIS BOOK. 5 it indeed a, system of laws ; or o^tlio prevailing simplicity and, reasonableness of its rules. An eminent English lawyer lias said, that it was astonishing within how small a space all the principles of commercial law may be compacted. It is equally true, that the laws' of business are generally free from mere technicality arid obscurity; and the reason is, that they are for the most part, and substantially, nothing more than the actual practice of the business community, expressed in rules and maxims, and invested with the authority of law. The knowledge which a trader acquires of the laws of trade need not, at all events, be superficial ; for a knowledge of prin- ciples, and an intelligent appreciation of them, however limited it may be, should not be regarded as superficial. But these limits need not be narrow. The extent of this knowledge, and its accuracy, thoroughness, and utility, must obviously depend upon the books from which it is acquired, and upon the man- ner of using those books. It is undoubtedly true, that if any trader should employ his leisure in thoroughly learning all that is contained in any book that ever was or ever will be written, he may still find a ques- tion arising in his own business, which the knowledge he has does not answer distinctly, or perhaps does not answer at all ; for this is precisely what the most Ifearned lawyer sometimes finds. But if the book which the merchant uses is a good one, siich an occurrence would not be frequent. And when it takes place, it is precisely then that it is important for him to know the limits of his own knowledge, and to apply to those whose business it is to carry their learnuig of the law further than is possible for him. Considerations of this kind led me to the belief, that it was possible to make a book, which should place within the appi-e- licnsion of every intelligent trader, and of every young man who proposes to engage in any department of business, at the cost of no more time than every one can conveniently give to it, a useful knowledge of all the elements, or general rules and principles, of the Laws of Business. In other words, I thought it an undeserved reproach of our Laws of Business, to say that they were not intelligible by all, if stated with simplicity and accuracy ; and an equally undo- 6 THE LAWS OF BUSINESS FOE BUSINESS MEN. served reproach of our Men oftBusiness, to say that they could not comprehend la\ys, which were made for them, and were intelligible in themselves, and plainly stated. It seemed to me, therefore, that the. time had come, in this country, for a book which no one has ever attempted to make anywhere liereto- ■fore. This book should contain all the principles of all the branches of the laws which regulate business transactions, stated with all the accuracy that care and labor could insure in any book, and so stated that any man of good capacity, with reasonable effort, might understand all of them; and might, with the help of the Index, find in the volume a true and intelligible answer to the questions which every day arise ; and might, by a regular study of the whole book in course, be- come acquainted with the rules, and the reasons of the rules, by which all his business may be safely conducted. And this book I have endeavored to make. I have compiled it, almost wholly, from the law-books I have already made for the profes- sion. If they are accurate and trustworthy, this is so; and I may be permitted to say, that whatever earnest endeavors could do to make those books trustworthy was done ; and that accu- mulated testimony, which I have no right to disregard, encour- ages me to hope that I have not labored in this respect in vain. I have made some changes which seemed to be required by the intended adaptation of this book to merchants and not to lawyers. These are, first, the entire omission of citations and references to reports and authorities ; next, the addition of some elementary rules and principles and defiiiitions, which would not be necessary in a book for lawyers only ; and lastly, the general omission of merely technical words, and the full expla- nation of such words when they are used. If there are those who are preparing for a> life of business, or are now engaged in it, who will study this volume, in course ; — and by study I do not mean merely the reading of it, but reading closely and attentively, dwelling on .what seems most important, and examining with care what seems obscure ; — I venture to hope that they Avill find the work so arranged, and the meaning so expressed, that what comes before explains vrhat follows, and every part of it will be intelligible. At the same time, I have labored to make evetything plain by itself, ■ OP THE PURPOSE AND USB OP THIS BOOK, 7 as far as that was possible, that it might not disapppint those Avho, without reading it in coivrse, look i,nto it for an answet to questions as they arise in business. And for such persons I have endeavored to have the Index of Subjects (at the end of the book) exceedingly full and minute. They who study the work in course may find some parts in- appropriate to their pursuits. Thus, if they are not engaged in commerce, cither on the ocean or our inland waters, the chapters on the Law of Shipping, and the Law of Marine Insujj- ance, may have no especial interest for them. Other persons might omit other parts, and prefer these. But, to tlie best of my knowledge, I have left no topic undisposed of, which be- longs within the wide circle of commercial transactions, by sea or by land, on a large or a small scale. To the chapters on Commercial Law I have added some on Conveyances of Land, of various kinds, on Mortgages, on Leases, and on "Wills. In the Appendix I have put the most important laws of tlie United States respecting maritime property, and the best forms I could prepare, or prociire, for a great variety of purposes, and such as are used in different parts of this country. And, as a concluding remark, I would say that this book is not calcu- lated for one part of the country rather than another. It was not necessary to do this; for it is one of the advantages of Commercial Law, that it is substantially the same thing in all parts, not only of our widely extended country, but of nearly the whole civilized world. I have cited no authorities in this work, because I supposed they would occupy space and increase the cost uselessly, for na one engaged in business would have the time or wish to pursue the investigation of a question of law throiigh the Keports. If they are desired, however, they may be found collected and re- ferred to in my other works, from which I have compiled this volume. . 8 THE LAWS OP BUSINESS FOB BUSINESS MEN. CHAPTER II. OF COMMERCIAL LAW IN GENERAL. All law is divided into what is called, in law-books, common ^aw and statute law. "We have legislatures, and our fathers had them ; and a very large proportion of the laws now binding upon us were made by those legislatures in a formal and reg- ular way. All these are Statutes ; and taken altogether, they compose the Statute Law. Beside this, however, there is an- other very large portion of our law which was not enacted by our legislatures ; and it is called the Common Law. In fewer words, all law was regularly enacted, or it was not. If it was, it is statute law ; if it was not so enacted, it is common law. The common law of this country consists, in the first place, of all the law of England — whether statute or common there — which was in force in this coiiutry at the time of our inde- pendence, and recognized by our courts, and which has not since been repealed or disused. And next, of all those uni- versal usages, and all those inferences from, or applications of, established law, which courts in this country have recog- nized as having among us the force of law. For this common law there is no authority excepting tlie decisions of the coiirts ; and we have no certain means of knowing what is or is not a part of the common law, excepting by looking for it in those decisions. Hence the value and importance of the reported decisions, which are published by official reporters in most of our States. The courts are /Mtfida^ bodies, and not legislative ; that is, they are bound to declare and define and apply the law, biit have no power to make it. And some have called the common law "judge-made law," as if the courts had exceeded their powei-s, and violated. their duties, in thus " making" common law. But the objection is not a wise one ; for the very necessity of a court springs from tlie constant need of a tribunal compe- tent to determine what the law is ; and if the determination OP COMMERCIAL LAW IN GENERAL. 9 of this tribunal has not the force of law, it would be of no use. The legislature can always, by a statute, amend, annul, or adopt any rule of common law. It is very important, however, that our' common law should be as fixed and as definite as possible ; and that is the reason, not only why nearly all decided cases are now reported and printed, but why a case once decided becomes a precedent and almost a law for all of like kind that follow. We say almost a law, for a court may make a mistake, and other coiirts should not be bound by it, but have the power of substituting the true ' doctrine. And the changes in society and in the course: of • business make some changes in the laAv necessary. Hence, however desirable stability may be, some fluctuation is inevita- ble. And hence the law under which we live changes from time to time, merely by the action of the courts, without the same public and authentic notice as when a new law is passed. Tor example, we have in Massachusetts, as in most of the States, a statute copied substantially from an English statute, prohibiting unnecessary work or labor on Sunday. In 1813 the Supreme Court of Massachusetts held, that if a man signed a note or deed on Sunday, without sufficient cause, he was -liable to pimishment for this violation of law, biit the instru- ment was valid. So the law remained until 1847. In that year the court decided that no instrument could be valid which was made in violation of law, and therefore that such a note or deed would be void. This is now the law in Massachusetts, as it is the prevailing rule elsewhere. • We have from this cause not only changes of the law, but uncertainties. In part, because questions occur in practice about jvhich lawyers differ, and mUst differ, until the courts settle them ; but also because different courts at the same time, or the same courts at different times, decide them in different ways. There are still some uncertainties of this kind in the laws of business. I, have not attempted to suppress or conceal them, or to give my own decision of them in the same way as if that were law. A person not a lawyer is sometimes surprised to be told that no certain answer can be given to the question he asks J and it is generally so much safer for the lawyer to say 2 JO THE LAWS OP BUSINESS FOR BUSINESS MEN. anything else but this, — for the uncertainty will often he at- .tributed to his ignorance, — that he is sometimes induced to give as law what is only liis opinion. I have endeavored never to do this, and never to avoid the danger of seeiping ignorant, by concealing such uncertainties. Wherever tiiey came in my way, and seemed necessary to a full exposition of thelaw on any given topic, I have stated them distinctly ; and wherever I thought I had sufficient grounds for a decided opinion, I have expressed it, but only a^ my opinion. A very important part of the common law, especially to all men in business, is what is .called, by an ancient phrase, the Law-Merchant. By this is meant the law of merchants; or, more accurately, the law of -mercantile transactions; and by this again is meant all that branch of the law, and all those - principles and rules, which govern mercantile transactions of any kind. This great department of the law derives its force in part from statutory enactments, but in far greater part from the well-established usages of merchants, which have been adopted, sanctioned, and confirmed by the courts. For exam- ple, a large proportion of the law of factors and brokers, most of that of shipping and of insurance, and nearly all the pecu- liar riiles applicable to negotiable paper (or promissory notes' and bills of exchange payable to order), belong distinctly to the Law-Merchant. The courts of this country have always acknowledged that a custom of merchants, if it were proved to be so nearly univer- sal and so long established that it must be considered that all merchants know it and make their bargains with reference to it, constitutes a part of the law-merchant. And the law- merchant is itself a part of the common law, and therefore has the whole obligatory force of law. This would not be true, if the custom was one which violated statute law, or the obvioxis principles of public policy or common honesty. But we may suppose that no custom of this kind would ever be so generally adopted and established as to come before the courts with any claim for recognition as law. There is another distinction which should also be understood. It is that between Courts of La-s^ and Courts of Equity. lu England this distinction is very great ; it is less in this country, OP COMMERCIAL LAW IN GENERAL. 11 and appears to be growing still less. In most of onr States the same courts sit at one time as courts of law, and at others as courts of equity. But different arrangements on this point preyail in different parts of the country. It would require a volume, and a large one too,' to state with any clearness all the differences between these courts. Here we would say only, first, that actions may be brought in equity courts, mainly, in the four cases of fraud, accident, mistake, and trust ; and secondly, that while courts of law can only give com- pensation in money for damages, courts of equity compel the delinquent party to perform specifically the very thing he ought to do. Tims, if a policy of insurance was made, either by fraud or accident or mistake, different from what the parties agreed that it should be, the law could do nothing, imless an inju.red party could prove damages of a certain kind, and these he might recover. But a court of equity would rectify the error, and order the policy made as it should be made. So if the owner of land agreed iu writing to sell it itpon certain terms, and afterwards refused to sell it, law could only give damages, but equity could and would compel the owner to make a proper deed of the land. The difference between the powers and remedies of courts of Law and those of courts of Equity is sometimes important in reference to mere business transactions, or to the laws of business. Some instances of this are considered in this work. Sometimes we speak of courts of law and courts of equity ; and sometimes, using the shorter and usual phrase of law- books, say only that law will do this, and equity do that ; but by law is meant law as administered by courts, and by equity the equity administered -by courts. And all courts of equity have now rules of jurisdiction and of practice about as exact and rigorous as those of courts of law; although differing al- most .wholly from them. A great deal of the language of every art or science or pro- fession is technical (indeed, technical means belonging to some arf), and is peculiar to it, and may not be understood by those who do not pursue the business to which it belongs. This is as true of law as of everything else. In this work, however, I Jiave avoided as far as possible mere law-words ; and when I 12 THE LAWS OP BUSINESS FOR BUSINESS MEN. have used them have explained them at the time. There are some, however, whicli cannot be dropped : they express exactly, what is meant, and we cannot express it without them, unless by long and awkward sentences. A good instance of this is in those words which end' in er (or or) aiid in ee. As for exam- ple, promisor or, promisee, vendor and vendee, indorser and indorsee. These terminations are derived from the Norman- Freneh, which was, for a long time, the language of the courts and of the law in England. And it might seem that we had just as good terminations in English, in er and ed, which mean the same thing. But it is not sO. Originally they meant the same thing, but they do not now ; for both er and ee are ap- 13lied in law to persons, and ed to things ; so that we want all three terminations. For example, indorser means the man who indorses ; indorsee riieans the man to whom the indorse- ment is made; but the note itself we say is indorsed. So vendor means the man who sells, vendee means the man to whom soinething is sold, and the thing sold is vended!. And the promisor makes the promise, the promisee receives it, and the thing to be done is promised. We have constantly retained not only this phraseology, but some other words or phrases, of which similar things might be said. The volume closes with a chapter on Conveyances of Land, one on Mortgages, one on Leases, and one on "Wills. We con- fess that we had some dotibt about adding these. The -whole law of real estate is, to the last degree,' technical ; and that of wills nearly as much so. The phrase real estate is derived from times when landed property was deemed the only real property, and real estate means in law only land and things attached to the land, as houses and the like. The system of law which belongs to this species of property is, in all its forms and phraseology, entirely distinct from that which relates to personal property ; — by which last phrase is meant everything tliat is not land or its appurtenances. And these systems of law are almost as distinct in their principles as in their forms. No man can live much in the world, and have a common edu- cation, without understanding nearly all the words whicli^it is necessary to use in speaking of the laws of business. But he may know no more of the phrases of real law than if they OP COMMERCIAL LAW IN GENERAL. 13 belonged to a foreign tongue. And withont an understanding of this language, lie can know b\it little of the principles or laws which express themselves in it. Nevertheless, land is now so frequently a subject of business transactions, that it was thought best to give, in familiar or explained language, those rules and forms and directions which are of most frequent recurrence, and which it is therefore most important to know. But we feel bound to add, that every, one who is about to engage in any important transaction in relation to land, whether to buy or sell or hire, or take or give as security, unless it be of the simplest character, as a common lease for example, and all who want to make a will that shall be safe, will do well to act under good advice. People generally are not aware that law- yers, and even eminent mercantile lawyers, frequently, perhaps usually, employ lawyers who are especially devoted to real law (or the law of real estate), when they have occasion to ascertain titles for themselves, or to have intricate and complicated in- strimients drawn in their own business. The phrase " presumption of law " will be sometimes met with. This means, that in certain cases, and upon certain facts, the law presumes without proof that the parties did so and so, or intended so and so. There are a great many presumptions of law; indeed, something of this kind occurs in every case. Thus, if anybody is charged with crime or wi"ong, the presump- tion of law is that he, is innocent. If one makes a promissory note without any time expressed for payment, the presumption of law is that the money is payable on demand. If there be a sale, and no delay agreed on as to delivery of the thing sold, or the paynient for it, the presumption of law is that the thing sold is to be delivered at once, and that payment is to be made at once. Of these presumptions a few are absolute, that is, the law will not receive any evidence to the contrary ; biit most of them -^ especially in iiaercantile transactions — are open to evidence, and may be removed by siifficient proof. "We distin- guish between these when we treat of them. It will be noticed, also, that some questions are spoken of as " questions of fact," and others as " questions of law." This distinction is occasionally important in cases which arise in business. The rule is, that a court must not undertake to de- 14 THE LAWS OF BUSINESS FOR BUSINESS MEN. cide a .qii^tion of fact, because this is within the exclusive province of the jury. But the court alone must decide all questions of law, and the jury are bound to take and apply the law as it is given them by the court. Thus, if goods are sold to an infant (by which the law means a minor), and he refuses to pay for them, the question comes up whether they were necessaries; for if they were, the infftnt is bound to pay for them. Tills question resolves itself into two. One is the ques- ' tion of law, what kind of things the law means by " necessa- ries" when it says the infant must pay for them; and this the court alone decide, and instruct the jury accordingly. The other is. Are the things sold such as the court say the law con- siders necessaries? and this tlie jury alone decides. These questions sometimes run together ; and juries often undertake to settle the law as well as the fact ; but they have no i-ight to do so. Judges are selected from the most learned of the pro-> fession, and paid by the people to be their lawyers ; that is, to • secure for. the people the intelligent construction and applica^: tion of the laws which tlie people have made by their represent- atives to protect themselves. And tlie question whether the jury or the judge shall determine the law,' is only the question wliether tlie people wisli to have their own laws construed and applied by those who are most able to do this properly, or by those who are less able. Another phrase often met with is " the burden of proof." The law means by tliis the duty or necessity of proving what one asserts ; and it is often very important to ascertain on whom this duty or burden rests. Thus, if A sues B for the price of goods sold, and A says he sold them to B, and B says he never bought them of A, B lias nothing to do until A proves the sale ; for the burden of proof is on him. The general rule is, tliat whoever asserts an affirmative must prove it, and lie who only denies need not prove it. One reason for this is ob- vious. It must be far easier for a man to prove that lie did a certain thing, (for any one who saw it is a sufficient witness,) than for another man to prove that he did not do a certain thing ; for if ten thousand people did not see him, this does not prove it, for perhaps somebody else did see him. The burden of proof sometimes shifts back and forth 'in a OP COMMERCIAL LAW IN GENERAL. 15 case. If A sues B on a note, B does nothing until A'discharges the burden of proof by showing that B signed it. Then the burden of proof is on B, if he says he paid it ; and if B proves that on a certain day he gave A certain money or goods in payment, he discharges his burden of proof, and it then sliifts on A, and, if he still denies the payment, he must prove diat the money was couiiterfeit, or the goods worthless, or some other similar fact, which shows tliat there was no payment in fact. Another word is in frequent use in the law-merchant. It is "lien." This is a Norman-French word, and literally means a tie, a bond, or connection. It is used in law to signify the right which a party has over a thing in his possession, to Itcep it until his charge \ipon it, or arising out of it, is paid. Thus, if a wharfinger or warehouseman stores goods, or a common carrier carries them, he is not bound to deliver them up until the storage or carriage is paid for, because he lias a lien on the goods for these charges, and by virtue of the lien may keep them until these charges are paid. There is still another word which occurs so often that it may be well to explain it. It is " assets" ; thus lawyers and law- books speak of the assets of an heir, or an executor, adminis- trator, trustee, or assignee. .Tliis word means all the property, and valuable interests of every kind, which belong to any fund, and are available for the charges to which that fund is appro- priated. Thus, .to say that siich a thing is " assets " in the hands of the assignee of a bankrupt, is to say that he is enti- tled to it as a part of his fund, and must realize or collect or redupe it to money as well as he can, and divide it among the creditors. 16 ' THE LAWS OP BUSINESS FOR BUSINESS MEN. C H A P T E R 1 1 1 . ■ > OF THE PARTIES TO MERCANTILE CONTRACTS. SECTION I. WHO MAY BE PARTIES TO MERCANTILE CONTRACTS. It was once the doctrine of the English courts, that the law-merchant did not apply to any contracts between parties who were not merchants. But this view passed away; and it has long been a well-established rule in that country, as well as this, that the law-merchant applies to mercantile contracts, such as negotiable notes, bills of lading, charter- parties, policies of marine insurance, and the like, whoever may be the parties to them. All mercantile transactions begin or end in contracts of some kind, express or implied, executed or to be executed; and the first essential element of every contract is the ex- istence of parties capable of contracting. Generally, all per- sons may bind themselves by contracts. Whoever would re- sist a claim or action founded on his contract, and rests his defence on the groimd of his incapacity, as, that he was a minor, must prove the facts on Avhicli this defence rests, as it is never presumed. And if the plaintiff say that the de- fendant made a new promise after he was of age, and prove any iiew promise before the beginning of the suit, the defend- ant must prove that he was also under age, and therefore incapacitated, when he made this new proipise. The incapacity may arise from many causes ; as from in- sanity ; or from being under guardianship ; or from alien- age in time of war; or from' infancy; or from marriage. Of infants and married women we must speak in some detail. OP JKE PAKTIES TO MERCANTILE' CONTRACTS. 17 SECTION II. OF INI-AKTS. All persons are infants, in law, until the age of twenty- one. Biit in Yermont, in Maryland, and perhaps one or two other States, women are considered of full age at eigh- teen, for some purposes. The rule of law is, that a person becomes of age at the beginning of the day before his twenty-first birthday. This rule opposes the common notion, and it rests ou no very good reason, but on ancient authority and constant repetition. The reason assigned is, that the law takes no notice of parts of a day. The effect of the rule is, that a person born on the 9th of May in the year 1840, becomes of age at the beginning of the 8th of May, 1861, and may sign a note, or do any- thing, with the full power of a person of age, on any hour of that day. The contract of an infant (if not for necessaries) is voidable. That is, he may disavow it, and so anmil it, either before his majority, or within a reasonable time after it. As he may avoid it, so he may ratify and confirm it. He rnay do this by word only.- But a mere acknowledgment that the debt exists is not enough. In England, and in the State of Maine, it is provided by statute, that this acknowledgment or confirmation can only be by a new promise in writing, signed by the prom- isor. This rule seems to be useful, and we think it will be more widely adopted. It must be a promise by the party, after full age, to pay the debt ; or such a recognition of the debt as may fairly be understood by the creditor as expressive of the intention to pay it 5 for this would be a promise by implication. There are no particular words or phrases which the law requires or favors as a confirmation ; but, no ratification or confirmation can bo used in any action which was brought before the ratifi- cation was made. It must also be made voluntarily, and with the purpose of assuming a liability from which he knows that the law has discharged him. And if it be a conditional prom- ise, the party who would enforce it must prove the condition- 18 THE LAWS OF BUSINESS FOB BUSINESS MEN. to be, fulfilled. Thus, if the plaintiff relies on a new prom- ise, and asserts and proves that the defendant said, after full age, " I will pay when I am able," he must also prove that the ^defendant was able to pay when the action was brought. If an infant's contract is not avoided, it remains iii force. And it ijaay be confirmed without words ; and the difficult ques- tion sometimes occurs, what confirmation by mere silence, after a person arrives at full age, prevents him from avoiding his contract made during his infancy ? As a general rule, mere silence, or the absence of disaffirmance, is not a confirmation ; because it is time to disaffirm the contract when its enforce- ment is soxight. But if an infant buys property, any imequivocal act of owner- ship after majority — as selling it, for example — is a confirma- tion of the purchase. And, generally, a silent continued pos- session and use of the thing obtained by the contract is evidence of a confirmation ; therefore, if an infant buys a horse, and gives his note for it, and after he is of age the seller puts the note in suit, the buyer may return the horse and refuse to pay the note ; bxit if he keeps the horse, this is considered e'vidence of a confirmation of the note. The evidence of confirmation is much stronger if there be a refusal to re-deliver the thiiig "when it can be re-delivered ; and is perhaps conclusive, Avlien the conduct of the party may be construed as a confirmation, and if not so constriied must be regarded as fraudulent, or wrongful. Thus, where an infant purchased a potash-kettle, and' gave his promissory note for the price, it being agreed by. iihe parties that he might try the kettle, and return it if it did not suit him ; and the vendor, after the infant became of age, requested him to retvirn the kettle if he did not intend to keep it ; but he retained and used it a month or two afterwards. The court held that this was a sufficient ratification of the contract, and that an action might be sustained on the note. The great exception to the rule that an infant's contracts are voidable, is when tlie promise or contract is for necessaries. The rule itself is for the benefit and protection of the infant ; and the same reason causes the exception ; for it cannot be for the benefit of the infant that he should be unable to purchase food, raiment, and shelter, on a credit, if he has no funds. OF THE PARTIES TO MERCANTILE CONTRACTS. 19 The same reason, however, enlarges this exception, iintilit covers not only strict necessaries, or those without which tlie infant might perish, or would certainly be xmcomfortable, but ail those things which are distinctly appropriate to his person, station, and means. There is no exact dividing line which could make this defi- nition precise. But it is settled that mercantile contracts, as of partnership, purchase and sale of merchandise, signing notes and bills, are not necessaries, and that all such contracts are voidable by the infant. So, if he gives his note even for neces- saries, he is not bound by it ; but may defend against it on the gTound that it was for more than their true value ; and the jury will be instructed to give against him only a verdict for so miich as the necessaries were worth. If he borrows money, to be expended in the purchase of necessaries, and gives his note, the debt, or the note, has been held, at law, voidable by the infant. But courts of equity have held an infant liable for such a debt, and we think cou.rts of law would in this country ; for it is well settled that, even at law, an infant is liable for money paid at his request for neces- saries for him ; and if he give a note for necessaries witli a surety who pays it, the surety may recover against the infant. If an infant avoid a contract, he can take no benefit from it ; tluis, if he contracts to sell, and refuses to deliver, he cannot demand the price; or if he contracts to buy, and refuses the price, he cannot demand the thing sold. An infant is as liable for torts (by torts or tortious acts the law means ivrongs or offences) as an adult ; and therefore, if he fraiidulently represented himself as of age, when he was not, and so made a contract which he afterwards sought to avoid, this fraud will not prevent his avoiding the contract, but for the fraud itself he is answerable just as an adult would be. So if he disaffirms a sale, for which he has received the money, he must return the money ; because keeping it woidd be a confirmation of the sale. So if after his majority he destroys or puts out of his hands a thing bought whilp an infant, he cannot now demand his money back, as he might have done on tendering the thing bought ; for by his disposal of it he has acted as owner, and confirmed the sale. 20 THE LAWS OF BUSINESS FOB BUSINESS MEN. J In general, if an infant avoids a contract on which li^has advanced money, and it appears that he has received from the^ other party an adequate consideration for the money so ad- vanced, which he cannot or will not restore, he cannot recover back the money which he advanced. Bnt if an infant has en- gaged to labor for a certain period, and, after some part of the work is perfornied, rescinds the contract, he can recover for the work he has done, as much as that work was worth. The contract of an infant is voidable only by him, or by those having a right tO' act for him, and not by the other party. The election to avoid or confirm belongs to the infant alone ; and his having this right does not affect the obligation of tke other party. Therefore, one who gives a note to an infant, or makes any other mercantile contract with him, must abide by it, al- though the infant may, if he choose, annul it. But if the note were given or the contract made by a fraud on the part of the infant, the injured party has the same right of defending against it on this ground as if the fraudulent party were not an infant. And it is a universal rule of the law, that 110 contract which is tainted with fraud is valid against an innocent party ; therefore, a wilfully false repre- sentation of the infant that he has reached his majority would be a fraud, and would enable the party dealing with him to set the contract aside. A father is bound to supply an infant child with necessaries ; and, if he does not, is liable for their value to any person who supplies them. And for these, as we have seen, the child him- self is also liable. SECTION III. OF MARRIED WOMEN. By the common law of England and of this country, a married woman is wholly incapable of entering into mercan- tile contracts on her own account. By the fact of marriage, her husband becomes possessed of all her real estate during her life, and if a living child be born of the marriage, he has OP THE PARTIES TO MERCANTILE CONTRACTS. 21 her real estate during Ids own life, if lie survive Lor. Tliis life-right in her real estate is called, in law, his tenancy by the curtesy. All the personal property which she has in actxial possession becomes absolutely his, as entirely as if she had made a trans- fer of it to him. ■ But by property in possession the law means only her goods and chattels ; or things which can be handled ; and which actually are in her hands, or under her direct and immediate control. If she have notes of hand, money due her, or shares in various stocks, these are not considered as things in possession, but as things in action. Things in possession are those things which one has now in his hands, and things in action those Aj'hich are so called because he who owns them cannot get possession of tliem with- out an action, if other persons choose to resist him. All debts, and evidences of debt, as bonds, notes, and all shares in stoclcs, whether national or State, or of incorporated companies or other companies, are things in action. But bank-bills are usually regarded as money, ajid therefore as things in pos- session. Tlie common law makes a wide difference between these in many respects. The law of husband and wife as to things in action is this. The liusbaiid may, if he pleases, reduce them to his pos- session, and so make them absolutely liis own. It is some- times difficult to decide whether the husband has reduced them to possession. In general, he does this by any act wliich is distinctly an act of ownership ; as if he demands and col- lects tlie debts due to her, or indorses her notes — which he can do in liis own name — and sells them, or has the stock transferred to his own name, or, in general, makes any final and effectual disposition of these things in action. Then they have become absolutely his own. If, however, he does not reduce them to possession, and dies, and she survives him, her whole right and property re- vive at his death, without any interest whatever in his rep- resentatives. And even if he disposes of them by will, this is ineffectual, unless he had reduced them into his possession while he lived. If, however, he survives her, he will be made, if he wishes 22 THE LAWS OP BUSINESS FOE BUSINESS MEN. it, her administrator, and then can collect all her things in action, and hold them or their proceeds as his own. And if she dies, and then he dies before he has collected these thiiigs in action, administration on his wife's effects will be granted to Ms next of kin, and not to hers ; and when collected, they will belong' to his estate. Ou the other hand, the Inisband is liable, with her, for all the debts for which his wife was liable when he married her. This is true whether they were then payable, or did not mature until after the inarriage ; and whether he received anything with her or not. If he does not pay them, and dies before the creditor has obtained a judgment against him, his estate is not liable, even if he had a fortune with her, and that fortime goes to his heirs or his creditors, and her creditors get nothing. So it is if the wife dies before the creditor recovers a judgment against the husband, and the luisband then retains all her for- tune. But her responsibility revives at his death, and she is liable as before marriage, even if she carried him a fortune, and all her fortune went, as above stated, to his representa- tive?. But if she dies, leaving things in action not rediiced by the husband to possession, and he reduces them to his posses- sion as her administrator, he must apply them to the payment of her debts, and can hold to himself only what is left after such payment. Such, we have said, is the common law of England and of this country. We have stated it because it is the origin and common foimdation of the law everywhere ; although' there may be no one of our States in which it remains wholly un- qualified by statutory provisions. But these provisions are very various ; and in many of the States they change with al- most every year. In nearly all the States, a wife joining in a deed with her husband may convey her real estate, or release her right of dower. She is not, however, generally, bound by any cove- nant in the deed. And in many of the States she must be privately examined by magistrates designated by statute, to ascertain that the deed is made by her of her own free will. And in some of the States, she must be previously aiithorized by the Supreme Court, on petition, to make conveyance of her property. OP THE PARTIES TO MERCANTILE CONTRACTS. 23 In many now, — and the number is rapidly increasing, — slie holds as her own separate property all that she possessed before marriage, whether real or personal, and all that comes to her after marriage, provided it was not purchased by lier husband's money, or otherwise came to her from him in fraiid of his creditors. In some, her property alone is answerable for her debts, or her husband only to the amount of the property ho received with her. In some, provision is made that, if her husband deserts or leaves her, or' is at sea, she may trade as if unmarried. In a few she may do this, although cohabiting with her husband. In Louisiana the statutory provisions in this respect are very full. There are in different States different provisions in respect to her power of disposing by will of her real estate or her per- sonal estate. These provisions are very various, and do not exist in most of the States. By quite a frequent provision, her deposits in banks made before marriage, and, in some States, tliose made before or after marriage, arc her OAvn, and subject to her own draft, provided they are not previously attaclied for her debts. In California, both her right of dower and the husband's tenancy by the curtesy seem, to be abolished. In some of , the States, it is provided that his interest in her real estate shall not be taken for his debts during her life or that of her children. In very many of the States, the homestead is secured to her and her children, during their lives, to a certain value. This value is frequently $500 ; and it runs from this to $2,000 in Texas, and $5,000 in California. There are in some States provisions that this homestead must be bought and designated as siich. In others it is made liable for the debts of the wife or husband for wages of labor, or other debts of similar char- acter. In many States, an insurance on the life of her husband for her benefit may be made by her or for her, and is scciired to her against all creditors, provided the animal premium does not exceed a certain sum, which is generally two or three hun- dred dollars. 24 THE LAWS OP BUSINESS FOB BUSINESS MEN. These statements are abridged from a full digest of all the .provisions in all the States, and I state them hci-e only in their general form, (giving the particulars in the first volume of my -work on the Law of Contracts,) in part because to state them fully here would require twenty or thirty pages ; in part, because they are changing continually, propositions being con- sidered and perhaps laws enacted bearing on this subject in almost every session of every legislature ; but principally be- cause many of the most important of these provisions are of quite uncertain meaning and efiect. The principles of the common law have been so long determined that they can gen- erally be stated in their length and breadth, with confidence. We cannot do this with these new statutory provisions, imtil we have the aid of usage or adjudication. And in the mean time the only safe course for any action in relation to this sub- ject, in any of the States, is to ascertain the condition of the law on the point in question at the time. It will be seen that these changes in the common law are very great indeed; and they are not precisely the same in Iny two of our States. It is in truth a very difficult question, how far it is well to abrogate the old law, which was of feudal origin, and certainly inappropriate to our own state of society. After sufficient experiment, we shall know better than we know now how to pay a due regard to the property and the rights of the wife, and yet preserve the marriage relation from the mis- chiefs and degradation which must ensue if husband and wife are no longer one person in any sense, but may bargain to- gether, and buy, and sell, and own, and pay, with, or from, or to each other, and sue each other and defend against each other, precisely like other persons. It should be added, that the wife may everywhere by com- mon law be the agent of the husband, and transact for him Ins mercantile concerns, making, accepting, or indorsing bills or notes, purchasing goods, rendering bills, collecting money and receipting for it, and in general entering into any contract so as to bind him, if she has his authority to do so. Further if she is in the habit of thus acting for him, and lie knows it, and does not object, and still more if he by his own acts sanc- tions hers, it will be deemed that he has given her authority OP THE PARTIES TO MERCANTILE CONTRACTS. 25 to act for him. And wlulo thoy contiiuic to IIto together, the law considers the wife as clotlied with autliority by tlie hus- band to buy for him and his family all things necessary in kind and quantity for the proper support of his family ; and for such purchases made by her, ho is liable. So if a woman carries on trade personally, and to all appear- ance as a sole trader, and her husband knows this, and makes no objection, especially if he resides with her, and still more if he is benefited by the trade, or takes the profit in any way, it will be \inderstood — in the absence of sufficient testimony to the contrary — that she is acting as his agent, and he will be liable on her trade contracts, although made in her own name ; unless in those few States in wliicli express provision is made for her trading as a single woman, without casting any liability on him. The husband is responsible for necessaries supplied to his wife, if he does not supply tliem himself. And he continues so liable if he turns her out of his house, or otlierAvise sepa- rates himself from her, without good cause. But he is not so liable if she deserts him (unless on extreme provocation) , or if lie turns her away for good cause. If she leaves him because he treats her so ill that she has good right to go from him and his house, this is the same tiling as turning her away ; and she carries with her his credit for all necessaries supplied to her. But what the misconduct must be to give this right, is uncertain. Some EngHsh cases are very severe on this point. In one, a husband brought a pros- titute into his house, and confined his wife to her own room under pretence of her insanity. But the court held this to be insufficient. Tlie Supreme Court of New York, in comment- ing upon this case, said that " the doctrine contained in it can- not be law in a Cliristian country." In America the law must be, and undoubtedly is, that the wife is not obliged to stay and endure cruelty or indecency. It may be added, that if a man lives with a woman as his wife, and represents her to be so, he is liable for necessaries supplied to her, and for her contracts, in the same way as if she were his wife. 26 THE LAWS OP BUSINESS FOR BUSINESS MEN. CHAPTER lY. OP AGEEEMENT , AND ASSENT. SECTION I. or THK LEGAL MEAKING OF AGREEMENT. No contract which the law will recognize and enforce exists, until the parties to it have agreed upon the same thing, in the same sense. Thus, in a case where the defendants by letter offered to the plaintiffs a certain quantity of " good " barley, at a certain price. Plaintiffs replied : ," We accept your offer, expecting you will give us fine barley and full weight." The jury found that there was a distinction in the trade between the words "good" and "fine," and the court held that theye was not a sufficient acceptance to sustain, an action for non- delivery of the barley. So where a person sent an order to a merchant for a particular quantity of goods on certain terms of credit, and the merchant sent a less quantity of goods, and at a shorter credit, and the goods were lost by the way, it was held by the court that the merchant must bear the loss; for there was no contract, express or implied, between the parties. There is an a^Dparent exception to this rule, when, for exam- ple, A declares that he was not understood by B, or did not understand B, in a certain transaction, and that there is there- fore no bargain between them ; and B replies by showing that the language used on both sides was explicit and unequivocal, and constituted a distinct contract. Here, B would prevail. The reason is, that the law presumes that every person means that wiiich he distinctly says. If A had offered to sell B his horse for twenty dollars, and received tlie money, and then tendered to B his cow, on the ground that he was thinking only of his cow, and used the word horse by mistake, this would not avoid .his obligation, unless he could show that the mistake was known to B; and then the bargain would be OF AGREEMENT AND ASSENT. 27 fraudulent on B's part. This would be an extreme case ; biit difficult qviestions of this sort often arise. If A had agreed to sell, and had actually delivered, a cargo of shingles at "13.25," supposing that he was to receive that price for a " bunch," which contains five hundred, and B supposed that he had bought them at that price for a "thousand," which view should prevail? The answer would be, first, that if there •was, honestly and actually, a mutual mistake, there was no contract, and the shingles should be returned. But, secondly, if a jury should be satisfied, from the words used, from the usage prevailing where the bargain was made and known to the parties, or from other circumstances attending the bargain, that B knew that A was expecting that price for a bunch, B would have to pay it ; and if they were satisfied that A knew that B supposed himself to be buying the shingles by the tliou- sand, then A could not reclaim the shingles, nor recover more than that price. There was such a case so decided. In construing a contract, the actual and honest intention of the parties is always regarded as an" important guide. But it must be their intention as expressed in the contract. If the terms of the contract be wholly unambiguous, there is no need of, and no room for, construction. ' If the parties, or either of them, show that a bargain was honestly but mistakenly made, which was materially different from that intended to be made, it may be a good ground for • declaring that there was no contract. But it would not be a good ground for substituting the contract they had not made, but intended to make, for that which they had made, but had not intended to make. On this subject there is another rule of frequent application ; ' namely, that when any written instrument does not express the real intention of the parties in consequence of some mis- take in the language used, as by the use of one word when the parties intended another, such instriiment will be corrected by a court of equity, and made to conform to what the parties in- -tended. But only mistakes of fact can be corrected ; no man being , permitted to take advantage of a mistake of the law, either to enforce a right, or avoid an obligation ; for it would be 28 THE LAWS OF BUSINESS FOE BUSINESS MEN. obtiotisly dangerous and iin-wise to encourage ignorance of the' law, by permitting a party to profit, or to escape, by his igno- rance. But the law which one is required at his peril to Inow, is the law of his own country. Ignorance of the law of a for- eign state is ignorance of fact. In this respect the several States of the Union are foreign to each other. Hence, money paid through ignorance or mistake of the law of another State may be recovered back. Fraud annuls all obligation and all contracts into which it enters, and the law relieves the party defrauded. If both of the parties are fraudulent, neither can take advantage of the fraud of the other ; and if one is fraudulent, he cannot set his own fraud aside for his own benefit. Thus, if one gives a fraudulent bill of sale of property, for the purpose of defraud- ing his creditors, he cannot set that bill aside and annul that sale, although those who are injured by it may. SECTION II. WHAT IS AN ASSENT. The most important application of the rule stated at the be- ginning of this chapter, is the requirement that an acceptance of a proposition must be a simple and direct affirmative, in order to constitute a contract. For if the party receiving the proposition or offer accepts it on any condition, or with any change of its terms or provisions which is not altogether im- material, it is no contract until the party making the offer consents to these modifications. Therefore, as we have already seen, if a party offers to buy certain goods at a certain price, and directs that the goods shall be sent to him, and the owner accepts the offer and sends, the goods as directed, and they are lost on the way, it is the buyer's loss, because the goods were his by tire sale, which was completed when the offer was accepted. But if the owner ac- cepts the offer, and in his acceptance makes any material modi- fication . of its terms, and then sends the goods, and they are lost, it is his loss now, because the contract of sale was not completed. OP AGREEMENT AND ASSENT. 29 Nor mil a voluntary compliance with the conditions and terms of a proposed contract make it a contract obligatory on the other party, imless there have been an accession to, or an acceptance of, the proposition itself. Thus, where one offers to pay the debts of a certain person, in a certain way, if the creditor would forbear to sue them, and the creditor did forbear to sue them, but gave no assent to or acceptance of the proposition, and after a time sought to make the guar- antor liable, the court held that he was not liable because there was no assent or acceptance, and therefore no bar- gain. But there may be cases in which an offer may come from a distance, or be such in its purpose and terms that an immediate compliance with it may be the only, or at least the ready and proper way, of signifying acceptance and assent. Thus, in general, if A says to B, if you will do this, I will do that ; and B instantly does what was proposed to him, this doing so is an acceptance, and A is bound. But if the doing of the thing may be something else than acceptance of the offer, or if the thing may be done for some other reason than to signify an acceptance or assent, there must be acceptance also, or there is no bargain. SECTION III. OF OFFERS GIVING- TIME. It sometimes happens that one party makes another a cer- tain offer, and gives him a certain time in which he may ac- cept it. The law on this subject was once somewhat uncer- tain, but may now be considered as settled. It is this. If A makes an offer to B, which B at once accepts, there is a bar- gain. If B declines or neglects to accept it at once, but takes time to consider, and then accepts, A may say he has changed his mind and does not make that offer. If A when he makes the offer says to B that he may have a certain time wherein to accept it, and is paid by B for thus giving him time, he can- not withdraw the offer ; or rather, if he withdraws it,, for this breach of his contract, the other party, B, may have his action 30 THE LAWS OP BUSINESS FOB BUSINESS MEN. for damages ; and an acceptance by B within the time is obli- gatory upon A. If A is not paid for giving the time, A may then withdraw the offer at once, or whenever he pleases,, pro- ■ vided B has not previously accepted it. But if B has accepted the offer before the time which was given expired, and before the offer was withdrawn, then A is bound, although he gave the time voluntarily and without consideration. For his offer is to be regarded as a continuing offer during all the time given, unless it be withdrawn. A railroad company asked for the terms of certain land they thought they might wish to buy. The owner said in a letter, they might have it at a certain price, if they took it within thirty days. After some twenty-five days, the railroad company wrote accepting the offer. . The owner says, No, I have altered my mind ; the land is worth more ; and I have a right to withdraw my offer, because you paid me nothing for the time of thirty days allowed you. But the court held that he was bound, because this was an offer con- tinued through the thirty days, unless withdrawn. They said that the writing when made was Avithout consideration, and did not therefore form a contract. It was then but an offer to contract, and the parties making the offer most undoubtedly might have withdrawn it at any time before acceptance. But when the offer was accepted, the minds of the parties met, and the contract was complete, and no withdrawal could then be made. SECTION IV. OP A BARGAIN BY COKEESPOSTDENCE. When a contract is made by correspondence, the question occurs. At what time, or by what act, is the contract completed ? The cases on this subject have fluctuated very much ; but the law may now be considered as conclusively settled both in England and in this country. If A writes to B proposing to him a contract, this is a continued proposition or offer of A until it reaches B, and for such time afterwards as would give B a reasonable opportunity of accepting it. But it may be withdrawn by A at any time before acceptance. It is not OP AGREEMENT AND ASSENT. 31 however withdrawn, in law, until a notice of withdrawal reaches B. This is the important pohit. Thus if A, in Boston, writes to B, in New Orleans, oifcring him a certain price for one hun- dred bales of cotton ; and the next day alters his mind, and writes to B, withdrawing his oifer ; if the first lettei- reaches B before, the second reaches him, although after it was written and mailed, B has a right to accept the offer, and by liis ac- ceptance bind A. But if B delays his acceptance until the second letter reaches him, the offer is then effectually with- drawn. It is a sufficient acceptance if B writes to A declaring his acceptance, and puts his letter into the post-office. It seems now quite clear, that as soon as the letter leaves the post-office, or is beyond the reach of the writer, the acceptance is com- plete. ■ That is, on the 5tli of May, A in Boston writes B in New Orleans, offering to biiy certain goods there at a certain price. On the 8th of May, A writes that he has altei'ed his mind and cannot give so much, and mails the letter. On the 12th of May, B in New Orleans receives the first letter, and the pcxt day, the 13th, answers it, saying that he accepts the offer and mails his letter. On the 14th, he receives the second letter of A withdrawing the offer. Nevertheless the bargain is complete and the goods are sold. But if B had kept his let- ter of acceptance by him until he had received A's letter of withdrawal, he could not then have put his letter into the mail and bound A by his acceptance. The late cases would also indicate, that if tlic letter of with- drawal reaches B after he has put his letter of acceptance into the post-office, but before it has gone, and while he could still take it back if he chose, he may disregard the withdrawal of the offer, and let his letter go on its way. This certainly is not settled ; but the dieta of judges, and the principles on which the later decisions rest, wotild seem to lead to the con- clusion that the contract is entirely complete as soon as the letter is in the post-office. The party making the offer by letter is not bound to use the same means for withdrawing it which he uses for making it ; because any withdrawal, however made, terminates the offer, if only it reaches the other party before his acceptance. Thus, if A in the case just supposed, a week after he has sent his 32 THE. LAWS OF BUSINESS FOR BUSINESS MEN. offer by letter, telegraphs a "withdrawal to B, and this with- drawal roaches him before he accepts tlie offer, this witlidrawal is effectual. So if he sent his offer by letter to England, in a sailing ship, and a fortnight after sent a revocation in a steamer, if this last arrives before the first arrived and was accepted, it would be an effectual revocation. SECTION v.. WHAT EVIDENCE MAY BE EECEIVED IN EEFERENCE TO A WRITTEN CONTKACT. If an agreement upon which a party relies be oral only, it must be proved by evidence, and any evidence tending to show what the contract was is admissible. But if the contract be reduced to writing, it proves itself; and now no evidence whatever is receivable for the purpose of varying the contract or affecting its obligations. The reasons are obvious. The law prefers written to oral evidence, from its greater precision and certainty, and because it is less open to fraud. And where parties have closed a negotiation and reduced the result to writing, it is to be presumed that they have written all they intended to agree to, and therefore what is omitted was finally rejected by them. But some evidence may always be necessary, and therefore admissible ; as, e'^adence of the identity of the parties to the contract, or of the things which form its subject-matter. Quite often, neither the court nor the jury can know what person, or what thing, or what land, a contract relates to, unless the par- ties agree in stating this, or extrinsic evidence shows it. And upon the whole, we cannot state the rule on this subject better than, that, while no evidence is receivable to contradict or vary a written contract, all evidence — not otherwise inadmissible — may be received to explain its meaning, and show what the contract is in fact. There are some obvious inferences from this rule. The first is, that, as evidence is admissible only to explain the contract, if the contract needs no explanation, that is, if it be by itself OF AGREEMENT AND ASSENT. ' 33 perfectly explicit and unambiguous, evidence is inadmissible, because it is "wholly unnecessary excepting to vary the mean- ing and force j)f the contract, and that is not permitted. An- other, following from this, is, that if the evidence purports, imder the name of explanation, to give to the contract a mean- ing which its words do not faii-ly bear, this is not permitted, because siich evidence would in fact make a new contract. A frequent use of oral evidence is to explain, by means of persons experienced in the subject-matter of the contract, the meaning of technical or peculiar words and phrases ; and siich ■v^itnesses are called experts, and are very freely admitted. It may be remarked, too, that a written receipt for money is not within the general rule as to written contracts, being al- ways open, not only to explanation, but even to contradiction, by extrinsic evidence. But this is true only of a simple receipt. If a written instriiment not only recites or acknowledges the receiving of money or goods, but contains also a contract or grant, such instrument, as to the contract or grant, is no more to be affected by extrinsic evidence than if it contained no re- ceipt ; but as to the receipt itself, it may be varied or contra- dicted in the same mamier as if it contained nothing else. Thus, where a receipt was given for money, and it was said therein tliat the money was received " for safe-keeping," the court would not permit the party who gave the money to prove by other evidence that he gave it in payment of a debt, or for any other purpose than " safe-keeping." But they would 'per- mit eitlier party to show that tlie amount was more or less than the sum stated. So if a deed recites that it was made in " con- sideration often tliousand dollars, the receipt whereof is hereby acknowledged," the grantor may sue for the money, or any part of it, and prove that the amount was not paid ; for this aifects only the receipt part of tlie deed. But he cannot say that the grant of the land was void because he never had-his money, nor tliat any agreement the deed contained was void for such a reason ; because, if he proved that the money was not paid for the purpose of thus annulling his grant or agree- ment, he would be offering evidence to affect the other part of the .deed ; and tliat he cannot do. A certain legal inference from a written promise can no 5 34 THE LAWS OP BUSINESS FOB BUSINESS MEN. more be rebutted by evidence than if it were -written. Thus, it is not only true that, if A, by his note,, promises to pay B a sum of money in sixty days, he cannot when calj^d upon resist the claim by proving that B, when the note was made, agreed to Y^iit ninety days; but if A promise to pay money and no time is set, this is by force of law a promise to pay on demand, and evidence is not receivable to show that a distant period was agreed upon. Still, where a contract is entire, and a part only is reduced to writing, and the law does not supply the residue, evidence may be received to prove that residue ; but not if it materially changes or contradicts what is written. As where a memorandum was made when a horse was hired, in the words, " six weeks at two guineas," and signed, the court woul'd not receive evidence as to the time for which he was hired, nor as to the money to be paid ; but permitted evi- dence as to all other terms of the bargain. The construction or interpretation of a written contract may sometimes be very material to the interests or rights of third parties, who had nothing to do with writing it, and were in no way privy to it. In such case, these parties may show by evi- dence what the contract which purports to have been written really was, as between the parties to it, as freely as if it had not been written. . , Generally spealung, all written instriiraents are construed and interpreted by the law according to the simple, customary, and natural meaning of the words used. It should be added, that when a contract is so obscure or uncertain that it must be set wholly aside, and regarded as no contract whatever, it can have no force or effect upon the rights or relations of the parties, but they are remitted to their ■ origuial rights and obligations. SECTION VI. OP CUSTOM, OR USAGE. A CUSTOM, or iisage, which may be regarded as appropriate to a contract, has often great weight in reference to it. This it OF AGREEMENT AND ASSENT. 35 may have, fifst, as to the construction or meaning of its words ; and next, as to the intention or understanding of the parties. The ground and reason for this influence of a custom is tliis. If it exist so widely and uniformly among merchants, and for so long a time, that every merchant must be considered as knowing it, and acting with reference to it, then it ought to have the same force as if both parties expressly adopted it ; because each party has a right to think that the other acted upon it. Sometimes this is carried very far. In one English case, a man had agreed to leave in a certain rabbit warren ten thow- sand rabbits ; and the other party was permitted to prove that, •by the usage of that trade, a thousand meant one hundred dozen, or twelve hundred. In an American case, a man agreed to pay a carpenter twelve shillings a day for every man employed by him about a certain building ; the carpenter was permitted to prove that, by the usage of that trade, " a day " meant ten hours' work ; and as his men had worked twelve and a half, he was permitted to charge fifteen shillings, or for one and one fourth days' work, for every day so spent. In these cases the custom affected the meaning of the words. But it also has the effect of words ; as if a merchant employed a broker to sell his ship, and nothing was said about terms, and the broker did something about it, and the ship wi^ sold^ if the broker could prove a universal and well-established ciis- tom of that place, that for doing what he did under the em- ployment he was entitled to full commissions, he would have them, as if they were expressly promised. Any custom will be regarded by the court, which comes within the reason of the rule that makes a custom a part of ' the contract. It comes within the reason only when it is so far established, and so well known to the parties, that it must be supposed that their contract was made witli reference to it. For this purpose, the custom must be established and not cas- ual, uniform and not varying, general and not personal, and known to all the parties. But the degree in which these char- acteristics must belong to the custom will depend in each case upon its peculiar circumstances. Let us suppose a contract for the making of an article which has not been made until 36 THE LAWS OF BUSINESS FOE BUSINESS MEN. I within a dozen years, and only by a dozen persons. Words are \ised in this contract of which the meaning is to be ascer- tained'; and it is proved that these words have been used and understood in reference to this article, always, by all who have ever made it, in one way. Then this custom will be permitted to explain and interpret the words of the parties. But if the article had been made a hundred years or more, in many countries and by multitudes of persons, the evidence of this use of these words fey a dozen persons in a dozen years would not be sufficient to give to this practice all the force of custom. Other facts inust be considered ; as, how far the meaning sought to be put on the words by custom varies from their common meaning in the dictionary, or from general use ; and whether other makers of the article use these words in various senses, or use other words to express the alleged meaning. Be- cause the main question is always this : Can it be said that both parties must have used, or ought to have used, these words in this sense, and that each party had good reason to believe that the other party so used them? Thus, when the brief but violent " Morns multicaulis " (or mulberry) speculation pre- vailed, a few years ago, a man made a contract to sell and de- liver a certain number of the trees " a foot high " ; and the biiyer was permitted to prove that, by the usage and custom of ail who dealt in that article, the length was measured to the top of the ripe wood only, rejecting the green and immature top ; and the " foot high " was to be so understood. No custom, however, can be proved or permitted to influ- ence the construction of a contract, or vary the rights of the parties, if the custom itself be illegal. For this would be to permit, or even oblige, parties to break the law, because others had broken it. Nor would the courts sanction a custom which was in itself unreasonable and oppressive. There was a vessel cast ashore on the coast of Virginia, and the master sold the cargo on the spot ; and on trial the jury found that he was authorized to do so by the usage there ; but the Supreme Court of Massachu- setts, where the ship and cargo were insured, said that the iisage was unreasonable, and they would not allow it. The< Supreme Court of Pennsylvania in one case refused to allow a OP AGREEMENT AND ASSENT. 37 usage by wliich plasterers charged half the size of the windows at the price per square yard agreed on for the plastering of a house. Some other instances may be cited to show how the courts have dealt with this matter of custom, lu an English case, on a policy of insurance, evidence of custom was received as to whether " rice " was considered as " corn " in the memo- randum. And in an American insuranc% case, it was shown by usage that " roots " did not include sarsaparilla roots. In another American case, the master of a vessel was allowed, on the evidence of usage, to retain as his own perquisite a sum paid as freight for money carried by him, and the owners were discharged from liability on the contract for carrying it, be- cause the custom made it the master's own contract. The Supreme Court of the United States permitted evidence of a custom in the banks in Washington to allow four days of grace instead of three. And in an English case, it was held that a broker, who bought shares for a person that did not take them, was authorized by iisage to sell them again, and, if they brought less than the broker paid, to charge the party for whom he bought them with the difference, although this party did not know of the custom. But in another English case, one of the parties set up a usage as to the time when clotlis sent for in- spection should be returned. Some witnesses said three days ; others said a week ; and one said a month. And the court said the evidence was insufficient, because the usage must be uniform. So also it must be constant and not occasional. In another English case, the court remarked that the custom of merchants, or mercantile usage, does not depend upon the pri- vate opinions of merchants as to what the law is, or their opin- ions publicly expressed ; but on their acts. ■Lastly, no custom, however universal, or old, or known, (un- less it has actually become law,) has any force whatever, if the parties see fit to exclude and refuse it expressly, or provide that the thing which the custom affects shall be done in a way different from the custom. For a. custom can never be set up against either the express agreement or the clear intentions of the parties. 38 THE LAWS OF BUSINESS FOK BUSINESS MEN. CHAPTER V. OP CONSIDERATION. SECTION I. OF THE NEED OF A CONSIDERATION. It is an ancient and well-established rule of the common law of England and of this country, that no promise can be enforced at law, unless it rests upon a consideration. If it do not, it is called a nudum pactum, by which words are meant a naked bargain, or, as it is sometimes called, in English words made out of the Latin, a nude pact ; and the promisor, even if he admits his promise, is under no legal obligation to per- form it. There are two exceptions to this rule. One is when the promise is made by a sealed instrument, or deed ; (every written instrument which is sealed is a deed.) Here the law is said to imply a consideration ; the meaning of which is that it does not require that any consideration should be proved. The seal itself is said to be a consideration, or to import a con- sideration. ■ The second exception relates to negotiable paper ; and is an instance in which the law-merchant has materially qualified the common law. - We shall speak more fully of this excep- tion when we treat of negotiable paper. The word " consideration," as it is used in this rule, has a peculiar and technical meaning. It denotes some substantial cause for the promise. This cause must be one of two things ; either a benefit to the promisor, or else an injury or loss to the promisee sustained by him at the instance and request of the promisor. Thus, if A promises B to pay him a thousand dol- lars in three months, and even promises this in writing, the promise is worthless in law, if A makes it as a merely volun- tary promise, without consideration. But if B, or anybody for OP CONSIDERATION. 39 liim, gives to A to-day a thousand dollars in goods or money, and this was the ground and cause of the promise, then it is enforceable. And if A got nothing for his promise, but B, at the request of A, gave the same goods or money to C, this would be an equally good consideration, and the promise would be equally valid in law. This rule sometimes operates harshly and unjustly, and per- mits promisors to break their word under-circumstances call- ing strongly for its fulfilment. . Courts have been led, perhaps, by this, to moderate the rule, and to say that the consideration is sufficient if it be a substantial one, although it be not an adequate one. This is the unquestionable rule now, and it is sometimes carried very far. In one case an American coiu't refused to inquire into the adequacy of the consideration, — or whether it was equal to the promise made upon it, — and said, if there was the smallest spark of consideration it was enough, if the contract was fairly made with a full tinder- standing of all the material facts. Still, there must be some. SECTION II. WHAT AKE SUFFICIENT CONSIDERATIONS. The law detests litigation ; and therefore considers any- thing a sufficient consideration which arrests and suspends or terminates litigation. Thus the compromise, or forbear- ance, or reference to arbitration, or any similar settlement, of a suit, or of a claim, is a good consideration for a promise founded upon it. And it is no defence to a suit on this prom- ise, to show that the claim or suit tlms disposed of would probably have been found to have no foundation or substance. If the claim or suit be a mere pretence, or oppression, and have no reality whatever, and there is no rational possibility of enforcing it, then indeed it is nothing, and any settlement of it is also nothing, and a promise founded upon such settle- ment rests upon no consideration. But if there be any honest claim, which he who advances it believes to be well grounded, and which within a rational possibility may be so, this is 40 THE LAWS OP BUSINESS FOE BUSINESS MEN; enough; the court will not go on and try the validity of the claim or of the suit in order to test the validity of a prom- ise which rests upon its settlement; for the very purpose foi* which it favors this settlenient is the avoidance of air neces^ sity of investigating the claim by litigation. But for reasons of public policy, no promise can be enforced of Which the consideration was the discontinuance of criminal proceed- ings, or of any in which the public are interested. If any work or service is rendered to one, or for one, and he requested the same, it is a good consideration for a prom- ise of payment ; and^ not only so, but the law will imply the promise, that is, will suppose that he has made it, and he may be sued upon it in the same way as if he had made it, and will not be permitted to deny it. The rule is the same as to goods, or property of any kind, delivered to any one at his request. No person can make another his debtor against that other's _ will, by a voluntary offer of work, or service, or money, or goods. Biit if that other accept what is thus offered, and retain the benefit of it, the law will, generally, imply or pre- sume that it was offered at the request of that other party, and will also imply his promise to pay for it, and will enforce the promise; unless it is apparent, or is shown, that it was offered and received as a mere gift. A promise is a good consideration for a promise ; and it is one which frequently occurs in fact. But it is said that the promises must be mutual ; and sometimes questions of this sort have arisen ; if A promises to live with B two years, for the purpose of learning a certain trade, but B makes no express promise to teach, and A leaves at the end of one year, it has been said that B cannot recover damages, because there was no con- sideration for A's promise, inasmuch as^B made no promise. But we should rather say in such cases, that. If A performed his promise, he might have an action against B on his con- structive or implied promise to teach ; and that this construc- tive or implied promise to teach was a sufficient consideration for A's promise to stay with B. So, if A says to B, " If you will deliver goods to C, I will pay for them," although there is no obligation upon B to de- liver the goods, and therefore no liiutuality in the contract, i • OF CONSIDERATION. 41 yet, if he does deliver them, he furnishes a consideration for the agreement j and may enforce it against A. There is also an exception to tliis requirement of mutuality in tlie case of contracts between infants and persons of full age. For though the infant may avoid his contract, the adult is bound, as we said in Speaking of mfants. An agreement by two or more parties to refer disputes or claims between them to arbitration, is not binding upon any of the parties unless all have entered into it. This principle, that a promise is a good consideration for a promise, has been sometimes applied to subscription papers; all who sign them being held on the ground that the promise of each is a good consideration for the promises of the rest. But they are riot often promises to each other ; being generally the promises of all the subscribers to some third party, wlio makes no promise. The law on the subject of these subscrip- tion papers, and of all voluntary promises of contribtition, is as yet somewhat unsettled, the cases not being reconcilable. The prevailing rule, we think, however, is this: no such promises are binding, unless something is paid for them, or unless some party for whose benefit they are made, — and this party may be one or more of the subscribers, — at the request, express or implied, of the promisors, and on the faith of the siibscrip- tions, incurs actual expense qt loss, or enters into valid con- tracts with other parties which will occasion expense or loss. As the objection to these promises is the want of considera^ tion, it may perhaps be cured by a seal to each name, or by one seal which all the parties agree to consider the seal of each. It is to be regretted that the Ifiw does not regard a merely moral consideration as a sufficient legal consideration ; but so it is. Thus, it has been held in this country, that a note given by a father to a party who had given needful medicines, food, and shelter to his sick son, who was of full age, was void in law, because there was no legal consideration. And the same doc- trine was applied where a son made a similar promise for food and support to his aged father. If, in either case, the prom- ise had been made before the food or other articles were sup- plied, or even a request made before the supply by the party 6 • 42 THE LAWS OP BUSINESS FOB BUSINESS MEN. ^rovaismg afterwards, then the supply of the food and support would have been a good consideration. Bixt they had all been supplied before any request or promise, and nothing was left but the moral obligation of a father to compensate one who had supported his son, or of a son to support lus father ; and this the law does not deem suf&cient to make even an' express promise enforceable at law. SECTION III. OF ILLEGAL CONSIDERATIONS. If the whole of a consideration, or if any part of the con- sideration of an entire and indivisible promise, be illegal, the promise founded upon it is void. Thus, where a note was given in part for the compounding of penalties and sup- pressing of criminal prosecutions, it was held to be wholly void and uncollectable. And where a part of the consideration of a note was spirituous liquors, sold by the payee in violation of the statute, such note was held to be wholly void. But if the consideration consists of separable parts, and the promise con- sists of corresponding separable parts, which can be apportioned and applied, part to part, then each illegality will affect only the promise resting on it ; for in fact there are many considera- tions and many promises. If the consideration be entire and wholly legal, and the promise consists of separable parts, one legal and the other illegal, the promisee can enforce that part which is legal. When a law provides a penalty for an act, that act is held to be illegal, although it is not expressly prohibited. SECTION IV. OF IMPOSSIBLE CONSIDERATIONS. No contract or promise can be enforced by him who knew that the performance of it was wholly impossible ; and there- OP CONSIDERATION. 43 foi'e a consraeration ■which is obviously and certainly impossi- ble is not sufficient in law to sustain a promise. But if one makes a promise, he cannot always defend himself when sued for non-performance by showing that performance was impos- sible ; for it may be his own fault, or his personal misfortune, that he^ cannot perform it. He had no right to make such a promise, and must respond in damages; or if he had a right to make it in the expectation of performance, and this has become impossible subsequently, — as by loss of property, for example, — this is his misfortune, and no answer to a suit on the promise.* There are, however, obviously, promises or con- tracts, which, from their very nature, must be construed as if the promisor had said, " I will do so and so, if I can." For example, if A promises to work for B one year, at $20 a montli, and at the end of six months is wholly disabled by sickness, he is not liable to an action by B for breach of his contract; and there is authority and good reason for saying that ho can recover his pay. for the, time that he has spent in B's service. A mere want of money, or a pecuniary impossi- bility, is not regarded by the law as an impossibility. SECTION V. OF FAILURE OF CONSIDEKATIOX. If a promise be made upon a consideration which is appar- ently valuable and sufficient, but which turns out to be noth- ing ; or if the consideration was originally good, but becomes wholly valueless*before part performance on either side, there is an end of the contract, as the promise cannot be enforced. And if money were paid on such a consideration, it can be re- covered back. But only the sum paid can be so recovered, without any increase or addition as compensation for the plain- tiff's loss and disappointment, if there were no fraud or op- pression. If the failure of consideration be partial only, leaving a sub- stantial, though far less valuable, consideration behind, this may stUl be a sufficient fotm'dation for the promise, if that be 44 THE LAWS OF BUSINESS FOE BUSINESS MEN. entire. The promisor may then be sued on the promise ; biit he will then be entitled, by dedxiction, set-off, or in some other proper way, to due allowance or indemnity for whatever loss he may sustain as to the other parts of the bargain, or as to the whole transaction, from the partial failure of the consider- ation. Thus, if he promised so much money for work done in siich a way, or as the price of a thing to be made and sold to him, if no work is done, or the thing is not made or sold, there is an end of the promise, because the consideration has failed. But if the work was done, but not as it should Imve been, or , the thing made and sold, but not what it should have been, and the promisor accepted the work or the thing, he may now show that the consideration for his promise has partially failed, and may have a proportionate reduction in his promise, or in the amount he must pay. And if the promise be itself sepa- rable into parts, and a distinct part or proportion of the con- sideration failed, to which part some distinct part or proportion of the promise could be applied, that part cannot be enforced, although the residue of the promise may be. If A agrees with B to work for him one year, or any stated, time, for so much a month, or so much for the whole time, and, after working a part of the time, leaves B without good cause, the question arises whether A can recover anything from B for the service he has rendered ; and at this time the question must be considered as somewhat unsettled at law.' It • is universally conceded that he cannot on the contract, because that is entire, and is broken by A, and therefore A has no claim under it. And it is the ancient and still prevailing rule, that A can recover nothing in any form or way. It has, however, been held in New Hampshire, that A can still recover whatever his services are worth, B having the right to set off or deduct the amount of any damage he may have sustained from A's breach of the contract. We think this view just and reason- able, although it has not been supported by adjudication in other States. If A agrees to sell to B five hundred barrels of flour at a certain price, and, after delivering one half, refuses to deliver any more, B can certainly return that half, and pay A nothing. But if B chooses to retain that half, or if he lias so disposed of or lost it that he cannot return it, he must, gener- OF CONSIDEHATION. 45 ally at least, pay what it is worth, deducting all that he loses by the breach of the contract. And this case we thinlc analo- gous to that of a broken contract of service ; biit B's liability to pay, even in the case supposed as to goods, has been denied in New York. A difficulty sometimes arises where A, at the request of B, undertakes to do something for B, for which he is to be paid a certain price ; and iii doing it he departs materially from the directions of B and from his own undertaking. What are now the rights of the parties ? This question arises most frequently in building-contracts, in which there is perhaps usually some departure from the original undertaking. The general rules are tliese. If B assent to the alteration, it is the same thing as if it were a part of the original contract. He may assent expressly, by word or in writing ; or constructively, by seeing the work, and approving it as it goes on, or being silent ; for silence under such circumstances would generally be equiva- lent to an approval. But if the change be one which B had a right, eitlier from the nature of the change, or the appearance of it, or A's language respecting it, to suppose would add nothing to the cost, then no promise to pay an increased price would be inferred from either an express or tacit approval. Generally, as we have seen, if A does or makes wliat B did not order or request, B can refuse to accept it, and, if he re- fuses, will not then be held to pay for it. But if he accepts it, he must pay for it. This consequence resiilts, however, only from a voluntary acceptance- For if A choose, without any re- quest from B, to add something to B's house, or make some alteration in it, which being done cannot be undone or taken away without detriment to the house, B may hold it, and yet not be liable to pay for it ; and A has no right to take it away, unless he can do so without inflicting any injury whatever on B. This rule would apply whether the addition or alteration were larger or smaller. « It' is sometimes provided in building-contracts that B shall pay for no alteration or addition, unless previously ordered by hinj in writing. But if there be such provision, B. woiild be liable for any alteration or addition he ordered in any way, or voluntarily accepted. 46 THE LAWS OP BUSINESS FOR BUSINESS MEN. So it is sometimes agreed that any additions or alterations shall be paid for at the same rate as the work contracted for. But we think that the law would imply this agreement if the parties did not make it expressly, although this point is hot well settled. SECTION VI. OF THE EIGHTS OF ONE WHO IS A STRANGER TO THE CONSIDERATION. Formerly it was. held that no one who was a stranger to the consideration could enforce a promise resting upon it. But this rule has been considerably relaxed, at least in this coun- try. Thus, if A pays to B a consideration, and B thereupon promises to pay C a sum of money, it has been held that C may sue B upon this promise, whether the promise were made to A or to C. So where B gave to the lessee of certain prem- ises a written promise to take the lease and pay to A, the les- sor, the rent, with the taxes, according to the terms of, the lease; and B afterwards entered into possession of the prem-- ises, and occupied them with the knowledge of A, it was held ' that A might recover rent from B on this promise. So if A, B, and C give a consideration jointly to D, whereupon D makes a promise to A, or B, or C, or any two of them, an action can be maintained on the promise by the party to whom it is given. SECTION VII. OF THE CONSIDERATION ARISING FROM DISCHARGING THE DEBT OF ANOTHER. If a is compelled to do for B that which B should have done, and was under an obligation to do himself, A can now demand fr«m B full indemnity or compensation ; and, to ena- ble liim to enforce this claim, the law will imply or presume a request from B that A should do this thing, and also a promise from B to 'A of repayment or indemnity, which promise rests upon the sufficient consideration of A's doing, or undertaking to do, that thing ; and the law will not permit the party to OP CONSIDEKATION. 47 deny the request or promise which it thus presumes. This rule applies to all cases in wliich a surety or guarantor pays or does for his principal that which tlie principal undertook to do, and the surety undertook that he would do for the principal if the principal did not do it. The law considers that this request of the principal to the surety, and also this promise of indem- nity, belong necessarily to siicli a relation. Biit the rule is quite otherwise where A without compulsion does for B what B was uiider an obligation to do for liimself ; as if A voluntarily pays to C a debt due from B to C. Here the law will not presume or imply both tlift>request and thC' prom- ise. If, therefore, neither be proved, A cannot enforce repay- ment from B ; and tlie reason is. that A cannot, as was before remarked, make himself tlie creditor of B witliout B's assent. And this reason is more than merely technical, for B may have good ground for preferring to be the debtor of C, rather than of A. But if A can prove either the request or the promise, tlie law will conclusively presume the other. Thus, if A can prove that B requested him to pay his debt to C, the law will presume B's promise of repayment ; or if A can prove that B promised to A a repayment, the law will consider this as an acknowledgment and acceptance of the payment as a service jjpndered to him, and will thereupon presume- a pre- vious request to A. Aud in either case A can recover from B on this promise. 48 THE LAWS OP BUSINESS FOE BUSINESS MEN. CHAPTER VI. OP SALES OP PERSONAL PKOPEETT. SECTION I. WHAT CONSTITUTES A SALE. It is important to distinguish carefully between a sale and an agreement for a futiire sale. This distinction is sometimes overlooked; and hence the phrase "an executory contract of sale," that is, a contract of sale which is to be executed here-> after, has come into use ; but it is not quite accurate to spealr of this as if it were a sale. Every actual sale is an executed contract, although payment or delivery may remain to be made. . There may be an executory contract /or sale, or a bargain that a future sale shall be made ; but such a bargain is not a pres- ent sale ; nor does it confer upon either party the rights or the obligations which grow out of the contract of sale. A sale of goods is the exchange thereof for monev. More precisely, it is the transfer of the property in goods from a seller to a buyer, for a price paid, or to be paid, in money. It differs from an exchange in law ; for that is the transfer of chattels for other chattels ; while a sale is the transfer of chat- tels for that which is the representative of all value. Here we must paiise to speak of the legal meaning of the word " property." It is seldom or never used in the law as it is in common conversation, to mean the things themselves wliich are bought, or sold, or owned. Because in law it means the ownership of the things, and not the things themselves. In conversation one might say a thief had the property of such a person ; or that a thief had stolen the property of such a per- son. But in law this can never be said. For in law the jirop- erty is the right, i\\e ownership; and that "no thief can take from the true owner, though he may take the things them- selves. So if one sells a horse to another, to be delivered a OF SALES OP PERSONAL PROPERTY. 49 month hence, the moment the sale is made the property in the horse is said to pass from the seller to the buyer, although the horse himself remains behind. Thus the possession is one thing, the property is another, and the thing itself a third. And they all may be separated If A sells a horse to B, to be delivered a month hence, and A keeps the horse at livery in a stable, the stable-keeper has the horse in his stable ; but lie is only the agent of A, and his possession is the possession of A, "svho is said to have constructive possession of the horse ; and the buyer alone had the property in the horse as soon as the bargain was made. This is indeed the very essential test of a sale. If a bargain transfers the property in the thing to another person for a price, it is a sale ; and if it does not transfer the property, it is not a sale ; and, on the other hand, if it be not a sale, it does not transfer the property. As soon as a thing is sold., the buyer oions it, ■wherever it may be. And to constitute a sale at common law, all that is necessary is the agreement of competent parties that the property (or ownership) in the sub- ject-matter shall then pass from the seller to the buyer for a fixed price. The sale is made when the agreement is made. The com- pletion of the sale does not depend xipon the delivery of the goods by the seller, nor upon the payment of the price by the buyer. By the mutual assent of the parties to the terms of the sale, the buyer acquires at once the property and all the rights and liabilities of property ; so that, in case of any loss or de- preciation of the articles purchased, the buyer will be the suiferer, as he will be the gainer by any increase in their value. It is, however, as has been said, a presumption of the law, that the sale is to be immediately followed by payment and delivery, unless otherwise -agreed upon by the parties. If therefore nothing appears but a proposal and an acceptance, and the vendee departs without paying or tendering the price, the vendor may elect to consider it no sale, and may, there- fore, if the buyer comes at a later period and offers the price and demands the goods, refuse to let him have them. But a credit may be agreed on expressly, and the seller will be 7 50 THE LAWS OP BUSINESS FOE BUSINESS MEN. bouiKl by it; and so he will be if the credit is inferred or implied from xisage or from the circiimstances of the case. And if there be a delivery and acceptance of the goods, or a receipt by the s&Uer of earnest, or of part payment, the legal inference is that both parties agree to hold themselves mutually bound by the bargain. Then the buyer has either the credit agreed upon, or such credit as from custom or the nature or circumstances of the case is reasonable. But neither delivery, nor earnest, nor part payment, is essential to the completion of a contract of sale. They only prevent the seller from re- scinding the contract of sale -without the consent of the pur- chaser. Their effect upon sales under the provisions of the Statute of Frauds will be considered in the chapter on that subject. SECTION II. OF THE EIGHTS OF PROPEKTY AND OF POSSESSION. Because this distinction is so absolutely indispensable to any correct understanding of the Law of Sales, and at the same time is one of the nicest and most difficult that is known in the law-merchant, we repeat that the word property is tised in law in a strict and peculiar sense. It does not mean the thing owned, but the interest in that thing, or the ownership of it ; and, as we have said, property, or the right of property, may be, and often is, severed from the right of possession. One instance of this we have already given. So where the owner of a horse lets him out on hire for a week ; the ownership or property of the owner is unaffected by this, bu?the hirer has for that week not only the possession, but the right of posses- sion. When however a sale is completely made, the property in the goods passes, as we have seen, from the seller to the buyer ; that is, the buyer becomes at once the owner of the goods. But the possession may not pass to the buyer; and the right of possession does not pass to him, imtil he pays the price, unless it be a sale on credit. If there be no credit, the seller acquires at once a right to the price ; the buyer acquires at once the right of property ; and he may unite the right OF SALES OF PERSONAL PROPERTY. 51 of possession to his right "of property by paying or offering to pay tlie price. Tfhe seller, on the other hand, if he desires to enforce payment of the price, must deliver or offer to deliver the goods. Thus either party may compel the other to a per- formance , of his part of the agreement by first performing or offering to perform his own. This right of the seller to retain possession of the property sold until the price is paid is called a lien. This word lipi, •which we have explained in the second chapter, was originally a Norman-French word introduced in England by the Nor- mans, and meant bond, or tie, or connection ; it is now of fre- quent use in the law, and means the right of retainmg posses- sion of property until some charge upon it, or some claim oil account of it, is satisfied. It rests therefore on possession. Hence the seller (and every other person who has a lien) loses it by voluntarily parting with the possession, or by a delivery of the goods. And it is a delivery for this purpose, if he delivers a part without any pxirpose of severing that part from the rC' mainder ; or if he make a symbolical delivery which vests this right and power of possession in the buyer, as by the delivery of the key of a warehouse in which they are locked up. "Whether the delivery of an order on the warehous6man is of itself delivery, before presentation of the order to the ware- houseman, is not certain. We think, however, that a presen- tation of the order is necessary, and that until it is made there is no complete transfer of possession. If the Avarehoiiseman consented, and agreed to hold the goods as the buyer's, there would certainly be a change of possession, because the ware- houseman would hold them for the buyer, and therefore his possession would be the possession of the buyer. And we think such a presentation makes a delivery, whether the ware- houseman gives or withholds his consent, unless he had a right to withhold it, and exercised his right ; but some recent cases in England throw a doubt upon this. If the seller delivers the goods to the biiyer, as he thereby loses his lien, he cannot afterwards, by virtue of this lien, re- take the goods and hold them. But if the delivery was made with an express agreement that non-payment of tlic price should revest the property in the seller, this agreement may 52 THE LAWS OP BUSINESS FOE BUSINESS MEN. be vdid, and the seller can recliaim the goods from the buyer if the price be not paid. , If the'buyer neglect or refuse to take the goods and pay the price within a reasonable time, the seller may resell them on notice to the biiyer, and look to him for the deficiency by way of damages for the breach of the contract. The seller, in mak- ing such resale, acts as agent or trustee for the buyer ; and his proceedings will be regulated and governed by the rules usu-- ally applicable to persons acting in those capacities ; and the principal one of these is, that he will be held to due care and diligence, and to perfect good faith. Certain consequences flow from the rules and principles already stated, which should be noticed. Thus, if the party ' to whom the offer of sale is made, accepts the offer, but still refuses or neglects to pay the price, and there are no circum- stances indicating a credit, ot otherwise justifying the refusal or neglect, the seller may, as we have said, disregard the ac- ceptance of his offer, and consider the contract as never made, or as rescinded. It would, however, be proper and prudent on the part of the seller expressly to demand payment of the price before he treated the sale as null ; and a refusal or neg- lect would then give him at once a right to hold and treat the goods as his own. So, too, if the seller unreasonably neg- lected or refused to deliver the goods sold, and especially if he refused to deliver them, the buyer thereby acquires tiie right to consider that no sale was made, or that it has been avoided (or annulled). But neither party is bound to exer- cise the right thus acquired by the refusal or neglect of the other, but may consider the sale as complete ; and the seller may sue the buyer for non-payment, or the buyer may sue the seller for non-delivery. As a sale of goods necessarily passes the property in them from the seller to the buyer, only he who has in himself the property in the goods can make a valid sale of them. But a sale may be made by him who has the propertij in the goods, but not the possession; especially if they are withheld from him by a wrongdoer. By such sale there passes to the buyer, not a mere right to sue the wrongdoer, but the property in the goods, with whatever rights belong to them. OP SALES OP PERSONAL PROPERTY. 53 If the seller has merely the right of possession, as if he hired the goods, or the possession only, as if he stole them, or found them, he cannot sell them and give good title to the buyer against the owner; and the owner may therefore re- cover them even from an honest purchaser, who was wholly ignorant of the defect in the title of him from whom he bought them. This follows from the rule above stated, that only he who has in liimself a right of property can sell a chattel, be- cause the sale must transfer the right of property from the seller to the bxiycr. In England a sale in a "market overt," passes the property in a stolen chattel to an honest purchaser. (" Overt " is a Norman-Prencli word, and means in English "open"; "market overt" is an "open market," and an " overt act " is an " open act.") In this country we have no " markets overt," established by law, and the only exception to the above rule is where money, or negotiable paper trans- ferable by delivery, (which is considered as money,) is sold or paid away. In either case, he who takes it in good faith, and for value, from a thief or finder, holds it by good title. The transfer of the I'ight of property in the thing sold is so far a necessary and immediate consequence of a completed sale, and essential thereto, that where it cannot take place, or by agreement does not take place, there is no sale. Therefore, while there may be a delay agreed upon expressly or impliedly, either as to the payment of the money or the delivery of the goods, or both, and yet the sale be complete and valid, still, if when there is such delay anything remains to be done by the seller, to or in relation to the goods sold, for their ascertain- ment, identification, or completion, the property in the goods does not pass until that thing is done ; and there is as yet no completed sale. Therefore, if there be a bargain for the sale of specific goods, but there remains something material which the seller is to do to them, and they are casually burnt or sto- len, the loss is the seller's, because the property (or owner- ship, had not yet passed to the buyer. So, if the goods are a part of a large quantity, they re- main the seller's until selected and separated ; and even after tliiat, until recognized and accepted by the buyer, unless it is plain from words or circumstances that the selection aiid 54 THE LAWS OF BUSINESS FOK BUSINESS MEN. separation by tlie buyer are intended to be conclusiye upon both parties. If repairing or measuring or counting must be done by the seller, before the goods are fitted for delivery or the price can be determined or their quantity ascertained, ' they remain, until this be done, the seller's. But if the seller delivers them and the buyer accepts them, and any of these acts remain to be done, these acts -will not be considered as belonging to the contract of sale, for that will be regarded as completed, and the property in the goods will have passed to the buyer with the possession ; and these acts will be taken only to refer, to the adjustment of the final settlement as to the price. Questions of this kind have given rise to mvich litigation, and caused some perplexity. Whatever rule be adopted, it may be sometimes difficult to apply it ; but we cannot doubt that the true principle is this. Every sale transfers the prop- erty, and that is not a sale which does not transfer the prop- erty, in the thing sold ; but this property cannot pass, and therefore the thing is not sold, unless, first, it is so far com- pleted and finished as to be in fact and in reality the thing purporting to be sold. And, in the second place, it must be so distinguished and discriminated from all other things, that it is certain, or can be made certain, what is the specific thing, the property in which is changed by the sale. If the transac- tion is deficient in either of these two points, it is not a sale, although it may be a valid contract for a future sale of certain articles when they shall be completed, or when they shall be separated from others. Thus, a purchaser offers a nursery- man a dollar apiece for two hundred out of a row of two thou- sand trees, which are all alike, and the offer is accepted. This is no sale, bccaiise any two hundred may be delivered, and there- fore the property or ownership of any specific two hundred does not pass. But if the purchaser or seller had said, the first two hundred in the row, or the last, or every third tree, or otherwise indicated the specific trees, there woiild have been a sale, and by the sale those specific trees would have become at once the trees of the buyer. The seller would dig up and deliver them as the buyer's trees, and if they were burned \vp by accident an hour after the sale, and before dig- OP SALES OF PERSONAL PROPERTY. 55 ging, the bviyer ■would lose the trees. If not specified, how- ever, even if they were paid for, they remain the property of the niirseryman, because, instead of an actual sale, there is only a bargain that he will select two hundred from the lot, and take tip and deliver them. And if they are destroyed before delivery, this is the loss of the nurseryman. Moreover, it is to be noticed that a contract for a future sale, to take place either at a future point of time, or when a certain event happens, does not, when that time arrives, or on the happening of the event, become of itself a sale, transferring the property. The party to whom the sale was to be made does not then ac- quire the property, and cannot by teiidering the price acqiiire a right to possession ; but he may tender the price, or whatever else would be the fulfilment of his obligation, and then sue the owner for his breach of contract, if he will not deliver the goods. But the property in the goods remains in the origi- nal owner. For the same reason that the property in the goods must pass by a sale, there can be no actual sale of any chattel or goods wliich have no existence at the time. It may, as. we have seen, be a good contract for a future sale, but it is not a present sale. Thus, in contracts for the sale of articles yet to be manufactured, the subject of the contract not behig in ex- istence when the parties enter into their engagement, no prop- erty passes until the chattel is in a finished state and has been specifically appropriated to the person giving the order, and ap- proved and accepted by him. As there can be no sale unless of a specific thing, so there is no sale but for a price which is certain, or which is capable of being made certain by a distinct reference to a certain standard. SECTION III. OP BELIVEKY AND ITS INCIDENTS. When a sale is effected, the buyer has an immediate right to the possession of the goods, as soon as he pays or tenders the. price ; O"- *t once, without payment, if the sale be on credit. And the se}'oi- is^bound to deliver the goods. 56 THE LAWS OP BUSINESS FOE BUSINESS MEN. What is a sufficient deliTery is sometimes a question of diffi- culty. In general, it is sufficient, if the goods are placed in the buyer's hands or his actual possession, or if that is done which is the equivalent of this transfer of possession. Some modes and instances of delivery we have already seen. We add, that if the goods are landed on a wharf alongside of the ship which brings them, with notice to the buyer, or knowl- edge on his part, this may be a sufficient delivery, if usage, or the obvious nature of the case, make it equivalent to actually giving possession. And usage is of the utmost importance in determining questions of this kind. In general, the rule may be said to be, that that is a sufficient delivery which puts the goods within the actual reach or power of the buyer, with immediate notice to him, so that there is nothing to prevent him from taking actual possession. When, from the nature or situation of the goods, an actual delivery is difficult or impossible, as in case of a quantity of timber floating in a boom, slight acts are sufficient to consti- tute a delivery, if they sufficiently indicate the transfer of possession. So if the property which is the subject of the sale is at sea, the indorsement and delivery of the bill of lading, or other muniment of title, is sufficient to constitute a delivery, and by such indorsement and delivery of the bill of lading the property in the goods immediately vests in the buyer ; and he can transfer this to one who buys of him, by his own indorsement and delivery of the bill of lading. Where goods at sea are sold, the seller should send or deliver the bill of lading to the buyer within a reasonable time, that he may have the means of offering the goods in the market. And it has been held that a refusal of the bill of lading authorized the buyer to rescind the sale. Until delivery, the seller is bound to keep the goods with ordinary care, and is liable for any loss or injury arising from the want of such care or of good faith. But if he exercises ordinary care and diligence in keeping the commodity, he is not liable for any loss or depreciation of it, unless this arises from some defect which he has warranted not to exist. Thus, in a case in New York, A sold to B a certain quantity of beef, B paying the purchase-money in full ; and it was agreed be- OF SALES OP PERSONAL PEOPERTY. 67 tween them that the beef should remain in the ciistotly of A until it should be sent to another place. Some time after, B received a part, which proved to be bad, and the whole was found, on inspection, to be unmerchantable. The court held that, as the beef was good at the time of its sale, the vendee (or buyer) must bear the loss of its subsequent deterioration. If the buyer lives at a distance from the seller, the seller must send the goods in the manner indicated by the buyer. If no directions are given, he must send them in siich a way as usage, or in the absence of usage, as reasonable care would require. And generally all customary and proper precautions should be taken to prevent loss or injury in the transit. If these are taken, the goods are sent at the risk of the biiyer, and the seller is not responsible for any loss. But he is re- sponsible for any loss or injury happening through the want of such care or precaution. And if he sends them by his own servant, or carries them himself, they are in his custody, and, generally, at his risk, until delivery. But if the buyer distinctly indicates the way or means by which he wishes that the goods should be sent to him, as by such a carrier, or such a line, if the seller complies with his directions, and exercises ordinary care over the goods until they are delivered to the person or line so pointed out, his responsibility ends with this delivery, in the same manner as it would if he deliv- ered the goods into the hands of the owner. This question of delivery has a very great importance in an- other point of view ; and that is, as it bears ixpon the honesty, and therefore the validity, of the transaction. As the owner of goods ought to have them in his possession, and as a trans- fer of possession usually does, and always should, accompany a sale, the want of this transfer is an indication, more or less strong, that the sale is not a real one, but a mere cover. The law on this subject has fluctuated considerably ; and is differ- ent in different parts of the country. Generally, and as the prevailing rule, it may be stated thus. Dehvery is not essen- tial to a sale at common law ; but if there is no delivery, and a third party, without knowledge of the previous sale, pur- chases the same thing from the seller, he gains an equally valid title with the first buyer; and if he completes this 8 58 THE LAWS OF BUSINE^ .^OE BITSINESS MEN. .i title by acquiring possession of the thing before the other, he can hold it against the other. So, also, unless delivery or pos- session accompany the transfer of the right of property, the things sold are subject to attachment by the creditors of the seller. And if the sale be completed, and nevertheless no change of possession takes place, and there is no certain and adeqiiate cause or justification of the want or delay of this change of possession, the transaction will be regarded as fraud- ulent and void in favor of a third party, who, either by pur- chase or by attachment, acquires the property in good faith, and without a knowledge of the former sale. In this country the rules of law on this point are hardly so strict as in. Eng- land; and, generally, fraud would not be absolutely inferred from the want of change of possession, although it would be so inferred there. Indeed, in that country it seems to be hardly open to explanation ; but here, this circumstance might be explained, and if shown to be perfectly consistent with honesty, and to have dcctirred for good reasons, and especially if the delay in taking possession was brief, the title of the first buyer would be respected. If goods are sold in a shop or store, separated, and weighed or numbered if that be necessary, and put into a parcel, or otherwise made ready for delivery to the buyer, in his pres- ence, and he request the seller to keep the goods for a time for him, this is so far a delivery as to vest the property in th(5 goods in the buyer, and the seller becomes the bailee of the buyer. And if the goods are lost while thus in the keep- ing of the seller, without his fault, it is the loss of the buyer. (In law the word bail means " to deliver." Thus a " bailor " _ is one who delivers a thing to another ; the " bailee " is the party to whom it is delivered ; and " bailment " is the delivery. The " bail " of a party who is arrested, is he or they to whom the arrested person is given up, on their agreement that he shall be forthcoming when required by law.) In a contract of sale there is sometimes a clause providing that a mistake in description, or a deficiency in quality or quantity, shall not avoid the sale, but only give the buyer a right to deduction or compensation. But if the mistake or defect be great and substantial, and affects materially the OF SALES OP PERSONAL PROPERTY. 59. availability of the thing for the purpose for -which it was bought, the sale is nevertheless void, for the thing sold is not that which was to have been sold. If the buyer knowingly receives goods so deficient or so dif- ferent from what they should have been that he might have refused them, he will be held to have waived the objection, and to be liable for the whole price ; unless he can show a good reason for not returning them, as in the case of materi- als innocently used before discovery of the defects, or the like. Thus, where a man bought a chandelier warranted sufficient to light a certain room, and kept it six months, the court did not permit him to return it and refuse jaynlent, although it was not what it had been warranted to be. Sometimes two or three months, or even less, is held too long a keeping to per- mit a subsequent return But though the buyer cannot re- turn the thing, yet, when the price is demanded, he may set off whatever damages he has sustained by the seller's breach of contract, and the seller can recover only the value to the buyer of the goods sold, even if that be nothing. But a long delay or silence may imply a waiver of even this right on the part of the buyer. One who orders many things at one time, and by one bar- gain,' may, generally, refuse to receive a part without the rest ; but if he accepts any part, he severs that part from the rest, and rebuts (or removes) the presumption that it was an entire contract ; the buyer will then be held as having given a sepa- rate order for each thing, or part, and as therefore bound to receive such other parts as are tendered, unless some distinct reason for refusal attaches to them. If many several things are bought at one auction, but by different bids, and especially if the name of the buyer be marked against each, there is a separate sale to him of each one, and it is independent of the others ; so that he must take and pay for any one or more, al- though the others are not what they should be, or cannot be had. If, however, it could be shown by the nature of the case, or by evidence, that the things were so connected tliat one was bought entirely for the sake of the other, be would not be obliged to take the one unless he could have the other. This rule applies also when the things sold are lots of land. In- 60 THE LAWS OP BUSINESS FOE BUSINESS JIEN. deed, the general rule may be stated thus. The question whether it is one contract, so that the buyer shall not be bound to receive any part unless the whole be tendered to him, will be determined by ascertaining' from all the facts whether the parts so belong together that it may reasona- bly be supposed, that none would have been purchased if the whole had not been purchased, or if any part could not have been purchased. The buyer may have, by the terms of the bargain, the right of redelivery. For sales are sometimes made upon the agree- ment that the purchaser may return the goods within a fixed, or within a reasonable time. He may have this right without any condition, and then has only to exercise it at his discre- tion. But he may have the right to return the thing bought, only if it tiirns out to have, or not to have, certain qualities ; or only upon the happening of a certain event. In such case the burden of proof is on him to show that the circumstances exist which are necessary to give him tliis right. In either case the property vests in the buyer at once, as in ordinary sales; but subject to the right of return given him by the agreement. If he does not exercise his right within the agreed time, or within a reasonable time if none be agreed upon, the right is wholly lost, the sale becomes absolute, and the price of the goods may be recovered in an action for goods sold and delivered. SECTION IV. OP CONTKACTS VOID FOR ILLEGALITY OR FRAUD. As the law will not coinpel or require any one to do that which it forbids him to do, no contract can be enforced at law which is tainted with illegality. It may, however, be neces- sary to consider whether the contract be entire or separable, and whether it is wholly or partially illegal. If the whole consideration, or any part of the consideration, be illegal, the promise founded upon it is void, whether the promise is legal or not. But if the consideration is legal, and the promise is OF SALES .OF PERSONAL PROPERTY. 61 in part legal and in part illegal, it is valid for the legal part and may be enforced for that part. Thus, if a master of a vessel agreed to smuggle goods, and in consideration of his doing so the owner promised to pay him oiie fourth of his profits, and also to advance twenty dollars a month to his fam- ily during a certain time, the master could enforce no part of this promise, and recover no damages for any breach of it, because the consideration is illegal. But if, for One thousand dollars paid, the receiver agreed to sell and deliver a quantity of merchandise, and also to assist the buyer in some contem- plated fravid, he would be bound to sell and deliver the goods, because the consideration was legal, and this part of the prom- ise was legal, but not to assist in the fraud, because this part of the promise is illegal. We mean to say, that if a whole promise, or any part of a promise that cannot be severed into substantial and independent parts, is illegal, the whole prom- ise is void. But if the consideration is legal, and the promise is legal in part and illegal in part, and that part of the promise which is legal can be severed from that part which is illegal, and there be a substantial promise having a value of its own, this legal part can be enforced. For further remarks upon this subject, however, we refer to the previous chapter on Consideration. Formerly, an agreement to sell at a future day goods which the promisor had not now, and had not contracted to buy, and had no notice or expectation of receiving by consignment, was considered open to the objection that it was merely a wager, and therefore void. But later cases have admitted it to be a valid contract. We have already said, in our fourth chapter, that fraud viti- ates and avoids every contract and every transaction. Hence, a wilfully false representation by which a sale is effected ; or a purchase of goods with the design of not paying for them ; or hindering others from bidding at auction by wrongful means ; or selling at auction, and providing by-bidders who should run the thing up fraudulently; or selling "with all faults," and then purposely concealing and disguising them, as when a man advertised a ship for sale at auction " with all faults," but pur- posely put her in a situation where an important fault could 62 THE LAWS OP BUSINESS FOR BUSINi:SS MEN. not be easily detected ; or any similar act, will avoid a sale. » «No title or right passes by such sale to the fraudulent party ; but the innocent party, whether buyer or seller, may waive the fraud, and insist that the fraudulent pa,rty shall not take, ad- vantage of his own fraud to avoid the sale. And by an excep- tion to the general rule that he who has no title can give none, if a fraudulent buyer sells to a third party who is wholly without participation in or knowledge of the fraud, the inno- cent buyer may acquire a good title. A buyer who is imposed upon by a fraud, and therefore has a right to annul the sale, must exercise this right as soon as may be after discovering the fraud. He does not lose the right necessarily by every delay, but certainly does by any considerable and uiiexcused delay. A seller may rescind and annul a sale if he were induced to make,, it by fraud. But he may waive the right and sue for the price. If, however, the fraudulent buyer gets the goods on a credit, and the seller sues for the price, this suit is a con- firmation of the whole sale, including the credit ; or rather it is an entire waiver of his right to annul the sale, and the suit cannot be maintained until the credit has wholly expired. If a party who has been defrauded by any contract brings an action to enforce it, this is a waiver of his right to rescind, and a confirmation of the contract. Or if, with knowledge of the fraud, he offers to perform the contract on conditions which he had no right to exact, this has been held so effectual a waiver of the fraud that he cannot set it up in defence, if sued on the contract. SECTION V. OF SALES WITH WARRANTY. A SALE may be with warranty ; and this may be general, or particular and limited. A general warranty does not extend to defects which are known to the purchaser ; or which are open to inspection and observation, unless the purchaser is at the time unable to discover them readily, and relies rather OP SALES OP PERSONAL PROPERTY. 63 upon the knowledge and warranty of the seller. A warranty- may also be either express or implied. It is not implied by the law generally merely from a full, or, as it is called, a soimd price. The rule of law, caveat emptor, {let the buyer take care,') prevents tliis. But the usage of the trade will be considered, and if that require a declaration of certain defects whenever they exist, the absence of such declaration is a warranty against such defects. Mere declarations of opinion are not a warranty. Thus, in England, an action was brought on a warranty that certain goods were fit for the China market. The plaintiif produced a letter from the defendant, saying that he had goods fit for the China market, which he offered to sell cheap. But the court held that such a letter was not a war- ranty, but merely an invitation to trade, it not having any spe- cific reference to the goods actually bought by the plaintiif. If these declarations are intended to deceive, and have that effect, they may avoid the sale for fraud. And affirmations of quantity or quality, which are made pending the negotiations for sale, with a view to procure a sale, and have that effect, will be regarded as a warranty ; thus, in New York, it was held that a representation made by a vendor, upon a sale of flour in barrels, that it was in quality superfine or extra- superfine, and worth a shilling a barrel more than common, coupled with the assurance to the buyer's agent that he might rely upon such representation, was a warranty of the quality of the flour. So in England, where upon the sale of a horse the vendor said to the vendee, " You may depend upon it, the horse is perfectly quiet and free from vice " ; this was held to amount to an express warranty. Goods sold by sample are warranted by such sale to con- . form to the sample ; but there is no warranty that the sam- ple is what it appears to be. Thus, in England, there was a sale of five bags of hops, with express warranty that the bulk answered the samples by which they were sold. The sale was in Janiiary ; at that time the samples fairly answered to the commodity in bulk, and no defect was at that time perceptible to the buyer. In July following, every bag was found to have become unmerchantable and spoiled, by heating, caused probably by the hops having been fraudulently watered 64 THE LAWS OF BUSINESS FOR BUSINESS MEN. by tlie grower, or some other person, before they were pur- chased by the defendant. The defendant knew nothing of this fact at the time of sale, and the samples were as much damped as the rest ; and it was then impossible to detect it. It was held by the court that there was here no implied war- ranty that the bulk of the commodity was merchantable at the time of sale, although a merchantable price was given. It seems, according to the weight of authority, that a breach of warranty does not generally authorize the buyer to return the article sold, unless there be an agreement to that effect, or fraud ; but only to sue on the warranty, and recover damages for the breach of it. But if one orders a thing for a special purpose known to the seller, he may certainly return it if unfit for that purpose, if he does so as soon as he ascertains its unfit- ness. In this country, the seller of goods actually in his possession is generally held to warrant his own title by the fact of the sale. But if the property be not in the possession of the vendor, and there be no assertion of ownership by him, no imiDlied -warranty of title arises. If a thing is ordered of a manufacturer for a special purpose, and is siipplied, there is an implied warranty that it is fit for that purpose. In an English case, the defendant was a dealer in ropes, and represented himself to be a manufacturer of the article. The plaintiff, a wine-merchant, applied to him for a crane-rope. The defendant's foreman went to the plaintiff's premises, in order to ascertain the dimensions and kind of rope required. He examined the crane and the old rope, and took the necessary admeasurements, and was told that the new rope was wanted for the purpose of raising pipes of wine out of the cellar, and letting them down into the street ; when he in- formed the plaintiff that a rope must be made on purpose. The defendant did not make the rope himself, but sent the order to his manufacturer, who employed a third person to make it. It was held that, as between the parties to the sale, the defendant was to be considered as the manufacturer, and- that there was an implied warranty that the rope was a fit and proper one for the purpose for which it was ordered. And the seller was held responsible, not only for the rope, which broke, but for a pipe of wine which was thereby lost. OP SALES OF PERSONAL PROPERTY. 65 This principle miigt not be applied to those cases where an ascertained article is purchased, although it bo intended for a special purpose. For if the thing itself is specifically selected and purchased, the purchaser takes upon himself the risk of its effecting its purpose. This is illustrated in an English case thus: "If a man says to another, 'Sell me a horse fit to carry mo,' and the otlier sells a horse ■which he knows to be unfit to ride, he will be liable for the conseqviences ; but if a man says, ' Sell me that gray horse to ride,' and the otlier sells it, knowing that the buyer will not be able to ride it, that would not make him liable." It has been miich discussed whether a bill of sale, describing the article sold, amounts to a warranty that the airticle conforms to the description. It seems now to be well settled that it does. In a recent Massachusetts case, there was a bill of sale as fol- lows : " H..& Co. boiight of T. W. & Co. two cases of indigo, $272." The article sold was not indigo, but principally Prus- sian blue. No fraud was imputed to the seller, and thc^article was so prepared as to deceive experienced and skilful dealers in indigo. The naked questic^ was presented, whether the bill of sale constituted a warranty that the article sold was indigo. And the court held that it did. Here the warranty implied by tlie bill of sale was as to 1;he kind of goods. In another case the bill was, "Sold E. T. H. 2,000 gallons jorme quality winter oil.'" The tiling sold was oil, and winter oil ; but not prime quality. And the court held that the bill of sale amounted to a warranty that it was of that quality. In an English case, a vessel was adver- tised for sale as " copper fastened" ; and this was held to be a warranty that she was so according to the usual understanding of merchants. In Pennsylvania the courts consider a bill of sale as a war- ranty of the kind of goods, but not of their quality. Thus, where a bill of sale described the thing sold as " superior sweet-Seen ted Kentucky leaf tobacco," the court held that ajl the warranty was satisfied if the tobacco was "Kentucky leaf tobacco," and would not permit the plaintiff to recover in an action on tlie warranty, although the tobacco was of low quality, ill-flavored, and not sweet-scented. But the rule in this country generally is the same as that in Massachusetts and England. 9 66 THE LAWS OP BUSINESS FOE BUSINESS MEN. , One who sells provisions is always considered in law as war- ranting that they are good and wholesome. SECTION VI. OF THE SALE OF ONE'S BUSINESS. Such sales are not unfrequent in this country ; and the seller always agrees and promises that he will not pursue that trade, business, or occupation again. There are numerous cases, both in English law-books and in our own, which have arisen from bargains of this kind. The law seems now to be settled, that such a contract is wholly void and inoperative, provided the seller agrees to give up his business and never resume it again, amjwhere, that is, without any limitation of space or time. But the contract' is good, if for a fair consideration the seller agreestnot to resume or carry on that .business within a certain time, or within certain limits. What these limits must be, is not certain. The courts say thejUniist be " reasonable," and made in good faith. A contract not to carry on a business in a certain town would undoubtedly be good. So, we should say, would be . a bargain not to do so within a certain State. This may not be qiiite certain, although, in one case in Massa- setts, a contract not to use certain machines in any of the United States except two, (which were Massachusetts and Rhode Island,) was held valid, all of the States but two being considered as a sufficiently defined or limited place ; but this was unusual. We should expect that the courts generally would sanction such a bargain, if it were limited to only a part of the United States ; as to all New England, for example. In such a contract, it would be better for the parties to agree upon flae amount which the seller should pay by way of dam- ages, if he violated his bargain, because it might be very diffi- cult to prove specific damages ; and such a bargain, if it were reasonable, would be enforced by law. Such damages, agreed on beforehand, are called liquidated damages. Generally, it is the duty of the jury to determine, from the evidence before them, what damages an injured party has sufifered, and what amount would indemnify him. STOPPAGE IN TBANSITU. 67 CHAPTEE VII. STOPPAGE IN TRANSITU. Here is an instance where a Latin phrase has become Eng- lish, by general adoption and use In transitu means "in the transit," and the English phrase may just as well be used ; but the Latin one is iised much oftener. "What the whole phrase Stoppage in transitu means, is this. A seller, who has sent goods to a buyer at a distance, and after sending them finds that the buyer is insolvent, may stop the goods at any time before they reach the buyer. His right to do this is called the right of Stoppage in transitu. •The right exists only between a buyer and seller. A surety for the price of the goods, bound to pay for them if the buyer does not, has not this right. But one who is substoMtially a seller has ; ' thus one ordered by a foreign correspondent to buy goods for him, and then buying them in his own name and on his own credit, and sending them as ordered, may stop them in transitu. So may a principal who sends goods to his factor, or one who remits money for any particular purpose. The fact that the accounts are unsettled between the parties, and the balance uncertain, does not defeat the right ; nor does the reception and negotiation of a biU for the goods, or actual part payment. If the goods are sent to pay a precedent and existing debt, they are not subject to this right. The right exists only upon actual insolvency ; but this need not be formal insolvency, or bankruptcy at law ; an actual inability to pay one's debts in the usual way being enough. If the seller, in good faith, stops the goods, in a belief of the buyer's insolvency, the buyer may at once defeat this step- page, and reclaim the goods, by payment of the price. So he may, we think, by a tender of adequate security, if the sale be on credit. And if the sale be on credit without security, by agreement, then the seller can stop the goods and demand 68 THE LAWS OP BUSINESS FOE BUSINESS MEN. security only for actual and sufficient cause, and takes this •risk on himself. The stoppage must be effected by the seller, and evidenced by some act ; but it is not necessary that he should take actual possession of the goods. If he gives a distinct notice to the party in possession, whether carrier, warehouseman, middle- man, or Avhoever else, before the goods reach the buyer, this is enoiigh. But a notice of stoppage in transitu, to be effectual, must be given either to the person who has the immediate cus- tody of the goods ; or if to the principal whose servant has the custody, then at such a time, and under such circumstances, as that he may, by the exercise of reasonable diligence, com- municate it to his servant in time to prevent the delivery to the consignee. Therefore, where timber was sent from Que- bec, to be delivered at Port Fleetwood in Lancashire, England, a notice of stoppage given to the ship-owner at Montrose, while the goods were on their voyage, whereupon he sent a letter to await the arrival of the captain at Fleetwood, directing him to deliver the cargo to the agents of the vendor, — was held not to be a sufficient notice of stoppage i7i transitu. They can be stopped only while in transitu ; and they are in transit only until they come into the possession of the buyer. But this possession need not be actual, a constructive possession by the hujer being sufficient ; as by being placed on the wharf of the buyer, or on a neighboring wharf with notice to him ; or in a warehouse with delivery of the key to him, or of an order on the warehouseman. Thus, where goods were shipped at Troy, N. Y., directed to' the purchaser at Vergennes, Vt., and were landed upon the wharf at Vergennes, half a mile from the pur- chaser's place of business. The purchaser's goods were usually landed at the same place, and it was not customary for the wharfinger, or the carrier, or any one for them, to have any care of the goods after they were landed ; but the consignee was accustomed to transport the goods from the wharf to his pftice of business ; as was also the custom with other persons having goods landed there. The goods, while on the wharf, were not subject to any lien for freight or charges. It was held that a delivery on the wharf was a constructive delivery to the veridee, and that the right of stoppage was gone when STOPPAGE IN TBANSITU. 69 the goods were landed. But the entry of the goods at the cus- tom-house, without payment of duties, does not terminate tlia transit. If the buyer has demanded and marked them at the inn where they had arrived on the termination of the voyage or journey, personally or by his agent ; ox if the carrier still holds goods, but only as the agent of the buyer ; in all these cases the transit is ended. But if the carrier holds them by a lien for his charges against the buyer, the seller may pay these charges and discharge the lien, and then stop the goods in transitu. And the master of a ship, which the buyer hires or owns, may be a carrier, in whose hands the seller may stop the goods, if they are to be delivered finally to the buyer him- self ; but if they have been put on board the buyer's ship, to be transported, not to him, but by his order to another place, they will never be any more in his possession than they are when first put on board; and therefore they are so far in his possession, as soon as on board, that there can be no stop- page in transitu. If the buyer has, in good faith and for value, sold the goods, before he has received them, and in expectation of their arrival, and indorsed and delivered the bill of lading, this second pur- chaser holds the goods free from the first seller's right to stop them. But if the goods and bill are transferred only as secu- rity for a debt due from the first purchaser to the transferee, the original seller may stop the goods, and hold them subject to this security, and need pay only the specific advances made on their credit, or on that very bill of lading, and not a general indebtedness of the first purchaser to the second. A seller who stops the goods in transitu does not rescind the sale, but holds the goods as the property of the buyer ; and they may be redeemed by the buyer or his representatives, by paying the price for which they are a security ; and if not re- deemed, they become absolutely the seller's, in the same way as a pledge might become his ; and if he fails to obtain from them the full price due, lip has a claim for the balance upon the buyer. The exercise of this right is necessarily adverse to the buyer ; for if the goods are taken by the seller, by agreement with the b\iyer, it i^ no longer a stoppage in transitu. An honest buyer, 70 THE LAWS OF BUSINESS FOE BUSINESS MEN. apprehending bankruptcy, might wish to return the goods to their original owner ; and this he could undoubtedly do, if they have not become distinctly his property, and the seller his creditor for the price. But if tliey have, the buyer has no more right to benefit this creditor by such an appropria- tion of these goods, than any other creditor by giving him any other goods. It has been questioned whether, when goods sold are sent by the seller to the buyer by any regular and usual convey- ance, the vendee may go forward to meet them, and take possession of them before the* time of their regular delivery, and thus abridge, by his own act, the right of stoppage of the seller. But it seems that he may do this, and that the right of stoppage in transitu is terminated by the buyer's thus taking possession of the goods. OP GUARANTY. 71 CHAPTER VIII. OF GUARANTY. A GUARANTOR is One who is bound to another for the fulfil- ment of a promise, or of an engagement, made by a third party. This kind of contract is very common. Generally, it is not negotiable ; that is, not transferable so as to be enforced by the transferee in his own name. But no special form or words are necessary to the contract of guaranty ; and if the word " guarantee" be used, and the whole instrument contains all the characteristics of a note of hand, payable to order or bearer, then it is negotiable. Thus, in a case in New York, the instru- ment was as follows : " For and in consideration of thirty-one dollars and fifty cents received of B. F. Spencer, I hereby guarantee the payment and collection of the within note to him or bearer. Auburn, Sept. 25, 1837. (Signed) Thomas Burns." And it was held negotiable. What negotiable means will be fully explained in the chapter on Notes of Hand and Bills of Exchange. The guaranty may be enforced, although the original debt cannot ; as, for example, the guaranty of the promise of a wife or an infant ; and sometimes the guaranty of a debt is requested, and given, for the very reason that the debt is not enforceable at law. But, generally, the liability of the principal measures and limits the liability of the guarantor. And if the creditor agree that the principal debt shall be reduced or lessened in a certain proportion, the guaranty is reduced in an equal propor- tion, especially if the guarantor be a party to the arrangement. A contract of guaranty is construed somewhat strictly. Thus, a guaranty of the notes of one, does not extend to notes which he gives jointly with another. A guarantor who pays the debt of the principal may de- mand from his creditor the securities he holds, although not, perhaps, an assignment of the debt itself, or of the note or bond which declares the debt, for that is paid and discharged. And 72 THE LAWS OP BUSINESS FOR BUSINESS MEN. in a court of equity the creditor mil be restrained from re- sorting to the guarantor, until he has collected as much as he can from these securities. Unless the guaranty is by a sealed instrument, there must be a consideration to support it. If the original debt or obli- gation rest upon a good consideration, this will support the promise of guaranty, if this promise be simultaneous with or prior to the original debt. But if that debt or obligation be first incurred and completed, before the guaranty is given, there must be a new consideration for this promise to guaran- tee that debt. But the consideration need not pass from him who receives the guaranty to him who gives it. Any benefit to him for whom the guaranty is given, or any injury to him who receives it, is a sufficient consideration if the guaranty be given because of it. In general, if there be a new and independent consideration for the guaranty passing between the parties to it, this will make it an original promise, and not a promise to pay the debt of another ; and will therefore protect it from the Statute of Frauds, of which important statute we shall speak more particularly in the next chapter. A guaranty is not binding unless it is accepted, and unless the guarantor has knowledge of this. But the law presumes this acceptance in general, when the giving of the guaranty and an action on the faith of it, by the party to whom it is given, are simultaneous. In New York, wherever the guaranty is abso- lute, notice of its acceptance is unnecessary, xmless expressly required. But, generally, an ofier to guaranty a future opera- tion, especially if by letter, does not bind the offerer, unless he has such notice of the acceptance of his offer as would give him a reasonable opportunity of indemnifying himself. If the liability of the principal be materially varied by the act of the party guarantied, without the consent of the guarantor, the guarantor is discharged. Many interesting cases have arisen, which involve this question. Thus, where a bond was given conditioned for the faithful performance of the duties of the office of deputy collector of direct taxes for eight certain town- ships, and the instrument of appointment, referred to in the bond, was afterwards altered, so as to extend to another town- OP GUARANTY. 78 ship, mthoxit the consent of the siircty, the Siipreme Court of the United States held that tlie surety was discharged from his responsibihty for moneys collected by his principal after the alteration. Again, in an English case, the facts were, that, in a bond by sureties for the careful attention to business and tlie faithful discharge of the .duties of an agent of a bank, it was provided " that he should have no other business of any kind, nor be connected in any shape with any trade, manufacture, or mercantile copartnery, nor be agent of any individual or copart- nery in any manner or way whatsoever, nor be security for any individual or copartnery in any manner or way whatsoever." The bank siibsequently, without the knowledge of the sureties, increased the salary of the agent, he undertaking to bear one fourth part of all losses which might be incurred by his dis- counts. The House of Lords held, affirming the decision of a majority of the court below, that this was such an alteration of the contract, and of the liability of the agent, that the sure- ties were discharged, notwithstanding that the loss arose, not from discounts, but from improper conduct of the agent. The guarantor is also discharged if the liability or obligation be renewed or extended by law. As if a bank, incorporated for twenty years, be renewed for ten more, and the officers and business of the bank go on withoxit change ; the original sure- ties of the cashier are not held beyond tlie first term. So a guaranty to a partnership is extinguished by a change among the members, although neither the name nor the business of the firm be changed. Btit a guaranty, by express terms, may be made to continue over most changes of this kind. A specific guaranty, for one transaction which is not yet exhausted, is not revocable. If it be a continuing or a gen- eral guaranty, it is revocable, unless an express agreement, founded on consideration, makes it otherwise. A creditor may give his debtor some accommodation or in- dulgence, without thereby discharging his guarantor. It would seem just, however, that he should not be permitted to give him any indulgence which would, materially prejudice tlie guarantor. Generally, a guarantor may always pay a debt, and so acquire at once the right of proceeding against the party whose debt he has paid. On tliis ground, it has been 10 74 THE LAWS OP BUSINESS FOB BUSINESS MEN. lield that, 'where a surety requested the creditor to proceed against the principal debtor, and tlie creditor refused to do this, and afterwards the debtor became insolvent and the surety was without indemnity, still, the surety (or guarantor) was not discharged, because he might have paid the debt, and then sued the party whose debt he paid. In New York, it seems indeed to be the law, that, if the surety requests the creditor to proceed against the principal debtor, and he refuses, and the principal debtor afterwards becomes insolvent, the surety wiU be discharged. But this rule has not been established there . withoiit much opposition ; and can hardly be said, even now, to be certain. But if, by gross negligence, the creditor has lost his debt, and has deprived the surety of security or uidemnity, Ve should say that the surety must be discharged, unless he was equally negligent. If a creditor gives time to his debtor, by a binding a,greement which will prevent a suit in the mean time, this undoubtedly discharges the guarantor, because it deprives him of his power of acquiring a right of proceeding against the debtor, by paying the debt ; for the debtor cannot be siied. If there be a failure on the part of the principal, and the guarantor is looked to, he should have reasonable notice of tliis. And, generally, any notice would be reasonable wliich would be sufficient in fact to prevent his suffering from the delay. And if there be no notice, and the guarantor has been unharmed thereby, he is not discharged. If a guaranty purport to be official, that is, if it be made by one who claims to hold a certain office, and to give the promise of guaranty only as such officer, and not personally, the gen- eral rxile is, that he is not liable personally, provided he actu-- ally held that office and had a right to give the guaranty offi- cially. But he would still be held personally, if the promise, made, or the relations of the parties, indicated that credit was given personally to the parties promising, and not merely to them in their official capacity. A guaranty was given for the price of a cargo of iron ; and the buyer bargained with the seller to pay him more than the fair price, the excess to go towards an old debt. The guaranty was held to be altogether void, because fraudulent; and was not enforced even for the fair price. OP THE STATUTE OF FRAUDS. 75 CHAPTER IX. OF THE STATUTE OF FRAUDS. SECTION I. OF ITS PUBPOSE AND GENEBAL PKOVISIOSTS. • The Statute^ of Frauds, so called, was passed in the 29th year of Charles II. (1677) for the purpose of preventing frauds and perjuries, by requiring in many cases written evi- dence of a contract. It is very generally in force in this country; but none of the various statutes of' the different States copy the English statute exactly, and no two of them agree exactly in all their provisions. They do, however, agree substantially ; and we shall give in this chapter the prevailing and nearly universal rules for the construction and application of this statute. It is often of very great importance in com- mercial transactions. Those provisions which especially relate to commercial law are contained in the fourth and seventeenth sections. By the fourth section, it is enacted that " no action shall be brought whereby to charge any executor or administrator, upon any special promise, to answer damages out of his own estate ; or whereby to charge the defendant, upon any special promise, to. answer for the debt, default, or miscarriages of another per- son ; or to charge any person upon any agreement made upon consideration of marriage ; or any contract for sale of landsj tenements, or hereditaments, or any interest in or concerning them; or upon any agreement 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 authorized." By the seventeenth section, it is enacted that " no contract 76 THE LAWS OF BUSINESS FOR BUSINESS MEN. for the sale of any goods, wares, and merchandises, for the price of £ 10 sterling, or upwards, shall be allowed to be good, except the buyer 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 charged by such contract, or their agents thereunto lawfully authorized." The second and fifth clauses of the fourth section, and the whole of the seventeenth, relate to our present subject. The second clause prevents an ordl guaranty from being enforced at law ; but if money be paid on one, it cannot be recovered back. SECTION II. OF A PROMISE TO PAY THE DEBT OP ANOTHER. Such a promise, although in writing, is not valid without a consideration; as we have already stated and illustrated in the chapter on Guaranty. And this necessity, and difficulty of distinguishing in many cases between an original promise, which need not be in writing, and a collateral promise, which must be in writing, has caused much litigation. By an origi- nal promise is meant a man's promise to pay his own debt ; a collateral promise is a promise to pay the debt of another man. If it be an original promise, it is not within the statute, and need not be in writing ; but if it be a collateral promise, or a promise for another, it is within the statute. By the phrase within iJie statute, is meant that the promise is such as the statute applies to ; and such a promise must be in writing, and signed by the party whom it is sought to charge upon the promise. The best rules to determine whether there be a sufficient consideration, and also whether the promise be collateral and within the statute, or original, and so out of the statute, are these : — 1. Where the guaranty is made at the same time with the original promise, and is an essential cause of the credit given to the original promisor, that credit is a consideration OP THE STATUTE OF FRAUDS. 77 for tlie collateral promise. 2. Where the guaranty is given after the original promise is completed and credit given, there must be a new consideration for the guaranty. 3. If, after the new promise is given, the original promisor remains liable, and there is no liability on the part of the guarantor other than what arises from his guaranty, this is a collateral prom- ise, and is generally within the provisions of the statute, and must be in writing. It is indeed very often difFicxilt to say whether the promise of one to pay for goods delivered to anotlier is an original promise, as to pay for one's own goods, or a promise to pay the debt or guaranty the promise of him to whom the goods are delivered. The question may always be said to be: To ivliom did the seller give, and was authorized to give, credit? This question the jury will decide, upon consideration of all the facts, under the direction of tlie court. If a seller sues one to whom he did not deliver the goods, on the ground that this other promised to pay for them, then the question is. Did this other promise to pay for them as for his own goods ? for then the promise need not be in writing. Or did he promise to pay for them as for the goods of the party receiving them ? and tlien it is a promise to pay the debt of another, and must be in writ- ing. If, on examination of the books of the seller, it appears that he charged the goods to the party who received them, it will be difficult, if not impossible, for him to maintain that he sold them to the other party. But if he charged them to this otlier, such an entry would be good e\'idence, and, if confirmed by circumstances, strong evidence that this party was the pur- chaser. But it cannot be conclusive ; for the party not receiv- ing the goods may always prove, if he can, that he was not the buyer, and that he promised only as surety for the party who ■ was the buyer; and, consequently, that his promise cannot be enforced if not in writing. And, in general, in determin- ing this question, the court will always look to the actual, cliaracter of the transaction, and the intention of the parties. The courts, both in England and in America, have often en- deavored to illustrate this question. Thus, in an early English case, the court said : " If two come to a shop, and one buys, and the other, to gain him credit, promises the seller, 'If he 78 THE LAWS OF BUSINESS FOE BUSINESS MEN. does not pay jon, I will,' this is a collateral undertaking, and void, \Tithout writing, by the Statiiteof Frauds. But if he says, ' Let him have the goods, I will be your paymaster,' this is an undertaking as for himself, and he shall be intended to be the very buyer, and the other to act but as his servant." So, in a case in Maryland, the court said : " If B gives credit to C for goods sold and delivered to him, on the promise of A to ' see him paid,' or ' to pay him for them if C should not,' in .that case it is the immediate debt of C, for which an action will lie against him, and the promise of A is a collateral un- dertakmg to pay that debt, he being only liable as a surety. But where the party midertaken for is under no original lia- bility, the promise is an original undertaking of the party promising, and binding upon him without being in writing. Thus, if B furnishes goods to C, on the express promise of A to pay for them, as if A says to him, ' Let C have goods to such an amoimt, and I will pay you,' and the credit is given to A, in that case C being \inder no liability, there is nothing to which the promise of A can be collateral ; but A being the immediate debtor, it is his original undertaking, and not a promise to answer for the debt of another " ; and therefore need not be in writing. If a promise or undertaking be once shown to be original, and not collateral, as we have endeavored to explain and illus- trate those terms, it can never be brought within the operation of the statiite; that is, it never needs to be in writing. This is a rule to which there is no exception that we are aware of. But the converse does not hold universally. For, though it is generally true, as we have said, that collateral promises are within the statute, and therefore must be in writing, there are in the books several cases of collateral promises to wliich it has been held that the statute did not apply. Many attempts have been made to discover a principle which would explain all these cases, and serve as a test in the future for distinguishing those collateral promises whicli are, from those which are not, within the statute. Chief Justice Kent stated the principle thus: " When the promise to pay the debt of another arises out of some new and original consideration of benefit or harm, mov- ing between the newly contracting parties, it is not within the OP THE STATUTE OF FRAUDS. 79 statute." But this -will scarcely explain all the cases, though it may most of them. "We should prefer to state the distinc- tion thus. Whenever the main purpose and object of the promisor is not to answer for another, but to subserve some purpose of his own, his promise is not within the statute, al- though it may be in form a promise to pay the debt of an- other, and although the performance of it may incidentally have the effect of extinguishing the liability of another. If there be an oral promise to pay the debt of another, and also to do some other thing, this last can be enforced at law, if this other thing, and so much of the promise as relates to it, can be severed from the debt of the other and the promise relathig to that debt ; for although that promise must be in writing, the other may be oral. SECTION III. OF AS AGREEMENT NOT TO BE PERFOEMED WITHIN A YEAR. Under the fifth clause in the fourth section, it is held that an agreement which may be performed within the year is not affected by the statute, as the words, " that is not to be per- formed within one year," do not apply to an agreement which, when made, was, and by the parties was understood to be, fairly capable of complete execution within a year, without the intervention of extraordinary circumstances, — althoiigh in point of fact its execution was extended much beyond the year. So where one agreed orally, for one guinea, to give another a number of guineas on the day of his marriage, it was held that this promise was not within the statute, that is, not one which the statute required to be in writing, because he might be married within a year, and the promisor was therefore bound by it. So where one agreed orally never to go into the staging business in a certain place,- as this contract could last only while the promisor lived, and he might die within a year, he was held to be bound by it. 80 THE LAWS OF BUSINESS FOE BUSINESS MEN: SECTION IV. OP THE ACCEPTANCE OP A THING SOLD. Under the exceptional clause in the seventeenth section, " unless the buyer shall accept and actually receive the same," it is clear that a mere delivery is not enough, without a dis- tinct acceptance by the buyer. But anytMng would amount to a delivery and acceptance, which was intended to be so, and was received as sueli,"and which actually put the goods within the reach and power of the buyer. The symbolical deliveries before mentioned, as the delivery of the key of a warehouse, or an entry in the books of the warehouse-keeper, or indorsement and delivery of a bill of lading, or even of a receipt, in many cases, or a delivery of a part of one whole, without tlie intention of separating it from the rest, are sufficient. But some of many distinct and sever- able things may be delivered without this operating as a deliv- ery of the rest ; nor is the delivery of a sample sufficient^ unless it be delivered as a part of the thing sold. The subject of delivery has been considered in the chapter on Sales. If the buyer receives the goods, but reserves the right of returning them and rescinding the sale if they are not satisfac- tory, or as represented, this we should hold to be a conditional acceptance, which does not suffice to take the case out of the requirement of the statute, iintil this right is extinguished by lapse of time or otherwise, or given up ; for imtil then tliere is no definite and certain acceptance. " Earnest " must be given and received as such to make the sale valid under that clause of the statute. " Earnest " is a payment of a part as a symbol for the whole, and the part-pay- ment must be actual payment, and not a mere agreement tliat something else, as a discharge of an existing debt, shall be taken as part-payment. OF THE STATUTE OF FRAUDS. 81 SECTION V. OF THE FORM AND SUBJECT-MATTER OF THE AGREEMENT. The " agreement " must be in writing ; bnt generally, in this country, the writing need not contain or express the con- sideration, which may be proved otherwise. Nor need it be all on one piece of paper. For it is sufficient if on several pieces, as in several letters, which, however, relate to one and the same biisiness, and may fairly be read together as the state- ment of one transaction. The "signature" may be in any part of the paper, — the beginning, middle, or end, except in those of our States in which the statute has the word "subscribed" instead of " signed " ; in which case it should be in the usual place at the bottom. If the name and the agreement be printed^ it is suffi- cient ; hence, a printed shop-bill, with the name of the seller, as usual, at the beginning, if delivered to the buyer, is gen- erally sufficient to charge the seller in an action for refusing to deliver the goods. Shares in railroad companies, in manufacturing companies, and, we think, in all corporations and joint-stock companies, are " goods, wares, or merchandises," within the statute, in this country, and an agreement for their purchase and sale must here be in writing, although it is held otherwise in England. We tliink thai; a contract for an article not now the seller's, or not existing, and which must therefore be bought or manii- factured before it can be delivered, will also be within the stat- ute, and must be in writing, if the article may be procured by the seller by purchase from any one, or manufactured by him- self at his choice, the bargain being, in substance as well as form, only that the seller shall, on a certain day, deliver cer- tain articles to the buyer for a certain price. But if the bar- gain be rather that the one party shall make a certain article, and deliver it to the other party, who shall thereupon pay him for his materials, skill, and labor, this is not a contract of or for sale, but an agreement to hire and pay for work and labor, — or to employ that party in a certain way ; and it is not 11 82 THE LAWS OF BUSINESS FOE BUSINESS MEN. within the Statute of Frauds, as a contract for tlie sale of goods, ■wares, or merchandises. The operation of the statute in the clauses we have consid- ered, is not to avoid the contract, but only to inhibit and pre- vent actions from being brought upon it. In all other respects, it is valid. Thus, if A says, " In consideration of a promise from B to C to work for him two years, I will do so and so," and, when called up to do what he promised, says his promise was void, because B's promise to C was within the Statute of Frauds, and was not in writing, and was therefore void, — the answer is, that B's promise is not void, but is perfectly good as a consideration for A's promise, although no action can be maintained on B's promise. It may be further remarked, that the operation of the statute has been always limited to such contracts as have not been execxited in any substantial part, and therefore remain wholly executory. For if they have been executed substantially in good part, they are binding, although only oral. In Massachusetts, the Statute of Frauds also provides (3d section) that no action shall be brought to charge any person upon, or by reason of, any representation or assurance made concerning the character, conduct, credit, ability, trade, or dealings of any other person, unless it be made in writing, and signed by the party to be charged. And there are provisions substantially similar to this in tlie statutes of Maine and Ver- mont. The " £ 10 " mentioned in the first section,*is from thirty to fifty dollars in different States. OP PAYMENT. 83 CHAPTER X. OP PAYMENT. SECTION I. HOW PAYMENT MAY BE MADE. The obligations which arise out of most mercantile con- tracts are to be satisfied by payment of money. TIae parties may always agree to any specific manner of payment, and tlien that becomes obligatory on the creditor as well as the debtor. As, by deducting the amount to be paid from a debt due to the debtor either from the creditor or from' any one else. Or the amount may be made, by agreement, payable by a bill or note. If the debt is to be paid by a bill, it must be such a bill as is agreed upon, and this must be tendered by the debtor. But the word " bill " does not necessarily mean an " approved bill " ; and if this phrase be itself used, it means only a bill to which there is no reasonable objection. In the absence of any especial agreement, the only payment known to the law is by cash, which the debtor must pay when it is due, or tender to the creditor. The tender should, properly, be in cash, and must be so if that is required ; but a tender in good and current bank-bills is ^ sufficient, unless it be objected to because they are not money. Generally, if the tender be refused for any express and spe- cific reason, the creditor cannot afterwards take advantage of any informality, to wliich he did not object at the time of the tender. • The tender maybe- of a larger sum than is due. But a tender of a larger sum, with a requirement of change or of the balance, is not good. Nor must it be accompanied with a demand or condition that any instrument or document shall be delivered ; nor that the sum tendered shall be received as 84 THE LAWS OP BUSINESS FOB BUSINESS MEN. all that is due ; nor that a receipt in full shall be given. But it seems that a simple receipt for so much money paid may be demanded. We have already seen that, if a receipt be given, it is only strong evidence of payment, but not conclu- sive. And even if it be " in full of all demands," it is still open to explanation or denial by evidence. A lawful tender, and payment of the money into court, is a good defence to an action for the debt. But the creditor may break down this defence by proving that he demanded the money of the debtor, and the debtor refused to give it, sub- sequently to the tender. If the buyer or debtor give, and the seller or creditor re- ceive, a negotiable note or bill for the s\im due, this is not anywhere absolute and conclusive payment. In Maine and in Massachusetts the law presumes that such note or bill is payment of the debt, unless a contrary intention is shown. In England, in all the States of this Union but those two, and in the. Supreme Court of the United States, it is not payment, unless the intention of the parties that it should be so is shown. In New York, it has been held that the debtor's own promis- sory note is not payment, even if it be intended or expressly agreed that it should be. If a creditor, who receives from his debtor any bill or note, negotiates or sells it for value to a third party, witliout making himself liable, it is still pay- ment, althoiigh it be dishonored, because it has been good to him, and he has received the avails of it ; and if it is not held as payment, he can recur to his original debtor, and then he will have the value of the bill, or payment, twice. Not so, however, if he negotiates it in such a way as to make him- self liable upon it ; for if he pays it, he loses what he sold it for. SECTION II. t OF APPHOPKIATION OF PAYMENT. Ip one who owes several debts to his creditor makes to him a general payment, it may be an important question to which of those debts this payment shall be appropriated ; for some of OP PAYMENT. 85 them maj' be secured, and others not, or some of them carry- interest, .and others not, or some of them be barred by the Statute of Limitations, and others not. There is no doubt that the payor may appropriate his pay- ment, at the time of the payment, at his own pleasure. And if lie docs not exercise this right, perhaps it is as certain that the receiver may, at the time of payment, make the appro- priation. But if neither party does this at that time, and at a future period the question comes up as to which party may then make the appropriation, or rather, how the law will then appropriate the payment, there is more difBciilty. Upon the whole, we should prefer to state, as the better and prevailing rule, that, if the court can ascertain, either from the words used, or from the circumstances of the case, or from any usage, what was the intention and understanding of the par- ties at the time of tlie payment, that intention will be carried into effect. And if this cannot be ascertained, then the court will direct such appropriation of the payment as will best pro- tect the rights and interests of both parties, and do justice be- tween them. And one reason for this conclusion would be, that the law woulS presume that this was the original inten- tion of the parties. A very general rule, which would indeed be always adopted in the absence of especial reason to the contraiy, is, to apply the first payments to the oldest debt, xmtil that is satisfied, and then go on applying the successive payments to the debts in the order of their age. If A owes a debt to B, on B's own account, and another debt to B as trustee for somebody, and A pays B a sum of money without appropriating it, B caianot apply it all to the debt due him on his own account ; but must divide it between that debt and the debt due to him as trustee, in proportion to their re- spective amounts. Because it is his diity as trustee to take as good care of the debts due to him for another, as of those due to him on his own account. We have spoken of a " bill or note " ; and notes are some- times called bills ; so bank-notes- are often called bank-bills. But the legal meaning "of " bill " is always a draft or order on somebody to pay money. A note is a promise to pay. See next chapter. 86 THE LAWS OF BUSINESS FOR BUSINESS MEN. CHAPTER XI. OP NEGOTIABLE PAPER; OR NOTES OP HAND AND BILLS OP EXCHANGE. SECTION I. OP THE PURPOSE OF, AND PAKTIES TO, BILLS AND NOTES. By negotiable paper is meant evidence of debt which may be transferred by indorsement or delivery, so that the trans- feree or holder may sue the same in his own name ; or, in other words, it means paper, that is, bills of exchange or promis- sory notes, payable to the order of a payee, or to bearer. The rules of law on the subject of nSgotiable paper are more exact and technical than those of any other department of. Mercantile Law. They reach, on many points, an extreme nicety, which makes it difficult to express them intelligibly to persons who do not already possess some familiarity with the subject. All difficulty of tliis kind cotild have been easily avoided, by omitting any notice of these nice points. But it was thought better to mention them, one and all, for these are the things an intelligent merchant should know; and al- though the rules stated, especially those in reference tb pre- sentment, notice, and some other subjects, may seem to be in- tricate and difficult, they require, it is believed, only careful consideration to be fully imderstood. Where and when bills of exchange were invented is not certainly known. They were not used by any ancient na- tions, but have been employed and recognized by most com- mercial nations for some centuries. A still more recent in- vention is the promissory negotiable note, which, in this country, for inland and domestic purposes, has taken the place of the bill of exchange very generally. Besides these two, bills of lading, and some other documents, have a kind of negotiability, but it is quite imperfect. The utility of bills and notes in commerce arises from the fact that they repre- OP NEGOTIABLE PAPER. 8T sent money, ■which is the representative of everything else ; and many of the peculiar rules respecting negotiable paper . are derived from this representation, and intended to make it adequate and effectual. A negotiable bill of exchange is a written order whereby A oi'ders B to pay to C or his order, or to bearer, a sum of money, absolutely and at a certain time. A is the Drawer, B the Drawee, and C the Payee. If the bill is presented to B, and he agrees to obey the order, which he does in a mercantile way by writing the word "Accepted" across the face of the bill, and also writing his name below this word, the drawee then becomes the Acceptor. If C, the payee, chooses to trans- fer the paper and all his rights under it to some other person, he may do this by writing his name on (usually across) the back ; this is called Indorsement, and C then becomes an In- dorser. The person to whom C thus transfers the bill is an Indorsee. The indorsee may again transfer the bill by writing his name below that of the former Indorser, and the Indorsee then becomes the second Indorser ; and this process may go on indefinitely. If the added names cover all the back of the note, a piece may be wafered on to receive more. In Prance, this added piece is called " allonge," and this word is used in some law-books, but not by our merchants. It is quite important to have a clear idea of the difference hetween the parties to a note, and the parties to a bill of ex- change. If A makes a note to B, then A promises to pay, and is the promisor, and B is the promisee, or payee. But if it be payable to B or order, B may write his name across the back, that is, may indorse it, and is an indorser. And if he directs, over his signature on the back, that the note be paid to any person in particular, such payee is now an indorsee. But when a bill is drawn, nobody promises, in words, to pay it. A orders B to pay to C. If B, when requested, says he will not do as ordered, the law supposes A, the drawer, to have promised by implication that he would pay if B did not. If B accepts, which is usually done by writing his name across the face of the bill under the word "Accepted," the law now supposes that B promises C to pay the bill to him. Now B, being the acceptor, is held by the law just as a maker of a »» THE LAWS OP BUSINESS FOR BUSINESS MEN. note is, because he is supposed to have promised in tlie same way. A, the drawer, is held just as the first indorser of a note is held, because he is supposed to have promised to pay if B did not. If the bill was negotiable, that is, payable to C, or his order, then C may indorse the bill, and although his name is the only one on the back of the bill, he is treated in law only as second indorser, because the drawer is bound in the same way as first indorser. And if D then puts his name below C's, he is treated as third indorser, and so on. Fern the rights, obligations, and duties of all these parties, see the sub- sequent sections. We repeat, that a negotiable promissory note is a writteii promise to pay to a certain person or his order, or to bearer, at a certain time, a certain sum of money ; and he who signs this is called the Maker or the Promisor ; the other party is the Promisee or Payee. Tlie payee of such a nofe has the same power of indorsement as the payee of a bill of exchange. If the note be not payable to any order, nor to bearer, it is then not negotiable ; but it has been held that, if such a note be indorsed by the payee, payable to some person or his order, this becomes negotiable as between the indorser and indorsee, and subsequent parties. Such an indorsement niay in fact be regarded as a bill of exchange, drawn by the payee of the note upon the maker, in favor of the person to wliom the note is indorsed. The maker of a negotiable note holds, as has been said, the same position as the acceptor of a bill, the drawer the same as the first indorser of a note ; that is, a party holding a note and seeking payment of it looks first to the maker, and then to the indorser. One holding a bill looks first to the drawee or acceptor, and, on his failure, to the drawer. Neither indorsement, nor acceptance, nor, indeed, making, is complete until delivery and reception of the bill, or note, or acceptance ; and a defendant may show that there was no legal deliveiy of the paper. The law of negotiable paper first defines a bill or note, and determines what instruments come under these names, and then describes and ascertains the duties and obligations of all the parties we have named above. We shall follow this order. OP NEGOTIABLE PAPER.- 89 SECTION II. WHAT 13 ESSENTIAL TO A NEGOTIABLE NOTE OR BILL. A. WRITTEN order or promise maybe perfectly valid as a writ- ten contract or promise, but, although made "to order," will not be negotiable, unless certain requisites of the law-mer- chant are complied with. The difference between a note that is negotiable and one that is not, is very important in many respects. One of these is as to the operation of the trustee process, or foreign attach- ment, or garnishee process, as it is sometimes called. If A owes B a hundred dollars, C, a creditor of B, may trustee A, (to use the common phrase,) and A must then pay to C what he owes to B. And this is so, even if A have given his note to B for the hundred dollars, if the note be not negotiable, that is, not to B or order. But if the note be negotiable, A cannot be trusteed. Because, if he is obliged to pay the money to C, and B should indorse the note to D for value, and D take it hon- estly, A must pay the note to D, and so would pay it twice. But if the note is not negotiable, B cannot indorse it, and A is safe in paying the money over. 1. The Promise must be absolute and definite. — The promise of the note, and the order of the bill, must be absolute. Words expressive of intention, in the first case, or a request, which imports only to ask a favor, in the second case, are insufficient. But no one word, and no set of words, are absolutely necessary ; for if from all the language the distinct promise or positive order can be inferred, that is sufficient. The time of payment is usually written in a bill or note ; if not, it is payable on demand. The time of payinent must not be uncertain ; therefore, the note is not negotiable, if the promise be to pay on one's marriage, or if certain terms are complied with, or on the sale of certain goods, or at thirty days after the arrival of a ship, or out of a certain expected pay- ment when it should be made. But if it distinctly refers to an event which must happen, as to one's death, it has been held 12 90 THE LAWS OF BUSINESS FOE BUSINESS MEN. negotiable ; and this has been extended to the paying off of tlie crew of a public vessel ; but we doubt the soundness of tliis decision. In fact, any contingency apparent on the face of the instrument prevents it from being a negotiable note ; and the happening of the contingency does not cure it. * And the payment promised or ordered must be of a definite sum of money ; and, therefore, a promise to pay a certain sum " and aU fines," is not a negotiable promissory note. But if the con- tmgency be wholly in the payee's power, the note may still be negotiable ; thus, a promise to pay a sum, with interest, in twelve months after notice, was held a good note. The promise or order to pay out of a certain fund is not fatal, if this be merely descriptive or directory ; but if it must or shoiild be construed as making the payment depend upon the fund, however ample and certain that may seem, it is a fatal contingency. So, an order to pay rents accruing to a certain time, or to pay over a sum oiit of njoney collected by an attorney, or an order drawn on the treasury by a public officer, is not a bill of exchange. Nor is a bill drawn by one government upon another, for a treaty payment, subject to the law-merchant as a bill, and incident to protest, damages, &c. An order drawn expressly for the whole of a particular fund will operate as a transfer of that fund, although not recognizable as a bill of exchange. \ A negotiable bill of exchange or promissory note must be payable in money only, and not in goods or merchandise or property of any kind, or by the performance of any act. If payable in " current funds," or " good bank-notes," or " cur- rent bank-notes," this should not be sufficient on general prin- ciples, and according to many authorities ; some courts, how- ever, construe this as meaning notes convertible on demand into money, and therefore as the same thing as money. A bill or note may be written upon any paper or proper substitute for it, in any language, in ink or pencil. A name may be signed or indorsed by a mark ; and, though usually written at the bottom, it may be sufficient if written in the body of the note ; as, " I, A. B., promise," i this note five hundred or a thousand dollars, he coiild make this defence as well against C as against B, if B boiight the note after it was dishonored. Hence, it is said the indorsee of a dishonored note is not liable to a set-off be- tween the original payee and the maker. In some of our States it is held that, if a maker of a note pays money on it after it is due, he cannot have the benefit of this payment against one who purchases the note after it is due without knowledge of the payment, unless he caused the pay- ment to be indorsed upon the note ; because it is his diity to see that this indorsement is made, in order to put purchasers of the note on their guard. Nor is the mere want of considera- tion between payee and maker one of those defences to Avhich a pTirchaser for value after dishonor, even with notice, is liable, provided the bill or note was originally intended to be without consideration, as in the case of an accommodation bill or note, or one intended as a gift. But it seems that, if a bill or note be delivered as security for a balance on a running account, and, when it becomes due, the balance is in favor of the depos- itor, who does not withdraw the bill, but leaves it where it was, and afterwards the balance becomes against the depositor, the holder may still hold it to seciire the balance, and will not be regarded as the transferee of an over.due bill. In the absence of any evidence on the point, the presumption of law is, that the bill was transferred to any present holder before maturity. And a promissory note payable on demand is considered as intended to be a continuing security, and therefore as not overdue, unless very old indeed, without some evidence of demand of payment and refusal. Biit it is not so with a check ; for this shoiild be presented without unreasonable delay, and, although a taker after one day's delay may not be affected, nor a taking after six days be held as conclusive evidence of negligence or fraud, yet the jury may infer this, so that the drawer will not be held if the bank have failed. It is most important to the holder of negotiable paper to 104 THE LAWS OP BUSINESS FOB BUSINESS MEN. know .distinctly what his duties are in relation to presentment for acceptance or payment, and notice to others interested in case of non-acceptance or non-payment. 3. Of Presentment for Acceptance. — It is always prudent for the holder of a bill to present it for acceptance without delay; for if it be accepted, he has new security; if not, the former parties are immediately liable ; and it is biit just to the drawer to give him as early an opportunity- as may be to withdraw his funds or obtain indemnity from a debtor who will not honor his bills. And if a bill is payable at sight, or at a certain period after sight, there is not only no right of action against anybody* until presentment, but, if this be de- layed beyond a reasonable time, the holder loses his remedy against all previous parties. And although the question- of reasonable time is generally one only of law, yet, in this con- nection, it seems to be treated as so far a question of fact, that it is submitted to the jury ; there is no certain rule deter- mining what is reasonable time in this respect. If a bill of exchange be payable on demand, it is not like a promissory note, but must be presented within a reasonable time, or the drawer will be discharged. A holder may put a bill payable after sight into circulation, without presenting it himself; and in that case, if a subsequent holder presents it, a much longer delay in presentment would be allowed than if the first holder had kept it in his own possession. The presentment shcfuld be made during business hours; but it is said that in this country they extend through the day and until evening, excepting in the case of banks. But a dis- tinct usage would probably be received in evidence, and per- mitted to affect the question. Ill health, or other actual impediment without fault, may excuse delay on the part of the holder ; but not the request of the drawer to the drawee not to accept. Presentment for acceptance should be made to the drawee himself, or to his agent authorized to accept. And when it is presented, the drawee may have a reasonable time to consider whether he will accept, during which time the holder is justi- fied in leaving the bill with him. And it seems that this time OP NEGOTIABLE PAPER. 105 would be as much as t-wenty-foui- hours, uuless, perhaps, the mail goes out before. And if the holder gives more than twenty-four hours for this purpose, he should inform the pre- vious parties of it. If the drawee has changed his residence, the holder should use due diligence to find him ; and what constitutes due or reasonable diligence is a question of fact for a jury. And if he be dead, the holder should ascertain who is his personal representative, if ho has one, and present the bill to him. If the bill be drawn upon the drawee at a par- ticular place, it is regarded as dishonored if tlie drawee has absconded, so that the bill cannot be presented for acceptance at thai place. 4. Of Presentment for Demand of Payment. — The next question relates to the duty of demanding payment ; and here the law is much the same in respect to notes and bills. The universal rule of the law-merchant is, that the in- dorsers of negotiable paper are supposed to agree to pay it only if the maker or previous indorsers do not, and provided due measures are taken to get it paid by those who oviglit, in the first place, to pay it. Therefore every holder of negotiable paper can hold it as long as he likes, and not lose his claim against the maker of a note, or the acceptor of a bill, unlegs he holds it more than six years, and the Statute of Limita- tions bars his claim. The reason is, that the maker or acceptor promises directly, and not merely to pay if another does not. But every indorser of a note or bill, and every drawer of a bill, only promises to pay if a maker or acceptor or some previous indorser does not. If there is a biU of exchange with six indorsers, the last promises in law to pay it\only if the acceptor, the drawer, and the five previous indorsers do not pay. He has therefore a right that a demand according to law should be made against every one of these persons, and that their refusal to pay should be notified to him, forthwith, so that he may secure himself if he can. And the law-mer- chant is Tcry rigorous and precise in defining what demand should be made by the holder, and when and" how demand should be made on every prior party, in order to hold any subsequent party; and also as to what notice of the demand . • ' 14 106 THE LAWS OF BUSINESS FOR BUSINESS MEN, and. refusal of the prior party should be given to any subse- quent party to -whom the holder looks for payment. A demand is sufficient, if made at the usual residence or place of business of the payer, either of himself, or of an agent authorized to pay ; and this authority may be inferred from the habit of paying, especially in the case of a child, a wife, or a servant. The demand should not be made in the street. When made, the bill or note should be exhibited ; and if lost,, a copy should be exhibited, although this does not seem abso- lutely necessary. And when the payer calls on the holder, and declares to him that he shall not pay, and desires him to give notice to the indorsers, this constitutes demand and refusal, provided this declaration be made at the maturity of the paper ; but not if it was made before maturity, because the payer may change his intention. Bankruptcy or insolvency of the payer is no excuse for non- demand ; although the shutting up of a bank, perhaps, may be regarded as a refusal to all their creditors to pay their notes. Absconding of the payer is a sufficient excuse ; but if the payer has shut up his house, the holder must nevertheless in- quire after him, and find him, if he can by proper effi)rts. If the payer be dead, demand should be made at his house, TMiless he have personal representatives, and in that case, of them. And if the holder die, presentment should be made by his personal representatives ; that is, by liis executor or administrator. It is said that both the death and insolvency of the payer do not relieve the holder from the duty of de- manding payment. But it seems to be held in one case that, where the maker of a negotiable note was dead at the time the indorsement was made, the indorser was chargeable without deniand on the mak-er. If the drawer has no effects in the hands of the drawee, and has made no arrangement eqmvalent to having effects there, non-presentation for payment is not a defence which he can make if sued on the bill. Impossibility of presenting a bill for payment, without the fault of the holder, as the actual loss of a bill, or the like, will excuse some delay in making a demand for payment ; but not more than the circumstances reqiiire. And the mere mistake OP NEGOTIABLE PAPER. 107 of the holder is no excuse, because he has no right to make mistakes at the expense of otlier people. Thus, where a bill of exchange payable in London was sent by the mistake of the holder in Birmingham to Liverpool, for payment, and there the mistake was discovered and the bill was sent to London, and woiild have arrived in season, but the negligence of the clerks in the post-office at Liverpool delayed it two days ; it was held by the court, that neither the mistake of the holder nor the negligence of the clerks was excuse enough, and the acceptor having failed, the indorsers were discharged. In this country, all negotiable paper payable at a time certain is entitled to grace, which here means three days' delay of payment, unless it be expressly stated and agreed that there shall be no grace ; and a presentment for payment before the last day of grace is premature, the note not being due until then. If the last day of grace falls on a Sunday, or on a legal holiday, the note is due on the Saturday, or other day before the holiday. But if there be no grace, and the note falls due on a Sunday, or other holiday, it is not payable until the next day. . Generally, if a bill or note be payable in or after a certain number of days from date, sight, or demand, in counting these days, the day of date, sight, or demand is excluded, and the day on which it falls due included. And we think the law would supply the word "/rom," &c., if the.word were not used. Thus, a note dated January 1, and payable in " twenty days " would be held payable in. twenty days (and three days' grace) after the day of the date ; that is, on the 24th. If a note is made payable in one or more . months, this means calendar months, whether shorter or longer. If made on the 13th of December, and payable in two months, it is payable on the 13th of February and grace, that is, on the 16th. But if so many days are named, they must be counted, whether they are more or less than a month. Thus, if the above note were pay- able in sixty days, it would be due on the 11th and grace, or on the 14th of Pebriiary. If dated 13th January, and payable in sixty days, it would be due on the 14th of March, with grace, or on the 17th. Although payment must be demanded promptly, that is, on 108 THE LAWS OP BUSINESS FOE BUSINESS MEN. the day on which it is due, it need not be done instantly ; a holder has all the business part of the day in which the bill or note falls due to make his demand in. Bills and notes payable on demand should be presented for payment within a reasonable time. If said to be " on inter- est," this strengthens the indication that they were intended to remain for a time unpaid and undemanded. But to hold indorsers, they should still be presented within whatever time circumstances may make a reasonable time ; and this is such a time as the interests and safety of all concerned may require ; and it may be a few days, or even one or two weeks. A. bill or note in which no time of payment is expressed, is held to be payable on demand. And evidence to prove it otherwise is inadmissible. The holder of a check should present it at once ; for the drawer has a right to expect that he will ; it should, therefore, be presented, or forwarded for presentment, in the course of the day following that in which it was received, or, upon fail- ure of the bank, the holder will lose the remedy he would otherwise have had against the person from whom he receives it. If the drawer of the check had no funds, he is liable always. Every demand of payment should be made at the proper place, which is either the place of residence or of business of the payer, and within the proper hours of business. If made at a bank after hours of business, if the ofiicers are there, and refuse payment for want of funds, the demand is sufficient. A note payable at a particular place should be demanded at that place ; and a bill drawn payable at a particular place should be demanded there, in order to charge antecedent par- ties ; an action, however, may be maintained against the maker or acceptor without such demand ; but the defendant may dis- charge himself of damages and costs beyond the amount of the paper, by showing that he was ready at that place with funds. If a bill drawn payable generally be accepted payable at a par- ticular place, we think the holder may and should so far regard this as non-acceptance, that he should protest and give notice. But if tliis limited acceptance is assented to and received, it must be complied with by the holder, and the bill must be pre- OF NEGOTIABLE PAPER. 109 sented for payment at that place, or the antecedent parties are discharged. If payable at a banker's, or at the house or counting-room of any person, and such banker or person becomes the o^7ner at maturity, this is demand enough ; and if there are no funds deposited -with him for the payment, tliis is refusal enough. If any house be designated, a presentment to any person tliere, or at the door if the house be shut up, is enough. If this direction be not in the body of the note, but added at the close, or elsewhere, as a memorandum, it is not part of the contract, and should not be attended to. If the payer has changed his residence, lie should be sought for with due diligence ; but if he has absconded, this is an entire excuse for non-demand. Wliere a bill or note is not presented for payment, or not presented at the time, or to the person, or in the place, or in the way, required by law, all parties but the acceptor or maker are discharged, for the reasons before stated. 5. Of Protest and Notice. — If a bill of exchange be not accepted when properly presented for that purpose, or if a bill or note, when properly presented for payment, be not paid, tlie holder has a further duty to perform to all who are responsible for payment. But this duty differs somewhat in the case of a bill or note. In case of iion-payment of a. foreign bill, there should be a regular protest by a public notary ; but this, although frequently practised, is not necessary in the case of an inland bill, or a promissory note, whether foreign or inland. But notice of non-payment should be given to all antecedent parties, equally, and in the same way, in the case of both bills and notes. The demand and protest must be made according to the laws of the place where the bill is payable. It should be made by a notary-public, who should present the bill himself; , but if there be no notary-public in that place or within reason- able reach, it may be made by any respectable inhabitant in the presence of witnesses. The protest should be noted on the day of demand and re- fusal ; and may be filled up afterwards, even, perhaps, so late as at the trial. 110 THE LAWS. OP BUSINESS FOE BUSINESS MEN. The loss of a bill is not a sufficient exciise for not protesting it. But a subsequent promise to pay is held to imply,, or be equ£4 to, a previous protest and notice Tlie notarial seal is evidence of the dishonor of a foreign bill ; but not, it would seem, of an inland bill. And no col- lateral statement in the certificate is evidence of the fact therein stated; thus, the statement by a notary that tlie drawee refused to accept or pay because he had no funds of the drawer, is no evidence of the absence of such funds. ^ We repeat, that the general, and, indeed, universal duty of the holder of negotiable paper is, to give notice of any refusal to accept a bill or fay a bill or note to all antecedent parties. The reasons of this have been stated. These previous parties have engaged that the party who should accept or pay will do so ; and they have further engaged that, if he I'efuses to do his duty, they will be liable in his stead to the persons injured by his refusal. They have a right to indemnity or compensation from the party for whom they are liable, and to such immedi- ate notice of his failure as shall secure to them an immediate opportunity of procuring this indemnity or compensation if they can. Nor is the question what notice this should be, left to be judged of by the circumstances of each case ; for the law-mer- chant has certain fixed rules applicable to all negotiable paper. Notice must be given even to one who has knowledge. No particular form is necessary ; it may be in writing, or oral ; all that is absolutely essential is, that it should designate the note or bill with sufficient distinctness, and state that it has been dishonored ; and also that the party notified is looked to for payment ; but it has been held that the notice to the party, when given by the immediate holder of the bill, sufficiently implies that he is looked to. And notice of protest for non- payment is sufficient notice of demand and refusal. How dis- tinctly- the note or bill should be described, cannot be precisely defined. It is enough if there be no such looseness, ambiguity, or misdescription as might mislead a man of ordinary intelli- gence ; and if the intention was to describe the true note, and the party notified was not actually misled, this would always be enough. The notice iieed not state for whom payment is demanded, nor where the note is lying; and even a mis- OF NEGOTIABLE PAPER. Ill statement in this respect may not be material, if it do not actually mislead. No copy of the protest need be sent ; but information of the -protest should be given. If the letter be properly put into the post-office, any miscar- riage of the mail does not affect the party giving notice. The address should be sufficiently specific. Only the surname, — as ",Mr. Ames," — especially if sent to a large city, might not, in general, be enough ; thus, in an English case, where a letter, directed " Mr. Haynes, Bristol," containing notice of the dis- honor of a bill, was proved to have been put into the post- office, it was held that this was not sufficient proof of notice ; the direction being too general to raise a presumption that the letter reached the particular individual intended. But where a party drew a bill, dating it generally " London," it was held that proof that a letter containing notice of the dishonor of the bill was put into the post-office addressed to the drawer at " London," was evidence to go to the jury that he had due notice of dishonor ; because, if the party chooses to draw a bill, and date it so generally, it implies that a letter sent to the post-office, and directed in the same way, will find him. ^Vnd if a letter, ho'wever generally directed, can be shown to have reached the right person at the right time, it is sufficient. The postmarks are strong evidence that the letter was mailed at the very time these marks indicate ; but this evidence may be rebutted, that is, contradicted. A notice not only may, but should, be sent by the public post. It may, however, be sent by a private messenger; but is not sufficient if it do not arrive until after the time at which it would have arrived by mail. It may be sent to the town where the party resides, or to another town, or t® a more distant post-office, if it is clear that ho may thereby receive the notice earlier. And if the notice is sent to what the sender deems, after due diligence, the nearest post-office, this is enough. If the parties live in the same town, notice should not be sent by mail. In a case in Massachusetts, the court said, the general rule certainly is, that, when the indorser resides in the same place with the party who is to give the notice, the notice must be given to the party personally, or at 112 THE LAWS OF BUSINESS FOR BUSINESS MEN. his domicile or place of business. Perhaps a different rule may- prevail in London, where a penny post is established and reg- ulated by law, by which letters are to be delivered to the party addressed, or at his domicile or place of business, on the same. day they are deposited. And perhaps the same rule might not apply where the party to whom notice is to be given lives in the same town, if it be at a distant village or settlement where a town is large, and there are several post-offices in different parts of it. But in that case, the defendant had his residence and place of business in the city of Bangor, and the only notice given him was by a letter addressed to him at Bangor, and deposited in the post-office at that place. And this was insufficient to charge him as indorser. The notice should be sent either to the place of business, or to the residence, of the ' party notified. But if one directs a notice to be sent to him elsewhere than at home, it seems that it may be so sent, and bind not only him, but prior parties, although time is lost by so sending it. The notice should be sent within reasonable time ; and in respect to negotiable paper, the law-merchant defines this within very narrow limits. If the parties live in the same town, notice must be given or sent so that the party to whom it is sent may receive the notice in the course of the day next after that in which the party sending has knowledge of the fact. If the parties live in different places, the notice must be sent as soon as by the first practicable mail of the next day. Each party receiving notice has a day, or until the next post after the day in which he receives it, before he is obliged to send the notice forward. Thus, if. there be six indorsers, and the note is dxie on the 10th of May, in New York, and is. then demanded and unpaid, the holder may send it by any mail which leaves New York on the 11th of May, to the last indorser, wherever he lives ; and that indorser may send it to the indorser immediately before him, by any mail on the day after he receives it ; and so may each of the parties re- ceiving notice ; and all the parties receiving notice in this way will be held. So, too, a banker, with whom the paper is deposited for collection, is considered a holder, and entitled OP NEGOTIABLE PAPER. 113 to a day to give notice to the depositor, who then has a day for his notice to antecedent parties. The different branches of one establishment have been held distinct holders for this purpose, and each to be entitled to a day. If notice be sent by ship, it is said that it naay be delayed until the next regular ship ; but this is not quite certain ; or, rather, the rule can hardly as yet be considered fixed and definite. It should be sent by the first safe opportunity. Neither Sunday nor any legal holiday is to be computed in reckoning the time "within which notice miist be given. There is no presiunption of notice ; and the plaintiff must prove that it was given, and was sufficient. Thus, proving that it was given in " two or three days," is insufficient, if two would have been right, but three not. Notice should be given only by a party to the instrument, who is liable upon it, and not by a stranger ; and it has been held that notice could not be given by a first indorser, who, not having been notified, was not himself liable. A notice by any party liable will operate to the benefit of all antecedent or subsequent parties ; that is, will hold them all to the original holder of the note, if the original holder gave notice properly to the party nearest to him. The notice may be given by any authorized agent of a party who could himself give notice. ' Notice must be given to every antecedent party who is to be held. And we have seen that this may be given by a holder to the first party liable, and by him to the next, &c. But the holder may always give notice to all antecedent parties ; and it is alw%^s prudent, and in this country, we believe, qtiite usual, to do so. For the holder loses all remedy against all those who are discharged by the failure of any one re- ceiving notice to transmit it properly. But if a holder under- takes to notify all the antecedent parties, he must notify all as soon as he was obliged to notify the party nearest to him ; that is, the day after the dishonor of the note. We mean by this, that every party has a day ; so that, if there be six in- dorsers, if the first indorser is notified on the seventh day from the dishonor, it is enough, i/the holder took his day to notify the sixth indorser, and that indorser his day to notify the fifth, and so on. But the holder has nobody's day but his own ; and 15 114 THE LAWS OP BUSINESS FOE BUSINESS MEN. if he undertakes to notify all the parties, he must notify them all on the first day after the non-payment. Notice may be given personally to a party, or to his agent authorized to receive notice, or left in writing at his home or place of business. If the party to be notified is dead, notice should be given to his personal representatives. A notice ad- dressed to the "legal representative of," -owner of a ship requested another part-owner to eifect insurance for him, and the party applied to promised to effect insurance accordingly ; and was again reminded of his promise, and again renewed his promise ; but he neglected to cause the ship to be insured ; and when it was lost without any insurance, and this promisor was sued by the party requesting him, the court held that he was not responsible, being only a gratuitous agent. If, how- ever, a person holds himself out as exercising a certain trade or profession, and is employed therein, lie will be considered as bound, in law to have and exercise the skill and care 'requi- site for the proper discharge of the duties of that profession, even if he was paid nothing. One reason is, that, although no money is paid or promised him, he is entitled to make a proper and customary charge to his employer, and this is a compen- sation. It is, however, undoubtedly a very general rule, that an agent who has no compensation, and does not begin his work, and has no property intrusted to him, is not liable for not doing what he undertakes to do. If he enters upon and actiially begins his work, and then leaves it imperfectly or badly done, for this -he may be made liable. A strictly gra- tuitous agent will be held responsible for property intrusted to him. For any breach of duty, an agent is responsible for the whole injury thereby sustamed by his principal ; and, gener- ally, a verdict against tlie principal for misconduct of the agent measures the claim of- the principal against the agent. The loss must be capable of being made certain and definite ; and then the agent is responsible, if it could not have happened but for his misconduct, although not immediately caused by it. Thus, where an insurance-broker was directed to effect in- surance on goods " from Gibraltar to Diiblin," and caused the policy to be made, " beginning from the lading of the goods on AGENCY. 141 board," and tliey were laden on board at Malaga, and went thence to Gibraltar, and sailed for Dublin, and were lost on the Toyage, so that the policy did not cover them, because not laden at Gibraltar, tliis was held to be gross negligence on his part, and he was held responsible for the value of the goods. If any agent embezzles his employer's property, it is quite clear that the employer may reclaim it whenever and wherever he can distinctly trace and identify it. But if it be blended in- distinguishably with the agent's own goods, and the agent die or become insolvent, the principal can claim only as a common creditor, as against other creditors ; but as against the factor or agent himself, the whole seems to belong in law to the prin- cipal ; becatise the factor or agent had no right thus to mix iip the property of another with his own, and if he chooses to do so, he must lose all of his own property that cannot be sepa- rated from that which is not his own. An agent employed to sell property cannot buy it himself ; nor, if employed to buy, can he buy of himself; unless ex- pressly authorized to do so. Nor can a trustee purchase the property he holds in trust for another. But the other party may ratify and confirm such sale or purchase by his agent ; and he will do this by accepting the proceeds and delayuig- any objection for a,long time after the wrongful act is made known to him. And if a trustee or agent to sell property buys it not in his own name, but through somebody else, the sale is equally void ; or indeed, according to some authorities, more certainly void, because such indirect action suggests a fraudulent pur- pose. Among the obvious duties of all agents is that of keeping an exact account of their doings, and particularly of all pecuniary transactions. After a reasonable time has elapsed, the court will pi'esume that such an account was rendered, accepted, and settled. Otherwise, every agent might always remain liable to be called upon for such account. Moreover, he is liable not only for the balances in his hands, bxit for interest; or even, where there has been a long delay to his own profit, he might be liable for compound interest, on the same ground on which it has been charged in analogous cases against execii- tors, trustees, and guardians. No interest whatever would be. 142 THE LAWS OP BUSINESS FOE BUSINESS MEN. charged, if such were the intention of the parties, or the effect of tlie bargain between them ; and this intention may be in- ferred either from direct or circumstantial evidence, — as the nature of the transaction, or the fact tliat the principal knew that the money lay useless in the agent's hands, and made no objection or claim. Although, as we have seen, the revocation of authority is generally within the power of the principal, an agent ought not to suffer damage from acting under a revoked authority, if the revocation were wholly unknown to him without his fault. The general rule is, that a principal may revoke his agency, and an agent may throw up the agency, at pleasure. But neither would be permitted to exercise this power in an unfair and injurious manner, which circumstances do not require or justify, without being responsible to the other party for any damages caused by his wrongful act. Insanity revokes authority, especially if legally ascertained. But if the principal, when sane, gave an authority to his agent, and a third party acts with the agent in the belief of his au- thority, but after the insanity of the principal has revoked it, the insanity not being known to this third party, it seems that this- revocation will not be permitted to take effect to the injiuy of this third party. SECTION IX. OP TACTORS ASfD BE0KEK8. All agents who sell goods for their principals, and guaranty the price, are said in Europe to act under a del credere commis- sion. In this country, this phrase is seldom used, nor is such guaranty usually given, except by commission merchants. And where such guaranty is given, the factor is so far a surety, that his employers must first have recourse to the prin- cipal debtor. Still, his promise is not " a promise to pay the debt of another," within the Statute of Frauds. Nor does he guaranty the safe arrival of the money received by him in pay- ment of the goods, and transmitted to his employer, but must use proper caution in sending it. If he takes a note from the AGENCY. 143 purchaser, this note is his employer's ; and if he takes depre- ciated or bad paper, he must make it good. A broker or factor is bound t© the care and skill properly- belonging to the business which he ujidertakes, and is respon- sible for the want of it. A factor intrusted with goods may pledge them for advances to his principal, or for advances to himself to the extent of his lien for charges and commissions. And his power to pledge them, which grows out of the law-merchant, has been miich en- larged by statute in England and in many of our States. The mere wishes or intimations of his employer bind him only so far as they are instructions ; but although in the form of intimations or suggestions, if sufficiently distinct, they have the force of instructions. Thus, in New York, a principal wrote to his factor, statmg that he thought there was a short supply of the goods he had consigned, and giving facts on which his opinion was founded, and concluded, " I have thought it best for you to take my pork out of the marlcet for the present, as thirty days will make an important change in the value of the article." This was considered by tlie court to be a distinct instruction, binding upon the fifttor ; and he was therefore held liable for the loss caused by selling the pork within the thirty days. All instructions the agent or factor miist obey ; but may still, as we have already stated, depart from their letter, if in good faith, and for the certain benefit of his employer, in an unforeseen exigency. Having possession of the goods, he may insure them ; but is not bound to do so, nor even to ad- vise insurance, unless requested, or unless a distinct usage makes this his duty. He has much discretion as to the time, terms, and manner of a sale, but must use this discretion in good faith. For a sale wliich is precipitated by him, without reason and injuriously, is void, as unauthorized. If he send goods to his principal without order, or contrary to his duty, the principal may return them, or, acting in good faitli and for the benefit of the factor, may sell them as the factor's goods. Although a factor charges no guaranty commission, he is liable to his principal for his own default ;' so he is if he sells on credit, and, when it expires, takes a note to himself ; but 144 THE LAWS OF BUSINESS FOR BUSINESS MEN. if he takes at the time of the sale a negotiable note from a party in fair credit, and the note is afterward dishonored, this is the loss of his employer, unless the factor has guarantied it. If he sells the goods of many owners to one purchaser, taking a note for the whole to himself, and gets it discounted for his own iise or accommodation, he is then liable without any guar- anty for the payment of that nOte. So, if he gets discounted for his own use a note taken wholly for his principal's goods. But he may discount the note to reimburse himself for ad- vances, without making himself liable. If he sends his own note for the price to his employer, he miist pay it. As a factor has possession of the goods, he may use his own name in all his transactions, even in suits at law ; but a broker can buy, sell, receipt, general, either be itself declared void, or would have the effect of avoiding the award, becaiise it prevented it 172 THE LAWS OF BUSINESS FOE BUSINESS MEN. from being certain, or final and conclusive. The arbitrators, by a general submission, are required to determine the law ; and only a decided and important mistake could be shown, and have the effect of defeating the award ; it has been said, that only a mistake amounting to a perverse misconstruction of the law would have this effect ; certainly a very great power is given to arbitrators in this respect, and it has ■ even been ex- pressly declared that they have not only all the powers of a court of equity as well as of law, but may do what no court could do in giving relief or doing justice. Other grounds of objection to an award are irregularity of proceedings. Thus, a want of notice to the parties furnishes a ground of objection to the award. And for this purpose it is not necessary, that the submission provide for giving such notice, because a right to notice springs from the agreement to submit. But this rule is not of imiversal application, for there may be cases where all the facts have been agreed upon and made known to the arbitrators, and where the case does not depend upon the evidence, and no hearing is desired, and therefore notice would be unnecessary. Another instance of irregularity is the omission to examine witnesses ; or an examination of them when the parties were not present, and their absence was for good cause ; or a con- cealment by either of the parties of material circumstances ; for this would be fraud. So if the arbitrators, in case of disagree- ment, were authorized to choose an umpire, but drew lots which of them should choose him. Exit it has been held enough that each arbitrator named an umpire, and lots were drawn to de- cide which of these two should be taken, because it might be considered that both of these men were agreed upon. And if an umpire be appointed by lot, or otherwise irregularly, if the parties agree to the appointment, and confirm it expressly, or impliedly by attending before him, with a full knowledge of the manner of the appointment, this, it seems, covers the irreg- ularity. OP ARBITRATION. 173 .SECTION II. OF THE REVOCATION OF A SUBMISSION TO ARBITRATORS. It is an ancient and well-established rule, that either party may revoke his submission at any time before the award is made ; and by this revocation render the submission wholly ineffectual, and of course take from the arbitrators all power of making a binding award. And, generally, this power exists xmtil the award is made. In this country, our courts have always excepted from this rule submissions made by order or rule of court ; for a kind of jurisdiction is held to attach to the arbitrators, and the sub- mission is quite irrevocable, except for such causes as make it necessarily inoperative. There is a strong reason why a sub- mission by order of court, or before a magistrate, should be preferred where it can be had, in the fact above stated, that the law permits any party who finds an award is going against him to revoke liis submission or reference when he will, before the award is made ; — provided the award was only by agree- ment out of court, or not before a magistrate. In some of our States, the statutes authorizing and regulating arbitration provide for the revocation of the submission. It should be stated, however, that, as an agreement to submit is a valid contract, the promise of each party being the consid- eration for the promise of the other, a revocation of the agree- ment or of the submission is a breach of the contract, and the other party has his damages. And damages would generally include all the expenses the plaintiff has incurred about the submission, and all that he has lost by the revocation, in any way. If either party exercise this power of revocation, he must give notice in some way, directly or indirectly, to the other par- ty ; and until such notice, the revocation is inoperative. The revocation may be implied as well as express ; and would be implied by any act which made it impossible for the arbitrators to proceed. So it was held that bringing a suit for the claim submitted, before an award was " conclusively made,' • operated a revocation of the submission. So the marriage of 174 THE LAWS OP BUSINESS FOR BUSINESS MEN. a ■VToman works a relocation of her submission ; and it is held that this is a breach of an agreement to submit, on which an action may be sustained against her and her husband. And the lunacy of a party revokes his submission. And the utter destruction of the subject-matter of the arbitration would be equivalent to a revocation. We should say that the bankruptcy or insolvency of either or both parties did not necessarily operate as a revocation, un- less the terms of the agreement to refer, or the provisions of ■the insolvent law, required it. But the assignees acquire what- ever power of revocation the bankrupt or insolvent possessed, and, generally, at least, no further power. The death of either party before the award is made vacates the submission, if made out of court, unless that provides in terms for the continuance and procedure of the arbitra- tion, if such an event occur. But it seems to be held in this country that a submission under a rule of court is not re- voked or annulled even by the death of a party. So the death or refusal or inability of an arbitrator to act would annul a submission out of court, unless provided for in the agreement ; but not one under a rule of court, unless for especial reasons, satisfactory to the court, which would have the appointment of a substitute, if it saw fit to continue the reference. It may be well to add, that, after an award is fully made, neither of the parties without the consent of the other, nor either nor all of the arbitrators without the consent of all the parties, have any further control over it. If the submission provides for any method of delivering the award, this should be followed. If not, it is common for the referees to deliver the award to the counsel for the prevailing party, on payment by him of the fees of arbitration. Then the prevailing party looks to the losing party, for the whole, or a part, or ixone of the costs, as the award may determine. The award should be sealed ; and addressed to all the par- ties ; and it should not be opened except in presence of all the parties, or of their attorneys, or with the consent of those absent indorsed on the award. If the submission is under a rule of court, it should be returned to court by the arbitrators, or the ■ counsel receiving it, sealed, and opened only in court, or before the clerk, or with the written consent of parties. OF THE CARRIAGE OF GOODS. 175 CHAPTER XV. OP THE CABEIAGE OP GOODS AND PASSENGERS. SECTION I. OP A PRIVATE CARRIER. One who carries goods for another is either a private carrier or a common carrier. A. private carrier is one who carries for others once, or sometimes, but who does not pursue the business of carrying as his usual and professed occupation. The contract between him and the owner of the goods which he carries is one of service, and is governed by the ordinary rules of law. Each party is bound to perform his share of the contract. The carrier must receive, care for, carry, and deliver the goods, in such wise as he bargains to do, whether this bargain be in words, or implied by the law from the nature of the service which he undertakes to render. If he carries the goods for hire, whether actually paid or due, he is bound to use ordinary diligence and care ; by which the law means such care as a man of ordinary capacity would take of his own property under similar circumstances. If any loss or injury occur to the goods while in his charge, from the want of such care or diligence on his part, he is responsible. But if the loss be chargeable as much to the fault of the owner as of the carrier, he is not liable. The owner must show the want of care or diligence on the part of the private carrier, to make him liable ; but slight evidence tending that way would suffice to throw upon him the burden of accounting satisfac- torily for the loss. And if there were such negligence on the part of the- carrier, or of a servant for whom he is responsible, the carrier is liable, although the loss be caused primarily by a defect in the thing carried. Tlius, in an English case, the plaintiff had sent a cask of brandy, by the defendant's wagon, 176 THE LAWS OP BUSINESS FOR BUSINESS MfiN. from Shrewsbury to London. Before the wagon reached Bir- mingham, it was perceived, by persons in the wagon, that the cask was leaking fast, and the driver was informed of it ; but though he stayed tliree liours in Birmingham, after his arrival tlaere, he made no examination of the cask, nor took any step to prevent the leakage. He passed in like manner through Wolverhampton, where the wagon also made some stay, with- out regard to the cask ; but at the next stage beyond Wolver- hampton, having some parcels to deliver, he took the cask out, and the remainder of the brandy was saved. It was left to ' the jury to consider whether the injury arose from the negli- gence of the defendant's servant, the wagoner, in not examin- ing the cask, after he was informed of its leaky state, at either of the places where he halted ; and the jury found in the af- firmative, and an application to set aside the verdict was refused by the King's Bench. If he carries the goods without any compensation, paid or promised, he is, in the language of the law, a gratuitous bailee, or mandatary ; he is now bound only to slight care ; which is such care as every person, not insane or fatuous, would take of his own property. For the want of this care, which would be gross negligence, he is responsible, but not for ordinary negligence. In an early English case, on which much of the law about carriers is founded, the defendant undertook to re- move several hogsheads of brandy, then in a cellar in D., and safely lay them down again in a certain other cellar in Water Lane ; and the defendant and his servants managed so negli- gently that one of the casks was staved. And the coiirt were unanimously of opinion, that, if a man tmdertakes to carry goods safely and securely, he is responsible for any damage they may sustain in the carriage through his negligence, al- though he was not a common carrier, and was to have nothing for his carriage. Whether a private carrier has a lien on the goods he carries, for his compensation, or, in other words, whether he may hold ' them until that be paid, is not certainly determined, but we think he has. If he incurs expenses about the goods, for sviffi- cient reason, and in good faith, he has imdoubtedly a lien on them for those expenses. , OP THE CAERIAGE OP GOODS. 177 We Slim up what may be said of the private carrier in the remark, that the general rules which regulate contracts and miitual obligations apply to the duties and the rights of a pri- vate carrier, with little or no qualification. But it is otherwise with a common carrier. SECTION II. OF THE COMMON CARRIER. The law in relation to the rights, the duties, and the respon- sibilities of a common carrier is quite peculiar. The reasons for it are discernible, but it rests mainly upon established usage and ciistom. And as these usages have changed considerably in modern times, this law has undergone modifications, and on some points may be considered as even now in a somewhat uncertain state. He is a common carrier " who undertakes, for hire, to trans- port the goods of such as choose to employ him from place to place " ; or, as we should prefer to say, from some known and definite place or places to other known and definite place or places. He is one who undertakes the carriage of goods as a business ; and it is mainly this which distinguishes him from tlie private carrier. In one or two of the courts of this coun- try there has been a disposition to annul this distinction ; and to affect all persons who carry goods for hire, whether casually and by special employment, or as a general business, with the same liabilities. But this disposition is not general, and we do not believe it will be permanent anywhere ; for we see nothing in tlie condition of our country, or of our carrying business, which calls for this change in the law. Tlie rights and responsibilities of the common carrier may be briefly stated thus : — He is bound to take the goods of all who offer, if he be a carrier of goods, and the persons of all who offer, if he be a carrier of passengers ; and to take due care and make due transport and delivery of them. He has a lien on the goods which he carries, and on the baggage of pas- sengers, for his compensation. He is liable for all loss or injury 23 178 THE LAWS OF BUSINESS FOR BUSINESS MEN. to the goods under his charge, although wholly free from neg- ligence, unless the loss happens from the act of God, or from the public enemy. These three rules will be considered in the next section. Truckmen or draymen, porters, and others who undertake the carriage of goods for all applicants from one city or town to another, or from one part of a city to another, are charge- able as common carriers. So, proprietors of stage-coaches are chargeable as common carriers of passengers, and of the bag- gage of passengers ; or of others, if they so advertise them- selves. So are hackney-coachmen within their accustomed range. If drivers of stages, or omnibuses, commonly carry and receive pay for goods or parcels which are not the baggage of ■passengers, and are held out or advertised, or generally known, as so carrying them, they are common carriers of goods, and the proprietors are liable for the loss of such parcels, although neitlier they nor the drivers were in fault. But if there is no «uch habit or usage, and the driver receives such a parcel to be carried somewhere, and is paid for it, the driver carries it as a private carrier, and not as a common carrier, and is chargeable only for negligence or fault. And if the line of carriages is establisl,ied for passengers, and the driver does not account for what is paid him for occasional parcels, but takes it as his own perquisite, the proprietors are not answerable even for the driver's fault or negligence, unless circumstances in some way bring the fault home to them. In this country, in recent times, the= business of carrying goods and passengers is almost monopolized by what are called expressmen, by railroads, or by lines of steam-packets along our coasts, or upon our navigable streams or lakes. These are undoubtedly common carriers ; and although their peculiar method of carrying on this business is new, and will presently require from us especial consideration, there can be no doubt of their being, to all intents and purposes, common carriers. Ordinary sailing-vessels are sometimes said to be common carriers. We should be disposed to restrict this term, however, to regular packets ; or, at most, to call by this name general freighting ships. It is not, however, necessary to consider this OF THE CARRIAGE OF GOODS. 179 question, as water-borne goods are now almost always carried under bills of lading, which determine the relations and re- spective rights of the parties ; and these we shall consider in our chapter on the Law of Shipping. The boatmen on our rivers and canals are common carriers ; and ferrymen are common carriers of passengers by their of- fice, and may become common carriers of goods by taking up that business. A steamboat usually employed as a carrier may do something else, as tow a vessel out of a harbor, or the like ; and the character of common carrier does not attach to this especial employment and carry with it its severe habilities. Therefore, for a loss occurring to a ship in her charge while so employed, the owner of the steamer is not liable without negli- gence on his part, or on the part of those whom he employs. The same person may be a common carrier, and also hold other offices or relations. He may be a warehouseman, a wharfinger, or a forwarding merchant. The peculiar liabili- ties of the common carrier (to be spoken of presently) do not attach to either of these offices or employments^ Thus, a ware- houseman is liable for loss of the goods which he takes for storage, only in case of his own negligence ; he is not, as a com- mon carrier is said to be, an insurer of the goods. The ques- tion then arises, when the liability of such a person is that of a warehouseman, and when it is that of a carrier. If a carrier receives goods to be stored until he can carry them, — a canal-boatman, for example, — or if, at the end of the journey, he stores them for a time for the safety of the goods oi* the convenience of the owner, while thus stored he is liable only as warehouseman. But if he puts them into his store or office only for a short time, and for his own convenience, either at the beginning or end of the transit (or journey), they are in his hands as carrier. Where these relations seem to unite and mingle in one per- son, it may be said to be the general rule, that, wherever the deposit, in whatever place or building, is secondary and subor- dinate to the carriage of the goods, which is therefore the chief thing, the party taking the goods is a carrier ; and otherwise a depositary only of some kind. If, therefore, goods are deliv- ered to a carrier, or at his depot or receiving-room, with direc- 180 THE LAWS OF BUSINESS FOB BUSINESS MEN. tioiis not to carry them until further orders, he is only a depos- itary, and not a carrier, until those orders are received ; but ■when they are received, he becomes a carrier ; and if the goods are afterwards lost or injured before their removal, he is liable as a common carrier. Thus, in a late case in Maine, it was held, where a railroad corporation, being common carriers, have a warehouse at which they receive goods for transportation, and goods are delivered there with instructions to forward them, while the goods remain in the warehouse for the convenience of the railroad, until they can be forwarded in the usual course of business, the railroad holds them as common carrier, and is liable for them as such. But if the goods are kept back in the warehouse for the convenience of the owner, and by his order, while they are so detained the railroad will not be liable as common carrier, but as depositary only. And instructions to forward goods forthwith may be inferred from an established course of dealing between the owner and carrier, without direct evidence of instructions. But a recent case in Massachusetts, to be referred to more fully when speaking of the termination of a carrier's liability, throws perhaps some doubt on this rule. SECTION III. OF THE OBLIGATION OF THE COMMON CARKIER TO KECEIVE AND CAERY GOODS OR PASSENGERS. He cannot refuse to receive and carry goods offered, without good cause ; for by his openly announcing himself in any way as engaged in this business, he makes an offer to the public which becomes a kind of contract as to any one who accepts it.' He may demand his compensation, however ; and if it be re- fused, he may refuse to carry the goods ; nor is he bound to carry them if security be offered to him, but not the money. But if the freight money be not demanded, the owner of the goods, if he is able-, ready, and willing to pay it, has all his rights although he does not make a formal tender of the money. A carrier may refuse if his means of carriage are already fully employed. But in England, in a case where a railway company, OP THE CARRIAGE OP GOODS. 181 being common carriers, had issued excursion tickets for a jour- ney, it was held that they were not excused from carrying passengers according to their contract, upon the ground that there was no room for them in their conveyance ; and that, in order to avail themselves of this answer, they should make their contract conditional upon there being room. If the com- mon carrier cannot carry the goods without danger to them, or to himself, or other goods ; or without extraordinary incon- venience ; or if they are not such goods as it is his regular business to carry ; he is excused for not carrying them. He is always entitled to his usual charge ; but not to extraor- dinary compensation, unless for extraordinary service. The common carrier of goods is bound to receive them in a siiitable way, and at suitable times and places. If he has an office or station, he must have proper persons there, and proper means of security. During tlie transit, and at all stopping- places, due care must be taken of all goods ; and that means the kind and measure of care appropriate for goods of that description. If he have notice, by writing on the article or otherwise, of the need of peculiar care, — as, " Glass, with great care," or " Tliis side uppermost," or " To be kept dry," — he is bound to comply witli such directions, supposing them not to impose unnecessary care or labor. Thus, in a Massachusetts case, where a box containing a glass bottle filled with oil of cloves was delivered to a sailing packet to be carried from Philadelphia to Boston, marked, "Glass — with care — this side up," it was held that this was a sufficient notice of the value and nature of the contents to charge him for the loss of the oil, occasioned by his disregarding such direction, al- though the defendants contended that the bottle was not strong enough and was badly packed. The court said, that as the carriage is a matter of contract, as the owner has a right to judge for himself what position is best adapted to carrying goods of this description with safety, and to direct how they shall be carried, and as the carrier has a right to fix his own rate of carriage, or refuse altogether to take the goods with such' directions, the court are all of opinion, that, if a carrier accepts goods for carriage thus marked, he is bound to carry the goods in the manner and position required by the notice. 182 THE LAWS OP BUSINESS FOR BUSINESS MEN. If he carry passengers, lie must receive all ■who offer. In one case in New Hampshire it was decided that the pro- prietors of a stage-coach, who hold themselves out as com- mon carriers of passengers, are bound to receive all who require a passage, so long as they have room, and there is no legal excuse for a refusal ; and that it was not a lawful excuse that they ran their coach in connection with another coach, which extended the line to a certain place, and had agreed with the proprietor of such other coach not to receive passengers who came from that place on certain days, unless they came in his coach. The defendant was one of the pro- prietors and driver of a stage-coach running daily between Amlierst and Nashua, which connected at the latter place with another coach running between Nashua and Lowell, and thus formed a contmuous mail and passenger line from Lowell to Amherst and onward to Francestown. A third person ran a coach to and from Nashua and Lowell, and the defendant agreed with the proprietor of the coach connecting with his line, that he would not receive passengers who came from Lowell to Nashua in the coach of such third person, on the same day that they applied for passage to the places above Nashua. The plaintiff was notified at Lowell of this arrange- ment, but notwithstanding came from Lowell to Nashua in that coach, and there demanded a passage in the defendant's coach to Amherst, tendering the regular fare. Upon these facts, it was held that the defendant was bound to receive him, there being sufficient room, and no evidence that the plaintiff was an unfit person to be admitted, or that he had any design of injuring the defendant's business. But this obli- gation of the passenger carrier is subject to the conditions, that there is sufficient room, that the person applying for carriage is a fit person to be received as a passenger, and that he has no design to interfere in any way with the carrier's interests, or to disturb his line of patronage. So all persons may be excluded who refuse to obey the reasonable regula- tions which are made for the government of the line ; and the carrier may rightfully inquire into the habits or motives of passengers who offer themselves. An action was brought before Judge Story, in the Circuit OF THE CAERIAGE OF GOODS. 183 Court of the United States, sitting in Boston, against the proprietor of a steamboat, running from New York to Provi- dence, for refusing to receive tlie plaintiff on board as a passen- ger. Tlie plaintiff was the known agent of the Tremont Line of Stage-coaches. The proprietors of the steamboats President and Benjamin Franklin had, as the plaintiff knew, entered into a contract with another line, called The Citizens' Stage- coach Company, to carry passengers between Boston and Providence, in connection with the boats. The plaintiff had been in the habit of coming on board the steamboats at Provi- dence and Newport, for the purpose of soliciting passengers for the Tremont Line, which the proprietors of the President and Benjamin Franklin had prohibited. It was held, that, if the jury should be of opinion that the above contract was reasonable and bona fide, and not entered into for the pur- pose of an oppressive monopoly, and that the exclusion of the plaintiff was a reasonable regulation in order to carry this contract into effect, the proprietors of the steamboat would be justified in refusing to take the plaintiff on board. In a case tried before the Supreme Judicial Court of Massa- chusetts, it was held, that, if an innkeeper, who has frequently entered a railroad depot and annoyed passengers by soliciting them to go to his inn, receives notice from the superintendent of the depot that he must do so no more, and he nevertheless repeatedly enters the depot for the same purpose, and after- wards obtains a ticket for a passage in the cars, with a bona fide intention of entering the cars as a passenger, and goes into the depot on his way to the cars, and the superintendent, be- lieving that he has entered the depot to solicit passengers, orders him to go out, and he does not exhibit his ticket nor give notice of his real intention, but presses forward towards the cars, and the superintendent and his assistants therefore forcibly remove him from the depot, using no more force than is necessary for that purpose, such removal is justifiable, and not an indictable assault and battery. A common carrier is bound to carry his passengers over the whole route, and at a proper speed, or supply proper means of transport ; to demand only a reasonable or usual com- pensation ; to notify his passengers of any peciiliar dangers ; to 184 THE LAWS OP BUSINESS FOE BUSINESS MEN. treat all alike, unless there' be actual and sufficient reason for the distinction, as in the filthy appearance, dangerous con- dition, or misconduct of a passenger; and to behave to all with civility and decorum. He must also have proper carriages, and keep them in good condition, and not overload them; and suitable horses and drivers ; stop at the usual places, with proper intervals for rest or food; take the proper route; and drive at proper speed; and leave the passengers at the usual stopping-places, or wherever he agrees to. In none of these things can he de- part from what is usual and proper at his own pleasure. And if by any breach of these. duties a passenger is injured, the carrier is responsible. So if he puts his passengers in peril, and one of them be hurt by an effort to escape, as in jximp- ing off, it is no defence of the carrier to show that he would have been safe if he had remained. In England, it was held that a common carrier who had re- ceived a pickpocket as a passenger on board his vessel, and taken his fare, could not put him on shore so long as he was not guilty of any impropriety. But this may be doubted. The common carrier must certainly einploy competent and well-behaved persons for all duties ; and for failure in any of the particulars of his duties and obligations, he is respon- sible not only to the extent of any damage caused thereby, but also, in many cases, for pain and injury to the feelings. He is also bound to deliver to each passenger all his baggage at the end of his journey ; and is held liable if he delivers it to a wrong party on a forged order, and without personal default. Lastly, he must make due delivery of the goods to the sender, or to the person whom the sender may appoint, at the proper time, in the proper way, and at the proper place. As to the party to whom the goods should be delivered, he should be the owner or sender, or some one authorized by him. In a case in Massachusetts, it was held, that if A, for whom goods are transported by a railroad company, au- thorizes B to accept the delivery thereof, and to do all acts incident to the transportation and delivery thereof to A, and B, instead of receiving the goods at the usual place of deliv- ery, requests the agent of the company to permit the car OF THE CARRIAGE OP GOODS. 185 wliicli contains the goods to be hauled to a near depot of another railroad company, and such agent assents thereto, and assists B in hauling the car to such depot, and B then requests and obtains leave of that company to use its machin- ery to remove the goods from the car, then the company that transported the goods is not answerable for the want of care and skill in the persons employed in so removing the goods from the car, nor for the want of strength in the machinery used for the removal of them, and cannot be charged for any loss that may happen in the course of such delivery to A. If a party authorized to receive the goods refuse, or is unable, to do so, the carrier mxist keep them for the owner, and with due care ; b\it now under the liability of a ware- houseman, and not of a carrier. In a case in New York, where the consignee of certain kegs of butter, sent from Al- bany to New York by a freight barge, was a clerk, having no place of business of his own, and whose name was not in the city directory, and who was not known to the carrier, and after reasonable inquiries by the carrier's agent could not be found, it was held that the carrier discharged himself from further responsibility "by depositing the property with a store- house-keeper, then in good credit, for the owner, and taking his receipt for the same, according to the usual course of busi- ness in the trade, though the butter was subsequently sold by the storehouse-keeper, and the proceeds lost to the owner by failure. The court there said, that, when goods are safely con- veyed to the place of destination, and the consignee is dead, absent, or refuses to receive, or is not known, and cannot, after due efforts are made, be found, the carrier may discharge , himself from further responsibility by placing the goods in store with some responsible third person in that business, at the place of delivery, for and on account of the owner. When so delivered, the storehouse-keeper becomes the bailee and agent of the owner in respect to such goods. So the carrier must keep the goods for the owner, if he has good reason to believe that the consignee is dishonest, and will defraud the owner of his property. As to the time when goods should be delivered, it must be within the propePliours for . business, when they can be suitably stored; or if the 24 186 THE .LAWS OF BUSINESS FOR BUSINESS MEN. goods are delivered to the sender himself, or at his house, then at some suitable and convenient hour. In a case in Connecticut, a common carrier received from the plaintiif a package of money, to convey it from S. to P., and deliver it at the bank in P. ; it appeared that when the defendant (the carrier) arrived at P. the bank was shut ; that he went twice to the house of the cashier, and, not finding him at home, brought the money back, and offered it to the plaintiif, who declined to accept it, and that the . defendant then refused to be further responsible for any loss or acci- dent; it was held that, in the absence of any special con- tract, (none being proved in this case,) these facts did not constitute a legal excuse to the defendant for the non-per- formance of his undertaking. There must be no unnecessary delay, and the goods must be delivered as soon after a detention as may be with due diligence. In an English case, it appeared that a parcel had been deliv- ered to the defendants in London, on the 8th of August, ad- dressed to the plaintiff at Birmingham, where it ought to havB arrived on the 10th, but did not arrive until the 3d or 4th of September. It was held, upon this evidence, that the plaintiff was entitled to recover damages, — the duty to deliver within a reasonable time being a term ingrafted by legal implication upon a promise or duty to deliver generally. As to the time of delivery a carrier is no insurer, but is liable only for default ; and in some cases a considerable period of detention wUl not discharge the carrier's obligation. Thus, in an English case, where the defendants contracted to carry the plaintiff's goods from Liverpool to Leghorn, and on the vessel's arriving at Pal- mouth, in the course of her voyage, an embargo was laid on her " until the further order of Council " ; it was held that such embargo only suspended, but did not dissolve, the contract between the parties ; and that even after two years, when the embargo was taken off, the defendants were answerable to the plaintiff in damages for the non-performance of their contract. As to the way and the place at which the goods should be delivered, much must depend upon the nature of the goods, and much also upon the usage in regard to them, if such usage exists. A somewhat remarkable case on this point was OF THE CARRIAGE OP GOODS. 187 decided in Vermont. The defendants -were common carriers on Lake Champlain, from Burlington to St. Alban's, toucliing at Port Kent and Plattsburg long enough to receive and discharge freight and passengers. This action was brought against them to recover for the loss of a package of baiiJc-bills. It appeared in evidence, that the package in question, which was directed to " Richard Yates, Esq., Cashier, Plattsburg, -N. Y.," was delivered by the teller of the plaintiffs' bank to the captain of the defendants' boat, which ran daily from Burlington to Plattsburg, and thence to St. Alban's, and that, when the boat arrived at Plattsburg, the captain deliv- ered the package to one Ladd, a wharfinger, and that it was lost or stolen while in Ladd's possession. No notice was given to the consignee by the captain of the boat of the arri- val of the package, nor had he ajiy knowledge of it until after it was lost. The principal question in the case was, whether the package was sufficiently delivered to discharge the defend- ants from their liability as carriers. The defendants offei'cd evidence to show that a delivery to the wharfinger, without notice, under the circumstances of the case, was a good deliv- ery according to their uniform usage, and the usage of other carriers similarly situated. The case was before the Supreme Court of Vermont three times, and that court, upon each oc- casion, held, that, in the absence of any special contract, a delivery to the wharfinger without notice, if warranted by the usage of the place, was sufficient, and discharged the defend- i,nt from all liability. The goods should be so left, and with such notice, as to secure the early, convenient, and safe reception of them by the person entitled to have them. Something also must de- pend, on this point, on the mode of conveyance. A man may carry a parcel into the house, and deliver it to the owner or his servant ; a wagon or cart can go to the gate, or into the yard, and there deliver what it carries. A vessel can go to one wharf or another; and is bound to go to that wliich is reasonably convenient to the consignee, or to one that was agreed upon ; but it is said a vessel is not bound to comply with requirements of the consignee as to the very wharf the ■goods should be left at, but may leave the goods at any safe. loo THE LAWS OF BUSINESS FOE BUSINESS MEN. convenient, and accessible wharf at which such goods are usually left. Where not delivered to the owner personally, or to his agent, immediate notice should be given to the owner. In fact, it may be said that the carrier cannot be made responsible with- out a notice of delivery to him, unless the delivery is itself a notice ; and so, also, he cannot make adequate delivery without similar notice. But if the carrier has pointed out a place or way of delivery to himself, as at his station or in his box, he must take notice ; and if the owner has in any way designated how the goods may be delivered to himself, he is bound by it. The notice must be prompt and distinct. And if the goods are delivered at an unsuitable or unauthorized place, no notice will make this a good delivery. Railroads terminate at their station, and although goods might be sent by wagons to the house or store of consignees, this is not usually done, as it is considered that the railroad carrier has finished his transit at his own terminus. Usually, the consignee of goods sent by railroad has notice from the consignor when to expect them ; and this is so common, that it is seldom necessary, in fact, for the agents of the railroad to give notice to the consignee. But this should, we think, be given where it is necessary ; and should be given as promptly, directly, and specifically as may be necessary for the purpose of the notice. In a recent case in Massachusetts, the court appear to be of opinion, that the liability of a railroad company as carriers is terminated as soon as the goods are unladen from their car in their warehouse ; and that after- wards they are only liable as warehousemen or depositaries, that is, for their own fault. Indeed, it was distinctly held that the proprietors of a railroad, who transport goods over their road for hire, and deposit them in their warehouse, with- out additional charge, until the owner or consignee has a reasonable time to take them away, are not liable as common carriers for the loss of the goods by fire, without negligence or default on their part, after the goods are unladen from the cars and placed in the warehouse, but are liable as ware- housemen only, for want of ordinary care; although the owner or consignee has no opportunity to take the goods OP THE CARRIAGE OF GOODS. 189 away before the fire. But this decision seems to go very far indeed. A railroad company may be compared to owners of ships in this respect, that they cannot take eitlier tlie cars or the ships farther tlian tlie station or the wharf, and therefore may deliver the goods there. But a carrier by water is bound to give notice that the goods are on the wharf, and is not exonerated as carrier until he gives such notice, whereas, in this very case, the court intimate that a railroad company is not bound to give notice. The law on the point when the responsibil- ity of a railroad company as a common carrier ends, is not yet settled ; nor will it be until it is determined by statutes, by further adjudication, or by established and general usage. It may happen that some third party may claim the goods under a title adverse to that of the consignor or consignee. If the carrier refuse to deliver them to this third party, and it turns out that the claimant had a legal right to demand them, the carrier would be liable in damages to him. But the car- rier may and should demand full and clear evidence of the claimant's title ; and if the evidence be not satisfactory, he may demand security and indemnity. If the evidence or the indemnity be withheld, he certainly should not be held an- swerable for anything beyond that amount which the goods themselves would satisfy, for he is in no fault. If he delivers the goods to such claimant, proof that the claimant had good title is an adequate defence against any suit by the consignor or consignee for non-delivery. In a case in Pennsylvania, the defendants were common carriers of goods between New York and Philadelphia, and had signed a receipt for certain goods as received of A, which they promised to deliver to his order. In an action by the indorsees, of this receipt, who had made advances on the goods, it was held that the defendants might prove that A had no title to the goods, but that they had been fraudulently obtained by him from the true owner ; and that, upon demand, they had delivered them up to the latter. The same doctrine has also been held in New York. 190 THE LAWS OF BUSINESS FOE BUSINESS MEN. SECTION IV. OP THE EIESr OF THE COMMON CAREIEB. By "lien," we have said, is meant a bond, or something which fastens one thing to another. Tlie legal meaning of this word, which we have had occasion to use in preceding chap- ters, is the right of holding or detaining property until some charge against it, ox some claim upon the owner on account of it, is satisfied. The common carrier has this right against all the goods he carries, for his compensation. While he holds them for this purpose, he is not liable for loss or injury to them as a common carrier ; that is, not imless the injury happen from his own fault. He may not only hold the goods for his compensation, but may recover this out of them, by any of the usual means in which a lien upon personal chattels is made productive. That is, he holds them just as if they were pledged to him by the owner as a security for the debt. Therefore, if the debt be not paid in a reasonable time after it is due and demanded, the carrier may have a decree of a coiirt of equity for their sale ; or may sell them himself at auction, retaining his pay from the proceeds, and paying over the remainder. But to make this course justifiable and safe, the carrier must wait a reasonable time, and give full notice of his intention, so that the owner may have a convenient opportunity to redeem the goods ; and there must be proper advertisement of the sale, and every usual precaution taken to insure a favorable sale ; and the car- rier must not buy himself, and must conduct in all respects with entire honesty. If a carrier carries goods for and at the request of a party who does not own them, and at the end of the transit the true owner discovers or interposes and claims them, the carried might recover his fare if he had rendered a certain service or benefit to the owner by conveying the goods, which service or benefit the owner accepted by there receiving the goods. But it would be a personal claim only which he might sue for, and OP THE CARRIAGE OF GOODS. 191 for ■which he would have no lien. This, at least, is the conclu- sion to which we think the principles of the common law would lead ; but on the authorities it is somewhat uncertain. SECTION V. OF THE LIABILITY OF THE COMMON CARRIER. This is perfectly well established as a rule of law, although it is very exceptional and peculiar. It is sometimes said to arise from the public carrier being a kind of public officer. But the true reason is the confidence which is necessarily reposed in him, the power he has over the goods intrusted to him, the ease with which he may defraud the owner of them, and yet make it appear that he was not in fault, and the difficulty which the owner might have in making out proof of his default. This reason it is important to remember, because it helps us to construe and apply the rules of law on this subject. Thus, the rule is that the common carrier is liable for any loss or injury to goods under his charge, unless it be caused by the act of God, or by the public enemy. And this phrase, " the act of God," has been said to mean the same thing as " inevitable (or unavoidable) accident." But this is a mistake. Tlie rule is intended to hold the common carrier responsible wherever it was possible that he caused the loss, either by negligence or design. Hence, the act of God means some act in which neither the carrier himself, nor any other man, had any direct and immediate agency. If, for example, a house in which the goods are at night is struck by lightning, or blown over by a tempest, or washed away by inundation, the carrier is not liable. This is an act of God, although man's agency interferes in causing the loss ; for without that agency, the goods would not have been there. But no man could have directly caused the loss. On the other hand, if the building ■was set on fire by an incendiary at midnight, and the rapid . spread of the flames made it absolutely impossible to i-escue the goods, this might be an inevitable accident if the carrier ■were wholly innocent, but it would also be possible that the in- 192 THE LAWS- OF BUSINESS FOR BUSINESS MEN. cendiary was in collusion with the carrier for the purpose of concealing his theft ; and therefore the carrier would be liable without showing that this was the case. As a general rule, the common carrier is always liable for loss by fire, unless it be caused by lightning ; and this rule has been applied to steamboats. So, it may be true that after the lightning, the tempest, or inundation, the carrier was negli- gent, and so lost the goods which might have been saved by proper efforts, or that he took the opportunity to steal them. If this could be shown, the carrier would, of course, be liable ; but the law will not presume this, if the first and main cause were such tliat the carrier could not have been guilty in respect to it. So, a common carrier would be liable for a loss caused by a robbery, however sudden, unexpected, and irresistible, or by a theft, however wise and full his precautions, and however subtle and ingenious the theft, although either of these might seem to be " inevitable " ; tliat is, unavoidable by any means of safety which it would be at all reasonable to require. The " act of God," which suffices 'to excuse the common car- rier foj- injury to the goods he carries, must be tlie immediate, and not the remote, cause of the injury. Thus, an action was brought in England against the master of a vessel navigating the river Ouse 'and Humber from Selby to Hull, by a person whose goods had been wet and spoiled. At the trial, it ap- peared in evidence that at the entrance of the harbor at Hull therfwas a bank on which vessels used to lie in safety, but of which a part had been swept away by a great flood some short time before the misfortime in question, so that it had become perfectly steep, instead of shelving towards the river ; that, a few days after this flood, a vessel sunk by getting on this bank, and lier mast, which was carried away, was suffered to float in the river, tied to some part of the vessel ; and the defendant, upon sailing into the harbor, struck against the mast, which, not giving way, forced the defendant's vessel towards the bank, where she struck, and would have remained safe had the bank remained in its former situation ; but on the tide ebbing, her stern sunk into the water, and the goods were spoiled ; upon . which the defendant tendered evidence to show that there had been no actual negligence. The judge before whom the case OP THE CARRIAGE OF GOODS. 193 •was tried rejected the evidence, and ruled that the act of God ■which could excuse the defendant must be immediate ; but this was too remote ; and directed the jury to find a verdict for the plaintiflf, and they accordingly did so. The case was after- wards submitted to the consideration of the Court of King's Bench, who approved of the direction of the judge at the trial. In another English case, it was held that a loss caused by a boat's running on an unknown " snag," in the usual channel of the river, is referable to the act of God. But iii a case in Virginia it was held that, where a common carrier strands his boat upon a bar recently formed in the channel of the river, of the existence of which he was previously ignorant, he is liable for the damage done to the freight on board his boat. The act of God may be negative merely, as where a vessel is wrecked from a failure of wind. Thus, in New York, where a vessel was beating up the Hudson against a light and variable wind, and being near shore, and while changing her tack, the wind suddenly failed, in consequence of which she ran aground and sunk, it was held that the sudden failure of the wind was the act of God, and excused the master ; there being no negligence on his part. So it includes whatever loss springs from the inherent nature of the thing ; as its fermentation or decay; always provided the carrier took all reasonable pre- cautions, in respect to stowage, exposure, and the like, to pre- vent this. For whatever the direct and principal cause of injury may be, if the negligence or default of the carrie]; sub- stantially mingles with it, he is responsible. The general principles of agency extend to common carriers, and make them liable for the acts of their agents, done while in the discharge of the agency or employment. So, the knowl- edge of his agent is the knowledge of the carrier, if the agent be authorized expressly, or by the nature of his employment, to receive this notice or knowledge. But an agent for a common cai-rier may act for himself, — as a stage-coachman in carrying parcels, for which he is paid personally and does not account with his employer, — and then the employer, as we have said, is not liable, unless the owner of the goods supposed the stage- coachman carried the goods for his employer, and was justi- fied by the facts and apparent circumstances in so believing. 25 194 THE LAWS OP BUSINESS FOR BUSINESS MEN. A carrier may be liable beyond his own route. It is very common for carriers, who share between them the parts of a long route, to imite in the business and the profits, and then all are liable for a loss on any part of the route. Thus, where an association was formed between shippers, on Lake Ontario, and the owners of canal-boats on the Erie Canal, for the trans- portation of goods and merchandise between the city of New York and the ports and places on Lake Ontario and the River St. Lawrence, and a contract was entered into by the agent of such association for the transportation of goods from the city of New York to Ogdensburg, on the. river St. Lawrence, and the goods were lost on Lake Ontario ; it was held that all the defendants were answerable for the loss, although some of them had no interest in the vessel navigating the lake, in which the goods were shipped. If they are not so united in fact, but seem to be so, and justify a sender in supposing they are united, they are equally liable. Thus, where A and B were jointly interested in the profits of a common stage-wagon, but, by a private agreement between themselves, each undertook the conducting and man- agement of the wagon, with his own drivers and horses, for specified distances, it was held that, notwithstanding this pri- vate agreement, they were jointly responsible to third persons for the negligence of the drivers throughout the whole dis- tance. If 'a carrier takes goods to carry only as far as he goes, and then engages to send them forward by another carrier, he is liable as carrier to the end of his own route ; he is liable also if he neglects to send the goods on ; but he is not liable for what may happen to them afterwards. Thus far the law is quite settled. It seems to be still the rule in England, that, iLa carrier takes goods which are marked or otherwise designated to go to a place beyond his own route, it will be presumed that he agrees to carry them thither, and that he has made arrange- ments for that purpose, which affect him with the liability of a carrier through the whole route, unless he can show that the fact is otherwise, and also that the sender understood the fact to be otherwise, or had good reason so to understand it. OF THE CAEEIAGE OP GOODS. 195 It is otherwise in this country, according to the weight of recent authority, and a common carrier will not be held liable, as such, beyond his own route, without evidence of a distinct contract to that effect ; and the mere fact of his receiving a package directed to a place beyond his route will not be sufficient evidence for that purpose. This has been so held by the Supreme Courts of New York, Vermont, Massachusetts, and Connecticut. It is obvious that the opposite rule would be much less safe in this country of immense distances, and where companies sometimes associate for the purpose of facilitating the carriage of goods over vast spaces, than, in England. And we think it open to dovibt, whether the rule stated as the English rule will continue without important modifications there. SECTION VI. OF THE CAKRIER OF PASSENGERS. The carriers of passengers are under a more limited liabil- ity than the carriers of goods. This is now well settled. The reason is, that they have not the same control over passengers as over goods ; cannot fasten them down, and use other means of securing them. Hence, the distinction applies to the car- riage of slaves ; for, while they are in some respects property, they are also possessed of the same power and necessity of locomotion as other men. But while the liability of the car- rier of passengers is thus mitigated, it is still stringent and extreme. No proof of care will excuse the carrier if he loses goods committed to him. But proof of the utmost care will excuse him for injury done to passengers. Some of the authorities, and, as we think, the reason of the case, would justify us in saying that the carrier of passengers is liable for injury to them, unless he can show that he took all possible care, — giving always a reasonable construction to this phrase ; and in the case of railroad companies there is au- thority for using the words in almost their literal meaning ; that is, for holding them liable for all injury to passengeraj which could have been possibly avoided. 196 THE LAWS OP BUSINESS FOR BUSINESS MEN. SECTION VII. OF A NOTICE BY THE CARBIER, KESPECTING HIS LIABILITY. It is now settled — though formerly denied — that the com- mon carrier has a right to make a special agreement with the senders of goods, which shall materially modify, or even wholly prevent, his liability for accidental loss or injury to the goods. Wliether he could make such a bargain with his passengers, to prevent his liability for injury to their persons, is much more doubtful. The question does not seem to have come directly before the courts. And although the language used to express the carrier's rights is sometimes broad enough to extend to the persons or passengers, as well as to their goods, we think it open to doubt whether this was meant, or would be generally admitted as law. And if it were admitted, we should expect the carrier held to stricter proof of a bargain, and to a more definite bargain, with regard to persons, than might suffice as to goods. The principal question is. What constitutes such a bargain ? It seems to be well settled, by the weight of authority in this country, that a mere notice that the carrier is not respon- sible, or his refusal to be responsible, although brought home to the knowledge of the other party, does not necessarily con- stitute an agreement. The reason is this. The sender has a right to insist upon sending his goods, and the passenger has a right to insist upon going himself, leaving the carrier to his legal responsibility ; and the carrier is bound to take them on these terms. If, therefore, the sender or the passenger, after receiving such notice, only sends or goes in silence, and without expressing any assent, especially if the notice be given at such time, or under such circumstances, as would make it inconvenient for the sender not to send, or for the passenger not to go, then the law will not presimie from his sending or going an assent to the carrier's terms. But the assent may be expressed by words, or made manifest by acts ; and it is in each case a question of evidence for the jury, whetlier there was such an agreement. OP THE CARRIAGE OP GOODS. 197 It seems to be conceded also, that a notice by the carrier, ■which only limits and defines his liability to a reasonable ex- tent, as one which states what kind of goods he will carry, and what he will not ; or to what amount only he will be liable for passengers' baggage, without special notice ; or what informa- tion he will require, if certain articles, as jewels or gold, are carried ; or what increased rates must be paid for such things, — any notice of this kind, if in itself reasonable and just, will bind the party receiving it. No party will be affected by any notice, — neither the car- rier, nor a sender of goods, nor a passenger, — unless a knowl- edge of it can be brought home to him. In a case in Pennsyl- vania, where the notice was in the English language, and the passenger was a German, who did not understand English, it was held incumbent on the carrier to prove that the passenger had actual knowledge of the limitation in the notice. But the knowledge may be brought home to him by indirect evidence. As by showing that it was stated on a receipt given to him, or on a ticket sold him, or in a newspaper which he actually read, or, perhaps, in one which he was in the habit of reading, or even that it was a matter of usage, and generally known. But in an action in Massachusetts for lost baggage, it was proved that there was a notice printed on the back of the passage ticket given to the plaintiff, that the defendants would not be responsible beyond a specified sum ; but no other notice was given, nor was plaintiff's attention called to this. And it was held that these facts did not furnish that certain notice which must be given to exonerate such carrier from his liability. This question is one of fact, which the jury will determine upon all the evidence, under the direction of the court. And if the notice is ambiguous, they will be directed to construe it against the carrier. Any fraud towards the carrier, as a fraudiilent disregard of a notice, or an effort to cast on him a responsibility he is not obliged to assume, or to make his liability seem to be greater than it really is, will extinguish the liability of the carrier so far as it is affected by such a fraiid. If a carrier gives notice which he is authorized to give, the party receiving it is bound by it, and the carrier is under no 198 THE LAWS OP BUSINESS FOR BUSINESS MEN. obligation to make a special inquiry or inyestigation to see that the notice is complied with, but may assume this as done. It should, however, be remarked, that such notice affects the liability of the common carrier only so far as it is peculiar to liim ; that is, his liability for a loss which occurs without his agency or fault ; for he is just as liable as he would be without notice, for a loss or injury caused by his own negligence or default. Whether a common carrier could make a valid bargain by which he should be free from all liability, however the loss might occur, may not be certain. But in the present state of the law, we are inclined to think he might ; so far, that such a bargain would protect him against everything but his own wilful or fraudulent misconduct. But no bargain could be made to protect him against this. SECTION VIII. OF THE carrier's LIABILITY TOR GOODS CARRIED BY PASSENGERS. A CARRIER of goods kuows precisely what goods, or rather what parcels and packages, he receives and is responsible for. A carrier of passengers is responsible for the goods they carry with them as baggage ; what that is, the carrier does not always know ; and he is responsible only to the extent of what might be fairly and naturally carried as baggage. This must always be a question of fact, to be settled as such by the jury, upon all the evidence, and imder the direction of tlie court. But there can be no precise and definite standard. A traveller on a long journey needs more money and more baggage than on a short one ; one to some places and for some purposes, more than one going to other places or for other purposes. Tims in New York it was decided that baggage does not properly include money in a trunk, or any articles usually carried about the person. And in -another New York case, it was held that, where the baggage of a passenger consists of an ordinary travelling-trunk, in which ther^ is a large sum of money, such money is not considered as included under the OP THE CARRIAGE OF GOODS. 199 term baggage, so as to render the carrier responsible for it. But a passenger may carry as baggage, money not exceeding an amount ordinarily carried for travelling expenses. So in Massachusetts it was held that common carriers are responsi- ble for money bona fide included in the baggage of a passen- ger, for travelling expenses and personal use, to an amount not exceeding what a prudent person would deem proper and necessary for the purpose. In Pennsylvania, carriers were held responsible for ladies' trunks containing apparel and jew- els. And in Illinois a common carrier of passengers was held liable for the loss of a pocket-pistol, and a pair of duelling- pistols, contained in the carpet-bag of a passenger, which was stolen out of the possession of the carrier. But in Tennessee it was held that " a silver watch, worth about thirty-five dol- lars ; also medicines, handcuffs, locks, &c., worth about twenty dollars," — were not included in the term baggage, and that the carrier was not responsible for their loss. In Ohio, it was held that a gold watch, of the value of ninety-five dollars, was a part of the traveller's baggage, and his trunk a proper place to carry it in. In another New York case, it was held that the owners of steamboats were liable as common carriers for the baggage of passengers; but to subject them to damages for loss thereof, it must be strictly baggage ; that is, such ar- ticles of necessity and personal convenience as are usually carried by travellers. It was accordingly held, in tliat case, that the carrier was not liable for the loss of a trunk, contain- ing valuable merchandise and nothing else, although it did not appear that the plaintiff had any other trunk with him. But in a case in Pennsylvania, where the plaintiff was a carpenter moving to the State of Ohio, and his trunk contained carpen- ters' tools to the value of $55, which the jury found to be the reasonable tools, of a carpenter, it was held that he was entitled to recover. There is some diversity, and perhaps some uncertainty, in the application of the rule ; but the rule itself is well settled, and a reasonable construction and application of it must al- ways be made ; and for this purpose, the passenger himself, and all the circumstances of the case, must be considered. The purpose of the rule is to prevent the carrier from be- 200 THE LAWS OF BUSINESS FOB BUSINESS MEN. coming liable by the fraud of the passenger, or by conduct which would have the effect of fraud ; for this would be the case if a passenger should carry merchandise by way of bag- gage, and thus make the carrier of passengers a carrier of goods without knowing it and without having been paid for it. Generally, a common carrier of passengers, by stage, packet, steamer, or cars, carries the moderate and reasonable baggage of a passenger, without being paid specifically for it. But the law considers a payment for this so far included in the payment of the fare, as to form a sufficient ground for the carrier's liability to the extent above stated. The carrier is only liable for the goods or baggage delivered to him and placed under his care. Hence, if a sender -of goods send with them his own servant, and intrust them to him and not to the carrier, the carrier is not responsible. So, if a pas- senger keeps his baggage, or any part of it, on his person, or in his own ha^ds, or within his own sight and immediate con- trol, instead of delivering it to the carrier or his servants, the carrier is not liable, as carrier, for any loss or injury which may happen to them ; that is, not liable without actual default in relation to these specific things. Thus, in an action brought in New York to charge a railroad company, as common car- riers, for the loss of an overcoat belonging to a passenger, it appeared that the coat was not delivered to the defendants, but that the passenger, having placed it on the seat of the car in which he sat, forgot to take it with him when he left, and it was afterwards stolen ; and it was held that the defendants were not liable. But if the baggage of a passenger is deliv- ered to a common carrier, he is liable for it in the same way, and to the same extent, as he is for goods which he carries. There has grown up in this country a very peculiar excep- tion to the rules of evidence, in relation to travellers' baggage. This exception permits the traveller to maintain his action against the carrier by proving, by his own testimony, the contents of a lost trunk or box, and their value. It is said to rest altogether upon necessity. And, therefore, the testi- mony of the wife of the owner is similarly admissible. But it is always limited to such things — in qiiantity, quality, kind, and value — as might reasonably be siipposed to be carried in OP THE CARRIAGE OF GOODS. 201 svicli a trunk or valise. Tims, in the State of Maine, where the plaintiif proved that ho had delivered to the defendants a box to be carried to a certain place ; that the box was not delivered ; that he had made a demand thereof; and that the defendants admitted its loss ; and then " offered to show, by his own testimony, (it not appearing that he had any other means of showing it,) what was in said box, and the value of the articles," the declaration having alleged that the box contained medical books, surgical instruments, and chemical apparatus, it was held that the plaintiff's oath was inadmis- sible. The rule, with this limitation, seems reasonable and safe, and is quite generally adopted. In Massachusetts it was distinctly denied by the Supreme Coui't, but was afterwards established by statute. The common carrier of goods or of passengers is liable to third parties for any injury done to them by the negligence or default of the carrier, or of his servants. So he is for in- jury to property by the wayside, caused by his fault. But the negligence of the party suffering the mjury, if it was mate- rial and contributed to the injury, is a good defence for the carrier ; unless malice on his part can be shown. Where the party mjured is in fault, the common carrier has still been held liable, if that fault was made possible and injurioiis through the fault of the carrier. Thus, in a case in England where a party was sued, not as a carrier, but for damage caused by his fault, in which case the defendant's servant left a horse and cart unattended in a public street, and the plaintiff, a child under seven ypars of age, during the driver's absence, climbed on the wheel, and other children urged forward the horse, whereby the plaintiff was thrown to the ground and hurt, it was held that the jury were justified in finding a verdict for the plaintiff, although the plaintiff was a trespasser, and con- tributed to the injury by his own act. Whether a railroad company is responsible for fire set to buildings or property along the road, without negligence on its part, has been much considered both in England and in this country. In some of our States they are made so liable by statute provision. And this fact, together with the general principles of liability for injury done, would seem to lead to 26 • 202 THE LAWS OP BUSINESS FOR BUSINESS MEN. the conclusion, that they are not liable unless in fault, or unless made so by statute. A frequent cause of disaster, both on land and on the ocean, is collision. For this, a carrier by land, a railroad company for example, should be held liable, in our view of this question, unless the company could show that it took all possible care to prevent the collision ; and we do not know that the general principles of law in relation to carriers could lead to any other conclusion. The common carrier at sea, whether under canvas or steam, must be held to a careful, if not a strict, compliance with the rules and practice applicable to each case of meeting another vessel, which have been devised for the purpose of preventing collision ; and of which we shall treat in our chapter on the Law of Shipping. OP LIMITATIONS. 203 CHAPTER XVI. OP LIMITATIONS. SECTION I. OP THE STATUTE OP LIMITATIONS. The statute of 21 James I. chapter 16, commonly called the Statute of Limitations, was passed in England in 1623. Among its provisions, it enacts that all actions of account and upon the case, (which include nearly all the actions which can be brought for indebtedness or damages,) provided they do not concern the trade of merchandise between merchant and merchant, their factors or servants, all actions of debt grounded upon any lending, or contract without specialty, (that is, contracts without seal,) and all actions for arrearages of rent, shall be commenced and siied within six years next after the cause of such actions or suit, and not after. In few words, all claims which do not rest on a seal or a judgment must be sued within six years from the time when they arise. The provisions of this statute were copied, without much im- portant variation, in the statutes of all our States ; and upon them, as they are explained and in some respects materially modified by adjudication, the law of limitation rested, in Eng- land and in this country, until 1827, when the statute of 9 George lY. chapter 14, commonly called Lord Tenterden's Act, was passed. This statute, after reciting the statute of James, provides, in substance, that if a debt or promise be once barred by the Statute of Limitations, no acknowledgment of the debt or new promise shall renew the debt and take away the effect of the statute, unless the new promise is in writing, and is signed by the party who makes the promise. But this new statute expressly permits a part-payment either of princi- pal or interest of the old debt to have the same effect as be- fore. And tliis statute also provides, that if there be joint con- 204 THE LAWS OP BUSINESS FOE BUSINESS MEN. tractors or debtors, and a plaintiff is barred by the statute against both, but the bar of the statute is removed as to one by a new promise or otherwise, the plaintiff may have judgment against this one, but not against the other. And statutes sub- stantially similar have been passed in Maine, Massachusetts, Vermont, New York, Indiana, Michigan, Arkansas, and Cali- fornia. SECTION II CONSTKUCTION OF THE STATUTE. For the law of limitation there is a twofold foundation. In the first place, the actual probability that a debt which has not been claimed for a long time was paid, and that this is the reason of the silence of the creditor. But besides this reason, there is the inexpediency and injustice of permitting a stale and neglected claim or debt, even if it has not been paid, to be set up and enforced after a long silence and acquiescence. In truth, these two reasons mingle ; but as one or the othei* pre- vails, its effect is seen in the construction of this law, and in its application to cases. If, for example, the statute is considered as only a statute of presumption, or, in other words, if it is supposed to say that a debt which is six years old shall not be demanded, because the law presumes that so old a debt must have been paid, it is ob- vious that, when evidence is offered to do away the effect of the law, courts will look at this evidence mainly to ascertain whether it rebuts this presumption, by proving that the debt still exists. In this view, and for this purpose, any acknowledgment or ad- mission of the mere existence of the debt, by the debtor, would be sufficient to do away with the law. Thus, Lord Mansfield said, long ago, " The slightest acknowledgment has been held sufficient to rebut the presumption that an old debt has been paid ; as saying, ' Prove your debt, and I will pay you ' ; ' I am ready to account, but nothing is due you ' ; and much slighter acknowledgments than these will ta-ke a case out of the statute." If, however, courts regarded the statute rather as a statute of repose, or, in other words, as intended to prevent the enforce- OP LIMITATIONS. 205 ment of stale claims, ■whether they were paid or not, then it is obvioxis that a mere admission that the debt was legal and remains unpaid, amounts to nothing. The law says, it has re- mained unpaid so long, that it is too late now to bring it for- ward. But if the debtor is willing to waive the protection of the law, and not only acknowledges the debt, but promises to pay it, there is no reason why he should not be held upon this promise. Between these two views it may be said that the courts have fluctuated from the beginning. As soon as the statute was passed, whenever it was pleaded by the defendant in bar of the action, if the plaintiff sought to remove this bar by any words of the defendant, he was obliged to allege " a new promise " made by the defendant. This rule of pleading tends to show that, at the beginning, the statute was regarded as a statute of repose, which could not be set aside by a mere acknowledgment that the debt was unpaid. But although the rule itself indicates this, the practice of the courts took the opposite direction. An impression prevailed, not perhaps at the beginning, but early, and continiied long, that the statute itself was not to be fa- vored ; that a resort to it was generally a dishonorable attempt to escape the payment of a just debt ; and that the court should give its aid to the creditor who en(J*rored to do away the effect of this law. Such language as toIs was not used, but such was the practice ; and, accordingly, any sort of ac- knowledgment, proved in almost any way, was permitted to remove the bar of the statute. At length, however, a different, and, as we think, a far more just and rational view, prevailed. It began to be admit- ted by the profession and by the courts, although it never has been, perhaps, by the community, that it was a necessary and beneficial law, and should be, if not favored, at least applied fairly and rationally, and permitted to do its very useful work in suppressing stale claims. These views are now very gen- eral, both in the English courts and in our own. One effect of them was Tenterden's Act, which we have given already, and wHch, as may be seen, guards against the admission of loose and uncertain testimony in proof of a new promise. Before inquiring into the rules of law which now apply to the case of an acknowledgment or new promise, it should be 206 THE LAWS OF BUSINESS FOR BUSINESS MEN. remarked that a prescription, or limitation, of common law, much more ancient than the statutes above quoted, is still in full force. This is the presumption of payment after twenty years, which is applicable to all debts ; not only the simple contracts to which the Statutes of Limitation refer, that is, contracts which are merely oral, or which if written have no seal, • but to specialties, or contracts or debts under seal or by judgment of court. Of these it will not be necessary to speak here, excepting to remark, that in one or two oT our States the Statute of Limitation excepts a promissory note which is signed in the presence of an attesting witness, and is put in suit by the original payee, or his executor or adminis- trator ; such a note in those States, which we believe are now only Maine and Massachusetts, may be sued any time within twenty years after it is due. Bank-bills, and other evidences of debt issued by banks, are everywhere excepted from the operation of the statute. SECTION III. OP THE NEW PROMISE. The first question we propose to consider is, what is the new promise which suffices to take a case out of the statute. If the promise be made, the former debt, although not in it- self enforceable, is* considered a sufiicient consideration for the new promise. This might be made as well orally as in writing, until Lord Tenderden's Act. But although this act requires, as matter of evidence, that the new promise shall be in writing, it does not afiect at all any question respecting the character or suificiency of the new promise ; they remain to be decided by the same principles, ajid in the same manner, as before. • The first thing to be said is, that now, by the general con- sent of the courts of this country and of England, a mere ac- knowledgment, which does not contain, by any reasonable implication or construction, a new promise, and still more, if it expressly excludes a new promise, is not sufficient. In the leading American case \ipon this point, before the Su- OP LIMITATIONS. 207 preme Court of the United States, it was proj-ed, in answer to the plea of the Statute of Limitations, tliat tlie defendant, one of the partners of a firm then dissolved, said to the plain- tiff: "I know we are owing you"; "lam getting old, and I wish to have the business settled " ; it was held that these expressions were insufficient to revive the debt. So, in New Hampshire, in an action on a promissory note, the defendant, on being asked to pay the note, said " lie guessed the note was outlawed, but that would make no difference, he was willing to pay his honest debts, always." As he did not state in di- rect terms that he was willing to pay the note, this was held not sufficient to revive the debt. A new promise is not now implied by the law itself, from a mere acknowledgment. Whether an acknowledgment of an existing debt is suffi- cient to take it out of the statute, or, in other words, whether it carries with it a promise to pay that debt, is a question of law for the court, when it is only a question as to the legal meaning and effect of the words used ; for this would be a mere question of construction, which is always a matter of law only. But if the question is as to what words were used, and what was the intention of the parties to be gathered from the words and acts, this is a question of fact, and it is for tlie jury to determine. Tlie new promise need not define the amount of the debt. That can be done by other evidence, if only the existence of the debt and the purpose of paying it are acknowledged. Still, the new promise must be of the specific debt, or must distinct- ly include it ; for if wlioUy general and undefined, it is not enough. A testator who provides for the payment of his debts generally, does not thereby make a new promise as to any one of them. If the new promise is conditional, the party relying upon it must be prepared to show that the condition has been ful- filled. Thus, if the new promise be to pay " when I am able," the promisee must prove not only the promise, but that the promisor is able to pay the debt. Even if there seems to be a promise wholly unconditional and tmqualified in its terms, it is competent for the defendant to show, by the attendant circumstances or other proper evidence, that it was not in- 208 THE LAWS OP BUSINESS FOB BUSINESS MEN, tended, nor iiyderstood, as an acknowledgment or a promise- On the other hand, if the expressions in tliemselves are doubt- ful, the plaintiff may make them clear, and show by evidence that they meant and were a promise. As the acknowledgment should be voluntary, it follows that those "made under process of law, as by a bankrupt, or by answers to interrogatories which could not be avoided, should never have the effect of a new promise. A doctrine has prevailed, and perhaps has at present the weight of authority in its favor, according to which every , new item and credit in a mutual and running account is an acknowledgment, by the party making it, that the account is open and unsettled, and so draws after it all preceding items as to have the same effect as a recognition of them, and a promise to pay the balance when that should be struck. This doctrine grew up, we think, in those days when courts dis- liked the Statute of Limitations, and sought opportunities, or at least favored attempts, to defeat it. Such is not the view of courts at present; and we should say that the general prin- ciples now prevalent would eventually limit this doctrine to cases where the account was mutual and open, and there was evidence that the items relied upon were intended to be charged in offset, so as to have the effect of a part-payment. But the law on this subject is not now quite clear. SECTION IV. OF PAET-PAYMENT. A PAET-PAYMENT of a debt is such a recognition of it as implies a new promise ; even if it be made in goods or chat- tels, if offered as payment and agreed to be received as payment, or by negotiable promissory note or bill. Thus, in England, where one was sued for money due for a quantity of hay, and pleaded that it had been due more than six years, which was a good defence, the plaintiff proved in reply that defendant had given him within six years a gallon of gin as part-payment for his debt ; and it was held, that this took the case out of the OF LIMITATIONS. 209 Statute of Limitations, and the plaintiff recovei-ed. But a pay- ment has this effect only when the payment is made as of a part of a debt. If it is made in settlement of the whole, of cou.rse it is no promise of more. And a bare payment, with- out words or acts to indicate its character, would not be con- strued as carrying with it an acknowledgment that more was due and would be paid. If a debtor owes several debts, and pays a sum of money, he has the right of appropriating that money as he pleases. If he pays it without indicating his own appropriation, the gen- eral rule is, that the creditor who receives the money may appropriate it as he. will. There is, however, this exception. If there be two or more debts, some of which are barred by the statute, and others are not barred by it, the creditor can- not appropriate the payment to a debt that is barred, for the purpose of taking it out of the statute by such part-payment. If a debt consists of both principal and interest, a payment specifically on account of either of these parts will take the re- mainder of that part, and the whole of the other part, out of the statute. If mutual accounts are settled, and a balance struck, all the items which are within the admitted account are so many payments, and may have the effect of part-payments in taking a debt towards which they go out of the statute. So, a payment for a creditor to a^ third party on account of a debt dqe from the payer to the creditor, is the same thing as a payment to the creditor. The Tenterden Act requires that the new promise should be in writing ; but provides also, as we have seen, that nothing in it shall alter, or take away, or lessen the effect of any payment of any principal or interest. This, therefore, remains a new promise, as before. SECTION V. or THE PROMISE OP ONE OF SEVERAL JOINT DEBTORS. The question has frequently arisen, whether a new promise by one of two or more joint debtors has the effect of reviving 27 210 THE LAWS OF BUSINESS FOE BUSINESS MEN. the debt as to the others, who make no promise. If the stat- ute be one of presumption and not of repose, as stated in the second section, such an admission would prove tlie debt and remove the statute as to all. So it has been held. But the present weight of authority and of reason limits the effect of the new promise to him who makes it. He may, however, be authorized to promise for the rest, and then he binds them. Thus, if A, B, and C are in partnership, and a note of theirs is more than six years old, the new promise of either of them, given while the partnership continues, binds all three, because either'could give a new note binding the firm. But if the part- nership has ceased, the new promise of A binds only himself, because he has no longer authority to bind the others. Ten- terden's Act provides that no joint contractor sliall be charge- able by reason of any promise by a co-contractor. In those of our States in which this clause also is adopted, it settles this question ; as in Massachusetts, Maine, and some other States. SECTION VI. TO WHOM THE NEW PKOMISE SHOULD BE MADE. Whether the new promise must be made to the creditor himself, (or to his agent.) or is sufficient if made to a third party, is not settled very fully. Thiis, if A says orally or in writing, " I cannot pay you, because I owe B and shall pay him first," it is not certain whether B can sue A on this promise. In "Pennsylvania, it seems settled that such a promise or acknowledgment is not sufficient, and this we think the better rule. In a case in that State, it was held that a declaration made by the defendant to a stranger to the suit or cause of action, that he owed to the plaintifi" a debt "of about $800, which he intended to have settled within twelve months from that date," is not sufficient to take the case out of the Statute of Limitations. But in New York, tlie old rule, which makes such an acknowledgment sufficient, seems not to have passed away. In that State, where the defendant said to a tliird OF LIMITATIONS. 211 person that he owed the plaintiffs $700 for goods received, it was held that such an acknowledgment was siifficient to restore the right of action, which had been barred by the statute. And this may be true in Massachusetts, and some other States. It is possible that a new promise by the maker of a negotiable promissory note to the payee, would take the case on that note out of the statute as to all who are parties to the note subse- quently to the payee, so that a new promise of a first indorser would be sufficient to restore the liability of the later indors- ers, by reason of the peculiar nature and purpose of negotiable paper. But the cases are in some conflict on this point also. SECTION VII. OP AccorrNTS between merchants. An important provision of the statute is that which excepts from its operation " accounts that concern the trade of mer- chandise, between merchant and merchant." There are three requisites before a debt is exempted from the effect of the stat- ute, on this ground. It miist be an " account " ; it must " concern merchandise " ; it must be " between merchants." The first question has been one of some difficulty in England ; but almost any transaction which was between merchants, and related to the buying and selling of merchandise, and ended in a debt, would probably be here held as an " account," within the meaning of the statute ; and a suit might therefore be brought upon it after six years. Formerly, none were considered as " merchants " in Eng- land, who did not trade " beyond seas." But the construc- tion of this word is far more liberal there at the present time. We have no exact standard or definition which will determine who is a merchant. The word " trader " is often used in this country, and sometimes as synonymous with merchant. A wide significance of the word, but perhaps not too wide, would include all of those whose business it is to buy goods and sell them again, whether by wholesale or retail. In 212 THE LAWS OP BUSINESS FOE BUSINESS MEN. Scotland, the phrase "travelling merchant" is frequently- applied to a pedler ; but we do not know that it is so used here. A similar difficulty exists as to what is meant by the word " merchandise." There is here also no definite standi ard ; but we should be disposed to include in it everything that is usually bought and sold by merchants, in the way of their business, and nothing more. In the Supreme Court of the United States, it was held that a contract between ship- owners and shippers of goods to receive half profits instead of freight on the shipment for a foreign voyage, was barred by the Statute of Limitations, because it was not a case of " mer- chants' accounts " in the proper meaning of the statute. So if a merchant sold another his horse or carriage, or a load of hay from his fields, or a picture from his house, we should say this debt would be barred by the statute, after six years, even if the charge were included in an account made up otherwise of mercantile items. It has also been held that no account was exempted from the statute, although between merchants, and concerning mer- chandise, unless some item of it accrued within six years ; and then that item drew in the whole account. But we think the later as well as the better authority, both in England and in this country, and much the stronger reason, would not make this requirement, but would exempt the whole of such an ac- count from the operation of the statute, although all its items were more than six years old. SECTION VIII. OF THE OTHER STATUTOKT EXCEPTIONS. The original English statute also provides, that, if a creditor at the time when the cause of action accrues is a minor, or a married woman, or not of sound mind, or imprisoned, or be- yond the seas, the six years do not begin to run ; and he may bring his action at any time within six years after such dis- ability ceases to exist. And by the 4th of Anne, chapter 16, section 19, it was provided, that if any person, against whom OP LIMITATIONS. 213 there shall bo a cause of action, shall ■when such cause accrues be beyond the seas, the action may be brought at any time within six years after his return. These exceptions and dis- abilities, in both the statutes, are usually contained in our own statutes. Tlie effect of these is, that the disability must exist when the debt accrued ; and then, so long as the disability contin- ues to exist, the statute does not take effect. But it is a general rule, that, if the six years begin to run, they go on witliout any interruption or suspension from any subsequent disability. Thus, if a cseditor be of sound mind, or a debtor be at liome, when the debt accrues, and one month afterwards the creditor becomes insane, or the debtor leaves the country, nevertheless the six years go on, and after the end of that time no action can be commenced for the debt. Or if the disability exists when the debt accrues, and some months afterwards ceases, so that the six years begin to run when it ceases, and afterwards the disability recurs, it does not interrupt the six years. So, too, if there be several disabilities existing at the time the debt accrues, the statute takes no effect until all have ceased. But if there be one or more disabilities at the beginning, so as to prevent the six years from running, and, before these are removed, other disabilities occur, as soon as those existing at the beginning cease, the six years begin, although the others have not ceased. Thus, if a debt was due the 1st of January, 1850, and then the creditor was a minor, but became of full age the 1st of January, 1851, the statute would not begin to run until the 1st of January, 1851. But if in 1852 he went to Europe, and in 1853 became insane, in six years from the 1st of January, 1851, that is, on the 1st of January, 1857, the debt would be barred by the limitation.- If, however, on the 1st of January, 1850, the creditor was a minor, and also abroad, and also insane, the statute would not begin to run until all these disabilities were removed; that is, not until he was of full age, and had come home, and was sane. As soon as all these things happened, the six years woiild begin, and would con- tinue uninterruptedly, although within them he became again insane, or left the country. 214 THE LAWS OP BUSINESS FOB BUSINESS MEN, In this country, a rational construction has heen given to the disability of being beyond the 'seas, and its removal ; and it is not understood to be terminated merely by a return of the debtor for a few days, if during those days he was not within reach. In a case in Maryland, where the defendant, a resident of another State, appeared in Baltimore, where the plaintiff resided, in six months after the cause of action accrued, and " purchased other goods from the plaintiff, and remained there for two days," it was held that the statute did not begin to run, because it did not appear but that the defendant made his pur- chase just before he left ; so that the plaintiff had no opportu- nity to sue out a writ against him with effect. If, however, the creditor knew that he had returned, or might have known it by the exercise of reasonable care aiid- diligence, soon enough to have profited by it, this removal of the disability brings the statute into operation, although the return was for a short time only. In some of our States, as in New York and New Hamp- shire, it is expressly provided, that, if a defendant leaves the State after the action accrues, the time of his absence shall not be taken as any part of the period within which the action must be brought. Under this clause a question has arisen, whether successive absences can be accumulated and the aggregate deducted ; but it is now generally agreed that this may be done, and that the statute is not confined to a single departure and return. Thus, if a man owes a debt, and after two years is absent one, and after two more is absent another, the debt is not barred in these States although six years old, nor will it be until the debtor has been two more years within reach of the creditor. The question has also arisen, whether this clause contemplates temporary absences, or only such as result from a permanent change of residence. And this has been decided differently by different courts. This disability applies as well where the debtor is a foreigner, residing permanently abroad, even if he have an agent here, as to o\ir own citizens who are only visiting abroad. It has been held, that if there be joint creditors, all of whom are absent when the debt accrues, and one of them returns, the six years begin as to all of them. And the reason is, that he OF LIMITATIONS. 215 may bring Jiis action at once, and use the names of the other creditors. But it has also been held, that, if several debtors are abroad, the limitation does not begin to run until all return ; for otherwise the creditor might be obliged to bring his action a,gainst the returning party alone, and he might be insolvent ; and yet an action and judgment against him would extmguish the creditor's right of proceeding against the others. SECTION IX. WHEN THE PERIOD OP LIMITATION BEGINS. It is sometimes a question from what point of time the six years are to be counted. And the general rule is, that they begin when the action might have been commenced. If a credit is given, this period does not begin imtil the credit has expired. Thus, in England, it was held that where a bill of exchange is drawn, payable at a future period, for the amount of a sum of money lent by the payee to the drawer at the time of drawing the bill, the payee may recover the money in an action for money lent, although six years have elapsed since the time when the loan was advanced ; the Statute of Limita- tions begimiing to run only from the time when the money was to be repaid, namely, when the bill became due. If a note on time be given, the six years do not begin until the time has expired, including the additional three days of grace ; if a bill of exchange be given, payable at sight, then the six years begin after presentment and demand ; but if a note be payable on demand, or money is payable on demand, then the limitation begins at once, because there may be an action at once. If there can be no action until a previous demand, the limitation begins as soon as the demand is made. If money be payable on the happening of any event, then the limitation begins after that event has happened. Thus, in the Supreme Court of the United States, in d,n action to recover tlie amount of a loss oc- casioned by the neglect or unskilful conduct of the defendant, an attorney at law, it was held that the Statute of Limitations began to run as soon as the error was committed, and not after- 216 THE LAWS OP BUSINESS FOR BUSINESS MEN. wards, when it was made known. If several sticcessive credits are given, as, if a note is given wliicli is to be renewed ; or if a credit is given, and then a note is to be given ; or if the credit is longer or shorter, at the purchaser's option, as, if it be agreed that a note shall be given at two or four months, — then the six years begin when the whole credit or the longer credit has expired. But a credit may be given on condition ; as, that a bill or note of a certain kind or amount shall be given at once, or when the credit expires. Then, if the bill or note is not given when it sliould be, the creditor may at once bring his action, and therefore the limitation begins. But we shoiild say, that if a purchaser agreed that after a certain credit he would give a certain bill or note, the seller must demand the bill or note at the proper time, and if it be refused, he has his action at once ; but if there is a mere neglect, and not a re- fusal, to give the bill or note, the credit does not expire until the period for which the bill or note should be made has ex- pired also. The same reason and the same rule run through many cases in which the interests of third parties are brought into question. Tlnis, if a surety pays for his principal, the limi- tation begins as soon as he pays, and begins on each payment, if there be many, as soon as each is made ; for the surety may sue the principal at once. If there be many sureties, and one pays at sundry times what is in the whole more than his share, he has a claim for contribution against all his co-sureties ; and the statute does not begin to run in their favor against him from his first payment, but as soon as his payments, whether one or more, amount to more than his sliare ; because until then he can claim no contribution. If one lends his note, the limitation begins when the lender is obliged to pay the note, because then, and not till then, he can sue the borrower. Generally, if there be any promise of indemnification, for the breach of which an action may be brought, the limitation against this action begins not until there is that actual injury or loss for which the indemnity is promised'; and if the prom- isor had a certain time in which to give the indemnity, not until that time has expired. So, if one sells property which is partly his own, and pai'tly. OF LIMITATIONS. 217 another's, the other is entitled to liis share of the price, but not -until payment is made by the buyer to the seller ; and therefore the limitation does not begin until then. Thus, in Massachusetts, where the defendant, a co-tenant with the plaintiff, sold some trees growing on the land, and received payment, half the price of which, belonged to the plaintiff. The plaintiff sued for his share more than six years after the sale, but less than six years after the trees were paid for ; and it was held that the Statute of Limitations began to run from the time the defendant received the payment, and not from the time of sale, and the plaintiff recovered accord- ingly. Even if the seller takes a note, the limitation does not begin from the maturity of the note, but from its payment, because only when he receives the money is he liable for the share of it which belongs to the other. But the seller may guaranty the note, or otherwise become bound to pay the other owner his share, without reference to the payment to him; and then the limitation begins as soon as he ought to have paid under this guaranty. SECTION X. THE STATUTE DOES NOT AFFECT COLLATERAL SECURITY. It is important to remember that the Statute of Limitations does not avoid or cancel the debt, but only provides that " no action shall be maintained upon it " after a given time. There- fore, it does not follow that no right can be sustained by the debt, although the debt cannot be sued. Thus, if one who holds a common note of hand, on which there is a mortgage or pledge of real or of personal property, without valid excuse neglects to sue the note for more than six years, he can never bring an action upon that note ; but his pledge or mortgage is as valid and effectual as it was before ; and as far as it goes, his debt is secure ; and for the purpose of realizing this secu- rity, by foreclosing a mortgage, for example, he may have whatever process is necessary on the note itself, although he cannot sue the note itself. And the debtor cannot redeem the property pledged or mortgaged except by payment of the debt. 28 218 THE LAWS OP BUSINESS FOE BUSINESS MEN. CHAPTER XVII. OF INTEREST AND USURY. SECTION I. WHAT INTEREST IS, AND WHEN IT IS DUE. Interest means a payment of money for the use of money. In most civilized cotintries the law regulates this ; that is, it declares how much money may be paid or received for the use of money ; and this is called legal interest ; and if more is paid or agreed to be paid than is thus allowed, it is called usurious interest. By interest is commonly meant legal in- terest; and by usury, usurious interest. Interest may be due, and may be demanded by a creditor, on either of two grounds. One, a bargain to that effect ; the other, by way of damages for withholding money that is due. Indeed, it may be considered as now the settled rule, that wherever money is withheld which is certainly due, the debtor is to be regarded as having promised legal interest for the delay. And upon this implication, as on most others, the usage of trade, and the customary course of dealings between the parties, would have great influence. Thus, in New York, A sued B for the transportation of a quantity of flour from Rochester to New York, and claimed interest upon the same. He offered to prove that it was the uniform custom of all those engaged in the same business to charge interest upon their accounts ; and that the defendant knew this. This evidence having been rejected in the court below, it was held by the Supreme Court, on appeal, that, such \isage being proved, the plaintiff" was entitled to interest, and that the evidence should have been received. And in another case in that State, where it was known to one party that it was the uniform custom of the other to charge interest upon articles sold or manufactured by him after a certain time, the latter was allowed to charge interest accordingly. OP INTEREST AND USURY. 219 In general, we may say that interest is allowed by law as follows : on a debt due by judgment of court, it is allowed from the rendition of judgment ; and on an account that has been liquidated, ^r settled, from the day of the liqiiidation ; for goods sold, from the time of the sale, if there be no credit, and if there be, then from the day when the credit expires ; for rent, from the time that it is due, and this even if the rent is payable otherwise than in money, but is not so paid ; for money paid for another or lent to another, from the payment or loan. In New York it was held, in an action on a contract to recover damages for the non-delivery of merchandise, that the plaintiff was entitled to recover the difFerenc||i between the contract price and the market value of the article at the time and place specified for its delivery, with interest thereon ; and that it was not within the discretion of the jury to allow inter- est or not ; the plaintiff being legally entitled to interest. Interest is not generally recoverable upon claims for unliqui- dated damages, nor in actions founded on tort. By unliqui- dated damages is meant damages not agreed on, and of an uncertain amount, and which the jury must determine. By torts is meant wrongs, or injuries inflicted But although interest cannot be given under that name, in actions of this sort, juries are sometimes at liberty to consider it in estimat- ing the damages. It sometimes happens that money is due, but not now pay- able ; and then the interest does not begin until the money is payable. As if a note be on demand, the money is always due, but it is not payable until demand ; and therefore is not on interest until demand. But a note payable at a certain time, or after a certain period, carries interest from that time, whether it be demanded or not. SECTION II. OF MONEY. The laws which regulate interest and prohibit usury are very various, and are not perhaps precisely tlie same in any two of 220 THE LAWS OF BUSINESS FOE BUSINESS MEN. our States. Formerly, usury was looked upon as so great an offence, that the whole debt was forfeited thereby. The law now, however, is — generally, at least — much more lenient. The theory that money is like any merchandise, worth what it will bring and no more, and that its value should be left to fix itself in a free market, is certainly gaining ground. In many States there are frequent efforts so to change the statutes of usury that parties may make any bargain for the use of money which suits them ; but when they make no bargain, the law shall say what is legal interest. And, generally, the forfeiture is now much less than the whole debt. In Maine, (^le excess above the legal rate of interest, six per cent, is not recoverable, and, if paid, may be recovered back at' any time within a year. In New Hampshire, the legal rate of interest being six per cent, the party taking the usury is sub- jected to a penalty of three times the amount of the usury taken, to be deducted from the debt. In Vermont, lawful interest only (six per cent) is recoverable, and a party paying more than legal interest may recover it back. Seven per cent, however, may be charged upon railway bonds. In Massachu- setts, a party receiving more than legal interest, six per cent, forfeits three times the amount of the unlawful interest taken. And where a party has paid more than legal interest, he may recover of the person receiving it three times the amount of the unlawful interest paid. In Rhode Island, upon an usurious contract, legal interest only is recoverable ; and where more than legal interest (six per cent) has been paid, it may be re- covered back. In Connecticut, upon usurious contracts, the legal rate of interest being six per cent, the whole interest is forfeited. In New York, all usurious contracts are void, and where more than the legal rate of interest, seven per cent, has been paid, it may be recovered back. In New Jersey, the legal rate of interest being six per cent, usury avoids the whole con- tract. However, in the township of Hoboken and in Jersey City, seven per cent may be charged. In Pennsylvania, the party taking the usury forfeits the amount of the money or other thing lent, one half to the State, the other to the party suing for the same. The legal rate of interest is six per cent. It has been decided under this act, that the contract itself is not OP INTEREST AND USURY. 221 Toid ; and a party is entitled to recover the sum actually lent, together with lawful interest ; otherwise, the State might be deprived of its share of the penalty by the borrower's refusing to enforce the statute. In Delaware, the party taking the usury forfeits the amount of the whole debt, one half to the State, the other to the informer. The legal rate is six per cent. ■ In Maryland, the excess paid above the legal rate of inter- est, six per cent, is recoverable back. In Virginia, the party taking more than the legal rate of interest, six per cent, forfeits the whole debt. In North Carolina the taking of unlawful in- terest renders the whole contract void. The legal rate is six per cent. In South Carolina, the pa^;,ty taking the usury for- feits the whole interest. The legal rate is six per cent. In Georgia, where the legal rate of interest is seven per cent, by the taking of usury the party forfeits the whole interest. In Alabama, the interest only is forfeited where usiiry is taken. The legal rate is eight per cent. In Arkansas, the legal rate is six per cent, and the taking of usury avoids the contract ; but xties fliay agree in writuig for ten per cent interest. In Flor- a, usury avoids the contract. The legal rate is six per cent. In Illinois, in all actions brought upon usurious contracts, the defendant shall recover his costs, and the plaintiff shall forfeit three times the amoimt of the whole interest. And a party pay- ing more than the legal rate of interest, six per cent, may re- cover of the party receiving the same three times the amount so paid. But banks may charge seven per cent, and individuals may make special contracts for ten per cent. In Indianaj the taking of usury caiises a forfeiture of live times the amount of the whole interest. Six per cent is the legal rate. In Iowa, where the legal rate of interest is six per cent, the taking of usury forfeits the whole interest ; but ten per cent is allowed on special contracts. In Kentucky, usury subjects the party to a forfeiture of the whole interest. The legal rate is six per cent. In Louisiana, the legal rate " being five per cent, usury causes the forfeitxire of the whole interest ; but eight per cent may be agreed upon by the parties. In Michigan, seven per cent is the legal rate of interest. Ten per cent may be charged upon special contracts. There is no penalty for takhig usury. In Mississippi, the legal rate is six per cent, and the receipt of 222 THE LAWS OP BUSINESS FOE BUSINESS MEN. usury forfeits the whole interest. Eight per cent, however, may be charged on special contracts. In Missouri, the legal rate is six per cent, and the receipt of usury forfeits the whole interest. In Ohio, where the legal rate is six per cent, the receipt of usury causes a forfeiture of the whole interest ; but eight per cent is chargeable upon special contracts. In Ten- nessee, six per' cent is the legal rate, and an excess avoids the whole interest. In Texas, the taking of usury avoids the whole interest. The legal rate is eight per cent, but on special con- tracts twelve per cent is chargeable. In Wisconsin, the legal rate is seven per cent, but special contracts may be made for twelve per cent. In CaUfornia, the legal rate is ten per cent, and there is no penalty for taking usury. There is no especial form or expression necessary to make a bargain usurious. It is enough for this purpose if there be a substantial payment, or promise of payment, of more than the law allows, either for the use of money lent, or for the forbear- ance of money due and payable. One thing, however, is cer- tain : there must be a usurious intention, or there is nO usurvj That is, if one miscalculates, and so receives a promise for more than legal interest, the error may be corrected, tlie excess waived, and the whole legal interest claimed. But if one makes a bargain for more than legal interest, believing that he has a right to make such a bargain, or that the law gives him all that he claims, this is a mistake of law, and does not save the party from the effect of usury. Thus, in a case in Massachusetts, where the defendant agreed to pay the plaintiffs more than the legal rate of inter- est, but the excess was owing to the mode of computation adopted by the plaintiffs, and which was usual among banks, the court said : " It is probable that in this case there was no intentional deviation on the part of the bank ; but a mistake of their right. An excess of interest was intentionally taken, upon a mistaken supposition that banks were privileged in this respect to a certain extent. This was, therefore, in the sense of the law, a corrupt agreement ; for ignorance of the law will not excuse." It may be well to remark, that the law makes a very wide distinction between a mistake of fact and a mistake of law. Generally, it will not permit a party to be OE INTEREST AND USURY. 223 hurt by a mistake of fact ; but it never suflfers any one to excuse himself by a mistake of law, because it liolds that everybody should know the law, and because it would be dan- gerous to permit ignorance of the law to operate for any one's benefit. The question has been much discussed, whether the use of the common tables which are calculated on the supposition that a year consists of 360 days, is usurious. In New York it is held that it is. But in Massachusetts, and some other States, it is held that the use of such tables does not render the trans- action usurious. We think this latter the better opinion. It is also settled, that only the contract which is itself usu- rioxis can be affected by the usury. If by one contract, or by one completed transaction, as the payment of a debt for an- other, a party acquires a valid claim for a certain amount, and lawful interest, and then by a new contract, as a new note, for instance, the debtor agrees to pay him usurious inter- est, this new note, it has been held, will be affected by the usury, but the original claim will not be. So, if a borrower promises to pay a certain sum, and then more than interest as a penalty, if he does not pay the first sum, this is not usuri- ous ; first, because by paying the first sum he can escape the penalty ; and secondly, because all penalties will be reduced by the court to the sum originally due and lawful interest. So, if a debtor requests time, and promises to pay for the forbearance legal interest, and as much more as the creditor shall be obliged to pay for the same money, this is not a usu- rious contract. And even if usuriotis interest be actually taken, this, although strong evidence of an original usurious bargain and intent, is not conlusive, but may be rebutted by adequate proof or explanation. When a statute provides that a usurious contract is wholly void, such a contract cannot become good afterwards; and therefore a note which is usurious, if it be therefore void by law in its inception, is not valid in the hands of an innocent indorsee. But it is otherwise where the statute does not de- clare the contract void on account of the usury. If a note, or any securities for a usurious bargain, be delivered up by the creditor and cancelled, and the debtor thereupon promises 224 THE LAWS OP BUSINESS FOR BUSINESS MEN. to pay the original debt and lawful interest, this promise is valid. New securities for old ones wliich are tainted with usury, are equally void with the old ones, or subject to the same de- fence. Not so, however, if the usvirious part of the original securities be expunged, and not included in the new; or if the new ones are given to third parties, who were wholly inno- cent of the original usurious transaction. And if a debtor suffers his usurious debt to be siied, and a judgment recov- ered against him for the whole amoimt, it is then too late for him to take any advantage of the usury. So, if land or goods be mortgaged to secure a usurious debt, and afterwards conveyed to an innocent party, subject to such mortgage, the latter cannot set up the defence of usury and thereby defeat an action to enforce the mortgage. And if A owes B a usurious debt, against which A could make a com- plete or partial defence, but pays the debt, usury and all, by transferring to B a valid note or debt of C, then, when C is called upon to pay this debt to B, C cannot make the defence that A's debt to B was usurious ; for the debt due from C is not affected by the usurious taint of the original debt from A toB. Usurers resort to many devices to conceal their usury ; and sometimes it is very difficult for the law to reach and punish this offence. A common method is for the lender of money to sell some chattel, or a parcel of goods, at a high price, the lender paying this price in part as a premium for the loan. In England it would seem from the reports to be quite com- mon for one who discoimts a note, to do tliis nominally at legal rates, but to furnish a part of the amount in goods at a very high valuation. In all cases of this kind, or rather in all cases where questions of this kind arise, the court endeavors to ascertain the real character of the transaction. Such a transaction is always suspicious, for the obvious reason that one who wants to borrow money is not very likely to desire at tlie same time to buy goods at a high price. But the jury decide all questions of this kind ; and it is their duty to judge of the actual intention of the parties, from all the evidence offered. If that intention is substantially that one should loan OP rNTEREST AND USURY. 225 his monef to another, who shall therefor, in any manner what- ever, pay to the lender more than legal interest, it is a case of usury. " Where the real truth is a loan of money," said Lord Mansfield, " the wit of man cannot find a shift to take it out of the statute." If this great judge meant only that, whenever legal evidence shows the transaction to he a usurious loan, the law pays no respect whatever to any pretence or disguise, this is certainly true. But the wit of man does undoubtedly con- , trive some " shifts," which the law cannot detect. There seems to be a general rule in these cases in reference to the burden of proof; the borrower must first show that he took the goods on compulsion ; and then it is for the lender to prove that no more than their actual value was received or charged for them. If one should borrow stock at a valuation much above the market rate, and agree to pay interest on this value for the use of the stock to sell or pledge, tlais would be usurious. Whether it would be sufficient to discharge this character of usury, for the lender to show that the dividends on the stock actually were, and were expected to be, as high as the inter- est on the valuation, so that he makes no gain by the trans- action, is not certain. So, one may lend his stock, and may, without usury, give the borrower the option to replace the stock, or to pay for it at even a high value, with interest. But if he reserves this option to himself, the bargain is usurious, because it gives the lender the right to claim more than legal interest. So, the lender may reserve either the dividends or the interest, if he elects at the tim^of the loan ; but he cannot reserve the right of electing at a future time, when he shall know what the div- idends are. A contract may seem 'to be two, and yet be but one, if the seeming two are but parts of a whole. Thus, if A borrows one thousand dollars, and gives a note promising to pay legal interest for it, and then gives another note for (or otherwise promises to pay) a further sum, in fact for no consideration but the loan, this is all one transaction, and it constitutes a usurious contract. But if there be a loan on legal terms, with no promise or 29 226 THE LAWS OF BUSINESS FOB BUSINESS MEN. obligation on the part of the borrower to pay any more, this might not be invalidated by a mere understanding that the borrower should, when the money was paid by him, make -a present to the lender for the accommodation. And if, after a payment has been made, which discharged all legal obliga- tion, the payer voluntarily adds a gift, this would not be usu- rious. But in every such case the question for a jury is, what was this additional transfer of money, in fact ; was it a volun- tary gift, or was it the payment of a debt ? A foreign contract, valid and lawful where made, may be enforced in a State in which such a contract, if made there, would be usurious. But if usurious where it was made, and, by reason of that usury^ wholly void in that State, if it is put in suit in another State where the penalty for usury is less, it cannot be enforced under this mitigated penalty, but it is wholly void there also. SECTION III. • ( OF A CHARGE FOR RISK OR FOR SERVICE. It is undoubtedly lawful for a lender to charge an extra price for the risk he incurs, provided that risk be perfectly dis- tinct and different from the merely personal risk of the debt- or's being unable to pay. If anything is paid for this last risk, it is certainly usury. But if it is a part of the bargain that the debt shall not be paid if a vessel or goods do not arrive in safety, as is the case in a loan on bottomry ,*or on responden- tia, (as we state in our chapter on the Law of Shipping,) this is not usury. And by the same principle, if one buys an an- nuity to end at the annuitant's death, or a life-estate, even on exorbitant and oppressive terms, against which a court of equity would relieve, still it is not a usurious contract, pro- vided the purchase be actual, and not a mere disguise. So, one may charge for services rendered, for brokerage, or for rate of exchange, and may even cause a domestic loan or discount to be actually converted into a foreign one, so as to charge the exchange ; and this would not be usurious. But OP INTEREST AND USURY. 227 here, as before, and indeed throughout the law of usury, it is necessary to remember that tlie actual intention, and not the apparent purpose or form of the transa-ction, must determine its character. So, if one lends money to be used in biisiness, and lends it upon such terms that he becomes a partner in fact with those who use it, taking his share of the profits, and be- coming liable for the losses, this is not usurious. So, if one enters into a partnership, and provides money for its business, and the other party is to bear all the losses, and also to pay the capitalist more than legal interest as his share of the profits, this is not usurious, because there is no loan, if there be in fact a partnership ; because then ther<|is a very important risk, as he becomes liable for all the debts of the partnership. If, however, there be only a pretended partner- ship, in order to disguise the fact of the loan, this would be usurious, although very possibly the lender might, as to a third party, lay himself open to a liability for debts incurred, by reason of his interest in the profits. The banks always get more than legal interest by their way of discounting notes and deducting the whole interest from the amount they give. This is perfectly obvious if we take an ex- treme case ; as if a bank discounted a note of a thousand dol- lars at fifteen years, in Massachusetts, the borrower would re- ceive one hundred (rollars, and at the end of fifteen years he would pay back the hundred dollars, and nine hundred dollars for the use of it. But this method is now established by usage and sanctioned by law. It must, however, h& confined to dis- counts of negotiable paper, not having a very long time to rim. For the rule is founded upon usage, and the usage goes no further. SECTION IV. or THE SALE OF NOTES. There are, perhaps, no questions in relation to interest and usury of more importance than those which arise from the sale of notes or other securities. In the first place, there is 22S THE LAWS OP BUSINESS FOR BUSINESS MEN. no doubt whatever that the owner of a note has as good a right to sell it for the most he can get, as he has to sell any goods or wares which he owns. There is here no question of usury, because there is no loan of money, nor forbearance of debt. But, on the other hand, it is quite as certain that if any person makes his own note, and sells that for what he can get, this, while in appearance the sale of a note, is in fact the giving of a note for money. It is a loan and a borrowing, and nothing else. And if the apparent sale be for such a price that the seller pays more than legal interest, or, in other words, if the note bear interest and is sold for less than its face, or isapt on interest and more than interest is discounted, it is a usurious transaction. Supposing these two rules to be settled, the question in each case is, imder which of them does that case come, or to which of them does it draw nearest. We are not aware of any general principle so likely to be of use in determining these questions as this : if the seller of a note acquired it by purchase, or if it is his for money ad- vanced or lent by Mm to its full amount, he may sell it for what he can get ; but if he be the maker of the note, or the agent of the maker, and receives for the note less than would be paid him if only a lawful discount were made, it is a usu- rious loan. In other words, the first holder of a note (and the maker of a note is not, and cannoPbe, its first holder) must pay to the maker the face of the note, or its full amoimt. And.E&ter paying this, he may sell it, and any subsequent pur- chaser may sell it, as merchandise. The same rule (if it be law, of which we cannot doubt) must apply to corporations, and all other bodies or persons who issue their notes or bonds on interest. If sold by brokers for them, for less than the full amount, it is usurious. Nor can such notes come into the market free from the taint and the defence of usury, unless the first party who holds them pays for them their full value. But then comes another question. If a note be offered for sale, and be sold for less than its face, and the purchaser sup- poses himself to buy it from an actual holder and not from the maker, can the maker interpose the defence that it was actu- ally usurious, on the ground that the seller was only his agent ? We should say that- he could not ; that there can be no usury OF INTEREST AND USURY. 229 unless this is intended ; and that the guilty intention of one party cannot affect another party who was innocent. Un- doubtedly, a note, originally usurious, is not healed, so far as the owner is concerned, by transfer to an innocent holder. The indorsers may be liable to the holder ; but whatever de- fence the maker could have, on the ground of usury, against the first holder, he may always have against any subsequent holder. This is because there was actual usury at the begin- ning ; that is, one lent and the other borrowed, both knowing that more than legal interest was paid. But in the case of an innocent purchaser, or, rather, of one who supposes, and has a right to suppose, that he is a purchaser, he did not lend his money at all ; he only bought a security with it ; and, there- fore, there is no usury. We should, however, say that, when a maker shows that the apparent seller was only his agent, and offers this as evi- dence that the note passed from him iisuriously, he thereby casts upon the buyer the burden of proving his innocence; but it is then enough for the buyer to satisfy the jury of his belief that he was only a purchaser. As one may sell the notes or other securities which he holds as property under no other restriction than that which attends the sale of merchandise, so we think that a man may sell his credit. The cases which relate to this question are far from harmonious. In the dread of usury which was formerly enter- tained, and the determination — so strongly expressed by Mans- field — that it should not, by any device, escape the law, it has undoubtedly been held that the indorser of a note shoidd be liable upon it only for what he received, with lawful interest. But although we have not much positive authority for setting tills rule aside, we are quite confident that a better under- standing of the nature of negotiable paper, of the contract of indorsement, and of the rules which properly belong to the sale and purchase of money, would make the indorser liable for the whole of the note. If A holds the note of B, and sells it to C, without indorsing it, he can certainly sell it for what he pleases ; if he chooses to add his indorsement, he will do so, and he will probably do this if the additional value which he thus imparts to it exceeds 230 THE LAWS OF BUSINESS FOE BUSINESS MEN. the risk he incurs. If, then, he indorses the note, it is to make his merchandise more valuable ; and it would seem to be little less than an absurdity to say, that a merchant may not thus give a paper he holds more value, or that he may give the paper this value, but must not realize this value by the sale. If, however^ the rule is, that, when called upon by the indorsee, he may plead usury as between them, and pay either nothing, or so much only as he received, without regard to the amount be agreed by his indorsement to pay, it is obvious that the whole effect and utility of the indorsement would be very much impaired. We think that a seller with indorsement should be, and that he now generally would be, held as liable for the full amount of the note. Some courts have held, that, if one honestly buys a nego- tiable note for less than its face, he can recover only so much as he pays, with lawful interest. But the law is otherwise gen- erally, and especially in our most commercial States, for the plain reason, that, if this be law, no note" would be salable when money was worth more than lawful interest. That is, no one would buy it, if he could only get his money back with simple interest. Suppose one owes a note for $1,000, ha'ving six months to run, when money is worth twelve per cent per annum. The note is worth in the market $1,000, less six per cent, or $60; that is, it is worth $940. But if a man gave this, he could recover under this rule only what he gave, with simple interest ; that is, $ 940 with three per cent interest, or $968.20. Therefore he would not buy it.- Only where it is supposed that the law can always regulate and control the actual market value of money, can this rule prevail. "VVe should say, also, that one who, having no interest in a note, indorses or guaranties it for a certain premium, will be liable for its face ; he does not now add his credit to the value of his property and sell both together, as where he indorses a note which he holds himself, but sells his credit alone. This transaction we should not think usiirious. And if it was open to no other defence, as fraud, for example, and was in fact what it purported to be, and not a mere cover for a usurious loan, we know no good reason why such indorser or guarantor should not be held liable to the full amount of his promise. OF INTEREST AND USURY. 231 This case arose in New York. A, being desirous of raising money \ipon a note, drawn by liimself, and indorsed for his accommodation by B and C, autliorized a broker to buy an ad- ditional name or guaranty, for the purpose of getting tlie note discounted, and application was accordingly made* to D, who thereupon indorsed the note, receiving a commission of two and a half or three per cent therefor ; it was held that the taking of the commission by D did not render the transaction usurious, and D was bound for the whole amount. The earlier cases, however, seem to have held that the compensation thus received must not exceed the lawful rate of interest for the time the paper has to run. SECTION V. or COMPOUND INTEREST. * Compound interest is sometimes said to be usurious ; but it is not so ; and even those cases which speak of it as " savoring of usury," may be thought to go too far, unless every hard bargain for money is usurious. As the authorities now stand, however, a contract or promise to pay money with compound interest cannot, generally, be enforced. On the other hand, it is neither wholly void, nor attended with any penalty, as it would be if usurious ; but is valid for the principal and legal interest only. Nevertheless, compound interest is sometimes recognized as due by courts of law, as well as of equity ; and sometimes, too, by its own name. Thus, if a trustee be proved to have had the money of the party for whom he is trustee (who is called in law his cestui que trusf) for a long time, without accounting for it, he may be charged with the whole amount, reckoned at compound interest, so as to cover his unlawful profits. If com- pound interest has accrued under a bargain for it, and been actually paid, it cannot be recovered back, as money usuriously paid may be. And if accounts are agreed to be settled by an- nual rests, which is in fact compound interest, or are actually settled so in good faith, the law sanctions this. Sometimes, in 232 THE LAWS OF BUSINESS FOR BUSINESS MEN. cases of disputed accounts, the courts direct tins method of settlement. Where money due on interest has been paid by sundry in- stalments, the mode of adjusting the amount which has the best authority, and the prevailing usage in its favor, seems to be this : Compute the interest due on the principal sum to the time when a payment, either alone or in conjunction with pre- ceding payments, with interest cast on them, shall equal or ex- ceed the interest due on the principal. Deduct this sum, and upon the balance cast interest as before, until a payment or payments equal the interest due ; then deduct again, and so on. OP BANKRUPTCY AND INSOLVENCY. 233 CHAPTER XVIII. OP BANKRUPTCY AND INSOLVENCY. SECTION I. OF THE HISTORY OF THE LAW OF BANKRUPTCY. Centuries ago, dealers in money, or " exchangers," as they were called in England, sat behind a bench, on which lay heaps of the com they bought or sold ; and some remains of this prac- tice may now be seen in various parts of the "old continent. This bench, or " banco," in the Italian language, gave its name to the moneyed institutions of deposit, or of currency, of which the earliest of great importance, if not the first in time, was the " Bank " of Venice. When such a trader became insolvent, or unable to meet his engagements, those who had charge of such things, whether as a police or as an association or guild of such dealers, broke his bench to pieces, as a symbol that he could carry on that business no longer. In Italian, the words " banco rotto " mean a broken bench ; and from this phrase antiquari- ans suppose that the word " bankrupt " grew. In this we see nothing of alleged criminality, or of punish- ment. But the laws of England went to an earlier source than the Italian commerce of the Middle Ages, and found in the Roman law the principle which governed, and perhaps stiH governs, their system of bankrupt laws. This principle is, that the bankrupt may be presumed to be dishonest and criminal, and treated accordingly. By the original English common law, the body of a freeman could not be arrested for debt, whether he was a trader or not. And the earliest processes of that law included none for impris- onment for debt. This was of later origin. In the reign of Edward I. a law was passed authorizing an arrest of a defend- ant in certain cases, for the purpose of more effectually se- curing the performance of commercial contracts. This was 30 234 THE LAWS OF BUSINESS FOR BUSINESS MEN. extended in its operation by a law of Edward III. and sundry statutes followed, applying further regulations to this subject, until late in the reign of Henry VIII. (1544) a statute was passed so nearly resembling a modern statute of bankruptcy, that it is generally considered the &st bankrupt law. In a statute of the 13th year of Queen Elizabeth, the operation of the law was confined to traders ; or, in the words of the law, " to such persons as had used the trade of merchandise in gross or in retail." And thus an important principle was in- troduced, which \ias since been adhered to, although somewhat liberally construed. In those, and in still earlier days, there was perhaps more reason for regarding a mercantile bankrupt as a criminal than there is now. Even at present, many insolvencies are iin- doubtedly frmidulent, and the innocent bankrupt generally, if not always, owes his failure to guilty intent or guilty impru- dence in some quarter. But it is also certain, that, in the vast complications of the commercial world, all who engage in busi- ness are subject to casualties, which imply no crime, and which no sagacity could avert. By the Roman law, the mer- chant who failed in business was expelled from the college (or guild) of merchants, and never suffered to trade again ; if that law prevailed here, many of our most eminent and useful mer- chants would have lost the opportunity of retrieving their af- fairs by ultimate success, and paying off, by the fruits of a later industry, the debts of an early insolvency. The community are now sensible of this. And to this con-i viction we owe the gradual, but of late years rapid, change in the spirit of our laws for the collection of debt. Now the en- deavor is made to discriminate carefully between an innocent and a wrongful insolvency; and to treat the latter only as criminal. That our laws do not yet effect this purpose per- fectly, and without any injurious result, may be trvie ; but the purpose and the principle are certainly right. The Constitution of the United States authorizes Congress to pass a bankrupt law. But not until eleven years after the adoption of the Constitution was a bankrupt law passed, in 1800, which, by its own terms, was limited to five years, but was in fact repealed after it had been in operation two years OP BANKRUPTCY AND INSOLVENCY. 235 and eight months. Sundry attempts were made from time to time for a new one ; and wlienever the vicissitudes of trade pressed more heavily than usiial on the community, these ef- forts were more urgent. And to tlie general decay of trade in the country, or rather the wide prevalence of actual insol- vency, was due the law which was passed in 1841, after an earnest bxit unsuccessful endeavor in the year previous. If the amount or number of applications for the law is a true measure of its need or its utility, this law was not passed too soon. In Massachusetts, for exapaple, there were 3,389 applicants for relief, and the creditors numbered 99,619, more than a third of the adult male population of the State, and the amount of their claims exceeded thirty millions of dollars, averaging about three hundred and fifty dollars to a creditor. This law was repealed March 3, 1843, one year six months and fourteen days after it was enacted ; and in this short pe- riod it affected more property, and gave rise to more numerous and more difficult questions, than any other law has ever done, in the same period. It was repealed because it had done its work. The people demanded it, that it might settle claims and remove encumbrances and liens and sweep away an in- debtedness that lay as an intolerable burden on the commu- nity. When it had done this, it began, or was thought to have begun, to favor the payment of debt by insolvency too much, and the people demanded its repeal. "We have no national bankrupt law now. We shall prob- ably never have one until another similar national emergency shall arise ; and perhaps not then, because the State insolvent laws are now so well constructed and systematized, that they effect, though not quite so well, nearly all the purposes of a national law. But these State laws are entirely independent of each other ; and their provisions are so different, that it is difficult, or in- deed impossible, to present a view of the bankrupt law of the United States which can have the unity and system of such a view of the laws of any nation, in which these laws are made by one legislature for the whole people, as in England, for ex- ample. But there is enough of system and of similarity, and enough of principle running through the whole, to make it 236 THE LAWS OP BUSINESS FOE BUSINESS MEN. expedient to endeavor to present a general view of the gener- ally admitted principles, without attempting to exhibit merely local details and peculiarities. SECTION II, OF THE DIFFERENCE BETWEEN BANKRUPTCY AND INSOLVENCY. This difference was not perhaps perfectly clear in its begin- ning, and has gradually grown dim with time, until now, in this country at least, it has become almost obliterated. But from it arose, and upon it, in some measure, depends, our present American law of insolvency. The earliest difference between these was, that bankrupt laws applied only to those "who used the trade of merchan- dise," while insolvent laws applied not only to traders, but to all who were indebted and unable to pay iheir debts. The more prominent distinction, however, was this, that the pro- cess under the bankrupt law was against the will of the bank- rupt, by his creditors, in order to obtain a sequestration of his effects, (by sequestration is meant the taking them out of his possession and control,) and prevent a further waste or fraud- ulent or unequal misapplication of them, and seciire the pay- ment of their debts as far as these effects would go. But the insolvent laws were intended for the relief of debtors who sought to be protected, by the delivery of all their property, from furtlier molestation. This distinction is now so far lost sight of, that the last national bankrupt law, and most of the State insolvent laws, provide separately for a process against a party, and also for one on the application and request of the insolvent himself. It has also been supposed that another ground of distinction lay in the fact, that the bankrupt law dis- charged the debt, while the insolvent law left the debt in full force, but protected the debtor himself from arrest or impris- onment. But this distinction has also faded away. For a long time, in England, these two systems of law — Bankruptcy Statutes and Insolvency Statutes — ran along to- gether, those of Insolvency being the more numerous, but the • OP BANKRUPTCY AND INSOLVKNCY. 237 two subjects were kept quite apart. At length they began to assimilate, and in the recent legislation, especially by the latest, they have continued to approach nearer and nearer together, until there is now scarcely any discrimination between them. In this country, 'there has not been any very clear distinc- tion between them, at any time ; but one consequence from the nominal distinction was important. These colonies, from the earliest times, enacted insolvent laws, but not bankrupt laws. And when the Constitution of the United States gave to Congress the power to pass a bankrupt law, it Seems to have been thought -that this in no wise afifected the rights which the States continued to possess, of enacting what insolvent laws they chose to. This right they have continued to exercise to the present day ; and always under the name of insolvent laws. But, so far as we may afl&rm with much positiveness any con- clusions on this obscure subject, we may say that the distinc- tion between insolvent laws and bankrupt laws is now, in this respect at least, nothing, and that a State can pass no law call- ing it an insolvent law, which it could not pass under the name of a bankrupt law ; and that the power given to Con- gress to pass a bankrupt law does not take it away from the States, who may pass what bankrupt laws they will for their own citizens, whenever there is no general bankrupt law en- acted by Congress. And even if there be such a law, any State may, perhaps, pass any bankrupt law which in no way interferes with or contravenes the statute of the United States. This last remark, even if admitted to be true, cannot have much practical value ; for it can hardly be supposed that Con- gress will pass any general bankrupt law which would be so inadequate or incomplete that a State could pass an insolvent law, of any importance, which should not interfere with it. Where cases had been commenced under the State insolvency laws, before the bankrupt law went into force, it was decided that they might go on to maturity, and were not superseded by this national law. At present,, we have no general bankrupt law, but a great variety of State insolvent laws. Of their special provisions we do not propose to say much ; but shall confine our remarks, principally at least, to those general principles which may be 238 THE LAWS OP BUSINESS FOE BUSINESS MEN. supposed common to them all, where not specifically excluded. And of these, what may be - called the fundamental principle is an equal division of the assets (or property applicable to debts) of an insolvent among his creditors. At common law, any person, whether a trader or otherwise, may pay any debt at his own pleasure, whether he be insolvent or not ; and if such payment exhaust his means, so that he can pay no other creditor, the common law makes no objec- tion. In other words, it permits a preference among credit- ors, to any extent and in any form. Nor does the English Statute of Fraudulent Conveyance affect this question. This statute was passed in the reign of Qiieen Elizabeth, and has been coiisidered as brought over to this country ; so that it is now a part of our common law. By its provisions, any trans- action is void because fraudulent, if intended to " hinder, de- lay, or defraud a creditor." But it is not considered that a debtor does this by paying one more than another, or pay- ing to some of his creditors all of their debts, and to others nothing, provided his reason for paying to these last nothing is that he had nothing left for them after paying the others. At this right of preference, the bankrupt system was directly aimed. Since the reign of Elizabeth, it has been restrained and almost suppressed in England. But in this country, where, as has been said, the English bankruptcy system was never introduced, and this whole matter was regulated by common law, a system of voluntary assignment, with prefer- ences of all kinds, prevailed extensively. The frauds and mischiefs resulting from this, gradually produced a conviction that both expediency and justice imperatively demanded an equal distribution of the assets of an insolvent among all his creditors. In Maine, New Hampshire, Massachusetts, Con- necticut, New Jersey, Delaware, Pennsylvania, Ohio, Missouri, Georgia, and Louisiana, special assignments, with preferences, are no longer permitted. In other States, particularly in New York, there seems to be a growing disposition to encourage an equal division, by providing not only, as is now generally done, that the insolvent shall be discharged only when his effects are equally divided, but that all preferences shall be void. This system is found to operate well wherever it is tried, and we OP BANKRUPTCY AND INSOLVENCY. 239 cannot doubt that it ■will be, at no distant day, universal. We are not aware that any State -which has suppressed special as- signments with preferences, has ever returned to them. In some of the States, however, preferences of debts due as wages of labor, to a certain amount, are permitted. SECTION III. OP THE TRIBUNAL AND JURISDICTION. The bankrupt law of the United States gave the jurisdiction of (or right to hear and determine) all cases of bankruptcy to the District Courts of the United States ; and the reasons for this are so obvious, that it would undoubtedly be so provided in every future law. The State insolvent laws, for the most part, provide commissioners of insolvency, and among these the judges of probate are sometimes placed ex officio ; but there is no uniformity on this point. There is, certainly in general, and we think always, a supervisory power in the Supreme Court, or in the Court of Chancery, of each State. If a creditor's claim be doubted, the assignees may have the question decided by a jury, — and so may the creditor, if his claim be disallowed, — by the provisions of many States. As to the manner of initiating the proceedings in bankruptcy, the national law contained some provisions copied substantially from the English laws ; and in the short time during which the law was in force, various rules were made by the courts, or re- sulted from adjudication and usage. At present, each board of commissioners, or each commissioner, seems to have the power of framing their own rules of practice, always, however, subor- dinate to the principles, first, that each case shall begin with an application, either from the creditor (where that is permit- ted) or the debtor, under oath, and then full notice, by adver- tisement or otherwise, to all interested, with sufficient delay, and convenient arrangement as to time and place. And, sec- ondly, all the facts material to any party are to be proved before the proper tribunal, by proper evidence, verified by oath, and subject to cross-examination, and generally governed by the common principles of the law of evidence. 240 THE LAWS OF BUSINESS FOB BUSINESS MEN. There is also introduced into most of these codes a rule de- rived from equity practice, by which the debtor may be com- pelled to answer, under oath, upon the interrogatories put to him by the commissioners, or by one or more creditors ; espe- cially upon • matters bearing on the question whether he has made any fraudulent or favoring assignments of property, with a view to bankruptcy, or while actually insolvent. But the common-law privilege would in most cases still be allowed him, of refusing to answer any question, if the answer could expose liim to punishment for a crime. The power to compel an answer is given to the commission- ers, by authorizing them to issue a writ or warrant, and com- mit a recusant to jail for contempt, as a common-law court could do. At common law, any kind or amount of preference of one or more creditors over others was, as we have seen, valid. That is, the law required of a debtor to pay Ms debts ; but permitted him to pay any debt at his own election, although by such an appropriation of his means he could pay no part of any other. As, however, the general purpose of the insolvent laws is to secure an equal division of all the assets among all the credit- ors, for this purpose they avoid any payment, assignment, or transfer which would have, or was intended to have, the effect of favoring a part of the creditors at the expense of the others. There is, however, an obvious difficulty in applying tliis rule. If a trader, as is usually the case, passes gradually into a state of insolvency, almost any creditor, who has the good fortune to be paid in full, gains an advantage over the rest," and reduces the means of the insolvent, to their injury. A line, however, must be drawn somewhere. If any transfer or appropriation of property be made with fraudulent intent at any time, and this fraud is known to the transferee, the transfer itself is yoid at common law. But, as was said, the mere intention of giv- ing to a creditor priority or preference is not fraudulent. And the national law contained, and most, if not all, our insolvent laws contain, a provision defining a period of time prior to which any transfer of property from a bankrupt, provided there was no fraud on his part with the knowledge and conni- OF BANKRUPTCY AND INSOLVENCY. 241 vance of the assignee, is valid ; but any assignment or transfer or payment after tliat period, if made by the bankrupt in con- templation of bankruptcy or insolvency, is void, however inno- cent or ignorant the assignee. In the national law this period was two months ; it differs in the different States, but is about th(J same time-generally. In computing this time, it is said that the day on which the transaction took place, or the day on which tlie petition is filed, must be excluded. In legal computations of time, gen- erally, the law knows no fractions of a day. But in the appli- cation of the insolvent laws, the very hour is inquired into. The reason of this, or at least its justice, is obvious. If one's rights depend upon whether he has lain in prison two months,' or whether a certain thing was done more or less than two months before- another, or whether a petition was filed under a law before that law was repealed or not, it is as proper to ascertain the exact time, as it is when there is a question whether an attachment of land or a record of a conveyance was first made. This has been denied in some cases, but not, we think, on good grounds. It woidd seem that this question of fraiidulent preference should stand upon the same footing as qiiestions of fraud gen- erally. It is a mixed question of fact and of law ; and so far as it depends upon law, or upon construction, the court may decide it, and the parties have a right to have it decided by the court. But so far as it rests upon proof, or is to be in- ferred from evidence direct or circumstantial, it would seem to be a question of fact, upon which a jury might pass. It may be remarked in this connection, although also true without reference trf the laws of bankruptcy or insolvency, that if one purchases of another property, either real or per- sonal, for its full value, and pays the price in money, it is still a fraudulent and void transaction, if the purchaser did it with intent to aid the seller in defrauding his creditors. And in this case the sale is wholly void, and the assignee of the seller,, if he goes into bankruptcy, will recover the property, although, the 'sale take place before the limited period above referred to. The very important influence ^of bankruptcy or insolvency in extending the lien of a seller, so that he may reclaim his ■ 31 242 THE LAWS OF BUSINESS FOR BUSINESS MEN. goods, unless they have come into the actual possession of the insolvent, or, in other words, the right which insolvency gives to the seller of stopping the goods in transitu, is fully consid- ered in the chapter on Stoppage in Transitu. This right de- pends of course upon insolvency, but not necessarily upon legal and formal, or, as it is sometimes called, notorious -in- solvency. SECTION IV. WHO MAY BE INSOLVENTS. The statutes provide, with much minuteness, as to who may become, or may be made bankrupt. In England, the statute of Geo. III. c. 16, § 2, collected in one clause the various kmds of persons whom the bankrupt law considered as traders, and somewhat enlarged the provisions of former statutes in this particular. But still the operation of the law was confined to traders. It will be remembered, however, that the insolvent laws originally diifered from the bankrupt laws, in the fact that they were not confined to traders ; that is, only a trader could be proceeded against by a creditor, and being so pro- ceeded against, his d^bt was discharged. But any debtor lia- ble to arrest might seek relief under the insolvent laws, and would be by them protected from imprisonment. Now, aU our present statutes are called insolvent laws ; and their op- eration is very wide. In England, for example, no married woman could be a bankriipt who was not lawfully a sole trad- er; but here, it may be presumed that 'any woman, whether married or not, who by the present or any future law of a State should be liable to suit upon a debt, could go into insolvency. An infant cannot be made a bankrupt ; but we do not know why he may not be declared insolvent on his own petition ; for the modern rule is, that none of his debts are absolutely void, but only — if not for necessaries — voidable by him. And therefore, imless, or until, they are avoided, he is the same as any other debtor. OP BANKRUPTCY AND INSOLVENCY. 243 A hmatic, while insane, could perhaps incur no debt for which he could he held responsible ; unless, possibly, for his own benefit, it was permitted to him to make a valid contract for necessaries. In such case, he could become insolvent for that, and he certainly could be declared insolvent on the pe- tition of a guardian, for debts contracted before insanity, or 'in a lucid interval. If a debtor attempts to place his property in the hands of assignees, for the benefit of his creditors, this, where .there is a bankrupt law, is an act of bankruptcy. That is, the debtor may be proceeded against as a bankrupt, and his voluntary assignment is void, and the assignee appointed under the bank- rvipt commission takes all his effects. And this is applied, even where there is no intention to defraud ; and even where the debtor provided, by the express terms of the assignment, that his effects should be applied and distributed according to the provisions of the bankrupt law. This would now be true in this country only where the State statutes expressly or by implication supersede all voluntary assignments ; but would not be true where they merely offer the relief they provide to those who seek it, leaving them at liberty to assign their effects for their debts, if they choose to do so. SECTION V. OF THE PROOF OP DEBTS. As the insolvent laws purpose to divide all the assets of the debtor ratably among all the creditors, it follows that they open the way very widely for all persons who have claims to present, and prove them. This proof is made, in the first place, by the oath of the creditor, and, if further proof be required, by such evidence as would be admissible and appropriate under the gen- eral rules of the law of evidence. The presentation and proof may be, in some degree at least, by agent or attorney ; and this is usually provided for in the statutes. In some cases it can only be by an agent or attor- ney ; as, when a corporation is a creditor. In such case, the 244 THE LAWS OP BUSINESS FOE BUSINESS MEN. corporation should act by an attorney specially appointed and authorized to act in their behalf. If trustees hold claims against a bankrupt, and present them, It has been said that the cestui que trust — or the party for whose benefit the trust exists — should join with the trustee. This may be proper in many cases, but in some it woiild be obviously impossible, as where the cestui que trust is a young " child, or a lunatic, or out of the country. And if she were a married woman, we should doubt the propriety of her joining, unless under some particular provision or peculiar character of the trust. If .the creditor be himself a bankrupt, so that his claim also has passed into the hands of his assignee, it would seem that his assignee alone might present and prove it in case of neces- sity ; but the practice appears to be to require the creditor's own oath, whenever it can be had. And this is founded on obvious reasons. We think they apply equally to the case of every claim assigned, and presented by the assignee. The recovery is for the benefit of the assignee ; but at common law he must do everything in the name of the assignor. And in such a case, if the assignor alone presents and proves, it might accrue to the benefit of the assignee, and be sufficient. But the more correct way would be for assignor and assignee to join. If a bankrupt holds claims, of which the legal title is in him, but the beneficiary interests are in others, as if he be for any purpose a trustee for others, and a balance is due to him in that capacity, or to the fund which he holds representatively, from his general assets, he may present and prove this claim against his own estate. Debts not yet payable can be proved. If they become due before a dividend, there is no deduction from them. If not, interest is deducted. In general, in order to equalize the claims, interest is cast upon all the claims proved to a certain day ; and if a, debt not yet due is then paid, in whole or in part, interest must be deducted to put it on an equal claim with others. If interest is cast for many years, compound in- terest is never allowed as such. But we presume that an ac- count would be cast by commissioners of insolvency wilh anmial rests, if it were one which would be so calculated in a suit against the insolvent. OP BANKRUPTCY AND INSOLVENCY. 245 So, persons holding annuities payable by the bankrupt have been permitted to come in, and have the value of the whole annuity reduced by computation to a single sum, and present and prove that as a debt. In several instances, a wife has been permitted to prove debts against her husband's estate. As where she held a bond or other legal instrument from him, payable at his death. Or if there were a settlement made upon her before marriage, and a sum due to her from her hus- band's estate under that settlement ; and a settlement made after marriage, in good faith, and before the husband became, or expected to be, insolvent, would have the same effect. The assignees, who for many purposes represent the bankrupt, or insolvent, may make any defence to a claim which he could make. Hence, a debt for gaming, or one open to objection as iisurious, or one without consideration, may be repelled So, also, the assignees may make some defences which the bank- rupt could not make. As if one presented a claim for dam- ages for a tort, or personal injury, this may be rejected by the assignee, although the insolvent might be guilty and have no defence. The reason given seems to be, that the insolvent would not pay them if they were recovered, but that his other creditors would. This, however, is equally true of every other claim or debt, if the whole fund belongs to all the creditors, and cannot pay all in full. The true distinction, on princi- ple, seems to be this : that, so far as the sum recoverable for wrong done is only an unliquidated compensation for personal harm, to be ascertained by a jury, and savors of punishment to the wrong-doer, the claim for it cannot be proved as a debt. But when judgment has been recovered for the tort, this takes the place of the original cause of action ; and it is a debt which can be proved like any other. In some of the statutes it is expressly provided, that, if the claim be for goods or chattels wrongfully obtained by the debtor, it may be proved. If the claim be merely contingent, that is, if it is to be valid and fixed if a certain event occur, and otherwise not, it may still be proved, — and not like an annuity, &c., by reduction to its present value, but at its full value ; the payment of the dividend depending upon the happening of the event which is to make the claim valid, and being delayed until that event. 246 THE LAWS OF BUSINESS FOE BUSINESS MEN. If a party holds a note which the bankrupt has indorsed or made, only to accommodate the holder, as there is no consider- ation for it, it cannot be proved. And, on the other hand, if the baiikrxipt holds a note made or indorsed to him without consideration, and for accommodation only, this note would not pass to the assignee as part of the bankrupt's assets. We should apply the same principle to the case of two promissory notes, both accommodation in so far as they were given for each other, that is, exchanged notes. Here, if at the time of the bankruptcy neither party had used his note, we should say that each should be returned, and not that the holder of the bankrupt's note should take his dividend, and pay the whole of the note given by him to the bankrupt. Each note was a good legal consideration for the other ; but the principle of accommodation paper should apply to both. If, however, either of the notes had been used and transferred to a third party, this principle would no longer be applicable ; and then the creditor would get only his dividend on the note he re- ceived, but mvist pay the whole of the note he gave. At common law, if one guaranties a debt for another, in any form, as a surety, or as an indorser, he has no legal claim against that other until he pays the debt. Therefore he can- not, before such payment, compel the party for whom he is surety to give him security or indemnity ; all he can do is to pay the debt, and then bring his action for damages. It is not so, however, under the bankrupt or insolvency law. Here, the fact of the debtor's insolvency carries with it the inference that the surety will have to pay the debt he has guaranteed. The surety is, therefore, permitted to come in and prove as his claim the whole amount for which he is surety. But it is in the nature of a contingent claim. And no dividend is paid to him excepting on the sum which he has actually paid under his obligation as surety. There is, however, a limitation to tliis right of the surety. He can prove his claim only when the debt already exists, although it may not now be payable. Thus, a surety for rent may prove for the rent due and unpaid, but not for any future rent. For this may never become due ; as the tenant may be turned out, or something else occur to defeat the claim for rent. OP BANKRUPTCY AND INSOLVENCY. 247 This might seem a little hard. Thus, if A hires of B a store for seven years, at 1 1,000 a year, and C is his surety for the rent, and after one year A fails, having paid no rent, C could have a dividend on what ho pays for the year's rent that is due, hut none on the remaining six years, for which he is bound. And the reason is, that, if B chooses not to terminate the lease, hut to hold C for the six years, C acquires by paying the rent the right to use the premises himself, or to let them and take the rent. There seems to be no way in which a surety may compel the party whom he guaranties to prove his claim and take his dividend from the assets of the debtor. This would, of coursej diminish the liability of the sxirety just so far ; and the surety ought to have the power of requiring this. In practice, a surety can only pay the debt, whether due or not, and is then subrogated to all the rights of the principal creditor. (By " subrogated to his rights" is meant, that he is put in his place and stead, and acquires his rights.) This prevents, probably, any practical mischief. And if the creditor, relymg on his surety, and at the same time wishing to distress his surety, re- fused the payment tendered to him, and also refused to prove his debt, undoubtedly such conduct would be considered as a negligence or fraud, which would discharge the surety. For to all suretysloip there must be attached the general condition, that the creditor shall do all that can reasonably be asked of him to 'secure the debt from the principal, or permit the sure- ty to do it. A creditor who holds security as collateral to his debt, may prove the balance due to him after deducting the value of the security. This value may be ascertained by the creditor's sell- ing it, or, under our bankrupt law, by having it appraised, and taking it at its appraised value. In general, if he has any liens on any property whatever for his debt, he must make them reduce his debt as far as possible, or otherwise make them available to the assets, as by surrendering them to the assignees. 248 THE LAWS OP BUSINESS FOE BUSINESS MEN. SECTION VI. OP THE ASSIGNEE. The assignee is usually selected or chosen by the creditors, at their first meeting; a majority in value of the creditors choosing, with some restrictions ; as that a certain niimber must concur in the choice, in order to prevent one or two very large creditors from deciding the question. If the cred- itors fail, or decline, to choose, usually the judge or commis- sioner presiding may appoint. The assignee, or assignees, thiis chosen, must signify their assent witliin a certain time, which is usually a short one. It is his duty to act as a faithful trustee for all concerned ; and with impartial justice to all. It would be impossible to enumerate all his duties. The principal among them are, to ascertain the regularity and sufficiency of the proceedmgs thus far ; to take immediate possession of all the assets (which mean property and effects and valuable interests of every kind which are available for the fund) of the insolvent, and demand and take any necessary steps to collect all outstanding assets of every kind. And he must take due care of the property tlius collected. In general, he is clothed with the power, and is subject to the responsibilities and disabilities, of a trustee. In one case his responsibility as trustee was so strictly con- strued, that an assignee who was an accountant was not al- lowed to charge for his services as accountant. So, if he sells any property of the insolvent, he cannot buy it himself. He may compound debts due, or otherwise arrange for them, but on his own responsibility, unless under order of the supervising court, which it is always prudent, and per- haps necessary, to obtain, previous to any action of the kind. Aud the same thing is true of any temporary investment, or any .change of investment of the assets. Generally, he should deposit all moneys, as soon as collected, in some bank of perfectly good credit, and to the special account of the fund of the assignment. He may redeem mortgages or pledges ; but here, also, he should obtain the sanction of the OP BANKRUPTCY AND INSOLVENCY. 249 court. So he may transfer notes payable to the insolvent, by indorsing them in his own name. And where a note was actually transferred before insolvency, by the insolvent, to a bona fide holder, and the insolvent intended to indorse the same, but neglected to do so, the assignee may indorse it for the holder. It is undoubtedly the rule, that, when the assignee acts in the discharge of simple and ordinary duties, he is liable only for want of ordinary skill and care. ■> But, as he may have the order of the court in all extraordinary cases, if he does not obtain this, but acts on his own judgment, he is held to a more stringent responsibility. It is not always easy to draw the line between these two classes of cases. The statutes pro- vide for some of them ; practice, or the obvioiis reason of the thing, for more ; and where there is any doubt, it is always in the power of the assignee, and always prudent for lum, to have the direction and authority of the court. The assignee is, in general, subject to the same equities as the insolvent, whose title to anything is not confirmed by pass- ing to the hands of the assignee, even where it would be so by transfer for value to a third party. Thus, if a negotiable note were held by an insolvent, who had bought it with knowl- edge that the consideration had failed, the promisor would have a good defence if he were sued by the insolvent himself, but not if he were sued by a third party, who bought it for value without notice or knowledge of the defence. But the same defence may be made to the action if it be brouglit by the assignee, whether the assignee has any such knowledge or not, becaiise he has not purchased the note. We have said that the assignee is bound to take possession of the whole estate of the insolvent. But here also he has, and should exercise, a discretion. If the property be enciim- bered by liens, or obligations, which would reduce its value to nothing, and for which the assignee makes himself or his fund responsible by taking possession, he may and should decline the possession. Leasehold property, for example, may be held by the insolvent on terms which require him to pay for it moro than it is worth ; and if the assignee takes possession of this property under the assignment, be would be liable for the rent, 32 250 THE LAWS OP BUSINESS FOR BUSINESS MEN. This he should avoid. But here also, we repeat, he would be safest in acting under the direction of the court. The assignee may sue in his own name, even upon covenants made with the insolvent. And all the assignees of any insol- vent should join in bringing any suit. SECTION VII. WHAT PROPERTY THE ASSIGNEE TAKES. It has been already intimated, that what the bankrupt holds in the right of another does not pass to the assignee. If, therefore, the bankrupt has collected a debt for another, and has kept the sum so collected apart, it belongs, generally speaking, to him for whom it was collected. But if it is merged (or sunk) indistinguishably into the general assets of the bankrupt,* the owner has only a claim for it, which must be proved like other debts. So, if the bankrupt sold goods for liis principal, and they are not paid for, the principal can col- lect the whole debt, and sue for it in his own name. Or if * the bankrupt has received payment of the goods, and has kept that payment apart, the owner, generally, could reclaim it; but not if it were merged in, and mingled with, his assets. The insolvent laws generally exempt from their operation the same or similar property with that excepted by statute from attachment or levy. Among these is wearing-apparel; but under this clause in the national act, it was held that articles of jewelry belonging to the bankrupt passed to his assignee. In New York, however, it was held that jewelry and ornaments Which belonged to the wife before marriage, or were given to her afterwards, — even if given by the hus- band, provided he was not then insolvent, and gave the arti- cles in good faith, — belonged to the wife, and not lo the as- signee. In a case which occurred in Boston, Judge Story differed somewhat from Judge Betts, applying the principles of equity and trust to the question, and allowing to the wife only such things as the husband must be regarded as holding in trust for her. So as to gifts to the cliildren of an insolvent ; OP BANKRUPTCY AND INSOLVENCY. 251 if made by himself, and in good faith, before insolvency, we know no reason why they should not remain the property of tlie children. If given by a stranger, there could be no doubt. An interesting case occurred before Judge Story, in which the wife of a person who petitioned the court for the benefit of the bankrupt law was possessed of a watch of about the value of fifty dollars, presented to her by the petitioner, about ten years before the filing of the petition. She had likewise several mourning rings and pins, and a few other articles of jewelry, of the value of about twenty-five dollars, some of which had been given her by friends, and others by the petitioner, some years previous, and one mourning ring, of the value of about five dollars, given her by the petitioner nearly two years before filing the petition. The petition further stated, that his two sons, of the respective ages of seventeen and twenty years, had each a gold watch, of the value of about fifty dollars, which had been purchased about two years before with money given by a friend, and with about twenty-eight dollars given to each by the petitioner, out of liis private cash. It was ruled by the court, that the watch of the wife, and any jewelry given to her by tliird persons before the marriage, or by her husband, either before or since the marriage, pass to the assignee as part of the property of the bankrupt, to which his creditors are entitled. But jewelry, as personal ornaments, and mourning rings, given to her by third persons since the marriage, as personal orna- ments or memorials, belong to the wife for her sole and sepa- rate use in equity, and do not pass to the assignee under the bankruptcy for the benefit of the creditors. That the watches of the sons, under the circumstances stated in the petition, be- long to them, as their property. But, nevertheless, if the peti- tioner was insolvent when he applied a part of his own money to purchase the same for his sons, he had no right so to do against the claims of the creditors ; and that in equity, there- fore, if the petitioner was so insolvent, the sons must account to the assignee for the amount of the money of the petitioner so paid towards the purchase of the watches. But if the peti- tioner was not then insolvent, and the donation on his part was made in good faith, and the donation was suitable to his rank in life, condition, and estate, then it was good, and not witliiu 252 THE LAWS OP BUSINESS FOB BUSINESS MEN. the reach of the creditors, or in fraud of their rights under the bankruptcy. A gift is not complete and eifectual until there has been an assent to it on the part of the donee ; and the same rule is generally applicable to a devisee. But where one devised real estate to a bankrupt, the bankrupt was not permitted to decline it ; and the true reason is, that the assignee had become pos- sessed of his right of acceptance. After a party is decreed to be a bankrupt, it would seem that whatever comes to the bankrupt remains his own property. It is sometimes important to determine the moment of time before which what comes to the bankrupt goes to his assignee, and after which all that comes to him remains his own. If the title to property, by devise or otherwise, falls upon him after the petition and before the decree, in England, it goes to the assignee, as much as if it fell before the petition. But our insolvent laws do not contain the same provisions as to de- cree, &c. ; and it is probable that the time when the insolvent shall begin to hold as his own what comes to him will generally be determined by the phraseology of each statute, or the prac- tice under it. The principle upon which this question must always be determined, can be no other than this : whatever falls to him before he is actually and completely an insolvent at law, goes to his assignee for his creditors ; whatever falls to him after this point of time, remains his own. If one partner of a firm becomes insolvent, this operates a dissolution of the partnership ; and his assignee takes only his interest in the balance remaining after the debts are paid. To ascertain this, it is the common practice to permit the property of the firm to remain in the hands of the other pai-tners, for them to settle the affairs of the firm and render an account. But there is nothing to prevent an appraisement or agreement as to the value of the insolvent's interest, and a transfer of that for its value to the other partners. But such an arrangement should not be made without the sanction of the court. And of course it would not be binding against the creditors, and in favor of the other partners, if it were made fraudulently, with their connivance or knowledge or reasonable means of knowl- edge. The assignee of the insolvent partner is said to have no OP BANKRUPTCY AKD INSOLVENCY. 253 right to take the property from the hands of the other partner or partners. But the solvent partners must have a right to hold the property needed to settle the concern. This subject has been alluded to in the chapter on the law of Partnership. Where, after the petition, property fell to the wife of the bankrupt, in such a way as to give him the right of possessing it, in the final decree the " equity " of the wife's interest was regarded, and reasonable provision for her support was made out of this property. And when, at the time of the insolvency, the wife was possessed of an interest or estate in expectancy, to become hers in possession after the death of some person, and that death occurred some time after her husband's in- solvency, the assignees were permitted to take the property for the ci'editors, when the death occurred; but the court made a proper provision for the wife. An assignment in insolvency passes to the assignee the money of tlie insolvent which is in the hands of an attorney who has collected it for him. It passes the possibility of estate or title, when that is con- nected with an interest ; but not a naked possibility, as that of an heir, who expects to inherit, and probably will, but has no certain right. And the test in all such cases is, could the insol- vent have made a transfer or assignment of his right ; for if so, it passes to his assignee. Thus, an only son of an aged father has every reason to expect his inheritance ; but his interest is not legally vested in him, and he cannot transfer it ; and there- fore the assignee does not take it, and if the father dies the day after the son is insolvent, the son takes it and keeps it. But if the father had property for his -life only, to be his son's at his death by the original title, the son must have this, if he lives, and may transfer his right during the father's life ; and there- fore, if he becomes insolvent, his assignee then takes this right, and takes the property at his father's death. And the assignee may sell this right and interest at once, and divide the proceeds among the creditors, and the purchaser of the riglit will take the property when the father dies. An assignment in insolvency cancels and revokes any author- ity or power or lien which the insolvent had the power of re- voking. Therefore, it does not revoke one which belonged to 254 THE LAWS OF BUSINESS FOE BUSINESS MEN. the agent or attorney as his own. As where the attorney had a vested right or interest in the authority ; as if he had paid money for it, or on some good consideration had a right to execute the authority, and apply the proceeds to payment of a debt due from the principal. Where there is no insolvent law, there is nothing to prevent a debtor from making a voluntary assignment of his property, in trust for his creditors ; and to assign so much only as he pleases, and favor one creditor, or one class of creditors, at his own choice, and generally to constitute the trust upon such terms as he prefers. The mischiefs resulting from this state of things led, as we have said, to the general introduction of insolvent laws. But these laws do not exist in all tlie States ; and where they do not, the same questions, and the same diversity of decision, may be expected which led to their adop- tion elsewhere. Thus, in some States, no assignment operated to the benefit of creditors who did not become parties to it ; in others, their assent was presumed on the ground that it was for their benefit. And, generally, an assignment which pro- vided for the absolute discharge of the assignor, was construed with much more strictness than one which provided only for the distribution of the property. SECTION VIII. OF THE DISCHARGE OP THE INSOLVENT. Among the insolvent laws of the several States, there is a great diversity in the kind and extent of relief or benefit which they give to the insolvent. In some, only his present assets are distributed, leaving future acquisitions liable to attach- ment. In some, the insolvent is discharged and protected from arrest or imprisonment. In some, the debtor is dis- charged, if this be voted by a certain proportion of his cred- itors. In some, the debtor is discharged, either if so voted, or without or against the will of his creditors, provided his assets pay a certain percentage of his debt. The persons who are entitled to relief under the insolvent laws differ in the different States, as follows. OF BANKRUPTCY AND INSOLVENCY. 255 In California, Michigan, Ohio, Indiana, Louisiana, Missouri, Connecticut, New York, Massacliusetts, Arkansas, and Rhode Island, any debtor, ■wlidthcr in or out of prison, may have the benefit of the insolvent laws. In Delaware, Maryland, Tennessee, Nortli Carolina, South Carolina, Georgia, Alabama, Mississippi, Illinois, and New Jer- sey, persons only are entitled to relief who are imprisoned on civil process. But in Maine, New Hampshire, Kentvicky, and. Virginia, the relief is confined to debtors charged in exe- cution. In Vermont, the only law resembling an insolvent act is one of the Legislature of 1855, forbidding voluntary assignments witli a preference ; but there is a constitutional provision, that the debtor sliall not be continued in prison wliere there is not a strong presumption of fraud, after he has delivered up and assigned, bona fide, all his estate for the use of his creditors. The provisions relating to the effect of the discliarge vaiy, also, in different States. The statutes of Arkansas, New Jer- sey, North Carolina, Mississippi, Tennessee, Illinois, Georgia, Missoiu-i, Connecticut, Pennsylvania, and Oliio exempt only the person of the debtor from imprisonment. The statutes of California, Michigan, and Massachusetts provide for tlie dis- charge of the insolvent from liability for the debt itself, if his property be assigned and distributed among his creditors. The laws of New York upon this subject differ in important respects from those of many of the States. We give a few of its provisions, as abridged from the statutes by Chancellor Kent. " The insolvent laws of New York enable the debtor, with the assent of two thirds in value of his creditors, and on the due disclosure and siirrender of his property, to be dis- charged from all his debts contracted within the State, subse- quently to the passing of the insolvent act, and due at the time of the assignment of his property, or contracted before that time, though payable afterwards. The creditor who raises objections to the insolvent's discharge, is entitled to have his allegations heard and determined by a jury. The insolvent is deprived of the benefit of a discharge, if, knowing of his insolvency, or in contemplation of it, he has made any assignment, sale, or transfer, either absolute or conditional, of 256 THE LAWS OF BUSINESS FOB BUSINESS MEN. any part of his estate, or lias confessed judgment, or given any security with a view to give a preference for an antecedent debt to any creditor. Tlie discharge applies to all debts founded iipon contracts made within the State, or to be ex- ecuted within it ; and for debts due to persons resident within the State at the time of the publication of notice of the appli- cation for a discharge, or to persons not residing within the ^tate, but who united in the petition for his discharge, or who accept a dividend from his estate." If a bankrupt or insolvent, who can be discharged only by the assent or vote of his creditors, gives money to any one or more to obtain their assent, his discharge is void ; and the assignees can recover the money from the creditor. And if ho gives the creditor a bond, note, or promise, for the same pur- pose, the paper or promise is void, and so is the discharge. And it has been held that the discharge was void if money was given for it by some one for the bankrupt, biit not by the bankrupt himself, nor with his authority or knowledge. No certificate of discharge aifects the claims of creditors upon co-debtors or sureties of the insolvent. Nor does it reach' the liability of the insolvent for torts, — as slander, trespass, or the like ; nor for claims for profits of land held by him without title ; nor for debts due to him in any capacity or relation of trust, which were not proved before the assignee ; nor, generally, for any debts which could not be, by law, proved before the assignee. SECTION IX. OF FOREIGN BANKRUPTCY OR INSOLVENCY. The effect of proceedings in bankruptcy in a foreign state has been much discussed and variously determined. The prin- cipal question may be stated thus. Let us suppose that an ' English merchant, resident in England, becomes a bankrupt there ; that he has also creditors in New York, and property there ; and that after the proceedings in England, which cer- tainly vest in his assignees all his property in that country, his OP BANKRUPTCY AND INSOLVENCY. 257 creditors in this country attach his property in Now York. Can the assignee in England set aside the attachment in New york, on the ground tliat the property in New York had passed to the assignee by force of the proceedings in England before the attachment ? After some fluctuation, the courts in England have settled down upon the rule, that the proceedings in bankruptcy in the country of the bankrupt's residence operate upon his asset? all over the world. And in France and Holland, and, indeed, among the commercial states of Europe generally, the same rule prevails. It is based upon two principles. One is, that the system of bankrupt law should not be considered as local, but as universal, and that all the various parts of this system in different states should recognize each other, and by their union form a branch of what may be called the private law of nations. Another is, that the bankrupt law, when it seques- ters the property of the bankriipt, and passes it over to his assignee, operates precisely like a grant, or sale, or other trans- fer of the bankrupt himself, and should be regarded as his own act, done by him under compiilsion of law. In this country, in the earliest cases, it would seem that our courts were disposed to adopt the English rule. But this ten dency soon disappeared ; and althoiigh to this day wise men doubt whether the English rule is not the most reasonable and just, it seems to be admitted that the American rule is the very opposite of the English. We hold in this country, that the bankrupt and insolvent law form a part of the law of nations in no sense and in no respect ; that they riot only derive all their force from the authority of the state which enacts them, but have no force whatever — no more than any other local and municipal law — beyond the limits of that sovereignty. So, too, our courts hold that the cession of the bankriipt's assets to his assignee is not to be regarded as his own act; but rather as the result and effect of his civil death. He has, as a merchant, ceased to be. He has no longer anything to do with his property ; and does not possess, and cannot exer- cise, any more right or power in respect to it than a mere stranger. And the principle on which his assets are to be: 33 258 THE LAWS OF BUSINESS FOR BUSINESS MEN. gathered and distributed is the same which would be applied if he had died insolvent, and an administrator, instead of an assignee, had possession of his property. Hence it follows, that within the state where insolvency goes into effect, it operates on all the property, in the same way that insolvency declared by probate would operate on the effects of a dead man ; that is, only within the state where it occurs ; leaving creditors under other jurisdictions to get hold of other assets if they can. Hence an English assignment imder the bankrupt law would not defeat the attempt of a creditor in New York to get hold of the property of tlie bankrupt that was there, provided the English assignee had not previously, in person or by agent, got possession of it ; hut after the New York debts and claims are satisfied, the English assign-ee takes all the residue. It may be added, also, that the question and the difference refer to personal goods and chattels only ; as real estate has always, ill view of the law, a place, and is transferable only uiider the law of that place. ^ The English courts do not intimate that their bankrupt law can have any force, as law, abroad ; or that any foreign law can have that force in England. But they hold that interna- tional comity requires that the tribunals in each state shall recognize this law, and the proceedings iinder it, in every other. But in this country, it is held that this would be an unreason- able and excessive stretch of comity ; and that it is the duty of our courts to protect our citizens against interference with their rights or securities by a foreign law, which was made neither by us nor for us. The English courts, indeed, have recently manifested a pur- pose — perhaps in consequence of the American decisions — to limit the operation of their rule to the proceedings under bank- ruptcy in states which admit the same rule. This is perfectly fair, but it tends to reduce this question of comity or justice into one of mere expediency, concerning which the courts and authorities of every country must judge for themselves, on their own facts. This question is much more important in this country than it is in England, because the numerous States of the Union OP BANKRUPTCY AND INSOLVENCY. 259 are, in the absence of a national banlcriipt law, foreign to each other, in this respect. And vastly more cases and qiiestions, involving far greater amounts of property, arise under this ques- tion between our States, than can come under it in England, in reference to foreign bankrupt laws, or the operation of her own in foreign States. Thus, by force of the American rule, if a New York merchant becomes insolvent, a Massachusetts creditor may get security from the insolvent's property in Mas- sachusetts, provided he can get hold of it by attachment before the New York assignee. Everybody agrees that the foreign assignee acquires such an interest in or right to the property, that, if he completes his title by taking possession _/?rsf, no cred- itor can interfere with him. There is a similar question, whether a discharge of the debtor under a bankrupt or insolvent law is a discharge of all his debts everywhere. And it has been decided in a similar way, tliat is, with a similar difference, in England and America. Here, however, this very interesting question is affected impor- tantly by tlie clavise in the national Constitution which pro- hibits the several States from passing laws which " impair the obligation of contracts"; but the questions which have arisen upon this subject are so nice and difficult, and the adjudication in respect to them is so various and irreconcilable, that it will be impossible to do more than give a very brief statement of what seems to be the result. And even this must be stated with some uncertainty. The foundation of the whole is a distinction introduced by the Supreme Court of the United States, between the riffht of the creditor and his remedy. They say that a State statute which affects the right of a creditor is unconstitutional and void. But if it affects only his remedy for a breach of his right, it is not unconstitutional. Thus, a statute which exempts the person of a debtor from arrest or imprisonment, touches Only the remedy, and is constitutional, although applying to pre- vious debts. But if it discharges the debts, or relieves the property from attachment, or prevents a judgment or execu- tion, or operates as a stay law, that is, a law to prevent process of law, it affects the right of the creditor and tlie obligation of the debtor, and is unconstitutional unless limited to debts sub- 260 THE LAWS OP BUSINESS FOR BUSINESS MEN. sequently incurred. And as a State may pass almost any law about subsequent contracts, because then people who make the contracts may know what obligations they assume, if a statute does not say whether it applies to the present or only to the past, it shall if possible be held to be intended to apply only to subsequent debts, because it shall be held to be intended to be constitutional rather than otherwise. But if it expressly covers all debts, whether subsequent or prior, equally, it is un- constitutional as to all subsequent debts. A State may, how- ever, make partial exemptions, as of apparel, tools, or even of a homestead, to a reasonable extent. But the decisions even on this subject are not uniform. The courts of the United States have held, that no State in- solvent law or process can discharge the debts of the citizens of that State, so as to aifect the citizens of another State, unless those citizens choose to come into the assignment. This, most of the State courts, if not all, deny. And therefore a citizen of New York, for example, whose Boston debtor has become insol- vent, and who chooses not to come into the assignment, but to sue his debtor, brings his action in the Circuit Court of the United States, sitting in Boston ; becaiise, if he brought it in the State courts, they would say the defendant was discharged, and would not sustain the action. It is, however, generally true, that a discharge by the insolvent law of a State in which the contract was made, and should be executed, and of which the debtor was a citizen at the time it was made, is valid in another State. Thus, if a Boston man received in New York the note of a New York man, made there and expressly pay- able there, and the promisor failed in New York and was dis- charged there, and the Boston man afterwards caught him in Boston and sued him there, the court of Massachusetts would hold that the defendant was effectually discharged from the debt. OP THE LAW OP PLACE. 261 CHAPTER XIX, OP THE LAW OP PLACE. SECTION I. WHAT IS EMBRACED WITHIN THE LAW OF PLACE. If either of the parties to a contract was not at home, or if both were not at the same home, when they entered into it, or if it is to be executed abroad, or if it comes into Utigation before a foreign tribunal, then the rights and the obhgations of the parties may be affected either by tlie law of the place of the contract, or by the law of the domicile or home of a party, or by the law of the place where the thing is situated to which the contract refers, or by the law of the tribunal before which the case is litigated. All of these are commonly in- cluded in the Latin phrase lex loci, or, as wc translate the phrase, the Law of Place. It is obvious that this law must be of great importance wherever citizens of distinct nations have much commercial intercourse with each other. In this country it has an especial and very great importance, from the circumstance that, while the citizens of the whole country have at least as much business connection with each other as those of- any other nation, our country is composed of more than thirty separate and independent sovereignties, which are, for most commercial purposes, regarded by the law as foreign to each other. SECTION II. or THE GENERAL PRINCIPLES OP THE LAW OF PLACE. The general principles upon which the law of place depends are four. First, every sovereignty can bind, by its laws, all 262 THE LAWS OF BUSINESS FOE BUSINESS MEN. persons and all things within the limits of the state. Second, no law has any force or authority of its own, beyond those limits. Third, by the comity or courtesy of nations, — aided in our case, as to the several States, by the peculiar and close relation between the States, and for some purposes by a con- stitutional provision, — the laws of foreign states have a qual- ified force and influence, which it is perhaps impossible to define oi%describe with precision. The fourth rule is perhaps that of the most frequent applica- tion. It is, that a contract which is not valid where it is made, is valid nowhere else ; and one which is valid where it is made, is valid everywhere. Thus a contract made in Massachusetts, and there void because usurious, was sued in New Hampshire and held to be void there, although the law of New Hampshire would not have avoided it if it had been made there. But it seems that courts do not take notice of foreign revenue laws, and will enforce foreign contracts made in violation of them; If contracts are made only or ally,, where by law they should be in writing, they cannot be enforced elsewhere where writing is not required ; but if made orally where writing is not re- quired, they can be enforced in other countries where such contracts should be in writing. The rule, that a contract which is valid where it is made is valid everywhere, is ap- plicable to contracts of marriage. As contracts relate either to movables or immovables, or, to use the phraseology of our own law, to personal property or to real property, the following distinction is taken. If the con- tract refers to personal property, (which never has a fixed place, and is therefore called, in some systems of law, movable property,) the place of the contract governs by its law the construction and effect of the contract. But if the contract refers to real property, it is construdd and applied by the law of the place where that real property is situated, without ref- erence, so far as the title is concerned, to the law of the place of the contract. Hence, the title to land ,can only be given or received as the law of the place where the land is situated requires and determines. And it has been said by high aiitlior- ity, that the same rule may properly apply to all other local stock or funds, although of a personal nature, or so made by OP THE LAW OP PLACE. 263 tliG local law, such as bank stock, insiiranco stock, manufac- turing stock, railroad shares, and other incorporeal property, owing its existence to, or regulated by, peculiar local laws ; and therefore no effectual transfer can bo made of such prop- erty, except in the manner prescribed by the local regulations. SECTION III. OF ITS EFFECT UEOS THE CAPACITY OF PERS0X8 TO CONTRACT. As to the capacity of persons to enter into contracts, it is undoubtedly the general rule, that this is determined by the law of his domicile ; and whatever that permits him to do, he may do anywhere. But it must be taken, we think, — for the law on this point is not certainly settled, — with this qualifica- tion, that a home incapacity, created entirely by a home law, and having no cause or necessity existing in nature, would not go with the party into another country. Thus, the law of Prance once fixed the age of twenty-five as that of majority. If, then, a Frenchman, in England or in tliis coiintry, twenty- four years old, made a purchase of goods, and gave his note for it, we have no doubt that note woidd be valid where it was made. But if a woman nineteen years of age, whose home was in Vermont, where women are of age at eighteen, made in- Massachusetts, Avhile only visiting there, her note for goods, we incline to think this note could not be enforced in Massachu- setts ; if, however, a Massachusetts woman of nineteen, who could not make a valid note for goods in her own State, went for a short time from Massachusetts into Vermont, and while there made her note, for goods bought there, we think this note could be sued there. If it were sent back to Massachu- setts, and there put in suit, we think the note should be open to no defence in that State that could not be urged in Vermont, where the note was made (xmless it was expressly to be paid in Massachusetts) ; but it is quite possible that, as the law of the domicile (Massachusetts) and the law of the place of the con- tract (Vermont) were in conflict, that law of these two Avould prevail which was also the law of the place of the forum, or 264 THE LAWS OF BUSINESS FOB BUSINESS MEN. tribunal, or court, and therefore such a note might not be enforced by the courts in Massachusetts. SECTION IV. OF THE PLACE OF THE CONTRACT. A CONTRACT is made v)hen both parties agree to it, and not before. It is therefore made where both parties agree to it, if this is one place. But if the contract be made by letter, or by separate signatures to an instrument, the contract is then made where that signature is put to it, or that letter is written, which in fact completes the contract ; thus, it has been held, that where a proposal to purchase goods is made by letter sent to another State, and is there assented to, the contract of sale is made in that other State, and if it is valid by the laws of the latter State, it will be enforced in the State whence the letter was sent, although it would have been invalid if made there. Where A, in America, orders goods from England, and the English merchant executes the order, the contract is governed by the law of England, for the contract is there consvimmated ; and it is the law of this place of contract, as we have seen, which, in general, determines its construction, and its force and effect. But this rule is subject to a very important quali- fication, when the contract is made in one place, and is to be performed in another place ; for then, in general, the law of this last place must determine the force and effect of the con- tract, for the obvious and strong reason, that parties who agreed that a certain thing should be done in a certain place intended that a legal thing should be done there, and there- fore bargained with reference to the laws of the place, not in which they stood, biit in which they were to act. Tliis princi- ple has been applied to an anteniiptial contract, and it was held, that when parties marry in reference to the laws of another country as their intended domicile, the law of the in- tended domicile governs the construction of their marriage contract as to the rights of personal property. But, for many commercial transactions, both of these rules OF THE LAW OP PLACE. 265 seem to be in force ; or rather to be blended in snch a way as to give the parties an option as t^what shall be the place of the contract, and what the rule df liw which shall apply to it. Thus, a note written in Boston, and expressly payable in Bos- ton, is, to all mtents and purposes, a Boston note ; and if more than six per cent interest is promised, it is usurious, whatever may be the domicile of the parties. If made in Boston, and no place of payment is expressed, it is payable and may be demanded anywhere, but would still be a Boston note. But if expressly payable in California, (whei'e there are at this time no usury laws,) and promising to pay twenty per cent interest, we are strongly of opinion that, when payment of the note was demanded in California, the promise of in- terest would be held valid. So, if the note were made in Calirornia, payable in Boston, and promising to pay twenty per cent interest, we think it would not be msurious. In other words, if a note is made in one place, but is payable in another, the parties have their option to make it bear the in- terest which is lawful in either place. An interesting case occurred in Vermont, involving these principles. It was an action on two promissory notes given in Montreal, by persons living there, to the defendants, payable in Albany, N. Y., and by the defendants indorsed to- the plaintiffs. The notes were thus made at Montreal, where the makers resided, and the indorsers and the plaintiffs resided in Vermont. The lawful rate of interest in Montreal was six per cent per annum, and in New York seven per cent. The court, after examining all the authorities, said : " Prom all which, we consider the follow- ing rules in regard to interest on contracts made in one coun- try, to be executed in another, to be well settled : — 1. If a contract be entered into in one place, to be performed in another, and the rate of interest differs in the two countries, the parties may stipulate for the rate of interest of either country, and thus, by their own express contract, determine with reference to the law of which country that incident of the contract shall be decided. 2. If the contract so entered into stipulate for interest generally, it shall be the rate of interest of the place of payment, unless it appear the parties intended to contract with reference to the law of the other place. 3. If 266 THE LAWS OP BUSINESS FOB BUSINESS MEN. the contract be so entered into for money, payable at a place on a day certain, and no jiiterest be stipulated, and payment be delayed, interest by ArayAaf damages shall be allowed, ac- cording to the law of the place of payment, where the money may be supposed to have been required by the creditor for use, and where he might be supposed to have borrowed money to supply the deficiency thus occurring, and to have paid the rate of interest of that country." If a note made in Boston and payable in California were demanded in California and unpaid, and afterwards put in suit in Massachusetts, and per- sonal service made on the promisor there, we should say that any interest which it bore should be recovered, provided it were lawful in California. And indeed, generally, that such a note, being made in good faith, might always bear any in- terest lawful where it was payable. So it would be if tli^note were made in* Boston, and payable in New York, with seven per cent interest. But a note made in Boston, and intended in fact to be paid in Boston, and bearing seven per cent inter- est, could not escape the usury laws of Massachusetts merely by being written payable in New York. In everything relating to process and remedy, the lex fori (by which Latin phrase is meant the law of the forimi or court, or of the place where the suit is brought) prevails over every other. This is true of arrest. Thus, in a suit between A and B, both resident in England, on a contract made between them in Portugal, the contract was interpreted according to the laws of Portugal, but the remedy was taken according to the laws of England where the suit is brought ; that is, A could arrest B in England for a debt which accrued in Portugal, while both resided there, although the Portuguese law does not allow of arrest for debt. In New York, where a seal is necessary to constitute a deed, the action peculiar to sealed instruments will not lie on a contract to be performed in Penn- sylvania, with a scrawl and the word seal in the place of the seal, though, by the law of Pennsylvania, this constitutes a seal. The form of action relates to the remedy, and is governable by the law of the forum. This is also true of the statutes of limitation and of prescription. Thus, a foreigner, bringing in Massachusetts an action on a simple contract debt more thaa OP THE LAW OP PLACE. 26T six years after it accrued, ■would find his action barred by our statute of limitation, although the debt accrued in his own country, where there might bo a longer limitation, or none at all. SECTION V. OF DOMICILE. It is sometimes important, and very difficxilt, to determine where a person has his domicile, or Home. In general, it is his residence ; or that coiintry in which he permanently resides. He may change it by a change of place both in fact and in in- tent, but not by either alone. Thus, a citizen of New York, going to London and remaining there a long time, but without the intention of relinquishing his home in New York, does not lose that home. And if he stays in New York, his intention to live and remam abroad does not affect his domicile until he goes in fact. He may have his legal domicile in one place, and yet spend a very large part of his time in another.' But he cannot have more than one domicile. His words or declarations are not the only evidence of his intent ; and they are much stronger evi- dence when against his interest, than when they ar6 in his favor. Thus, one goes from Boston to Eixgland. If he goes intending not merely to travel, but to change his residence permanently, and not to return to this country unless as a visitor, he changes his domicile from the day that he leaves this country. Let us suppose, however, that he is still regarded by our assessors as residing here, although travelling abroad, and is heavily taxed accordingly. If he can prove that he has abandoned his original home, he escapes from the tax which he must other- wise pay. Now, his declarations that he has no longer a home here, and that his residence is permanently fixed in England, and the like, would be very far from conclusive in his favor, and could indeed be hardly received as evidence at all, unless they were connected with facts and circumstances. But if it could be shown that ho had constantly asserted that he was 268 THE LAWS OP BUSINESS FOB BUSINESS MEN. still an American, that he had no other permanent residence, no home but that which he had temporarily left as a traveller, such declarations would be almost conclusive against him. In general, such a question would be determined by all the words and acts, the arrangement of property at home, the length and the character of the residence abroad, and all the facts and cir- cumstances which would indicate the actual intention and understanding of the party. Two cases have occurred in the city of Boston, which illus- trate this question. In one, a citizen of Boston, who had been at school in the city of Edinburgh when a boy, and formed a predilection for that place as a residence, and had expressed a determination to reside there if he ever should have the means of so doing, removed with his family to that city, in 1836, de- claring, at the time of his departure, that he intended to reside abroad, and that if he should return to the United States he should not live in Boston. He resided in Edinburgh and vicin- ity, as a houselceeper, taking a lease of an estate for a term of years, and endeavored to engage an American to enter his family for two years, as instructor of his children. Before he left Boston, he made a contract for the sale of his mansion- house and furniture there, but shortly afterwards procured said contract to be anntilled, (assigning as his reason therefor, that, in case of his death in Europe, his wife might wish to re- turn to Boston,) and let his house and furniture to a tenant. Held, that he had changed his domicile, and was not liable to taxation as an inhabitant of Boston in 1837. In the other case, a native inhabitant of Boston, intending to reside In France, with his family, departed for that country in June, 1836, and was followed by his family about three months after- wards. His dwelling-house and furniture were leased for a year, and he hired a house for a year in Paris. At the time of his departure he intended to retuni and resume his residence in Boston, but had not fixed on any time for his return. He returned in about sixteen months, and his family in about nine months afterwards. Held, that he continued to be an inhab- itant of Boston, and that he was rightly taxed there, during his absence, for his person and personal property. This last case was distinguished from the former, by the different intent of the parties upon their departure from home. OP THE LAW OP PLACE. 269 It is a general rule, that, if one has a domicile, he retains it until he acquires another. Thus, if a seaman, without family or property, sails from the place of his nativity, which may be considered his domicile of origin, although he may return only at long intervals, or even be absent for many years, yet, if he does not, by some actual residence or other means, acquire a domicile elsewhere, he retains his domicile of origin. It seems to be agreed that one may dwell for a considerable time, and even regularly during a large part of the year, in one place, or even in one State, and yet have his domicile in another. If one resides in Boston five months in the twelve, including the day on which residency determines taxation, and the other seven months at his house in the country, he will be taxed in Boston, and may vote there, and his domicile is there. A woman marrying takes her husband's domicile, and changes it with him. A minor child has the domicile of his father, or of his mother if she survive his father ; and the sur- viving parent, with whom a child lives, by changing his or her own domicile in good faith, changes that of the child. And even a guardian has the same power. 270 THE LAWS OF BUSINESS FOB BUSINESS MEN. CHAPTER XX. OF THE LAW OP SHIPPING. SECTION I OF THE OWNERSHIP AND TRANSFER OF SHIPS. The Law of Shipping may be considered under three divis- ions. First, as to ownership and transfer of ships. Second, as to the employment of ships as carriers of goods, or of passen- gers, or both. Third, as to the navigation of ships. We be- gin with tlie first topic. Sliips are personal property ; or, in other words, a ship is a ■ chattel^ and yet its ownership and transfer are regulated in this country by rules quite analogous to those which apply to real property. The Constitution of the United States gives to Congress the power to enact laws for the regulation of commerce. In ex- ecution of this power, acts were passed in 1792, and immedi- ately after, which followed substantially (with one important exception, to be hereafter noticed) the Registry and Naviga- tion Laws of England, one of which had been in force about a century and a half. The English laws were intended to secure English commerce to Englishmen and English ships ; and it was supposed that the commercial prosperity of England was in a great measure due to them. To secure the evidence of the American character of a vessel, the statute of 1792 provides for an exact system of registration in the custom-house. There is no requirement of registration. The law does not say that a ship shall or must be registered, but that certain ships or vessels may be ; and if they are regis- tered, they shall have certain privileges. And the disadvan- tage of being without registry operates as effectually as posi- tive requirement with a heavy penalty could do. The ships which may be registered are those already regis- OP THE LAW OF SHIPPING. 271 tered, 31 December, 1792, under the act of September, 1789 ; those built withiu the Uiiited States, and owned wholly by- citizens thereof ; and those captured and condemned as prizes, or adjudged forfeited by Yiolation of law, if at the time of regis- try they are owned wholly by citizens of this country. No ship can be registered, if an owner or part-owner usually reside abroad, although he is a citizen, unless he is a consul of the United States, or agent for, and a partner in, a mercantile house estabUshed and doing business here ; nor if the master be not a citizen of the United States ; nor if the owner or part- owner be a naturalized citizen, and reside in the country whence he came more than a year, or in any foreign country more than two years, unless he be consul or public agent of the United States. But a ship which has lost the benefits of registry by tlie non-residence of an owner, in such a case may be registered anew if she become the property of a resi- dent citizen, by bona fide purchase ; nor can a ship be regis- tered which has been, at any time, the property of an alien, unless she becomes the property of the original owner or his representative. Sometimes Congress, by special acts, permits tlie registration, as an American ship, of a vessel which has become, by purchase, American property. If a registered American sliip be sold or transferred, in wliole or in part, to an alien, the coitificatc of registry must bo delivered vip, or the vessel is forfeited ; but if, in case of a sale in part, it can be shown that any owner of a part not so sold was ignorant of the sale, his share shall not be subject to such forfeiture. And as soon as a registered vessel arrives from a foreign port, her documents must be de- posited with the collector of the port of arrival, and the owner, or, if lie does not reside within the district, the master, must make oath that the register contains the names of all persons who are at that time owners of the ship, and at the same time report any transfer of the ship, or of any part, that has been made within his knowledge since the registry ; and also declare tliat no foreigner has any interest in the ship. If a register be issued fraudulently, or with the knowledge of the owners, for a ship not entitled to one, the register is not only void, but the ship is ibrfeited. If a new register is issued, the old one must 272 THE LAWS OP BUSINESS FOE BUSINESS MEN. be given up ; but where there is a sale by process of law, and the former owners withhold the register, the Secretary of the Treasury may authorize the collector to issue a new one. If a ship be transferred while at sea, or abroad, the old register must be given up, and all the requirements of law, as to regis- try, &c., must be complied with, within three days after her arrival at the home port. Exclusive privileges have at various times been granted to registered vessels of the United States. By the statute of 1817, it is provided, that no merchandise shall be brought from any foreign country to this, except in American vessels, or in vessels belonging to that country of which the merchan- dise is the growth. Also, that no merchandise shall be carried from port to port in the United States, by any foreign vessel, unless it formed a part of its original cargo. A ship that is of twenty tons burden, to be employed in the fisheries, or in the coasting trade, need not be registered, but must be enrolled and licensed accordingly. If under twenty tons burden, she need only be licensed. If licensed for the fisheries, she may visit and return from, foreign ports, having stated her inten- tion of doing so, and being permitted by the collector. And if registered, she may engage in the coasting trade or fishery, and if licensed and enrolled, she may become a registered ship, subject to the regulations provided for such cases. A ship that is neither registered nor licensed and enrolled, can sail on no voyage with the privilege or protection of a national character or national papers. If she engages in for- eign trade, or the coasting trade, or fisheries, she is liable to forfeiture ; and if she have foreign goods on board, must at aU events pay the tonnage duties leviable on foreign ships. In these days, no ship engaged in honest business, and belonging to a civilized people, is met with on the ocean, without having the regular papers which attest her nationality, xmless she has lost them by some accident. OP THE LAW OF SHIPPING. 273 SECTION II. OF THE TRANSFER OF PROPERTY IN A SHIP. The Statute of Registration provides, tliat, " in every case of sale or transfer, there shall be some instrument in writing, in the nature of a bill of sale, which shall recite at length the said certificate ; otherwise the said ship or vessel shall be in- capable of being registered anew." It follows, therefore, that a merely oral transfer, although for valuable consideration, and followed by possession, gives the transferee no right to claim a now register setting forth his ownership. But this is all. There is nothing in this statute to prevent the property from passing to and vesting in such transferee. It is, how- ever, iinquestionably a principle of the maritime law generally, that property in a ship should pass by a written instrument. And as this principle seems to be adopted by the statute, the courts have sometimes almost denied the validity of a merely parol transfer. The weight of authority and of reason is, how- ever, imdoubtedly in favor of the conclusion stated by Judge Story, that " the registry acts have not, in any degree, changed the common law as to the manner of transferring this species of property." It would follow, therefore, that such transfer would be valid, and would pass the property. The English Registry Act provides, that " when the pi'operty in any ship, or in any part thereof, shall, after registry, be sold, the same shall be transferred by bill of sale, or other in- strument in writing* containing a recital of the certificate of registry, or the principal contents thereof; otherwise, siich transfer shall not be valid or effectual for any purpose what- ever, either in law or in equity." Our Registry Act contained no such provision. Perhaps this important omission arose from a. doubt whether legislating concerning the transfer of ships at home, as property, could be considered as a regulation of commerce ; for if not, it was not within their constitutional power. In 1850, Congress, however, passed an act, " to provide for- recording the conveyances of vessels, and for other purposes."' 35 274 THE LAWS OP BUSINESS FOB BUSINESS MEN. By this statute it was provided " that no bill of sale, mortgage, hypothecation, or conveyance of any vessel or part of any ves- sel of the United States, shall be valid against any person other than the grantor or mortgagor, his heirs and devisees, and persons having actual notice thereof; unless such bill of sale, mortgage, hypothecation, or conveyance be recorded in the office of the collector of the customs where such vessel is registered or enrolled." Then follows an exception in favor of liens by bottomry, and in subsequent sections are provisions for recording by the collector, and giving certificates, &c. This statute has no effect, that we perceive, upon oral trans- fers, excepting that, as they cannot be recorded, their operation is limited to the grantors and those who have actual notice. Where the transfer is by bill of sale, the record of this, under the late statute, is, perhaps, notice to all the world. But in most of our States there are already provisions for the record of mortgages of personal property, and it may be a difficult question how these are affected by this statute of the United .States. For example, if there be such a record as is required Jby the State law, is this sufficient, without a custom-house record, either because it is a public notice, which is the eqiiiv- alent of actual notice to everybody, or because the State has the right to regulate this matter ; or, if there be a record in the custom-house and none which conforms to the State re- quirements, is this sufficient against all the world ? If we suppose this statute to be constitutional, of which we do not, however, feel certain, we should say that it controlled and superseded the State statute, so as to make that unnecessary and ineffectual ; and therefore a record "in the custom-house only would be sufficient, and a record under the State law would affect only those who had actual knowledge of it. As a ship is a chattel, a transfer of it should be accompanied by a delivery of possession. Actual delivery is sometimes im- possible where a ship is at sea ; and perhaps the statute of 1850 makes the record of the transfer eqiiivalent to change of possession. If there be no record, possession should bo taken as soon as possible ; and prudence would still reqiiire the same course, we think, in case of transfer by writing and record. . There have been cases which have been supposed to intimate OP THE LAW OF SHIPPING. 275 that, as between two innocent purchasers, he that gets actual possession first completes his title as against the other. We doubt the correctness of this in all Cases. We say rather, that if A becomes in good faith the purchaser of a vessel, and has taken constructive possession, (as by having a bill of s^e indorsed on the register and recorded in the custom-liouse, and taking an order to the master or other person in posses- sion to deliver her up,) he has no right to delay unnecessarily the taking actual possession, for this may deceive and injure otlier persons. And if B, a second purchaser, in ignorance of the first purchase, during sucli delay or neglect gets actual possession, he would hold the vessel ; unless, indeed, prevented by the record. But if B gets actual possession before A, but while A was so prevented that his want of actual possession • cannot be imputed to him as neglect, A will get a better title than B, if he (A) takes actual possession as soon as lie can. By the word " ship," and still more by the phrase " ship and her appurtenances," or " apparel," or " furniture," every- thing would pass which was distinctly connected with the ship, and is on board of her, and fastened to her if that be usual, and needed for her navigation or for her safety. Kentledge, a valuable kind of permanent ballast, has been held to pass with tlie ship ; so have a rudder and cordage prepared for a vessel, but not yet attached to her, and not quite finished ; and so would a boat, anchors, &c., generally. But the answer to the question, What is part of the ship ? must always depend some- what iipon the words of the instrument, and upon the circum- stances of the case and the intention of the parties. Sometimes, wlien a ship is built, she is paid for in instal- ments. If these are regulated by the progress in building, so that, when so much is done, a sum deemed eqiiivalent to the labor and materials used shall be paid, and when more is done, another siim in due proportion, and so on, it is held that each payment purchases the ship as slie lies ; and if she be lost after any such payments, the loss is the loss of the purchaser. But if paid for, so much down, and so much at a certain time, so much at another, Ac, without reference to the state of the ship at these times, these are only payments on account, and the ship does not belong to tlie purchaser until completed and de- livered. 276 THE LAWS OF BUSINESS FOK BUSINESS MEN. A sale by tlie decree of any regular court of admiralty, witlv due notice to all parties, and -with proper precautions to pro- tect the interests of all, and guard against fraud or precipi- tancy, would tmdoubtedly be acknowledged by courts of admi- r|[ty of every other nation as transferring the property effect- ually. SECTION III. OF PART-OWNERS. ■ Two or more persons may become part-owners of a ship, in, either of three ways. They may build it together, or join in purchasing it, or each may purchase his share independently of the others. In either case, their rights and obligations are the same. If the register, or the instrument of transfer, or other equiv- alent evidence, do not designate specific and unequal propor- tions, they will be presumed to own the ship in equal shares. Part-owners are not necessarily partners. But a ship, or any part of a ship, may constitute a part of the stock or capital of a copartnership ; and then it will be governed, in all re- spects, by the law of partnership. A part-owner may at any time sell his share to whom he will. But he cannot sell the share of any other part-owner, without his authority. If he dies, his share goes to his repre- sentatives, and not to the surviving part-owners. A majority of the part-owners may, generally, manage and direct the employment of the property at their discretion. Bvit a court of admiralty will interfere and do justice between them, and prevent either of the part-owners from inflicting injury upon the others. One part-owner may, in the absence of the rest, and without prohibition from them, manage the ship, as for himself and for them. And the contracts he enters into, in relation to the employment or preservation of the ship, bind all the part- owners in favor of an innocent third party. In general, all the part-owners are liable, each one for the OF THE LAW OP SHIPPING. 277 whole amount, for all the repairs of a ship, or for necessaries actually supplied to her, in good faith. If one pays his part, or more than his share, and it is agreed between him and the creditor that he shall not be held further, still, if the others do not pay, he must pay, unless there is a better consideration for the promise not to call on him, than his merely paying a part of what he was legally bound to pay ; for where a man is bound to pay all, his paying a part is no consideration what- ever for a promise to him. If he had a discharge under seal, it might protect him at law, but wovild not, of itself, in admi- ralty. If it can be clearly shown, however, that especial credit was given, and intended to be given, to one part-owner personally, to the exclusion of the others, then the others cannot be holden. If the goods were charged to " ship " so and so, or to " ship and owners," this would tend strongly to show that it was in- tended to supply the goods on the credit of all the owners. If charged to some one owner alone, this would not absolutely prove that credit was intentionally given to him exclusively. But it would raise a presumption to that effect which could be rebutted only by showing that no other owner was known ; or by some other evidence which disproved the intention of dis- charging the other part-owners. So, if the note, negotiable or otherwise, of one par1>owner were taken in payment, if the promisor refused to pay, the others would be liable, unless they could show a distinct bar- gain by wliich they were exonerated. Commonly, the ship's husband, as the agent of all the own- ers for the management of the ship has long been called, is one of the part-owners. But he is not so necessarily. He may be appointed in writing or otherwise. His duties are, in general, to provide for the complete equipment and repair of the ship, and take care of her while in port ; to see that she is furnished with all regular and proper papers ; to make proper contracts for freight or passage, and collect the receipts and make the disbursements proper on these accoimts. For these things he has all the necessaiy powers. But he cannot, without special power, insure for the rest, nor buy a cargo for them, nor borrow money, nor give up their lien on the cargo for the freight, nor delegate his authority. 278 THE LAWS OF BUSINESS FOR BUSINESS MEN. Where he acts ■within his powers, a ship's husband binds all his principals, that is, all the part-owners. But a third party- may deal with him on his personal credit alolie ; and if the part-owners, believing this, and authorized to believe it by any acts or words of the third party, settle their accounts with the ship's husband accordingly, this third party cannot now estab- lish a claim against them to their detriment. If a ship's hus- band be not a part-owner, all the part-owners are liable to him, each for the whole amount. Whether a part-owner has a lien on the shares of other part- owners, or on the whole vessel, for advances or balances due on account of the vessel, that is, whether the part-owner who has advanced more than his proportion has the shares of the other owners as his security for their proportions, is not certain on authority. Perhaps the current of adjudication may be adverse to this lien, generally. But there is not wanting au- thority, nor, as we think, strong reason, for saying that this lien should belong to the part-ownership of a ship, as such. In England, it seems at this day, after some fluctuation in the decisions, that there is no such lien or security ; but the courts of this country, and especially of New York, favor this lien. SECTION IV. OF THE LIABILITY OP MORTGAGEES. A MORTGAGEE of a ship, who is in possession, is, in general, liable for supplies, repairs, &c., in the same way as an owner. But if he has not taken possession, he is not liable for supplies or repairs merely on the ground that his security is strength- ened by whatever preserves or increases the value of the vessel. Nor can he be made liable, except by some act or words of his own, which show that credit was properly given to him, or that he has come under a valid engagement to assume this respon- sibility. OF THE LAW OP SHIPPING. 279 SECTION V. or THE CONTRACT OF BOTTOMRT. By this contract, a ship is hypothecated (or pledged) as secu- rity for money borrowed. The form of this contract varies in different places, and, indeed, in the same place. Its essentials are : — First, that the ship itself is bound for the payment of the money. Second, that the money is to be repaid only in case the ship performs a certain voyage, and arrives at its des- tined termination in safety ; or, as it is sometimes provided in modern bottomries, in case that the ship is in safety on a cer- tain day ; therefore, if the ship is lost before the termination of the voyage or the expiration of the period, no part of tlio money is due, or, as is sometimes said, the whole debt is paid by the loss. As the lender thus consents that the repayment of the money shall depend upon the safety of the ship, ho has a legal right to charge " marine interest," which means as much more than legal interest as will serve to cover his risk. The lender may require, and the borrower pay, this marine interest, which may be much more than lawful interest, on a bottomry bond, without usury. And it has been said that maritime interest, or more than legal interest, must be charged by the contract, or it is not a loan on bottomry. But tliis, we think, is not accurate. We hold that mai-itime interest may always be waived by the lender ; for such interest, however usual, or nearly universal, is not of the essence of the con- tract. If the interest be not expressed in the contract, it will gen- erally be presumed to be meant and! included in the sum named as principal. If, by the contract, the lender takes more than legal interest, and yet the money is to be paid to him whether the ship be lost or not, this is not a contract .of bottomry, and it is siibject to all the consequences of usury. But the lender may take security for his debt and marine interest, additional to the ship itself, provided the security is given, like the ship itself, to make the payment certain when it becomes due by the 280 THE LAWS OP BUSINESS FOR BUSINESS MEN. safety of the ship, but is wholly avoided if the ship be lost ; for then the lender takes the risk of losing the whole, principal and interest, by the loss of the ship, and may therefore charge more than simple interest. The most common contracts of bottomry are those entered into by the master in a foreign port, where money is needed and cannot otherwise be obtained. Therefore the security goes with the ship, and the debt may be enforced, as soon as it is payable, against the ship, wherever the ship may be. In Europe, contracts of bottomry are seldom made otherwise now. But in this country, they are frequently made by the owner himself, in the home port. And sometimes they are nothing else than contrivances to get more than legal interest. Thus, if A lends to B f 20,000 on B's ship for one year, at fifteen per cent interest, conditioned that, if the . ship be lost, the money shall not be. paid, and the lender insures the ship for three per cent, he gets twelve per cent interest, which is twice the legal interest, and yet incurs no risk. If such a contract were ob^ viously and certainly merely colorable, and only a pretence for getting usurious -interest, the courts would probably set it aside ; but it might be difficult to show this. If the money is payable at the end of a certain voyage, and the owner, or his servant the master of the ship, terminate the voyage sooner, — either honestly, from a change in their plan, or dishonestly, by intentional loss or wreck, — the money be- comes at once due. In admiralty, and, it may be supposed, in coinmon-law courts, a bottomry bond, made abroad, would override all other liens or engagements except the claim for seamen's wages. The reason is, that a bottomry bond is supposed to be made from necessity, and to have provided the only means by which the ship could be brought home. For the same reason, a later bond is sustained as against an earlier, and the last against all before it. It is possible, however, that a distinction might be taken between liens created by contract and those arising from wrong done, and that a lien by bottomry would be preferred over all the former, but not over the latter. In an English case, a collision occurred, and the vessel, to the negligence of whose crew the collision was owing, put into OP THE LAW OP SHIPPING. 281 Cowes for repairs. A lender, without knowledge of the claim against her for the collision, advanced money for repairs, imder an agreement, of the master to execute a bottomry bond. It was held that the lender was entitled to priority over tlie owners of the injured vessel who claimed compensation for injury, only to the extent of the increased value of the vessel arising from the repairs. The lien of bottomry depends in no degree on possession, for the ship may go all over the world with the bottomry security attached to her ; but the lender ought to collect the sum due, and so discharge the bond as soon as he conveniently can ; and therefore an unreasonable delay in enforcing it will destroy the lien. There may be a mortgage of a ship, as of any chattel, as we have already said ; but this is a very different thing from a loan on bottomry. We have seen that the statute of 1850 re- quires mortgages of ships to be recorded, but does not require that bottomjry bonds should be. There is excellent reason for this distinction in reference to bottomry bonds made abroad, but none as to those made at home. In a case before Judge Story, it was held that the nature of a bottomry bond did not require that the money loaned should be for the neces- sities or the use of the ship. There certainly seems to be no reason why a loan made for general purposes in a home port, secured by a bottomry bond, should have any privileges over a loan secured by mortgage. But the whole business of bot- tomry was invented to sxipply the necessities of the ship in a foreign port ; and the reasons applicable then are applied to home bottomries, although theses are very different tilings in their nature and purpose. SECTION VI. OP THE EMPLOYMKNT OP A SHIP BT THE OWNER. An owner of a ship may employ it in carrying his own goods, or those of another. He may carry the goods of others, while he himself retains the possession and direction of the ship ; or 36 282 THE LAWS OP BUSINESS FOR BUSINESS MEN. lie may lease his ship to others, to carry their goods. In the first case, he carries the goods of others on freight ; in the second, he lets his ship hy charter-party. We shall consider first the carriage of goods on freight. He may load his ship as far as he can with his own goods, and then take the goods of others to fill the vacant space ; or he may put up his ship as " a general ship," to go from one stated port to another, and to carry the goods of all who offer. It may be remarked, that the word " freight " is used in dif- ferent ways ; sometimes, to designate the goods or cargo that is carried, and there is some reason for believing that this was its earliest sense ; sometimes, to denote the money which the shipper of the goods pays to the owner of the ship, for their transportation. Not unfrequently, when the word is used in this latter sense, the word "money" is added, as the phrase " freight money " leaves no question as to what is meant. Sometimes a ship-owner who lets the whole burden of his ship to another, is said to carry the shipper's goods on freight. Biit the most common meaning of the word, especially in law pro- ceedings, is the money earned by a ship not chartered, for the transportation of the goods ; and in this sense we shall iise it. Nearly the whole law of freight grows out of the ancient and universal principle that the ship and the cargo have reciprocal duties or obligations towards each other, and are reciprocally pledged to each other for the performance of these duties. In other words, not only is the owner of the ship bound to the owner of the cargo, as soon as he receives it, to lade it prop- erly on board, take care of it while on board, carry it in safety (so far as the seaworthiness of the ship is concerned) to its destined port, and there deliver it, all in a proper way, but the ship itself is bound to the discharge of these duties. That is to say, if, by reason of a failure in any of these particulars, the shipper of the goods is damnified, he may look to the ship- owner for indemnity ; but he is not obliged to do so, because he may proceed by proper process against the ship itself. This lien, like that of bottomry, is not dependent upon possession, but will be lost by delay, especially if the vessel passes into the hands of a purchaser for value without notice. On the other hand, if the ship discharges all its duties, the owner may look to the OF THE LAW OP SHIPPING. 283 shipper for the payment of his freight ; but is not obliged to do so, because he may keep his hold upon the goods, and re- fuse to deliver them until the freight is paid. The party who sends the goods may or may not be the owner of ,them. And he may send them either to one who is the owner, for whom the sender bought them, or to one who is only the agent of the owner. In either of these cases, the sender is called the consignor of the goods, and the party to whom they are sent is called the consignee. The sending them is called the consigning or the consignment of them ; but it is quite common to hear the goods themselves called the consignment. The rights and obligations of the ship-owner and the shipper are stated generally in an instrument of which the origin is lost iu its antiquity, and which is now in universal use among commercial nations, with little variety of form. It is called the Bill of Lading. It should contain the names of the con- signor, of the consignee, of the vessel, of the master, of the place of departure, and of the place of destination ; also the price of the freight, with primage and other charges, if any there be, and either in the body of the bill or iu the margin, the marks and numbers of the things shipped, with sufficient precision to designate and identify them. "Wo give a usual form of the Bill of Lading in the Appendix. It should be signed by the master of the ship, who, by the strict maritime law, has no autliority to sign a bill of lading until the goods are actually on board, There is some relaxa- tion of this rule in practice ; but it should be regretted and avoided. Usually one copy is retained by the master, and three copies are given to the shipper ; one of them he retains, another he sends to the consignee with the goods, and the other he iisually sends to the consignee by some other conveyance. The delivery of the goods promised in the bill is to the con- signee, or his assigns ; and the consignee may designate his assigns by writing on the back of the bill, " Del*er the within- named goods to A. B.," and signing this order ; or the consignee may indorse the bill with his name only in blank, and any one who acquires an honest title to the goods and to the bill may 284 THE LAWS OP BUSINESS FOR BUSINESS MEN. TPrite over the signature an order of delivery to liiraself. It is held that the consignee has this power, if such be the usage, even if the word " assigns " be omitted. Such indorsement not only gives the indorsee a right to demand the goods, but passes to him the property in the goods. As the bill of lading is evidence against the ship-owner as to the reception of the goods, and their quantity and quality, it is common to say " contents unknown," or " said to con- tain," &c. But without any words of this kind, the bill of lading is not conclusive upon the ship-owner in favor of the shipper, because he may show that its statements were erro- neous through fraud or mistake. But the ship-owner, or mas- ter, is bound much more strongly, and perhaps conclusively, by the words of the bill of lading, in favor of a third party, who has bought the goods for value and in good faith, on the credit of the bill of lading. In a case which occurred in New York, the court said, that, as between the shipper of the goods and the owner of the vessel, a bill of lading may be explained or corrected as far as it is a receipt ; that is, as to the quantity of the goods shipped, and the like ; but as between the owner of the vessel and an assignee of the bill, for a valuable consid- eration, paid on the strength of the bill of lading, it may not be explained or corrected ; becaiise the master, by signing the bill, authorizes the purchaser to believe the goods are what the bill says they are. The law-merchant gives to the ship, as we have seen, a lien on the goods for the freight. The ma,ster cannot demand the freight without a tender of the goods at the proper time, in the proper way, to the proper person, and in a proper condition ; but then the consignee is not entitled to the goods without paying freight. The law gives this lien, whether it be ex- pressed or not. But it may be expressly waived. The bill of lading, or other evidence, may show the agreement of the par- ties that the goods should be delivered first, and the freight hot be payab^ until a certain time afterwards ; and such an agreement is in general a waiver of the lien. Nevertheless, if it seemed that the ship-owner did not intend to give up his security on the goods, a court of admiralty would be disposed so to construe such an agreement as to give OF THE LAW OP SHIPPING. 285 the consignee possession of the goods, for a temporary purpose, as to ascertain their condition, or, possibly, that he might offer tliem in the market, and by an agreement to sell raise the means of paying the freight ; ahd yet would preserve for the master his security upon the goods for a reasonable time, un- less, in the mean time, they should actually become, by sale, the property of a bona fide purchaser. The contract of affreightment is entire ; therefore no freight is earned unless the whole is earned, by carrying the goods quite to the port of destination. If by wreck, or other cau.se, the transportation is incomplete, no absolute right of freight grows out of it. "We say no absolute right, because a condi- tional right of freight does exist. To understand this, we must remember that, as soon as the ship receives the goods, it, on the one hand, comes under the obligation of carrying them to their destination, and on the other, at the same time, or on breaking ground and beginning the voyage, acquires the right of so carrying them. Therefore, if a wreck or other interrup- tion intervenes, the ship-owner has the right of transshipping them, and sending them forward in the original ship, or anotlier ship, to the place of their original destination. "When they arrive there, he may claim the whole freight originally agreed on; but if forwarded in the original ship, he can claim no more ; for then the extra cost of forwarding the goods is his loss. If the master or owner of the ship forwards them in another ship from necessity, and at an increased cost, it seems that the shipper must pay this increased cost. The owner not only may, but must, send forward the goods, at his own cost, if tliis can be done by means reasonably within his reach. He is not, however, answerable for any delay thus occurring, or for any damage from this delay. The shipper himself, by his agent, may always reclaim all his goods, at any intermediate port or place, on tendering all his freight ; be- cause the master's right of sending them forward is merely to earn his full freight. If, therefore, the goods are damaged and need care, and the master can send them forward at some time , within reasonable limits, and insists upon his right to do so, the shipper can obtain possession of his goods only by paying full freight. If, however, the master tenders the goods there 286 THE LAWS OF BUSINESS FOR BUSINESS MEN. to the shipper, and the shipper there receives them, this is held to sever or divide tlie contract by agreement, and now what is called a freight j9ro rata itineris, or for that part of the voyage which is performed, is due. This is quite a common transaction. Difficult questions sometimes arise as to what is a reception of the goods by their owner. The rights of the master and of the shipper are apparently opposed to each other, an^ neither must be pressed too far. The master must not pretend to hold the goods for forwarding, to the detriment of the goods or their value, when he cannot forward them, btit merely uses this pretence to compel a payment of full freight. And the shipper must not refuse to receive the goods, when the master can do no more with them, and offers their delivery in good faith. The questions of this kind, so far as they are difficult, are generally questions of fact. Courts tend to this result ; where the goods cannot be forwarded by the master without luireasonable effort or cost, or where they need measures for their preservation which he cannot take, and they come into possession of the shipper, and their original value has been increased by the transportation to that place, the ship-owner is held to be entitled to a proportionate share of the freight. Still, as matter of law, it seems to be settled, that, if- the mas- ter certainly will not, or certainly cannot, carry or send the goods forward, the shipper is entitled to them without any payment of freight. So, the shipper may always refuse to re- ceive them at any place other than that at which they were to be carried by the ship, and then, under no circumstances, is freight joro rata payable, on the general ground that the origi- nal contract is at an end, and no new one has been substituted, either expressly or tacitly, or by implication of law. If freight for a part of the voyage is payable, the question arises by what rule of proportion shall it be measured. One is purely geographical, and was formerly much used ; that is, the whole freight would pay for so many miles, and the freight for a part must pay for so many less. Another is purely com- mercial. The whole freight being a certain sum for the whole distance, what will it cost to bring the goods to the place where thoy are received, and how much to take them thence to their original destination. Let the original freight be divided into OP THE LAW OF SHIPPING. 287 two parts proportional to these, and the first part is the freight i for the part of the voyage through whicli tiiey were carried, or, as it is called, the freight pro rata. Neither of these, nor indeed any otlier fixed and precise rule, is generally adopted in this country. But both courts and merchants seek, by combining the two, to ascertain what proportion of the increase of value expected from the intended transportation has been actually conferred upon the goods by actual partial transportation, and this is to be taken as the freight that is Aiie pro rata itineris. If the bill of lading requires delivery to the consignee or his assigns, " lie or they paying freight," — which is usual, — and the master delivers the goods without receiving freiglit, which the consignee fails to pay, the master or owner cannot in the absence of express contract fall back on the consignor and make him liable, unless he can show that the consignor actu- ally owned the goods, or by his words or acts made himself re- sponsible therefor ; in wliich case the bill of lading, in this respect, is nothing more than an order by a principal upon an agent to pay money due from the principal. Generally, he Avho receives the goods under the common bill of lading is liable for the freight ; but not if he be merely an indorsee or assignee of the consignee, and obtain them by his order, and not under the bill of lading, unless siich indorsee, by express or implied promise, agrees to pay the freiglit. Generally, and under the usual bill of lading, the goods are to be delivered to the consignee or his assigns, on the payment of freight. If goods are accepted under this bill of lading, the party receiving them, whether the consignee or his assignee, becomes liable for the freight. If the master de- livers goods to any one, saying that he should look to him for the freiglit, he may demand the freight of him unless that per- son had the absolute right to the goods without payment of freight ; wliich must be very seldom the case. If the consignee is not liable for the freight, his indorsement of the bill of lad- ing does not make him so. And if the consignee is liable, and the goods are received by any one as agent of the consignor, this agent does not thereby become liable. If freight be paid in advance, and not subsequently earned, it must be repaid, unless it can be shown that tlie owner took 288 THE LAWS OF BUSINESS FOB BUSINESS MEN. a less sum than he would otherwise have had, and for this or some other equivalent reason the money paid was as a final settlement, and was to be retained by the owner at all events. If a consignee pay more than he should, he may recover it back, if paid through ignorance or mistake of fact ; but not if, with full knowledge of all the facts, he was ignorant or mis- taken as to the law. If one sells his ship after a voyage is commenced, he alone can claim the freight of the shipper of goods, although the con- tract of sale may require the seller to pay it over to the pur- chaser. A mortgagee of a ship who has not taken possession has not, in general, any right to the freight, unless this is spe- cially agreed. Neither has a lender on a bottomry bond. But it seems that a mortgagee is entitled to the freight accruing •after he takes possession, although the outfit's for the voyage were furnished by the mortgagor. No freiglit, of course, can be earned by an illegal voyage ; as the law will not enforce any illegal contract, or sanction any illegal conduct. The goods are to be delivered, by the bill of lading, in good condition, excepting " the dangers of the seas," and such other risks or perils as may be expressed. If the goods -are dam- aged, to any extent, by any of these perils, and yet can be, and arc, delivered in specie, (that is, if the goods are actually deliv- ered although hurt or spoilt, as corn or hides although rotten, flour although wet, fish although spoilt,) the freight is payable. Tlie shipper or consignee cannot abandon the goods for the freight, if they remain in specie, although they may be worth- less ; for damage caused by an excepted risk is his loss, and not the loss of the owner. If they are lost by a risk which the ship- . owner does not except in the bill of lading, he is answerable for that loss, and it may be charged in settlement of freight. If they are lost in substance, though not in form, that is, although the cases or vessels are preserved, as if sugar is washed out of boxes or hogsheads, or wine leaks out of casks, by reason of injury sustained from a peril of the -sea, though the master may deliver the hogsheads or boxes or casks, this is not a delivery of the sugar or of the wine, and no freight is due. OF THE *AW OF SHIPPING. 289 If the goods arc injured, or actually perish and disap- pear, from internal defect or decay or change, that is, from causes inherent in the goods themselves, freight is due. In a case before the Siipreme Court of the United States, where a libel was brought against a vessel by the owners of twenty-four boxes of cotton thread for damage done to it on board the ves- sel on a voyage from Liverpool to Charleston, the court said : " Now the evidence shows very satisfactorily that the damage to the goods was occasioned by the effect of the humidity and dampness, which in the absence of any defect in the ship, or navigation of the same, or in the storage, is one of the dangers and accidents of the seas, for which the carrier is not liable. The burden lay upon the plaintiffs to show that it might, not- witlistanding, have been prevented by reasonable skill and dili- gence of those employed in the conveyance of the goods. For it has been held, if the damage has proceeded from an intrinsic principle of decay, naturally inherent in the commodity itself, whether active in every situation, or only in the confinement and closeness of the ship, the merchant must bear the loss as well as pay the freight ; as the master and owners are in no fault, nor does their contract contain any insurance or war- ranty against such an event. But if it can be shown tliat it might have been avoided by the use of proper precautionary measures, and that the usual and customary methods for this purpose have been neglected, they [the master or owners] may still be held liable." If they are lost from the fault of the owner, the master, or crew, the owner must make the loss good ; but in this case may have, by way of offset or deduction, his freight, becaiise the shipper is entitled to full indemnification, but not to make a profit out of this loss. If goods are delivered, although dam- aged and deteriorated from faults for which the owner is re- sponsible, as bad storage, deviation, negligent navigation, or the like, freight is due ; the amount of the damage being first deducted. In an important English case, the action was for- freight under a charter-party, which entitled the ship-owner- to freight " on a right and true delivery of the whole of the goods, agreeably to bills of lading." The bills of lading re- quired them to be delivered in good order and well condi- 37 290 THE LAWS OP BUSINESS P»E BUSINESS MEN tioned. The cargo, consisting of chests of fruit, was much injured by the negligence of the master and crew in not venti- lating sufficiently. The freight was recovered. The grounds of the decision were these. The duty of making a right and true delivery of the cargo was satisfied by the delivery made of the number of chests of fruit shipped on board ; and if the contents of any of them turned out to be damaged by the neg- ligent stowing, or subsequent want of care and proper ventila- tion, by the master and crew, the defendant had a cross-action or a right of setoff for his damages ; but this damage was no sufficient defence against an action for tlie freight. The rules in respect to passage-money are quite analogous to those which regiilate the payment of freight. Usvially, how- ever, the passage-money is paid in advance. Biit it is not earned except bjt carrying the passenger, or, pro rata, by car- rying him a part of the way with his consent. And if paid in advance, and not earned by the fault of the ship or owner, it can be recovered back. SECTION VII. OF CHARTER-PARTIES. The owner may let his ship to others ; and the written in- strument by which this is done is called by an ancient name, the origin of which is not quite certain, a Charter-party. The form of this instrument varies considerably, because' it must express the bargain between the parties, and this of course varies with circiimstances and the pleasure of the parties. An agreement to make and receive a charter, though not itself equivalent to a charter, will, if the purposes of the proposed charter are carried into effect, be considered as evidence that such a charter was made and completed. Generally, only the burden of the ship is let ; the owner holding possession of her, finding and paying her master and crew and supplies and repairs, and navigating her as is agreed upon. Sometimes, however, the owner lets Ids ship as he might let a house ; and the hirer takes possession, mans, navi- gates, supplies, and even repairs her. OP THE LAW OP SHIPPING. 291 lu the latter case, bills of lading are not commonly given by tlie owner to the hirer ; but if the hirer takes the goods of other shippers, bills of lading are given by him to them ; but in the former, which we have said is much more common, bills of lading are usually given by the owner to the charterer (or hirer), as they are in the case of a general ship, for much the same purpose and with much the same effect. Tliere is no particular form for a charter-party, but in all our commercial cities blank forms are sold by mercantile sta- tioners. A good form is given in the Appendix. Tliey should designate particularly the ship, the voyage, the master, and the parties ; sliould describe the ship generally, and particu- larly as to her tonnage or capacity ; should designate espe- cially what parts of the ship are let, and wiiat parts, if any, are reserved to the owner, or to the master, to carry goods, or for the purpose of navigation ; should describe the voyage, or the period of time for which the ship is hired, with proper particu- larity ; should set forth the lay-days, the demurrage, the obli- gation upon either party'to man, navigate, supply, and repair the ship, and all other particulars of the bargain, for this is a written instrument of an important chai-acter, and cannot be varied by any external evidence. Finally, it should state, dis- tinctly and precisely, how mucli is to be paid for the ship, • — whether by ton, and if so, whether by ton of measurement or ton of capacity of carriage, or in one gross sum for tlie wliole burden, — and when the money is payable, and how ; that is, in what currency or at what exchange, especially if it be payable abroad." Tlie charter-party \isually binds tlio ship and freight to the performance of the duties of the owner, and the cargo to the duties of the shipper. But tlie law-merchant would in almost all cases create this mutuality of obligation, if it were not expressed. If the hirer takes the whole vessel, he may put the goods of other shippers on board (unless prevented by express stipula- tion) ; but whether he fills the whole ship or not, he pays for the whole ; and what he pays for so much of the ship as is empty, is said to be paid for dead freight ; and if the master brought back the cargo because it could not be disposed of, the owner of the cargo would pay freight for bringing it back, 292 THE LAWS OF BUSINESS FOR BUSINESS MEN. although the charter-party said nothing about a return cargo. The freight is calculated on the actual capacity of the ship, unless she is agreed to be of a specified tonnage. If either party is deceived or defrauded by any statement in the charter- party, he has, of course, his remedy against the other party. The question has arisen under charter-parties, analogous to that under bills of lading, whether the lien of the ship-owner on the cargo, for freight, is lost by want of possession. Here, however, the owner seems to let the ship out of his hands, and not to be the carrier of the charterer. Hence, in England, there have been great doubts whether the technical defect of possession did not destroy this lien. Less weight is now given to this reason or objection than formerly, even there. In this country it seems to be settled that the owner, under any com- mon charter-party, and especially if bills of lading are signed by his master, has this lien on the cargo for his freight. If, however, he lets his whole ship, giving up, the possession en- tirely, and having notliing to do with the officers or men or navigation, and of course not being a party through his master to the bills of lading, it would seem that there can be no suf- ficient ground for a lieu. His contract with the hirer is then purely personal, and to him alone he looks for the payment of •the money due, without any security on the goods. If a charterer takes the goods of other shippers, payment by one of them to the master or owner is a good defence against the claim of the charterer against him, for so much as the char- terer was bound to pay the owner, but no more. Tlras, if A hires or charters a ship, and is to pay $10,000, and takes goods for B, for the freight of which B is to pay A $5,000, and A pays the owner in part, but owes him $ 3,000 ; now if the owner demands of B the freight-money, and B pays, to the owner the $5,000 he owes A, he cannot charge A witli more than the $3,000 due from A to the owner, but must pay A the balance of $2,000. The voyage may be a double one ; a voyage out, and then a voyage home ; or a voyage to one port, and thence to another. The question sometimes arises, whether any freight is payable if the ship arrives in safety out, and delivers her cargo there, and is lost on her return with the cargo that represents the OF THE LAW OP SHIPPING. 293 cargo out. Of course, the parties may make what bargain they please, and the law respects it ; but in the absence of an agreement on this point, the courts would generally consider each voyage, at the termination of which goods are delivered, as a voyage by itself, earning its own freight. As time has become of the utmost importance in com- mercial transactions, both parties to this contract should be punctual, and cause no unnecessary delay ; and for such delay the party injured would have his remedy against the party in fault. Tlie charter-party usually provides for so many " lay- days," and for so much " demurrage." Lay-days, or working- days, are so many days which the charterer is allowed, without paying for them, or paying only a small price, for loading or for unloading the vessel. These lay-days are counted from the arrival of the ship at her dock, wharf, or other place of dis- charge, and iiot from her arrival at her portof destination, un- less otherwise agreed on by the parties. In the absence of any custom or bargain to the contrary, Sundays are computed in the calculation of lay-days at the port of discharge ; but if the contract specifies " working lay-days," Sundays and holidays are excluded. If more time than the agreed lay-days is occu- pied, it must be paid for ; and " demurrage " means wliat is thus paid. Usually, the charterer agrees to pay so much demur- rage a day. If he agrees only to pay demurrage, without specifying the sum, or if so many working days are agreed on,' and nothing more is said, it would, generally at least, be con- sidered that the number of lay-days determined what was a reasonable and proper delay, and tliat for whatsoever was more than this the party in fault must pay a reasonable indemnity. Courts in England have intimated, that, even if demur- rage is agreed on at so much a day, it might be enlarged, on strong evidence that the sum agreed on did not give indem- nity, or lessened, if it were clearly shown that it gave much more than an indemnity. But we should doiibt whether our courts would thus set aside the bargain of the parties, unless for reasons of great urgency. If, after the lay-days allowed for unlading have commenced, and of course after a safe arrival, but before the cargo is unladen, ship and cargo, or cargo alone, is lost, without the fault of the ship, of the owner, or of the 294 THE LAWS OF BUSINESS FOR BUSINESS MEN. master, the freight or charter-money is due, because that was earned by the safe arrival. Thus, in a case wliich occurred in New Yorit, a vessel, whilst waiting to unload her cargo, was capsized by a freshet, and the greater part of her cargo lost. But freight was claimed and allowed for the whole, on the ground above stated. If time be occupied in the repairs of the shijD, wliich are made necessary without the fault of the owner or master, or of the ship itself, that is, if they do not arise from her original unseaworthiness, the charterer pays during this time. Tlie charterer or hirer must not abandon the vessel while he can keep her afloat, and suitably provided for the employment and destination for which she was hired ; and the owner must be ready to pay all expenses and damages necessarily inciirred for the purpose. But the shipper will not be bound by the char- ter-party to wait for the repair, unless the vessel can be re- paired within a reasonable time. Many cases have arisen where the ship was delayed by dif- ferent causes, and the question occurred, which party should pay for the time thus lost. On the whole, we should say that no delay arising from the elements, as from ice, or tide, or tempest, or from any act of government, or from any real dis- ability of the consignee, which could not be imputed to his own act, or to his own wrongful neglect, would give rise to a claim on the charterer for demurrage. Demurrage seems essentially due only for the fault or volun- tary act of the charterer ; but if he hires at so much on time, that is, by the day, week, or' month, then, if the vessel be de- Wed by seizure, embargo, or capture, and the impediment is removed, and the ship completes her voyage, the charterer pays for the whole time. If she be condemned, or otherwise lost, this terminates the voyage and the contract. The contract may be dissolved by the parties, by mutual con- sent, or against their consent by any circumstance which makes the fulfilment of the contract illegal ; as, for example, by a declaration of war, on the part of the country to which the ship belongs, against that to which she was to go. So, either an embargo, or an act of non-intercouse, or a blockade of the port to which the ship was going,' may either annul or suspend OP THE LAW OF SHIPPING. 295 the contract of charter-party. And we should say they Avould be held to suspend only, if they were temporary in their terras, and did not require a delay which would be destructive of the purposes of the voyage. In reference to all these points, it is to be understood, that, if the parties know ot expect the circumstance when they make their bargain, and provide for it, any bargain they clioose to make in relation to it would be enforced, unless it reqiured one or other of the parties to do something prohibited by the law of nations, or the law of the country in which the parties re- sided, and to whose tribunals they must resort. SECTION VIII. OP GENERAL AVERAGE. "Whichever of the three great mercantile interests — ship, freight, or cargo — is voluntarily lost or damaged for the ben- efit of the otliers, if the others receive benefit therefrom, they must contribute ratably to the loss. That is to say, such a loss is averaged upon all the interests and property wliich derive advantage from it. The phrase "general average" is used, because a loss of a part is thus divided among all the other parts, and is sustained by all in equal proportion. This rule is ancient and universal. We have no doubt whatever that it would be held to apply to all our inland navigation, whether of river or lake, steam or canvas. The loss must be voluntary. Therefore,, if the cargo be ac- tually thrown over, and the ship saved thereby, or if the ship be actually cast ashore, and the goods saved thereby, yet if, in the first case, the cargo could not possibly have been saved, and if, in the second case, the ship could not possibly have been saved, there is no average. We distinguish this from the cases where all cannot possibly be saved, but something may be, if something else is sacrificed. Here there is no doubt that the thing lost by voluntary choice is to be paid for. This question has been much discussed ; biit we say that the loss must be vol- untary ; and if the peril of any one whole and specific thing is 296 THE LAWS OF BUSINESS FOR BUSINESS MEN. such that its safety is impossible, the destruction of it in a way to insure the safety of the rest is not sucli a voluntary loss or sacrifice as would give a claim for indemnity. There have been many cases, and some conflict, respecting the voluntary stranding of the ship. But there ought to be no doubt whatever about the principle, whatever may be thediffir culty of applying it in different cases. If the ship must be lost in that tempest, and only a place is selected favorable to the safety of life and cargo, there can be no average. But if the ship, although in imniinent danger, may be saved, and a sub- stantial chance of safety is voluntarily .given up for the sake of the cargo, there must be an average. If a ship is accidentally stranded, and got off, and the voyage resumed, and ship,, car- go, and freight saved, all must contribute to the expense of getting her off. So, if she be stranded near her port of desti- nation, and the cargo be transported thither in lighters, this expense is a matter of average. So would be any sea damage sustained by the goods in the lighters. The loss must not only be voluntary, but, what is indeed implied in its being voluntary, it must be for the purpose and with the intention of saving something else. And this inten- tion miist be carried into effect ; for only the interest or prop- erty which is actually saved can be called on to contribute for that which was lost. The reason of what has been said mvist be distinctly under- stood, because the whole law of general average rests upon it. It is simply this : if any man's property be destroyed for the benefit of his neighbors, they who are helped by his loss ought to make iip his loss. The law supposes that all who are inter- ested in the ship or the cargo, or any part of either, agree together beforehand, that, if a sacrifice of a part can save the rest, that sacrifice shall be made, without stopping to ask who it is that suffers in the first place ; and that afterwards, if the sacrifice be beneficial to any for whom it was made, such per- sons shall bear their share of it, by contributions to iiim whose property was purposely destroyed for their good. And their contributions shall be in proportion to the value of the prop- erty saved for them by the sacrifice. Any loss which comes within this reason is an average loss ; OF THE LAW OP SHIPPING. 297 as ransom paid to a captor or pirate ; not so, however, if he take wliat he will, and leave the ship and the rest, for here is no contribution. So, cutting away bulwarks or the deck, to get at goods for jettison, is an average loss. So is a damage which, though not intended, is the direct effect and conse- quence of an act which was intended ; as, where a mast is purposely cut away, and by reason of it water gets into the hold and damages a cargo of corn, this damage is as much a general average as the loss of the mast. But if a ship makes all sail in a violent gale to escape a Ice shore, and so saves ship and cargo, but carries away her spars, &c. ; or if an armed ship fights a pirate or enemy, or beats him off at great loss ; the first is a common sea risk, the second a common war risk, and neither of them is a ground for average contribution. It is not considered prudent to lade goods on deck, because they are not only more liable to loss there, but hamper the vessel, and perhaps make her top-heavy, and increase the com- mon danger for the whole ship and cargo. Therefore, by the general rule, if goods on deck are jettisoned, (which old mer- cantile word means cast overboard,) they are not to be con- tributed for. But there are some voyages on which there is a known and established usage to carry goods of a certain kind on deck. This justifies the carrying them there, and then the jettison of them would seem to entitle the owner to con- tribution. The repairs of a ship are for the benefit of the ship itself. But if a ship be in a damaged condition, at a port where she cannot be permanently repaired, and receive there a temporary repair, ' which enables her to proceed to another port where she may have a thorough repair, and thereby the voyage is saved, the cost of all of the first repair which was of no fur- ther use than to make the permanent repair possible, is to be contributed for by ship, freight, and cargo, because all these were saved by it. If a ship put into a port for necessary repair, and receive it, and the voyage is by reason thereof successfully proseciited, the wages and provisions of the crew, from the time of putting away for the port, the expense of loading and unloading, and 38 298 THE LAWS OF BUSINESS FOE BUSINESS MEN. "• every other necessary expense arising from this need of repair, seem, by the best authority, to be an average. Nor do we, in this country, refuse an average for these expenses wliere the repair was made necessary by a common sea peril, and allow one only where the repair was required by a voluntary loss, as the 'cutting away of a mast, or the like, as they have seemed to do in England. But it looks now as if they were adopting our rule. As to the expenses, wages, &c. during a capture, or a de- tention by embargo, it is not quite certain what the rule is. We should prefer to limit the claim for contribution to those expenses which were necessarily and successfully incurred in saving or liberating the property. In regard to the rules or principles for estimating the con- tributory interests, — how, that is to say, the value of the ship, or of the freight, or of the cargo, is to be ascertained, — it is to be regretted that we have nothing like uniformity in the usages of different parts of this country. Perhaps this cannot be determined in any better way than by an arbitrary rule, or estimate ; and there are many such rules in the law of insur- ance and shipping ; and we believe it would be well if the rules applied by the courts in New York should be generally received. If any one place should have the right and author- ity of a commercial metropolis, it would seem to be .that where the greater extent of commerce brings up such questions most frequently, and where the practical bearing of any rule is likely to be best illustrated. They are not, however, absolutely uniform or well settled even there. In the courts of that State, the contributory value of the ship has been held in some cases to be her value at the commencement of the voyage, deducting one fifth for supposed deterioration. But this rule never has been adopted in Massachusetts. And it seems not to have been applied in a late case in New York, in which the value at the port of departure, deducting the actual wear and tear, was held her contributory value. But in cases of jettison of goods, where tlie vessel arrives in safety, the rule adopted, both in England and generally in this coiintry, seems to be, to take the value at the end of the voyage. Where masts, sails, or cables, or other parts of the equipment of a ship, are lost, one third is OP THE LAW OP SHIPPING. 299 deducted from the cost of the new articles, and the remainder is contributed for. Tlie freight pending contributes, after de- ducting tlie expenses of earning it. But if only pro rata freight is earned, that only contributes. If no freight is event- xially earned, there is no contribution on account of it. In Massachusetts, and generally in the United States, one third is dediicted from the gross freight for seamen's wages and otlier expenses. But in New York, the rule seems to be to deduct two thirds. If a vessel is wrecked and the cargo transshipped, the contributory value of the freight is the excess of its amount over the amount paid the other vessel. The cargo, if the ves- sel arrives at the port of destination, contributes its net value at that place. But if a jettison takes place, and the vessel returns to the port of departure, or some neighboring port, then the invoice price is to be taken, or the market value at that place. In one case which occurred in Boston, a cargo of ice was shipped from Boston to Charleston, S. C. TJie vessel ran ashore on Cape Cod, the ice was thrown overboard to save her from destruction, and the voyage was broken up. As no freight was earned, no contribution was made on account of it. The value of the ice was taken as stated in the bill of lading, there' being no invoice. The court said, if the goods had arrived at the port of destination in safety, the owner would have realized the price there. He suffers just so much loss as was caused by the jettison, wliich could be there accurately estimated. And the freight would then be brought into the contribution. But when, as in- the case at bar, the voyage is broken up near the port of departure, and the vessel has not adopted an intei-mediate port as and for the port of destination, but has returned home, and the freight has not been saved by the jettison, the contribution to the general average loss should be between the ship and the cargo, upon the assumed value of the cargo at the port of departure. Tliis, we think, furnishes an exact rule ; whereas the adopting the value at the port of destination would, in such a case, be uncertain, — depending upon matters of opinion instead of matters of certainty. It is the master's duty to have an average adjustment made at the first port of delivery at which he arrives. And an ad- 300 THE LAWS OP BUSINESS FOB BUSINESS MEN. jiistment made there, and especially if this be a foreign port, is generally held to be conclusive upon all parties. For the pur- pose of this rule,' our States are foreign to each other ; as tlioy are indeed for most purposes under the Law of Admiralty, or the Law of Shipping. But a foreign adjustment might doubt- less be set aside or corrected, for fraud or gross error ; and our courts differ somewhat in the degree in which they regard it as conclusive. It is universally admitted, that the master has the right of refusing delivery of the goods, imtil the contribution due from them on general average is paid to him. That is, he cannot hold the whole cargo, if it belong to different consignees, until the whole average is paid ; but he may hold all that belongs to each consignee, until all that is due from that consignee is paid. And in this country the doctrine has been carried so far, that the master may retain property belonging to the United States until the average contribution due iipon it has been paid. As the purpose of average and contribution is to divide the loss proportionably over all the property saved by it, the whole amount which any one loses is not made up to him, but only so much as will make his loss the same percentage as every other party suffers. Thus, if there be four shippers, and each has on board $5,000, and the ship is worth (for the purpose of the adjustment) 115,000, and the freight 15,000, and all the goods of one shipper are thrown over; now the whole contributing interest is $40,000, and the loss, which is 15,000, is one eighth of this contributory interest. The shipper whose goods are jettisoned therefore loses one eighth of his goods, and the remaining seven eighths are made up to him, by each owner of property saved giving up one eighth. There are usually in every commercial place persons whose business it is to make up adjustments. As the losses usually consist of many items, some of which are general average and some rest on the different interests on which they fell, and as the contributory interests must all be enumerated, and the value of each ascertained according to the general principles of law, qualified, perhaps, by the local law or usage of the port, and then the average struck on all these items, it is obvious OF THE LAW OF SHIPPING. 301 that tliis miist be a calculation requiring great care and skill ; and as the adjustment affects materially persons who may not be present, but specially represented, — for all these reasons only tho§e who are known to be competent to the work should be employed to make this adjustment. The name given to such persons in Prance is dSpacheur, and this name is fre- quently used in other countries ; with us this work is generally done by insurance brokers. SECTION IX. OF SALVAGE. In the Law of Shipping and the usage of merchants, the word " salvage " has two quite different meanings. If a ship or cargo meets with disaster, and the larger part is destroyed or lost, and a part be saved, that which is saved is called the " sal- vage." Thus, if a ship be wrecked, and sold where she lies, because she cannot be got off, her materials, wood and metal, her spars, sails, cordage, boats, and everything else about her which has any value, constitute the " salvage." And all of this, or the proceeds of it if it be sold by the master, belong to the owner or to the insurer, accordingly as circumstances may indicate ; and this question will be considered in the chapter on the Law of Insurance. Besides this, which is the primary meaning of the word, sal- vage has quite another signification. By an ancient and uni- versal law, maritime property which has sustained maritime disaster, and is in danger of perishing, may be saved by any persons who can save it, whether they are or are not requested to do so by the owner or his agent. And the persons so sav- ing it acquire a right to compensation, and a lien or claim on the property saved for compensation. The persons saving the property are called " salvors " ; the amount paid to them is paid for saving the property, or, as it was called, for the " sal- vage," meaning at first by this word the act of saving it ; hut the habit of paying so much " for salvage " led to understand- ing by " salvage " the money paid. Then it was said, the 302 THE LAWS OP BUSINESS FOB BUSINESS MEN. money was paid as salvage. This is now the more common iise of the word. Tims a party bringing a saved vessel in de- mands " salvage," and estimates the salvage as so much ; and the owners are said to lose so much by salvage, or so much money is charged to salvage, and insurers are said to be liable for salvage, meaning in all these and similar cases the amount paid for saving, or for the act of salvage. This law is not only applicable to all maritime property, but is confined to that ; and • is wholly unknown in reference to property saved from destruction on land. Judge Story, in one of his works, intimates that he who finds and restores valuable property on land should be entitled to compensation for his labor or risk. Morally this may be so ; but no such claim was ever allowed in England or in this country, unless on a promise (expressed or implied by a request for the service) by the owner. Because this principle is wholly and exclusively maritime, no court but that of Admiralty acknowledges and enforces it. The way in which it is enforced is this. We have already said that salvors have a lien on the property saved for their compensation ; that is, they have possession of it, and have a right to keep possession of it until their claim be satisfied. For this purpose they bring it into the nearest port, and then make their claim of the owner or his agent, if they can find him, and he is within reach. If he cannot be found, or if he refuses what they think proper to demand, they employ coun- sel who are acquainted with the practice in Admiralty courts, who present to the court in the district where the property is a libel, as it is called in Admiralty law, setting forth the facts, and the demand for salvage. Thereupon the court takes pos- session of the property, and orders notice to the owners, if pos- sible. The owners thereupon appear, and either resist all the demand for salvage, on the ground that no services were per- formed which entitled the party to salvage, or, admitting the service, they go to trial to determine whether any salvage, and, if so, how much, shall be paid. On this question evidence and argument are heard, and the court then issues such decree as the case seems to require. Although services were rendered to the ship or cargo, or OF THE LAW OP SHIPPING. 303 both, it does not follow that they wore salvage services in the legal sense of the word. For certainly every person who helps another at sea does not thereby acquire a right to take possession of the property in reference to which his assistance was given, and carry it into port. To give this right, the property, whether ship or cargo, must have been, in the proper and rational sense of the term, saved ; that is, there must have been actual disaster and impending danger of destruction ; and from this danger the property must have been rescued by the exertions of the salvors, either alone, or working together with the original crew. It is to be noticed, however, that neither the master nor offi- cers nor sailors of the ship that is saved can be salvors or enti- tled to salvage. The policy of the law-merchant forbids tlie holding out such a reward for merely doing their duty. It considers that sailors might be induced to let the vessel get into danger, if they could expect a special reward for getting her out of it. Tliey are already bound by law to do all they possibly can do to save the ship and cargo under all circunt- stances. But courts of Admiralty have sometimes allowed gratuities to seamen, for extraordinary exertions and very meritorious conduct. A passenger may be a salvor of the ship he sails in, because he has no especial duty in regard to it. If the court of Admiralty find it to be a case for salvage, there are no positive and certain rules which determine how much shall be given, or in what proportions to the different salvors. In every case the court are governed by the circum- stances- of that case. It is, however, quite generally agreed, that if a ship or cargo be "entirely abandoned at sea, or, in maritime phrase, derelict, those who find it and take posses- sion of it, and bring it in, take one half of the property saved, for salvage. More than this is very seldom given ; but this has been done in a few extraordinary cases. If the property may not be entirely derelict or deserted, and all hope of recovering it by the original crew given up, then less than half is given by way of salvage. How much less de- pends on the circumstances. It may be very little, or nearly half. The court inquire how much time was lost by the sal- 304 THE LAWS OF BUSINESS FOE BUSINESS MEN. Tors, how much labor the saving of the property required, and, most of all, how much exposiire the salvors underwent, or how much danger they incurred. For it is an established rule, that, in addition to a fair compensation for time, labor, and loss of insurance (for which see the chapter on Insurance), the court will give a further sum by way of reward, and for the purpose of encouraging others to make similar exertions and incur similar perils to save valuable property. And in this point of view, all necessary exposure and danger are considered as entitled to liberal reward, If the court have not restored the property to its owners on their giving bonds with sureties to pay the salvage and costs, they order the property sold ; and they may do either of these things at any period of the proceedings. At the close, they decree the whole amount of salvage, and also direct particu- larly its distribution. A large part, usually about one fourth of the whole salvage, is allowed to the owners of the saving ship or ships ; another large part to her master, less parts to the officers, in propor- tion to their rank, and the residue is divided among the crew, with such discrimination between one and another as greater or less exertions or merit require. The trial is had, and the whole decree and this distribution of the salvage made, by the court alone, without a jury. But the statute of the United States, which gives our courts of Admi- ralty (which are exclusively United States courts, no State court having any Admiralty power) jurisdiction in Admiralty over our inland lakes and rivers, provides that disputed facts shall be tried by a jury, in most cases, at the request of either party. SECTION X. OF THE NAVIGATIOX OF THE SHIP. 1. Of the Pov^ers and Duties of the Master. — The master has the whole care and the supreme command of his vessel, and his duties are coequal with his authority. He must see to OP THE LAW OP SHIPPING. 305 everything tliat respects her condition ; inchiding her repair, supply, loading, navigation, and unloading. He is principally the ■ agent of the owner ; but is, to a certain extent, the agent of the shipper, and of the insurer, and of all who are interested in the property under his cliarge. Much of his authority as agent of the owner springs from necessity. He may even sell the ship, in a case of extreme necessity ; so he may make a bottomry bond which shall pledge her for a debt ; so he may charter her for a voyage or a term of time ; so he may raise money for repairs, or incur a debt therefor, and make his owners liable. All these, however, he can do only from necessity. If the owner be present, in person or by his agent, or is within easy access, the master has no power to do any of these things unless specially authorized. If he does them in the home port, the owner is liable only where by some act or words he ratifies or adopts the act of his master. If in a foreign port, even if the owner were there, he may be liable, on his master's contracts of this kind, to those who neither knew nor had the means of knowing that the mas- ter's power was superseded or qualified by the presence of the owner. The master being by the law-merchant the general agent of the owner of the ship, no one dealing witlx him can be prejudiced by any private or secret limitations to his au- thority by the owner. Beyond the ordinary extent of his power, which is limited to the care and navigation of the ship, he can go, as we have said, only from necessity. But this necessity must be greater to justify some acts than for others. Thus, he can sell the ship only in a case of extreme and urgent necessity ; that is, only when it seems in all reason impossible to save her, and a sale is the only way of preserving for the owners or insurers any part of her value. "We say " seems " ; for if such is the ap- pearance at the time, when all existing circumstances are care- fully considered and weighed, the sale is not voidi for want of authority, if some accident, or cause which could not be anticipated, as a sudden change in the wind or sea, enables the purchaser to save her easily. Several such cases have occurred. So, to justify him in pledging her by bottomry, there must 39 306 THE LAWS OP BUSINESS FOR BtJSINESS MEN. be a stringent and sufficient necessity ; but it may be far less than is required to authorize a sale. It is enough if the money is really needed for the safety of the ship, and cannot otherwise be raised, or not without great waste. So, to charter the ship, there must be a sufficient necessity, unless the master has express power to do this. But tjae necessity for this act may be only a merca.ntile necessity ; or, in other words, a certain and considerable mercantile expe- diency. So, to bind the owners to expense for repairs or supplies, there must also be a necessity for them. But here it is suffi- cient if the repairs or supplies are such as the condition of the vessel, and the safe and comfortable prosecution of the voyage, render proper. Where the master borrows money, and the lender sues the owner, great stress is sometimes laid upon the question whether the captain was obliged to pay the money down. But we do not see in principle any great difference between incurring a debt for ser\'ice or materials which the owner must pay, or incurring the same debt for money bor- ro.wed and applied to pay for the service or materials. So the master — unlike other agents, who have generally no power of delegation — may substitute another for himself, to discharge all his duties, and possess all his authority, if he is unable to discharge his own duties, becau.se, in that case, the safety of the ship and property calls for this substitution. Generally, the master has nothing to do with the cargo be- tween the lading and the delivery. But, if the necessity arises, he may sell the cargo, or a part of it, at an intermediate port, if he cannot carry it on or transmit it, and it must perish be- fore he can receive specific orders. So, he may sell it, or a part, or pledge (or hypothecate) it, by means of a respondentia bond, in order to raise money for the common benefit. A bond of respondentia is much the same thing as to the cargo, that a bottomry bond is as to the ship. Money is borrowed by it, at maritime interest, on maritime risk, the debt to be discharged by a loss of the goods. But it can be made by the master only on even a stronger necessity than that required for bottomry ; only when he can raise no money by bills on the owner, nor by a bottomry of the ship, nor by any other use of the prop- OP THE LAW OF SHIPPING. 307 erty or credit of the owner. Indeed, it seems that, when goods are sold by the master to repair the vessel, it is to be considered as in the nature of a forced loan, for which the owner of the vessel is liable to the shipper, whether the vessel arrive or not. The general remark may be made, that a master has no ordinary power, and can hardly derive any extraordinary power even from any necessity, except for those things which are fairly within the scope of his business as master, and during his employment as master. Beyond this, he has no agency or authority that is not expressly given him. The master has a lien on the freight-money for his disburse- ments and charges for the owner. The extent of this lien is not quite certain on the authorities. But in this country, we think, it seciires the whole amount due to him, for wages, primage, (which is a certain small charge or commission cus- tomarily allowed him,) or disbursements. And that he may hold the cargo even from the consignor or shipper, until his lien is discharged. The owner is liable also for the wrong-doings of the master ; but, we think, with the limitation which belongs generally to the liability of a principal for the torts of his agent, or of a master for the torts of his servant. That is, he is liable for any injury done by the master, while acting as the master of his ship. But not for the wrongful acts which he may do per- sonally, when he is not acting in his capacity of master, al- though he holds the ofBce at the time. Thus, if, through want of skill or care while navigating the ship, he runs another down, the owner is liable for the collision. But not if the master, when on shore, or even on his own deck, quarrels with a man, and beats him. Nor is the owner liable if the master embezzles goods which he takes on board to fill his own privi- lege, he to have all the freight and profit. Nor for injury to, or embezzlement of, goods put clandestinely on board, when the owner is on board and attending to the lading of the ship, and the shipper of the goods knows this, or has notice enough to put him on his guard. 2. Of Collision. — The general rvile in this country, in re-' spect to collision, is, that, if both parties be equally in fault, the 308 THE LAWS OF BUSINESS FOE BUSINESS MEN. loss is apportioned between them ; if neither party be in fault, the loss rests where it falls ; but if the fault be wholly, or substantially, on the one side, the other can recover full compensation. There are certain rules in regard to sailing, founded on the principle that the ship which can change its course to avoid collision with least inconvenience must do so ; and therefore that the ship that has a fair or leading wind shall give way to one on a wind, or go under her stern ; and it is said that, if vessels are approaching each other, both having the wind on the beam, or so far free tliat either may change its course in either direction, the vessel on the larboard tack must give way, and each pass to the right. The same rule governs vessels sailing on the wind, and approaching each other, when it is doubtful which is to the windward. But if the vessel on the larboard tack is so far to windward that, if both persist on their course, the other will strike her on the lee side, abaft the beam, or near the stern, in that case the vessel on the starboard tack shoiild give way, as she can do so with greater facility, and less loss of time and distance, than the other. Again, when ves- sels are crossing each other in opposite directions, and there is the least doubt of their going clear, the vessel on the starboard tack should persevere on her course, while that on the larboard tack should bear up, or keep away before the wind. It is also held that steam-vessels are regarded in the light of vessels navigating with a fair wind, and are always under obli- gations to do whatever a sailing vessel going free or with a fair wind would be required to do under similar circumstances. Their obligation extends still further, because they possess a power to avoid the collision not belonging to sailing vessels, even with a free wind, the master having the steamer under his command, both by altering the helm and by stopping or revers- ing the engines. As a general rule, therefore, when meeting a sailing vessel, whether close-hauled or with the wind free,* the latter has a right to keep her course, and it is the duty of the steamer to adopt such precautions as will avoid her. Vessels in tide-ways, or otherwise in danger of collision, should hang out lights, but there is no positive rule or usage requiring the master, always, in the night-time, to keep a light OF THE LAW OF SHIPPING. 309 exhibited on his vessel. In each case, wlictlier common pru- dence required of the plaintiffs to have a light, and whether the omission of it amounted to negligence, miist depend upon the darkness of the night, the number and situation of the vessels in the harbor, and all other circumstances connected with the transaction. This is a question of fact, within the province of the jury. All these rules should be observed, and neglect of them would go far to imply a want of care or skill. But none of these rules are in this country so positive as to bind masters or owners in all cases with the force of law. For any misdeed of the master, for which the owner is liable, this liability is limited in our own country, as well as in many others, to the vakie of the ship and freight. SECTION XI., or THE SEAMEN. The law makes no important distinction between the officers, or mates, as they are usually called, and the common sailors. Our statutes contain many provisions in behalf of the seamen, and in regulation of their rights and duties, although the con- tract between them and the ship-owner is in general one of hiring and service. The principal statutes on the subject are given in the Appendix. They relate principally to the follow- ing points : 1st, tlie shipping articles ; 2d, wages ; 3d, provis- ions and subsistence ; 4th, the seaworthiness of the ship ; 5th, the care of seamen in sickness ; 6th, the bringing them home from abroad ; 7th, regidation of punishment. First. Every master of a vessel is bound to have shipping articles, which articles every seaman on board must sign, and they must descrro e accurately the voyage, and the terms on which each seaman ships. Courts will protect seamen against uncertain or catching language, and against unusual and op- pressive stipulations. If a number of ports are mentioned, they are to be visited only in their geographical and commer- cial order, and not revisited unless the articles give the master 810 THE LAWS OP BUSINESS FOE BUSINESS MEN. a discretion. Admiralty courts enforce or disregard the stip-_ idations as they are fair and legal or otherwise, and exercise a liberal equity on this subject ; but courts of common law are more strictly bound by the letter of the contract. The articles are generally conclusive as to wages ; but accidental errors or omissions may be supplied or corrected by either party, by parol. Second. Wages are regulated as above stated, and also by limiting the right to demand payment in a foreign port to one third the amount then due, unless it be otherwise stipulated. Seamen have a lien on the ship and on the freight for their wages, which is enforceable in Admiralty. By the ancient rule, tliat freight is the mother of wages, any accident or mis- fortune which makes it impossible for the ship to earn its freight destroys the claim of the sailors for wages. The rear son is, to hold out to the seamen the strongest possible induce- ment to enable the ship to carry the goods and earn the freight. Third. Provisions of due quality and quantity must be fur- nished by the owner, and double wages are giveu to the sea- men when on short allowance, \mless the necessity be caused by some peril of the sea, or other accident of the voyage. The master may at any time put them on a fair and proper allow- ance to prevent waste. Fourth. As to the seaworthiness of the vessel, our statutes provide that it may be inquired into at home or abroad, by a regular survey, on complaint of the mate and a majority of the seamen. But this very seldom occurs in practice. If seamen, after being shipped, refuse to proceed upon their voy- age, and are complained of and arrested, the court will inquire into the condition of the vessel, and if the complaint of the seamen is justified, in a greater or less degree, will discharge them, or mitigate or reduce their punishment. Fifth. As to sickness, our statutes requir# that every ship shall have a proper medicine-chest on board. Moreover, twenty cents a month are deducted from the wages of every seaman to make up a fund for the maintenance of marine hos- pitals, to which every sick seaman may repair without charge. In addition to this the general law-merchant requires every OF THE LAW OF SHIPPING. 311 ship-owner or master to provide suitable medicine, medical treatment, and care, lor every seaman who becomes sick, wounded, or maimed, in the service of the ship, at home or abroad, at sea or on shore ; unless this is caused by "the mis- conduct of the seaman himself. The right to these things extends to the officers of the ship, and probably to the master. Sixth. The right of the seaman to be brought back to his own home is very jealously guarded by our laws. The mas- ter should always present his shipping articles to the consul or commercial agent of the United States, at every foreign port which he visits, but does not seem to be required by law to do this unless the consul desires it. He must, however, present them to the first boarding officer on his arrival at a home port. And if, upon an arrival at a home port from a foreign voyage, it appears that any of the seamen are missing, the master must account for their absence. If he discharge a seaman abroad with his consent, he must pay to the Ameri- can consul three months' wages, of which the consul gives two to the seaman, and remits one to the treasury of the United States to form a fund for bringing home seamen from abroad. This obligation does not apply where the seaman is discharged because the voyage is necessarily broken up by a wreck, or similar misfortune. But proper measures must be taken to repair the ship if possible, or to obtain her restoration, if captured. And the seamen may hSld on for a reasonable time for this purpose, and if discharged before, may claim the extra wages. Our consuls and commercial agents may authorize the dis- charge of a seaman abroad for his gross misconduct, and he then has no claim for the extra wages. On the other hand, if he be treated cruelly, or if the ship be unseaworthy by her own fault, or if the master violate the shipping articles, the consul or commercial agent may direct the discharge of the seaman ; and he then has a right to these extra wages, and this even if the seaman had deserted the ship by reason of such cruelty. They may also send our seamen home in American ships, which are bound to bring them for a compensation not to ex- ceed ten dollars each, and the seamen so sent must work and obey as if originally shipped. It is of great importance, that 312 THE LAWS OP BUSINESS FOE BUSINESS MEN. the powers and duties of our consuls abroad should be dis- tinctly defined and well known. And Congress ■ has recently enacted an excellent statute on this subject. If a master discharges a seaman in a foreign port, he is liable to a fine of five hundred dollars, or six months' impris- onment. And a seaman may recover full indemnity or com- pensation for his loss of time, or expenses incurred by reason of such discharge. Seventh. As to the regulation of punishment, flogging has been abolished and prohibited by law. Flogging means the use of the cat, or a similar instrument, but not necessarily blows of the hand, or a stick or a rope. Desertion, in maritime law, is distinguished from absence without leave, by the intention not to I'eturn. This intention is inferred from a refusal to return. If he returns and is received, this is a condonation (or forgiving) of the offence, and is a waiver of the forfeiture. If he desert before the voyage begins, he forfeits the advanced wages, and as much more ; but he may be apprehended by a warrant of a justice, and forcibly compelled to go on board, and this is a waiver of the forfeiture. By desertion on the voyage, he forfeits all his wages and all his property on board the ship, and is liable to the owner for all damages sustained in hii'ing another seaman in his place. Desertion, under the statute of the United States on this subject, seems to be a continiied absence from the ship for more than forty-eight hours, without leave ; and there must be an entry in the log-book of the time and circumstances. But any desertion or absence without leave, at a time when the owner has a right to the seaman's service, is an offence by the law-merchant, giving the owner a right to full indemnity. SECTION XII. OF PILOTS. An act of Congress authorizes the several States to make their own pilotage laws ; and questions under these laws are cognizable in the State courts. No one can act as pilot, and OF THE LAW OP SHIPPING. 313 claim the compensatio'n allowed by law for the service, unless duly appointed. And he should always have with him his commission, which should always designate the largest vessel he may pilot, or that which draws the most water. If a pilot offers himself to a ship that has no pilot, and that is entering or leaving a hasfcor and has not already reached certain geo- graphical limits, the ship must pay him pilotage fees, whether his services are accepted or not. As soon as the pilot stands on deck, he has control of the ship. But it remains the mas- ter's duty and power, in case of obvious and certain disability, or dangerous ignorance or error, to disobey the pilot, and dis- possess him of his authority ; but the master should interfere with the pilot only in extreme cases. If a ship neglect to take a pilot when it should and can do so, the owners will bo an- swerable in damages to shippers or others for any loss which may be caused by such neglect or refusal. Pilots are them- selves answerable for any damage resulting from their own negligence or default, and have been held strictly to this lia- bility. The'owner is also liable, on general principles, for the default of the pilot, who is his servant. SECTION XIII. OF MATEKIAL MEN. Marituie law calls by this name all persons employed to repair a ship or furnish her supplies. Such persons, and in- dteed all who woi'k upon or about her, as stevedores, who are persons employed to load or unload a vessel, have a lien on the ship for their charges. There is, however, this important distinction. Material men, by Admiralty law, have a lien only on foreign ships, and not on domestic ships. Biit many of our States have by statute given this lien to material men on all ships, without distinction ; as in New York, Pennsylvania, Massachusetts, Maine, Illinois, Indiana, Missouri, Alabama,' and Michigan; and in Louisiana the same lien exists under the general Spanish law. It has been held, that such a lien extends beyond mere pe- 40 314 THE LAWS OF BUSINESS FOB BUSINESS MEN, pairs, — certainly to alterations, and perhaps to reconstruc- tion, — but not to original building, unless the statute in- cludes ship-building. A laborer, employed in general work by a shipwright or mechanic, and by him sometimes employed on the vessel and sometimes elsewhere, gets no lien on the vessel for that part of the labor performed about i^. These statute liens take precedence of the claims of all other creditors. They may be enforced either in the courts of the State, or iu the Admiralty court of the district in which the vessel is situ- ated. It has been said in previous pages, that our States are for- eign to each other for most purposes under the law of Admi- ralty ; and they are so as to the lien of- material men. There- fore, in States in which there is no statiite on the subject, material men would have a lien for siipplies or repairs for a vessel belonging to any other of our States, but not for a vessel belonging to the State in which the supplies were furnished or the repairs were made. OP MAEINE INSUBANCE. 315 CHAPTER XXI. OP MAEINE INSURANCE. SECTION I. HOW THE CONTRACT OP INSURANCE IS MADE. At tlie present day Insurance is seldom made by individuals. Formerly, this was the universal custom in our commercial cities. Afterwards, companies were incorporated for the pur- pose of making insurance on ships and their cargoes ; and the manifold advantages of this method have caused it to supersede the other. The contract of insurance hinds the insurer to indemnify the insured against loss or injury to certain property or interests which it specifies, from certain perils which it also specifies. The consideration for this obligation on the part of the insurer is the premium paid to the insurer, or promised to be paid to him, by the insured. The instrument in which this contract is expressed is called a Policy of Insurance. But no instrument is essential to the validity of the contract ; for if the proposals of the insured are written in the usual way in the proposal book of the insured, and signed by their officer with the word " done " or " accept- ed," or in any usual way to indicate that the bargain is made, it is valid, although no policy be delivered ; and it would be construed as an insurance upon the terms expressed in the pol- icy commonly used by that company. We think a contract of insurance which was merely oral, if otherwise unobjectionable, would be valid. But on this subject there is a diversity of opinion.' "We suppose the law to have been correctly stated in a case which occurred recently before the Circuit Court of the United States, sitting in Boston. A bill in eqiiity was brought by the complainants to compel the specific performance of a contract for re-insurance on The Great Republic. The agent 316 THE LAWS OP BUSINESS FOE BUSINESS MEN. of the plaintiffs went to tlie office of the defendants on the 24th of December. The president not being in, he filled up a blank proposal in the usual form. He called again that day and saw the president, who offered to make the insurance at a certain rate. The agent said he would consult with his principal, to which the president assented ; and on Monday, the 26th, re- ceiving an answer accepting, he saw the president and told him that the offer was accepted. The rate, as agreed on, was in- serted in the proposal. That night the vessel was destroyed by fire. The proposal was in the usual form, with "Binding," and a blank left for the president's name. This blank had not been filled up. The court held that the contract was complete as soon as the proposal was accepted. If proposals are made, on either side, by letter, and accepted by the other party, also by letter, this is a valid contract of insurance as soon as the party accepting has mailed his letter to that effect, if he have not previously received notice of a withdrawal of the proposals. The form of the policy is generally that which has been used for many years both in England and in this country, with such changes and modifications only as will make it express more accurately the bargain between the parties. And for this pur- pose it may be and is varied at pleasure. It is subscribed only by the insurers ; but binds both parties. The insured are bound for the premium, although no note is given. The date may be controlled by evidence showing when it was made and delivered ; but if delivered after its date, it takes effect at and from its date, if that were the intention of the parties. It may be effected on application of an agent of the insured, if he have full aiithority for this purpose ; which need not be in writing. But a mere general authority, even if it related to commercial matters, or to a ship itself, as that of a " ship's husband," is not sufficient. A party may be insured who is not named, if " for "whom it may concern," or words of equivalent import, are used. But a party who seeks to come in under such a clause must show that he was interested in the property insured at the time the insurance was made, and that he was in the contemplation of OP MARINE INSURANCE. 317 the party asking insurance. The phrase " on account of owners at the time of loss," or an equivalent phrase, will bring in those who were intended, if they owned the property when the loss occurred, although there were assignments and trans- fers between the time of insurance and the loss. Bach person whose several interest is actually insured by any such general phrase, may demand or sue in his own name. If the nominal insured is described as "agent" generally, this is equivalent to " for aH whom it may concern." And an insurance " for " will be read as for all whom it may concern, if that were intended. So, if the designation of the insured be common to many persons, the intention of the parties must decide for whom it is made. Whatever is written on any part of the sheet containing the policy, or even on a separate paper, if referred to or signed by the parties as a part of the policy, is thereby made a part of it. But things said by either party wliile making their, bargain, or written on other paper and not so referred to or signed, form no part of it. The policy may expressly provide that its terms shall be made definite, especially as to the property insured, by subsequent indorse- ments or additions. Thus, it is very common to insure prop- erty to a certain amount, " from A. to B., on board ship or ships, as shall hereafter be indorsed on this policy." And when this or any equivalent phrase is used, the insured causes the insurers to indorse on the policy the name of the vessel, and the amount shipped, as soon as he has notice of it. Alterations may be made at any time by consent. But a material alteration by the insured, without the consent of the insurer, discharges the insurer ; although it was made hon- estly, in the hope or belief of having his consent. A court of equity will correct a material mistake of fact. A policy may be assigned, and the assignee may sue in tlie name of the assignor. If the assignment be assented to by the insurer, this does not always make a contract between him and the assignee, on which he may sue in his own name. If the loss is made by the policy payable " to order " or " to bearer," it will then be negotiable by indorsement or delivery, but it is not certain that the transferree can even then sue in his own name. In New York and some other States, not only these 318 THE LAWS OP BUSINESS FOK BUSINESS MEN. assignees, but all assignees of debts or contracts, may sue in their own names. If the insured transfers the property, unaccompanied by a transfer of the policy with consent of the insured, this dis- charges the policy, unless it was expressly made for the ben- efit of whoever should be owner at the time of the loss, as before stated. There is usually a clause to the effect that the policy is- void if assigned without the consent of the insurers. But this does not apply to an assignment by force of law, as in a case of insolvency, or in a case of death. And after a loss has occurred, the claim against the insurers is always assign- able like any other debt. And a seller who remains in posses- sion of the property as trustee for the purchaser, or a mort- gagor retaining possession, may retain the policy and preserve his rights. SECTION II. OF THE INTEREST OP THE INSURED. The contract of Insurance is a contract of indemnity for loss. The insured must therefore be interested in the prop- erty at the time of the loss. The value to be paid for may be agreed upon beforehand, and expressed in the policy, which is then called a valued policy ; or left to be ascertained by proper evidence, and the policy is then called an open policy. This valuation, if in good faith, is binding on both parties, even if it be very high indeed. But a wager policy, that is, one without interest, is void ; and although there be some in- terest, the valuation may still be so excessive as to be open to the objection that the interest is a mere cover, and that the contract is void because only one of wager. So the valuation is void if fraudulent in any respect ; as if it cover an illegal interest or peril. The insured may apply his valuation to the whole property, or to that part of it which he wishes to insure ; thus he may cause himself to be insured for one half of a cargo, the whole of which is valued at $20,000, or for one half, which half is OP MARINE INSURANCE. 319 valued at 120,000 ; and if the policy says, " Insured |15,000 on half the ship Scipio (or on her cargo), valued at $20,000," whether it is meant that the whole ship (or cargo) is val- ued at $20,000, or the half only that is insured, will be deter- mined by a reasonable construction of the language used. If he owns the whole, the valuation, in general, will be held to apply to the whole ; and only to a part if he owns only a part. He may value one thing insured, and not another ; or may value the same thing in one policy and not in another, and then the valuation does not affect the policy which does not contain it. If only a part of the goods included in the valua- tion are on board and at risk, it applies to them in due propor- tion to their value. A valuation of an outward cargo will, generally, be taken as a valuation of a return cargo, substituted for the other by purchase and covered by the same policy. And a valuation will cover the insured's whole interest in the thing valued, in- cluding the premium, unless a different purpose is expressed or indicated. ♦ A valuation of freight applies to the freight of the whole cargo ; and if a part only be at risk, it applies in proportion. And it applies either to the whole voyage, or to freight earned by voyages which form parts of the whole, as may be intended and expressed. If profits are insured as such, they arc generally valued, but may be insured by an open policy. If they are valued, the loss of the goods on which the profits were to have been made implies in this country a loss, of the valued profits, witliout proof that there woiild have been any profit wliatever ; it seems to be necessary in England to show that there would have been some profit, and then the valuation attaches. It is very common to insure profits, in fact, witiiout saying anything about them, by a valuation of the goods sufficiently high to include all the profits that can be made upon them. In an open policy, where the value insiired is to be deter- mined by evidence, the value of the property — whether ship or goods — which is insured, is its value when the insurance took effect, including the premium of insurance ; as the law of 320 THE LAWS OF BUSINESS FOR BUSINESS MEN. insurance intends indemnifying the assured, as accurately' as may be, for all his loss. If a ship be insured, its value through- out the insurance is the same as at the beginning, without allowance for the effect of time upon it. And all its appur- tenances, in a mercantile sense of this phrase, enter into this Yalue. While the value of the property does not vary with time, the interest of the insured at the time of the loss (which may be the whole, or half, or any other part) is that on which he founds his claim. Thus, if an owner of a ship is insured 120,000 on ship A. B., valued at 130,000, and afterwards sells half of the ship, and it is subsequently lost, he recovers only $10,000. But if he owned half originally, and insured that, and before the loss acquired the other half, he recovers only the half insured. If the insurance is on goods on successive passages, and at the close of one passage the goods are sold at a profit, and the whole proceeds invested in the cargo put on board, this in- creased value enters into the value. Generally, the value of goods is their invoice price, with all those charges, commis- sions, wages, &c. which enter into the cost to the owner, when the risk commences. The drawback is not deducted ; and the expenses incurred after the risk begins, as for freight, &c., are not included. And the rate of exchange at the beginning of the risk is taken. SECTION III. OF THE INTEREST WHICH MAY BE INSURED. A MERE possibility or expectation cannot be insured ; but any actual interest may be. If one has contracted to buy goods, he may insure them, and will recover if the property be in him at the time of the loss ; for if they are then destroyed, it will be his loss. (For what is meant by the property being in him, see the chapter on Sales.) If one has taken on himself certain risks, or agreed to indem- nify another for them, he may insure himself against the same OP MARINE INSURANCE. 321 risks. The policy may express and define tlie interest in such a way that any change in the nature of it will discharge the insurance. If it is not so defined and declared, a change, as from the interest of an owner to that of a mortgagor, or of a mortgagee, will not defeat the policy. A mere indebtedness to a party on account of property gives the creditor no insurable interest ; thus, one who repaired a house or a ship cannot insure the house or ship merely because the owner owes him ; but if the creditor has a lien on the property, this is an insurable interest. And, generally, every bailee or party in possession of goods, with a lien on them, may insure them. And a lender on bottomry or respondentia may insure the ship or goods. And any persons who have pos- session of property, or a right to possession, and may legally make a profit out of it, as factors on commission, consignees, or carriers, may insure their interest. If a mortgagee be insured, and recovers from the insurers, he, generally at least, transfers to them the security for his debt, or accounts with them for its value ; because, to the ex- tent of that security, he has met with no loss, and, if he did not transfer it, would recover his money twice ; but a recent decis- ion in Massachusetts throws some doubt on this obligation of the insured to transfer the security for the debt to the in- surers. A policy usually adds to the description of the property, " lost or not lost." This phrase makes the policy retrospec- tive ; and attaches it to tlie property if that existed when, by the terms of the policy, the insurance began, whether tliis were for a voyage or for a certain time, although it had ceased to exist when the policy was made. In a case in Boston, there was an insurance on the cargo of the ship Tarquin, " lost or not lost, now on a whaling voyage." The court said : " To construe this policy so as to make the risk commence on the day of its date, it would be necessary to limit the word ' voy- age ' to a very small part of the voyage, without any words expressing such limitation, and would render the words ' lost or not lost ■ wholly inoperative. Wc are of opinion that this policy would attach upon the oil from the time the vessel first., began to take whales in the course of this voyage." 41 322 THE LAWS OP BUSINESS FOB BUSINESS MEN. An interest which was originally valid and sufficient, cannot bo defeated by that which threatens, but does not complete, an actual divestment of the interest in property ; therefore, not by attachment, or an execution for debt; nor by liability to seizure by government for forfeiture ; nor a right in the seller to stop the goods in transitu ; nor capture ; because after all these the property may remain in or return to the insured. But sale on execution, actual seizure by government and for- feiture, stoppage in transitu, or condemnation by court as lawful prize, divest the property, and therefore discharge the insurance. The insurance never attaches if the interest is illegal origi- nally ; and it is discharged if the interest becomes illegal sub- sequently to the insurance, or if an illegal wse. of the subject- niatter of the insurance is intended. And any act is illegal which is prohibited by law, or made subject to a penalty. The effect would be. the same if the policy opposes distinctly the principles and the purposes of law, as wagering policies do. Mariners, or mates, are not permitted by the law-merchant to insure their wages, but may insure goods on board, boiight with their wages ; and one legally interested in* the wages of a mariner may insure • them ; as one to whom they are as- signed by order or otherwise. A master may insure his wages, commissions, or any profit he may make out of his privilege. An unexecuted intention of illegality, if not distinctly acted upon, will not defeat a policy ; nor a remote and incidental illegality ; as smuggling stores on board, or not having on board the provisions required by law ; nor a change from le- gality to illegality, which cannot be proved or supposed to be known to the insured. And upon these questions, the court, if the case be balanced, will incline to the side of legality. A cargo may be insiired which is itself lawful, but was purchased with the proceeds of an illegal voyage. If a severable part of a cargo or a voyage is legal, it may be insiired, by itself, although other parts are illegal. But if a part of the whole property insured together is illegal, this avoids the whole policy. A compliance with foreign registry laws certainly is not necessary, and with our own probably is not, to sustain the insurance of an actual owner in good faith. OP MARINE INSURANCE. 323 By the la-w of nations, goods contraband of war are • for- feited if captured by a belligerent against whom they might be used. Goods are contraband ■which are munitions of war, or are designed or capable of supporting an enemy in carrying on war, — as even food, if sent to a place which an enemy seeks to reduce by starvation ; and so are any goods sent to a block- aded port. No contraband trade is, strictly speaking, illegal, in the neutral country which carries it on ; that is, the coiu-ts of that country will not declare it illegal, or annul contracts which have this trade in view for illegality. But if the owners of a ship contemplate contraband trade, either in the place they send her to, or in the goods they put on board, this is an ad- ditional risk, and therefore it must be communicated to the insurers, or the policy is void. Freight is a conunon subject of insurance. In common conversation, this word means sometimes the cargo carried, and sometimes the earnings of the ship by carrying the cargo. The latter is the meaning in mercantile law, and especially in the law of insiirance. It includes in insurance law the money to be paid to the owner of a ship by the shipper of goods, and the earnings of an owner by carrying his own goods, and the amount to be paid to him by the hirer of his ship, and the profits of such hirer, either by carrying his own goods, or by carrying, for pay, the goods of others. An interest in freight begins as soon as the voyage is deter- mined upon, and the ship is actually ready for sea, and goods are on board, or are ready to be put on board, or are promised to be put on board by a contract which binds the owner of the goods to put them on board, for that voyage. If a ship is insured on a voyage which is to consist of many passages, and sail without cargo, but a cargo is ready for her, or contracted for her at the first port she is to reach and sail from, the owner has an insurable interest in the freight from the day on which he sails from his home port. If one makes advances towards the freight he is to pay, and this is to be repaid to him by the ship-owner if the freight is not earned, the advancer has no insurable interest in what he advances ; but if he is to lose it, without I'cpayment, if the ship be lost or the freight not earned, he has an insurable in- terest. 324 THE LAWS OF BUSINESS FOR BUSINESS MEN. SECTION IV. OF PRIOR INSURAKCE. OuE marine policies generally provide for this by a clause, to the effect, that the insurer shall be liable only for so much of the property as a prior insurance shall not cover. The sec- ond covers what the first leaves, the third what the second leaves, and so on ; and as soon as the whole value of the prop- erty is covered, the remainder of that policy, and the subse- quent policies, have no effect. This priority relates not merely to the date of the instrument, but to the actual time of insur- ance. Sometimes the policy provides that the insured shall recover only the same proportion of the whole loss which the amount insured in that policy is of the whole amount insured by all the policies on the whole property. When a prior policy is deducted, from this deduction is taken the amount of the premium paid for the insurance. It sometimes happens that the property is increased in value, or in the valuation, after the first insurance is effected ; but in settling with a second, only the actual amount covered by the first is deducted. A subsequent policy may be suspended by the fact that prior policies cover all the property, and when any of these prior policies is exhausted, the next policy begins to take effect. If all once attach, and afterwards the property is diminished, we should prefer the rule that all the policies should be dimin- ished pro rata. It has been held, however, that the rule as to prior policies operates, and the last policy is discharged or les- sened by the whole amount of the diminution. Where no provision is made in the policies as to priority, all are insurers alike, but all together only of the whole value at risk. The insured, therefore, may recover of any one insurer at his election, and this insurer may compel the others to con- tribute to him in proportion to their respective insurances. Insurances may be simultaneous, and then no clause as to prior policies has any application, and all the insurances are liable pro rata. They are simultaneous, if said to be so in the - OP MARINE INSURANCE. 325 policies ; or if made on the same day, and bearing the same date, and there is no evidence as to wliich was, in fact, first made. SECTION V. OF DOUBLE INSURANCE AND REINSUKANCE. Ip there be double insurance, either simultaneously or by successive policies in which priority of insurance is not pro- vided for, we have seen that all are insurers, and liable each in proportion ; thus, if all the policies cover twice the value of the property insiu'ed, each policy is valid for one half of its own amount. But there is no double insurance, unless all the policies in- sure the very same subject-matter, and, taken together, exceed its whole value. Many insurances of the same subject-matter, for the benefit of different parties, do not constitute double insurance. Eeinsurance is lawful ; for whoever insures another has assumed a risk against whicli he may cause himself to be in- sured. This is often done by companies who wish to close their accounts, to lessen their risks, or get rid of some especial risk. SECTION VI. OF 'THE MEMORANDUM. This word is retained, because the English policies have attached to them a note or memorandum providing that the insurers shall not be liable for any loss upon certain articled therein enumerated, (and thence called memorandum articles,) unless it be total, or greater than a certain percentage. Ii^our policies, the same thing is provided for, biit usually by a clause contained in the body of the policy. The general purpose is to guard against a liability for injuries which may very probably 326 THE LAWS OF BUSINESS FOB BUSINESS MEN. not arise from maritime peril, because the articles are in them- selves perishable ; but which injuries it might not be easy to refer to the precise causes which produced them. Thus, grain, fish, hides, fruit, &c. are very liable to be somewhat injiired on the voyage, and if there has been bad weather, or a greater leak than usual, it is impossible to say whether these goods have lost value from their own decay, or from a pei'il of the sea. It is therefore provided, that the insurers shall not pay unless there be a total loss by a sea peril, which ends all ques- tion, or so large a loss as ten or twenty per cent ; for this could hardly happen without visible and certain cause. And then if the cause were shown to be not a peril insured against, the insurers would not be liable. The articles excepted, and the percentage of loss necessary to charge the insurers, vary very much at different times and in different States. SECTION VII. OF WARRANTIES. A STIPULATION or agreement in the policy, that a certain thing shall be or shall not be, is a warranty. And every war- ranty must be, if not strictly, at least accurately complied with. Nor is it an excuse that the thing is not material ; or that the breach was not intended, or not known ; or that it was caused by an agent of the insured. A warranty is equally effectual if written upon a separate paper, but referred to in the policy itself as a warranty. And the direct assertion or allegation of a fact may constitute a warranty. If the breach of the warranty exists at the commencement of the risk, it avoids the whole policy, although the warranty was complied with afterwards and before a loss ; and although all other risks were distinct from that to which the warranty related ; and even if the breach was caused by one of the risks against which •there was insurance. Thus, if a vessel is war- ranted " coppered," and she is not coppered, and is lost by the ignition of cotton in the hold. Here, the breach of the war- OF MARINE INSUKANCE. 327 ranty, that is, the -want of tlie copper, has nothing to do with the loss ; but the iiisurei-s would be discharged. If the breach occur after the risk begins, and before a loss, and is not caused or continued by the fault of the insured, the insiirers are held ; as they are if a compliance with the war- ranty becomes illegal after the policy attaches, and it is there- fore broken. ' The usual subjects of express warranty are, first, the owner- ship of the property, which is chiefly important as it secures the neutrality, or freedom from war risks, of the property in- sured. The neutrality is sometimes expressly warranted ; and this warranty is not broken, if a part of the cargo that is not insured is belligerent. But it is broken if a neutral has the legal title, but only in trust for a belligerent. The neu- trality of the ship and of the cargo must be proved by the ship's having on board all the usual and regular documents. False papers may, however, be carried for commercial pur- poses, either when leave is given by the insurers, or when it is permitted by a known and established usage. If neutrality is warranted, it must be maintained by a strict adherence to all the rules and usages of a neutral trade or employment. Without warranty, every neiitral ship is bound to respect a blockade which legally exists by reason of the presence of an armed force sufficient to preserve it, and of which the neutral has knowledge The second most common express warranty is that of the time of the ship's sailing. She sails when she weiglis anchor or casts off her fastenings, and gets tmder way, — if she be then ready for sea and intended for sea, — although stopped imme- diately after, or driven back. But however ready and intended, if she is stopped before she gets under way, this is a breach of the warranty of sailing. Nor is it complied with by leaving a place to return to it immediately ; or by going from one port of the coast or island, which she is warranted to leave, to another. If the ship is warranted " in stich a harbor or port," or " where the ship now is," this means at the time of the insurance. And " warranted in port " means the port of in^ance, unless an- other port is expressed or distinctly indicate Fa 328 THE LAWS OP BUSINESS FOR BUSINESS MEN. '" " SECTION VIII. OP IMPLIKD WAKKANTIES. The most important of these warranties — which the law makes for the parties without their saying anything about them, althougli they may, if tliey please, make them for them- selves — is that of seaworthiness. By this is meant, that every person who asks to be insured upon his ship, by the mere force and operation of law, warrants that she is, in every respijct, — hull, sails, rigging, officers, crew, provisions, im- plements, papers, and the like, — competent to enter upon and prosecute that voyage at the time proposed, and encounter safely the common dangers of the sea. If this warranty be' not complied with, the policy does not attach, whether the breach be known or not, imlcss there is some peculiar clause in the policy waiving this objection. If the ship be seaworthy and the policy attaches, no subse- quent breach discharges the insurers from their liability for a loss previous to the breach. Even if it does not attach at the beginning of the voyage, if the unseawortliiness be capable of prompt and effectual remedy, and be soon and entirely reme- died, the policy may then attach. Especially if it could be considered as attaching in the port, and then as suspended only by the sailing in unseaworthy condition, and then reviv- ing, or re-attaching, on repair. The true rule should be, that if unseaworthiness prevents the policy from attaching at the proper commencement of the risk, the contract becomes a nullity. If she becomes unseaworthy in the course of the voyage, from a peril insufficient to produce it in a sound vessel, this may be evidence of inherent weakness and original unseawor- thiness; and then the policy never attached. But if origi- nally seaworthy, and by any accident made otherwise, the policy continues to attach until she can be restored to a sea- worthy conditio^^y reasonable endeavors. And the general rule is, that she must be so restored as soon as she can be. It is the duty of the master to repair her as soon as he can ; by the OP MARINE INSURANCE. 329 aid of another ship if tliat may be, but otherwise not to keep her at sea if she can readily make a port where she can be made seawortliy ; and not to leave that port until she is sea- worthy. The neglect of the master would not gperally dis- charge the insurers, but it is the rule that a ship must not leave a port in an unseaworthy condition, if she could there be made seaworthy ; if she does, the insurers are no longer held. But their liability may be, not destroyed, but only sus- pended, if the seaworthiness be cured at the next port, espe- cially if that be not a distant port. Thus, if a ship loses her best anchor, and goes into a port where she may get one, but leaves it without an anchor because the master thinks the an- chor costs too much there, and he will buy one at the next port, she is unseaworthy as soon as she goes to sea, and the insurance is suspended ; but if as soon as she arrives at the next port ■ she gets an anchor, the unseaworthiness is cured, and the policy revives. For a loss happening while their lia- bility is suspended, we should say, they are not liable, whether the loss was occasioned by that unseaworthiness or not. But there are some who hold that the insurers are liable for a loss happening during an occasional unseaworthiness which could have been repaired, unless the loss arise from that unseawor- thiness. There cannot possibly be a definite and universal standard for seaworthiness. The ship must be fit for her voyage or for her place. But a coasting schooner needs one kind of fi.tness, a freighting ship to Europe another, a whaling ship another, a ship insured only while in port another. So as to the crew, or provisions, or papers, or a pilot, or certain furniture, as a chronometer or the like ; or the kind of rigging or sails. In all these respects, much depends upon the existing and estab- lished usage. There is, perhaps, no better test than this ; the ship must have all those things, and in such quantity and of such quality as the law requires, provided there is any positive rule of law affecting them ; and otherwise such as woiild be deemed requisite according to the common consent and usage of persans engaged in that trade. And the reason for this rule is, that this is exactly what the insurers have a right to expect, and if the insured intend anything less, or the insurers 42 330 THE LAWS OP BUSINESS FOR BUSINESS MEN. desire anything more, it should be the subject of special bar- gain. If a policy be intended to attach when a ship is at sea, — as, for example, upon a whaler tliat has been out a year or more, — we should say the same principle would apply, and ought to be sufficient as a rule of law, although it might sometimes involve difficult questions of fact. That is, we think the ship must be seaworthy, in that sense and in that way in which a ship of her declared age, size, employment, and character, after being at sea for that time, under ordinary circumstances, ought to be in, and may be expected to be in, by all concerned. It seems to be admitted that the standard of seaworthiness is to be found from the iisage and understanding of merchants, at the place where the ship belongs, and not at that where the ship is in- sured. If the question arises on a time policy, whether a ship must be at the beginning seaworthy, and in such condition that she will remain so unless some accident intervene during the whole of the period, we should answer, she must be seaworthy in the beginning, only in the sense in which her then place and con- dition require ; as, if in port, seaworthy for that ; if just going to sea, seaworthy for that ; if at sea, seaworthy for that, And then she must be kept in a seaworthy state, which means fit to encounter the perils of any service she is put to, from time to time, during the whole period. And if at any time during that period she is unseawortliy for her then place and the work, through the fault of the insured or his agents, and a loss occurs by reason of such unseaworthiness, the insurers will not be liable therefor ; and perhaps not if a loss occurs from any cause during such unseaworthiness. There are otlier implied warranties. One of these is, that the insured shall deal honestly with the insurer, and make a distinct and true statement of all material circumstances affect- ing the risk. Another is, that the ship shall pursue the usual course of her voyage, without deviation from it, or the un- necessary encounter of unusual risks. But these will be con- sidered in subsequent sections. • OF MARINE INSURANCE. 331 SECTION IX. OF KEPKESENTATION AND CONCEALMENT. If there be an affirmation or denial of any fact, or an allega- tion which would lead the mind to that conclusion, whether made orally or in writing, or by exhibition of any written or printed paper, or by a mere inference from the words of the policy, before the making of the policy, or at the making, and the same be false, and tend to procure for him wlio makes it the bargain, or some advantage in the bargain, it is a misrepre- sentation. And it is the same thing, whether it refers to a subject concerning which some representations were necessary, or otlierwise. Concealment is the suppression of a fact not known to the other party, referring to the pending bargain, and material thereto ; and the effect of it is not removed by a result which shows that the circumstances to which it refers do not enter into the risk. A misrepresentation or a concealment discharges the in- surers. To have this effect, it must continue until the risk begins, and then be material. It is no defence, that it arose from inadvertence or misappre- hension, because the legal obligation of a full and true state- ment is absolute ; nor that the insurers were not influenced by it, if it were wilfully made with intention to deceive. If it be in its nature temporary, and begins after the risk begins, and ends before a loss happens, the insurers are not discharged. And if it relate to an entirely several subject-mair ter of insurance, as the goods only, and has no effect upon the risk as to the rest, as the ship, for example, it discharges the insurers only as to that part. Ignorance is never an excuse, if it be wilful and intentional. If one says only he believes so and so, the fact of his belief in good faith is sufficient for him. But if he says that is true of wliich he does not know whether it be true or false, and it is actually false, it is the same misrepresentation as if he knew it to be false. If a state- ment relate to the future, a future compliance or fulfilment is necessary. 332 THE LAWS OF BUSINESS FOE BUSINESS MEN. Any statement in reply to a distinct inquiry will be deemed material ; because the question implies that the insurer deems it material. On the other hand, the insured is not bound to communicate any mere expectation or hope or fear ; but only all the facts material to the risk. If the concealment or misrepresentation by the insured arose from the master's concealment from his owner, it seems to be the law in this country that the insurers are not discharged. If the insured state honestly that he is informed so and so, giving his authorities, this is no misrepresentation, although he is misinformed. But generally the insured who procures insurance through an agent is liable for that agent's conceal- ment or misrepresentation, although unknown and unauthor- ized by him. If one who is insured proposes to another insurer a second insurance on the same policy, on the same terms expressly or impliedly, and the first is founded on concealment or misrepre- sentation, this taint extends to and annuls the second. A premium mucli lower than would be proper for a certain risk, if certain facts were disclosed, may be evidence tending to show that they were not disclosed. SECTION X. WHAT THINGS SHOULD BE COMMUNICATED. Not only ascertained facts should be stated by the insured, but intelligence, and mere rumors, if of importance to the risk ; and it has been held that intelligence known to his clerks would be generally presumed to be known to him ; and it is no defence, that the things have been found to be false. It has been held that an agent was bound to state that his directions were sent him by express ; because this indicated an emer- gency. If the voyage proposed would violate a foreign law not generally known, this should be stated. It is impossible to give any other criterion to determine what should be communicated, than the rule that everything should be stated which might reasonably be considered in estimating . OP MARINE INSURANCE. 333 the risk- And it is obvious that tlie season, or political events, or the character of the voyage, may naake that material in a particular case, -which is not so generally ; as the national character of the ship or goods ; whether contraband or not ; the interest of the insured ; the time of sailing ; and the last news, as to weather and the like, from the part of the ocean in which the ship to be insured is supposed to be. And so every other thing of any kind which the insurer might reasonably wish to take into consideration in estimating the value of the risk which he is invited to assume. The question, however, being one of concealment as it affects the estimation of the risk, it is obvious that the insured need not state to the insurer things which he already knows ; and by the same reason, he is not bound to state things which the insurer ought to know, and might be supposed to know. These are, in general, all those things which the insured learns by means which are quite as open to the insurer as they are to him ; as general facts widely published, and known by others long enough to justify the inference that all interested in such matters are acquainted, with them. So things resting upon a general rumor, which is known to all alike. So facts of sci- ence ; as the position of a port, the peculiar dangers or liabili- ties of any well-known navigation, the prevalence of winds, currents, or weather of any particular description at a certain place or in a certain season. Whether the siippression of such a thing be a faulty concealment on the part of the insured, or only an innocent silence, must depend upon the standard above stated. If it be known to him in such a way that he oiight as a reasonable man to doubt whether the insured knows it, then he ought as an honest man to put an end to the doubt by stat- ing it ; otherwise he may be silent. And so he may be about anything expressly provided for in the policy, unless he be ex- pressly interrogated on the subject. If either party says to the other so much as should put the other upon inquiry, in reference to a matter about which in- quiry is easy and would lead to information, and the other party makes no inquiry, his ignorance is his own faidt, and he must bear the consequences of it. An intention, which if carried into effect would discharge 334 THE LAWS OF BUSINESS FOE BUSINESS MEN. the insurers, as, for example, an intention to deviate, need not be stated, unless the intention itself can be shown to affect the risk. So a part damage to the property need not be stated, unless it affects its present probability of safety. A false statement that other insurers have taken the risk on such or such terms is a misrepresentation, but not a false state- ment by the insured that he thinks they would take it on such terms, for of this the insurers can judge for themselves. Every statement or representation will be construed ration- ally, and so as to include all just and reasonable inferences. A substantial compliance with it will be sufficient ; and a lit- eral compliance which is not a substantial one, will not be sufficient. SECTION XI. OF THE PREMIUM. This is undoubtedly due when the contract of insurance is completed; but in practice in this country, the premium in marine insurance is usually paid by a premium note on time, which is given at or soon after the delivery of the policy. If the policy acknowledge the receipt of the premium, and it is not paid, this receipt would be no bar to an action for it. The premiiim is not due, if the risk is not incurred ; whether this be caused by the non-sailing of the ship ; or by one insured on goods not having goods on board ; or not so much cargo as he is insxired for ; or by any error or falsity in the descrip- tion which prevents the policy from attaching. If the premium be not earned, or not wholly earned, it must be returned in whole or iu part by the insurers if it have been paid ; and not charged iu account with the insured, if it be unpaid. The premium may be partially earned ; and then there must be a part return only. As if the voyage consist of several pas- sages, or of " out and home " passages, and these are not con- nected by the policy as one entire risk ; or if the insured has some goods at risk, but not all which he intended to insure. OP MARINE INSURANCE. 335 It is, however, an invariable rule, that if the whole risk at- taches at all, that is, if there be a time, however short, during which the insurers might, in case of loss from a sea peril, be called on for the whole amount they insure, there is to be no return of premium. If there be simultaneous policies, and, taken together, they- cover more than the whole amount at risk, the same rule ap- plies as where one policy covers more than the amount at risk, and consequently there must be on each policy a proportionate return of premium. If they are not simultaneous, and the earlier policies at- tached for their whole amount before the later ones were made, the earlier ones earn their whole premium ; and the later pol- icies must return theirs, in whole if there is nothing left on which they attach, and in part if there be something left and they attach in part. If the policy be effected by an agent who is responsible for the premium, and the insurance is neither authorized nor con- firmed by the principal, there is no return of premium for this cause, if the principal might have adopted the insurance, and made it obligatory on the insurers, at a time when the prop- erty insured was at risk. If the note be signed by an agent, the insurers may look to a principal actually insured by it, whether known or unknown to them at the time. Unless it can be inferred from the facts, or otherwise shown, that, with a knowledge of the principal, the insurers accepted the note of the agent or broker as that upon which they should exclusively rely. There is no return of premium for avoidance of the contract by its illegality, if both parties knew this illegality and were equally in fault. In this country, insurers usually retain one half of one per cent of a returnable policy. And our policies contain a clause permitting the insurers to set off the premium due against a loss, Avhether the note be signed by the insured or by another person. 336 THE LAWS OP BUSINESS FOB BUSINESS MEN. «# SECTION XII. OF THE DESCRIPTION OF THE PEOPEKTY INSURED. The description must be siicli as will distinctly identify the property insured, as by quantity, marks, and numbers, or a reference to the fact of shipment, or the time of shipment, or tlie voyage, or the consignee ; or in some similar and satis- factory way ; and no mere mistake in a name, or otherwise, vitiates the description if it leaves ij; sufficiently certain. If different shipments come within the policy, the insured may attach it to either by his declaration, which may be done after the loss, provided this appears to have been the intention of the parties. " Cargo," " goods on board," " merchandise," mean much the same thing ; and do not attach to ornaments, clothing, or the like, owned by persons on board and not in- tended for commercial purposes. " Property " is the word of widest and almost unlimited meaning. "Ship" or "vessel" includes all that belongs to it at the time, — even sextants or chronometers belonging to the ship-owner, and by him ap- propriated to the navigation of the ship. So it includes all additions or repairs made during the insiirance. The phrase " a return cargo " will generally apply to a homeward cargo of the party insured in the same ship, how- ever it be procured ; but the phrases " proceeds " and " re- turns " are generally regarded as limited to a return cargo bought by means of the outward cargo. And neither of these, or any similar phrases, will apply to the same cargo brought back again, unless it can be shown, by the usage, or other ad- missible evidence, that this was the intention of the parties. The nature of the interest of the insured need not be spe- cified, unless peculiar circumstances, closely connecting this interest with the risk, make this necessary. But either a mortgagor or a mortgagee, a charterer, an assignee, a con- signee, a trustee, or a carrier, may insure as on his own property, and without describing the exact nature of his interest. It is common to cover the freight by a high valuation of the OP MARINE INSURANCE. 337 ship ; but if there bo an open policy on the ship, when its value comes to be inquired into, the freight is notftncluded. An owner of both ship and cargo may cover by tlie word freight what his ship would earn by carrying that cargo for another person. •Insurance on freight from one port to another covers the freight on goods taken in by agreement at ports interme- diate to them. But if the insurance be on freight, and the goods are of such a kind that the insurance, had it been on goods, would not have attached, the insurance will not attach to the freiglit. Thus, in an American case, the insurance was on freight generally. . The goods had not been put on board, but a specific contract had been entered into respecting them. Some were to be carried above, and some under deck. It was held that for the portion to be carried under deck the insured might recover his freiglit, but not for that which Avas to have been carried on deck, because an insurance on the goods would not have been valid if they had been carried on deck. Freight " to " a place is valid, although the cargo is to go farther, and the freight be paid only at the more distant port. But insurance on freight " at and from " a place does not cover freight " to " tliat place. If a charterer pays a certain price to the owner, and has agreed to carry a cargo for another at a higher price, he may insiire the difference, which is his profit, under the name of freight. SECTION XIII. or THE PKEILS COVERED BY THE POLICY. The policy enumerates, as the causes of loss against which' it insures. Perils of the Sea, Fire, Piracy, Theft, Barratry, Cap- ture, Arrests, and Detentions ; and " all other perils," by which is meant, by construction of law, all other perils of a like kind with those enumerated. It is a universal rule, that tlie insurers are liable only for- extraordinary risks. The very meaning of " seaworthiness," which the insured warrants, is that the ship is competent tO' 43 338 THE LAWS OP BUSINESS FOR BUSINESS MEN. encounter with safety all ordinary perils. If she he lost or in- jured, and the»loss evidently arose from an ordinary peril, as from common weather, or the common force of the waves, the insurers are not liable, because the ship should be able to with- stand these assaults. And if the loss be unexplained, and no extraordinary peril be shown or indicated, this fact would raise a very strong presumption of unseaworthiness. As, for example, if the vessel went down while sailing with favorable winds on a calm ocean. So the insurers are not liable for loss or injury by wear and tear, or natural decay, or the effect of age. The ship itself, and every part of it, and everything which belongs to it, must give o\it at some time ; and when it is actually lost, the insur- ers are not held without sufficient evidence of a cause adequate to produce its loss, provided it had been in a good condition and properly secured. For without this evidence it would be pre- sumed to have been lost by its own defect. It is, indeed, another universal I'ule, that the insurers are never liable for a loss which is caused by the quality of the thing lost. This rule applies, as above stated, to the ship, her rigging and appurtenances, when worn out,by age or hard ser- vice. But its most freqiient application is to perishable goods. The memorandum, already spoken of, provides for this in some degree. Biit the insurers are liable for the loss of no article of merchandise whatever, if that loss were caused by the in- herent qualities or tendencies of the article, unless these quali- ties or tendencies were excited to action and made destructive 'by a peril insured against. Thus, if hemp rots from sponta- neous fermentation, which cannot occur if it be dry, the insiirers are not liable if the loss arose from the dampness which the hemp had when laden on board ; but if the vessel were strained by tempest, and her seams opened, and the hemp was in this way wet, and then rotted, they are liable. The insurers do not, of course, insure any man against his own acts. But when we consider whether they are liable for losses caused by the agents or servants of the insxired, it is necessary to make a somewhat nice distinction. Beginning with the general principle, which should apply as well to the .contract of insurance as to all others, we say that the owner, OP MARINE INSURANCE. 339 as principal, is liable for the acts of his agents while they are acting as his agents, and only executing the' work he gave them to do, in a manner which conforms with his instructions and authority. But for the consequences of the negligence or wilful misconduct of the master or crew, the insurers may be liable to tlie owner, because, in this respect, the master or crew are not tlie agents of the owner. They are his agents only if he directed the very negligence or wrongful act which destroys the property insured, and then the insurers are of course dis- charged. So they are, if the misconduct be such as to prove the original unfitness of the master or crew, and therefore to show the unseaworthiness of the ship in this particular ; or if they give the insurers the defence of deviation (to be spoken of presently) , or the lilce. The insurers may take upon themselves whatever risks they choose to assume. And express clauses in a policy, or the uniform and established usage and construction of policies, may throw upon them, as in fact it does, a very large liability to the owner or shipper for the efifects of the misconduct — wilful or otherwise — of the master and crew. Tlie clause re- lating to barratry, to be spoken of presently, is of this kind. If the cargo is damaged through the fault of the master or crew, the sliipper of the cargo has a remedy against the owner of the ship. But this does not necessarily discharge the insur- ers. If, however, he enforces his claim against them, he is bound to transfer to them his claim against the ship-owner. For the insurers of the cargo, by paying a loss thereon, put themselves, as it were, in the position of the shippers, and ac- quire their rights. Generally, no loss will be attributed to the negligence or default of the master or crew, which can be with as good rea- son attributed to any of the perils insured against. SECTION XIV. OP PERILS OF THE SEA. By this phrase is meant all the perils incident to navigation ; and especially those arising from the wind and weather, the 340 THE LAWS OF BUSINESS FOE BUSINESS MEN, state of tliG ocean, and its rocks and shores. But it will be re- membered that the insurers take upon themselves only so many of these as are " extraordinary." Hence, destruction by worms is not such a peril as the insurers are liable for, because it is not extraordinary. It is known to exist in all waters ; and in certain waters, and at certain seasons, this danger is very great ; and it is the duty of the insured to guard effectually against this. It is supposed that, by coppering sufficiently, and other proper precautions, a vessel may be perfectly protected from any, considerable damage by worms. And if this can be done, it is the duty of the ship-owners to do it. It seems now settled that^^re is not included among " perils of the sea," or " perils of the river." If the vessel, or the cargo, — which is far more common, -r- be injured by rats, this has been regarded as so far a peril that cannot be certainly prevented, that, if the insured have taken reasonable precaution against them, the insurers are liable.. There is, now, however, a general disposition to put the danger from rats on the same footing as that from worms. Thus, in an English case, goods were insiired on a voyage from London to Honduras, with leave to touch at Antigua. While at the last-named port, her timbers were so damaged by rats that a . survey was called, and the vessel condemned. The court held that the underwriters were not liable. In an action against a common carrier for damages caused by rats, the defence was that the captain had two cats on board. According to the writers on foreign maritime law, this would have been a good defence. But the English court held that it was no excuse. They said : " Now, whatever might have been the case when Eoccus wrote, we cannot but think that rats might be banished from a ship by no very extraordinary degree of diligence on the part of the master ; and we are further very strongly inclined to believe, that, in the present mode of stow- ing cargoes, cats would ajfford a very slight protection, if any, against rats. It is difficult to understand how, in a full ship, a cat coiild get at a rat in the hold at all, or at least with the slightest chance of catching it." .An American case supports the view that an insurer will be liable in such a case, if there be no fault on the part of the captain. Chancellor Kent says : " The better opinion would ; seem to be, that an insurer is not liable for damage done to a OF MARINE INSURANCE. 341 ship by rats, becaiise it arises from the negligence of the car- rier, and may be prevented by due care, and is within tlie control of hnman prudence and sagacity." If a vessel reach a harbor in the course of its voyage, and is therein detained by stress of weather, or by being frozen in, or by any such caxise, the expenses of the delay, which may be very considerable, are the loss of the owner, and not of the insurers. But those incurred by bearing away for repair fall, as will be more fully stated hereafter, upon the insurers. If a vessel be not heard from, it will be supposed, after a reasonable interval, that she has perished; but the law has not determined the length of this interval with any exactness. The presumption of law will be, that she was lost by an extra- ordinary peril of the sea, and, of course, the insurers will be answerable for her. But this presumption may be rebutted by any sufficient evidence, as of unseaworthiness, or any other probable cause of loss. SECTION XV. OF COLLISION. Collision is a peril of the sea which may deserve especial notice. In the chapter on Shipping, it has been stated that, where a collision is caused by the fault of one of the ships, the ship in fault sustains the whole loss ; that is, it miist bear its own loss, and must indemnify the other ship for the injury that ship sustains. It has been held that the insurers of the ship in fault are liable for the whole of this loss, because it is all caused by collision, which is a peril of the sea. But the Supreme Court of the United States have recently decided that the insurers are not held for more than the loss directly sustained by the ship they insure, that is, not for the amount that ship pays to the other ship for injury done to it ; because they neither insiire the ship not in fault, nor do they insure the owners of the ship in fault against a mere indebtedness which is cast upon them by the negligence of their servants ; for negligence can never be the ground of a claim, althoiigh 342 THE LAWS OF BUSINESS FOB BUSINESS MEN. it, may be no defence against a claim arising from a peril in- sured against. This view has been adopted and emphatically- approved by the Court of Appeals of New York, reversing a decision of the Supreme Court ; and this rule now rests on the weiglit of authority. The question is one of some difficulty ; but, upon the whole, we think the rale as now established by the Supreme Court of the Union, and the highest court of our principal mercantile State, rests on the better reason. The Supreme Court of the United States once confirmed a decision of the Circuit Court for the First Circuit, to the eifect, that, where a collision takes place without fault, in a port of which the local law divides the whole loss, (therein opposing the general maritime law,) the insurers of a vessel the owners of which, by this law, were made to pay a large sum beyolid their own injury, were liable for it. But this case was exactly opposed to a contemporary decision in the Court of Queen's Bench in England ; and its authority has certainly been shaken by the recent decision of the Supreme Court of the United States. SECTION XVI. OF FIHE. This peril also must come imder the common rule, that the insurers will not be held unless it be caiised by something ex- traordinary, and not belonging to the inherent qualities' of the thing which takes fire. The master and crew may burn a ship and cargo, to prevent their capture by an enemy, for this is their duty to the state ; and therefore it would seem that the insurers would be liable for such a destruction by fire, although their policy expressly exempted them from liability for loss by capture, or by war risks generally. The insurers would be held also for any direct and immedi- ate consequences of the fire ; and for loss caused by the en- deavor to extinguish it ; and, perhaps, for all loss or expense that arose fi:om, or was due to, honest and reasonable efforts OF MARINE INSURANCE. 343 to prevent it. It is, indeed, a general rule, that tlie insurers are liable for the loss or injury which is the natural, direct, and proximate eflect of any peril insured against, although the loss itself may he only the effect of a preceding loss ; as, if a part of the cargo was burned up, and another part was injured by water used to arrest the fire, the insurers would be liable for both parts. SECTION XVII. OP PIRACY, KOBBERY, OR THEFT. There can be no piracy or robbery, without violence ; but this is not necessary to constitute the crime of theft. Piracy and robbery are most usually committed by strangers to the ship ; they may, however, be committed by the crew ; and the insurers are answerable for such a loss, unless it arose from the fault of the owner. If theft be committed by the crew, we should still hold those who insured against "theft" liable. This may be doubtful ; but insurers regard it as at least pos- sible, and provide against it by the phrase " assailing thieves." This excludes theft without violence, and perhaps all theft by those lawfully on board the vessel, as a part of the ship's com- pany. If, after shipwreck, the property is stolen, the insurers are liable, and might perhaps be so if there were no insurance against theft, if this was a direct effect of the wrecking. SECTION XVIII. OP BARKATKY. This word has given rise to much discussion, and its mean- ing may not be now positively determined. We understand by it, however, any wrongful act of the master, officers, or crew, as any fraud, cheat, or trick done by them, or either of them, against the owner. If he directed the act, or consented to it, or by his negligence or default caused it, — whether he 344 THE LAWS OP BUSINESS FOB BUSINESS MEN. were actual owner, or apparent or temporary owner by hiring the vessel, — it is no barratry. But it is not necessary that it should be done with an intention hostile to him. For an act otherwise barratrous would be none the loss so because the committer of it supposed it would be for the advantage of the owner. So, too, the voluntary and unnecessary encounter of any extraordinary peril, althoiigh done from a belief that it would be advantageous to the owner, would be a barratrous act ; and of course it would be if done by the master for his own benefit. Mere negligence, if gross and extreme, may be barratrous, even if there be no purpose of helping or of hurt- ing any one. And, indeed, the mere not doing of an act may be barratrous, if thereby an injury was sustained which might have been prevented by a proper and reasonable resistance, and therefore should have been so prevented. It must be an act against the owners. Therefore, if the master be a part-owner, he cannot commit barratry. Nor will any act of a master be barratroiis, which is done by him as supercargo, consignee, or factor, or in any capacity or function whatever, other than that of master. Not only is an apparent owner's consent to an act destruc- tive of its barratrous character, but his consent will have this effect, and, on the other hand, the legal owner's ■n^ill not. Thus, if there be an apparent or temporary owner, as a charterer who loads and sails her, the master, however, being appointed by the actual owner, — if this master commits an act of barratry against the apparent owner, its character is not taken away, and it remains barratrous, although he did it with the consent, or by the order, of the actual or legal owner. The master being appointed by the owner, and controlled by him, many policies provide that they do not insure against bar- ratry, if the insured be the ovmer of the ship. The purpose of this is obvious; it is to prevent an insurance of the owner against the acts of one for whom the owner ought to hold him- self responsible. The effect of the clause is, generally, to limit the insurance against barratry to goods shipped by one who is not owner of the vessel. Still, if a charterer, who filled the ship he hired with his own goods and those of others, insured his freight, — meaning the excess of what he would earn over OF MARINE INSURANCE. 345 what he niust pay, — the insurance against barratry would ex- tend to liiin, and not be prevented by this clause, because he is not the owner of the ship. As a general rule, the insurers are liable for the misconduct of the crew, wlien all usual and reasonable precautions have been taken by the owner, and his servant, the master, to pre- vent such misconduct. SECTION XIX, OF CAPTURE, AKEEST, AND DETENTIOK'. The phrase which refers to these perils is usually in these words : " Against all captures at sea, or arrests, or detentions of all kings, princes, and people." Almost every word of this sentence has been the subject of litigation or of discussion. The provision has been held to apply not only to captures, arrests, or detentions by public enemies, by foreign belligerent powers, but to those by the very government of which the in- sured is himself a subject, unless the same be for a breach of the law by the insured. Then the insurers are not liable, be- cause they never are for the consequences of an illegal act of tlie insured. By the " people " are understood the sovereign power of a state, whatever be its form of government. " Cap- ture " and " seizure " are equivalent ; they differ from " de- tention" in this respect : the two former words mean a taking with intent to keep ; the latter, a taking with intent to restore the property. " Arrest " is any taking possession of the prop- erty for any hostile or judicial purpose. SECTION XX. OP THE GENERAL CLAUSE. ' This clause has a very limited operation. We have already remarked, that it is usually restricted to perils of a like kind with those already enumerated ; and although this phrase has U 346 THE LAWS OF BUSINESS FOB BUSINESS MEN. been declared to be substantial and material, it might be diffi- cult to hold an insurer liable under this clause, when he would not have been liable under any one of the enumerated perils. Another phrase sometimes used, " against all risks," has been construed very widely, and as if it included every cause of loss except the fraud of the insured. If it stood by itself, it might be difficult to define it ; but if it followed the usual enumera- tion, we should say that it should be limited by that in its sig- nificance and operation, and apply only to things like those enumerated. SECTION XXI. OF PROHIBITED TRADE. This is not the same with contraband trade (which belongs to war), although the words are sometimes used as if they were synonymous. It is perfectly lawful for a ship to break through a blockade if it can, or to carry arms or munitions of war to a belligerent. But then it is perfectly lawful for the state whose enemy is thus aided, to catch, seize, and condemn the vessel that does this, if it can. The vessel takes iipon itself this risk; and we have seen that it is not covered by a common policy, unless the purpose is disclosed and permitted. Prohibited trade belongs to a time of peace. It is either trade prohibited by the state to which the ship belongs, — and then it is wholly illegal, and the insurers are not only not answerable under a general policy for a loss occasioned by this breach of law, but an express bar- gain to that effect would itself be illegal and void ; or it may be trade prohibited only by a foreign state. And then it is not an illegal act in the vessel by whose sovereign if is not pro- hibited. On general principles, we should say that the inten- tion to incur this extra risk should be communicated ; because the insurers should be enabled to take it into consideration. But in practice,, our policies generally, if not universally, ex- cept expressly the risks arising from prohibited trade. If there has actually been such a trade, and a seizure, forfeit- ure, and condemnation because of it, the insurers are certainly discharged by the operation of this exception. OF MARINE INSURANCE, 347 If there has been an attempt at s\ich a trade, which was not earned into effect, but the vessel was seized and condemned therefor, according to the laws of the country where the attempt was made, here also we should say that the insurers were discharged. If, however, the seizure and condemnation were for an alleged trade, or attempt to trade, but there was no justifica- tion for the same in fact, the vessel being wholly innocent, such a loss as this would not come under the exception, and the insurers would be liable. If there be such a trade, or attempt thereto, and no seizure or condemnation, the insurers are not discharged from their liability for an independent loss by this exception. Tlie parties may always agree to add such risks, or except such, as they choose. And sometimes an excepted risk and one insured against are mingled. If, for example, all war risks and all captures are excepted, and a vessel is stranded upon a foreign and hostile shore, and captured there and con- demned, are the insurers liable ? Yes, if the vessel would have been lost by the stranding ; but not if, so far as tliis peril went, the owners would have recovered her. SECTION XXII. OF DEVIATIOX. As the insurers are entitled to know, either from informa- tion given thenn or from the known course of the trade, what risks they assume, it is obvious that the insured have no right to change those risks, and that if they do, the insurers are not held to the new risk. Such a change of risk is called a devia- tion ; it certainly discharges the insurers ; and although the word originally meant in law what it means commonly, a de- parture from the proper course of the "voyage, it now means, in the law of insurance, any departure from, or cliange of, the risks insured against. And it discharges the insurers, although it does not increase the risk, as they have a right to stand by the exact bargain they have made. There^ay be a deviation 348 THE LAWS OP BUSINESS FOE BUSINESS MEN. wliile the ship is in port ; or where the insurance is on time, and no voyage is indicated. And a very slight deviation may suffice to discharge the underwriters. But no deviation discharges the insurers, or, in tlie language of the law, no change or risk is a deviation, imless it be volun- tary, that is, unless it be made without sufficient necessity. Nor is this necessity determinable altogether by the event ; for it must be judged of by the circumstances as they existed at the time, and entered into, or ought to have entered into con- sideration. If a deviation is only temporary, it only suspends the liabil- ' ity of the insurers. Biit it is not temporary, unless after its termination all other risks arc precisely what they would have been if there had been no deviation. And tliis is true of very few deviations indeed, and certainly not of any change of course, even for an hour ; for the ship will not be again in the same place, and subject to the very same winds and waves, as she would otherwise have been. The proper course — a departure from which is a deviation — is always the usual course, provided there be a iisage ; for a master is not bound to follow their track, wlierever one or two have gone before, but must be allowed his own reasonable dis- cretion. If there be no course so well established that every one would be expected to follow it, the master must go to his destined port in the most natural, direct, safe, and advanta- geous way. And a mere mistake on this point does not con- stitute a deviation. A deviation from the coiirse marked out by established tisage is not, however, excused by a mistake. And if a master, where there is no controlling ^age, has made up his mind that a certain course is the best and proper course, and takes another, whether from some motive of his own or by the order of his owner, this is a deviation ; becaiise the insur- ers have a right to the master's best discretion, and to his fol- lowing it. An extraordinary and unnecessary protraction of a voyage would be a deviation. But the mere length of the voyage, without other evidence, would not prove this. Liberty policies, so called, are often made. That is, the in- sured is expressly *rmitted to do certain things, which, with- OF MARINE INSURANCE. 349 out such permission, would constitiite a deviation. And a large proportion of the cases on the subject of deviation have arisen under these policies. Most of the phrases commonly used have been construed by the courts ; and generally quite strictly. A liberty to " enter " a port, or " touch " at a place, permits a ship to go in and come out, but it permits little delay, because for delay the word " stay " or " remain " is ne- cessary. It is said that even to " enter and stop at" gives no liberty to trade at the port, but that word itself, or its full equivalent, must be used. Still, the circvimstances of each case would influence the court very strongly in construing any sxich phrase or permission. It is certain that no permission is necessary for any change of course or risk that is made for the saving of life, or even for the purpose of helping the distressed. Always provided, how- ever, that the change of course, or the delay, was no greater and no longer continued than this cause for it, actually and rationally considered, required. And the rule applies to every case in which it is attempted to justify a deviation on the ground of necessity. It is, however, equally well settled, that a change of course or of risk for the pui'pose of saving prop- erty is a deviation not justified by its cause. Sometimes it is intended that a ship shall visit many ports, and even go backwards and forwards, at places between the port from which she sails and that at which the voyage is finally to terminate. Such purposes as this are sometimes provided for by a policy on time ; and sometimes by express permission to go to, and trade at, certain ports. But there must be no going back and forth unless this also is expressly stated. If not stated, the ports mentioned must be visited in a certain order. If a port is named as one to which the ship will go, to that she must go. If it be only said that she may go to it, she may pass by without entry. If permission be given to enter and stop at a dozen different ports, the vessel may omit any of them, or ihe whole, but must visit in the proper order all to which she does go. What tliis order is, must be determined by the words used, and by the facts, in each case. Generally, if ports are enu- merated, they must be visited in the order in which they are 350 THE LAWS OP BUSINESS FOE BUSINESS MEN. mentioned ; or if it appears that this was not intended, then in their geographical order, which may not be that which tlie map indicates, but that settled by the usual course of naviga- tion. Where no final port is designated, it would seem that the ports permitted may be visited in any order ; but even here the voyage cannot be unreasonably protracted. The substitution of a new voyage for that agreed upon is of course a deviation, and one that can seldom or never be jus- tified by any necessity, so as to carry the insurer's liability on the new voyage. If an entirely new voyage is intende^d, and a vessel sails upon it, but in the same direction in which she would have gone on the insured voyages, the policy never attaches, and the premium is never earned, because the ship never sails on the insured voyage. But if the ship is intended to pursue the insured voyage to its proper terminus, but at a certain point of the voyage to deviate by going into another port, there is no deviation until that point is reached and the deviation actually begun ; because it is certain that no mere intention to deviate discharges the insurers until it is carried into execution. Whether the intended deviation was only an intended deviation, or was so great a change of the voyage that the mere intention to make it was an intention to sail on an entirely different voyage, in which case the policy does not attach, would be in every case a question of mixed law and fact. And if it was a part of the intention not to go finally to the proper terminus of the voyage, this would generally, we think, indicate that the old voyage was given up and a new one substituted. SECTION XXIII. OF THE TERMINI Or THE VOYAGE, AND OF THE EISK. These miist be distinctly stated, whether they be termini of time or place. ' A policy from to , or from B. to — , or from to B., would be void. Nor would it be any better if the termini were named witli apparent distinct- ness, but in such wise as to mean nothing, or nothing sufE- ciently certain. OF MARINE INSURANCE. 351 A policy takes effect from its date, if the bargain was then complete, although not delivered until afterwards. And it may be remarked, that, if there be an unreasonable delay in the sailing of the vessel, the policy never attaches, for tlie bar- gain is considered as annulled. The common phrase " lost or not lost," or any equivalent ■words, make the policy retrospective, as has been said, so far that the insurers are responsible for any loss which occurred before the policy was made, but within the time or the voyage insured. If the loss be known, it must of course be stated ; but even then, if its extent or amount is wholly unknown, the property may be the subject of valid insurance. If the policy is to take effect " on " a certain day, it begins with the begin- ning of that day. If " from and after " a day, that day is excluded, but " from " only may be more ambiguous, and the construction of the word be open to evidence. It has been said, however, that " from the date " includes the day, and " from the day of the date " excludes it ; but this is a very nice distinction, and we doubt whether it would be adhered to in practice. A policy on a vessel " at" such a place, generally attaches •when she is there in safety. Thus, in an English case, the in- surance was at and from the island of St. Michael's. Tlie ship arrived in a very disabled state, and, after lying at anchor tlicre twenty-four hours, was blown out to sea and wrecked. The court held that the policy under these circumstances never attached ; because, to make it attach, she must have once been at the place in good safety. But if there were a policy " to " a place, and anotlier was made out between the same parties " at," or " at and from," the same place, we should say that the law would presume that the parties intended that the second policy should attach whenever the first one ceased by her arri- val, without reference to the condition of the ship or her peril at the time. Generally, a policy on goods attaches to them at the time ■when it would have attached to the vessel had she been insured. And if tlie risk is to begin at a certain time, and also at a cer- tain port or place, the latter words may be shown to bo mere surplusage, and not intended to control the former ; and the 352 THE LAWS OF BUSINESS FOE BUSINESS MEN. risk -will begin at that time, wherever the ship may be. The extent which should be given to the meaning of the word "port" is sometimes a question of some difficulty; but in gen- eral all places are within a port which belong to it by mer- cantile usage and acceptance, although not within the same municipal or legal precinct. "At and from" covers a vessel in a port, as well as after she leaves it. " From " only covers the vessel after she gets under way. " At and from," applied to goods, does not cover them in the port when' they are on shore and warehoused, nor until they become subject to marine risk, by being water-borne. They are, however, covered, not only when they reach the ship, biit as soon as they are piit on board of boats or lighters, or any other usiial water conveyance to the ship. And if insured to a port, they continue covered after they leave the ship by any usual conveyance for the shore, until they are safely landed. The word " at," applied to an island or a coast, may embrace all the ports therein, and cover the ship while sailing from one to another. " To a port and a market," covers a voyage to the port, and thence to every place to which, by mercantile usage or reasonable construction, a ship may go thence in search of a market ; and even to return to that port, perhaps more than once, if honestly with intent to learn there where a market coiild be found. If the insurance be on a certain voyage, a very strong presumption of law would confine it to the next voyage whicli came under that description. If the insurance be to " a port of discharge," this does not terminate if the vessel goes to a port for inquiry, or for needful refreshment or repair. If it be " a final port of discharge," the insiirance ceases upon such parts of the cargo as are left at one port or another, and continiies on the ship, and on all the goods on board, until arrival at the port where they will be finally discharged. A vessel is " at sea," when in bays or straits ; and indeed, by a rather broad construction, whenever not " in port." And if the insurance begins on a ship on a certain day " if at sea," . this has been construed to mean " if not at home," and there- fore to attach if the ship was in a distant port. The English policies and our own contain a provision that OP MARINE INSURANCE. 353 the insurance continues on tlio ship- " until she shall be arrived and moored twenty-four hours in safety"; and on the goods until they be " landed," or " safely landed." Under this clause, the ship is insured until moored in safety, so far as the perils insured against are concerned, but not against the peculiar and local dangers of the port, or the possi- bility that a tempest there might injure her when moored ; for these dangers continue to exist as long as she stays there, and the liability of the insurers would never terminate. If she enters the harbor, and, before she is moored, is blown off, or ordered into qiiarantine, she is insured until this delay ceases and she is safely moored in port. And if before or within the twenty-four hours a dangerous storm begins, she is insured until that storm, or its danger, ceases. Goods, we have seen, are covered in their transit from the ship to the shore. SECTION xxiy. or TOTAL LOSS AND ABANDONMENT. The law of insurance recognizes an actual total loss, and also a constructive total loss. It is actual when the whole property passes away,, as by submersion or destruction by fire. It is a constrtictive total loss, when the ship or goods are partially destroyed, and the law permits the insured to abandon the sal- vage, or whatever is saved, to the insurers, and claim from them a total loss. By " abandonment " is meant, in insurance law, the transferring of the property insured, or what is left of it, to the insurers. The word is used, because originally the insured gave up, renounced, or abandoned the property, saying to the insurers, we will have nothing more to do with it, and you may do with it what you like. And the word is still always used, although now it means a transfer. And in the law of insur- ance, a constructive total loss is a partial loss made total by an exercise of the right of abandonment. That is, the actual loss took from the insured a part, and the abandonment took the 45 354 THE LAWS OP BUSINESS FOR BUSINESS MEN. rest, and so they have lost all. A constructive total loss is sometimes called a " technical^' total loss. The abandonment, we say, transfers all that remains of the property to the insurers. If nothing remains, or if that which remains has no value, there need be no abandonment, and this is an actual total loss. The inspired never need make an abandonment if he chooses not to do so. And if from such choice or neglect he makes no abandonment, his claim against the insurers is still perfect ; but it is a different claim from that which it would have been if he had abandoned, because it is now to be settled as a par- tial loss, of which we shall speak hereafter. For it is the pur- pose and effect of an abandonment to convert an actual partial loss into a constructive total loss. And if he makes an aban- donment when he has no right to make it, such abandonment is wholly inoperative, unless the insurers choose to accept it ; but if they accept it, they must settle the loss as a total loss. The topics in relation to this subject which we will consider are : — 1. The necessity of abandonment. 2. The right of abandonment. 3. The exercise of this right. 4. The accept- ance of the abandonment. 5. The effect of the abandonment, or of the absence of abandonment. 1. Of the Necessity of Abandonment. It is said, that if a ship be completely wrecked, and reduced to " a mere congeries of planks and iron," or if she has not been heard from for a sufficiently long time, there need be no aban- donment, and the insured may claim as for a total loss, with- out one. In either case, or any other case, if the insurers pay a total loss, they are entitled to whatever shall come to hand of the property insured. And it is usual, and we think more proper, to abandon in both of these cases. If the property was injured by sea peril, and passed from the insured by a justifiable sale by the master, there need, per- haps, be no abandonment, but the insured will account for the proceeds. If, however, he abandon, the salvage or proceeds belong at once to the insurers, and are afterwards at their risk ; otherwise they are at the risk of the insured. OF MARINE INSURANCE. 355 2. Of the Right of Abandonment. The insured cannot convert every partial loss, however small, into a total loss, by abandonment, transferring the damaged property to the insvirers. But by a ride which is nearly uni- versal in this country, and not unknown abroad, if the damage by a peril insured against exceed one half of the value of the property insured, — whether ship, goods, or freight, — he may abandon the property to the insurers and claim as for a total loss. But if the vessel actually reaches her destined port, she cannot be abandoned, although the repairs would cost more than half of her value. When we speak in another section of partial loss, it will be seen that, by the established usage of this country, an allowance of " one third, new for old," is always made. This means, that if a new thing were given for an old one because the old one had been injured, the insurer would be more than indemni- fied. The sails, for example, might be so new that they had lost little of their value ; or so old, that they were of no value. To avoid inquii"ing into each case, usage has adopted, as a fair average to apply to all cases, that the thing injured has lost one third of its value. Wlien it is replaced by rei3airs, tlie in- sured therefore loses one third of the cost of repair, and the insurers pay two thirds. Now our policies provide that there shall be no total loss by abandonment, unless the injury exceed fifty per cent when " estimated as for a partial loss " ; that is, one third off". Con- sequently, the repairs necessary to restore the vessel to a sound condition must amount to more than seventy-five per cent of her value when repaired, (one third of which, twenty-five per cent, being cast off, leaves fifty per cent,) before there can be an abandonment, which the insurers are bound to accept, and settle the loss as a total loss. "We think, however, the usage not sufficient to require that this one third sliall be cast off", ixnless expressly stipulated in the policies, as above stated, or in some equivalent manner. The valuation in the policy, if there be one, generally deter- mines the value on which this estimate is to be made. In New York and in Massachusetts this seems to be distinctly 356 THE LAWS OF BUSINESS FOR BUSINESS MEN. held ; but the courts of the United States and of some of our States incline to say that, whether the policy be valued or open, the value of the ship, the loss of *ie half of whicli authorizes abandonment, is the actual value of the ship at the time the loss occurs, and that this value is to be proved by proper evidence. The premium, we think, should be excluded; but this may. not be quite settled. A loss by jettison, by salvage, by gen- eral average contribution, by wages of sailors paid while they assisted in making the repairs, should be included in the fifty per cent. If the insured have lost a part of his goods by jet- tison, and have a claim for contribution which is not yet paid, the whole of his loss is to be included to make up the fifty per cent, and the insurers take the claim to contribution by aban- donment. Thus, if his loss be by jettison of eight tenths of his goods, it is 80 per cent, and if he has a claim for contribu- tion in general average for 35 per cent, this does not reduce his loss to 45 per cent, so that he cannot abandon ; but he may call his loss 80 per cent, and abandon, and by the abandon- ment transfer to the insurers his claim for 35 per cent. The expense of repairs is to be taken at the place where actually made, or where they must have been made, if made at all. If the repairs cost less than fifty per Cent, and the ship is bottomed for the amount, and afterwards sold on the bottomry bond, this is a total loss ; unless the vessel came within reach of the owner, so as to make it his fault or neglect that she was sold. If a sale be lawfully made by the master, under the author- ity from necessity which we have considered in the chapter on the Law of Shipping,* this is a total loss, and the insured must account for the proceeds. If distinct interests are included in one policy, either under one common valuation, or under no vakiation, they are so far united as one subject-matter of the insurance, that the general rule requires that they should all be abandoned together, and therefore an abandonment of one alone is ineffectual. But it seems to be also held, that if these interests, or if several por- tions of the cargo, are separately valued, this makes them so far distinct from each other, that there may be a separate aban- donment of one or of the other. OP MARINE INSURANCE. 357 3. Of the Exercise of the Right of Abandonment. As an abandonment has the effect of an absolute transfer of the property to the insurers, and is intended for tliis purpose, it is obvious that it cannot be made by one wlio is not possessed of such title to the property, or such interest therein, as would enable him to make a valid transfer. There is no especial form or method of abandonment. But the proper and safe way is to do it in "writing, and to use the word " abandon," or " abandonment," although other words of entirely equivalent meaning might suffice. It must be distinct and unequivocal, and state, at least in a general way, the grounds of the abandonment. If the abandonment be deficient in form, the insurers will waive any objection of this kind if they call for further proof, and otherwise act as if the abandonment were altogether suffi- cient. The insured may abandon at any time when the ship, by a peril insured, is taken for an uncertain period from the master's control, and the voyage is broken up and cannot be renewed, Tuiless at a cost which of itself gives this right. The existence of the right depends upon the actual state of facts at the time, and not upon the supposed facts. If a ship be captured or stranded, and the owner, on receiving notice, make an abandonment, and the ship be restored or got off from the shore before the abandonment is actually made, although the owner be wholly ignorant of it, the abandonment is wholly void. But if the facts existing when the abandonment was made were such as to justify the abandonment, it will be good, although subsequent occurrences show that the vessel was neither lost nor endangered as was supposed. Nothing, however, gives the right of instant abandonment, without a faithful endeavor of the master to find, if he can, and use, if he can, some means of deliverance and safety. But if, when de- livered and restored to the master, or owner, her damage amounts to more than half of her value, estimated as above stated, " as a partial loss," she may then be abandoned. If the precise voyage insured be broken . up by a peril insured against, this justifies an abandonment, although the vessel 358 THE LAWS OP BUSINESS FOE BUSINESS MEN. might be put in condition to pursue a different voyage or ren- der a different service. As the insurers, who take the salvage (or saved) property by abandonment, have a right to every possible opportunity to make the most of it, it follows as an invariable and universal rule, that the insured must make an abandonment immediately after he receives the intelligence which justifies it ; and if he does not, he will be regarded as having elected not to abandon, and no subsequent abandonment will have any effect. It may be stipulated in the policy that he shall have so many days, after receiving intelligence, for abandonment. But while this gives him a right to delay, it does not oblige him to, and he may therefore make a valid abandonment at once. The abandonment may be made on information of any kind, if it be entitled to weight and credence. So even a general rumor, without specific intelligence to the insured, will author- ize an abandonment, if the rumor seems to be well grounded and altogether credible. 4. Of the Acceptance of the Abandonment. As there is no especial form or method of making an aban- donment, so there is no regular and established form of accept- ing an abandonment. Indeed, an acceptance, merely as such, or ill so many words, is seldom made. And as the insurer's accepting is not necessary to give full effect to an abandonment which has been made on proper grounds, and in the right way and time, it is seldom asked for. The acceptance of the abandonment may be inferred from words, or acts. The question has arisen whether it could be inferred from mere silence ; and, in general, it cannot. " An insurer is not bound," says Mr. Justice Story, " to signify his acceptance. If he says nothing, and does nothing, the proper conclusion is, that he does not mean to accept it." The rule may be stated thus. If the insiirer, with a suffi- cient knowledge of the facts, says or does that which induces an honest insuj'ed to believe that he has accepted the abandon- ment, and will pay the loss, and to act on that belief, it is an acceptance, and is so far binding on the insurer. But it leaves open, — not the question whether the abandonment was OP MARINE INSURANCE. 359 riglitfiilly made, for that is closed, — but all remaining ques- tions and defences, either as to the whole case, or as to any part of it. 5. Of the Effect of Abandonment. We regard it as an ancient, reasonable, and -well-established rule, that, if insurers pay as for a total loss, this payment enti- tles tliem to full possession of all that remains of the property insured, and also of all rights, claims, or interests which the insiircd has in, or to, or in respect of the property lost, and which, if he valued or enforced them himself, would, if added to the amount paid by the insurers, give him a double indem- nity. Hence, if the insured has lost his goods by jettison, and has a claim for a general average contribution, and the insurers pay him for all his goods, they stand in his place, and acquire that claim for contribvition wliich the loss of the goods gave liim. And we should, very generally at least, extend this rule to the claim which a mortgagee has on the mortgage for his debt. That is, if the insurers pay for the loss of the property whtch seciu'es the debt, they acquire, to the extent of their payment, the mortgagee's claim against the debtor. But in a recent case, some nice distinctions are taken on this subject. If the salvage which the insurers take is encumbered with liens or charges, the insured must pay or satisfy these, except- ing so far as they spring from, or may be referred to, a peril which the insurers have insured against. As, for example, if they take a ship, it is free from liens for wages earned before the peril, but they must themselves pay any wages earned in saving the ship. And, indeed, the insurers may be bound for wages and expenses incurred in good faith, and with a reason- able discretion, in the endeavor to save the ship, — which, by the peril and abandonment, was their property, — although the amount of the charges was greater than the value of the salvage ; but not for expenses after the insurers had refused to accept the abandonment, and expressly directed tliat no more charges should be made on their account. If, however, this prohibition were not in good faith, and tended to the de- struction of the property, it would be ineffectual. By the abandonment, both the owner and the master become. 360 THE LAWS OF BUSINESS FOR BUSINESS MEN. to some extent, the trustees and agents of the insurers, in re- spect to the property abandoned ; and are bonnd to act, in relation to it, with care and honesty. Still, if the property, after abandonment, or after a loss for which there is to be an abandonment, be further lost or wasted, by the bad faith or neglect of the master, or of the consignee of the owner, while they continue to act as such, this loss must be made up by the owner, because, although they are, in a certain sense, agents of the insured, they are then agents of the owner, and he is responsible for them to the insured. Goods are totally lost if destroyed, or if so injured as to have little or no value for the purpose for which they are intended ; or if the voyage upon which the insurance on the goods was effected is entirely broken up. And, in addition to all this, the rule which permits abandonment if more than fiifty per cent be lost, of which we have already spoken, is applicable to goods, in this country ; subject, however, to the important qualification, that it does not apply if any substantial portion of- the goods arrive at their destination uninjured ; or if the goods are insured " free from average." And the rule of abandonment, salvage, and transfer to the insurers, is the same in relation to goods as to the ship. The ship may be totally lost, and not the goods. And we have seen, in our chapter on Shipping, that, if the ship be wrecked, and the goods are or can be saved, it is the duty of the master to send them forward to their destined port, if this is within his power, and the circumstances of the case do not make it useless or clearly unwise. If he cannot transmit them, he is bound to do that which is, on the whole, the best thing for the interest of all concerned. If he fails to do his duty, and the goods are lost, wholly or partially, by this failure, the in- surers are not responsible, unless they have insured the owner of the goods against the misconduct of the master. And the shipper of the goods has his remedy against the owner of the ship for loss incurred by the master's misconduct, which claim passes over to the insurers of the goods, if they pay the loss to the shipper. So, if there be many several shipments all insured, there may be a total loss of one, a partial loss of another, and no loss of a third. OF MARINE INSURANCE. 361 The rule which gives a power of sale to the master, in a case of urgent necessity, and only then, applies to tlie goods as well as to the ship. And if goods are hypothecated, the rule is the same as where the ship is bottomed. The freight is totally lost when the ship is totally lost, or made unnavigable, or is subjected to a detention of such a character as to break up the voyage. If there be a construc- tive total loss of the ship, the owner may abandon the freight with the ship. But if the ship be actually lost, the freight may not be ; for the master has the right, and is under the duty, as we have seen, of transmitting the goods, if he can. And if he does, the owner of the ship is entitled to the whole of his freight ; and the expense of the transmission is all that he loses. If the master might have done this, and fails to do it, the esti- mated expense of transmission is still all the loss for which the insurers are responsible, because the rest of the loss is caused by the master's fault in not transmitting the goods. So, if the ship can be repaired and go on again, and finish her voyage, the owner would have the riglit to hold on to the goods, and finally carry them and earn his freight. And he has this right, although the delay would be very long, and even if the goods are injured, and it would cost time and money to put them in a condition of safety for the residue of the voyage. Still the ship-owner, by his agent, the master, may do all tliis, and then earn his freight ; and therefore, if it can be done, whether it is done or not, all the claim which the insured on freight can make on the insurers is for the expense of doing it, or Avhat that expense would have been. The rule which gives a right of abandonment for a loss of fifty per cent applies to freight also. If, therefore, freight pro rata be paid, it will be a total loss by construction, if less than half be paid. So, if the ship be injured, and part of the cargo be lost, but the ship may be repaired and carry the remain- ing goods on, if that part would pay more than half of the whole freight, it has been held not to be total, and otlierwise it is. Preiglit is fully earned if the goods remain siibstantially in specie,. a,nd are so delivered to the consignee, altlioiigh there be a very great deterioration. But freight is lost, and the in- 46 362 THE LAWS OF BUSINESS FOR BUSINESS MEN. surers are responsible, if nothing is left of the goods but the mere products of decomposition, so that they are lost in fact. If, after some freight is earned, there is an abandonment of the ship, and after the abandonment more freight is earned, the American cases hold, that the freight earned before the abandonment goes to the insurers on freight; while that earned after the abandonment goes to the insurers of the ship. But the French law is the reverse, and so seems to be the rule ill England. SECTION XXV. OF REVOCATION OP ABANDONMENT. An acceptance of an abandonment makes it irrevocable, ex- cept with the consent of the insurers. But the insurers may assent ; and the assured may, by his acts, revoke his abandon- ment, and then the insurers, by words, or by their silence, as- sent. As if the ship be sold as a wreck, and the insured buys it himself, and treats it as his own, either by selling it as his own, or sending it on another voyage, if he had abandoned the ship, this would be a revocation of the abandonment. It is a different question, whether subsequent events can have the effect of revocation, and make void an abandonment which was justified by facts, and rightly made in point of form, at the time. Tiie rule, we should say, was, that no subsequent events could thus annul an abandonment. But if, for example, a vessel is stranded and in a dangerous position, and the owner, hearing of it, abandons, and the next hour he hears of her safety, by reason of a favorable change of wind, or some unex- pected deliverance, it may be said that he had not in fact a right of abandonment at the time he made it. The subse- quent facts did not take the right away, but only proved that it never existed. This conclusion may seem to conflict with the riile that tlie right to abandon depends iipon the appear- ance of things at the time ; this is, however, their appearance when carefully and wisely considered ; and such events would go to show that there had not been a careful and wise consid- OP MARINE INSURANCE. 363 eration of all facts and possibilities. For if it was certainly justified at the time, and then well made, it cannot be in the power of any mere change of circumstances to annul it. SECTION XXVI. OF GENERAL AVERAGE. The general principle upon which the universal rule of gen- eral average rests, is reasonable and just, and vei-y simple. The rule, as already stated in the chapter on the Law of Shipping, is this. If many interests or properties are in peril, and one or more of them are wholly or partially sacrificed for the purpose of saving the rest, all that is thereby saved must contribute towards indemnifying the owner of that which was sacrificed. He is not to be indemnified in full ; for then he would be better off than those who contribute ; he would gain by the fact that, in a common peril, his property was selected to be made the price of the common safety. But there is no reason why he should gain ; jiistice is perfectly satisfied if he is made to suffer no more than the rest do. And this end is attained by the law of general average, because it adds together the whole loss, and considers it the loss of all who were in peril and saved from peril by the loss, and therefore assesses the whole amount of the loss, ratably, upon the whole property that is saved; and in this way, every one interested loses an equal proportion of that which was successfully sacrificed for the common good. This subject belongs primarily to the law of shipping, and comes within the scope of the law of insurance only when any of the property which is lost or saved is insured. If an owner of property is insured, and other property is sacrificed to save the insured property from a peril common to it and to the sacrificed property, the insured property must pay such indemnity for the sacrificed property as will make them suffer alike. And the amount thus paid or contributed by the insured property is a loss by a sea peril, for which the insurers are liable. 364 THE LAWS OF BUSINESS FOB BUSINESS MEN. On the one hand, the insurers of the sacrificed jDropcrty are under an obligation to pay for the loss thus made or in- curred voluntarily, because it was not only the right, but the duty, of the master and crew to destroy a part rather than let the whole perish. It was therefore a loss by a peril of the sea, although purposely caused for the benefit of others ; and the insurers must pay for it. On the other hand, the owners of the property sacrificed acquire by its sacrifice a claim for contribution and indem- nity ; and if the insurers pay them for their loss, they acquire their claim for contribution. And this they take advantage of, in some cases, by deducting it from the amount they pay, and in other cases by first paying all the loss, and then collect- ing all the contribution for their own benefit. We have al- ready seen that the insurers cannot deduct the coptribution for the purpose of bringing the loss below fifty per cent, and thereby preventing an abandonment. SECTION XXVII. OF PARTIAL loss. A PARTIAL loss is simply a loss of a part, and not of the whole. The principal questions relating to it arise out of the ride of one third off, new for old, which has been already spoken of. We repeat the rule, with the reason of it. A ship sails to-day with new copper. Another sails with -her copper nearly worn out. Both meet with peril which requires new coppering. The first is new coppered, and the insurers pay for it, and the insured gains nothing, because the copper on her was worth as much as it is now. The second is also coppered, and the insurers pay for it. But this ship gains nearly tlie whole value of the copper put on, because the old copper was worth very little. Now the whole purpose and principle of the law of insurance is to indemnify the insured, or make his loss good, and no more. Formerly they tried to do it by finding out in each case how much the old materials had lost of their value. But this was found so difficult, that it OF MARINE INSURANCE. 365 ■was agreed upon by merchants and insurers to average all tke cases, and consider that all old materials had lost one third of their value. And the rule is found to work well in practice. ' The first effect of this rule is, that the tiling or the part lost or injured, whether.it be new or old, worn out or not worn at all, must be replaced or repaired in adaptation and conforrtiity with the vessel, in the same way in which it would be if she wore properly repaired at the owner's port, by his orders. This third part is generally, and we think rightly, dediicted from dockage, moving the ship, and similar expenses, provided they are incidental to the main purpose of repair. Whether the value of the old materials should be deducted from the expense of repair, or from the amount for which the insurers are liable, after the third " new for old " is taken off, may not be settled by authority ; but we think the rule should be as follows. If a sea peril makes it necessary to recopper a vessel, and the cost will be $9,000, and her old copper is worth $3,000, we should say that this should bo deducted, leaving $6,000, for two thirds of which only ($4,000), one third being off, new for old, the insurers would be liable. The other way would be for. the insurers to say, " We are liable for ^ 9,000 less one third, — that is, for $6,000, — and the old copper is ours by way of salvage ; and as this is worth $3,000, we are in fact liable only for the balance, or $3,000." By this last rule, the insurers would pay $1,000 less than by the first. The first inile, namely, that the old materials should first be deducted from the expense of repairs, and then one third be deducted from the balance, seems now to be established in New York and in Massachusetts, and we think it much the more reason- able. If an owner effects insurance on a part only of the value of the property insured, — as if for $5,000 on a ship valued at $10,000, — he is insured for half, and is his own insurer for the other half, and he recovers in the same proportion from the insurers in case of a partial loss. Thus, if there be a par- tial loss of sails and rigging, or of repairs, amounting, after one third is deducted, to $2,000, one half of this is the loss of the insurers, and they pay it to him, and one half is his own loss. 366 THE LAWS OP BUSINESS FOE BUSINESS MEN. The insurer takes no part of the risk of the nriarket, and his liability is the same whether that rises or falls, although tMs may make a great difference as to the amount lost by the in- sured. What goods have lost from their original invoice valuej is the amount which the insurer pays. Thus, if he insures $10,000 on goods of which that is the original value, and they are so far damaged by a sea peril, that at the pott of discharge they bring, or are worth, only half of what they would have brought if they had not been damaged, the insurers are liable for $6,000, or that half, although the goods thus damaged may bring in the market of arrival the whole of their invoice cost or more. And if they bring but a quarter of it, the insurers pay no more than one half, because the rest of the loSs is caused by the falling market. If the goods have sustained damage or loss by leakage, or by breakage, or by natural decay, or from inherent defect in qual- ity, — that is, not by a sea peril, — before the partial loss occurs, a proportional deduction should be made from the par- tial loss, as the insurers are liable only for the injury resulting from that loss, and not for any part of that which already ex- isted when the loss took place, or which has occurred since from causes against which they did not insure. SECTION XXVIII. OF ADJUSTMENT. We have spoken of adjustment in the chapter on the Law of Shipping ; and here add only, that an adjustment of an insur- ance loss, with all its incidents of general average, salvage, and the like, is usually made in all commercial cities, by persons whose profession it is to make adjustments, and usxially in a similar form, although the law prescribes no particiilar form or method. They are instruments of much importance, because they gen- erally are made, and ought always to be made, at the first port of discharge after the loss occurs ; and an adjustment made there, in good faith, with a sufficient knowledge of the circum- OF MABINE INSURANCE. 367 stances, and by persons properly employed to make it, is bind- ing on all interests and parties. If the insurers refuse to pay a loss, they waive the adjust- ment, and the insured may present a new one, more favorable to themselves, if the law of insurance will sustain it. Our policies commonly contain a provision, that the loss shall be paid so many days after proof and adjustment of loss. But if the insurers refuse to pay, or dispute the claim, no other ad- justment is necessary, either for trial, judgment, or execution, than that made by the jury. If no repairs actually are made, but the loss which calls for repairs is to be adjusted, the third off, new for old, is to be deducted from the estimated cost of repair, in the same way in which it would have been from the actual cost. The insurers may sometimes be liable for more than a total loss, as in some cases of contribution, for which they are liable, followed by a total loss, for which they are also liable ; or where expenses were properly incurred by the insured, under the provisions of the policy, and a total loss occurs afterwards. We should say, also, that there might be a partial loss repaired and paid for by the insurers, and then a total loss under the same policy, for which they would be liable, without having the right of demanding a deduction or set-off of what they had paid on the partial loss. Our policies providCj iisually, that any unpaid premium, or other sums due from the insured, shall be deducted from the amount payable to the insured. Indeed, the common rules and practice of the law of set-off would lead to a similar result. But the right is limited to demands which the insurers have against the insxired himself, and is not extended to those which they may have against the agent employed by the insured to effect the insurance. The premium note frequently expresses that the insured will pay, not only tlie premium, " but any pre- miums or balances due to the insurers," or uses other language to the same effect. Such a note is a valid contract, but, al- though made payable to order, it cannot be, on general princi- ples, a negotiable note ; and therefore an indorsee must, in most of our States, siie it in the name of the insurers, and in all be subject to equitable defences. 368 THE LAWS OP BUSINESS FOE BUSINESS MEN. CHAPTER XXII. OF FIEE INSUEANCE. SECTION I. OF THE USUAL SUBJECT AND I'OKM OF THIS INSURANCE. "We have seen that fire is one of the perils insured against by the common marine policies. It is usual, howeyer, to insure buildings, and personal property -which is not to be water-boi'ne, against fire alone ; and this is what is commonly understood by Fire Insurance. The general purposes and principles of this kind of insur- ance are the same as those of marine insurance ; and the law in respect to it differs only in those respects and in that degree in which the difference is made necessary by the subject-matter of the contract. Very many of the questions which occur un- der fire insiirance may receive illustration from what has been already said upon similar topics and questions iiuder marine insurance. This kind of insurance is sometimes made to indemnify against the loss by fire of ships in port ; more often of ware- houses, and mercantile property store.d in them; or of personal chattels in stores or factories, in dwelling-houses or barns, as merchandise, furniture, books, and plate, or pictures, or live stock. ■ But by far the most common application of this mode of insurance is to dwelling-houses. Like marine insiirance, it may be effected by any individual who is capable of making a legal contract. In fact, however, it is always, or nearly always, in this country, and we suppose elsewhere, made by companies.' There are stock companies, in which certain persons own the capital and take all the profits by way of dividends. Or mutual companies, in which every one who is insured becomes thereby a member, and the net profits, or a certain proportioa OF FIRE INSURANCE. 369 of them, are divided among all the members in such manner as the charter or by-laws of the company may direct. Or both united, in which case there is a capital stock provided, as a permanent guaranty fund, over and aljove the premiums re- ceived, and a certain part or proportion of the net profits is paid by way of dividend upon this fund, and tlie residue di- ■\dded among the insured. Of late years the number of mxitual fire insurance compa- nies has greatly increased in this country, and probably by far the largest amount of insurance against fire is effected by them. The principal reason for this is, undovibtedly, their greater cheapness ; the premiums required by them being, in general, very much less than in the stock ofiices. For ex- ample, if the insurance is effected for seven years, which is a common period, an amount or percentage is charged, about the same as that charged by the stock companies, or a little more. Only a small part of this is taken in cash ; for the rest a premium note or bond is given, promising to pay what- ever part. of the amount may be needed for losses which shall occur during the period for which the note is given. More than this, therefore, the insured cannot be bound to pay, and it frequently happens that no assessment whatever is demanded ; and sometimes, where the company is well established and does a large business upon sound principles, a part of the money paid by him is refunded when the insurance expires, or cred- ited to him on the renewal of the policy, if such be his wish. The disadvantage of these mutual companies is, that the premiums paid and premium notes constitute the whole capi- tal or fimd out of which losses are to be paid for. To make this more secure, it is provided by the charter of some compa- nies, that they shall have a lien on the land itself on which any insured building stands, to the amount of the premium. But while this adds very much to the trustworthiness of the premium notes, and so to the availability of the capital,- it is, with some persons, an objection, that their laud is thus sub- jected to a lien or encumbrance. There is another point of difference which recommends the stock company rather than the mutual company. It is that the stock company will generally insure very nearly the full 47 370 THE LAWS OP BUSINESS FOR BUSINESS MEN. value of tlie property insured, while the mutual companies are generally restrained by their charters from insuring more than a certain moderate proportion, namely, from one half to three fourths, of the assessed value of the property. It would follow, therefore, that one insured by a mutual company cannot be fully indemnified agaiist loss by fire ; and may not be quite so certain of getting the indemnity he bargains for as if he were insured by a stock company. But tliis last reason is, practi- cally, of very little importance, and the lowness of the premi- ums effectually overcomes the other. The method and operation of fire insurance have become quite uniform throughout this country ; and any company may appeal to the usage of other companies to answer ques- tions which have arisen undeu its own policy ; only, however, within certain rules, and under some well-defined restrictions. In the first place, usage may be resorted to for the purpose of explaining that which needs explanation, but never to contra- dict that which is clearly expressed in the contract. And no usage can be admitted even to explain a contract, unless the iisage be so well established, and so well known, that it may reasonably be supposed that the parties entered into the con- tract with reference to it. Thus if, under a policy against fire on a vessel in one port of this country, an inquiry is raised as to the local usage, tlie policy is not to be affected by proof of usage upon any particular matter in other ports of the world, or even of the United States. And not only the terms of the contract must be duly regarded, but those of the charter or act of incorporation ; thus, if this provides that " all policies and other instruments made and signed by the preSdent, or other officer of the company, shall bind the company," an agreement to cancel a policy should be so signed ; although it cannot be doubted that a party insured might otherwise give up his policy, or renounce all claim under it, and that a valid agreement to that effect between him and the company would not be set aside, and the company still held, on the groimd of a merely formal defect. In regard to the execiition of a fire policy, and what is ne- cessary to constitute such execution, we say that delivery is not strictly necessary, and a signed memorandum may be sufficient. OF PIEB INSURANCE. 371 or, indeed, an oral bargain only, and that this insurance may " be effected by correspondence, and that the contract is com- pleted when there is a proposition and assent, as we have al- ready said in reference to marine insurance. The leading case on this siibject came by appeal before the Supreme Court of the United States. The facts were briefly as follows. John Minot, the agent of an insurance company at Fredericksburg, at the request of Tayloe, who was about leav- ing for Alabama, made application for an insurance on his dwelling-house, to the amount of $8,000, for one year. This application was dated 25th November, 1844. A reply from the defendants was received, under the date 30th November, 1844. On the 2d of December Minot wrote to Tayloe, informing him of th^ir willingness to effect the insurance, stating terms, &c., and added, " Should you desire to effect the insurance, send me your check, payable to my order, for $57, and the business is concluded." But in consequence of a misdirection of the let- ter, it did not reach Tayloe till the 20th. On the next day, the 21st, Tayloe mailed a letter accepting the terms, and re- mitting a check for the premium, with a request that the policy should be deposited in the bank for safe-keeping. This letter of acceptance was received by Minot on the 31st of December, and upon the 1st of January, 1845, he wrote to Tayloe, com- municating his refusal to carry into effect the insurance, on the ground that his acceptance came too late, the house having been burned on the 22d of December. Tlie company confirmed the view of the case taken by their agent, and refused to issue the policy or pay the loss. The court below passed a decree in favor of the defendants ; bixt upon appeal to the Supreme Court, it was held that the decree should be reversed, and the plaintiff recover. It has been held in an action on a fire policy, as doubtless it would be on a marine policy, that a memorandum made on the application book of the company by the president, and signed by him, was not binding, whore the party to be in- sured wished tlie policy to be delayed until a different adjust- ment of the terms could be settled, and after some delay was notified by the company to call and settle tlie business, or the company would not be bound, and he did not call ; because 372 THE LAWS OP BUSINESS FOE BUSINESS MEN. there was here no constimmated agreement. So, too, a subse- quent adoption or ratification is equivalent, eitlier in a fire or marine policy, to the making originally of the contract ; with this limitation, however, that no party can, by his adoption, secure to himself the benefit of a policy, if it had not been in- tended that his interest should be embraced within it. It is quite common to describe the insured in marine policies by general expressions, — as, "for whom it may concern," or " for owners," or the like ; but such language is seldom if ever used in fire policies, the insured being nearly always specifi- cally named in them. There are some exceptions in the case of consignees, mortgagees, &c., which will be mentioned in a subsequent section. It may be remarked, that the effecting of a fire insurance is not so often done through the agency of a broker as that of marine insurance ; nor is it so usual to pay nothing down, and to give a note for the whole premium. If, however, an insur- ance company has an express rule requiring such payment, it may be waived ; and this waiver may be express or implied, from the conduct of officers of the company who have the right to .act for it. And their admissions bind the company. SECTION II. OF THE C0N8TKUCTI0N OF POLICIES AGAINST FIRE. The rules of construction are generally the same in refer- ence to fire policies as to marine policies. It is sufficient if the words of the policy describe the persons, the location, and the property, with so much distinctness that the court and jury have no difficulty in determining their identity with a certainty which prevents any real and substantial doubt. In the construction of this as of other contracts, the inten- tion of the parties is a very important and influential giiide ; but it must be the intention as expressed ; for otherwise, a con- tract which was not made would be substituted for that which was made ; and evidence from without the contract would be permitted to vary and to contradict it. Thus, where stock in OP FIRE INSURANCE. 373 trade, household furniture, linen, wearing-apparel, and plate were insured in a policy, tlie court held that the term "linen" mvist be confined to "household linen," and woiild not include linen drapery goods purchased on speculation. lu a case where the policy required that the houses, buildings, or other places whei-e goods are deposited and kept, shall be truly and accurately described, and the place was described as the dwelling-house of the insured, whereas he occupied only one room in it, as a lodger, this description was held sufficient. It was held in another case, that the insurance by an inn- keeper against fire of his "interest in the inn and offices," does not cover the loss of profits during the repair of the damaged premises. And in another, the words " stock in trade," when used in a policy of insurance in reference to the business of a mechanic, as a baker, were held to include not only the mate- rials used by him, but the tools, fixtures, and implements necessary for the carrying on of his business ; and the words in question were held to have a broader application to the busi- ness of mechanics than to that of merchants. Where the plaintiff took out a policy of insurance against fire, " on his goods, stock in trade, equitable assignment to the insurers of the claim of the insured against the railroad company ; and the insiu'crs might enforce this by a suit in the name of the insured. SECTION X. OF NOTICE AXD PROOF. Where the policy requires a certificate of the loss, the pro- duction of it is a condition precedent to any claim for payment. And it must be such a certificate as is required ; but a sub- stantial compliance with its requirements is siifficient. So, too, if the notice is to be given forthwith, there must be no un- reasonable or umiecessary delay. And all the circumstances of the case are considered, in determining whether tliere was 400 THE LAWS OP BUSINESS FOR BUSINESS MEN, or "was not due diligence. A notice of a loss, which was re- quired by the policy to be given " forthwith," and was in fact given thirty-eight days after a loss, has been held insufficient. But circumstances may justify a longer delay. Where a cer- tificate is required to be furnished " as soon as possible," it is still sufficient if it be furnished within a reasonable time. But where the fire took place in November, and the account of loss was not furnished till the March following, it was held not to be a compliance with the conditions. Generally, this is a ques- tion for the jury. In fire policies, as the premises may be supposed always open to the inspection of the agents of the insurers, a general notice of the fire will probably be enough. If the assured has assigned the policy with consent, the assignee may give the notice ; and if he does, the neglect of the original insured to give notice does not prejudice the as- signee. The insurers may waive their right of notice wholly or par- tially. And they may do this expressly, or by any acts which fairly indicate to the insured that they accept an imperfect notice given to them, or that they do not need and do not re- quire that any notice should be given, or that they have taken the matter into their own hands, and have made inquiries, and obtained all the information possible. And a refusal " to set- tle the claim in any way," has been held to supply a good ex- cuse for not offijring notice. The preliminary proofs, by which is meant affidavits, certifi- cates, statements, &c., setting forth the loss and its circum- stances, though required by the policy, are not admissible as evidence as to the damages or amount of claim. If it were provided in the policy that they might be so used, tliis would make them evidence, but we are not aware that this is ever said expressly ; and it cannot be inferred from the mere re- quirement of them. If the policy provide that the assured shall, if required, submit to an examination under oath, the insurers are not bound by his statement under oath ; biit if he be duly required, and therefore submit himself to an examination under oath, he cannot afterwards be .required to submit to further examina- tion under oath. OF FIRE INSUEANCE. 401 SECTION XI. OF ADJUSTMENT AND LOSS. Insurers against fire are not held to pay for loss of profits, gains of business, or other indirect and remote conseqiiences of a loss by fire. We do not know, however, why profits may not be specifically insured against fire, where it is not forbidden by, or inconsistent with, the charter of the insurers. There is one wide difference between the principle of adjust- ment of a marine policy and of a fire policy. In the former, if a proportion only of the value is insured, the insured is con- sidered as his own insurer for the residue, and only an equal proportion of the loss is paid. Thus, if, on a ship valued at $10,000, $5,000 be insured, and there is a loss of one half, the insurers pay only one half of the sum they insure, just as if some other insiirer had insured the other $5,000. But in a fire policy, the insurers pay in all cases the whole amoimt which is lost by fire, provided only that it does not exceed the amount which they insure. It is said that general average clauses or provisions are in- serted in fire policies in England ; but they are not known here. Still, in one case, the principle of general average was partially applied. Blankets were used by the insured, with the consent of the insurers, to protect a bxiilding from a near fire ; they did this, effectually, but were themselves made worthless, and an action of the insured against the insurers for this loss was siistained by the court. But the owners of other bu.ild- ings in the neighborhood, who might have been protected by the use of the blankets, were thought to be too remotely inter- ested to be liable to contribution. As a contract of fire insurance is an entire one, if the policy ever attaches, there should be no return of premium, although the property be destroyed the day after, and not by fire ; as by demolition by whirlwind, or other similar accident. If, how- ever, there were an insurance on goods believed to be at a certain place, at a certain time, and none of them were there, there might be an entire return of premium, because there was 61 402 THE LAWS OP BUSINESS FOR BUSINESS MEN. never any insurance. But if a part were there, there should be no partial return ; because the rule that, where a part only is insured, only a proportionate part is paid by tlie insurers in case of loss, applies only to marine policies, as stated above. Most of the fire policies iised in this country give the insur- ers the right of rebxiilding or repairing premises destroyed or injured by fire, instead of paying the amount of the loss. If, under this power, the insurers rebuild the house insured, at a less cost than the amount they insure, this docs not exhaust their liability ; they are now insurers of the new building for the difference between its cost and the amount they have in- sured. And if the new building burns down, or is injiired while the policy continues, the insured may claim so much as, added to the cost already incurred, shall equal the sum for which he was insured. It may be important to add, that, under our common mutual policies, the insured will also be liable for assessments for losses after the destruction of his building by fire, during the whole term of the policy. There is no rule in fire insurance similar to that which makes a dediiction, in marine insurance, of one third, new for old. Still, the jury, to whom the wliole question of damages is given, are to inquire into tlie greater value of a proposed new building, or of a repaired building, and assess only such damages as shall give the insured complete indemnity. Where insurers had reserved a right to replace articles de- stroyed, and the insured refused to permit them to examine and inventory the goods that they might judge what it was expedient for them to do. Chancellor Walworth refused to aid the insiirers in a court of equity ; b^it such conduct on the part of the insured would be evidence to the jury of great weight, to prove an overstatement of loss. If, after the adjustment and payment, there appears to have been fraud in the original contract, or in the adjustment, or material mistake of fact, it would seem that money paid may be recovered back ; but not so if the mistake be of law. If the policy contains a provision that any fraud in the claim, or any false swearing or affirmation in support of it, shall avoid the policy, (as is frequently the case in England,) OP FIRE INSURANCE. 403 it •would seem that it would be left to the jury to say whethei* there was any material and substantial fraud connected with the matter, and if so, to find for the insurers. From the present state of the aiithorities, it may be stated, as a general rule, that the law allows no claims upon the pro- ceeds of policies of fire insurance in favor of any third parties, unless there be a bargain or contract, or a trust, to that effect. Thus, a tenant cannot compel his landlord to expend money received from an insurance office, on the demised premises being burnt down, for rebuilding them, nor prevent the land- lord from suing for the rent until the premises are rebuilt, if, by the terms of the lease, rent is due although the biiilding is burned. 404 THE LAWS OP BUSINESS FOE BUSINESS MEN. CHAPTER XXIII. OF LIFE INSURANCE. SECTION I. OP THE PURPOSE AND METHOD OF LIFE INSURANCE. If a insures B a certain sum payable at B's death to B's representatives, we have only the insurer and insured, as in other cases of insurance. But if A insures B a sum payable to B or his representatives on the death of C, although C is often said to be insured, this is not qiiite accurate ; more properly, B is the insured party and C is the life-insured. Life insurance is usually effected in this coimtry in a way quite similar to that of fire insurance by our miitual compa- nies. That is, an application must be first made by the in- jured; and to this application queries are annexed by the insurers, which relate, with great minuteness and detail, to every topic which can affect the probability of life. These must be answered fully ; and if the insurer be other than the life-insured, there are usually questions for each of them. There are also, in some cases, questions which should be an- swered by the physician of the life-insured, and others by his friends or relatives ; or other means are provided to have the evidence of the physician and friends. These questions are not, perhaps, precisely the same, in the forms given out by any two companies ; and we do not speak of them in detail here. The rules as to the obligation of an- swering them, and as to the sufficiency of the answers, must be the same in life insurance that we have already stated in the chapters on Fire and Marine Insurance ; or rather must rest upon the same principles. And the same rules and prin- ciples of construction therein set forth woxild doubtless be applied to the question whether a contract had been made, or at what time it went into effect. OP LIFE INSURANCE. 405 SECTION II. OF THE PREMIUM. If the insm-ance be for one year only, or less, the premium is usually paid iu money, or by a note, at once. If for more than a year, it is iisually payable annually. But it is common to provide or agree that the annual payment may be made quarterly, 'with interest from the day when the whole is due. Notes are usually given ; but if not, the whole amount woxild be considered due. If A, whose premium of f 100 is payable for 1856 on the 1st day of January, then pays $25, and is to pay the rest quarterly, but dies on the 1st of February, the $ 75 due, with interest from the 1st of January, would be de- ducted from the sum insured. Provision is sometimes made that a part of the premium shall be paid in money, and a part in notes, which are not called in unless needed to pay losses. The greater the ac- commodation thus allowed, the more convenient it is, obvi- ously, to the insured, but the less certain will he be of the ultimate payment of the policy, because, in the same degree, the fund for the payment consists only of such notes, and not of payments actually made and invested. There is a great diversity among the life insurance companies in this respect. But even the strictest, or tliose which require that all the premiums shall be paid in money, usually provide also that an amount may remain overdue, without prejudice, which does not exceed a certain proportion — say one half or one third — of the money actually paid in on the policy. This is con- sidered, under all ordinary circumstances, safe for the com- pany, becaiise every policy is worth as much as this to the company. Or, in other words, it would always be profitable for the company to obtain a discharge of its obligation on a policy, by repaying the insured so small a proportion of what has been i-eceived from him. 406 THE LAWS OP BUSINESS FOE BUSINESS MEN. SECTION III. OF THE KESTRICTIONS AND EXCEPTIONS IN LIFE POLICIES. Our policies usually contain certain restrictions or limita- tions as to place ; the life-insured (he whose life is insured for his own or another's benefit) not being permitted to go beyond certain limits, or to certain places. But there is nothing to prevent a bargain permitting the life-insured to pass beyond these bounds, either in consideration of new and further pay- ments, or of the common premium. So certain trades or occupations, as of persons engaged in making gunpowder, or of engineers or firemen about steam- engines, are considered extra-hazardous, and as therefore pro- hibited, or requiring an extra premium. The exception, however, which has created most discussion, is that which makes death by suicide afl. avoidance of the pol- icy. The clause respecting duelling is plain enough ; and no one can die in a duel without his own fault. But it is other- wise with regard to self-inflicted death. This may be volun- tary and wrongful, or the result of insanity and disease for which the suffering party should not be held responsible. If a policy is accepted, which expressly declares that the sum in- sured shall not be payable if the liffe-insured die by his own hands, whether wilfully, knowingly, or intentionally, or other- wise, there is no doubt that this clause would have its full and literal effect. But it might then be very difficult to- limit its application. If, for example, a nurse gave a sick man a fatal dose by mistake, and he took the glass in his hand, and put it to his lips, drank, and died, it might fall within the language of such a provision, but could hardly come within any princi- ple that would be recognized. Most persons die by their own act, in this sense ; because most owe their death to some act or acts of indiscretion or exposure. The insurers may except any kind of death, as they may except death by a certain dis- ease, or by a certain cause or in a certain place. The difficult question is. What is the construction and operation of law, where the clause is only " death by his own hands," or some equivalent phrase ? OP LIFE INSURANCE. 407 Although strong authorities favor that construction of any clause of this kind ■which would avoid the policy if death were actually self-inflicted, although in a state of insanity, the op- posite view is also well sustained. And we are of opinion that the general principles of the law of contracts, and of the law of insurance particularly, would lead to tlie conclusion that " death by his own hands," but without the concurrence of a responsible will or mind, would not discharge the insurers, without a positive provision to tliat effect. We should piit such a death on the same footing witli one resulting from a mere accident, brought about by the agency, but withoiit the intent, of the life-insured. As if, in a case like that above siip- posed, poison were sent to liim by mistake for medicine, and he swallowed it under the same mistake. It was once made a q^iestion, upon which high authorities differed, wliether deatli by tlie hands of justice discharged the insurers wlien the policy made no express provision for this. Perhaps the weight of authority is in the affirmati^'c. But tlie question lias now but little practical importance, as our policies always express this exception. Although a policy express that it shall not take effect until the premium is paid, this payment may be waived' by the com- pany. Taking a note would certainly be a waiver, if not a payment. Tlie premiums, after the first, must be paid on the days on whicli they fall due. If no hour be mentioned, tlicn it is believed that the insured would have the whole day, even to midnight. It is possible, however, that he might be re- stricted to the usual hours of business, and perhaps even to those in which the office of the insurers is open for business. In some policies a certain number of days is allowed for the payment of the premium. Tlien, if the loss happen after tlie premium is due and unpaid, and during tliis number of days and before they have expired, but after the loss, the premium is paid, the insurers should be bound by this subsequent pay- ment of the premium by the insured or his representatives, within the designated period. But if a certain time were allowed, — say fifteen days, — and the language of the policy be such as indicates the intention of the parties that the payment of the premium during the fifteen days is to be 408 THE LAWS OP BUSINESS FOR BUSINESS MEN. made by the life-insured personally, or during his life, then if he dies, and the premium is paid by his executors during the fifteen days, it has been held that the stim insured cannot be recovered of the company. And it has also been held, that where the printed proposals allow a certain time within which the premium may be paid, after it becomes due, and they are not referred to in the policy so as to become a part of the con- tract, if the life-insured dies after the premium becomes due, the executors cannot, by a tender thereof within the time allowed by the proposals, recover on tlie policy. Where this time had elapsed, and the insurers, under their rules, had charged their agent with the amount, — not hear- ing of the default from him, of which it was the agent's duty to notify them immediately, — and the insured, some days after- wards, paid the premium, which was received by the agent, it was held that this was not sufficient to renew the policy. This seems to be a harsh and extreme case ; for if the insurers had themselves received and accepted the money from the insured, there seems no reason for dotibting that this would have bound them. Practically, the utmost care is requisite on the part of the assured, to pay his premium as soon as it is due ; and it is a wise precaution to pay it a little before. This is the only proper and safe course. But we believe it to be not unusual for the insurers to accept the premium if offered them a few days after, and continue the policy as if it were paid in season, provided no change in the risk has oc- curred in the mean time. Tlie time of the death is sometimes very important. If the policy be for a definite period, it must be shown that the death occurs within it. If there were an insurance on a man's life for a year, and some short time before the expiration of the term he received a mortal wound, of which he died one day after the year, the insurer would not be liable. And the terms of the policy may possibly make it necessary to de- termine which' of two persons lived longest ; as if a sum were insured on the joint lives of two persons, to be paid to the representatives of the survivor. In the cases in which a question of this kind has been raised, there has been some disposition to establish certain presumptions of the law ; OF LIFE INSURANCE. 409 as that the older survived the younger, or the reverse ; or that the man survived the ■woman. We apprehend, however, that there is not, and cannot be, any other presumption of law on the subject, than that, after a certain period of absence and silence, tliere is a presumption of death ; and seven years has been mentioned in England and in this coiintry as this period, and even sanctioned by legislation in New York. But all questions of this kind we regard as pure questions of fact. Whichever party rests his case upon death or life, at a certain time, nmst satisfy the jury upon this point, by such evidence as may bo admissible, and sufficient. If tlie presumption of death in seven years is relied upon, it has been supposed that this strongly imports life during the whole of that period, and death only at the end, unless there be evidence of some particular peril at some definite time ; but this may well be doubted. It is held in England, that where a person has not been heard of for seven years, there may be a presumption that he is dead, but no presumption as to the ti7ne of his death, and the fact that he died at the expiration of seven years, or at any other time within the seven years, must be proved by the party relying on it. SECTION IV. OF THE INTEREST OF THE INSURED. Every one insured in any way must have an interest in the subject-matter of the insurance. Any one may insure his own life ; but if the insured and the life-insured are not the same, that is, if the insured be insured on some other life than his own, interest must be shown. The English statutes have been' siip- posed to require this ; and although we have no precise legisla^ tion on the subject, it must be true in this country, that an insurance of any kind without interest is a mere wager, and a void contract. The general rule is, that any substantial pecuniary interest is sufficient, although not strictly legal nor definite. This has been held in the case of a sister, dependent on a brother for support ; and the rule would be held to apply not only to 52 410 THE LAWS OP BUSINESS FOE BUSINESS MEN. all relations, but where there was no relationship, if there were a positive and real dependence. That is, any one may insure a siim on the life of any person on whom he or she really depends for support or for comfort. So an existing debt gives the creditor an insurable interest in the life of a debtor. But if the debt be not founded on a legal consideration, it does not sustain the policy. And if the debt be paid before the death of the debtor, the insurers are discharged. So it was thought they were, on the general prin- ciples of insurance, if the debt were paid after the death of the debtor, and before the insurance is paid, or if on any ground, or by any meanSj the whole risk of the insured is terminated, and he cannot suffer any loss by the death of the life-insured. But recent adjudication in England has unset- tled the former rule in regard to this question, and now it seems probable that the insurers would be required to pay under such circumstances. The loading case in England on this subject had a peculiar interest, from the celebrity of the life-insured, as well as from the severe examination to which it has recently been subjected. The plaintiffs were creditors of the Rt. Hon. William Pitt, and on November 29, 1803, obtained from the Pelican Life Insurance Company an insxirance on his life for seven years, renewable from year to year for seven years, at an annual premium, Avhich was duly paid, and the policy renewed, until his death, on January 23, 1806. Tlie debt of Mr. Pitt, at the time the policy was effected, and dur- ing the rest of his life, was equal to the sum of £ 500, and at his decease amoimted to £1,109 lis. 6d., which sum, he dying insolvent, was paid to the plaintiffs by his executors, the Earl of Chatham and the Lord Bishop of Lincoln, oxit of the money granted by Parliament for that purpose. The in- surance company, against which this suit was brought on the policy, resisted payment, on the ground that the contract of life insurance was one of indemnity, and the plaintiffs, having been fully paid, had been fully indemnified. This defence was sustained. But in recent cases this case is said to have been wrongly decided, and that both the law and usage in England are otherwise ; and now, it seems that the insurers would be held there, although the whole debt were paid. We OP LIFE INSURANCE. 411 think it ■would be so here ; but in this country, life insurance companies sometimes avoid the question, by making it a part of the contract, that the insured creditor shall transfer to the company an amount of his debt equal to that for which he is insured ; and then, if the debt is paid, it must be paid to them. A difficult question arises, when the insurers on the death of a debtor pay the sum they insured to the creditor, and, the representatives of the debtor, or a surety or guarantor of the debt, defend themselves against the creditor on the ground that the debt is paid and fully discharged by the payment under the policy. The cases may not settle this question; nor does the practice, so far as we are aware of it. The gen- eral principles of all insurance would lead to the conclusion, that, by such payment the debt is paid, so far as the creditor is concerned ; but that the insurers have by substitution the rights of the insured, and may prosecute, in his name, but for their own benefit, any action against the estate or representa- tives of the debtor which the creditor might prosecute him- self. Recent adjudication, to which we alluded in the last paragraph, would however lead to a different conclusion, and deny the insurers any benefit from the debt, and oblige the representatives of the debtor to pay it to the creditor, to whom it had been also paid by the insurers. SECTION V. OF THE ASSIGNMENT OF A LIFE POLICY. Life policies are assignable at law, and are very frequently assigned in practice. A large proportion of the policies which are effected, are made for the purpose of assignment ; that is, for the purpose of enabling the insured to give this additional security to his creditor. If the rtiles of the company or the terms of the policy refer to an assignment of it, they are bind- ing on the parties. On the one hand, an assignment would oper- ate as a discharge of the insurers, provided a rule or expressed provision gave this effect to the assignment. And, on the other, if the agreement were that the policy should continue in favor 412 THE LAWS OP BUSINESS FOR BUSINESS MEN. of the assignee, even after an act -nrhicli discharged it as to the insured himself, — as, for example, his suicide, - — the insurers would be bound by it. It is an important question, what constitutes an assignment. The general answer must be, any act distinctly importing an as- signment. And, therefore, a delivery and deposit of the policy, for the purpose of assignment, will operate as such, without a formal written assignment. So will any transaction which gives to a creditor of the insured a right to payment out of the insurance. It seems, however, that delivery is necessary. And where an assignment was indorsed on the policy, and notice given to the insurer, but the policy remained in the possession of the insured, it was held that there was no assignment. Wliere, however, the assignment was by a separate deed, which was duly executed and delivered, tliis is an assignment of the pol- icy, without actual delivery of the policy itself. And a mere verbal promise to assign, a valuable consideration being re- ceived for the promise, has been held good as against the insured ; and perhaps, after proper notice, against his assignee in bankruptcy. This subject of assignment is frequently regulated by the by-laws of the insurers, or by the terms of the policy. Where it is not, we see no reason for saying that the right to know and choose the party insured does not apply, as in other kinds of insurance ; and consequently the insurers are discharged if there be an assignment without their knowledge and consent. The cases, however, do not settle this question, and there are opinions that life insurance is in this respect distinguished from other insurance. SECTION VI. OF WAEKANTY, KEPRESENTATION, AND CONCEALMENT. The general principles on this subject are the same which we have already stated in reference to other modes of insurance. In life policies, however, the questions which must be answered are so minute, and cover so much ground, that no difficulty OP LIFE INSURANCE. 413 often arises except in relation to the answers. One advisable precaiition is for the answerer to discriminate carefully between what he knows and what he believes. If he says simply " yes " or " no," or gives an equivalent answer, this is in most cases a strict warranty, and avoids the policy if there be any material mistake in the reply. But where the answerer adds, the words "to the best of my knowledge and belief," he war- rants only the fact of his belief, or, in other words, nothing but his own entire honesty. The cases which turn tipon the answers to the questions are very numerous ; but they necessarily rest npon the especial facts of each case, and hardly permit that general rules should be drawn from them. Some, however, may be stated. The first is, that perfect good faith should be observed. Tlie want of it taints a policy at once ; and the presence of it goes far to protect one. Thus, where the life-insured was beginning to be insane, but was wholly unconscious of it, the policy was not vitiated by the concealment, although two doctors in at- tendance upon him knew how the case stood. There is a warranty, or statement, usually making a part of nearly all life policies ; it is that the life-insured is in good health. But this does not mean perfect health, or freedom from all symptoms or seeds of disease. It means reasonably good health ; and loose as this definition, or rule, may be, it would be difficult to give any other. And if a jury on the whole are satisfied that the constitution of one warranted to be " in good health " is radically impaired, and the life made unusually precariotis, there is a breach of the warranty, al- though no specific disease is shown which must have that eifect. On the other hand, this warranty is not broken by the presence of a disease, if that be one which does not usually tend to shorten life, (in one English case dyspepsia was said to be such a disease,) unless it were organic, or had increased to that extreme degree as to be of itself dangerous. Consumption is "the disease which is most feared in this country, as well as in England. And the questions which re- late to the symptoms of it, as spitting of blood, cough, and the like, are exceedingly minute. But here also there must be a reasonable construction of the answers. Thus, if spitting of blood be positively denied, there is no falsification in fact, 414 THE LAWS OP BUSINESS FOE BUSINESS MEN. thoiigh literally speaking the life-insured may have spit blood many times, as when a tooth was drawn, or from some acci- dent. If there be an action on the policy, and the insurers rest their defence on any falsification of this kind, the question usually put to the jury is. Was the party affected by any of these or similar symptoms, in such wise that they indicated a disorder tending to shorten life? And any symptom of this kind, however slight, — as a drop or two of blood having ever flowed from inflamed or congested lungs, — should be stated. In a case in Massachusetts, an applicant for life insurance answered an interrogatory, whether he had ever been afflicted with a pulmonary disease, in the negative ; and in answer to an interrogatory, whether he was then afHicted with any dis- ease or disorder, and what, stated that he could not say whether he was afHicted witli any disease or disorder, but that he was troubled with a general debility of the system; and it was proved that the applicant was then in a consumption, the symptoms of which had begun to develop themselves five months before, and were known to him ; but were not dis- closed to the insurers, although sufficient to indiice a rea- sonable belief on the part of the applicant, that he had siich a disease. It was held, .that, whether these statements amounted to a warranty or not, they were so materially untrue as to avoid the policy, although the insured, at the time of his appli- cation, did not believe that he had any pulmonary disease, and the statement made by him was not intentionally false, but, according to his belief, true. The insurers always ask who is the physician of the life- insured, that Ihey may make inquiries of him if they see fit. And this question must be answered fully and accurately. It is not enough to give the name of the visual attendant ; but every physician really consulted should be named, and every one consulted as a physician, although he is an irregular prac- titioner or quack. If the warranty be that the life-insured is' a person of sober and temperate habits, it has been held, in an action on such a policy, that the jury are not to inquire whether his habits of drinking are such as might injure his health ; for if he has any " habits of drinking," this would discharge the insurers, because they have a perfect right to say that they will insure OP LIFE INSURANCE. 415 only those who ai'O temperate. But it might be answered, that although the insurers have this right, and there may be good reasons why this should be the general practice, yet unless they use the Avord " abstinence," or something eqiiivalent, they have no right to say that any one is not " temperate " who does not drink enough to affect his health ; for certainly all " intemperance" does this. An answer, " not subject to fits," is not necessarily falsified by the fact that the life-insured has had one or morcfits. But if the question had been, " Have you ever had fits? " then it is said that any fit of any kind, and however long before, must be stated. But if a man had a fit when a young child, and forgot to mention it, or considered it wholly unimportant, and it had nothing to do with his state of health, it would hardly be held a falsification which woidd avoid the policy. As there is always a general question as to any facts affect- ing health not particularly inquired of, a concealment of such a fact goes to a jury, who are to judge whether the fact was material, and whether the concealment were honest. As when a life-insured was a prisoner for debt, and so without the benefit of air and recreation ; and where a woman whose life was insured had become the mother of a child under disgrace- ful circumstances, and the insurers defended against tlie policy on this ground, the question was submitted to. the jury, whether the concealment of these facts was a material concealment. If the policy, and the papers annexed or connected, put no limits on the location of the life-insured, he may go where he will. But if, when applying for insurance, he intends going to a place of peculiar danger, and this intention is wholly with- held, it would be a fraudulent concealment. If facts be erroneously but honestly misrepresented, and the insurers, when making the policy, knew the truth, the error does not affect the policy. Nor does the non-statement of a fact which diminishes the risk ; or concerning which there is an express warranty. If upon a proposal for a life insurance, and an agreement thereon, a policy be drawn up by the insurers, and presented to the insured and accepted by them, which differs from the terms of the agreement, and varies the rights of the parties concerned, equity will interfere and deal with the case on the 416 THE LAWS OP BUSINESS FOE BUSINESS MEN. footing of tliis agreement, and not of the policy. But it may be shown by evidence and circumstances, that it was in-tended by the insurers to vary the agreement, and propose a different policy to the insured, and this was understood by the insured, and the policy so accepted. SECTION VLI. INSURANCE AGAINST DISEASE, AND AGAINST DISHONESTY OF SERVANTS. Of late years, both of these forms of insurance have come into practice ; but not so long or so extensively as to require that we shoiild speak of them at length. In general it must be true, that the principles already stated as those of insurance against marine peril, or fire, or death, must apply to these other — and indeed to all other — forms of insurance, excepting so far as they may be qualified by the nature of the contract. . . From one interesting case wliich has occurred in England, it seems that, when an application is made for insurance, or guaranty, agninst the fraud or misconduct of an agent, ques- tions are proposed, as we should expect, "which are calculated to call forth all the various facts illustrative of the character of the agent, and all which could assist in estimating the probability of his fidelity and discretion. But a declaration of the applicant as to the course or conduct he was to pursue, was distinguished from a warranty. He may recover on the policy, although he changes his course, provided the declara- tion was honest when made, and the change of conduct was also in good faith. In this case the application was for insxir- ance of the fidelity of the secretary of an institution. There was a question as to when, and how often, the accounts of the secretary would be balanced and closed ; and the applicant answered that these accounts would be examined by the finan- cial committee once a fortnight. A loss ensued from the dis- honesty of the secretary ; and it appeared to have been made possible by the neglect of the committee or the directors to examine his accounts in the manner stated in the policy. But the insurers were held, on the ground that there was no war- ranty. OF DEEDS CONVEYING LAND. 417 CHAPTER XXIV. OP DEEDS CONVEYING LAND. SECTION I. WHAT la ESSENTIAL TO SUCH DEEDS. By the old law, no instrument was considered made imtil it was sealed ; then it was thought to be done, and the word deed, wliich literally means only something done, was given to every written instrument to which a seal was affixed ; and that is the legal' meaning now. B\it the common meaning of the word is an instrument for the sale of lands ; and it is of this that we would now treat. In our first chapter, we have given the reasons why our remarks or directions on this subject must be only brief and general. By the statutes and usage of this country, generally, no lands can be transferred excepting by a deed, which is signed, sealed, acknowledged, delivered, and recorded. What the deed should be, that is, in what words it shoufd be expressed, we can best show by the forms in the Appendix, and do not propose to say more about it than this. It is not safe to depart from forms, and established phrases, which. have passed before the courts so often, that their exact meaning is certainly known. There are things which seem to be, and per- haps are, A^aiii repetitions ; and for the usual words it may be thought that others of the same or better meaning may be substituted. Such changes may be made, perhaps, without detriment ; but perhaps, also, with ruinous results ; and it is not wise to run the risk. It should be signed ; and this means, properly, that the seller or grantor shoiild write his name in the usual way, in the proper place, and witli ink. If the grantor cannot write Ms name, he may merely make his mark. It has been said tliat. 53 418 THE LAWS OP BUSINESS FOE BUSINESS MEN. writing with a lead pencil is enough, but it would not be safe to trust to it. The name of the grantee should be distinctly written in the proper place, in. ink. Sometimes, in our large cities, an agent buys land for a principal who does not wish to be known, and the agent's name is inserted as grantee, m pen- cil, and the deed is so executed and acknowledged and deliv- ered ; and some time afterwards the agent rubs his name out, and writes the name of his principal, the actual buyer, instead. But this is a very unsafe and reprehensible practice, and the deed cannot be considered satisfactory. The deed of a corporation must be signed by an agent or attorney, who should be careful to execute it in the manner indicated in some of the forms in the Appendix. In one case, in Massachusetts, where a deed was written throughoxit as the deed of a corporation, and their treasurer signed it thus : " In witness whereof, I, the said C. C, in behalf of the said company, and as their treasurer, have hereunto set my hand and seal,^' — it was held that this was the deed of the treasurer, and not the deed of the corporation, and did not transfer the lands. This is an extreme case, and the law might not always be applied with so much severity ; but it is best not to incur any such risk. So, too, the rule that a person who is to be authorized to affix the seal of another should be authorized under the seal of the principal, is so general, that, although it has important Exceptions, it should always be observed. Tlie seal is properly a piece of paper wafered on, or sealing- wax pressed on. In the New England States generally, and in New York, nothing else satisfies the legal requirement of a seal. In the Southerti and "Western States generally, a scrawl, intended for a seal, usually made by writing the word " seal" witliin a square or diamond, is regarded in law as a seal. If there be but one seal on an instrument, and many parties, all of whom should seal it, tliis seal will be taken generally for the seal of each one ; although, properly, each signer should put a seal against his own name. The dged should be delivered. If a man makes a deed, and acknowledges it, and keeps it in his possession, and dies, the deed has no effect whatever ; no more than if the grantor had put it in the fire. Even where it was recorded, and then taken OP DEEDS CONVEYING LAND. 419 back by the grantor and kept by him, with words going to " show that the grantor did not wisli tlie grantee to know of it, it was held no1||o have been delivered. But there are no especial words or form necessary for delivery. If the deed, in any way whatever, gets into the possession of the grantee, with the knowledge and consent of the grantor, it is a delivery. The grantor may deliver it by his agent, and it may be de- livered to the agent of the grantee, authorized by him to receive it. Moreover, the law permits a kind of conditional deliveiy. Thus, the grantor may deliver the deed to a third person, to be delivered by him to the grantee on a certain con- dition, or when a certain thing is done ; and when that condi- tion is performed, or the thing is done, the deed belongs to the grantee, and takes effect in tliQ same way as if it had been delivered to him personally. So the grantor may put the deed in the hands of the third person, with directions to give it to the grantee after the death of the grantor, provided the grantor does not reclaim it in the mean time. Then the grantor can reclaim it whenever he will, which he cannot do after he has delivered it to the grantee ; but if he does not reclaim it during his life, at his death it becomes the property of the grantee, and the law now considers that it was delivered to him when first delivered to that third party. So that deed is good even against creditors, provided that the grantor was perfectly solvent when he put the deed in the hands of the third party, and acted altogether in good faith. If a deed to a married woman be delivered either to her or to her husband, it is sufficient. As there must be delivery to the grantee, or to some one for him, so there must be assent and acceptance on his part. The law will help any evidence tending to show such assent, by presuming in favor of the grantee's assent if the deed be wholly and only favorable to him. But if there is money to be paid by him, or anything important to be done if he accept the deed, this presumption is much feebler. It is usiial and proper that the execution of the deed should be attested by witnesses. In many of our States two witnesses are required by statute. In New York, one is enough. In the. greater number, witnesses are not absolutely required by stat- 420 THE LAWS OF BUSINESS FOE BUSINESS MEN. utes, nor by strict law of any kind ; but even there it is usual and safer to have them. The witness should see the party sign ; i|^t if the deed is signed near him, and is immediately brought to him by the grantor, who tells him that is his signature, and asks him to witness, this would be sufficient in law. It is desirable that witnesses, when called on to testify, should remember the signature, sealing, &c. ; biit it is suffi- cient in law that they are certain of their handwriting, and can declare under oath that they should not have attested the ex- ecution and delivery 'if they had not seen it. If witnesses are dead, proof of their handwriting is sufficient ; and if this cannot be offered, then proof of the handwriting of the grantor is enough. If witnesses attest tlie signing, sealing, and delivery^ in the common form, proof of their handwriting, in case of their death or absence, is proof of the execution and delivery of the deed. The witness should, properly, be of sufficient age and under- standing, but may be a minor. He should have no interest in the deed. Hence a wife is not a proper witness of a deed to her husband. But the courts, and especially a court of equity, would seldom permit a deed to be avoided through the incom- petence of a witness, if there were no suspicion of wrong. So a deed must be acknowledged. For this purpose the grantor must go before a person qualified by law to receive acknowledgments, and exhibit the deed to him, and acknowl- edge it as his free act and deed ; and the person receiving the acknowledgment then certifies that he has received tliis ac- knowledgment, under the proper date. In general an acknowledgment may be made before any jus- tice of the peace, or a commissioner appointed for the State in which the land to be conveyed is situated, if the deed is ex- ecuted- in another State, or ■ any consul or consular agent of thg United States if the deed is executed in a foreign country. This acknowledgment must be made, or the deed cannot be recorded. But it seems to be law, that, if the deed gets on record, neither a defect in the acknowledgment, nor a total want of acknowledgment, avoids it ; it would not, however, be prudent to act on this supposition. OF DEEDS CONVEYING LAND. 421 Formerly, all the grantors acknowledged the deed ; and this continues to be usual in most places, and is the safest practice. But, generally, itiis now sufficient in law, if either of the grantors acknowledge it. In many States, if a wife, separately or joining with her hus- band, conveys away her land, a particular form and mode of acknowledgment is required, in order to ascertain that she does it of her own free will ; and any such directions or require- ments should be followed with great care. An attorney, A. B., who executes a deed for another, C. D., should acknowledge it as " the free act and deed of the said C. D.," and not as his own. The justice taking the acknowledgment must be careful to state it in his certificate, exactly as it was made before him. In some of our States, recent laws have in effect reqiiired the assent of the wife to a transfer of the husband's real estate ; not merely to convey her dower, but to pass the property to the grantee. We do not enumerate or specify these States, for such a list might only mislead the reader, as the law on this subject seems now to be fluctuating continually. In all our States, we have the excellent system of registering (or recording, as it is more freqiiently called) all deeds of land in the public registers of the county in which the land lies. This was adopted for the purpose of giving certainty and noto- riety tO' title, and it works admirably well. The investigation of title is usually easy to those accustomed to this mode ; and every purchaser of land should ascertain that the deed will give him good title before he takes it. Frequently, the B,egis- ter of deeds, for a small fee, will give him the necessary infor- mation. Exit if he wishes a fuller investigation, he must em- •ploy a good lawyer, accustomed to this work. The law generally requires that a deed of lands should be acknowledged and recorded to have full effect ; but judicial de- cisions have everywhere qualified the force of these words, and in some instances the language of the statutes varies. But the rules of law in reference to the recording are quite uniform in all the States, and are as follows. In the first place, every acknowledged deed is considerc^w&s recorded as soon as it is in the hands of the recording oiiicer ; 422 THE LAWS OP BUSINESS FOR BUSIN'ESS MEN. and therefore he generally minutes upon it the day, liotir, and minute when it was received by him This may be very important ; for if A makes his deed and delwers it to B, who presents it for record at five minutes past noon, and G, a cred- itor of A, attaches the same estate at four minutes past noon of the same day, the grantee loses the land and the creditor gets it ; but the grantee saves it, if he presents it to the office three minutes and fifty seconds after noon. In the next place, as the purpose of public registration is general notoriety, a deed is perfectly good without record against the grantor himself and his heirs, because the grantor himself could not but know of the deed, and, as all title passed out of him by it, his heirs could take none from him. And finally, a deed not recorded is just as good as if it had been recorded, against any parties, or the heirs of any parties, who took the land from the grantor by a subsequent deed, even for a full price, if they had at the time notice or knowledge of the prior and unrecorded deed. Many wise persons have doubted the expediency of this last rule, becaiise it tends to raise troublesome questions, and to make grantees careless about recording their deeds. But the rule itself is iiniversally and firmly established, and in some statutes requiring record this exception is expressed. A deed should be dated ; but, if it have no date, will take effect from delivery. Any erasures or alterations shoiild be noticed and stated above the names of the witnesses, as having been made before the execution of the instrument. Any ma- terial alteration" by a grantee, or by his procxirement, makes the deed void in most cases, so far as he is concerned. It is usual, and therefore proper, to name executors, ad- ministrators, &c., as in the forms in the Appendix ; but, gen- erally, the rights and obligations of the deceased fall on them by law. OF DEEDS CONVEYING LAND.. 423 SECTION II. OF THE USUAL CLAUSES IN DEEDS. It is customary tft recite in all deeds the consideration on whicli they are made. This is usually the price paid for them. Sometimes it is this price in part, and other things in part. Sometimes there is no price paid, the land being either a gift, or conveyed for other considerations. In the great majority of deeds, the language iised is, "in consideration of (so much money) paid me by the said (grantee), the receipt -whereof I acknowledge." Or it is, " in consideration of one dollar paid me, the receipt of which I acknowledge, and divers other con- siderations " ; or, " in consideration of one dollar to me paid, the receipt of which I acknowledge, and of the love and good- Trill I bear to the said (grantee)." It is always customary, although not necessary, to put in " one dollar," or some other nominal sum, although no price is paid. Although the price is inserted, and the receipt thereof be acknowledged, the seller is not bound by his receipt. It is a general rule, as has been stated, that all written receipts of money are open to evidence, as written contracts generally are not. Under this rule, the seller may sue for the whole or any part of the money of which he lias acknowledged the receipt, if ho can prove that the money he demands has not been paid to him. He cannot, however, say that the money has not been paid, and therefore the deed is void, and the land has not passed to the grantee. For only that part of the deed which is a relteipt is open to denial or evidence. > Of the words of conveyance, which are usually " give, grant, sell, and convey," it needs only be said, that it is best to use them, because it is usual, but that other words, or these with some change, would be sufficient in law. The description of the land should be minute and accurate, to an ex;treme degree. In the country, it is customary and well to refer to the previous deeds by which the grantor ob- tained his title. This is done by describing them by their par- ties, date, aiid book and page of registry. It may be well tO' 424 THE LAWS OF BUSINESS FOE BUSINESS MEN. remark, that. a deed referred to in a deed becomes, for most purposes in law, a part of tlie deed referring. By the law of England and of America, if land is conveyed by deed to " A. B.," the grantee takes it for his life only. Nor will he take it in full property, (or, to use the technical law term, in fee simple,) that is, with full power of disposing of it during. his life or at his death, with a right on the part of his heirs to it if he does not dispose of it, unless it is given to " A. B. and his heirs." These last words, which are commonly called words of inheritance, must always be added ; for al- though there are some qualifications to this rule, which might help those who take such a deed inadvertently, there are none to which it would be safe to trust. The deed is terminated by this clause of execution: "In witness whereof, I, the said A. B., on the day of in the year , have hereunto set my hand and seal," or " sub- scribed (or written) my name and affixed my seal." And there should be no departure from this, although an exact ad- herence to this formula may not be necessary to the validity of the deed. If the deed contains nothing but what has now been said, it will convey the land, or all the right, title, and interest in and to the land, possessed by the grantor. But it is only what is called a quitclaim deed. That is, it is not a warranty deed. These phrases, which are in common use, explain themselves. Originally, a quitclaim deed was intended, and indeed oper- ated, only where the grantee already held possession of the land, or some title to it, and the grantor intended to renounce all his right or title in favor of the grantee.. But it was soon used where a man intended to sell and convey land, but nift to give any warranty. And now, because there is some question, in some of our States, as to the effect of the words "give, grant, sell, and convey," although there be no express war- ranty in the deed, it is best, and it is usual, when only a quit- claim is intended, without any warranty whatever, to substi- tute for the words of conveyance above mentioned the words "grant and quitclaim," or, more accxirately, "release and quitclaim.' Then, if the grantee afterwards loses the land because the grantor had no title to it, the grantor is nevertheless OP DEEDS CONVEYING LAND. 425 under no responsibility, provided tlie transaction was an honest one on his part. All purchasers, therefore, desire to have a warranty deed if they can get one. And a deed becomes a warranty deed, ■when clauses like those which follow are inserted just before the execution clause : — "And I, the said A. B. (the grantor), for myself, my heirs, executors, and administrators, do covenant with the said 0. D. (tlie grantee), his heirs and assigns, that I am lawfully seized in fee of the afore-granted premises ; that tliey are free from all encumbrances ; that I have good right to sell and con- vey the same to 'the said C. D. as aforesaid ; and tliat I will, and my heirs, executors, and administrators shall, warrant and defend the same to the said C. D., his heirs and assigns for ever, against the lawful claims and demands of all persons." It%ill be noticed that this paragraph contains four different agreements or Avarranties, — covenants the law calls them. The cases are multitudinous, and the law excessively nice', as to tlicir exact meaning and operation. None of this teclinical learning is it worth wliile to spread before the general reader. But the general purpose and effect of all of them together should be stated. It is, tliat if " the said C. D," that is, the grantee, or his heirs or assigns, are turned out of that estate, (ousted or evicted, the law says,) on the ground that the grantor had no title, or an encumbered title, and could not convey any free title, he or they may fall back on the grantor or his heirs, and demand damages for the loss of the land. It is a question how much damage a grantee thus ousted shall recover. In most of our States, it seems to be the money paid for it, with interest, (deducting rents and profits,) and the legal costs and charges (not including counsel fees) for defending against the suit, and no more. But in other States, as generally in New England, the party ousted recovers tlie value of the land, with his improvements, which he loses by the defect of the grantor's title. It is not, however, settled uniformly what the measure of damages is. In forms of deeds there is usually a blank of a few lines left after the word " encumbrances " ; and this is intended for the insertion of any mortgage, or other encumbrance, which may 54 426 THE LAWS OP BUSINESS FOR BUSINESS MEN. exist; thus, "excepting a mortgage to, &c., dated, &c., to se- cure the sum of, &c." Or, " excepting a right in the owners of the adjoining land to have and maintain a drain running, &c." Sometimes quitclaim deeds are made with this warranty: "And I will, and my heirs, &c. shall, warrant and defend, &c. to the said C. D., &c. against all claims and demands of my- self, or of any persons deriving title by or through me." Such a warranty will hold the grantor and his heirs liable for any encumbrance made or suffered by him, but not for any other. As the usual covenants of a wairanty deed are made with the grantee, " his heirs and assigns," if such' grantee conveys the land only by grant and quitclaim, without warranty, Ms grantee takes the benefit of all the previoiis warranties to whicli this last grantor was entitled. Thus, A sells with war- ranty to B ; B quitclaims to C ; C is ousted by D, who proves that he has a better title than A. C now may sue A on A's warranty to B, which was transferred to G. Sometimes estates are conveyed on condition ; but this is a very catching thing, and nobody should ever take siich a deed if he can help it. It is hardly safe to have the word condition in a deed. The reason is, that if an estate is conveyed on condition, and the condition is bx-oken, the estate is lost. Thus, if land is sold on a certain street with this clause: "And the land aforesaid is sold on condition that neither the grantee, nor any one deriving title from or throiigh him, shall build within ten feet of the street." If any owner build six inches over the line, by mistake, or extend his building by an ad- dition of a foot or so in any part, the whole land, house and all, viight be lost and forfeited to the grantor. And the grantor can always secure the proper effect of such a condition by a clause like. this: "Provided, however, and it is agreed, that if the said C. D., &c. shall build, &c., the said A. B., or his heirs or assigns, may enter upon the land hereby con- veyed, and abate and remove any and all buildings, or parts of buildings, which stand nearer said - street than the limit of ten feet aforesaid" ; — or some similar clause, as a lawyer would frame it to suit the case. By a rule of law which originated in this country, and is OF DEEDS CONVEYING LAND. 427 now universal here, if a married woman holds lands, the Inis- band and the wife, joining in one deed, may convey them. In some of our States such a deed is regulated by statutes, which of course are to be regarded. And in many of them the wife now has peculiar powers by statute, as stated in our chapter on Parties, Section III., on Married Women. It may be neces- sary that she should renounce or release certain rights, as of homestead, &c., under these statutes, or the grantee will not take a clear title ; and in such case proper words should be inserted. This is now the custom, for example, in Massaghu- setts. She should always release her right of dower, unless it is intended that slie should preserve it. Her signing the deed with her husband does not release anything, even if it could be proved that such was her intention, unless the deed con- tains words expressing her intention to release or convey such or such a right or interest. In most printed forms there is a blank left to be filled up for this purpose. It may be well to remark, that bargains are often made for the purchase and sale of real property. If the contract be oral only, it has no force in any court. If it be in writing, either party may, in a court of law, recover damages from the other, if he refuses to perform his contract. Or, in a court of equity, he may compel the other to execute his contract. Not, how- ever, if there was fraud in the contract, or oppression, or gross misrepresentation, or intentional and important concealment. But a mere inadequacy of price — aU things being honest — will not prevent a court of equity from enforcing such an agreement. 428 THE LAWS OP BUSINESS FOR BUSINESS MEN. CHAPTER XXV. OP MORTGAGES. ^SECTION I. , OF MORTGAGES OP KEAL ESTATE. The purpose of a mortgage is to give to a creditor the secu- rity of property. It is very similar to a pledge, although not the same thing. Mortgages are now made- of personal property, as well as, of real property; but we will first consider a mortgage of real property ; or, as it is usually called, a mortgage deed. This is a deed conveying the land to the creditor as fully, and in precisely the same way, as if it were sold to him out- right; but with an addition. This consists of a clause in- serted before the clause of execution, to the effect, that, if the grantor (the mortgagoi') shall pay to the grantee (the mortga- gee) a certain amoimt of money at a- certain time, then the deed shall be void. It is usually expressed in words like these : — "Provided nevertheless, that if the said A. B. (the grantor), his heirs, executors, or administrators, shall pay to the said C. D. (the grantee), his executors, administrators, or assigns, the sum off with interest (semiannually, or otherwise as agreed on), on or before the day of , then this deed, and also a certain promissory note signed by said A. B., whereby said A. B. promised to pay said C. D., or his order, the said sum at the said time, shall both be void ; and other- wise shall I'emain in full force." In New York it is more frequent to make a bond, to be secured by the mortgage ; and the proviso should be altered accordingly, and should also be made to express any other terms agreed on. Some of these will be spoken of presently. In law, everything is a mortgage which consists of a valid conveyance, and a promise, or agreement, which may be on a OF MORTGAGES. • 429 distinct piece of paper or instrument, providing that tlio con- veyance shall be void when a certain debt is paid, or the act performed for which the mortgage is security. The mortgagee has now a proper title ; but it is subject to avoidance by payment of the debt. Until such payment, the land is his ; and all the mortgagor owns in relation to it is a right to pay the debt and redeem the land. Hence, a mort- gagee has instantly as good a right to take possession of the land (unless the deed provides that the mortgagor may retain possession) as if he were an outright purchaser. Formerly, a mortgagor had a right to redeem his land only vintil the debt became due and unpaid ; for if ho did not pay the money when it was due, he had no further right. But courts of equity, deeming this too hard, allowed him a further time to redeem it. And courts of law adopted the same rule, which is also expressed in the statutes of all our States. This right to redeem is called a right in equity to redeem, or, more briefly and commonly, an equity of redemption ; which all courts now regard and protect. The mortgagor may sell this equity of redemption, or he may mortgage it by making a second or other subseqiient mortgage of the land, and it may be attached by creditors, and would go to assignees as a part of his property if he became insolvent. The law regards this equity as so important, that it will not permit a party to lose it by his own agreement. Thus, if a mortgagor agrees with the mortgagee, in the most positive terms, or in any way he can contrive, or for any consideration, that he will have no equity of redemption, and that the mort- gagee may have possession and absolute title as soon as the debt is due and unpaid, the law sets aside all such agree- ments, and gives him his equity of redemption for three years. Within a few years, however, a way has been found to effect this purpose indirectly, which the law sanctions. Many persons object to lending their money on mortgage, because they will have to wait three years after the debt is due before the land can be certainly theirs. But it is now quite common for the mortgage deed to contain an agreement of the parties, that if the money is not paid when it is due, the mortgagee may, in a certain number of days thereafter, sell the land, (providing also 430 THE LAWS OP BUSINESS FOR BUSINESS MEN. sudi precautions to secure a fair price as may be agreed on,) and, reserving enough to pay his debt and charges, pay oyer the balance to the mortgagor. Tlie three years of redemption do not begin from the day when the debt is due and unpaid, unless the mortgagee then enters and takes possession for the purpose of foreclosing the mortgage, as the legal phrase is ; by which phrase is meant extinguishing the equity of redemption. If the debt has been due a dozen years, the mortgagor may still redeem, unless the mortgagee has entered to foreclose, and three years have since elapsed. He may make entry for this purpose in a peaceable manner, before witnesses, as pointed out in the statutes regulating mort- gages, or by an action at law. If the mortgagor redeems, he must tender the debt, with interest, and the lawful costs and charges of the mortgagee ; but he will be allowed such rents and profits as the mortgagee has actually received, or would have received but for his own fault. It is commonly thought that the mortgagor has a right to retain possession until the debt is due and unpaid, and in fact he usually does so. But we have seen that the mortgagee has just as much right of immediate possession as a buyer ; and therefore, if it is not intended that he should have possession at once, the mortgage deed ought to contain a clause to the effect, that the mortgagor may retain possession as long as he pays instalments and interest as due, and cofnplies with his other agreements. One of these other agreements, which is now very common, is that the mortgagor shall keep the premises insured in q, cer- tain sum for the security of the mortgagee ; and if there be such an agreement, it should be expressed in the deed. Other- wise, if the mortgagee insures the house, he cannot charge the premium to the mortgagor. If a mortgagor erects biiildings on the mortgaged land, or puts fixtures there, and the mortgagee takes possession of the land and purchases the mortgage, he gets all these additions. If tlie mortgagee puts them on the land, and the mortgagor redeems, he gets, the benefit of them all, without paying the mortgagee for them. OP MORTGAGES. 431 SECTION II. OF MORTGAGES OF PERSONAL PROPERTY It -was said that moi'tgages are now often made of personal property. The instrument need not be so formal as a mort- gage deed of land. Any instrument will answer the purpose, which would suffice as a bill of sale of the property, and which contains, in addition to the words of transfer, a clause provid- ing for the avoidance of it wlien the debt is paid. We give a form in tlie Appendix. When the mortgagor of personal property retained posses- sion, it was very doubtful what security the mortgagee had. Now, however, it is generally provided by statute, that tlie mortgagor may retain possession, if the mortgage be recorded. Tliese instruments sliould always bo recorded according to the provisions of tlie statute of the State in wliich tliey are made ; although the general rule would apply to tliem, that they would operate without record, as to all parties having notice or knowledge. The statutes respecting mortgages of personal property always provide for an equity of redemption, whicli is usually very much shorter than that of land. A frequent period is sixty days. Tlie requiremen.ts of the statute in respect to notice, foreclosiire, &c. must be strictly followed. It used to be thought that a personal mortgage miglit be made to cover property subsequently acquired by the mort- gagee. Tims, a dealer in dry goods would mortgage all his stoclc to secure some creditor, and provide in the mortgage that it should operate upon all his goods and merchandise sub- sequently acquired by him. But it has been settled that such a clause has no effect ; because no man can make a mortgage of property which he does not own at the time. How mortgages and other se^rities are affected by insol- vency, is stated in the chapter on Insolvency. 432 THE LAWS OP BUSINESS FOE BUSINESS MEN. SECTION III. OP THE TLEDGE OP PEKSONAL PEOPEKTY. A PLEDGEE is bound to take ordinary (not extreme) care of the tlii]ig pledged ; and if it be lost, or injured for want of such care, he is answerable. He cannot use it, except at his own peril ; that is, he is liable for any injury caused by using it, even if it was not his fault. If the thing — as a horse — needs use for its own safety, then the pledgee may use it for this purpose, and is liable only for negligence. He must account with the pledgor for the income, increase, or profits. One difference between a mortgagee and a pledgee is this. A mortgagee need not take possession, for the mortgagor may retain it, and now this is provided for, as we have seen, by recording the mortgage. . But if a thing is given in pledge, the pledgee must have, and keep, possession of it. The most important difference is this. A mortgagee may; sell and transfer his mortgage, and his transferee may transfer it again, and so on ; and when the debt is paid, the mortgagor reclaims it from whomsoever' has it then. But if a pledgee sells the pledge before the debt is due, it is said that he is at once answerable to the pledgor for its full value, although the debt be not paid. Some cases of this kind have been carried very far in New York. It is held there, — and on groimds which may suffice to make it law everywhere, — that if A lends money to B, and takes stocks' in pledge, A cannot sell these stocks and keep the proceeds, and replace the stock and return it when the debt is paid. He can do nothing but keep the stock ; and if lie selb it, the pledgor may recover at once its full value, and the pledgee will have no security for his debt. In such a case a pledgee, being sued, offered the testimony of brokers and others, to prove a uniform and established usage in the city of New York tlras to sell or use pledged stock until the debt was paid ; but the court said the usage was illegal, and OF MORTGAGES. tes refused to receive the evidence. But it has been thought that this case went too far. It is certain that after the debt is due and payable, and after demand if it be payable on demand, the pledgee may have a decree in chancery for a sale of the pledge, or may sell it himself, provided he first gives a reasonable notice to the pledgor, and then sells it, after a reasonable delay, in a proper manner, generally, perhaps always, bv a public sale at auction ; and uses all reasonable precautions to get its value, as by advertisement, &c. ; and does not buy it himself, directly or indirectly ; and conducts himself in all respects honorably ; and then he must account for the proceeds. Sometimes the parties agree, when the pledge is given, or afterwards, how the pledge shall be treated, or how sold if not redeemed, &c. ; and such agreements, if fair and reasonable, would undoubtedly be binding on both parties. It is agreed that negotiable paper is excepted from the com- mon rule ; and the pledgee of that may sell or discount it be- fore the debt is due ; and must account for it, or its proceeds, if the debt is paid and the paper redeemed, or for the balance if he applies it to payment of the debt. A loan of stock is not like a pledge of stock, because it au- thorizes the borrower to sell or pledge it, or use it in any way, at any time ; but he must replace and return the same quantity of the same stock, when it is called for. If he could not thus make use of the stock, the loan of it must be of no benefit what- ever to the borrower. But he cannot thus use stock pledged to him, unless by a special agreement which permits this use. A pledgee, who receives a pledge to secure one or more spe- cific debts, cannot retain it to secure other and further debts of the pledgor, unless with his consent. This consent may be express, or implied from words or circumstances which show that such was the understanding of the parties. 43* THE LAWS OP BUSINESS FOB BUSINESS MEN. CHAPTER XXVI. OF LEASES. A LEASE is a contract, ■whereby one party (the tenant) has the possession of tlie land and all that is on it, and the other party (the landlord) reserves (that is, agrees to take) a rent, which the tenant pays him by way of compensation. All things usually comprehended under the words " house," "farm," "land," " store," &c. pass to the tenant, where such words are used, unless there be an express exception. And in- accuracies as to qualities, name^, measurements, or amounts will be corrected, if there be enough in the lease to make the purposes and intentions of the parties certain. And letting to hire anything to be used carries with it all those appurtenan- ces and accompaniments necessary for the proper use and en- joyment of the thing, which belong to the letter. A landlord is boiind to put his lessee into possession with good title. If he covenants " to renew " generally, this means a renewal of the lease on the same terms, but without an addi- tional covenant of renewal. A landlord is under no legal obligation to repair the house, unless he expressly agrees to do so. If the house is never so much dilapidated and disfigured as to paper, paint, &c., and locks and blinds and doors and windows are out of order, and the like, the tenant can claim nothing of the landlord. Even if it becomes wholly uninhabitable, by no fault of the house, or of the landlord, as if it biirns up, or is blown down, or if the overflow of a stream ruins a field or a farm, still the land- lord is not bound to do anything, unless by special agreement. But if the house is uninhabitable by its own fault, as if it has a noisome and unwholesome stench, cfr, according to one case, if it be overrun with rats, or so decayed as to be open to the weather, it would seem to be the law of this country, tjiat the tenant may leave the house ; always provided, however, ■that the objection or defect be not one which the tenant knew or OF LEASES. 435 anticipated, or ■would have known or expected if he had made reasonable inquiry and investigation before he tooli his lease. And perhaps no tenant can leave his house, or refuse or abate his rent, for any objection or difficxilty arising after» he hires the house. But, strange to say, the important qiiostion what the tenant's riglits-are in such a case seems to be still uncertain. If the house be wholly destroyed, the tenant must still pay rent, under an ordinary lease; because the law looks upon the land as the principal thing, and the house as secondary. And not only so, but if the tenant covenants " to return and redeliver the house at the end of the term, in good order and condition, reasonable wear and tear only excepted," he would be bound under this agreement to rebuild the house if it were burned down. But recently all well-drawn leases have clauses providing that the rent shall cease or be abated while the premises are uninhabitable from fire or any other unavoid- able calamity. A similar exception is added to the clause about returning the house, at the end of the lease. If this exception be in, a tenant is not bound to rebuild, even if the hotise be burned through tlie carelessness of himself or his ser- vants. A tenant of a room, or of a suit of chambers, is entitled to the use of all the appurtenances and accommodations which fairly go with it, as of tlie front door and entry, water-closets, and of all windows, &c. proper to the enjoyment of what he hires. But an express agreement about all these things, and cellar-room, piimp, and the lilce, is always safest. The tfenant is not bound to make general i-epairs without an express agreement. But he must make such as are necessary to preserve the house from injury, as from rain if shingles or slates are blown off or glass broken. And he would be bound even for ornamental repairs, as paper and paint, under a cove- nant to return "in good order." The tenant of a farm is bound, without express covenants, to manage and cultivate the same in such manner as good husbandry and the usual course of management of such farms in his vicinity would reqiiire. The times for payment of rent are iisually specified in the 436 THE LAWS OP BUSINESS FOB BUSINESS MEN. lease ; if not, they would be governed by the usage of the country, if there were any of sufficient distinction and force. A tenant under a lease which says nothing aboiit underlet- ting, has a perfect right to do so, remaining himself bound for his rent to his landlord. A tenant is not responsible for taxes, unless it is expressly agreed in the lease that he shall be. If there be a claiise prohibiting him from underletting or assigning, and he agrees not to, nevertheless he may do so without forfeiting the land ; but he will be, as before, liable for rent ; and besides this, he will be responsible in an action for any damages whicli the landlord can show that he has sustained by such underletting. It is usual to go farther in the lease than this, and provide that such underletting shall make a forfeiture of the lease, and authorize the landlord to enter upon the premises and turn the tenant out. Where there is this covenant, if the tenant now underlets, the landlord cannot avail himself of tlie clause of forfeiture and afterwards hold the tenant for his rent. Ho may either hold him for his rent, and also for damages, or ho may terminate tlie lease ; but cannot do both. That is, if he continues to hold the tenant responsible for rent, he cannot prevent the tenant's letting somebody else occupy the house and pay to him (the tenant) the rent which he pays over. A tenant of a farm, if his lease is terminated by any event which was uncertain, and which he could neither foresee nor control, is entitled to the annual crop which he sowed while his interest in, and right to, the farm continued. If a lease be for a certain time, the tenant loses all right or interest in the land or premises when that time comes, and he must leave, or the landlord may turn him out at once. But if he be a tenant at will, as he is generally if he holds over after a lease with consent, or occupies the land or house or store without a lease, but with consent and an oral bargain, then he cannot leave, nor can he be turned out, without a no- tice to quit. The law on this sxibject is not uniform. Nor on some points is it, perhaps, quite certain. In general, however, it is this. If rent is payable quarterly, or not more frequently, then there must be a quarter's notice. If rent is payable OP LEASES. 437 oftener, then the notice must be as long as the period of pay- ment. Thus, if rent is payable monthly, there must be a month's notice ; if weekly, a week's notice. But the notice must terminate on a day when the rent is payable. It may be given' at any time, but operates only after the required in- terval or period between two payments. Thus, if a tenant whose lease terminates on the 31st of December holds over by consent, and pays rent quarterly, and the landlord wishes that he should leave the house on the last day of September, he may give notice On the preceding 30th day of June, or any day pre- ceding that. Bat if he gives notice on any day before the 30th of June, the tenant will still have a right to stay until the 30th of September. Properly, the notice should specify the day, and the right day, when the tenant must leave ; and should be in writing. Where the rent is in arrear, the notice to quit may be more brifef ; the statutes of the different States vary on this point, but a frequent period is fourteen days. And if notice to qiiit is given because the rent is unpaid, it may be given at any time, and will operate at the end of the period which the law designates ; but it should specify the day on which the tenant must quit. A tenant may give notice of his intention to quit, and gen- erally it will be subject to the same rules already stated in reference to the notice given by a landlord. A tenant should give his notice to the party to whom he is bound to pay rent, " or to an authorized agent of that party. It is quite important that both tenant and landlord should have some knowledge of the law of fixtures. There are many things which a tenant may add, and after- wards remove, and iSany which he cannot remove. There are no fixed and certain rules which enable us always to draw this distinction. The method of affixing them may be a use- ful criterion, if it indicates the purpose of removal or other- wise. If with screws, or in such a way as to show that re- moval was intended, they may be taken away, when, if the same things were fastened more permanently, they could not be. lu modern times the rule in favor of the tenant seems to extend as far as this : whatever he has added, and can re- 438 THE LAWS OP BUSINESS FOR BUSINESS MEN. move, leaving the premises entirely restored and in as good order as if he had not removed it, that he may take away. Among the things held to be removable, in different adjudged cases, are these : ornamental chimney-pieces ; coffee-mills ; cor- nices screwed on ; furnaces ; fire-frames ; stoves ; iron backs to chimneys ; looking-glasses ; pumps ; gates ; rails and posts ; barns or stables on blocks. Among those held not removable are these : barns fixed in the ground ; benches fastened to the house ; trees, plants, and hedges, not belonging to a gardener by trade ; conservatory strongly affixed ; glass windows ; locks and keys. But almost every one of these might be removable, or not, according to the intent of the parties, and the rule above stated, of removableness with or without injury. If a man sells a house, the law of fixtures is construed far more severely against him than against a tenant who leav>s a house ; that is, the seller must permit the buyer to hold a gi^at many things which an outgoing tenant might remove. Of course, a seller may take what he will from^ his house before he sells it, or make what bargain the parties choose to make about the fixtures. But if he makes no such bargain, and sells the house, he cannot then take from the house what a tenant who put them there might take. In favor of trade and manufactures, the law permits almost anything which was put in by a tenant for such purposes to be taken away, if the premises can be restored to their original condition. OP THE DISPOSAL OP PUOPERTY BY WILL. 439 CHAPTER XXVII. OP THE DISPOSAL OP PROPERTY BY WILL. SECTION I. OF WILLS. Pew persons are aware liow very difficult it is to make an unobjectionable Will. There is nothing one can do, in refer- ence to which it is more certain that he needs legal advice, and that of a trustworthy kind. Eminent lawyers, not prac- tised in this peculiar branch of the law, have often failed in making their own wills, both in England and in this country. And there are seldom blank forms for wills printed and sold, as there are for deeds and leases. Nevertheless, it may happen that one is called upon to make his own will, or a will for his neighbor, under circumstances which do not admit of ^elay ; or he may have some interest in the will of a deceased person, and questions may have arisen, which some knowledge of legal principles will answer. We shall try to state here what may be of use in such cases ; and in the Appendix shall give a form for a will. Any person of sound mind and proper age may make a will. A married woman cannot, unless in relation to trust property, whereof the trust or marriage settlement reserVes to her this power ; or the statute law of her State gives it, as is the case now in many States. One must be of full age in order to devise real estate. But in most of our States minors may bequeath personal property ; and a frequent limitation of the age for such bequest is eigh- teen years for males, and sixteen years for females. The testator should say distinctly, in the beginning of the instrument, that it is his last will. If he has made other wills,, it is usual and well to say, "hereby revoking all former wills" ;. but the law gives effect to a last will always. 440 THE LAWS OP BUSINESS FOR BUSINESS MEN. It should close with the vor^s of attestation : " In witness whereof, I have hereunto signed and sealed this instrument, and published and declared the same as and for my last will, at on this day of .-" -Then should follow the signature and seal ; for this latter, although not always required by law, is usually and properly affixed. The witnessing part is ver'y material. The requirements in the different States are not precisely alike ; but they are all intended to secure such attestation as will leave the fact of the execution of the will, and its publication as such, beyond doubt. In a very few States, it is enough if the signature be proved by credible witnesses, although there be no witnesses who sub- scribed their names to the will. In many, two eubscribing wit- nesses are enough. But in some it is necessary, and in all we recommend, that the testator should ask three disinterested persons to witness his will ; and should then, in their presence, sign and seal it, and declare it to be his will ; and they should • then, each in the presence of the testator and of the other wit- nesses, sign his name as witness. Each should see what he says he witnesses ; and it should all be seen by the testator ; but the law is satisfied if the thing is done near the testator, and where he can see if he chooses to look. If the testator is too feeble to write his name, let him make his mark ; and for this purpose any mark is enough, although a cross is commonly made. So, if a wit- ness cannot write his name, he may make his mark ; but this should be avoided if possible. Over the witnesses' names should be written their attesta- tion ; and any 'alteration should be noticed. If the attestation be in the following words, it will be safe in any part of this country : — " At on this day of , the above-named signed and sealed this instrument, and pub- lished and declared the same as and for his last will ; and wo in his presence, and at his request, and in the presence of each other, have hereunto subscribed our names as witnesses." Witnesses should be selected with care, where that is possi- ble ; for if any question arises about fhe testator's sanity, or anything of the kind, their evidence is first to be taken, and is OP THE DISPOSAL OP PROPERTY BY WILL. 441 A'eiy important. But any persons competent to do ordinary- acts of business may be witnesses. Nor do tlio usual dis- qualifications for business apply. Thus, married women and minors may be witnesses of wills. But no person should be called upon to witness a will, who is a legatee, or an executor, or otherwise interested in the will. If such a person were a witness, it might not avoid the will ; but a legatee would lose or be obliged to renoimce his legacy ; and, generally, it might lead to unintended results. What was said in relation to deeds, of witnesses remembering, &c., or proof of handwriting in case of their death or absence, is true also of wills. As to the body of the will, the testator must express his wislies as clearly and accurately as possible ; and, iinless he has good legal advice, he should make the disposition of his property as simple as possible. Tlie word " bequeath " applies, properly, to personal estate only ; the word " devise," to real estate only. It is safe . enough to begin, " I give, bequeath, and devise my estate, and property, as follows: that is to say," — and then go on and tell what shall be done with this and that piece of property, or sum of money. Words of inheritance should be added to any devise of land, (if not intended for the life of the devisee only,) as was said in reference to deeds ; although they are not required in wills so peremptorily as in deeds. If it is intended, as usually is the case, that the will should apply to all the real estate possessed by the testator at the time of his death, although purchased after the will is made, there should be a clause expressing this intention. If children are not provided for in a will, the law presumes they were forgotten ; and it gives to any such child the same share as if there were no will, unless the omission is explained and accounted for, in such wise as to show that it was inten- tional. , The same rule applies, quite generally, to the issue of a deceased child. If the child were provided for in the life- time of the father, the law, generally, will not presume that he was forgotten ; it is best, however, to guard against any ques- tion of the kind, by naming the children, and saying that the omission to give them anything is intentional. 56 442 THE LAWS OF BUSINESS FOB BUSINESS BIJEN. A testator should always name his executors ; but the will is perfectly good without any executor being named, for the court of probate will appoint an " administrator with the will aimexed." SECTIOK II. OF CODICILS. A CODICIL is a little additional will. That is, it is a testa- mentary disposition, not revoking the former will, but varying it in some way, or making changes in it. There can be but one will, and that the last ; but there may be any number of codicils, all valid. The changes made by a codicil in a will, or in former codicils, should be very distinctly stated ; and some words like these should be used. " I hereby expressly confirm my former will, dated , excepting so far as the disposition of my property is changed by this codicil." And the codicil should be called, at the beginning and end, a codicil, and executed and witnessed in the same manner as a will. If a codicil gives one a legacy, who has already one by the will, the codicil should state whether it gives the second legacy instead of the first, or in addition to it. And if advances are made to a child during life, there should be an indorsement on the will, (but a codicil would be better,) stating whether these advances are to be charged to him, and in what way, whether with interest, &c. SECTION III. OF THE KKVOCATION OF WILLS. The law concerning the revocation of a will is quite nice and technical. A codicil, we have seen, does not revoke, and a new will does. So might tearing off the name ; but then the question might come, who tore it off. It is best to leave OF THE DISPOSAL OP PROPERTY BY WILL. 443 neither this nor any other question ; and therefore to destroy a ■will vrhich it is intended to revoke. If the will is out of the testator's reach and power, and so cannot be destroyed, it would be best to make a new will, revoking the old one ; which any testator can always do. A will is revoked by the operation of law, if the testator afterwards marry and have a child. If the testator, after this, intends that his will shall take effect, he should expressly con- firm it ; and the correct way to do this would be by making a new will. If he leaves anything to his wife, and intends that she should have it instead of dower, or of the additional rights which recent statutes in some of the States have given hec, he should say so. And then she will not have both, but may choose between the provision of the law and that of the will. 444 THE LAWS OF BUSINESS FOK BUSINESS MEN. CHAPTER XXVIII. STATUTES FOB THE RECOVERY AND COLLECTION OP DEBTS. 1. Of Arrest and Imprisonment. In eight States no person can be arrested or imprisoned for debt. These are Virginia, Maryland, North Carolina, Missis- sippi, Florida, Wisconsin, Arkansas, and Texas. In California no female, and in Louisiana no female and no person who has not a domicile in the State, and in Ohio no female nor any officer or soldier of the Revolutionary army, can be arrested or imprisoned for debt. In all the other States, the intention of the law is to limit imprisonment to those cases in which either fraud was committed in the contraction of the debt, or the debtor inten-ds to abscond out of the reach of process. The provisions to effect this -are very various. Generally, the plain- tiff must file in the clerk's office, or indorse upon the writ, an affidavit of the facts on which he grounds the right of arrest. In some of the States provision is made for the imprisonment on execution of a debtor who can be found to possess, and refuses to surrender, property or interest, real or personal, which might be made available for the payment of his debts. 2. Of the Trustee Process. The trustee process, or garnishee process, or process of for- eign attachment, — by all which names it is known, — is now nearly or quite universal. It is substantially this. A owes B a debt ; but A has no property in his hands or possession which B can get at ; but A has deposited in the hands of C goods or property or credits of some kind, or A has a valid claim against C, for wages or services, or money loaned, or goods sold, or something else ; and this B gets by suing A, not with a common writ, but with a trustee writ, so called, in which he declares that B is the trustee of A, for property, &c., and on" this writ, STATUTES FOR THE RECOVEUY OP DEBTS. 445 if B recovei's payment against A, B will have an execution against all A's property in the hands of C, and all A's valid demands against C. But C, -when notified, may come into court, and, in answer to all questions put to him, declare that he (C) has no property in his hands belonging to A, and that he does not owe A anything. And the plaintiff may shape the questions as he pleases to draw out the truth. No one is adjudged trustee, or made to pay to tie creditor the debt due to the debtor, if he has giveif a negotiable note for it, because he might have to pay it again to an honest in- dorsee. Nor if the debt i^ not certainly due ; nor, generally, if it is due from the trustee in any official capacity, which will require him to account over for the money in his hands ; nor if the debtor has recovered a judgment against the trustee, on whicli execution may issue. 3. Of the Homestead. Li sixteen of the States, a homestead is protected from cred- itors, and exempted from all attachment or execution, except- ing in some States for taxes, or wages of labor to a certain amount. In Maine, New Hampshire, Vermont, Massachusetts, Ohio, Tennessee, Alabama, and Iowa, it is limited to five hun- dred dollars in value. In Georgia, fifty acres, not to exceed two hundred dollars. In Florida, forty acres, not to exceed two hundred dollars. In New York, New Jersey, and Illinois, not to exceed one thousand dollars ; in Michigan, fifteen hun- dred dollars ; in Texas, two hundred acres or two thousand dollars in value ; in California, five thousand dollars. Various provisions are made in each of these States to com- bine a due protection of the creditor with proper prevention of fraud. The most common means are by requiring that " the homestead" should be distinctly defined and set apart, and in many cases by the additional requirement tliat the description and location of it should be piit on public record. In all the States there are also exemption laws. These pro- vide very generally that bed and bedding and other necessary furniture, needful clothing, a Bible and school-books, and a certain amount of food and fuel, shall not be taken on attach- 446 THE LAWS OP BUSINESS FOE BUSINESS MEN. ment or execution. In some States, the tobls of a trade, the uniform, arms, and equipments of soldiers or officers in the militia, the family burying-vault and gravestones, a team or yoke of oxen, bees with tlieir hives and honey, a boat for fish- ' ing, &c., are exempted. It is common to enumerate the arti- cles exempted quite minutely, and then add, that necessary articles to a certain amount of value, usually one or two hun- dred doll#s, are also exempted. 4. Of the Liens of Mechanics for their Work. In all our States there are now some provisions for securing to mechanics their wages, by means of liens. By tliis is meant, that every mechanic employed upon a house, and in most of the States upon a vessel, and in some upon any property whatever, as a railroad or canal, for exam- ple, either in the construction or repair of it, has a lien upon, or valid claim against, the property on which he has labored, for the amount of his wages. This lien or claim he has for a certain time, and during tliat time he may either sue for his wages and make an attachment of the property, or, in some States, file a petition with tlie proper court ; and in either may have the property sold to pay his wages, unless the owner re- deems it. But the mechanic must do certain things to acqtiire or to preserve his lien. Almost universally it expires after a certain brief period, — generally from thirty to ninety days, — unless enforced by attachment or petition. In some of the States the order or contract under which he works must be written, and be recorded in a public record. In some, notice of tlie inten- tion of the mechanic to hold on to his lieu must be given in writing to the owner of the property. The reason of tliese precautions is obvious enough. The purpose of the law is to assist and protect the mechanic, but ]iot to enable him to commit a fraud or do an injury to his neighbors. And it would be an injury to a man to let him buy a house and pay full price for it, and then tell him tliat the mechanics who built it had a lien (which is much the same in effect as a mortgage) upon the house, without his knowing STATUTES FOR THE ItECOVERY OF DEBTS. 447 anything about it. And it -would be an injury to an owner, ■who had contracted with a master-workman to repair or change his house at great expense, to settle with this master-workman in due time, and pay him the full amount of his bill, without any notice that lie was under an obligation to pay again for all the labor spent upon his house, or let the house go on execu- tion. Therefore are, these various provisions made. And they should be carefully regarded by the mechanic who seeks to preserve his lien and secure his wages, and by the owner or buyer who wishes to protect himself from the burden of pay- ing the same money twice over. Of all these laws, the provisions now in force are quite re- cent. Only of late years has imprisonment for debt been greatly mitigated or removed, and the trustee or garnishee process made what it now is, exceedingly convenient and use- ful. The homestead law and the lien law are wholly unknown to the common law, and tliough now so widely spread, are a modern invention, or, at least, of modern introduction. The effect of this recent origin is twofold. First, important practi- cal questions still exist as to their construction, ajjplication, and effect, wliich only time can solve. Secondly, theic is not only no general agreement as to their details, but, to all. ap- pearance, no permanent contentment with these details any- where. Tiie statutes on these subjects undergo very frequent changes of all degrees of importance, and we have no reason- able assurance, anywhere, that precisely what is law to-day will be law in the same place to-morrow. I have thought it best, therefore, not to attempt to give all those statutory provisions of the several States in detail. Such a thing might be much worse than useless, if it led to conduct grounded on a mistaken belief that the law of one time is just what it is at another. Nothing more has been attempted, there- fore, than this. First, to give a general and accurate view of all those principles of the laws relating to creditor and debtor whi(i are now generally agreed upon, and may be regarded as probably permanent. Secondly, to give such information as 448 THE LAWS OP BUSINESS FOR BUSINESS MEN. may be depended upon, to those who are caught in an emer- gency where they cannot at once seek counsel, or for any rea- son will not, and who may here be told, in general, how the law stands in relation to tliem. Thirdly, to indicate distinctly to the mechanic what rights he may possess and what securities he may hold, .and how he may lose the rights and securities he possesses, and to the owner or buyer what liabilities he may incur, unless the one and the other take ^le proper course which the law has provided for their safety. It is not to be disguised, tliat, in the present state of the laws for the collection of debts or the exemption of property, it would be difficult for a lawyer, and perhaps impossible for any one but a lawyer, to learn or state all the exact provisions and ef- fects of these laws. And even if this were possible, no me- chanic would probably be willing to trust to himself to make out his wi'it, or file his petition, to enforce his claims or lien ; and any competent counsel whom he would employ for this purpose would be able to tell him what the law was, at that very time, in that very State, and on that precise question. For these reasons, little more is attempted in this chapter, because little more is thought possible, than to yield all avail- able assistance to debtors or creditors who have not the means or opportunity of employing counsel, and of indicating to those- who can consult them the rights, security, and safety they may possess, by wise advice and accurate conformity with the law. ^rPENDIX. APPENDIX, OP CONTRACTS GENERALLY, AND THEIR FO:p:S. It is of no use to multiply forms of agreement. He who does not know the principles of law which relate to his agreements can seldom use any form safely. The preceding work will give, it is hoped, a knowledge of these prin- ciples ; and the exact form in which the agreement is expressed is of compar- atively little consequence. Every agreement should be written, and signed by both parties, and wit- nessed, where this can be done ; although the law aTOolutely requires witnesses in very few cases, and in none of mere contract. It is prudent, however, to have them, for it is a rule of law, that things which cannot be proved and things which do not exist are the same in the law. Everything agreed upon should be written out distinctly, and care should be taken to say all that is meant, and just what is meant, and nothing else ; for it is a rule of law, that no oral testimony shall control a written agreement, un- less fraud can be proved. Against fraud nothing stands. The following is a good general form : — 1. — • A General Agreement, sufficient for most purposes. Mutual Agreement of Tivo. A. B. of (^place of residence, and business or profession'), and C. D. of (as before), have agreed together, at (place), on (the day should alicn;/s be named), and do hereby promise and agree to and with each other, as follows: A. B., in consideration of the promises herein after made by C. D. (if there are any such promises), and of (Jiere state any other consideration which A. B. has), promises and agrees to and with C. D., that (here set forth, as above directed, the whole of what A. B. undertakes to do). And G. D. in consideration (set forth consideration and promise as before). Witness our hands, to two copies of this agreement interchangeably. A. B. SiToed and interchanged in presence of CD. E. F. G. H. If there be more than two parties, the form should be changed accordingly. •If only A. B promises, the form may be simpler, thus : — 2. — Promise of One or more. I, A. B., of (place and business as before), in consideration of (here set forth the consideration on which the promise is made) by me received, at (place), on 452 THE LAWS OP BUSINESS FOB BUSINESS MEN. (dale), do hereby agree with and promise to C. D., of (^place and occupation), that (here set forth the whole promise and undertaking of A. B.). Witness my hand, Signed in presence of A. B. g!h'. Common agreements are seldom any stronger or better for having seals put to them. But if this is desired, use the foregoing forms, and when you come to the execution, say : — "Witness my hand and seal (or our hands and seals). A. B. Signed, seaisa, and delivered (or mutually interchanged) C. D. in our presence. E. F. G. H. A bond must be sealed. A simple bond is only an obligation to do a cer- tain thing. But bonds with condition are generally used. The following is a sufficient form for all common occasions: — 3. — Bond. I, A. H., of (place, naming town, count)/, and State), (occupation), am held and bound to C. D., of (as before), in the sum of dollars ; to be paid to the said C. D. And I hereby bind myself and my heirs to this payment, by these presents. Witness my hand and seal (as before, with witnesses as before). A. B. [seal.] This is the bond. There is added nearly always in practice, and written immediately below the bond, the condition, which may run thus : — " The condition of this bond is as follows: If the said A. B. does (here set forth what A. B. has undertaken to do), then this bond shall be wholly void ; but otherwise shall remain in full force." If the bond contain a condition, the testification (which means the clause, "Witness my hand, &c.") should be written after the condition, or at the close of the instrument. If there be a condition,, the sum in the bond should be about twice as much as the sum to be paid, or forfeited by not doing as set forth in the conditions. Then it will cover all expenses, &c. And this is safe for both parties, for a court of equity always, and a court of law generally, cuts down the penalty of a bond to a sum which shall be an actual indemnity, and no more. EECEIPTS. Here no particular form is necessary, or generally adopted. The simplest is the best, if it tells all that it should very plainly. A general form may be this : — 4. — Receipt. (Place and date.) I have this day received from (name of payor), (amount received), in full of all demands (or on account), (or for a special thing set forth). Witness, (Signed,) A. B. C. D. APPENDIX. • 453 If a receipt is in full of all demands, it should say so ; if not in full, then it should say on account. And if the money is received on any particular ac- count, or for any special purpose, this should be stated. In this last case, the form of an agreement would often be better. It must be remembered that a receipt is unlike any other instrument in this particular ; that it may bo denied, varied, or contradicted by oral or other evi- dence, although fraud is not imputed. If more than a receipt in full is wanted, a Release should be given. This is, in fact, a very particular receipt, with a seal to it. And it is an instrument which the law regards as much more efl'ectual than a mere receipt ; and it would seldom permit it to be contradicted or set aside by any evidence, unless on an imputation of fraud. A general form, to be varied accordin"' to the circumstances of any particular case, is as follows : — mrw 5. — Release. I, A. B., of (place and occupation), in consideration of (amount paid) to me paid by C. 1)., of (place and occupation'), the receipt whereof I acknowl- edge, have remised, released, and discharged, and do for myself, my heirs, executors, and administrators, remise, release, and discharge, the said C. D., his heirs, executors, and-admiuistrators, of and from all debts, demands, claims, or actions, which I have in law or in equity (or of and from the debt or de- mand specified). Witness my hand and seal at (place), on (time). A. B. [seal.] Executed and delivered in presence of C. D. E. F. If the release is intended to apply prospectively, a form of agreement, re- citing all particulars, would generally be better. If it be mutual, then C. D, can give back to A. B. a similar release, or the two may be combined in one instrument. ASSIGNMENTS. These are of great variety in their purpose, and therefore in their form. An assignment may be of a mortgage, of a debt, of a note not negotiable (a negotiable note or bill should be indorsed), of a lease, of letters patent, of a copyright, of a contract, of shares of stock, or of almost anything else. "We shall give the general expressions which belong to all assignments ; and then the particulars must be filled out to suit the facts in each case. 6. — Assignment. I, A. B., oi (place and occupation), in consideration oi (gmount) paid me by C. D., of (place and occupation), the receipt whereof I acknowledge, (;/ tlie consideration be other than money, it should be set forth, and if money and something beside, then set forth the money as above, and add) and also in con- sideration of (setting it forth), have assigned and transferred, and do hereby assign and transfer, to the said C. D., the within written instrument (or what- 454 THE LAWS OP BUSINESS FOR BUSINESS MEN. ever else is assicjned), and all title, interest, claim, and estate in, to, and under the same. (Jf an instrument is assigned, and the assignment cannot he writ- ten on the instrument, refer to it by date, names, §•£. It is often convenient to add a brief power of attorney, thus:) And I hereby constitute and appoint the said C. D. my attorney irrevocable, with full power, for mo and in my name, but for his own use and benefit, to do whatsoever may be lawful and necessary for the reduction, possession, or enjoyment of the assigned premises ; with full power of substitution. Witness my hand and seal at (^place), on (time). A. B. [seal;] Executed and delivered in presence of C. D. E. F. ARBITRATION. The chapter on this subject will show that there are no especial forms requisite for an agreement to refer, or for an award. Such an agreement may be inserted in the general form for agreements inserted above. If made under a rule of court, or taken out before a magistrate, a lawyer or magistrate would almost necessarily be employed. We give below a general form for an award, which may be modified to suit any particular case. 7. — Aioard. We, whose names are hereunto subscribed, appointed referees by or under the within (or annexed) agreement of reference (or rule of court), duly noti- fied the parties thereto, and at (place), on (naming the days of meeting), heard whatever allegations, proofs, or arguments the said parties offered, and, having duly considered the same, do now determine and award, in full of all matters referred to us, as follows. That is to say : — (Here set forth the award fully andplainly.) Witness our hands, at (place), on (time). A. B. . C. D. E. F. SALES AND WARRANTY. If there be a sale with warranty, the simplest form for expressing the war- ranty would be by a common bill of sale, ending in words of warranty, thus: — 8. — Bill of Sale, with Warranty. (Place and date.) I have this day sold to A. B., of (place and occupation), twenty-five barrels of flour, for (amount) per barrel, being in the whole (omoujii), the receipt whereof I acknowledge. And in consideration thereof I warrant the said flour to be (here set forth the warranty). This may be varied to suit difi'erent cases, and the chapter on Warranty will show what words or acts suflice in each case to constitute a warranty. A guaranty may be, and usually is, written in the form of a letter, thus : — To A. B. of (place and occupation) : — Sir : If you will supply C. D. with the goods he may require, (or give Mm APPENDIX. 455 neio credit on goods already hougJU, or employ Mm in a certain loay, or do any- thing else for C. D.) I hereby guaranty to you payment for said goods, (or that C. D. will do or be zohatever ii agreed on,) to the amount of — dollars. (Dated and signed as in other instruments.') E. F. It is proper that the guaranty should state plainly whether it is meant to be a continuing one or not. Thus, after the word dollars, write : — " This guaranty to cover no other goods but those first furnished him, (or else) to cover any goods as far as that amount furnished him within one year (or other time specified), or to be responsible for his good conduct for one year from date (or other time)." Without many further remarks, we shall now give the most useful forms, leaving the reader who wishes to make use of them to learn the principles of law applicable to the subject-matter of each contract or instrument from the appropriate chapters of this work. 9. — A Deed of Warranty, in common use in Boston. Know all men by these presents, that I, A. B., of (residence, town or city, county, and State) , (occupation) , in consideration of (the amount paid) paid by (here name the grantee or pwcliaser, giving in like manner his residence and occupation), the receipt whereof is hereby acknowledged, do hereby give, grant, bargain, sell, and convey unto the said (name the grantee, and then de- scribe the premises granted, minutely and accurately) : — i^kEo have and to hold the above-granted premises, to the said (name the ^UnSee), his (or hers or their) heirs and assigns, to his (or hers or their) use and behoof for ever. And I, the said (the grantor), for (myself) and (my) heirs, executors, and administrators, do covenant with the said (grantee) , and with his heirs and assigns, that I am lawfully seized in fee simple of the afore- granted premises ; that they are free from all encumbrances, (f there be any encumbrances, as a mortgage, or lien, or right of way, or drain, or air, or light, say excepting, and then describe the encumbrance,) that I have good right to sell and convey the same to the said (the grantee), and his (or her) heirs and as- signs for ever as aforesaid ; and that I will, and my heirs, executors, and ad- ministrators shall, warrant and defend the same to the said (the grantee), and his heirs and assigns for ever, against the lawful claims and demands of all persons. In witness whereof, I, the said (the grantor), and , wife of said grantor, in token of her release of all right and title of or to dower in the granted premises, have hereunto set our hands and seals this day of in the year of our Lord eighteen hundred and [seal.] Signed, sealed, and delivered [seal.] in presence of CD. E. F. In those States in which a homestead law exists, the signature of the wife with a clause like that above, would not release the homestead. To effect this, the following clause should be inserted before the words, " In token of " : — "In token of her release to the said (the grantee), of all her right, interest, and estate to or in the premises herein conveyed, under the homestead laws of this State; and also," &c. Some very cautious conveyancers think this hardly sufficient, and prefer 456 THE LAWS OF BUSINESS FOK BUSINESS MEN. the following method, which would undoubtedly be effectual in every one of these Stotes. Insert before the paragraph be^nning " In witness whereof," this paragraph : — • "And I, A. B., wife iof the said (the name o/(Ae^ran(or), in consideration of one dollar to me paid by the said (the name of the grantee), the receipt whereof is acknowledged, do hereby release and assign to the said (the name of the grantee'), andais heirs and assigns, all my right, interest, claim, and estatein or to the premises within granted, under the homestead laws of this State, or any other statutory provisions thereof." It is to be remembered that, whether the deed be a warranty deed like that above given, or a release or quitclaim, or a mortgage deed, it is equally necessary and proper that the wife should release her homestead right, and her dower. Below the deed comes the acknowledgment. Commonwealth (or State) of (County) SS. (Town, month, and date.) Then personally appeared the above-named and acknowledged the above instrument to be free act and deed ; before me, , Justice of the Peace, (County, town, month, and date.) Received and entered with (County) Deeds, Lib. Fol. , Register of Deeds. 10. — Warranty Deed by Indenture, in common use New York. [The blanks should be filled as in the preceding form, and then either that form or this form would be sufficient anywhere ; but in the Western States some modifications of either are usual.] This indenture, made the day of , in the year one thousand eight hundred and fifty , between . of the first part, and of the second part, witnesseth, that the said part of 'the first part, for and in consideration of the sura of lawful money of the United States of America, to in hand paid by the said part of the sec- ond part, at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and the said part of the second part, heirs, executors, and administrators, for ever i-eleased and discharged from the same, by these presents ha granted, bargained, sold, aliened, remised, released, conveyed, and confirmed, and by these presents do grant, bargain, sell, alien, remise, release, convey, and confirm, unto the said part of the second part, and to heirs and assigns for ever, all together with all and singular the tenements, hereditaments, and appurtenances thereunto belonging, or in any wise appertaining, and the reversion and rever- sions, remainder and remainders, rents, issues, and profits thereof: And also, all the estate, right, title, interest, _ property, possession, claim, and de- mand whatsoever, as well in law as in equity, of the said part of the first part, of, in, and to the same, and every part and parcel thereof, with the ap- purtenances. To have and to hold the above granted, bargained, and described premises, with the appurtenances, unto the said part of the second part, heirs and assigns, to their own proper use, benefit, and behoof for ever, APPENDIX. 457 And the said for • heirs, executors, and administrators, do covenant, grant, and agree, to and with the said part of the second part, heirs and assigns, that the said at the time of the sealing and dehvery of these Brescnts, lawfully seized in of a good, absolute, and indefeasible estate of inheritance, in fee simple, of and in all and singular the above granted, bargained, and described premises, with the ap- purtenances, ajnd ha good right, full power and lawful authority to grant, bargain, sell, and convey the same in manner and form aforesaid. And that the said part of the second part, heirs and assigns, shall and may at all times hereafter peaceably and quietly have, hold, use, occupy, possess, and enjoy the above-granted premises, and every part and parcel thereof, with the appurtenances, mthout any let, suit, trouble, molestation, eviction, or dis- turbance of the said part of the first part, heirs or assigns, or of any other person or persons, lawfully claiming or to claim the same : And that the same now are free, clear, discharged, and unencumbered, of and from all former and other grants, titles, charges, estates, judgments, taxes, assessments, and encumbrances of what nature or kind soever And also, that the said part of the first part, and heirs, and all and every other person or persons whatsoever lawfully or equitably deriving any estate, right, title, or interest, of, in, or to the herein-befbre granted premises, by, from, under, or in trust for them, shall and will, at any time or times hereafter, upon the reasonable request, and at the proper costs and charges in the law, of the said part of the second part, heirs and assigns, make, do, and execute, or cause or procure to be made, done, and executed, all and every such fiir- ther and other lawful and reasonable acts, conveyances, and assurances in the law, for the better and more effectually vesting and confirming the premises hereby intended to be granted, in and to the said part of the second part, heirs and assigns for ever, as by the said part of the second part, heirs or assigns, or counsel learned in the law, shall be reasonably de- vised, advised, or required. And the said heirs, the above described and hereby granted and released premises, and every part and parcel thereof, with the appurtenances, unto the said part of the second part, helre and cissigns, against the said part of the first part, and heirs, and against all and every person and persons whomsoever, lawfully claiming or to claim the same, shall and will warrant, and by these presents for ever defend. In witness whereof the parties to these presents have hereunto interchange- ably set their hands and seals, the day and year first above written. Sealed and delivered in the presence of 11. — Mortgage Deed to a Corporation. [Fill the blanks as in the first deed.] Know all men by these presents, that in consideration of paid by a Corporation established by authority of the Commonwealth of Massachuseffi, the receipt whereof is hereby acknowledged, do hereby give, grant, bargam, sell, and convey unto the said Corporation, its successors and assigns for ever To have and to hold the above-granted premises to the said Corporation, its successors and assigns, to its and their own use and behoof, in fee simple, foe ever. 58 458 THE LAWS OP BUSINESS FOR BUSINESS MEN. And the said for and heirs, executors, and administrators, do covenant with the said Corporation, its successors and as- signs, that lawfully seized in fee simple of the aforegranted premises; that they arc free from all encumbrances that have good right to sell and convey the same to the said Corporation, its succes- sors and assigns eis aforesaid ; and that will, and heirs, executors, and administrators shall, warrant and defend the same to the said Corporation, its successors and assigns for ever, against the lawful claims and demands of all persons. Provided nevertheless, that if the said heirs, executors, or adminis- trators, shall pay unto the said Corporation, its successors or assigns, the sum of dollars ^-^ in from the day of the date hereof with interest on said sum at the rate of per cent per annum, payable and until such payment keep the buildings standing on the laud aforesaid insured against fire, in a sum not less than dollars' for the benefit of said Corporation and its successors and assigns, at such insurance office in as said. Corporation shall approve, and also pay all taxes lev- ied or assessed upon the said premises, then this deed, as also certain promissory note bearing even date with these presents, signed by the said whereby for value received promise to pay to the said Corporation or to its order the said sum and interest at the times aforesaid, shall be absolutely void to all intents and purposes. And provided also, that until default of the payment of the said sum or in- terest, or other default, as herein provided, the mortgagee shall have no right to enter and take possession of the premises. In witness whereof the said in token of release of all right and title of or to dower in the granted premises, have hereunto set hand and seal, this day of , in the year of our Lord eigh- teen hundred and Signed, sealed, and delivered [seal.] in presence of Commonwealth {or Stale) of ss. 18 Then personally appeared the above-named , and acknowledged the above instrument to be free act and deed ; before me, , Justice of the Peace, 18 . Keceived and entered with Deeds, Lib. Fol. 12. — Deed from a Corpoo-ation. [Fill the blanks as in the first deed, with such alterations a,s, the difference in the deed requires and indicates.] Know all men by these presents, that the Company, a body corpo- rate, duly incorporated by an Act of the Legislature of , in considera- tion of the sum of , paid to the said Company (or Corporation) by * , the receipt whereof is hereby acknowledged, do hereby give, grant, bargain, sell, and convey unto the said . heirs and assigns, a certain tract or parcel of land, situate in bounded, described, and measuring as follows, viz. : — To have and to hold the above-granted premises to the said heirs and assigns, to their use and behoof for ever. APPENDIX. 459 And the said Company do hereby covenant with the said * heirs and assigns, that the said Company are lawfully seized in fee simple of the afore-njraiited premises; that they are free from all encumbrances that the said Company have good right to sell and convey the same to the said heirs and assigns, in manner as aforesaid ; and will warrant and de- fend the same to the said heirs and assigns for ever, against the law- ful claims and demands of all persons. In witness whereof, the Company aforesaid, have caused these pres- ents to be signed by _ their President (or Treasurer, or Attorney, as the case may be), and their common seal to be hereunto affixed, this day of , in the year of our Lord one thousand ' eicrht hundred and fifty The Company, rseai of tue-i by John' Smith, their President and Attorney. Luompiiny. J Signed, sealed, and delivered in presence of us, A person executing a deed for a Corporation must be authorized either by a ly-law or by a vole. It is well to say which ; thus, after the word " Presi- dent," add ".thereto authorized by a by-law of the said Corporation hereunto annexed," or else, "thereto authorized by a vote of the said Corporation, a copy whereof is hereunto annexed " ; and the by-law or vote should be writ- ten on the deed, and certified by the Secretary or other proper oflicer. But if the authority actually exists, and can be proved, these additions are not ne- cessarj' to make the deed valid. The acknowledgment should be in this form. State of , SS. A. D. 185 . Then per- sonally appeared the above named and acknowledged the afore- going instrument to be the free act and deed of the said Company. Before me, , Justice of the Peace. 13. — Mortgage Deed without a Power of Sale, but with a Proviso to keep the Premises insured. [Fill the blanks as in tlic first deed.] Know all men by these presents, that in consideration of paid by , the receipt whereof is hereby acknowledged, do hereby give, grant, bargain, sell, and convey to the said To have and to hold the above-granted premises, with all the privileges and appurtenances thereto belonging, to the said grantee , heirs and assigns, to their use and behoof for ever. And the said grantor , for and heirs, executors, and administrators, do covenant with the said grantee , heirs and assigns, that lawfully seized in fee simple of the aforegranted premises ; that they are free from all encumbrances, 460 THE LAWS OP BUSINESS FOE BUSINESS MEN. that * have a good right to convey the same to the said grantee , heirs and assigns for ever, as aforesaid ; and that will, and heirs, executors, and administrators shall, warrant and defend the same to the said grantee , heirs and assigns for ever, against the lawful claims and demands of all persons. Brovided, nevertheless, that if the said grantor , ' heirs, executors, or administrators, shall pay unto the said grantee , executors, admin- istrators, or assigns, the sum of dollars Yjnr and, until such payment, keep the buildings standing on the land aforesaid insured agaiillN^e, in a sum not less than dollars, for the benefit of the said mof^gee and executors, administrators, and assigns, at such insurance office in as the said mortgagee shall approve ; then this deed, as also certain promissory note bearing even date with these pres- ents, signed by the said whereby for value received promise to pay to the said the said sum and interest at the times aforesaid, shall be absolutely void to all intents and purposes. And provided, also, that until default of the payment of the said sum or in- terest, or other default as herein provided, the mortgagee shall have no right to enter and take possession of the premises. In witness whereof, the said in token of release of all right and title of or to dower in the above- granted premises, have hereunto set hand and seal this day of , in the year of our Lord eighteen hundred and fifty- Signed, sealed, and delivered [seal.^ in presence of 14. — Mortgage Deed, with Power of Sale. [Fill the blanks as in the first deed.] Know all men by these presents, that in consideration of paid by the receipt of which is hereby acknowledged, do hereby give, grant, bargain, sell, and convey unto the said To have and to hold the above-granted premises, to the said grantee , heirs and assigns, to ^ use and behoof for ever. And , the said grantor , for and heirs, executors, and administrators, do covenant with the said grantee , heirs and assio-ns, that lawfully seized in fee simple of the aforegranted premises ; that they are free from all cncuipbrances ; that have good right to sell and convey the same to the said grantee , heirs and assigns for ever as aforesaid ; and that will, and heii-s, executors, and administrators shall, warrant and defend the same to the said grantee , heirs and assigns for ever, against the lawful claims and de- mands of all persons. Provided nevertheless, that if the said grantor , heirs, executors, or administrators, shall pay unto the said grantee , executors, administrators, or assigns, the sum of dollars y-j-j- in from the day of the date hereof, with interest on said APPENDIX. 461 sum, at the rate of dollars per centum per annum, payable and until such payment shall pay all taxes and assessments levied on the said granted premises, and shall also keep the buildings standing on the land afore- said insured against fire, in a sum not less than dollars, for the benefit of the said grantee , and executors, administrators, and assigns, at such insurance office in as the said grantee shall approve ; or in default of insurance being so made by the said grantor , heirs and assigns, shall pay to the said grantee , executors, administrators, and assigns, such amount as they may expend for effecting such insurance ; then this deed, as also certain promissory note , bearing e%en date with these presents, signed by the said -whereby, for value received, promise to pay to the said or order, the said sum and interest at the times afore- said, shall te absolutely void to all intents and purposes. But if default shall be made in the payment of the money above mentioned, or the interest that may grow due thereon, or of any part thereof, then it shall be lawful for the said grantee , executors, administrators, and assigns, to enter into and upon all and singular the premises hereby granted, or intended to be granted, and to sell and dispose of the same, and all benefit and equity of redemption of the said grantor , heirs, executors, administrators, or assigns, therein, at public auction ; such sale to be upon the premises hereby granted ; first giving notice of the time and place of sale, by publishing the same three weeks successively in one or more newspapers printed in the county of aforesaid : — And in his or their own name, or as the at- toUiey of the said grantor , for that purpose by these presents duly author- ized, constituted, and appointed, to make and dejpver to the purchaser or pur- chalers thereof, a good and suflicient deed or deeds of conveyance of the same, in fee simple ; and out of the money arising from such sale, to retain the prin- cipal and interest which shall then remain due of the moneys mentioned in the condition of this deed as aforesaid, together with the costs and charges of ad- vertising and selling the same premises ; rendering the overplus of the purchase money, if any there be, together with a true and particular account of such sales and charges, to the said grantor , heirs, executors, administrators, or assigns, and such sale, so to be made, shall for ever be a perpetual bar both in law and equity, against the said grantor , heirs and assigns, and all other persons claiming or to claim the premises, or any part thereof, by, from, or under him, them, or any of them. And provided also, that until default of the payment oF the said sum or interest, or other default as herein provided, the grantee shall have no right to enter and take possession of the premises. In witness whereof, the said in token of release of all right of dower in the afore-granted premises, have hereunto set hand and seal this day of in the year of our Lord eighteen hundred and Signed, sealed, and delivered [seal.] in presence of Commonwealth (or State) of SS. A. D. 185 Then personally appeared the above named and acknowledged the foregoing instrument to be free act and deed ; before me, , Justice of the Peace. , 18 ' Kecelved and entered with deeds, Lib. Fol. ■ « 462 THE LAWS OF BUSINESS FOR BUSINESS MEN. 15. — Deed with Covenant against Grantor. [Fill blanks as in the first deed.] This indenture, made the day of in the year one thousand eight hundred and fifty- between ' of the first part, and of the second part, -witnesseth, that the said part of the first part, for and'in consideration of the sum of lawful money of the United States of America, to in hand paid by the said part of the second part, at or be- fore the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, ha granted, bargained, sold, aliened, remised, released, con- veyed, and confirmed, and by these presents do grant, bargain, sell, alien, remise, release, convey, and confirm unto the said part of the second part, and to heirs and Assigns for ever, all together with all and singular the te;iements, hereditaments, and appurtenances thereunto belonging, or m any wise appertaining, and the reversion and re- versions, remainder and remainders, rents, issues, and profits thereof. And also all the estate, right, title, interest, property, possession, claim, and demand whatsoever, as well in law as in equity, of the said part of the firat part, of, in, or to the above described premises, and every part and parcel thereof, with the appurtenances. * To have and to hold all aSd singular the above mentioned and descriljed premises, together with the appurtenances, unto the said part of the second part, heirs and assigns for ever. Und the said for heii'S, executors, and administratore, do covenant, promise, and agree, to and with the said part of the second part, heirs and assigns, that ha not made, done, committed, executed, or suffered, any act or acts, thing or things whatsoever, whereby or by means whereof the above mentioned and described premises, or any part or parcel thereof, now are or at any time hereafter shall or may be impeached, charged, or encumbered, in any manner or way what- soever. In witness whereof, the said part of the fii-st part, ha hereunto set hand and seal th,e day and year first above written. Sealed and delivered in the presence of 16. — Naked Release ivithout Covenants. [Fill the blanks as in the first deed.] Know all men by these presents, that in consideration of the sum of to paid by the receipt of which is hereby acknowledged, do hereby remise, release, and for ever quitclaim unto the said To have and to hold the said released premises- to the said eirs and assigns, to use and behoof for ever. In witness whereof, the said APPENDIX. 463 have herevinto set hand and seal this day of in the year of our Lord one thousand eight hundred and fifty- Signed, sealed, and deUvcred [seal.] in presence of Commonwealth (or State) of SS. A. D. 185 Then personally appeared the above-named and acknowledged the above instrument to be free act and deed ; before me. Justice of the Peace. 17. — Release, loith Covenants of Special Warranty. [Fill the blanks a^ in the first deed.] Know all men by these presents, that in consideration of the sum of to paid by the receipt of which is hereby acknowledged, do hereby grant, bargain, sell, release, and for ever quitclaim unto the said To have and to hold the afore-granted premises to the said heirs and assigns, to use and behoof for ever. And do hereby for and heirs, executors, and administrators, covenant with the said heirs and assigns, that will, and heirs, executors, and administrators shall, warrant and defend the same premises to the said heirs and assigns for ever, against the lawful claims and demands of all persons claiming from, by, or Under or them, but against no others. In witness whereof, the said in token of release of all right of dower in the said granted premises, have hereunto set hand and seal this day of in the year of our Lord one thousand eight hundred and fifty- Signed, sealed, and delivered [seal.] in presence of 18. — Mortgage of Personal Property. [Fill the blanks as in the first deed.] Know all men by these presents, that in consideration of the sum of to paid by the receipt whereof is hereby acknowledged, have granted, bargained, and sold, and by these presents do grant, bargain, and sell unto the said To have and to hold, all and singular, the said goods and chattels -unto the said executors, administrators, and assigns, to sole use for ever. 464 THE LAWS OP BUSINESS FOE BUSINESS MEN. And the said for and executors and admin- istrators, do covenant to and with the said executors, administrators, and assigns, that lawfully possessed of the said goods and chattels, as of own property ; that the same are free from all encumbrances, and that will, and executors and administrators shall, warrant and defend the same to the said executors, administrators, and assigns, against the lawful claims and demands of all persons. Provided, nevertheless, that if the said executors or ad- ministratoi's shall well and truly pay unto the said executors, administrators, or assigns, the sum of then this deed, as also certain promissory note bearing even date here- with, signed by the said whereby promise to pay the said the said sum and interest at the time aforesaid, shall - be void ; otherwise shall remain in full force and virtue. And provided also, that until default by the said executors and administrators, in the performance of the condition aforesaid, or of some part thereof, it shall and may be lawful for them to keep posses- sion of the said granted property, and to use and enjoy the same : but if the same, or any part thereof, shall be attached, at any time before payment as aforesaid, by any other creditor or creditors of the said or if the said executors or administrators shall attempt to sell the same, or any part thereof, without notice to the said executors, administrators, or assigns, and without their assent to such sale in writing expressed, then it shall be lawful for the said executors, administrators, or assigns, to take immediate possession of the whole of said granted property to their own use. In testimony whereof, the said have hereunto set hand and seal this day of in the year of our Lord one thousand eight hundred and fifty- Executed and delivered in presence of 19. — Mortgage of Goods and Chattels, in general use in New York. [Fill the blanks as in first deed.] To all to whom these presents shall come, know ye, that of the first part, for securmg th^payment of the money hereinafter mentioned, and in consideration of the sum of one dollar to duly paid by of the second pSrt, at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged^ ha bargained and sold, and by these presents do grant, bargain, and sell unto the said part of the second part, and all other goods and chattels mentioned in the schedule hereunto annexed, and now in the To have and to hold all and singular the goods and chattels above bargained and sold, or intended so to be, unto the said part of the second part, executors, administrators, and assigns, for ever. And the said part of the first part, for heirs, executore, and- administrators, all and singular the said goods and chattels, above bargained and sold, unto the said part of the second part, heirs, execuCors, admin- istrators, and assigns, against the said part of the first part, and against all and every person or persons whomsoever, shall and will warrant, and for APPENDIX. 465 ever defend. Upon condition, that if the said part of the first part, shall and do well and truly pay unto the said part of the second part, executors, administrators, or assigns, then these presents shall be void. And the said part of the first part, for executors, administrators, and assigns, do covenant and agree, to and with the said part of the second part, executors, administrators, and assigns, that in case default shall be made in the payment of the said sum above mentioned, then it shall and may be lawful for, and the said part of the first part, do hereby authorize and empower the said part of the second part, • executors, administrators, and assigns, with the aid and assistance of any person or pei-sons, to enter dwelling-house, store, and other premises, and such other place or places as the said goods and chattels are or may be placed, and take and carry away the said goods and chattels, and to sell and dispose of the same for the best price they can obtain ; and out of the money arising therefrom, to retain and pay the said sum above men- tioned, and all charges touching the same, rendering the overplus (if any) unto or to executoi-s, administrators, or assigns. And until de- fault be made in the payment of the said sum of money, to remain and continue in the quiet and peaceable possession of the said gotids and chattels, and the full and free enjoyment of the same. In witness whereof, the said part of the first part, have hereunto set hand and seal the day of one thousand eight hundred and fiftj'- Sealed and delivered in the presence of 20. — Lease. [Fill the blanks as in firet deed.] This indenture, made the ' day of in the year eighteen hun- dred and between (the name, residence, and occupation of the lessor or owner"), and (the name, residence, and occupalion of the lessee or hirer), wit- nesseth, that in consideration of the covenants herein contained, on the part of the said (the name of the lessee), and representatives to be kept and per- formed, the said (the name of the lessor), doth hereby grant, demise, and lease unto the said To have and to hold the said and other premises hereby demised unto the said and ' representatives from the difring the full term of thence next ensuing. Yieldinn' and paying (except only in case of fire or other casualty as herein- after is mentioned) the rent or sum of yearly, by equal quarterly payments, to wit, on the day of the same sum on the day of the same sum on the day of and the same sum on the day of in every year during said term, and at that rate for such ful-ther time as the said lessee , or any other person or persons claiming under shall hold the said premises or any part thereof; the first quarterly payment thereof to be made on the day of now next ensuing. And the said for and representatives, hereby covenant and agree with and to the said representatives and assigns, that will, during the said term, and for such further time as the said lessee or any other person or persons claiming under 59 466 THE LAWS OF BUSINESS FOE BUSINESS MEN. shall hold the said premises or any part thereof, pay unto the lessor , heirs or assigns, the said yearly rent, upon the days hereinbefore ap- pointed for the, payment thereof, (except only in case of fire or other casualty as hereinafter mentioned,) and also all the taxes and assessments -whatsoever, whether in the nature of taxes now in being or not, which may be payable for, or in respect of, the said premises, or any part thereof, during said term. And also will Keep all and singular the said premises in such repair as the same are in at the commencement of said term, or may be put in by the said lessor or representatives during the continuance thereof, reasonable use and wearing thereof and damage by accidental fire or other inevitable; accidents only excepted ; And the said further covenant and agree with and to the said heirs and assigns, that or others having estate in the premises, will not assign this lease, nor underlet the whole or any part of the said premises , nor make or allow to be made any unlawful, improper, or ofiensive use thereof; and that no alterations or additions shall be made dur- ing the term aforesaid in or to the same without the consent of the said lessor , or of those having estate in the premises, being first obtained in writing allowing thereof; and also, that it shall be lawful for the said lessor , and those having estate in the premises, at seasonable times to enter into and upon the same to examine the condition thereof. And further, that the said and representatives shall and will, at the expiration of said term, peaceably yield up unto the said lessor , or those having estate therein, all and singular the premises and all future erections and addi- tions to or upon the same in good tenantable repair in all respects, reasonable wearing and use thereof and damage by fire or other casualties excepted. Provided always, and these presents are upon this condition, that if the said lessee or representatives or assigns do or shall neglect or fail to perform and observe any or either of the covenants contained in this instrument, which on or their part are to be performed, or if the said lessee shall be de- clared bankrupt or insolvent according to law, or if any assignment shall be made of property for the benefit of creditors, then, and in either of said cases, the lessor or those having estate in the said premises lawfully may, immediately or at any time thereafter, and whilst such neglect or default continues, and without further notice or demand, enter into and upon the said premises, or any part thereof, in the name of the whole, and repossess the same as of or their former estate, and expel the said lessee and those claim- ing under and remove effects, (forcibly if necessary,) without being taken or deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant, and that upon entry as aforesaid the said term shall cease and be ended. And provided also, that in case the premises or any part thereof shall, dur- ing said term, be destroyed or damaged by fire or other unavoidable casualty, so that the same shall be thereby rendered unfit for use and habitation, then, and in such case, the rent hereinbefore reserved, or a just and proportionate part thereof, according to the nature and extent of the injury sustained, shall be suspended or abated until the said premises shall have been put in proper condition for use and habitation by the said lessor , or these presents shall thereby be determined and ended at the election of the said lessor or legal representatives. It is expressly agreed, that, if any merchandise or property that may be in the premises during said term shall be injured or destroyed by water or other- wise, no part of such loss or damage shall be borne by the lessor ; and also that the lessee will keep all the glass in the premises in good repair, and leave the same at the end of said term in perfect condition. APPENDIX. 467 And the said lessor covenant and agree -with the said lessee and representatives, that and thoy paying the rent aforesaid,' and performing the covenants herein contained, on and their part to be paid and pe^ formed, shall peaceably hold and enjoy the said demised premises, vfithout hinderance or interruption by the said lessor , or any other person or persons whomsoever In -witness whereof the said parties have hereunto set their hands and seals. Signed, sealed, and delivered in presence of 21. — Lease, or Agreement to Let, with a Surely. — A Form in use in New York. [Fill the blanks as in foi-m No. 20, and as in the first deed.] This agreement, made the day of in the year one thousand eight hundred and between of the first part, and of the second part, witnesseth, that the said part of the first part, ha agreed to let, and hereby do let, to the said part of the second part, and the said part of the second part ha agreed to take, and hereby do take, from the said part of the first part, for the term of to commence on the day of 18 and to end on the day of 18 And the said part of the second part, hereby covenant and agree to pay unto the said part of the first part, the rent or sum of payable And also, to pay the regular annual rent or charge which is or may be as- sessed or imposed according to law, upon the said house or tenement, for the Croton water, on or before the first day of August in each year during the term; and if not so paid, the same shall be added to the quarter's rent then due, and to quit and surrender the premises at the expiration of the said term, in as good state and condition as they were in at the commencement of the term, reasonable use and wear thereof and damages by the elements ex- cepted. I And the said part of the second part further covenant that will not assign this lease, nor let or underlet the whole or any part of the said premises, nor make any alteration therein, without the written consent of the said part of the first part, under the penalty of forfeiture and damages; and that will not occupy or use the said premises, or permit the same to be occupied or used, for any business deemed extra hazardous on account of fire or otherwise, without the like consent, under the hke penalty. And the said part of the second part further covenant that will permit the said part of the first part, or agent, to show the premises to persons wishing to hire or purchase, and on and after the first day of next preced- ing the expiration of the term, will permit the usual notice of " to let " or " tor sale," to be placed upon the walls or door of said premises, and remain there without hinderance or molestation. And also, that if the said premises; or any part thereof, shall become vacant during the said term, the said part of the first part or representative may re-enter the same, either by force or otherwise, without being liable to any prosecution therefor ; and re- let the said premises as the agent of the said part of the second part, and receive the rent thereof, applying the same, first to the payment of such ex- penses as may be put to in re-entering, and then to the payment of the 468 THE LAWS OP BUSINESS FOR BUSINESS MEN. rent due by these presents; and the balance (if any) to be paid over to the said part of the second part, who shall remain liable for any deficiency. And the said part of the second part hereby further covenant that, if any default be made in the payment of the said i-ent, or any part thereof, at the times above specified, or if default be made in the performance of any of the covenants or agreements herein contained, the said hiring, and the rela^ tion of landlord and tenant, at the option of the said part of the first parj:, shall wholly cease and determine ; and the said part of the first part shall and may re-enter the said premises, and remove all persons therefrom ; and the said part of the second part hereby expressly waive the service of any notice in writing of intention to re-enter, as provided for in the third section of an Act entitled, "An act to abolish Distress for Kent, and for other pur- poses," passed May 13, 1846. In witness whereof, the^ parties to these presents have hereunto set their hands and seals, the day and year first above written. Sealed and delivered in presence of In consideration of the letting of the premises above mentioned to the above named do hereby covenant and agree, to and with the part of the first part above named, and legal representatives, that if de- fault shall at any time be made by the said in the payment of the rent and performance of the covenants above contained on part to be paid and performed, that will well and truly pay the said rent, or any arrears thereof that may remain due unto the said part of the first part, and also all damages that may arise in consequence of the non- performance of said covenants, or either of them, without requiring notice of any such default from the said part of the first part. Witness hand and seal this day of in the year of our Lord one thousand eight hundred and Witness 22. — Poiver of Attorney, in general use in New York. Know all men by these presents, that I, (ilie name, residence, and occupa- , tion of the principal,) have made, constituted, and appointed, and by these presents do make, constitute, and appoint (the name, residence, and occupa- tion of the attorney) true and lawful attorney for and in name, place, and stead (here state fully, minutely, and specifically just what it is in- tended that the attorney should do for the principal), giving and granting unto said attorney full power hnd authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully, to all intents and purposes, as might or could do if per- sonally present, with full power of substitution and revocation, hereby ratify- ing and confirming all that said attorney or substitute shall lawfully do or cause' to be done by virtue hereof. In witness whereof, have hereunto set hand and seal the day of in the year one thousand eight hundred and Sealed and delivered in the presence of State of New York, County of ss. Be it known, that on the day of one thousand eight hundred and before me in and for the State of New York, duly commissioned and sworn, dwelling APPENDIX. 469 personally came and acknowledged the above letter of attorney to be act and deed. In testimony whereof, I have hereunto subscribed my name, and affixed my seal of office, the day and year last above written. 23. — Power to transfer Stock. [Fill the blanks as in form No. 22.] Know all men by these presents, that do hereby constitute and appoint to be true and lawful attorney for and in name and behalf, to sell, assign, and transfer to the whole or any part of and for that purpose to make and execute all necessary acts of assignment and transfer. In witness whereof, have hereunto set hand and seal this day of 185 Sealed and delivered in the presence of 24. — Power to vote by Proxy. [Fill the blanks as in form No. 22.] Know all men by these presents, that I, do hereby constitute and appoint attorney and agent for me and in my name, place, and stead, to vote as my proxy at any accordin" to the number of votes I should be entitled to vote if then person- ally present. In witness whereof, I have hereunto set my hand and seal this day of one thousand eight hundred and fifty- Sealed and deUvered in the presence of 25. — Poioer to receive Dividend. [Fill the blanks as in form No. 22.] Know all men by these presents, that of do authorize, constitute, and appoint to receive from the the dividend now due on all stock standing to name on the books of the said Company, and re- ceipt for the same : hereby ratifying and confirming all that may lawfully be done in the premises by virtue hereof. Witness hand and seal this day « 18 Sealed and delivered in the presence of 470 THE LAWS OF BUSINESS FOE BUSINESS MEN. 26. — Power to transfer Stock. ^Irrevocable. [Fill the blanks as in form No. 22.] Know all men by these presents, that for value received, have bargainedj sold, assigned, and transferred, and by these presents do bargain, sell, assign, and transfer unto standing in name on the books of the and do hereby constitute and appoint true and lawful attorney irrevocable for and in name and stead, but to use, to sell, assign, transfer, and set over all or any part of the said stock, and for that purpose to make and execute all necessary acts of assignment and transfer, and one or more persons to substitute with like full power, hereby ratifying and confirming all that said attorney or substitute or substitutes, shall lawfully do by virtue hereof. In witness whereof, have hereunto set hand and seal this day of one thousand eight hundred and fifty- Sealed and delivered in the presence of 27. — Bill of Sale of a Registe,red Vessel: To all to whom these presents shall come, greeting : Know ye, that I, (or we,) (names, residences, and occupations of the owners or sellers,') of the or vessel called the of the burden of tons or thereabouts, for and in consideration of the sum of lawful money of the United States of America, to in hand paid before the ensealing and delivery of these presents, by (name, residence, and occupation of the buyer), the receipt whereof do hereby acknowledge, and therewith fully satisfied, contented, and paid ; ha bargained and sold, and by these presents do bargain and sell unto the said executors, administrators, and assigns, of the said or vessel, togetlier with the mast bowsprit, sails, boat anchors, cables, and all other necessaries thereunto appertaining and belong- in"-. The certificate of the registry of which said or vessel is cis fol- lows, to wit : — No. In pursuance of an Act of the Congress of the United States of America, entitled, " An Act concerning the Registering and Recording of Ships or Vessels," having taken or subscribed the required by the said act, and having mat owner of the ship or vessel called the of whereof is at present master, and is a citizen of the United States, an^that the said ship or vessel was APPENDIX. 471 And having certified that the said ship or vessel has declc and mast and that her length is her breadth her depth and that she measures tons ; and that she is tas and _ head : And the said ^ . having agreed to the description and admeasurement above specified ; and suflScient security having been given according to the said Act, the said has been duly registered at the port of Given under hand and seal at the port of tWs day of in the year one thousand eight hundred and A. B., Collector of To have and to hold the said and appurtenances thereunto belonging, unto the said executors, administrators, and assigns, to the sole and only proper use, benefit, and behoof of the said executors, administrators, and assigns, for ever. And the said ha and by these presents do promise, covenant, and agree, for heirs, executors, and administrators, to and vpith the said heirs, executors, administrators, and assigns, to warrant and defend the said and all the other before-mentioned appurtenances, against all and every person and persons whomsoever. In testimony whereof, the said ha hereunto set hand and seal this day of in the year of our Lord one thousand eight hundred and Sealed and delivered in the presence of C. D. 28. — Charter-party. This Charter-party, made and concluded upon in the day of in the year one thousand eight hundred and between of the of of the burden of tons or thereabouts, register measurement, now lying in the harbor of of the first part, and of the second part, witnesseth, that the said part of the first part, for and in considertitidn of the covenants and agreements hereinafter mentioned, to be kept and performed by the said part of the second part, do covenant and agree on the freighting and chartering of the said vessel unto the said part 472 THE LAWS OF BUSINESS FOE BUSINESS MEN. of the second part, for the voyage from the port of on the terms following, that is to say : — First. The ?aid part of the first part do engage that the said vessel in and during the said voyage shall be kept tight, stanch, well-fitted, tackled, and provided with every requisite, and with men and provisions necessary for sucln a voyage. • Second. The said part of the first part do further engage that the whole of said vessel (with the exception of the cabin, the deck, and the necessary room for the accommodation of the crew, and of the sails, cables, and provis- ions) shall be at the sole use and disposal of the said part of the second part during the voyage aforesaid ; and that no goods or merchandise whatever shall be laden on board, otherwise than from the said part of the second part, or agent, without consent, on pain of forfeiture of the amount of freight agreed upon for the same. T/iiVcZ. The said part of the first part do further engage to take and re- ceive on board the said vessel, during the aforesaid voyage, all such lawful goods and merchandise as the said part of the second part, or agents, may think proper to ship. And the said part of the second part, for and in consideration of the cove- nants and agreements to be kept and performed by the said part of the first part, do covenant and agree with the said part of the first part, to charter and hire the said vessel as aforesaid, on the terms following, that is to say ; — First. The said part of the second part do engage to provide and furnish to the said vessel Second. The said part of the second part do further engage to pay to the said part of the first part, or agent, for the charter or freight of the said vessel during the voyage aforesaid, in the manner following, that is to say:' — It is further agreed between the parties to this instrument, that the said part of the second part shall be allowed, for the loading and discharging of the vessel at the respective ports aforesaid, lay days as follows, that is to say : — and in case the vessel is longer detained, the said part of the second part agree to pay to the said part of the fii-st part, demui-rage at the rate of Spanish milled dollars per day for each and every day so detained, provided such detention shall happen by default of the said part of the second part, or agent. It is further understood and agreed, that the cargo shall be received and delivered alongside within reach of the vessel's tackles. It is also further undei-stood and agreed, that this Charter shall commence when the vessel is ready to receive cargo at her place of loading, and notice thereof is given to the part of the second part, or to agent To the true and faithful performance of all the foregoing covenants and a^froements, the said parties, each to the other, do hereby bind themselves, their executors, administrators, and assigns, and also the said vessel, freight, tackle, and appurtenances ; and the merchandise to be laden on board,'each to the other, in the penal sum of In witness whereof, the said parties have hereunto interchangeably set their hands and seals this day of 185 Sealed and delivered in the presence of APPENDIX. 473 29. — Bottomry Bond. KnoTT all men by these presents, that I now master and commander of the or vessel called the of the burden of tons, or thereabouts, now lying in the port of am held and firmly bound unto in the sum of lawful money of the United States of America, to be paid to the said or to certai u attorney executora, administrators, or assigns ; for which payment, well and truly to be made, I bind myself, my heirs, executors, and administrators, and also the said vessel, her tackle, apparel, and furniture, firmly by these presents. Sealed with my seal, at this day of in the year of our Lord one thousand eight hundred and Whereas the above-bounden ha been obliged to take up and borrow, and hath received of the said for the use of the said vessel, and for the purpose of fitting the same for sea, the sum of lawful money of the United States of America, which sum is to be and remain as a lien and bottomry on the said vegsel, her tackle, apparel, and furniture, at the rate or premium of for the voyage. In consideration whereof, all risks of the seas, rivers, enemies, fires, pirates, &c.,are to be on account of the said And for the better security of the said sum and premium, the said master doth, by these presents, hypothecate and as- sign over to the said heirs, executors, administratoi's, and assigns, the said vessel, her tackle, apparel, and furniture. And it is hereby declared, that the said vessel, is thus hypothe- cated and assigned over for the security of the money so borrowed, and taken up as aforesaid, and shall be delivered for no other use or purpose whatever, until this bond is first paid, together with the premium hereby agreed to be paid thereon. Kow the condition of this obligation is such, that if the above-bounden shall well and truly pay, or cause to be paid, unto the said the just and full sum of lawful money as aforesaid, being the sum borrowed, and also the premium aforesaid, at or before the expiration of days after the arrival of the said vessel at then this obligation, and the said hypothecation, to be void and of no effect, otherwise to remain in full force and virtue. Having signed and executed bpnds of the same tenor and date, one of which being accom- plished, the other to be void and of no efi'ect. Signed, sealed, and delivered in the presence of We do not give the form of a Respondentia Bond. Tliis contract is now unusual, and is made only when some special emergency calls for it, and must then be framed to suit that emergency, and express the special terms of the bargain. The foregoing form, in connection with what is said of Responden- tia Bonds in the text, and the points in which they resemble Bottomry Bonds and those in which they differ from them, will enable any merchant to frame a Respondentia Bond suited to most cases. 60 474 THE LAWS OP BUSINESS FOB BUSINESS MEN. 30. — Bill of Lading: Shipped, in good order and -well conditioned, by on board the called the whereof is master, now lying in the port of and bound for To say : — being marked and numbered as in the margin, and are to be delivered in the like good order and condition, at the aforesaid port of (the dan- gers of the seas only excepted,) unto or to assigns, he or they paying -freight for the said with primage and average accustomed. In witness whereof, the master or purser of the said vessel hath affirmed to bills of lading, all of this tenor and date ; one of which being accom- plished, the others to stand void. Dated in the day of 185 31. — Shipping Articles, in use in New York. United States of America. It is agreed, between the master and seamen, or mariners, of the of whereof is at present master, or whoever shall go for master, now bound from the port of New York, to And it is hereby expressly agreed, that should the said ship on the said voyage be seized, detained, or fined, for smuggling tobacco, or any other ar- ticle, by one or more of the undersigned sailors, cooks, or stewards, they shall all be responsible for the damages thence resulting, and shall severally forfeit their wages, and all their goods and chattels on board, to the amount of such damage, and that the certificate of the person or persons who may seize, de- tain, or fine the said ship for smuggling, signed by him or them, and verified by the American Consul at under his seal of office, shall be con^ elusive evidence of the facts therein stated, in all courts whatsoever, especially and as to the fact that smuggling had been committed, the individual or indi^ viduals by whom the same had been committed, the amount of the fine imposed therefor upon the said ship, the incidental expenses thereon, and the number of days the said ship was detained in consequence thereof. No grog allowed, and none 'to be put on board by the crew ; and no profane language allowed, nor any sheath-knives permitted to be brought or used on board. That, in consideration of the monthly or other wages against each respective seaman or mariner's name hei-eunder set, they severally shall and will perform the above-mentioned voyage : And the said master doth hereby agree with and hire the said seamen or mariners for the said voyages, at such monthly wages or prices, to be paid pursuant to this agreement, and the laws of the Congress of the United States of Amei-ica : And they, the said seamen or mariners, do severally hereby promise and oblige themselves to do their duty, and obey the lawful commands of their officers on board the said vessel, or the boats thereunto belonging, as become good and faithful seamen or mariners ; and at all places where the said vessel shall put in, or anchor at, during the said voyage, to do their best endeavors for the preservation of the said vessel and cargo, and not to neglect or i-efuse doing their duty by day or night, nor • APPENDIX. 475 shall go out of the said vessel on board any other vessel, or be on shore, under any pretence whatsoever, until the above-said voyage be ended, and the said vessel be discharged of her loading, without leave first obtained of the captain or commanding officer on board : that in default thereof, he or they will be liable to all the penalties and forfeitures mentioned in the Marine Law, en- acted for the government and regulation of seamen in the merchants' service, in which it is enacted, " That if any seaman or mariner shall absent himself from on board the ship or vessel, without leave of the master or officer com- manding on boai-d, and the mate or other officer having charge of the log-book, shall make an entry therein of the name of such seaman or mariner, on the day on which he shall so absent himself; and if such seaman or mariner shall return to his duty within forty-eight hours, such seaman or mariner shall for- feit three days' pay for every day which he shall so absent himself, to be de- ducted out of his wages ; but if any seaman or mariner shall absent himself fop more than forty-eight hours at one time, he shall forfeit all wages due to him, and all his goods and chattels which were on board the said ship or vessel, or in any store where they may have been lodged at the time of his desertion, to the use of the owner or owners of the said ship or vessel, and moreover shall be liable to pay him or them all damages which he or they may sustain by be- ing obliged to hire other seamen or mariners in his or their place." And it is further agreed, that in case of desertion, death, or imprisonment, the wages are to cease. And it is further agreed by both parties, that each and every lawful com- mand which the said master or other officer shall think necessary hereafter to issue for the effectual government of the said vessel, suppressing immorality and vice of all kinds, shall be strictly complied with, under the penalty of the person or persons disobeying forfeiting his or their whole wages or hire, to- gether with everything belonging to him or them on board the said vessel. And it is further agreed on, that no officer or seaman belonging to the said vessel shall demand or be entitled to his wages, or any part thereof, until the arrival of said vessel at the said vessel's final port of discharge, and her cargo delivered. And it is hereby further agreed, between the master, officers, and seamen of the said vessel, that whatever apparel, furniture, and stores each of them may receive into their charge, belonging to the said vessel, shall be accounted for on her return ; and in ease anything shall be lost or damaged, through their carelessness or insufficiency, it shall be made good by such officer or sea- man, by whose means it may happen, to the master and owners of the said vessel. And whereas, it is customary for the officers and seamen, while the vessel is in port, or while the cargo is delivering, to go on shore at night to sleep, greatly to the prejudice of such vessel and freighters, be it further agreed by the said parties, that neither officer nor seaman shall, on any pretence whatever, be entitled to such indulgence, but shall do their duty by day in discharge of the cargo, and keep such watch by night as the master shall think necessary to order relative to said vessel or cargo ; and whereas it frequently happens that the owner or captain incurs expenses while in a foreign port, relative to the imprisonment of one or more of his officers or crew, or in the attendance of nurses, or in the payment of board on shore for the benefit of such person or persons : now it is understood and agreed by the parties hereunto, that all such expenditures as may be incurred by reason of the foregoing premises shall be charged to, and deducted out of the wages of, any officer or such one of the crew by whose means or for whose benefit the same shall have been paid. And whereas, it often happens that part of the cargo is embezzled after be- ing safely delivered into lighters, and as such losses are made good by the 476 THE LAWS OP BUSINESS FOR BUSINESS MEN. owners of the vessel, be it therefore agreed by these presents, that whatever ofBoer or seaman the master shall think proper to appoint, shall take charge of her cargo in the" lighters, and go with it to the lawful quay, and there deliver his charge to the vessel's husband, or his representative, to see the same safely landed. That each seaman or mariner who shall well and truly perform the above- mentioned voyage (provided always that there be no desertion, plunderage, embezzlement, or other unlawful acts committed on the said vessel's cargo or stores) shall be entitled to the payment of the wages or hire that may her come due to him pursuant to this agreement, as to their names is severally af- fixed and set forth : Provided, nevertheless, that if any of the said crew disobey the orders of the said master or other officer of the said vessel, or absent him- self at any time without liberty, his wages due at the time of such disobedience or absence shall be forfeited ; and in case such person or persons so forfeiting wages shall be reinstated or permitted to do further duty, it shall not do away such forfeiture. It being understood and agreed, by the said parties, that parol proof of the misconduct, absence, or desertion of any officer or any of the crew of said vessel, may be given in evidence at any trial between the parties to this conti'act, any act, law, or usage to the contrary thereof notwith- standing. In testimony whereof, and for the due performance of each and every of the above-mentioned articles and agreements, and acknowledgment of their being voluntarily, and without compulsion or any other clandestine means being used, agreed to and signed by us, we have each and every of us hereunto af- fixed our hands, the month and day against our names as hereunder written. , And it is hereby understood, and mutually agreed, by and between the par- ties aforesaid, that they will render themselves on board the said vessel, on or before the day of 18 at o'clock in the noon. This is signed by all the officers and crew, under seventeen columns, which give the following particulars : — Date of entry, names, stations, birthplace, age, height in feet and inches, wages per month, advance wages, advance abroad, hospital money, time of service in months and days, whole wages, wages due, sureties, witness. On the back of this instrument are copious ex- tracts from the laws of the United States for the government of seamen, &c. ; and then follows a receipt in full in the following words. It should be re- marked, however, that the sailor's discharge of all demands for assault and batteiy or imprisonment, &c. is of little, if any, legal force. We, the undersigned, late mariners on board the on her late voyage described on the other side of this instrument, and now performed to this place of payment, do hereby, each one for ourselves, with our signa- tures, acknowledge to have received of agent or owner of said the full ^um hereunder set against our names ; being in full amount of our wages for our services, and all demands for assault and battery, or imprisonment, of whatever name or nature, against said her owners or officers, to the day or date hereunder also set against our names. APPENDIX. 477 S2. — AWin. It is impossible to do more than to give such forms and rules as -will be ap- plicable to all wills, and enable any person to draw a simple will with safety. No one can express accurately provisions for trust estates, remainders, exec- utory devises, &c., without knowing the law on these subjects,— ^ and this is an extensive and difficult department of the law. All that is necessary, and may be relied upon as generally sufficient, is as follows : — I, A. B., of (place and occupation), make this my last will. I give, devise, and bequeath my estate and property, real and personal, as follows, that is to say: — Tlien follow all the provisions and disposition of property which the testator intends, stated fully, plainly, and as accurately as possible, paying due regard to the rules and principles laid down in the chapter of this book on this sub- ject. And if these provisions are carefully presented in distinct and intelli- gible language, the courts will generally supply whatever of technicality is wanting. Then follows, first, the appointment of an executor, and then the execution, and finally the declaration of the witnesses, thus : — I appoint (jiame, residence, and occupation') executor (or executors if more than one be desired) of this my will. In witness whereof, I have signed and sealed and published and declared this instrument as my will, at (place), on (date). Signed, A. B. [seal.] The said A. B., at said (place), on said (day), signed and sealed this instrn- ment, and published and declared the same as and for his last will. And we, at his request, and in his presence, and in the presence of each other, have hereunto written our names as subscribed witnesses. C. D. E. F. G. H. A codicil should be written thus : — I,- A. B., of (place and occupation), do make this my codicil, hereby con- firming my last will made on the (date of the vHU), and all my former codicils (if there be any), so far as this codicil is consistent therewith ; and do hereby — Then follows whatever disposition the testator chooses to mate, stating and describing it as he would if it were a will, and executing it and having it attested in the same manner as if it were a will, excepting that, instead of calling it a will, wherever that word occurs, he says "codicil" instead of " will°' INDEX. A. Mandonmentj 155, 994, 353-362. by partner, 1^. Absence, of debtor or creditor from State, 212- 2J5. of witnesses, deed how proved, 420. Acceptance- See, in this Index, JV'egotiable Pa- per : Statute of Frauds ; Agreement and Assent ; Bills of Ezcliange. of guaranty, 72. presentment for, 104, 105. for honor, 125. of abandonment, 358, 359. of deed by grantee, 419. Accidentj equity has jurisdiction in cases of. See, in this Index, Equity* Accommodation Paper ^ 96, 115, 246. Accounts, to be kept by agent. 141. between partners, 150. 157, 161. between merchants, 203, 211, 212. how affected by Statute of Limitations, 208. annual rests in settlement of, 231. when compound interest allowed, 232, pledgee how to account, 432, 433. Aclcnowleda-ment^ of indebtedness, 203-217. ot receipt of premium, 334. of deeds, 417, 420, 421. .Action, things in, of married woman, 21, 99. form of, by wjiat law governed, 266, "Act of God," 191-193. ActSj as evincing interest, 29, 267, 968. usage depends upon, ratlier than upon opinions, 37. as affecnng question of domicile, 267. Administrators, right of, to indorse, 122. named in deed, 422. with the will annexed, 442- Admiraltij, law of. See, in this Index, Law of Shipping ; Marine Jnsurance. Advancements, to child during life, 442. Advances, factor may selLto cover, 144. must bo securedTjefore revocation, 145. upon freight, when may b6 insured, 323. Age, when one becomes of age, 17. fraudulent representations as to, 19,90. legal age by what law governed, 263. of witness, 420. Agencrf, 128-145. I. Aa-ency in General, 126, 127. who may be agent, 94,25, )26, 159, 159. when principal is responsible, 196, 128. general agent, 126, 197. particular agent, 126, 127. secret restrictions upon agent, 127. II, How Authority may he given to an Agent^ - • 197-131. orally, or in writing, 197. under seal, 197. by implication, 398. what authority an oral appointment ^ives, 127. ratitica'tion of agent's acts, 198, 199. imphed ratification,, 198, 129. ratification of stoppage in transitu, 129. distinction between agency of a factor and of a broker, 129, 130, 144. agency of bank or railroad officers, 130, I3J. power of attorney, form of, 468, 469. HI. Extent and Duration ofAuiliority, 131 - 133. agent's sales on credit, 131. when agent mixes goods, 131. when agent takes note payable to him- self, 131. power to warrant, 131. power to accept bills or indorse notes, 131, 139, 134. represontatidns of agent, 132, 137. revocation of agency, 131, 135, 145. by death, or marriage, 132. by insanity, 142. power coupled with an interest, revo- cation of, 132. agency of shipmaster, 133, 305-307. IV. Of the Execution ofAuUionty, 133, 134. how agent must sign, 133. power given to two, 133, 134, notice to joint agents, 134. effect of usage upon, 134. V. Liabdity of an Agent, 134, 135, 136. of one who assumes to bo agent, 134, VI. Rights of Action growing out of Agency, 135-137. by and against whom, 135-137. u])on disaffirmance of gale by principal, 135. by and against undisclosed principal, 135. if party trusts to agent alone, 136. knowledge of pnncipal, 136. knowledge of agent, 136. notice to principal, 136. notice to agent, J36. conspiracy with agent against principal, 137. negotiable paper in hands of agent, 137. VII. Pnncipal hoio affected by Act of Agent, 137, 138. representations of agent, 132, 137, payment to agent or sub-agent, 138. shopman, payment to, 138. criminal acts of agent, 138. VIII. Mutual Rights and Duties of Principal and Agent, 139-142. when agent has departed from instruc- tions, 139. wl^n principal must indemnify agent, 139. appointment of sub-agent, 139. 480 INbEX. what care and skill agent must use, 139,140. good faith necessary, 139. agent liable for whulo injury, 140. enibezzlernent by agent, 141. agent or trustee cannot buy of, or sell to, himself, HI. agent to k(>ep account, 141. for what interest liable, 141, 142. damages by revocation of agency, 142. IX, Factors and Brokers, 142-145. guaranty by, 142, 143. when may pledge goods, 143. instructions to, 143. ma^ insure, 143, 145. liability of, without guaranty commis- sion, 143, 144. discounts procured by, ,144. factor niav use his own name, 144. has lien, 130, 144. may sell to cover advances, 144. acts for one party only, 144. broker uses only name of principal, 144. lias no lien, J3U, 144. may act for both parties, 144. no authority to receive payment, 144. commissions, 141. advances must be secured before revo- c.ation, 145. foreign factor, 145. domestic factor, 145. our States foreign in this respect, 145. to use reasonable care, 145. X. In other respects : of wife, or party treated as such, 24, 95, 126. of partner, 152, 159. principles of, apply to common car- riers, 193. in proof of debt against insolvent es- tates, 243^244. bankruptcy of agent, rights of principal Jiow affected, 250. of owner and master after abandon- ment, 359, 3G0. agent how authorized to execute deed, 418. purchase of land by agent, 418. execution of deed by agent, ^421. delivery by or to agent, 410. in matters of insurance, 136, 316, 317, 332,3ti0, 372, 382-384. of ship's husband, 277, 278, 316. 384. Agreement. See, in this Index, Contract, to sell, breach of, II, 44j 45, 427, * to submit, not binding, unless, 41. of parties, constitutes sale, 49. affected by the Statute of Frauds, 75-82. as to carrier's liability, 196-198. between partners, as to losses, 147. for charlcr-|)arty, 290. when enforced in shipping, 295. as to prohibited trade, 347. should be written, signed, and wit- nessed, 451. how oral testimony alTects, d51 form of, 451,452. Agreement and Assent, 20.- 37. !.■ Legal Meaning of Agreement^ 26 - 28. explicit words, 26. intention of parties, when to govern, 27. mistake in choice of words, 27- mistakeof fact,27, 28. mistake of law, 27, 28. II. Wiat IS Assent, 26, 28, 29, 30. direct affirmative, 28. conditional acceptance, 28. when acts not enough, 29. IIL Qfers giving Time, 29, 30. #, withdrawal of ofTer, 29, 30. IV. Bargain by Correspondence, 30-32, 316, 371. when complete, 30, 31, 316, 371, offer by letter, withdrawaL of, 30-32, 316. V. Wkat Evidence can affect a written Contract, 32-34. extrinsic, when, 32-34. to contradictor vary, 32. to explain, or identify, 32, 33. when the contract is plain, 32, 33. evidence of experts, 33. to contradict a receipt, 33, 84, 334. when a receijit forms part of deed or other instrument, 33- but deed not affected, 33. to rebut legal inference, 33, 34. . as of payment on demand, when no time specified, 34. to supply part not reduced to writing, 34. when third parties are interested, 34. written instruments, how construed, 34. unintelhgible contract, void, 34. VI. Custom (»• Usage, 34-37. force of, 34, 35, affecting the meaning of words, 35. taking the place of words, 35. must be established and known, 35, 36. illegal, 36. unreasonable or oppressive, 36, 37. must bo uniform and continued, 37. depends upon acts., 37. when opposed to agreement or inten- tion, 37. Alien.f\\\ timeof war cannot contract, 16, may act as agent, 126. vessel belonging to, cannot bo regis- tered, 271. Allonge, 87. Alterations, in a policy of iiisnrance, 317. of insured property, 378, 379. in deed, 422. in will, 440. Ambiguous Insiruvients. 92, 93. Anchors, pass by conveyance of ship, 275. Annual Rests, in accounts, 231. in claims against insolvent, 244. Annuities, purchase of, not usurious, 226. payable by bankrupt, 245. ' Ante-nuptial Contracts, governed by what law, 264, " Apparel," of a ship, 275, Apparel, wearing, assignee in insolvency does not take, 250. exempt from attachment and levy, 250. Application, in insolvency, 239. in fire insurance, 374, 375. in life insurance, 404, 408. Appropriation of Paymof^ts, 84, 85. Appurtenances, what, conveyed by lease, 435. Arbitration, 166—174. I. Of the Submission and Award, 166- 172. submission, how made, 1G6. how construed, ]67. essentials of an award, 1G6- 169. award when void, 166- 1G9. severable award, 167, 169. award in the alternative, 168. award upon condition, 169. award void in part, 167, 169, 170. award when enforced, 170. covering '* all demands and questions," 170. implied award of release, 170. form of award, 170, 171. award to whom delivered] 171, 174. INDEX. 481 when relied on in defoiico. 171. irregular or improper conduct of arbi- trators, 171. " corruption, or undu<9 means," 171. mistake of fact or law, J7I. arbitrators judges of the law, exsept, 171,172. irregular proceedings, 173. II. Revocation of SiibirtL-ision to, 173, 174. by either party, 173. when, 173. eflect of, 173. submission by order^of court, 173, 174. damages for revocation, 173, 174. notice of, 173. implied by what, 173, 174. suit. 173. marriage, 173, 174. lunacy, 174. desiniciiou of subject-matter, 174. bankruptcy, 174. death of party, 174 death, refusal, or inability of arbi- trator, 174. award inado not subject to control, 174. lien of arbitrators for fees, 174. award should be sealed, 174. how addressed or opened, 174. III. In oVier respects : agreement to submit not binding, un- less, 41. partner no authority to submit, 153. form of award. 454. Arrest, bv what law governed, 98, 966. for debt, 233, 230, 242, 259, 266, 447 at soa, 337, 345. Articles, shipping, 309, 310, 474. jSssailing Thieves, 343. Assent, See, in this Index, Agreement and As- sent. of grantee to deed, 419. of wife to hiishaud's conveyance, 421. Assessments^ in mutual fire insurance, 369, 402. Assets^ 15, 238, 259-254. Assignee, of partner, 149, 150. of bankrupt or insolvent, 248 -250. may insure seaman's wages, 322. of property insured against fire, rights of, 396-399. Assignment, of leases, 46, 436. by partner, 149, 150, 152, 153. of debts and credits ui>on dissolution of partnership, ltj3. of policy of insurance, 317. of insured property, 396-399. of life policy, 411,412. form of, 453. *'At," used in insurance policies, 351, 352. *^At uTidfrom,*' how used in insurance policies, 351,352. "At Sea," meaning, and how used, 352. Attachment, foreign, 89, 162, 444, 445, 447. exemption from, 23, 427, 445 - 447. of property sold, not delivered, 58. in case of partnership, 160 - 162. by foreign creditor, as against assign- ment in bankruptcy, 256-259, of equity of redemption, 429. Attestation, of deeds, 419, 420. of wills, 440. Attested Mote, when barred by Statute of liimi- tations, 206. Attorney, execution of deed by, 421. proof of debts against insolvent estate by, 243, 244 power of, form, 4C8, 469. Auction, fraud of bidders at, 61. by-bidding at, 61, 128. sale at, of goods held for lien, 190. 61 Auctioneer, authority given to, 328. wlion may withdraw articles, or bid- der his bid. 138. credit given by, 131. AxitJiority, what, revoked by assignment in in- solvency, 253. Average, 295-301, 363, 364, 401. Award. See, in this Index, Arbitration, B. ■Sa^5'«5"«» 184, 198-202. Bad, and hadee, meaning of the term, 58. Badee, seller, for buyer, 58. gratuitous, 176. may insure poods, 321, 383. Balance, effect of striking, in mutual accounts, 209. Ballast, whether passes by conveyanco of ship. Bank, agency of cashier 6f, 130. collection of notes by, 132, 133. discounts by, not usurious, 227. checks on, 94-96, 103, 108, 114. * **Sanfc," of Venice, 233. Bank-Bills. See, in this Index, Banlc-J^otea. Banker, liability of, without acceptance, 124. Bank-JVotes, 93. bills and notes payable in, 90. warranty in transfer of, 121. not affected by Statute of Limitations, 206. Bankruptcy and Insoluency, 233-200. I, History of the Law of Bankruptcy, 233-236. bankruptcy considered criminal, 233, 234. arrest and imprisonment for debt, 233, 234. first bankrupt law, 234. confined to traders, 234, 936. change of opinion as to bankruptcy, 234. United States bankrupt laws, 934, 235. State insolvent laws, 235. If, Difference between Bankruptcy and Jnsol~ vcncy, 236 - 939. bankruptcy confined to traders, 234, 236, 249. insolvency applied to all, 936, 242. bankruptcy, involuntary, 236, 243. insolvency, voluntary, 236. 242. bankruptcy discharged debt, 236, 242. insolvency protected from arrest and imprisonment, 236, 249. these distinctions have gone, 236. powers of a State and of the United States to pass bankrupt laws, 237. division of assets among creditors, 238. meaning of the term " assets,'' 15, 938. common law permits preference of cred- itors, 238. which bankrupt system opposes, 238, voluntary assignments, 238, 243, 254. when preferences and special assign- ments are void, 238, 939, 943. debts for labor when preferred, 939. III. Tribunal and Jurisdiction, 939 - 942. under the United Slates law, 239. under State laws, 239. wlicn jury inay be brought in, 939. rules of proceeding and practice, 239, 240. commissioners may commit for con- tempt, 240. transfer of property by insolvent, when void, 240, 941.. fractions of a day, 241. fraudulent preference of creditors, 241.. .482 INDEX. fraudulent conveyances, 238, 240, S41. IV. Whomay be Insolvents, 042, 242. . traders, 942. . married women, 242. infants, 242. lunatics, 243. V. Of the Proof of Debts, QiZ -247. how proved, 243. by agent or attorn^yi 243, 244, by trustee for cestui que trust, 244. when the creditor is bankrupt, 244. or lias assigned his claim, 244. if bankrupt is trustee ,and owes the trust fund, 244. debts not yet due, 244. interest, how cast, 244. compound interest, 244. annual rests, 244. •when bankrupt owes annuities,245. debts due wife of insolvent, 245. defences against claims by assignee, 245-247. gaming debt, 245. usury, 245. , want of consideration, 945, claim for damages for tort or personal injury, 245. if the claim is contingent, 245. accommodation note, 246. exchanged notes, 246. claims by surety or guarantoi*, 246. rights of surety, 247. rights of creditor who holds collateral security or has a lien, 247. VI. Of the Assignee, 248 - 250. how chosen, 248. powers, duties, and responsibilities of, 248-250. liability of, 249. subject to what equities, 249. when should not take possession of property, 249. how may sue, 250. when should obtain direction of the court, 248-250. VII. What Property the ^ssigiice takes, 250-254. what bankrupt holds in another's rigiit, 250. debt collected by bankrupt for another, 250. if bankrupt sold goods for principal, 250. property exempt frum being taken, 250. wearing-apparel, 250. jewelry and ornaments, 250, 251. gifts, 250-252. whether bankrupt may decline gift or devise to him, 252. after decree in bankruptcy, property coming to bankrupt is his own, 252. property coining to banitrupt after peti- tion and before decree, 252. insolvency of partner; what assignee takes, 259, 253. property coming to wife of bankrupt, 253. money in the hands of attorney, 2.53. what possibilities jtass, 253. wliat authorities or liens revoked by msolvency, 353, 254. VIII. Of the Vtsckarrfc of tlie Insolvent, 254- 256. different provisions in llie States, 254, * persons entitled to relief in the different Stales, 255. discharge obtained hy bribery. 256. liability of co-debtors or sureties not afFccted by, 256. what liabilities of the insolvent not affected by, 256. IX. Of Fareiffn bankruptcy or fnsolvenqf. 256-260. whether assignee takes property wher- ever situated, 256-259. rights of foreign creditors, 2.56-959. • whether bankrupt system is part of the law of nations, or is local, 257. States of the CJnion foreign in this re- spect, 259. whether discharge of debtor is dts^r charge everywhere, 259, 260. distinction between right and remedy, 259.' . ^, X. In other respects .- necessary to right of stoppage in tran- situ, 67. of factor, 131, of partner, 150. acknowledgment of bankrupt, effect of Statute of Limitations upon, 208. of insurer, who is re-insured, 384, 385. of insured avoids policy,-398. Bargain. See, in this Index, Contract; Agree- ment and Assent. Barratry^ 343 -345. Bequest, whether bankrupt may decline, 252. to bankrupt, after decree, 252. to wife, instead of dower or other right, 443. "Beyond Seas," 212-214. Bid, when may be withdrawn, 128, BUI of Lading, 283, 284, 287-289. delivery of, upon sale of property at sea, 56. form of, 474. Bill of Sale, contains implied warranty, 65. of vessel, recording of, 273^ 274. form of, 454, 455, 470. . BUls of Exchange and Promissory JVotes. See, ■ in this [hdex, Negotiable Paper. when presumed payable on demand, unless time expressed, 13. meaning of the words "bill" and " note," 83, 85. payment in, 83, 84. when duo, 107. "on interest," when due, 108.. on demand, when due, 108. when no time is expressed, 108. memorandum, not a part of, 1U9. \^'hat. subject to indorsement, 1 16. agent's power to accept or indorse, 131 , 132, 134. "Blackstone^s Coviwentarics, 2. Blank, in biU or note, 92. indorsement in, 118. Blockade^ 294, 397, 346. ■ Boarding Officers, 311. Boat, passes by conveyance of ship, 275. Boatmen, 179. Bonds, of railroads and corporations, pass by delivery, 119. sale of, when usurious, ^8. form of, 459, 473. Borrowings by partner, 159, 155. BoUami-y, 279-281, 321. loans on, not usurious, 226. bond, form of, 473. Bribery, discharge in insolvency obtained by, ■ 256. Brokerage, charge for, not usurious, 226. Bra/cers. See, m this Index, Agency. authority given to, 198, 134. acting as agents, 129, 130, 134." lien of exchange brokers, 130. credit given by, 131. insurance. 134, 301. not partners, 149. Building, contract* Ibr, breach of, 45, 46. INDEX. 483 Building's, erected by mortgagor and by mortga- gee, 430. Burde}i of Proofy moaninf; of the Icrm, 14. OH whoin it rcst!«, 14. Busiiiess. See, in this Index, TVade, sale of one's^ GR. hours, 104, 108, 185. loan to be used in, when not usurious, 007. Bitsiness JIph^ disposition of, to know the laws of business, 3, 3, 4. need of such knowledge, 4. proper extent of sucIj knowledge, 5. mistakes of, from want of knowl- edge, 4. Buycr^ Pee, in this Index, Purchasers. By-btdding-j at auction, 61, 138. c. Calcjdating Tdblesy ^23. Capacity, to contract, 203, 964. Captor^ ransom paid to, 297. Capture. Sec. in this Index, Law of Shipping; Jilarine Insurance. Care, to be exercised by carriers, 177-181. by assignee in insolvency, 248. by pledgee, 432. of property msiired, 393, 393. Cargo. See, in this Index, Law of Shipping; Marine Insurance. wliat tiie word includes, 333. Carriage of Oood.^ and Passengers^ 175-209. See, in this Index, Lam of Skipping, vr. I. Of a Pricatc Carrier, 175-177. ' wlio is, 175. contract of, how governed, 175, 177. liability of, when carrying for hire, 175, 175. liability of, when carrying gratuitously, 170/ lieTiof, 176. II. Of Common Carriers, 177-160. law as to, peculiar, 177. who are, 177. truckmen and draymen, 178. porters, 178. sia-ie-coachmen, 178, 182, 183, 181. hackney-coachmen, 178. omnibus drivers, 178. expressmen, 178. railroads, 178, 183, 184. steal n-packets, 178. steamboats, 183. boatmen, 179. ferrymen, 179. rights and responsibilities of, as to goods and passengers, 177- 180. • warehouseman, wharfinger, forward- ing-merchant, not liable as, 179. storage of goods by carrier at beginning and end of route, 179, 180. III. Obligation of Common Carrier to receioe and carry Goods or Passengers, 180- lh9. when may refuse goods, 180, 18I. when goods to be received, 181. care to be exercised over, 177- 181. when tfiay refuse passengers, 181-183. duties of common carrier to passengers, 183. 184. 195. delivery of goods by common carrier, 134, 185, 186. place, time, and manner of delivery, 185, 180-189. delivery by vessel, 187. nonce to or by carrier, 187, 188. delivery by railroad company, 188, 189. notice to coiii^ignee by railroad com- pany, 188, 189. delivery of water-borne goods, 189. notice to ccmsignee by shipmaster, 189. when third party claims the goods from carrier, 189. IV. Lien ofComvion Carrier, G9, 177, 190, 191. may hold goods to satisfy lien, J90. how liable when thus holding, 190, how may enforce lien, 190. regulations as to sale of goods, 190. when party for whom goods arc carried has no title to them, 190, 191. V. Liability of Common Garner, 191 - 195. meaning of " the act of God," 191 - 193. loss by fire, 192. robbery or theft, 192, fermentation or decay, 193. negligence or default, 193, 194. for act or knowledge of agent, 193. beyond his own route, 194, 195. VI. Of Cai-rier of Passengers, 195. liability of, more limited, 195. carrier of slaves, 195. injury to passenpers, 195. injuries hy railroad, 195. VII. Of JVotice by Carrier respecting his Lia- bility, 196-198. special agreement as to liability, 196, 198, what constitutes such agreement, 196. mere notice not, 19fi. what notice does, 197, 198. fraud, how affecting liability, 197. fault of carrier not affected by notice, 198. VIII. Ca7'rier''s Liability for Goods carried by Passengers, 198-903. for baggage only, 198-200. what baggage is, 198, 199. whether money and jewels, 198, 199. compensation for carrying hagirage, 200. baggage in care of passenger or liis ser- vant, 200. contents, how proved, 200, 201. for injury to third parties, 201. to property by the way-^ido, 201. of railroitil company for fires set on the triick, 201. for collision, 203. collision at sea, 202. TX. Tn other respects : carrier may insure goods, 321, 383. Cashier of bank, ajicncy uf, 130. Caveat emptor, rule of. C3. Cestui que trust, nieaniiis of the term, 231. proof of debts by tnisleo for, 244. Changes.'in the law, 9. in phraseology of deeds, unsafe to make, 417. Charter-parties; S^OO-GOo. Chattels. See, in this Index, Personal Property. Ckecks on Banks, 94. presentation of, 9t, 103, 108. acceptance of, 94, 95. when pnynicnt. 95. couutcrnianded, 95. forged , 95. drawer of, when discharged, 114. Children. See, in this Index, Parent and Child. ■ of testalnr, when the law presumes they were fin-gntten, 441. advancement to, during life, 442, Clerk, payment to, 138. receiving profits, when partner, 148, 149. Coastinrr Vessels, registry and license of, 272. Ci/dicil,''442. 484 INDEX. Cohabitation^ 05. agreement for future, void, 100. Collateral Security^ Statute pf Limitations does not affect, 317, for usurious debt, 224. proof of claim against insolvent by one who Jiolda, 247. Collision. See, in tiiis Index, Law of Shipping ; Marine fiisurance ; Carriage of Goods. of cars, 20a. > of ships, 202. Comity, international, 258,269, Commerce. See, in this Index, Law of Shipping. Commercial Laio* See, in tins Index, Law-Mer- chant. Commissioner^ to take acknowledgements, 420. Commissioners in Insolvency^ powers of, 239, 240. Commissions^ 322- See, in this Index, Agency. Common Carrier. See, hi this Index, Carriage of Qoods. Common Law., how distinguished from stat- ute, 8. when usages form a part of, 8. whether "judge-made law," 8, power of legislature to amend, annul, or adopt, 9. uncertainties in, 9. modified by the law-merchant, 38. Company. See, in tiiis Index, Corporation. Compensatioii, ditferent at law and in equity for damages. See, in this Index, Lawj Equity. Compound Interest. See, in this Index, Interest and Usury. Compromise, of suits, 39, 40. Condemnation, of vessels. See, in this Index, Law of Shipping. Condition, estates conveyed on, 426. in sale, 397. See, in tliis Index, Sales of Personal Property. in fire insurance, 374-376. Condition Precedent, 375, 387. Confusion of Oooils, by agent, 131. Congress, regulation of commerce by, 270. Coiiaideration, 38-47. See, in tliis Index, Z>cc(Zf i J^egotiable Paper, III. I. Of the need of , ^, 39. promise without, when enforceable at law, 38. promise without, a. nudjim pactum, 38. operation of the rule requiring, 39. what amount sufiicient, 39. II. W7Latissu:gicient,3Q-4S. whatever stops litigation, 39. compromise or forbearance, 39. reference to arbitration, 39, 41. discontinuance of criminal proceedings, 40, 42. work or service, 40. goods or property delivered, 40. voluntary offer or gift, 40. implied promise to pay, 40. promise for promise, 40. mutuality in promises, 40, 41. promise of a minor, 41, promise upon subscription paper, 41. moral consideration, 41. III. Illegal Consideration.cls, 27L)-27-X Entr}j, for forccUisuro, 4HJ. Equitable Title, 151, 153. £}Hilies, assignee subject to same, as insolvent, 249. Equity J distinction hot ween courts of, and courts of law. Sec, in this Index, Law. has jurisdiction in rases of fraud, acci- dent, tniaitake, and trust, II. can compel specific performance, 11,437. remedy by, fur mistake in policy of in- surance, 11,373,374. breach of agreement to soH land. See, in this Index, Sale. correction of niisiako by, 27. explanation of llio term, Iiow used, 11. rulea of jurisiliclion and practice iii, II. in partnership matters, 151), 151, 152, 1.57-150, l!iO, ICl, 1G3, may decree sale of goods for lien, 190. interest recognized by, insurable, 380. incompetcncj' of witnesses in, 420. Equity of Redemption. See, in this Index, Mort- ffajre. Erasures^ in deed, 422. Escrow, 419. Eoiction, ^5. Evidence^ affecting a vritton contract. See, in tliis Index, ^^^recment and Assent. contents of lost trunk, how proved, 200, 201. to vary a cJiarteisparty. 291. affecting contract of insurance, 372, 373. EcceptioJiSj in life policies. See, in this Index, Life Insurance, Exchange, meaning of, in law, 48. charjic for, not usurious, ftC. Exchange Broker.-^: See, in tliis Index, Brokers. Exchanged JVotes, 346. j^cliequer Bills, in England, transferable by delivery, 119. Execution, of deeds. Peo, in this Index, Deeds. Executorsj assets of. See, in tliis Index, BanJc- ruptcy and Insoloency^ Wil. right of, to indorse, 122. pay interest, 141. should bo named in deed, 422. should not witness a will, 441. should be named m will, 442- ExemptioTiSy from attachjnent and execution, 445, 446. See, in this Index, Home- stead Ezcmption. Erpectalion, cannot be insured, 320. Expenses, insurance against what, 341. incurred in saving ship, who to pay for, 359. general average for what, 297, 298. Expert, meaning of the term, 33, 377. evidence of, 33, 377. jEj;?rcs5io«, exchides what is not expressed, 375. Expressvien. See, in this Index, Carriage of Goods. F. Fact, questions of, 13, 14, 197, 241, 409. mistake of. See, in this Index, Mistake, Factors. See, in this Index, Jlgency. acting as agents, l'il% 130, 139. lien of, 130. guaranty by, M-3. not partners, 149. bankruptcy of, rights of principal how affected ^250. how may insuro goods, ^1, 382, 383. Failure^ of consideration. Soo, in this Index, Consideration. Fatltcr. See, in this Index, Parcut and Child, Fee Simple, what words create, 4*4. Fermentation, liability oT carrier for loss by, 193. fire caused by, 394, Finder, rights of, in property, 119. Fire, when carrier liable for loss by, 191, 192. set by cars, 201, 202. at sea. See, in this Index, Marine In- surance. justifiable, to prevent capture, 342. Fire Insurance, 3r8-403. I. The usual Subject aJid Form of this Insur- ance, 368-372. how differs from marine insurance. 368. applies to what, 368. by whom made, 143, 145, 368. siock companies, 308 -370. mutual companies, 368-370. stock and mutual companies, 3G9. premium note, 369, 372, assessments, 309. redirn premium, 369. lien for premium. 369. amount of insurance, 369, 370. usage as affecting the contract, 370. terms of Charier of company, 370, wlien contract is complete, 370, 371. delivery not necessary, 370. nieutoranduin when enough, 370, 371. oral bargain enough, 371. may be made by cnrrespondcnce, 371. effected by agent, 136. ralificntinn of contract of, 372. how effected, 372. II. Construction of Policies against Fire, 372- 380. ' like marine policies, 372. distinctness of description. 373. 373. intention of the parties, 3:^2, .373, 376. what different policies cover, 373. mistake in policy, 11, 373, 374. memorandum in policy, 374. insured becomes member of mutual company, 374. application, effect of, 374, 375. answers binding, 374. conditions and statements, 374-376. when written aiid printed parts con- flict, 375. scale of premiums for different* risks, 375. "hazardous" property, occupations, or uses of buildint-'s, 375, 376. descri)>tion amounts to warranty, 376. rational construction of this rule, 376, 377. " storing " prohibited articles, 377. recitals amounting to permission, 377. alterations of insured jirojierty, 377, 373. if property is destroyed hy wliolly in- dependent cause, 378, 379. permanent alterations, 379. alterations around insured premises, 379. right to repair, 379. rejiairing cause of fire, 379. renewal of policy, 380. III. OfUie Interest of the Insured, 380-384. what will support insurance, 380. 488 INDEX. legal and equitable, 380, 382. moral or expoctrint. ^80. hufise on another'^ ]Kn{l, 380. debtor may insure property assigned to pay debts, 380. insurance by mortgagor, 380, 381, 430. insurance by mortgatree, 38i. rights and liabilities of mortgagor, mort- gagee, and insurance company, 380- 382. insurance by mortgagor for mortgagee's beflfefit, 382. ,, . of one holdingiproperty in wife's right, 382: of tenant for years, 382. interest and title must be fully stated, 382, 392. of trustee, agent, consignee^ 382, 383. what interests and how consignee may. insure, 389, 383. insurance by bailee, 38^. insurance by common carrier, 383. the insured, must be made known, 383, 384. insurance must bo authorized, 384. cotcnanl, shipmaster, ship's husband, 384. IV. Reinsurance, 384, 385. how effected, 384. certificate, notice, proof, &c., 384. statements aiid concealments, 384, 385. amount to be recovered upon, 385. if original insurer is discharged, or becomes insolvent, 385. V. Double Insurance, '3S5-2S7. double indemnity not allowed, 385, 366. provisions lu policies, as to prior or subsequent insurance, and notice thereof, 3^f). contribution among co-insurers, 386, 387. if insurances are in different names, 387. VI. Warranty and Representation, 387-392. warranty; what is, and how operates, 387, 3S9. warranty of the present, 387. warranty of the future, 387. continuing warranty, 387, 388. contained on separate paper, 388. in the application, 388, 389. statements, fcc, amounting to warran- ties, 388. indorsement on the policy, 388. need not be material, 389. rcprcscnUition, how differing from war- ranty, 389. fraudulent, 389, 390. must be material, 389. in the application, 388, 389. written and oral, 389. misroprcscutations and concealments, 389. concealment, 390 - 392. what insured is bound to state, 390,391, 392. when avoids a policy, 390, 391, 392. matters of common information, 391 special circumstances, 391. questions asked, 391. of encumbrance or defect in title when insurer has lien for premium, 3^2, 391. removal of chattels'after insurance, 392. goods in transit, 399. VII. Ridk incurred by the insurers, 399 - 394. property must be in existence, and not subject to unusual risk at time of insurance, 392. heat ; fire ; water, 392, 303. injury by removal from fire, 392, 393. blowing up of buildmgs, 303. lightning, 393. explosion by gunpowder or steam, 393. negligence of insured, 392, 393. insanity of insured, 393. if ranges, grates, chimneys, are de- stroyed, 393. caused by designed excess of heat, 394, by fermestation or qiiick^ime, 394. exceptions in policies, 394. if insured is charged with burning buildings, 394. VIU. Valuation, 395, 39G. differs from valuation in marine policy, 395. mutual companies insure only a pro- portion of the value, 395. conclusive, 395. new, in case of loss, 395, 396. in case of goods, 396- if property is mjured, but not destroyed, 396. IX. Alienation, 396-399. policies are personal contracts, 396, total and partial, 396. right to recover for previous loss, 396. provision m policies as to, 396, 397. liow should be made and notified, 399.. right of assignee at common law, 397. what constitutes, 397. by one joint owner to another, 397. by one partner to another, 397. dissolution of partnership,.397. if grantor takes back a lease, 397. effect of paying an assessment, 397. to secure a debt, 397. contract to convey. 397. conditional salts, 397. mortgage, 398. immediate repurchase, 398. bankruptcy, 398. voluntary assignment to pay debts, 398. if many estates or parties are insured, 398. policies not negotiable, 3D8. acti^i how brought by assignee, 398* defences against assignee, 398. premium note and obligation to pay losses not avoided by, 399. waiver of forfeiture, 399. * insurers taking claim of insured against third partv, 399. X. OfJ^otice and Proof, 399, 400. certificate of loss, 399, 400. notice, when to be given, 399, 400, what notice sufficient, 400. notice by assignee of policy, 400. waiver of notice, 400. amount of damages, how proved, 400 oath of insured, 400. XI. Of Adjustment and Loss, 401 - 403. indirect losses, as of profits, 401. difference between fire and marine poli- cy in, 401. in former whole loss is paid, 401. in latter only proportionate part, 401. general average in fire insurance, 401. property sacrificed to protect insured property, 401. when' premium is not to be returned, 401, 402. insurers' right to rebuild or repair, 402. insurers' liability after rebuilding, 409. insured's liability fur assessments after loss, 409. if new or repaired building differs in' value from tUo old, 409. INDEX. 489 wlien money paid by insurers may bo recovered back, 403. ' fraud or mistake, 403, 403. no equities in. favor of third parties, 403 ' insurance by mortgagor for mortgagee's benefit, 430. " Firm,'* Pee, lu this Index, Partnership. Fishino' yesscU^ registry and license of. Q73. Futures, put up by mortgacor or mortgagee, 430. Iho law of, 4.'J7, 43t(. Ftng^ijin-, Seo, lu this Index, Law t^f Skippinn; Fbredosure. See, in this Index, Mortsrage. Foreign Attach mf.uL See, m this TndeXj TYustcB Process Foreteller. Seo, ni tliis Index, Alien. Forfeiture., of vessels, 272. by breacli of condition, 42G. Forged, bank-bills, 93, 121. checks on bank, 05. indorsemeut. 120. bill or note, l-^I, 123. Fornif of action, by what law governed, 266. of deeds, uiisafG to vary, 417. FormuJas, of the Roman law, 2. Forwai'dmtr Morc/tant, liabililies of, 179. *' Fractions of a duij^'^ 241. Fraudf in insuraiice. See. in this Index, Marine Insurance : Fire Insnrance ; Life In- surance. equily has jurisdiction in cases of. See, in this Index, Equity, of an infant, 19,20. effect of. upon obligations and contracts, 28, 197, 198, 427. See, in this Index, Sales of Personal Property. who may t;ike advantage of, 28. iq declarations of party, G3. in contract of guaranty, 74. when dissolves partnership, 150. of partner, 1.53, 155, 15(5, 158, 159. in procuring award, 171. in preference of creditors, 241. Frauds, Statute of. See, tn this Index, Statute of F^-auds. Fraudulent Conveyances, 238, 240, 241. Fretg/U. See, in this Index, Laws of Skipping : Marine Insurance. "From," the word, how used in marine insur- ance policies. See, in this index, Ma- rine Insurance. " Furniture,'''' of a Ship, 275. G. Garnishee. See, in this Index, Trustee Process. General Agent. See, in this Index, Agency. General Aocrage. See, in this Index, Law of Shipping, Marine Insurance; Fire In- surance. General Partner, ](i4, IC5. Gift, whether bankrupt may decline, 252. to bankrupt after decree. 252. Ood, " act of." See, in this Index, Carriage of Goods- Good Faitfi. See, in this Index, Frauds ; Marine Insurance , Stoppage in Transitu- Goods. See. in this \mlex, Merchandise ; Sales of Pcrsonnl Property. as affected by uiaritimo contracts. See, in this Index, Law of Shipping. what, within the Statute of Frauds, 76, 81. smuggling of, by agent, 138. " carriage of. See, in this Index, Carriage of Goods, storage of, 179. J80, 185-189. carried by passengers, 198-202, 62 ordered by letter, place of cnntrEict, 264. upon transit, insurance of, 39:2. Grace. Seo, in this Index, Days of Grace. Grantee, to be distinctly mentioned in deed, 418. Guarantor. See, in this Index, Guaranty. rights of, 47, 247. notice to, of dishonor, 114. who IS, 117, 118. of bankrupt, claim of, 24fi. Guaranty, 71-74. See, in this Index, Statute of Frauds. when negotiable, 71. valid, though principal debt invalid, 71. how affected by reduction of principal debt, 71. how cuiistnied, 71. guarantor when entitled to creditor's scciirilicrt, 71. when cimsideration necessary, 72. distinction between, and original prom- ise, 72. acceptance of, 70. what works a discharge of, 72-74. when revocable, 73. indulgence given to debtor, 73, 74. notice to guarantor, 74. official, 74. by factor, 143, 143. to and by partner, 153^ 159. for premium, not usurious, 230, 231. Guardian, pays interest, 141. H. Handwriting, proof of deed by, 420. proof of will by, 441. Hazards. See, m this Index, Marine Insurance ,■ Fire Insurance; L\fc Insurance. Health, as affecting life insurance. Seo, in this Index, Life Insurnnce, Heat, not insured apaiii-st, 392. fire caused b\', 394. Heir, assets of insolvent, 252. Hiring, See, in this Index, Work and Service, Holder, of negotiable paper. See, in this Index, J^cirotiabte Paper. Holydaijs, notice on, 113. whether included in "lay-days," 293. Home. See, in this Inde.\, Domicile. Homestead Eremption, in favor of \\'ife and chil- dren, 23, 427, 445, 44li, 447. Honor, acceptance or payment for, 125. Hypotliecation, by master of vessel, 306,307,361. reconiiiifi of, 274. Husband and Wife. See, in this Index, Parties to Mercantile Contracts ; Married Wo- man, husband may indorse wife's note, 122. I. Ignorance, when an excu.se, 331. illegality, of consideration or promise, 40,42, 60, 61, 100. in sales of personal property, 60-62. in partner's contracts, 15n. in shipping contracts, 288, 295, 322. in contracts of insurance. See, in this Index, Marine Insurance. Illegal Voyaire,^m. Impossible Consideration, 42, 43. Imprisonment, dissolves partnership. 150. for debt, 233 - 235, 242, 259, 266, 444, 447. laws exempting from, are constitution- al. 259. . when Statute qf Limitations begins to run against one imprisoned, 212. 490 INDEX. Incapacity t See, in this Index, Infant ; Insanity ; Man'ied Women. Indemnification, promise nC, when harred, 2IG* Indemnity^ in insurance, 318, 385. Indenture, form of, '\o\\. Indorsee, See, in tins Index, Bills of Exchange and Pravussonj J^otes ; Jfegotiable Pa- per ', IndarsemP-iiL meaninp oltlie term, 19. Indorsement. .See, in tliis Index, Interest and *' Us-iiry ; JidU of Exchange and Promis- 'sory J^oles ; JV'eirotiable Paper pfbill of lading, 283, Q84. upon policy of insurance, 317, 388. Indorser. See, in tliis Index, Bills nf Efckantre and Promissory J^Totes ; J^egotiable Pa- per i Indor-icment. meaning of tlie rerm, 12. each has one day to transmit notice, 112. Infantj means minor in law, 34 necessaries for, 14. incapacity of, Ifi. when a i>ei"son becomes of age, 17. contract of, not for necessaries, 17-20, 100. avoidance of, 17-20. ratification of, 17-20. contract of, fornecessaries, 18-20. what included in the term necessaries, 14, J 9. note of. fftr necessaries, 19. note of, for nioijcv to buy necessaries, J 9. money paid at his request for neces- saries, 19. liable for torts, 19. rcprescnihig himself of age, 19, 90. upon disatfirmance of sale, must re- turn or tender money or property, 19 20. disaflivmance of contract for labor by, 20. party contracting with, when bound, 20. 4J. fraud of, 20. liability of father for. 20. may act as agent, 12G. when Statute of Limitations begins to run iiiiainsti 919. whether may po into insolvency, 249. domicile of. 2i 9. may be witness, 420. will of, 439. may witness will, 441. Information^ what suflicient to authorize aban- ' donment, 358. to be given reinsurers. 384, 385. Injuries, committed by an infant, 19. carrier of passengers when liable for, 195. railroad company when liable for, 195. of carrier to third party or property by the wayside, 901. hy railroad, 901, 902. by collision., 202. claiins for, when not enforceable against assignee of insolvent, 245. to goods on voyat^e, 988-990. Inland Bdls. See, in this Index, J^egotiahle Pa- per. Innocence^ of party presumed, 13. Insanity. See, in tins Index, Lunatic, of parties to contracts, 16. revokes agency, 149. dissolves partnership, 150. revokes submission, 174. as affecting life insurance, 413, of insured, fire caused by, 393. Insolvency, See, in this Index, Bankruptcy and Insolvency. Instalments, money paid by, for principal and interest, mode of adjusting, 2.39. paymeni for ship by, 275. Insuranee. See, m this Inrfex. Marine Insur- ance ; Fire Insurance ; Life Insurance. law of,belongs to Law-iMercbant. See, in this [ndcx, Laio-Merckant. Intentionj of parties to a contract, 27, 37, 37^, 373, 376. as affecting question of domicile, 967, 2C8. as affecting msiirance. See, in this In- dex, Marine Insurance; Life Imsur- axce ; Fire Insurance. Interest and Usia~y, 218-232. See, }\\ this In- dex, Usury. I. What interest iSj and when it is due, 918, 219. Iiow distinguished from usury, 918. for what tune allowed, 219. whetlier question of law or fact, 919. in actions for unliquidated damages, 919. in actions for torts, 219. IF. O/JJ/oKcy, 919-996. theory that it is hke merchandise, 920. usury laws, 919, 220. rates of interest andpenalties for usur^ m the different Stales of the Union, 920-222. what constitutes usury, 292-226. usury affects what coiitracts, 923. more than legal interest as a penalty, 923. for forbearance, 223. usurious contracts in the- hands of an innocent party, SSS, 224. new securities, ^4. by whom and when usury maybe taken advantage of, 223, 224. devices to conceal usury, 224-226, 280. usury in loans of stock, 295. foreign contracts, 226. III. Charge for Risk or fur Service, 226, 227. for what risks charges may be made, 226. loan on bottomry, 226. purchase of an annuity, 996. for services, brokerage, or rates of ex- change, ^6. effect of intention, 997. loan to be used in business, 227. money put into partnership, 227. discountsi by banks, 297. IV. Oftke Sale ofJ^otes, 997-231. of the right to sell a note, 927, 928. when sale of note is not usurious, 298. sale of coi^loration bonds for less than their face, usurious, 228. usurious sale to bona fide purchaser, ^8, 229. liability of mdorsers, 999. if seller acts as the maker^s agent, 999. sale of one's own credit, 229. seller of note with indorsement how liable, 929, 230. purcliaser of negotiable note for less than Its face can recover whole amount, 930. indorsement or guaranty for premium, 230,231. V. Compound /;i((TCs(, 931,232. contract for, not usurious, 931, not enforceable, except, 231. recognized in case of trustees not ac- counting, 231. INDEX. 491 paid, cannot bo recovered back, 231. annual rests, 231. disputed accounts, 232. when money due on principal and in- terest is paid by iDstalraents, mode or adjusting, 332. VI. Jn other rCA-pccts : when to bo paid by agents, executors, trustees, ami guardians, 141, 142. upon claims against insolvent, 944. affected by law of place, 9G5, 20e. '■ marine," 279, 280. Zntoxicatinff Ltqui/rs, sale of, by agent, 138. J. Jettison, 295-301, 359. Joint Liability, 154, 203, 304, 209, 210, 214, 215. Joint Stock, company, L50. Jury, must decide questions of fact, but not of law, 13, 14. take and apply the law as given by the court, 14. when called in on a question of in- solvency, 339. wlien called in to try question of sal- vage, 304. Justice of tlie Peace, takes acknowledgments, 420. K. Kentledge, whether passes by conveyance of ship, 275. Knov^ledge, of the law. 2. when not sufficient notice, 110. of principal and agent, 136. when to be communicated to insurers, 333. of prior unrecorded deed, 422; L. Labor. See, in this Index, Work and Service. Land, sale of, 11, 417-427. Landlord, 434-438. LaWj of business, 9-5. Roman formulas of, 9. technicalities of, 2, 11, 19. diffrisiun of a knowledge of, 9. influence of Blackatouo's Commenta- ries in spreading knowledge of, 2. the voice of the people, in America, 3. entitled to obediencOj 3. changes and uncertamties in, 5, 9. common, 8-10, 38. statute, 8. distinction between courts of, and courts of equity, 10, 11. can only give compensation in money for damages, 11, 427. remedy by, for mistake in policy of insurance, 11,373,374. explanation of the term, II. of real estate, 19, 13, 20-93, 151,152, 258,26-2, 417-427,441. of personal property, 12, 91-23, 48-66, 151, 958, 262, 203, 270, 431 -433. questions of, 13, 14, 171, 207, 941. detests litigation, 39. in partnership matters, 157-159, 160, 161. mistakes of, 27, 28, 171, 172, ^2, 933. of nations, whether bankrupt system forms part of, .257, 258. force of, how far extending, 261, 262. contracts in violation of. See, In this Index, ///c^a/i(y/ Fraud. correction of mistake by, 373, 374. Lam-Merckaiit, unity and system of its princi- ples, 4, 5. what constitutes, 5, 10. substantially the same in all civilized countries. 7. what contracts governed by, 10, 16. modifies connnon law, 38. Law 0/ i'irtce, 201-209. See, in this index, Bankruptcy and lasoLvencyy IX. I. What is embraced within, 261. place where contract made, 97, 261. place of domicile, 261. place where thing situated, 261. place of tribunal, 201. importance of, 261. II. Qcncrai Principles, "HU- 2^2, laws bind within the State only, except, 261,269. contract invalid where made, invalid everywhere, 9C9. contractvalid where made, valid every- where, 262. foreign revenue laws, 269. contracts as to personal property, how construed and applied, 258.962,203. contracts as to real property, 258, 269. HI. Its Effect on the Capacity of Persons to con- tract, 963, 964. when laws differ as tfl legal ago, 263. IV, Placeofthe CojUract,Q64-2(}7. when and where contract made, 48 -50, 264. See, in this Index, Agreement and Absent, by letter or separate signatures, 264. goods ordered by letter, 204, made in one place, to bo performed elsewhere, 97, 264. ante-nuptial contract, 9G4. as determining the questions of interest and usury, 965,206. process and remedy governed by what law, 97, 226, 266. form of action by what law, 97, 98, 266. arrest, tlio right of, governed by the law of the furuin, 98,266. foreign laws presumed like law of forum, 98. demand and notice, according to what law to bo made, 109. V. Of Domicile, QG7' 2.0. what is, and how changed, 267-9C9. can have but one, 2J7. party retains, until another is acquired, 269. of seamen, 269. when party spends portions of the year at ditTerent places, 209. of married woman, 269. of minor child, 2G9. Law of Shipping, 970 - 314. I. Of tlie Ownership and Transfer of Ships, 270 - 272. ship, personal property, 270. ownership and transfer, 270. provision of the Constitution and acts of Congress as to commerce, 970. registration of vessels, 270 - 272. regulations as to registry and registered vessels, 270-272. obtained fraudulently, 271. privileges of registered vessels, 270, 272. coasting vessels, 272. fishing vessels, 272. forfeiture of, 271, 272. II. Of the Transfer of Property in a ShiPi 273 - 276.. 492 INDEX. Btatuto requirements, 273. bill of sale, 273, 274, 454, 455, 470. oral tnuisferj 273, 274. wlien transferlree can "claim new reg- ister, 273. recording conveyances of vessels, 273, 274. liens by bottomry, force of, without re- cording, 274. what possession, necessary to transfer, 274, 275. what j)asses by the word " ship," 275. the words " appurtenances," " ap- parel," " furniture," 275. when transfer takes place, if payment ■ is made by instalments, 275. sale by decree of court, 27G. III. Of Part-owners^ 276- Q78. how persons may become, 276. presumption as to shares, 276. may or may not be partner, 276. one may sell his share, 276. upon death of one, 276. power of majority, 276. power of one, 276. how liable, 27G, 277. when one gives note, 277. ship's husband commonly part-owner, 277. agency, power, dutv, and liability of ship's 4usbaucl, 277, 278. lien of part-owner on shares of other part-owners, 278. IV. Liability of Mortgagees ^ 278. v. Of Vie Contract of Bottomry^ 279-^1. nature of, and essentials, 279-281, "marine interest" upon, 279. what amounts to usury upon, 279, 280. additional security, 279, 280. ■ when made, and how enforced, 280. lender may insure the vessel, 280. when voyage terminates sooner than expected, 280. overrides contracts and liens, 280, 281. later sustained against earlier, 280. does not depend on possession, 281. delay in collecting, 261. differs from mortgage, 281. need not he recorded, 281. nor be for the necessities or uses of the ship, 281. form of bottomry bond, 473. VI. Of the Employment of a Ship by the Owner, 281-290. carriage of goods on freight, 282-290. how may load ship, 282. meaning of *' freight," 282, reciprocal obligations of sljip and cargo, 282. lions of shipper and ship-own er,282-284. bill of lading, 283, 284, 287 - 289. what should contain, 283, 284. to be signed by master, 283. delivery and tender of, 283, 284. indorsement of, by consignee, 283, 284. form of, 474. evidence of what, 284. mistakes in, may bo corrected, 284. waiver of lien, 284, 285. contract of affreightment entire, 285. whether freight due when voyage is interrupted, 285, 286. transshipment, and cost of, 285. proportionate freight, 286, 287: reception of goods hjibwuer, 286. when master cannot forward, 286. who is liable for freight, 287. *frcight paid in advance and not earned, excess of freight recoverable, 288. to whom freight is duo after sale or mortgage of ship, or lien by bottomry, 2as. illegal voyage, 288. "the dangers of the seas," 288 - 290. the question of freight and damages when goods are damaged or lost, 287-290. passage -money, 290. VII. Of CluiTter-parties, S90 - 295. definitionand contents ol, 290. agreeraentvfor,' 290. what is generally let, 290, bills of lading by whom given, 291. form of charter-party. 471. not varied by external evidence, 291. lien of ship-owner, 291, 292. lien of charterer, 291. what freight hirer pays, 291, 2^-294. whether possession necessary to own- . er's lien, 992. dpuble voyage, 292, 293. whether freight is due if ship is lost on return voyage, 292, 293. lay-days and demurrage, 293, 294. vessel lust after lay-days commence, freight is due, 293, 294. when charterer pays for time while re- pairs arc made, 294. abandonment by charterer, 294. delay of ship, who pays, 294. seizure, embargo, or capture, 294. when ship is condemned, 294. dissolution or suspension of the con- tract, 294, 295. by mutual consent, 294. by war, embargo, non-intercourse, or blockade, 294. bargain between the parties enforced, except when, 295. VIII. (General Av&ragc,^^~2Ql. meaning of, and applied to what, 295, 296, 300. what losses entitle to, 295. voluntary loss, 295, 296. loss of cargo to save ship, 995. loss of ship to save cargo, 995- stranding of a ship, 996. loss must be with intent to savo some- thing else, 296. ransom paid to captor or pirate, 297.. cutting away bulwarks, 297. unintended effect of intended act, 297. sea and war risks, 997. loss of goods laden on deck, 297. repairs, wages, provisions, and expen- ses, 297, 298. rules or usages for making contribu- tions, 298, 299. liow value of ship, freight, and cargo is to be ascertained, 298, 999. when-and how average adjustment to be made, 299-301. adjustment in foreign ports, 300. our States foreign in this respect, 300. master may hold goods until general average is paid, 300. whole loss not compensated for, 300. IX. 0/Saft)oo-e, 30L-304. two distinct meanings, 301. who entitled to, 301. lien for, 301, 302. insurers' liability for, 309. applicable to all maritime property, 302. confined to what, 302. claim for, how enforced, 302, 303, 304. what are salvage services, 302, 303. who may be salvors, 303:. " INDEX. 493 amount and proportions of salvace, 303, 3J4. reujird of hazard, 304. when property may be sold, 304. share of siiip^owaers, master, &c., 304. trial had before Admiralty Cuurt, 304. when jury called iit, 304. X. JVavl^ation. of the Shtpj 304 - 309. I. Power and Duties of Master, 304 - 307. supremo power, duties coequal, 304. as to sliip's condition, repair, supply, loading, navigation, unloading, 305, 306. agent of whom, 305. necessity of authority, 305. when may soil ship, make bottomry bond, incur debt, charter sliip, dele- gate his authority, 305, 30G. ^ is general agent, 3lJ5. what njBcessity must exist, 305. master's duty as to cargo, 306. when may sell or hypothecate cargo, 306, 307, 361. respondentia bond and maritime inter- est, 306, scope of his authority, 307. lien of, on freight-money, 307. primage, 307. owner when liable for wrong-doing of, 307, 309. a 0/CoWision, 307-309. parties equally at fault, 307, 308. neither at fault, 308. one at fault, 308. rules as to sailing and meeting vessels, 308. Bte am- vessels, 308. when lights should be hung out, 308, 309. negligence, 309. how liability of owner for misdeed of master limited, 307, 309. XI. Of the SeaniGn, 3m ~ 312: seamen and mates equally protected, 309. statute provisions in behalf of, 309- 313. 1. Shipping Articles^ 309, 310, 474. 2. Wagiis,3lQ. 3. Provisions^ 310. 4. Seaworthiness of Ship, 310, 311. 5. Sickness qf Seamen J 310,311. 6. Right of Seamen to be brought home, 311, 319. 7. Punishment, 312. Xtl. 0/Pi/ofc, 312, 313. Xlir. Material Men, 313, 314. XIV. In other respects : warranty of sailing, 327. Law Reports. See, in this Index, Reports. Lawyer, the true province of, 2-5. Lay-Days,.593. Leases, 434 - 438. what lease is, and how construed, 434. what pass to tenant, 434. lessee entitled to possession and good title, 434. covenant to renew, 434. landlord not bound to repair, 434. when tenant may leave or refuse to pay rent, 434, 435. payment of rent when house is de- stroyed, 435. when tenant bound to rebuild or repair, 435. tenant of a room or suit of rooms en- titled to wJiat appurtenances, 435. how to cultivate farm, 435. when to pay rent, 435. underletting, or assigning, effect of, 436. contract for assignment of, 46. landlord pays ta.\es, 436. when tenant entitled to crops, 436. • notice to quit, 155,436, 437. notice when rent is unpaid, 437. notice by tenant, 437. the law of fixtures, 437, 438. what tenant may take away, 437, 438. foriua of, 465, 467. Legacy. See, in this Index, Wills. whether bankrupt may decline, 252. to bankrupt after decree, 252. Legislature, power of, to amend, annul, or adopt the common law, 9. Letter. See, in this Index, Agreement and As- sent i Law of Place. insurance effected by, 316, 371. Libel, by agent, 138. in admiralty, 302. Liberty Policies. See, in this Index, Marine In- surance. Lien, of mechanics, 446, 447. meaning of the term, 15, 51, 190. in case of wharfinger and warehouse- man, 15. of seller, upon goods sold, 51. when lost, 51. of carrier t)f goods, 15, 09, 176, 177, 190, 191. of factor and broker, 130, 144. of arbitrators, 174. proof of claim against insolvent by one wlio holds, 247. what, revoked by assignment in insol- vency, 253. in marine contracts. See, in this Index, Law of Shipping ; Marine Insurance. of fire insurance company for proi}iium, 369. Life Estate, what words create, 424. Life Insurance, 404-416. 1. Purpose and Method of, 404. insured pai'ly, 404. lifo-insurcd, 404. how effected, 404. application, 404. evidence of physician and friends, 404. II. Of the Premium, 405. premium notes, 405. III. Restrictions and Exceptions in Life Poli- cies, A^- Am. as to going to certain places, 406. certain occupations, 406. suicide and duelling, 406, 407. what is death by one's " own hands," 406, 407. self-inflicted death in insanity, 406, 407. death at the hands of justice, 407. when premiuui must be paid, 407, 403. waiver by company, 407, 408. statement in proposals, 408. time of death, 408, 4U9. presumptions of death and life after absence, 409. death, question of fact, 409. IV. Of the Interest of the Insured, 409-411. on life of husband for wife's benefit, 23. insured must have an interest in life- insured, 409. what pecuniaiy interest sufficient, 409. when creditor may insure debtor's life, 410. effect of payment by insurers, 410, 411. ' when insured transfers debt to com- pany, 410, 411. V. Assignment of a Life Policy, 411, 412. what constitutes, 412. delivery azid deposit, 412. INDEX, by deed, 4X2. verbal proiniso to assign, 412. when avoids policy, 412. • VL WaiTantyf RcprcsentaUoii, and Conceal- ment, 412 - 416. ^ answers to questions, 404, 412-414. good faith requisite, 413, 415. unconsciousness of insanity, 413. the expi'cssiun " good health " in poli- cies, 413. dyspepsia ; consumption, 413. spitting blood and cough, 413, 414. every physician of lii'e-inb>urod should be stated, 414. warranty of temperate habits, 414, 415. as to fits, 415. concealment or non-statement of facts, 415. intention of going into danger, 415. honest error, 414, 415. when policy differs from agreement, 415, 416. VII. InsuTunce against Disease and Dishonesty of Servants, 416. Lightning, wlien carrier liable for loss by, 191, 192. injury by, when covered by insurance, 393. , Lights, when to be displayed by ships, 308. Limitations, 203-217. I. Of the Statute of Limitations, 203,204. when passed, and provisions of, 203. Lord Tenterden's act that debt cannot be revived except by written promise or part payment ; and as to joint debtors, 203, 204, 206. II. Construction of the Sifliiifc, 204-906. whether presumption or repose, 204, 905. statute necessary and beneficial, 2u5. proscription or limitation at com.mon law, 206. attested notes, sued by payee, and bank- bills, not affected, 206. III. Of the J^cw Promise, 156, 157,203-208. question of law, 207. fiinncr debt good consideration for, 206. acknowledgment, 156, 157j 204-207 conditional, 207. voluntaiy, 208. by bankrupt, 208. ' mutual running accotint, 208, 209. IV. OfPart-Paym.eiU,Q08,20d. may bo iti goods or note, 208, 209. Avhen debtor owes creditor several debts, 209. if some are barred, others not, 209. if princi))al and intefest, 209. V. Promise of one of several joint Debtors, 209,210. VI. To w.'iom new Promise should be made, 210,211. promise by maker or indorser of promis- sory note, 211. VII. Accounts between JHcrcltants, 203, 211, 2i2. wliat aro "accounts," "merchants," " merchandise," 211, 212. when excini)ted, 212. VIII. Other Stattitory Erceptions, 212-215. i£ creditor is under a disability, 212- 215. a^ minor, married womin, unsound mind, imprisoned, " beyond seas," 21:}, 211. if debtor i.s " beyond seas," 913, 914. when tlio disability must exist, 213,914. several existing together, 213. successive absences, 214. temporary absences, 214. foreigner having agent here, 214. return of one of joint creditors, or joint debtors, 214, 915. IX. When Hie Period vf Limitation begins, 215 - 217. bin at sight, 215. note on time or on demand, 215. when demand is necessary, 215, 216. upon the happening of an event, 215. wlien credit is given, 215. successive or conditional credits, 216. when surety pays for principal, 216. upon lent note, 216. promise of indemnification, 216, in favor of joint owner who sells prop- erty, 216, 217. X. The Statute does not dffe&t Collateral Secu- rities, 217. does not cancel the debt, 217. • mortgage, 917. Limited Partnerships, 164, 165. Liquor, sale of, by agent, 138. Loan, by partner, 159. by partner to partnership, 158. usurious. See, in this Index, Interest and Usziry. of stock, 433. Lunatic. See, in this Index, Insanity. when Statute of Limitations begins to run against, 212, 213. insolvoucy of, 243. M. Mail, notice of non-acceptance and non-pay- ment given by, 111, 112, 114. Majority, age, of, 17, 263. of partnership, power of, 154. of part-owners of ship, 276. Mandatary, 176. Marine Hospital, fund, 310. Marine Lisurance, 315-367. I. How the Contract of Insurance is made, 315- 318. by companies, 315. nature of the insurance, 315. the policy, 315,316. when insurance valid without policy, 315. entries in proposal book, 315, 371. by oral contract, 315, 31C. by letter, 31C. the premium, 316. the date, 316. effected by agent, or " ship's husband," 316,384. insurance "for whom it may concern," 316. . " for owners at time of loss," 317. ftir an " agent," 317. u for -," 317. how insured may sue, 317. what forms part of policy, 317. subsequent indorsements, 317. alterations of policy, 317. assignment of policy, 317, 318. policy when negotialjle, 317. transfer of property, 317, 218. claiin for loss assignable, 318. II. The Interest ofUie Insured, 318-320. lender on bottomry may insure vessel, 280. in property at time of loss, 318, 320. valued, open, and wager policies, 318- 320, 322. fraudulent valuation, 318. valuation, how mado, and efifectof, 318, 319. INDEX. 495 valuation of freight and profits, 319. value, how dctenuined when policy is open, 319, 320. insurance on successive voyages, 320. III. The Interest lohidi may be insured^ 320-323. possibihiy or exiicctatlon, not, 320. of one who lias contracted to buy, 320. reinsurance against lisics, 320. change or divestuicnt of interest, 321 322. of one who lias lien, 321. lender on bottomry or respondentia, factors, consignees, carriers, bailee, 321, 382. 383. recovery of insurance by mortgagee, 321. transfer of mortgage to company, 321, 359. phrase '* lost or not lost," 321, 351. illegal interest, 318, 322. wages of seamen or mates, 322. master's wages, conunissions, or prof- its, 322. intended illegality unexecuted, 322, 334, 350. remote and incidental illegality, 322. partial illegality, 322. coniphauce with registry laws, 322. contraband trade, 323. insurance of freight, 319, 323. . when iiilcrost in freight begins, 323. advances upon freight, 323. insurance of profits, 319. IV. Of Prior Insurance, 324, 325. I)riority and pro rata rules, 324. deduction of premium, 324. when property lias increased in value, 324. when prior policy covers all, 324. contribution between insurers, 324. sinmltaiieoiis insurances, 321, 325. V. Donble Insurance and Remsitrancef 325. VI. Of t'le Memorandum, 325, 3^6. VII. Of Warranties, :im, 327. breach of, at commencement of risk, 326. brc:ich of, avoids whole policy, 326. if sh p is lost for other cause, 326, 327. breach of, after risk begins, 327. what are warranted, 327. Qwner^jlijp, neutrality, false papers, 327. hound to respect blockade, 327, 346. of time of sailing, 327. " warranted in port," 327. VIII. Of implied frarranties,Z^- 330. seaworthiness, 338-330, 338. meaning of the term, 328. unseaworthiness at commencement of voyage, 328. removal of the unseaworthiness, 328. occurring during voyage, 328, ^9. occasioned by peril at sea, 328. restoration to seaworthiness, 328, 329. duty and neglect of master, 328, 329. wlien insurer's liability never attaches, 328. when destroyed or suspended, 329. repairs, 329. loss of unscaworthy ship by another cause, 329. standards of seaworthiness, 329, 330. different kinds of fitness, 329, 330. of ship lon^ at sea, 330. under a time policy, 330, ot/icr implied warranties'!, 330; honest dealing and full statement of risks, 330. as to course of voyage, 330. IX. Representation and Concealment^ 331, 332. Avhat are, and effect of, 331. arising from inadvertence or misappre- honsion, 331. if insurers were not influenced by it, 331. temporary, 331, relating to several subject-matter, 331. ignorance, 331. what is material, 332. when insured is misinformed, 332. of agent, 332. in double iiit^urance, 332. premium, when evidence of, 332. X. What, should be communicated, 332-334. facts, intelligence, rumor.-i, 332, 333. intelligence known to clerks, 332. statements of agent, 332. foreign law, 3:i2. national character, 333. A\hethcr contraband, 333. interest of the insured, 333. time of sailing, 333. news, 333. what insurer ought to know, 333. scientific facts, 333. po.sition of a port, 333. dangers of navigation, 333. winds, ourrents, weather, 333. inquiries, 333. intention to deviate, 322, 334, 3.50. part damage, 334. statement as to other insurers, 334. statement cou.^lrued rationally and to be substantiallv, c'Mipliod with, 334. XL Of the Premium, 334, 335. wlien due, 334. preiinnm note, 334. acknowledgment of receipt of, 334. if risk is in»t incurred, 334. when must be rctnrnrd, 334, 335. when partially earned, 3-14. if ri.^Ic ha.s once attached, 335. policies covering more than ri.sk, 335. on simultaneous and pro rata policies, 335. on insurance made by unauthorized agent, 335. premium note signerl by ajrent, 335. return of, fur illegality, 335. portion of returnable premium retained by company, 335. set off of, aga'iirst loss, 335, 367. XII. Description of the property insured, 336- 337. . identity ; miptake, 336. when applicable to different shipment, 336. meaning of "cargo," -'goods on board," '' merchandise," 3;(ii. ornaments and clothing not included, 336. meaning of " (iroperty," "ship," " ve*;- scl," ''ret'irii cargo," "proceeds," "returns," 330. nature of insured's interest, when to be described, 33ii. freight not inc4uded' in description of ship in open pcdicy, 336, 337. the word "freight," 337. insurance on freight, 337. "to," "tit and from," 337. XIII. PcriU covered Inj the policy, 337-339. perils of the sea, fire, piracy, theft, bar- ratry, capture, arrests, detentions, " all other perils," 337, 339. only extraiir dinar]} rislc?!, 337, 338. unseavvorthineRS, wear and tear, nat- ural decay, 338, 339. loss caused by inherent qualities, 338. perishable goods, dampness, 338. 496 INDEX. Inps by act of ineiTTed or his agent, 3^8, 339. . , by act of master or crew, 339. assumed expressly, tir by usage, 339. transfer to. insiirerSj-by sliijtper, of claim -acciinst owners, 339. XIV. Perils of the Sea, 339.^341. injury by worms arid rats, 340, 341. whether fire is a peril of the sea or river^340. ex|>ense3 of detention in harbor, 341. ' , inbearing away for repair, 341. presumption when ship is not heard irtiMi, 341, XV. Of CoUmon, 341, 342. for what, insurers are liable, 341,'34^ XVI. Of F,re\ 340, 342, 343. • how mu-st be caused, 342, to prevent capture by enemy, 342. losses resultiiigfroni fire, 342, 343, XVII. Piracy, Robhery, and Tkeft, 343. insurel-s when liable, 343. by crew, 343. clause as to " assailing thieves," 343. theft after shipwreck, 343. XVIII. idTTairr/, 343-345. what consllluifs, 313, 34-1. part-owner, supercargo, consignee, fac- tor, cannot commit, 344. against owner or apparent owner, 344. insurance against, wlieh the insured is owner, or cbarterer, 344. misconduct of the crew, 345. XIX. Capture^ Arrest, and Detention, 345. phrase as to, in policies. 345. to what captures, arrests, and deten- tions applicable. 345. XX. Of the General Clause, 345. 34f^. insurance "against all risks." 346. XXI. Of Prohibited TVarfe, 346. 347. differs from contraband trade, 346. breaking a blockade, 327. 346- by state where ship belongs, 34G. by foreign state. 34fi. intention to engage in, 34G. when the insurers dia-charged, 346. 347. agreement between the parties, 347. when insured and excepted risks min- gle, 347. XXII, 0/£>cwintion, 347-350. discharges insurers, 347. when ship is in jjortj 348. when insurance is on time, 348. very slight, enough, 34Q. must be voluntary and without Buffi- cient necessity, 348. temporary, 348. wlia,t IS the proper course, 348. eflTeot of usage, 348. mistiiko, 348. juaster's discretion, 3^8. firotrattion of voyage when, 348, 350. iberty policies, 348, ,"349. liberty to '■enter," '■■ touch," "stay," "remain," 349. whether "enter and stop at" gives Tight to trade, 349. to save life or help tlie distressed, 349. to save property, 349. stoppmg at porta, 349, 350. substitution of new voyage, 350. intention to deviate, 322, 334, 350. XXIII. Termini of the Voyage and the Risk. • 350 - 353. must be distinctly stated, 350. when policy takes effect or is annulled by delay, 351. retrospective force of "lost or not lost," 321, 351. if a loss is known, 351. terms in policies (W (p (imc, 351. " on," " from,'' *' from and after," "from date," "from day of date, "351. terms relating to place, 351, 3.52. "at." "'to," "at and from," "port," "from," "to a port and market," "port of discharge," "final port o/ dis- charge," '-at sea," 351, 352. how long, after arrival in port, insurance continues, 3.53. perils in port, 353. goods in transit from'' ship to shore, 353. XXIV. Total Loss and Abandonment, 353-3G2. actual and constructive total loss, 353, 360. no abandonment for actual total ^oss, 354. abandonment optional, 354. effect of want of abandonmehf, 354 abandonment without right, 354. 1. Jfccessity of Abaiidon/tiejit, 354. 2. Ri^ht of Abandonment 355, 350, 357. if more than half is lost, 355, 360. if vessel reaches port, 355. rule " one third off, new for old," 355. vahie, how estimated, 355, 35i). upon sale on bottomry bond, 356. upon sale by master from necessity, 356. of distinct interests in one policy, 356. 3. Exercise oftJie "Right of Abandonment, 357, 358. who may make, and form of, 155, 357 waiver of defect in, by iiis-urers, 357 v.hen to abandon, 355. 357, 358. tipon A^hat information, 358. depends-npon facts, and hot supposed tacts,.357. subsequent events do not affect, 357. if maister is negligent. 357. , if voyage is broken up, 357, property saved, 358. 4. Azceptance of the Abandonment, 358, 359. - 5. Effect of Abandonment, a59-362. insurer's right to property and claims, 354, 357, 358, 359.- claim of mortgagee, 359. if salvage is encumbered, 359. insurers when bound forex|)enses,359. owner and master become trustees and agents, 360. how must act, 360. loss or waste after abandonment, 360. total loss of goods, 360. if more than fifty per cent lost, 360.- if portion aririves at port, 360. if '* free from average," 350. rule as to goods same as to ship, 360. loss of ship, not of goods, 3"0. insurance against misconduct of mas- ■ ter, 360. if there are several shipments. 360. sale or hypothecation of goods by mas- ter, 306, 307, 361. loss and abandonment of freight, 361. when, and what amount can bo ob- tained, 361. 50 per cent rule applies to freighl^ 361. when freight is earned, 361, 362.^^ freight earned after abandonmoiifc 862, XXV. Revocation of Abandonment, 362,363- XXVI. General Average, 363, 364. principle of, 363. loss by, is a sea peril j and covered by policy^ 363, 364. claim of insurers for Contribution, 364. XXVII. Partial Loss, 364 - 366. rule of ono third off, new for old, 364, 365. INDEX. 497 when part only is inssnrod, :iC,ri. market not iusurctl. 306- loss fiom inhercjil defect, prior to, 3ti6. XXVIII. ^iljtishnoiU 3lifi. 'M7. where should be made, 3GG. when hiiidhig, 307. waiver of, by refu.sal to pay, 3G7. loss, when to be paid, 3li7. if repairs are not actually made, 3G7, insurers Uable for more than total loss, 307. unpaid premium, 367. set-ofF of what claims, 335, 367. preiniuni note not negotiable, and open to equitable defences, 367. Jifarine Interest, 279, Qi^Q. Mark, signing by, 417, 440. Jifarket^ no( insured, 366. Market Ooert, 53. Markingy of articles sent by common carrier, effect of. 181, 194, 195. Marriage^ contracts for procuring, or in restraint of, 100. when revokes agency, 132. when revokes submission to arbitration, 174. when valid everywhere, 203. conlract^ti anticipation of, 2G4. Married fVumaii, opacity of, at common law, 16, 90. rights of husband as to real and per- sonal estate of, 20, 21. tenancy of husband by the curtesy, 21. lier things in possession, and action, 21. reduction of her things in action to pus- session, 21, ^. debts of, contracted before marriage, 92. common law of, varied in this country, 22. agency of, 24, 25, 126. husband's liability for necessaries fur- nished to, 25. when lie turns her away, or she leaves liim, 25. justifiable leaving, 25. woman treated as wife, 25. Ill the United States : how may convey real estate or release dower, 22, 427. covenants of, in a deed, 29. private examination of, 22. authorization of, to sell property, ^. where holds her own property, 23, where lier ]iroperty bound for her debts, 23. desertion of, by husband, 23. when mav trade, 23, 25. will of, 23, 439. deposits of, in banks, 23. dower and curtesy, wliere abolished, 23. husband's interest in her real estate, where may be taken for his debts, 23. rights under homestead acts, 23, 427. life insurance for benetit of, 523,409 410. law subject to great change, and uncer- tain, 24. when Statute of Limitations begins to jl run against, 912. r may go into insolvency, 949. ■ may prove claim against husband, 245. projrerty coming to, during insolvency of husband, 253. domicile of, 2C9. deed to, or by, 419, 421, 427. cannot witiiess deed of husband, 420. release of dower by,*427. when may make a will, 439. may witness will, 441. devise to. instead of dower, 4-13. 63 Mastcy. See, in this Tndex, SJiinmastcr. Material Meti, 313, 314. Mutes, cannot insure wages, 322. Mechanics'* Lien, 446, 447. Medicine Chest, at sea, 310. Merchandise, the word as used in the statute of frauds, 76, HI. what 13,211,219,330. when uiay bo brought by foreign ships, Merchants^ knowledge of, of the laws of busi- ness, 2-5. forwarding, 179. accounts between, 903, 211, 912. Mijior. See, m this Iiulex, Infarit. Misreprescntattons. See, in this Index, Repre- sentations. Mistalces., of business men, 4. equity has jurisdiction in cases of, 11- 27, 373, 374. of parties to contract, 26, 27. of fact, 97, 98, 171 , 172, 222, 923. of law, 27, 98, 171, 172, 222, 203. in sale, 58, 59. in writing bill or note, 91s, 92, US. of holder of bill or note, 106, 107, 120. in bill of lading, 284. in insurance, 11, 317, 336, 373, 374, 402. mistake in course at sea when consti- tuting deviation, 346. Jf/Mwy, 219-226. law can only give, as damages, 11,427. payment of, when stolen or found, 53. m payment and tender, 83, 84. the representative of property, 86, 87, 98, 119. whether '< baggage," 198, 199. Mortgag'es, 428 - 433. f. Murtgaire of Real Estate, 428-430. - differs fr..m pledge, 498, 432. form of mortgage, 457, 459, 460. form of proviso in, 428. what constitutes, in law, 428. title of mortgagor and mortgagee, 429. right of possession in wiioin, ^9, 430. mortgagor's right to redeem. 429. sale, mortgage.and attachment of equity of redemption, 429. equity of redemption cannot be surren- dered, except, 429. 430. when equity of redemption begins, 430. entry for foreclosure, 430. what mortgagor nmst pay, 430. what rents and profits allowed, 430. insurance by mortgagor for mortgagee's benefit, 430. buildings erected by mortgagor and by mortgagee, 430. 11. Mortgage of Personal Property j 431, form of, 463-465. possession of property, 431. recording of mortgage, 431. redemption, notice, and foreclosure, 431. cannot cover property to be acquired, 431. HI. Pledge of Personal Property, 432, 433. pledgee bound to what care, 432. how may use, 432. how to account, 432, 433. must have possession, 433. cannot sell or transfer, 432. unless debt is due, and by decree of court, 433. notice and inanner of such sale, 433. cannot purchase himself, 433. agreement between the parties, 433. may soil or discount pledged negotiable paper, 433, loan of stock differs from pledge, 433. 498 INDEX. pledge to secure niie debt cannot be retained to secure another, 4:}3. , IV. Ill other respects : made by partner, 153. not allected by Statute of Limitations, 217. for usurious debt, 224. of Phil), 274, 278, SSI. differs from bottomry bond, 081. of insured property, 32J, 359,380-382, 397, 398, 430. Mutual Insurance Companies, 3G8 - 370. N. J^ame^ partnership, 149, 154. Necessaries^ wJiat are, 14, ID. for an infant, J4, 18-20. for a married woman, 25. J^egligence^ of carrier, 177-184, 193- 195. when constituting barratry, 344. *of party insured, 393. of shipmaster, 285, 286, 288-290, 307 - 309, 328, 329, 357, 3G0. JsTegotiaUe Paper, 86-125. See, in this Index, Bills of Exchange and Promissory J^oies. I. Purpose of^ and Parties to^ 86 - 88. rules of, exact and teclinical, 86. the representative of money, 86, 87, 98, 119. . nogoliablo bill of exchange, 67. acceptance and indorseiueut of, 87, 88. difference between bill and note, 87, 88. II. What is essential to a JVegotiable BUI or JVoie, 89-98. negotiable note cannot bo trusteed, 89. 1. Promise must be Absolute and Definite, 89-91. payable from a certain fund, 90. payable in money only, 90. how may be written, signed, or in- dorsed, 90' date of, 90, 91. omissions or mistakes in writing, 91, 92, 118. g. The Payee must be designated, 91, indorsements, 91, 92. fictitious |).iyoe, 92. blank left for payee's name, 92. 3. Jlmbliruous and irregular Instruments, 92, 93. 4. Banlc-J^otcsy 93. 5. Checks on Banks, 94 - 9G. wiicrein differ from bills of exchange, 94. presentation and acceptance of, 94, 95, 103, 108. when payment, 95. countermanded, 95, forged, 95. drawer of, when discharged, 114. 6. Accommodation Paper, 9(5, 115, 246. 7. Forei^i and Inland Bills, 9f), 97. each of the United States foreign to the others, 96. protest of, 93, 97. 8. The Law of Place, 97, 98, 261-2G9 where a contriict is mado, 97. where to bo performed, 97. where i)ut in suit, 97, 98. III. Consideration of, 38, 93- 109. 1. Exception to tlie Cuinmon Law Rule, 98, 99. 2. Of ^^ value received^" 99. 3. fVhat the Consideration may fie, 99, 100, moral consideration, 41, 42, 99, 100. illegal consideration, 100. IV. Of the Rights and Duties of the Maker, 100. V, Of the Rights and Duties of Hie Holder, or Indorsee, 101 -116. 1. What Holder vinij do with Bill or Mite, 101. when one holds a bill Xor collection, or as trustee, 101., 2. TransfcY of, after dishonor, 102 - 104. transfer of, before dishonor, to party Iiaving notice of good defence, H)2, indorsee not liable to collateral defence, 102, 103. over-due note, and over-due check, 103. 3. Presentment for Acceptances 104, 105. if the drawee be dead, has changed his residence, or absconded, 105. 4. Presentment for Demand of Payment, 105- 109. indorsers, how liable, 105. fiufficient demand, and what will ex- cuse, 106, 107, 109. when and where demand must be made, 106-109. note or bill when due, 107, 108. presentment of check for iiayment, 108. 5. Protest and Notice, 109-116. what notice must be given, 1 LO, II I. notice by mail, personally at residence, or by penny post. III, 1 12, 114. notice, where and when to be sent, 112, • each party has a day, L12. notice by ship, 113. notice, by and to whom to be given, 113, notice to guarantor, 114. notice, effect of want of, 1 14, 1 15. notice, waiver of, and delay ui giving, 115,116. VI. Of the Ritrhts and Duties of the Indorscr, 116-122. meaning of word "iudorser," 116, 119. who may indorse, and effect of, 11G-I22. indorsement by third i>arty, before payee has indorsed, 117. when party is guarantor or surety, 117, 118. when transferonly by indorsement, 118. jndorsenient m blank, ^nd in full, 118. ri^'lits of holder for value, 118- 120, what pass by delivery, 119. Indorsement, how nuule, 119, 120. indorsement " without recourde,'* 101, 120. liability of transferrer, 121. warranty in transfer, 121'. when indorsement or acceptance may be made, 129. indorsement by executor or adminis- trator, 122. indorsement by husband, 122. Vn. Of the Rights and Duties of the Acceptor, 1^ - 124. how and by whom acceptance may bo made, and effect of, 1^- 124. liability of a banker without accept- . ance, 124. joint acceptors, 124. acceptance after maturity, 124. cancelling an Acceptance, 124. ([(talificd acceptance, 124. Virr. Acceptance or Paymentfor Honor, 325. IX. In other respects : transfer of, when stolen or found, 53. payment in, 83, 84. in tlie hands of an agent, 137. partner's authority to make and in- dorse, 153. r on which'partner is liable, held by Iho firm, loS, 159. power of partner to make or indorse after dissolution, 103. IXDEX. 499 new promise by maker or indnrser of note burred by tho iStiitiite of Limi- tations, 211. usurious note in tho hands of an inno- cent indorsee, 223. usurious discounts of, 034. sale of, 227 -231. proof of accommodation notes in insol- vency, 246. proof of exchanged notes in insolvency, 246. premium note not negotiable, 3G7. insurance policies not negotiable, 393 pledgee may sell or discount, 433. maker of, cannt>t be trusteed, 445. A'-utrality^ of vessels, when warranted, 327. jy,>tarij Public, 109, 110, 125. JVu(ejf. See, in this Index, Bills of Exchansre and Promissory J^otcs ; J^egotiaUh Paper. JVotice, of stoppage in transitu, 68. to guarantor, 72, 74. of non-acceptancD and non-payment, 109 116. waiver of, not waiver of demand, 115. to principal, agent, and joint agents, 134, 13G. to officer or member of corporation, 136. to or by partner, 155. to or by tenant, 437. to quit, 155, 436, 437. by arbitrators, 172. of revocation of submission to arbitra- tion, 173. to or by carrier, 187 - 189, l9r) - 198. of intention to sell, to satisfy lien, 190. question of, one of fact, 197. of prior unrepistered deed, 422. relating to mortgages, 431, 433. ^ JSTudum Pactum^ 38. o. Oo(/t, of insolvent, 240. of insured, 400. of traveller, as to bagpage, 200, 201. OMcers. See, in this Index, Mates, agency of, 130, 131. of ship, cannot be salvors, 303. on same fiwting as sailors, 309. Oral Contract, when enforced, 2. 2, 412. . of insurance, 315, 310, 371. for saie of land, 437. transferring ship, 273, 274. Ouster, 425. Outlawed, debts. See, in this Index, Limitations, Parent and Child, liability of father for necessa- ries, 20, mnlual obligations of, 41, 42. relation of, not legal consideration, 100. Parol Contract. See, in this InAex.Oral Contract. . Parties to Mcrcanida Contracts, 16-25. ■ 1. Who may be parties, 16. of lunatic, alien, person under guar- dianship, 16. II. Of Infants, 16-20. See, in this Index, Infants. , III. Married Women, 16,20-25. See, in this Ijidex, Married Woman ; Marriage. Partnership, 14G-1C5. 1. What a Partnership is, 140-161. II. How Partnership may be formed, 146 - 1411. when liability and authority begin, 146. 147. profits and losses how shared, 147. liability of partner.-^, 147, 148. waiver of pro\'isioM.s by neglect, 147. secret and dormant partner, 148, 151, 156, 160. nominal partner, 148. test of partner^^liip, 148. clerk or salesman receiving part of prof- , its, 148, 149. factors, brokers, sbipmasters, 149. partnership nnine or names, 149, 154. III. Dissolution of, 149-151. when and by whom, 149, 158. not wantonly or injuriously, 149. assignment of partner's interest, 149,150. assignee when partner, J50. joint-stock company, 150. by deathj insanity, imprisomneni, wrong-doing, fraud. 150, 162. by court of equity, 150, 158. bankruptcy of partner, 150. account between partners, 150, 158. sale of effects, 150. levy on partner's interest, 150. retirement of partner, 151. IV. Of Partnership Property, 151, 152. real and personal, 151, 152. equitable title to real estate, 151, 152. when partner holds as trustee for the firm, 152. improvements, 152. (Widow's dower, 152. purchaser from partner, 152. V. Authority of each Partner and joint liability of Partnership, 152 - 157. agency and power to bind in what acta and transactions, 152- 157,159, 210. partner's bad faith, 153. 155, 153-159. ratification of partner's act, 153. partner's power to bind by instrument under seal, 153. partnership has no seal, 153, 154, power of majority, 154. dissent of partner, 154. partners must act as sucfi, 154. when firm name is partner's name, 154. persons jointly liable, 154. reception of new member, 154, 155. service of legal process, 155. money borrowed or used, 152, 155. liability of secret partner, 150. criminal act of partner, 156. illegal contract of partner, 156. what acknowledgment revives a part- nership debt barred by the Statute of Limitations, 156, 157. when partner and when firm liable, 153-157. VI. Remedies of Partners against each other, 157-159. accounts between, 157. at law and in equity, 157-159. for what causes, 157 - 159. when iierson is member of two firms,158. when pitrtner participates in fraud, 158. partner liable to partnership,. 158, 159. VII. Riirhts of the firm against third parties^ °159, 160. defence of set-oflT against partner, 159. other defences, 159. guaranty to partner, 159. riehts of new firm, 159, 160. VIII. Rlffhts of Creditors in redpectto Fands^ fGO-162. ' respective rights of partnership, and in- dividual creditors, 160, 161. levy by individual creditor upon part- nership property, 161. attachiiient, levy, and sale, 161, 162. 500 INDEX. IX. Effects of Dissolution, 169-104- by death, 1G2, 1G3. indorseniont of iiptes, or bills, after dis- solution, ]G3. remedy of partnership creditors against the representatives of deceased part- , iier, 163. to whom debts should be paid, 163. liability of partners after dissolution,164. X. Limited Partnerships^ 164, 165. statute requirements, 164. effects of non-conformity to, 1G4, 165. general and special partners, 164, 165. XL In other respects : loans to, ^7. insolvency of partner; what passes to assignee, S52, S53. J as effecting fire insurance. See Fire Insurance^ IX. Passengers. See, in this Index, Carriage of Qoods and Passengers, at sea. 290t may bo salvors, 303. Payee. See, in this Index, JVegotiahle Paper; Bills of Exchange and Promissory J^otes. Payer. See, in this Index, JVegotiable Paper ; Bills of Exchange and Promissory Motes. Payment^ 83-86. See, in this Index, Agency. I. How Payment may be made, S3, 84. meaniTig of the words " bills " and " notes," 83, 85. what is a valid tender, 83, 84, wiiat receipt may bo demanded for tender, 84. whctlier a bill or note is payment, 84. II. Of Jippropriation of Payments , 84, 85. when debtor owes creditor several debts, 84, 85. ifonedebtis due creditor as an indi- vidual, and another as trustee, 85. ifonodebtis barred by the Statute of Limitations, 209. HI. In oVicr respects .■ presumption as to, 13. when to be made, 49, 50. by check, 95. for honor, 125. to agent, or shopman, 133. presentment for. See, in this Index, JVegotiable Paper. part-payment. See, in this Index, Lim- itations. by instalments. See, in this Index, /u- stalments. Pencii,.bill or note written in, 90. signing in, 418. Performance^ specific. See^ in this Index, Spe- cific Performance. Perils. See, in this Index, Marine Insurance; Fire Insurance ; Life Insurance. Personal Property^ law of, distinct from law of real estate, 12. meaning of the term, 12. of wife, 21-23. sales of, 48-66. of partnership, I5L contracts relating to, by what law gov- erned, 258, 262, 2(i3. ships are, 270. mortgage of. 431,463-465. pledge of, 432, 433. Pilots. See, in this Index, Laws of Shipping. Pirates. See, in this Indexi Marine Insurance. ransom paid to, 297. Place. See, i;i this Index, Lain of Place, Pledge, See, iu this Index, Mortgage, when factor may pledge, 143. iiy partner, 152. "by shipmaster, 305, 306. Policy. See, iu tiiis Index, Marine Insurance; ■ Fire Insurance ; Life Insurance. Policy, public, 100 " Port^" iu Insurance policies, 352. " Port and Market,'" in insurance policies, 352. " Port of Discharge^^' in insurance policies, 352. Possession. See, m this Index, Sales of Personal Property ," Mortgage. what, necessary to transfer of ship; 274, 275. lessee entitled to, 434. Power,, coupled with an interest, 132. what, revolted by insolvency, 253. of sale. See. in this Index, Mortgages. of attorney, form, 468. to transfer stock, form, 469, 470. to vote by proxy, form, 469. to receive dividend, form, 469. Precedents^ when to be followed by courts, 9. Preference, of creditors. See, in this Index, Bankruptcy and Insolvency. Premium^ guaranty for, not usurittus, 230, 231. iu insurance. See, in this Index, Ma- rine fnsurance j Fire Insurance ; Life Insurance. Premium JVote. See, in this Index, Marine Li- surance ; Fire Insurance ; L{fe Insur- ance. Prescription, of common law, 206. Presentment, for acceptance, 104, 105. for payment, 105 - 109. Presumption, of law, 13. that party is innocent, 13. that promissory note, without time of payment expressed, is payable on de- ., mand, 13, that delivery and payment are to be at • once, in case of sale, 13. absolute and disputable, 13. iu favor of awards, 170. in Statute of Limitations, 204, 205. Price. See, in this Index, Consideration} Sales of Personal Property, inadequacy of, 427. Primage, 307. Printed, agreement, suf^cient compliance with the Statute of Frauds, 81. conflicting witli written parts of the same instrument. 375. Process, legal, service of, 155. by "what law governed, 97, 266. Profits, , See, in this Index, Partnership. - insurance of, 319, 40 1. Promise, consideration of. See, in this Index, Consideration. implied, 40, 41. new, revives debt. See, In this Index, Limitations. for a promise, 40. upon subscription paper, 41, illegal, 42, 61. separable, 42, 44. to pay another's debt. See, in this In- dex, Statute of Ij^'auds. original and collateral, 76-79. Promisee, meaning of the term, 12. Promisor, meaning of Ihe term, 12. Promissory JVote. See, in this Index, Bills of Exchange iind Provtissory JVotes ," JVe- gotiable Paper. Proof, of debt:!. See, iu this Index, Bankruptcy and Insolvency. burden of. See, in this Index, Burden of Proof i Evidence. of loss in insurance, 399, 400. , Property. See, in this Index, Sales qf Personal Property. INDEX. 501 legal ineaninR of tlio word, 48-50, :i3G. transfer of, the test of sale, 48, 40, 54. right of, 5U-55. sale by party who has property, though not po^^es!si()U, 5-'. stolen, sale of, 53, U9. of a partnership, 151, loJ. Protest, of bills and notes. Wee, in this Index, J^eirotialile Paper, Provisions, implied warranty in sale of, 60. at sea, 310. Proxyj power to vote by, form, 4G9. Public Policy^ agreement opposed to, 100. Piininhmenty of soainon, 312. Purchasers. Seo, in this (ndex, Sales of Per- sonal Property. conflicting rights of, 57, 58. of |)artncrsliip property, 152. of note^. Sec, iu this Index, Interest and Uaury, Qnit, notice to, 155, 436, 437. ^nitclaim Deed, See^ in thie Index, Deed. R. RaUroad. See, in this Index, Carriage of Goods. bonds, pass by delivery, 119. sale ot\ n'hcn usurious, 228. officers, agency of, 130. injuries upon, liability for, 195. company, liability of, for fires set by cars, and for collision. 201, 202. Ransom. See^ in this Index, Law of Ship]) in ir. RfUiJication, ot infant's contrat:t, 17, 18. of agent's acts. See, iu this Index, •Agency. of stoppage 171 transitu^ 129. of paitner's acts, 153. of insurance contract, 379. RatSy injury to vessels by^ 340, 341. Real Estate, derivation and meaning, 12. law of, technical, 12. di^^tinct from law of personal property, in principles and in forms, 12. terms and langnage of the law of, not understood except by lawyers, 12, 13. generally, transactions as to, shouiu bo made with the advice of counsel, 13. of wife, 20-23. of partnership, 151, 152. contracts relating to, by what law gov- erned, 258, 262. conveyance of, 417 - 427. purchased after will is made, 441. Receipt, how may bo contradicted, 33, 84, 334. See, in this Index, .Agreement and Assent ; Deeds. what may bo demanded for tender, 84. form of, 452. Recordings of conveyances of vessels; 273. 274. conflict between State and United States laws, 274. of deed. See, in this Index, Deeds. of bottomry bond, 281. of personal property mortgages, 431. Redemption. See, in this Index, Mortgage. Reference, See, in tliis index, Arbitrdtioiu Registration. Sec, iji this Index, Recording. of vessels. See, in tliis Index, Law of Shipping. Registry Laws, compliance -with, 322. Remsurancc. Sec, in tiiis Index, Marine Insur- ance i Fire Insurance. Release, to or by partner, 155. implied award of, 170. form of 453, 4C2, 4t.3. Remedyj form of, by what law governed. See, in this Index, Law of Place. distinction between, and right, 259. Repairs, of ship. See, in this Index, Law of Shipping t Marine Insurance. of leased jjremises. See, iii (his Index, Leases. of goods sold, 54. riglit to, not affected by insurance, 379. by insurers, 402. Reports, of decisions, value and importance of, 8,9. Rcpresentaiiajis. See, in this Index, Fire Insur- ance ; Marine Insurance ; Life Insur- ance. fraudulent, of an infant, 19. when must be in writing, 82. of agent, 132, 137. as affecting contracts for sale, 427. Rtspondentia. See, in this Index, Law of Ship- ping f Marine Insurance. loans on, not usurious, 226. Respondentia Bond, 306. Rests, Annual, in accoimts, 231. in claims against insolvent, 244. Revenue Laics, foreign, how regarded, 2G2. Right, of property and of possession. See, in this Index, Sales of Personal Prop- erty. distinction between, and remedy, 250. Risks. See, in this Index, Marine Ins^nrancc; Fire Insurance ; Life Insurance. charge for, when usurious, 226, 227. Robbery, at sea. See, in this Index, Marine In- surance. liability of common carrier for, 192, RomaJi Formulas^ of their law, 2. Rumors, when to be contmiinicated to insurers, 3:i2, 333. when sufficient to authorize abandon- ment, 358. S. Sailing, Sco, in this Index, Law of SMpping ; Marine Insurance. Sailing Rules, 308. Sailors. See, in tliis Index, Seamen. Sale, of insured property. See, in this Index, Fire Insurance; Marine Insurance. power of. Sec, in this Index, Mvrt- gages. of land, different remedies at law and equity, upon breach of contract for, 11,427. of ono's business, GG. presumption as to delivery and payment. See, in this Iiulex, Presuv\ption. contract of, hreacli of, 44, 45, 427. by partner, 152. hy carrier, to scrnrc lien, 190. of notes and securiiies. Sec, in this In- dex, Interest and U.-tnry. of vessel. See, in this Index, Law of SJiipping ; Marine IiLsuraiice. by shipmaster. See, in this Index, Ma- rine Insurance. Salesman, payment to, 138. when partner, 148, 149. Sales of Personal Property, 4S-Gfi. I. What constitutes a sale, 48 - 50. differs from agreement to sell, 48, 55,427. differs from exchange, 48. test of sale, 48, 49, 53, 54. legal meaning of tlio word " propertyj" 48, 49, 50. 502 INDEX. when payment to bo made, 49, 50, delivery, earnest, and part-payment, 49, 50,80. II. Rights of Property and Posseasidn, 50 - 55 frequently severed, 50. tender of price and of goods, 51. lien of seller for price, 51. if buyer neglect or refuse to take goods, and pay tlio price, 55. if seller neglect or xefuee to deliver goods, 5-2. by whom sale may be made, 59, 53. sales at " market overt," 53. transfer of money or negotiable paper when stolen or found, 53.' . delay agreed upon, 53. when goods must be separated from larger quantities, 53, 54. if repairing, measuring, or counting re- mains to be done, 54. essentials of a sale, 54, 55. property not vested by contracttogell,55. sale of property not in existence, 55. III. Delivery and its Incidents^ 49-54, 55-60. when seller bound to deliver, 5o. what sufficient delivery, 51, 53, 54, 56. partial and symbolical, 51, 56. of order upouAvarehousemau, 51. of property at sea, 56. liability of feller before delivery, 56, goods sent to a distance, 57. not essential to sale, 57. when sale is postponed to the rights of a subsequent purchaser or attaching creditor, 57, 58. when seller bailee of buyer, 58. mistake or defect in goods, and waiver of, 58, 59. when the contract is entire, and when severable, 59, 60. right of biiyer to redeliver, 60. sales upon condition, 60. IV. Contracta void for Jlleg-allty or Fraud, 60 -GS. See, in this Index, Fraud; Jtleffatity. illegal consideration, CO, 100. consideration or promise partially ille- gal, 60. agreement for future sale, Gl. innocent party may acquire good title from fraudulent purchaser, 6S. by whom and when fraud may be taken advantage of, 28, 62. waiver of illegality or fraud, G9. V. Of Sales with fVar7-antyyG2~ 65. general and limited warranty, G9. express and implied warranty, 63. rule of caveat emptor, G3. declarations of opinion, C3. aflirmations of quality or quantity, 63. goods sold by sample, 63. breach of, remedy of buyer, 64. warranty of title, 64. of article manufactured for special pur- pose, 64, C5. warranty in bill of sale. Go. warranty of wholesome provisions, 66. VI. Sale of.one's Business, 66. Salvage. See, in this Index, Law^of Shipping ; Marine Insurance. Sample^ what warranty in sales by, 63, 64. Scraiol, 418. Seal, of deed. See, in this Index, Deeds. imports consideration, 38. who can have, 153, 154. as afTcctiug form of action, 266. of will, 440. Seameii. See, in tliis Index, Law of Shipping. domicile of, 3C9. wages of, when subject to contribution, 297,298.' cannot be salvors of their own siiip, 303. , canftotmsure wages, 3n2. Seaworthiness. See, in this Index, Law of Ship- ping f Marine Insurance. Security. See, in this Index, Collateral Security. new, for UKurious contract, 224. ^ sale of. See, m this Index, Interest and Usury, by bottomry bonds, 979, 280. Seizure. See, in this Index^ Marine Insurance. of vessel. See, in this Index, Law of Shipping. of partnership property, in suit against partner, 161. .Servant. See, in this Index, Work and Service. Service. See, in this Index, fVork and Service. charge for, not usurious. See, in this Index, Interest and Usury. of legal process on partners, 155- ^ entitling to salvage, 302, 303. Set-off J 44. indorsee of note when liable to, 103. for poods bought of factor, 130.' of chum against partner, in suit by firm, 159. .igainst claim for insurance, 335, 367. Shares. See, in this Index, StocU. Ship. See, in this Index, Vessel i Law of Ship- ping ; Marine Insurance y Carriage of Goods, Shipmaatcr, agency of, 133, 305, 307, 359, 360. not partner, 149. insurance of wages of, 322. loss by act of, 339. discretion of, 348. trustee and agent, when, 360. insurance against misconduct of, 3C0. sale or hypothecation of goods by, 306, 307, 361. may liold goods until general average is |)aid, 300. when cannot be salvor, 303. shares of salvage belonging to, 304. ^ powers and duties oif, 304-307, 328, 329. sickness of, 311. nmst account for absence of seamen, 311. as such cannot insure, 384. Shipper. See, In this Index, Law of Shipping ; Marine Insurance. Shipping. See, m this Inilex, Law-Merchant; Law of Shipping ; Marine Insurance, Ship^s Husband. See, in this Index, Law of Shipping ; Marine Insurance; .Agency. Ship^s PaperSj 327. Signature, of deeds. See, in this Index, Deeds. required by the Statute of Frauds, 81. of negotiable paper, 90. by agent, 133. to wills, 440. Slander, lifTbliily of insolvent for, after dis- charge, 556. Slaves, liability of carrier of, 195. Smua-gling, 138, 322. Special Partner, 164, IG5. Spectre Performance. See, in this Index, Equity. of contract to sell land, 11, 427. Statute Law. See, in this Index, Common Law. Statute of Frauds, 75-89. I. Of its Purpose and General Provisions^ 75, 76. II. Of a Promise to pay the Debt of another, 76-79. consideration necessary, 76 I must be in writing, 76. INDEX. 503 ■what constitutes such a protniso, 76 - 79. III. Of an ^ip-eemcnt not to be p&rforiiicd wiUiiii a year, 79. IV. Of the Acceptance of a Thing soU^ 80. what amounts to, 80. conditional acceptance and earnest, 80. V. Of the Furni and Subject-matter of the Agreement^ 81, ^. the ** agreoiueut " must bo written, or printed, 81. iM?od not be on one piece of paper, 81. whotlicr the consideration must bo written, 81. where tlie signature ma)' be placed, 81. what are " goods, wares, or inerciiun- dises," 81. contract for work and labor, 81. contracts witliiii tlie statute, in what respect valid, 82. contracts executed in part, 83. representatiotis concerning character, conduct, credit, ability, &c., 82. Statute of Limitations. See, in tliis liidoXy Limi- tations. ' Stay Laws, unconstitutional, 259. StcaiH- Vessels J rules as to, 308. Stevedore.^, who are, 313. lien of, 313. Stocky usurious loans of, 325. contracts relatiiig to, by what law gov- erned, 969, 963. loan of, 433. power to transfer, forms, 4C9, 470. , Stoppage in Transitu, 67 - 70, 129, 242. Storage of Goods, 179, 180, 377. by carrier, 1^5-189. Stranding. See, in this- Index, Law of Shipping. Siibiiiissioii. See, in this Index, Arbitration. Subscription Papers, promise upon, 41. Suicide, avoids life insurance, 406, 407. Sunday, law as to labor or work upon, in Mas- sachusetts, 9. contract made upon, void, 9, consideration violating law as to, 100, when last day of grace falls on, 107. wlien note falls due on, 107. wlioii not reckoned in computing time, 113. whether included in "lay-days," 293. Supercargo. See, in tliis Index, Marine Insur- ance. Surctiu claim of, against principal. 47. who is, 117,118. wJien barred, 216. of bankrupt or insolvent, 246, 247, 256. T. Tares, of leased property, 436- Tcnant. See, in tliis Index, Leases. ill common, 150, 364. for years, may insure, 383. by curtesy, may insure, 382. Tenderj 49, 51, 67. wiiat constitutes a valid, 83, 84. informality in, when to be taken ad- vantage of, 83. what receipt can be demanded for, 84, to common carrier, 180, Tcnterden^s Act, 203. Testimony. Sec, iu thii^ Index, Evidence. Theftj liability of common carrier for, 192. at sea. See, in this Index, Marine In- Burance. Thieves, " assailing," 343. Time, for acceptance of offer, 29, 30, com;)!it:irions of, 241. friciioiis of a d;iv, 241. of death, materia), 408, 409. policy on. See, in this Index, Marine Insurance. terms in policies as to, 351, Title, warranty of, 64. legal, J51, 152. equitable, 151, 152. investigation of, 491. lessee entitled to good, 434. Torts, Sec, in this Index, fVrong-do.lng. moaning of the term, 19, 219. of an infant, 19. actions founded upon, interest not al- lowed, '219. claims for, not enforceable against as- signee of insolvent, 245. liability of insolvent for, after discharge, 250. of shipmaster, 307, 309. Trade. See, iu this Index, Business. carried on by married woman, 25. contracts in restraint of, 100. prohibited. See, in this Index, Marine Insurance. when a ship has liberty to, 349. Traders, as aficctod by bankrupt and insolvent laws. See, in this Index, Bankruptcy and Insolvency. Tranter. See, in this Index, Sale; Sales of Personal Property. of vessels. See, in this Index, Law of Skipping. of insured property. See, in this Index, F^re lusurHHcei .Marine Insurance. Transit, insurance of goods upon, 392. from ship to shore, insurance upon, 353. stoppage in. See, in this Index, Stop- page in Transitu. Transshipment. See, in this Index, Law of Skip- jiing. Trespass, insolvent's liability for, after dis- cliarge, 256. Trust, equity has jurisdiction in cases of, 11. Trustee, assets of. See, in this Index, Bank- ruptcy and Insolvency. holding bill or note as, 101. cannot buy of, or sell lo, himself, 141. pays interest, 141. partner, for partnership, 152. if partner is, 155. not accounting, when compound in- terest allowed, 231. proof of debis by, against insolvent estate, 244. when insolvent is, 2-14. liability of insolvent trustee after dis- charge, 253. owner and master of ship, when, 3G0. may insure, 333. Trustee Process, 89, 102, 444, 445, 447. V. Umpire, choice of, by arbitrators, 172. Understanding, of wit]iess, 420. of ]);u'tics to a contract. Sec, in this Index, Agreement and Assent, United States, foreign to each other as to bills of e.\"ciiange, 9G. as to ijauliruptcy and insolvency, 259. as to the law uf siiippiiig, 300,^14. Unliquidated Damages, intorusi upon claims for, 219. Unseaworthiness. See, in this Index, Marine Insurance ; Law of Shipping. Usage^ See, iu this Index, Agrcciucnt and As- sent. when forming part of commnn law, 8. of merchants, wlieu forming part of law-morcJiaut, 10. 504 INDEX. of trade, as to warranty, G3. iiiasjcncy, 131, 234, ]3y. in law of cominon canters, 177, 186j 187. to allow interest, 918. in insurance, 339, 330, 339, 348, 355, 370. Usury. Pco,in this Index, Interest and U.iury. coiisidcrafion violating law against, lUO. in loans to partnership, 148. defence of, by assignee of bankrupt, 245. on bottomry bonds, 279, 280, V. Valuation, See, in this Index, Marine Insur- ance ; Fire Insurance, " Value Received," in notes and bills, 99. Vendee, See, in this Index, Sales of Personal Property. meaning of the term, 19. the law of fixtures as affecting, 438. Vendor, See, in this Index, Sales of Personal Property. meaning of the term, 19. the law of fixtures as affecting, 438. Vessels. See, in this Index, Cam'iage of Goods ; Law of Shipping^ ; Marine Insurance. Voluntary jSssignvients. See, in this Index, Bankruptcy and Insolvency. Vote, power to, by irfoxy, 469. Vuyage. See, in this Index , Law of Shipping; Marine Insurance, w. Wager^ contracts, Gl. policies, 380, 409. See, in this Index, Marine Insurance. Wages, of seamen, 310. seamen gind mates cannot insure, 322. incurred in saving ship, who to pay fur, 359. iVar. as affecting shipping. See, in this Index, Law ^ Skipping. Warehouseman, lien of, upon goods in his pos- session. See. in this Index, Lien. when not bouna to deliver goods, 15. delivery of an order upon, 51. liabilities of, 379. when a carrier becomes, 185-189. « Wares," what are, within the Statute of Frauds, 76, 81. Warranty. See, in this Index, Veed ; Fire In- surance; Marine Insurance ; Life In- surance; Chiaranty; Sales/ qf Personal Property. in transfer of bill or note, 121. in sales by agent, 131. Wca'^ing-^pparel, not to be taken by assignee in insolvency, 250. Wharfinger, lien of, upon goods in his posses- sion. See, in thia Index, Lien. when not bound to deliver goods, 15. liabilities of, 179. Widow, dower of. See, in this Index, Dower. Wif3. See, in this Index, Parties to Mercantile Contracts; Married Woman, Will, disposal of propjurty by, 439-443. I. Wills, 439 -A'^. by whom siiould be drawn, 13, 439; form of, 477. who may make, 439. married woman, 23, 439. at what age, 439. clauses and phrases in wills, 439-441. clause of attestation, 440. signature or mark of testator, 440. seal, 440. liow wilt shonld be witnessed, 440. who may be witnesses, 440, 441. ' the words " bequeath," " devisoj" 441. words of inheritance, 441. real estate purchased after will is made, 441. wlien the law presumes that children or grandchildren were forgotten, 441. executors should be named, 442. *' administrator witb will annexed," 442. II. Codicil, 449. legacy in addition to, or instead of, another, 449. advancements to child during life, 442. III. Of the Revocation of Wills j 442, 443. effect of codicil, 442. new will, 442, 443. tearing off name, 4^. by operatioii of law when, 443.- devise to wife in lieu of dower or other rights, 443. Wltnessesj must be examined by arbitrators, 179. to deed, 419, 420. to will, 440, 441. Work and Set^cice. See, in thi.«i Index, Service. on Sunday in Massachusetts, 9. good consideration, 40. Imptied promise for, 40. when disabled by sickness, 43. contract of, broken by improper per- formance, 44, 45. contract of, broken by servant leaving, 44, 45. contract for, not within the Statute of Frauds, 81. by partner for partnership, 153. debts for labor when preferred, 239 of seamen, 309 -312. upon vessels, 313, 314. insurance against disease and dishon- esty of servants, 416. Wreck, 285. Writ, service of, on partners, 155. Written^ instruments how construed, 34. conflicting with printed, part of same instrument. 375. promise. . See, in this Index, Statute of Frauds. Wrong-doing. See, in this Index, Torts, dissolves partnership. 150. of partner, firm liable for, 156. by shipmaster, 307, 309. Year, agreement not to be performdd within, 75, 79. THE END. KF 889 P27 Author Parsons, Tbbophilus Vol. Title Copy The laws of business for "bus: iie!?s-mBn, .... Date Borrower's Name ' \-- "\ V