(flornpU Ham i>rl|[ooI ICibtatg 
 
Cornell University Library 
 KF 801.A86 
 
 Principles of the law of contract, 
 
 3 1924 018 826 960 
 
The original of tiiis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924018826960 
 
PRINCIPLES 
 
 OF THB 
 
 LAW OF CONTRACT 
 
 BY ii 
 
 SIE WILLIAM K. ANSON, Baet., MA., B.O.L., 
 
 OF THB IHNBK TEMPLE, BAKKISTER AT LAW, TrNBRIAN KEADEB 
 OF ENGLISH LAW, FELLOW OF ALL BOULS' COLLEOE, OXFOBD. 
 
 EDITED AHD ANNOTATED "WITH AMEEICAN HOTES, 
 
 By O. W. ALDEIOH, Ph.D., LL.D., 
 
 PKOFBSSOB OF LAW IN ILLINOIS WESLEYAN TmiVERSITY. 
 
 CHICAGO: 
 
 CALLAGHAN AND COMPANY. 
 
 1880. 
 
COPYRIGHT, 
 1880. 
 
PREFACE OF AMERICAN EDITOR. 
 
 In fhe preparation of this book for an American 
 Edition regard has been had more especially to the 
 needs of the student than to those of the practitioner, 
 and the author's plan of giving but a small number 
 of references has been followed except in those cases 
 where the courts of the different States disagree in 
 their views upon any question. 
 
 The body of the text has been changed by leaving 
 out those portions based upon late English statutes, 
 and in a few instances by substituting the Common 
 Law rules instead of those omitted, and by a few 
 additions which seemed to be necessary. Quite a 
 number of American cases have been added to the 
 marginal references to enable the student the more 
 readily to verify the statement of the text. 
 
 Where the rule as given in the text is denied by 
 any or all of the American courts, this dissent has 
 been expressed in the foot notes, and in two or three 
 instances it appeared to be necessary to give the facts 
 of cases cited where the author seemed to use them 
 to support conclusions hardly warranted by the 
 decisions. 
 
 This volume has been prepared for the purpose of 
 giving to the American student an introductory work 
 
 (iii) 
 
iv PREFACE OP AMERICAN EDITOR. 
 
 on Contracts, -which, in the judgment of the editor, 
 based upon an experience of several years as a teacher 
 of that branch of the law, is better suited to the needs 
 of students than any other work which he has used or 
 examined. 
 Bloomington, III., March 1, 1880. 
 
AUTHOR'S PREFACE. 
 
 This book is an attempt to draw sucli an outline of 
 the principles of the law of Contract as may be useful 
 to students, and, perhaps, convenient to those who are 
 engaged in the teaching of law. To some of those 
 who are so engaged it has seemed that there is need 
 of an elementary treatise which should deal with the 
 subject of Contract in its entirety; and the existence 
 of such a need is my excuse for the production of the 
 present work. 
 
 The main object with which I have set out has been 
 to delineate the general principles which govern the 
 contractual relation from its beginning to its end. I 
 have tried to show how a contract is made, what is 
 needed to make it binding, what its effect is, how its 
 terms are interpreted, and how it is discharged and 
 comes to an end. 
 
 In thus sketching the history of a contract, I have 
 striven to maintain a due proportion in my treatment 
 of the various parts of the subject, and to avoid enter- 
 ing into the detail of the special kinds of contract. 
 The history and antiquities of the subject have, of 
 necessity, been dealt with only so far as was absplutely 
 necessary to explain existing rules, and I have placed 
 in Appendices what I have to say on two matters the 
 
 (V) 
 
vi AUTHOR'S PREFACE. 
 
 treatment of wliich seemed to be unavoidable and yet 
 out of place in any part of a merely general outline. 
 
 One of these is the "contract implied in law," or 
 quasi-contract. The effect of this legal relation has 
 been fully explained by Mr. Leake (part i, c. i, s. 2), 
 and it seemed to be only necessary to point out the 
 general character of the obligation which it creates, 
 and to sketch the history of the mode in which, for 
 the convenience of pleading, it figured for a while in 
 the outward form of contract. 
 
 The other subject is the special contract of Agency: 
 this, too, I regarded as a matter alien to a general dis- 
 cussion of the principles of contract, but the constant 
 recurrence of the relation of Principal and Agent 
 made it needful to give a brief outline of the chief 
 rules regarding Agency. 
 
 On one or two points, interesting in themselves, or 
 open to discussion, I have dwelt at a length dispro- 
 portionate perhaps to my general plan. The somewhat 
 slender autliority for some of the often-quoted rules 
 relating to past consideration, the various effects of 
 innocent misrepresentation, the questionable validity 
 of a bare waiver of contractual rights, are points to 
 which I have called the attention of the reader. The 
 intricate subject of the discharge of contract by breach, 
 and its effects, together with the kindred subject of 
 conditional and independent promises, would seem to 
 need a fuller analysis than it has yet received in the 
 books on Contract. Conditions are usually dealt with 
 in connection with the promise when made, whereas 
 their full effect can only be ascertained when they are 
 regarded as affecting the promise when broken. 
 
AUTHOR'S PREFACE. yii 
 
 Another object which I have striven to attain is 
 that of inducing the student to refer to the cases cited 
 in illustration of the rules laid down, and to form for 
 himself a clear notion of the law as it has been ex- 
 pounded from the Bench. The law of contract so far 
 as its general principles go has been happily free from 
 legislative interference: it is the product of the vigor- 
 ous common sense of English Judges; and there can 
 hardly be a healthier mental exercise than to watch 
 the mode in which a judicial mind of a high order 
 applies legal principles to complicated groups of fact. 
 
 The student, to whom a text-book is not, as it is to 
 the practicing barrister, a repository of cases for refer- 
 ence, but a collection of rules and principles which he 
 desires to learn, is too apt to take these upon trust 
 unless the cases from which they are drawn are thrust 
 upon his notice. , For this reason I have avoided the 
 citation of nnmeroiis cases, I have endeavored to select 
 such as form the most vivid illustrations of the rules 
 which I have laid down, and I have placed the refer- 
 ences to those which I have cited — where I thought 
 they would be most conspicuous — in the margin. 
 This is my excuse for a departure from the ordinary 
 arrangement of references in foot notes. 
 
 To the able Treatise of Mr. Pollock and the ex- 
 haustive Digest of Mr. Leake I have made frequent 
 references, but these do not express the extent of my 
 obligations to those learned authors. Their books 
 must needs enter largely into the composition of such 
 a work as mine professes to be. 
 
 I have also occasionally referred the reader to works 
 of a more special character, and in particular to the 
 
viii AUTHOR'S PREFACE. 
 
 great work of Mr. Benjamin for all points connected 
 with the contract of Sale of Personalty. But for jthe 
 .reason which I stated above I have avoided the accu- 
 mulation of a mass of authority, and have often run 
 lihe risk of seeming to dogmatize lest a numerous 
 collection of references should disincline the student 
 to the process of verification. 
 
 W. E. A. 
 
 1 Bbick Coukt, The Temple. 
 
TABLE OF CONTENTS. 
 
 PAET I. 
 
 PLACE or CONTEAOT IN JUEISPEUDENCE. 
 
 *PAGH. 
 
 Outline of subject 1 
 
 Analysis of Agreement 2 
 
 Distinction of Contract from Agreement .... 3 
 
 Analysis of Obligation 4 
 
 Distinction of Duty from Obligation 6 
 
 Forms of Obligation 7 
 
 PART II. 
 
 FOBMATIOH OF CONTBACT. 
 CHAPTER I. 
 
 PEOPOSAIi AND ACCEPTANCE. 
 
 Agreement traceable to Question and Answer , . .11 
 
 Forms in which Contract may originate 13 
 
 Requirements in Proposal 14 
 
 Requirements in Acceptance 14 
 
 Proposal inoperative till accepted 15 
 
 Under what circumstances may Proposal be revoked . . 17 
 
 How Proposal may lapse otherwise than by revocation . 23 
 
 Conti'act may arise from Conduct 23 
 
 Proposal by Advertisement 24 
 
 Representation of Intention as distinct from Proposal . . 26 
 
 (ix) 
 
X TABLE OF CONTENTS. 
 
 CHAPTEB II. 
 
 FOKM AND CONSIDEBATION. 
 
 *PAGB. 
 
 Form or Consideration necessary marks in a valid Contract . 29 
 
 Historical outline of the subject 29 
 
 Classification of Contracts 36 
 
 Formal Ooniraets. 
 
 Contract of Record 37 
 
 Contract under Seal ....... 89 
 
 How made 39 
 
 Its characteristics 40 
 
 When a Deed is essential to validity of a Contract . 44 
 Simple Contract. 
 
 Simple Contracts required to be in writing . . .46 
 
 The Statute of Frauds 47 
 
 The Fourth Section 47 
 
 Its requirements as to form . ... 48 
 
 The Contracts included under it .... 52 
 
 The effect of a breacli of its provisions . . .56 
 
 The Seventeenth Section of the Statute of Frauds . 57 
 
 Its requirements as to form 58 
 
 Nature of Contract specified 58 
 
 Effect of a breach of its provisions . . . .60 
 Oomideration. 
 
 Definition of Consideration 61 
 
 Consideration necessary to validity of every Simple 
 
 tract 63 
 
 Consideration need not be adequate to the promise . 63 
 In what Consideration may consist . . . .65 
 
 Mutual promises 66 
 
 Contingent or conditional promises . . . .66 
 
 Forbearance to sue 67 
 
 Compromise of suit 68 
 
 Bailment 70 
 
 Consideration which has been held unreal . . .71 
 
 Motive 71 
 
 Impossibility and Vagueness 74 
 
 Performance or promise to perform existing legal 
 
 duty . 75 
 
 Apparent exception, composition with creditors . 79 
 Promise to perform existing contract . . .80 
 
 Shadwell v. Shadwell discussed 80 
 
 Legality of Consideration 81 
 
 Executory and executed Consideration . . . .82 
 
TABLE OP CONTENTS. xi 
 
 *PAGB. 
 
 Past Consideration is no Consideration ... 85 
 First alleged exception to tliis rule, Consideration 
 
 executed upon request 85 
 
 The rule in Lampleiyh v. Braithwait discussed . . 86 
 Second exception, revival of Promise .... 90 
 Third alleged exception, voluntary discharge of an- 
 other's legal liability 93 
 
 Review of cases 93 
 
 CHAPTER III. 
 
 CAPACITY OF PABTIBS. 
 
 1. Political or Professional Status 97 
 
 2. Infancy. Ratification at Common Law .... 98 
 Necessaries, what they are, and how ascertained . . 104 
 Liability of Infant for wrong arising from Contract . 105 
 Or apart from Contract 106 
 
 3. Married "Women 106 
 
 Their Contracts void as a general rule .... 106 
 
 Exceptions 106 
 
 4. Corporations Ill 
 
 Necessary limits to their capacity to Contract . . . Ill 
 
 Express limitations 113 
 
 5. Lunatics and Drunken Persons 113 
 
 Their Contracts voidable, not void . . . . . 113 
 
 CHAPTER IV. 
 
 REALITY OF CONSBNT. 
 
 1. Mistake of intention as distinct from expression . 
 
 " as to nature of transaction .... 
 " as to persons with whom the contract is made 
 " as to subject-matter of Confraot, generally : 
 
 operative 
 
 " as to existence of subject-matter . 
 " as to identity of subject-matter . 
 " as to extent of promise as to subject-matter 
 Effect of Mistake is to avoid contract 
 
 2. Misrepresentation; difficulty attending its discussion 
 Misrepresentation as distinguished from fraud 
 Innocent Misrepresentation is inoperative . . 
 Unless it be a term in the contract .... 
 
 116 
 116 
 118> 
 
 130 
 131 
 133 
 133 
 127 
 128 
 129 
 133 
 
xu 
 
 TABLE OF CONTENTS. 
 
 Or occur in contracts uberrimasfidei . . • • 
 If a term in tlie contract, it is then a form of discharge 
 Contracts uberrimae fldei .... 
 
 Marine and fire insurance . 
 
 Sale of land 
 
 Prospectus inviting purchases of shares 
 Contract of suretyship is not uberrimae fidei 
 In its inception, hut becomes so when made 
 Expressions of opinion are not representations 
 Nor are commendatory expressions 
 
 3. Fraud. Its essential features . 
 
 It is a false representation 
 
 It is a representation of fact 
 
 Intentionally false, or reckless 
 
 Intended to be acted upon by the person injured 
 
 It must actually deceive 
 Its effect, it gives rise to action ex delicto . 
 " it makes contract voidable 
 
 " limits of right to affirm and avoid 
 
 4. Duress, its nature and effect 
 6. ZTndue Influence, how distinct from Fraud 
 
 Circumstances under which it is presumed 
 Suggested by personal influence 
 Or by the circumstances and relations of the parties 
 Its effect; how ditl'erent from that of Fraud . . 
 
 *PAGB. 
 
 133 
 138 
 139 
 140 
 141 
 142 
 143 
 144 
 144 
 144 
 145 
 145 
 147 
 148 
 151 
 152 
 153 
 154 
 154 
 155 
 156 
 157 
 158 
 160 
 161 
 
 CHAPTER V. 
 
 LEGALITY OF OBJECT. 
 
 Nature of illegality 
 
 Contracts in breach of Statute; effect of penalty 
 
 Wagering contracts 
 
 A wager defined and described 
 History of legislation on the subject 
 Contracts in breach of rules of Common Law 
 Agreements to commit a crime or wrong 
 Contracts in breach of the policy of the law 
 Public policy; its general application . 
 Agreements tending to injure public service 
 Agreements tending to pervert the course of justice 
 " tending to encourage litigation 
 
 " contrary to good morals 
 
 " in restraint of marriage 
 
 164 
 164 
 165 
 166 
 168 
 172 
 173 
 174 
 174 
 175 
 176 
 177 
 178 
 179 
 
TABLE OF CONTENTS. xiii 
 
 ♦page. 
 
 Agreements in restraint of trade 179 
 
 3. Effect of illegality 18a 
 
 Where the contract is divisible 181 
 
 Where the contract is indivisible .... 183 
 Where direct object is unlawful but intention inno- 
 cent 182 
 
 Where direct object is innocent but intention un- 
 lawful 183 
 
 Where the unlawful intention is on one side only . 186 
 Securities given for money due on illegal transac- 
 tions 186 
 
 Distinction between illegal and void contracts . . 187 
 Eflect of parties not being in pari delicto . . . 189- 
 Effect of locus poenitentiae while the contract is exec- 
 utory 191 
 
 PAKT III. 
 
 THE OPERATION OF OONTEA.CIT. 
 
 CHAPTER I. 
 
 THE LIMITS OF THE CONTKACTUAL OBLIGATION. 
 
 A contract only affects the legal relations of the parties to it 195- 
 
 Agency and Trust no real exceptions to this rule . . 198 
 
 1. Contract cannot impose an obligation on a third party . 197 
 
 Can it impose a dutyf LuYnley v. Qye discussed . . 198 
 
 3. Contract cannot confer rights on a third party . . 199 
 
 Though expressed so to do by the contracting parties . 199 
 
 CHAPTBB II. 
 
 THE ASSIGNMENT OF CONTRACT. 
 
 1. Assignment by act of the parties 204 
 
 Liabilities cannot be assigned 204 
 
 Rights may be assigned at Common Law only by substi- 
 tuted agreement in case of debt 206 
 
 Or by custom of inerchants ; 206 
 
 Rights may be assigned in Equity 308 
 
 But notice must be given to persons liable . . . 208 
 
xiv TABLE OF CONTENTS. 
 
 •page. 
 
 And the assignment " is subject to equities "... 309 
 
 Negotiability, its characteristics 312 
 
 Illustrated by bills of exchange and promissory notes . 213 
 
 Illustrated by bills of lading 216 
 
 3. Assignment by operation of law 317 
 
 Obligations assigned on tranfer of interests in land . 218 
 
 In the case of leasehold interests 218 
 
 In the case of freehold interests 218 
 
 Obligations of wife assigned by marriage . . . 321 
 
 Obligations assigned by death 332 
 
 Obligations assigned by bankruptcy or liquidation . 223 
 
 PAET IV. 
 
 THE INTEEPEETATION OF CONTEAOT. 
 CHAPTER I. 
 
 RULES KBLATING TO ETLDBNCB. 
 
 Provinces of Court and Jury 236 
 
 Difierence in proof of formal and simple contract . . 237 
 
 1. Proof of document purporting to be a contract . . 238 
 
 3. Evidence as to fact of agreement 230 
 
 3. Evidence as to terms of contract 333 
 
 Collateral promise 334 
 
 Explanation of terms 235 
 
 Usage 237 
 
 Equitable rules as to rectification and avoidance . . 239 
 
 CHAPTER II. 
 
 EDLB8 EELATISa TO CONSTRUOTIOH. 
 
 General rules 241 
 
 Rules as to Time and Penalties 242 
 
 PAET Y. 
 
 DISCHARGE OF COHTEACT. 
 
 Modes in which it may take place . . . " . , , 246 
 
TABLE OF CONTENTS. xv 
 CHAPTER I. 
 
 DISCHAKGE OF CONTRACT BY AGKBEMBNT. 
 
 *PAGH. 
 
 1. Waiver as a mode of discharge 247 
 
 Only applicable to executory contracts .... 248 
 
 And to bills of exchange and promissory notes . . 249 
 
 2. Substituted contract — 
 
 How different from postponement of rights . . . 250 
 
 Substituted terms 251 
 
 Substituted parties 252 
 
 3. Provisions for discharge 253 
 
 (1) Promise subject to right of rescission in a certain 
 
 event 253 
 
 (2) Conditions subsequent 254 
 
 Excepted risks 254 
 
 Act of God 255 
 
 (3) Provisions making contract terminable at option . 256 
 Form of discharge by agreement 257 
 
 In case of contract under seal 257 
 
 In case of parol contract 258 
 
 CHAPTER II. 
 
 DISCHARGB OF CONTBACT BT PEBFOEMANCB. 
 
 Performance when a complete discharge .... 261 
 
 Payment as a discharge 262 
 
 Tender as a discharge 264 
 
 CHAPTER III. 
 
 DISCHARGE OF CONTRACT BT BREACH. 
 
 Breach of Contract always gives a right of action, not 
 
 always a discharge 266 
 
 1. Position of party discharged by breach .... 267 
 
 He is exonerated from further performance . . . 267 
 
 May sue as upon a contract arising from conduct . . 268 
 Even if his performance be only partial — a quantum 
 
 meruit 269 
 
 3. Forms of Discharge by Breach 270 
 
 Renunciation before performance is due . . . 271 
 
xvi TABLE OF CONTENTS. 
 
 *PAGE. 
 
 Impossibility created by one party before performance 
 
 is due 373 
 
 Bennnciation in the course of performance . . • 274 
 Impossibility created by one party in the course of 
 
 performance 279 
 
 Failure of performance, when a discharge . . . 277 
 
 Independent promises of three kinds .... 277 
 
 (1) Absolute promises ... ... 278 
 
 (2) Promises admitting of more or less complete per- 
 
 formance 281 
 
 (3) Subsidiary promises 284 
 
 Conditional promises — nature of conditions . . . 286 
 
 Suspensory conditions 287 
 
 Conditions which determine discharge .... 288 
 
 (1) Concurrent conditions 38& 
 
 (2) Virtual failure of consideration .... 290 
 
 (3) Conditions precedent 294 
 
 How distinguished from Warranty 295 
 
 Acquiescence in breach of a condition turns it into a 
 
 Warranty ex post facto 297 
 
 But not if the breach be of an essential term . . . 299 
 
 3. Eemedies for Breach 300 
 
 Damages, rules governing their application . . . 301 
 
 Specific performance, when decreed 304 
 
 By what Courts administered 305 
 
 4. Discharge of Riglit of Action arising from Breach . . 308 
 
 By consent of parties. Release 306 
 
 By consent of parties. Accord and Satisfaction . . 307 
 
 By judgment 307 
 
 By lapse of time 308 
 
 Eevival of barred right of action 810 
 
 CHAPTER IV. 
 
 DISCHABOB OF CONTBACT BY IMPOSSIBILITY OF PEEFOEMAITCB. 
 
 Phases of Impossibility of Performance .... 312 
 
 Difficulties presented by Clifford v. Watis .... 313 
 
 Subsequent Impossibility as a rule is no discharge . . 314 
 
 Unless it be created by law of England .... 315 
 Or by destruction of a tiling the continued existence of 
 
 which is contemplated 316 
 
 Or by incapacity for personal service 317 
 
TABLE OP CONTENTS. xvii 
 
 CHAPTER V. 
 
 DISCHAEGE OF CONTRACT BY OPEBATION OF LAW. 
 
 *PAGB. 
 
 Merger . 318 
 
 Alteration of a written instrument 819 
 
 Bankruptcy 319 
 
 APPENDIX A. 
 
 CONTRACT AND QUASI-CONTRACT. 
 
 Historical connection of the two legal relations . . . 321 
 
 Legal relation arising from judgment 325 
 
 " " " accounts stated .... 325 
 " " " money paid by plaintiff for de- 
 fendant 325 
 
 " " " money received by defendant to 
 
 plaintiff's use . . , 826 
 
 APPEIJDTX B. 
 
 AGENCY. 
 
 Agency not a question of capacity of parties . . . 828 
 
 Modes of creating relation of agent and principal . . 330 
 
 Kinds of agency 831 
 
 Restriction and revocation of agency 334 
 
 Effect of agent's contract upon himself, his principal, and 
 
 third parties ' . . 835 
 
 2 
 
TABLE OF AMERICAN CASES. 
 
 CASK. BBFEBBKCB. *PAGB. 
 
 Abbott B. Hermon 7 Greenl. 121 23 
 
 Adams «. McMillan 7 Porter, 73 50 
 
 Allen ®. Hammond 11 Pet. 63 121 
 
 Aliens. Hart 73 111.104 72 
 
 Aliens. Thomas 3 Mete. (Ky.) 198 72 
 
 AmesB. LeEue 2 McLean C. C. 216 310 
 
 •Andover, etc., Turnpike Corp. ^ ^^^^^^^ ^^^ 
 
 V. Hay j 
 
 Andreas s. Hoxie 5 Texas, 171 189 
 
 Armfleld v. Tole 7 Ired. (N. C.) 259 185 
 
 Armsti-ong v. Toler 11 Wheat. 258 185 
 
 Arrington v. Porter 47 Ala. 714 258 
 
 Aurora «. West 23 Ind. 88 189 
 
 Ayres v. Chicago, etc., E. E. Co. 8 Cent. L. Journal, 405 76 
 
 B. 
 
 Babcock «. Trice 18 111.420 --. 134 
 
 Babcock v. Hawkins 33 Vt. 561 258, 307 
 
 Bacon ». Cobb 45 111.47 250,359 
 
 Badcock D. Steadman 1 Boot, 87 40 
 
 Badger B. Phinney 15 Mass. 359 lOG 
 
 Bailey 0. Crim 8 Eeporter, 455 .40 
 
 Ballou s. Talbot 16 Mass. 461 388 
 
 Bankhead «. Alloway 6 Cold. 56 151 
 
 Bank U. 8. v. Daniel 13 Pet. 32 148 
 
 Banks. Hammond lEich.281 113 
 
 Bank «. Poiteaux 3 Band. 136 46 
 
 (xix) 
 
XX TABLE OF AMERICAN CASES. 
 
 CASH. KEFEUBNCB. *page. 
 
 Bankof Columbia W.Patterson.. 7 Cranch, 399 46 
 
 Barr «. Lapsley 1 Wheat. 151 305 
 
 Barry J!. Coombe 1 Pet. 640 50 
 
 Bartholomew v. Jackson 2 Johns. 28 16 
 
 Bayley v. Lawrence 1 Bay, 499 - 314 
 
 Bayley B. Taber 5 Mass. 286 189 
 
 Beach B. Fulton Bank 3 Wend. 573 113 
 
 Beamani). Russell 20 Vt. 305 53 
 
 Beardena. Smith .11 Rich. L. (S. C.) 554 244 
 
 Bsckman v. Shouse 5 Rawle, 179 34 
 
 Beckwith «. Chewer .1 Foster, 41 32 
 
 Bennett «. Hall 10 Johns. 364 59 
 
 Berschi). Ins. Co 20 Ind. 64 167 
 
 Bevin v. Conn. Mut. Ins. Co 23 Conn. 244 167 
 
 Biddle v. Cornell 3 Har. N. J. L. 377 280 
 
 BigelowB. Baldwin 1 Gray, 245 79 
 
 Black «. Cord 2 Har. & G. 100 304 
 
 Blake®. Peck 11 Vt. 483. 69 
 
 Blair «. Perpetual Ins. Co 10 Mo. 539 113 
 
 Blake v. City of Elizabeth 2 N. J. L. J. 338 98 
 
 Blankenship D. Stout.. ..25 111. 133 99 
 
 Bliss «. Perrym an 1 Scam. 484 90, 
 
 Blowers B. Sturdevant 4Denio, 46 108 
 
 Blythe B. Speake 23 Texas, 439 386 
 
 Bohanan v. Pope 42 Me. 93 72 
 
 Booth V. Fitzpatrick 36 Vt. 681 86 
 
 Boring I). Clark 19 Pick. 220 197 
 
 Borland v. Gufley 1 Grant Cas. 394 3, 15 
 
 Boston & Me. R. R. Co. «. Bartlett.3 Cush.325 18 
 
 Bradford «. Bush 10 Ala. 386 331 
 
 Braman «. Bingham 26 N. Y. 483 44 
 
 Brice B.King 1 Head. 153 73 
 
 Bridge v. Hubbard 15 Mass. 96 189 
 
 Bridgeport Bank ». Dyer 19 Conn. 137 357 
 
 Brisbane v. Lestorjette 1 Bay, 113 189 
 
 Bristol®. Braidwood 38 Mich. 191 151 
 
 Bristow ®. Lane 31111.194 73 
 
 Brooklyn Bank v. De Grauw ...23 Wend. 343 307 
 
 Brooks B. Mintern 1 Cal. 481 49 
 
 Brooks®. White 2 Met. 283. 77 
 
 Bryant ®. Isburg 13 Gray, 607 386 
 
 Buckmaster®. Grundy 1 Scam. 310 44 
 
 Bulkley ®. Landon : 2 Coon. 404 85 
 
 Burr®. Beers 34N.Y. 175 73 
 
 Burtis®. Thompson 42N. Y. 346 273 
 
TABLE OF AMERICAN CASES. xxi 
 
 0. 
 
 CASE. KEFERESrOB. *PAGE. 
 
 Cabot «. Christy 42 Vt. 121 151 
 
 Cady «. Caldwell 5 Day, 67 57 
 
 Campbell v. Kew Eng. Ins. Co. .98 Mass. 381 141 
 
 Campbell v. Long 20 Iowa, 383 310 
 
 Campbell v. Vining 23 111. 525 810 
 
 Campbell v. Stokes 2 Wend. 187 106 
 
 Canal Bridget). Gordon 1 Pick. 297 46 
 
 Cardigan «. Page 6 N. H. 183 175 
 
 Carr «. Duval 14 Pet. 77 15 
 
 Carroll v. Forsytbe 69 111.127 311 
 
 Carroll i>. Knapp 9 Pet. 541 46 
 
 Carson v. Cheely. 6 Ga. 554 59 
 
 Carver «. Jackson 4 Pet. 1 41 
 
 Cast «. Roflf 26 111.452 269 
 
 Chandler ». Johnson 89 Ga. 89 176 
 
 Chase B.Allen 13 Gray, 42 244 
 
 Christy v. Sullivan 50 Cal. 337 148 
 
 City Bank of Columbus B. Beach.l Blatchford, 438 63 
 
 Clark V. Pendleton 20 Conn. 495 54 
 
 Clark «. Russell 8 Watts. 218 69 
 
 Clark ®. Crandall 8 Barb. 612 274 
 
 Clark V. Flint 22 Pick. 231 305 
 
 Clem V. Newcastle R. R 9 InJ. 488 148 
 
 Cleveland ■». Smith 2 Story, 280 241 
 
 Cobb V. Cowdery 40 Vt. 25 73 
 
 Colby V. Stevens. 38 N. H. 191 265 
 
 Commonwealth v. Harrington ..3 Pick. 29 179 
 
 Commissioners ». Perry ..5 Ohio, 58 73 
 
 Conklini). Ogborn 7 Ind. 553 99 
 
 Conrad ». Atlantic Ins. Co 1 Pet. 886 214 
 
 Converse v. Blumrich 14 Mich. 119 151 
 
 Cook«. Bradley 7 Conn. 57 35 
 
 Cook®. Murphy 70 111. 96 76 
 
 Cornwall «. Haight 8 Barb. 828 286 
 
 Craig B. Hooper 3 Cush.158 66 
 
 Cramptono. Ballard... .10 Vt. 251.. 72 
 
 Cram v. Hutchinson 3 Bradwell, 80. 40 
 
 Crawford ». Russell... .63 Barb. 92 179 
 
 Crawford «. MUlspaugh 13 Johns. 87 250 
 
 Crist ®. Armour 34 Barb. 378 271 
 
 Cronise ». Kellogg 20 111, 11 213 
 
 Crookshank o. Burrell 18 Johns. 58 60 
 
Xxii TABLE OF AMERICAN CASES. 
 
 CASE. BBFERENCB. *PAGB. 
 
 Carrie v. Donald 2 Wash. 58 40 
 
 Curtis*. Brown 5 Cush. 488 54 
 
 D. 
 
 Daoosta 0. Davis 4 Zabr. 319 56 
 
 Daggett B. Brown 38 111.493 269 
 
 Davis D. Arledge 3 Hill, (S. C.) 170 173 
 
 Davis D. Davis. 30 Ga. 296. 308 
 
 Davis D. Carlisle 6 Ala. 607 — 309 
 
 Denny n. Williams 5 Allen, 1 56 
 
 De Rivaflnola «. Corsetti 4 Paige, 264 , 305 
 
 Dillingham B. State 5 Ohio St. 380. 147 
 
 Disborough ®. Neilson 3 Johns. Cas. 81 66 
 
 Diversey v. Johnson Sup. Ut. 111. Oct., 1879 303 
 
 Dublols ®. Earle 7 R. I. 26. 243 
 
 Duke V. Harper 3 Mo. App. 1 178 
 
 Duncans. Pope 47 Ga. 445 85 
 
 E. 
 
 Eastman v. Wright 6 Pick. 316 5 
 
 Ehle V. Judson 34 Wend. 97 73 
 
 Elden v. Gough 5 Gill. 101 50 
 
 Elder v. Allison 45 Ga. 13 151 
 
 Emory B. Mohler 69 111. 221 240 
 
 Evans®. Fisher 5 Gilm. 569 108 
 
 Evans®. Kneeland 9 Ala. 42. 143 
 
 Evarts B. Agnes 4 Wis. 343 40 
 
 F. 
 
 Farrar o. Bridges 5 Humph. 411 16 
 
 Farris®. King 1 Stew. 255 189 
 
 Favor B. Phil brick 7 N. H. 826 , 183 
 
 Farwell ». Matther 10 Allen, 323 49 
 
 Pelton V. Diokerson 10 Mass. 387 73 
 
 Fenly D. Stewart 5 Sanf. 101 48 
 
 Fish V. Cushman 6 Cush. 20 107 
 
 Fish V. Clelland 33 111. 238 148 
 
 Fisher®. Mellea 1..103 Mass. 503 151 
 
 Fisher®. Campbell 9 Porter, (Ala.) 210 334 
 
 Fitch ®. Snedaker 38 N. T. 248 26 
 
TABLE OF AMEEICAN CASES. xxiii 
 
 CASE. KEPEKENCB. *PAGE. 
 
 Fitzgerald v. Peck 4 Litt. 125 122, 148 
 
 Fitzhugh B. Wilcox 13 Barb. 235 114 
 
 Fitzsimmons v. Allen 89 111. 440 57 
 
 Flick i>. Wellerton 20 Wis. 390 202 
 
 Foley «. Cowgill 5 Blackf. 18 40 
 
 Follettj). Rose 3 McLean, 312 65 
 
 Foords 1). McComb 12 Bush. 728 151 
 
 Fosters. Peyser 9 Cush. 343 146 
 
 Fowler B. New York Ins. Co 26 N. Y. 432 167 
 
 Fowler «. Redican 52 111. 465 50 
 
 Franklin D. Ezell 1 Sneed, 497 331 
 
 Freeman v. Boston 5 Met. 56 13 
 
 Frith », Lawrence 1 Paige, 34 23 
 
 Fridley ». Bowen 87 111. 151. 113 
 
 Fusting ■0. Sullivan 41 Ind. 162 243 
 
 G. 
 
 Gags V. Lewis 68 III. 604. 148 
 
 Gangwere's Estate 14 Pa. St. 417 114 
 
 Gibson!). Soper 3 Gray, 279 113 
 
 Gibson v. Partee 2 Dev. & Bat. 530 40 
 
 Gibson v. Colt 7 Johns. 6 N. Y. 390 331 
 
 Goodall V. Thnrman .1 Head. 209 303 
 
 Gordon «. Bulkley 14 Serg. & R. 331 330 
 
 Gordon c. R. R. Co 52 N. H. 596 26 
 
 Gordon v. Barger 4 Heisk. 668 185 
 
 Grand Lodge «. Wad dill 36 Ala. 313 113 
 
 Granger o. Fry 17 Pa. St. 491 67 
 
 Gray v, Wilson 4 Watts, 39 177 
 
 Gray®. Harper 1 Story, 574 237 
 
 Gray v. Brackinridge 3 Pen. & Watts, 75 98 
 
 Graves®. Clark 31 La. Ann. 567 189 
 
 Graves b. Tucker 10 Sm. & M. 9 40 
 
 Green s. Sperry 16 Vt. 390 106 
 
 Griswold v. Waddington 15 Johns. 57 97 
 
 Guthrie 0. Thompson 1 Oregon, 353 358 
 
 H. 
 
 Hagar v. Catlin 1 Weekly Jurist, 607 176 
 
 Hagood ■!). Harley 8 Rich L. 335 40 
 
XXIV 
 
 TABLE OF AMERICAN CASES. 
 
 CASE. KEFBRENCB. *PAGB. 
 
 Hamilton v. Lycoming Ins. Co .5 Pa. St. 339 30 
 
 Hancock «. Yonker 88 111. 308 337, 338 
 
 Hansen B. Erickson 28 111.357 383 
 
 Harlan B. Harlan 30 Pa. St. 303 64 
 
 Harper ®. Little 2 Greenl. 14 338 
 
 Hartley c. Varner 88 111. 561 53 
 
 Haven B. Foster 9 Pick. 113 148 
 
 Ha.yesB. Willis 4 Daly, 259 205 
 
 Hayneys. Coyne. 10 Heisk. 339 178 
 
 Eearshy B. Hicliox 7 Eng. 125 333 
 
 Heaton v. Angler 7 N. H. 397 306 
 
 Herrington v. Skaggs 3 Southern L. J. 291 303 
 
 Hewitt V. Jones 73 111. 218 117 
 
 Hewitt v. "Wilcox 1 Met. 154 98 
 
 Hight B. Ripley 19 Me. 137 60 
 
 Hoadleys. House 33 Vt. 179 386 
 
 Holbrook B.Burt 33 Pick. 546 386 
 
 Holbrook v. Armstrong IPairf. 31 66 
 
 Holmes v. Hale 71 111. 553 118 
 
 Holmes B. Clark 10 Iowa, 433 151 
 
 Homer v. Thwing 3 Pick. 493 106 
 
 Hopkins 0. Towell 5yerg.305 44 
 
 Hopkins B. Lee 6 Wheat. 109.... 308 
 
 Hopper 0. Lisk 1 Ind. 176 151 
 
 Howard v. Hoey 23 Wend. 350 391 
 
 Hubbard B. Martin 8 Yerg. 498 . . .-. 148 
 
 Hubbert ». Borden 6 Wheat. 79 49 
 
 Hunt B. Danforth 3 Curtis, 593 219 
 
 Huntingdon B. Knox 7 Cush. 371 49 
 
 Hunters. Jameson 6 Ired. L. 353 331 
 
 Hypes B. Griffin 89 111. 134 49 
 
 L 
 
 Me V. Stanton ..15 Vt. 685 , 49, 339 
 
 Indianapolis R. R. Co.b. Tyng..63 N. Y.653 151 
 
 J. 
 
 Jackson B. Parkhurst 9 Wend. 309 41 
 
 JanvrinB. Exeter 48 N. H. 483 26 
 
 Jeffrey B. Bigelow 13 Wend. 618 146 
 
TABLE OF AMERICAN CASES. xxv 
 
 CASE. KEPBBENCB. •PAGE. 
 
 Jenkins v. Hooker 19 Barb. 435 176 
 
 Jennings «. Lane 36 Me. 475 77 
 
 Jolinson®. Sellers 33 Ala. 265 80 
 
 Johnson v. Dickson 1 Blackf. 356 189 
 
 Jones «. "Watkins 1 Stew. 81 148 
 
 Jones ©. State Bank of Iowa 34111.313 313 
 
 Judah®. McNama 3 Blackf. 369 98 
 
 Kase V. John 10 Watts. 107 386 
 
 Keener®. Crall 19 111. 189 310 
 
 Kidder o. Kidder 33 Pa. St. 368 77 
 
 Kirkpatrick v. Taylor 43 111. 307 72 
 
 Kitchen V. Schenk 39 N. T. 515 63 
 
 Knox «. White 30 La. Ann. 336 189 
 
 Kreiss®. Seligman 8 Barb. 439 185 
 
 Kyles. Kavanaugh 103 Mass. 356 133 
 
 Lambs. Crofl. 13Met.353 59 
 
 Lane v. Adams 19 111. 169 268 
 
 Lane ®. Shackford 5 N. H. 130 57 
 
 Lawrences. Clark 36 N. Y. 138 173 
 
 Lawrence®. Kidder 10 Barb. 653 180 
 
 Lawrence ®. Dale 3 Johns. 6 N. T. 33 351 
 
 Lawrence B. Fox 30 N. Y. 368 73 
 
 Lawrence®. McCalmont 3 How. 436 63 
 
 Leonard ®. Leonard 14Pick. 380 114 
 
 Leonard ®. Mason 1 Wend. 533 313 
 
 Lerned B.Johns 9 Allen, 419 49 
 
 Lewis®. Eagle Ins. Co 10 Gray, 508 140 
 
 Lewis®. Gray 1 Mass. 397 238 
 
 Lewis ®. Payne 8 Cow. 71 319 
 
 Life & Fire Ins. Co. ®. Mechan- 1 _ „. , „^ ^,- 
 
 . , -. _, }-7 Wend. 81 113 
 
 ics' Ins. Co. ) 
 
 Litchfield ®. Hutchinson 117 Mass. 195 .'. 151 
 
 Livingston ®. Peru Iron Co 3 Paige, 390 136 
 
 Loach ®. Farnum 90111.368 .^. 357 
 
 Lonsdale ®. Brown 4 Wash. 86 90 
 
 Loomis ®. Spencer 8 Paige, 158 113 
 
 Loomis ®. Eagle Ins. Co 6 Gray, 396 173 
 
xxvi TABLE OF AMERICAN CASES. 
 
 CASE. BBPBRBNCB. *PAaE. 
 
 Loring ». Boston 7 Met. 411 - 84 
 
 Lowndes ». Chisholm 3 McCord, Chy. 455 148 
 
 Lowry®. Tew 3 Barb. Chy. 279 57 
 
 Lucas «. Waul 13 Sm. & M. 157 189 
 
 Lyon®. King 11 Met. 411 55 
 
 M. 
 
 Marr®. Johnson 9 Terg. 1 63 
 
 Marsh v. Falker 40 N. Y. 562 151 
 
 Martin «. Black 20 Ala. 309 67 
 
 Mason®. Hall 30 Ala. 599 73 
 
 Masson®. Bond 1 Denio, 69 154 
 
 Maxim ®. Morse 8 Mass. 125 90 
 
 Mayo®. Carrington 19 Gratt. 124 208 
 
 McCrea®. Purmort 16 Wend. 460 41 
 
 McHenry ®. Duffleld 7 Blackf. 41 338 
 
 McKinley ®. Watkins 13 111. 140 68 
 
 McKinney ®. Alvis 14 111. 33. 207 
 
 McKinzie ®. Nevins 23 Me. 138 829 
 
 McLennon ®. Johnson 60 111.306 239 
 
 Meadows ®. Bird 22 Ga. 246 189 
 
 Mecorney®. Stanley 8 Cush. 85 69 
 
 Mechanics'Bank of Alexandria)^ t> „„(, „_ 
 
 0. Seton ..j 
 
 Medlln ®. Piatt Co 8 Mo. 235 319 
 
 Merwin ®. Arbuckle 81 111.501 131, 151 
 
 Messmore ®. New York Shot Co.40 N. Y. 433 303 
 
 Michael®. Bacon 49 Mo. 474 185 
 
 Miller ®. Sims 2 Hill, (S. C.) 479 100 
 
 Miller ». Fletcher 37 Gratt. 403 40 
 
 Mills®. Wyman 3 Pick. 307 73 
 
 Minard®. Mead 7 Wend. 68 49 
 
 Mixer®. Howarth 31 Pick. 205 60 
 
 Molson®. Hawley 1 Blatchf. 400 63 
 
 Mooney ®. Lloyd 5 Serg. & B. 416 98 
 
 Montgomery ®. Lampton 8 Meto. (Ky .) 519 73 
 
 Monroe ®. Perkins 9 Pick. 805 76 
 
 Mordecai ®. Dawkins 9 Rich. (S. C!) L. 262 189 
 
 Morris Canal Co.®. Everett 9 Paige, 168 153 
 
 Morton ®. Sweetzer 13 Allen, 134 808 
 
 Morton ®. Schell 33 Ark. 289 151 
 
 Moss®. Wood R. M. Charlton, (Ga.) 43 44 
 
 Murray®. Lylburn 2 Johns. Chy. 441 309 
 
TABLE OF AMERICAN CASES. xxvii 
 
 CASE. KKFEBENCB. *PAGB. 
 
 Musser«. Ferguson ...55 Pa. St. 475 73 
 
 Mutter «. Eno 14 N. Y. 597 329 
 
 N. 
 
 Kelson®. Cowing 6 Hill. 336 331 
 
 Newcomb v. Clark .1 Denio, 226 49 
 
 Newell ». Newton ....10 Pick. 470 308 
 
 Newman v. Washington Martin & Terg. 79 98 
 
 Nichols V. Johnson 10 Conn. 193 319 
 
 North River Ins. Co. O.Lawrence 3 Wend. 482 113 
 
 Noyeso. Moor 1 Root, 143 57 
 
 O. 
 
 Onv. Lacey 3 Dough 380 113 
 
 Osgood 0. Franklin 3 Johns. Chy. 23 65 
 
 Oxford Iron Co. ». Spradling...4G Ala. 99 185 
 
 Packard v. Richardson 17 Mass. 133 50 
 
 Palmers. Stebbins.. .3 Pick. 188. 43 
 
 Pangborne ». Westlake 36 Iowa, 546 164 
 
 Parsinger v. Thorburn 34 N. Y. 634 ...393, 303 
 
 Perry ». Crammond 1 Wash. 100 163 
 
 Penrose ■». Curran 3 Rawle, 351 106 
 
 People V. Glann 70 111. 233 390 
 
 People®. Supervisors 37 Cal. 655 148 
 
 Peter B. Beverly 10 Pet. 533 263 
 
 Peters®. Balistier.. 3 Pick. 495 314 
 
 Pettigrew®. Chellis 41 N. H. 95 '. 151 
 
 Philips®. Stevens 16 Mass. 338 315 
 
 Philpot®. Gruniger 14 Wall. 570 71 
 
 Pierce®. Fuller 8 Mass. 223 180 
 
 Pinkham®. Geer 3 N. H. 163 148 
 
 Pinkston ®. Huie 9 Ala. 353 301 
 
 Plumleigh ®. Dawson 1 Gilm. 544 301 
 
 Poe ®. Justices Dudley Ga. 349 189 
 
 Porter ®. Hill 4 Greenl. 41 311 
 
 Preston®. Finney 3 Watts. & S. 53 281 
 
 Pritchard ®. Brown 4 N. H. 397 41 
 
XXVlll 
 
 TABLE OF AMBUICA.N CASES. 
 
 CASE. REFERENCE. *PAQB. 
 
 Quegly «. Mase 15 La. Ann. 197. 46 
 
 Quirks. Tliomas 6 Mich. 76 186 
 
 R. 
 
 RabeuOsborn 67in. 108. 5.5 
 
 Rapid, The 8 Cranch, 155 97 
 
 Reae. Durkey 35 111. 503 108 
 
 Rees«). Oveibaugh 6 Cow. 746 319 
 
 Reynolds ®. Nugent 25 lad. S28 75,76 
 
 Rhodes «. Rhodes.. 3 Sanf. Chy. 279 57 
 
 Richardson v. Strong 13 Ired. L. 106 113 
 
 Ricker s. Pairbirnks 40 Me. 43 241 
 
 Riddle «. Varnum 20 Pick. 280 59 
 
 Robb V. Montgomery 20 Johns. 15 281 
 
 Robinson B. Threadgill 13 Ired. L. 39 70 
 
 Robinson D. Green 3 Met. 159 183 
 
 Robinson v. Schly 6 6a. 515 65 
 
 RobyB. Cossett 78 111.638 330 
 
 Rockwood V. Charles 2 Hill, 499 189 
 
 Rocquemore B. Alloway 33 Texas, 461 185 
 
 Roods. Jones 1 Douglas, (Mich.) 188 76 
 
 Rufus «. MoConnell 17 111.213 148 
 
 Russell V. Branham 8 Blackf. 337 148 
 
 S. 
 
 Sargent ». Adams 3 Gray, 73 240 
 
 Sawyer ». Mayhew. 51 Me. 398 167 
 
 Sawyer ®. Ware 36 Ala. 675 59 
 
 Schuohhardt v. Allen .1 Wall. 359... 331 
 
 Soars 11. R. R. Co. 4 Allen, 433 36 
 
 Selden v. Myers 30 How. 506 161 
 
 Selma «. Mullen 46 Ala. 411... 46 
 
 Seymour v. Minturn 17 Johns. 100 78 
 
 ShawD Nudd 8 Pick. 9 330 
 
 Shepherd ®. Rhodes 7 R. L 470 73 
 
 Sherburne v. Shaw 1 N. H. 157 49 
 
 Shotwell V. Murray 1 Johns. Chy. 593 148 
 
 Sims V. McEwen 27 Ala. 184 24 
 
TABLE OF AMERICAN CASES. xxix 
 
 CASE. REFBRENCB. *PAGB. 
 
 Smiths. Tracy 36K.Y, 79 331 
 
 Smith ». Briggs 3 Denio, 73 387 
 
 Smith©. Rogers 17 Johns. 340 253 
 
 Smith «. Sherman 4 Cush. 408 234 
 
 Smith «. Richards 13 Pet. 26 131 
 
 Souverbye v. Arden 1 Johns. Cliy. 340 IR 
 
 Southern Life Ins. & Trust Co. ) _ _, , _ ,,„ 
 
 .. Lanier..... ^ ^^^- ^^^ "^ 
 
 Spaids ®. Barrett 57 111.289. 156 
 
 Spurgeon v. McBlwain 6 Ohio, 444 185 
 
 Stabler s. Cowman. 7 Gill. & J. 384 63 
 
 Staclipole B.Arnold. 11 Mass. 37 230 
 
 Staymaker v. Irwin 4 Whart. 369 15 
 
 Stebbins v. Palmer 1 Picl£. 71 23a 
 
 StoweB. Wyse 7 Conn. 214 41 
 
 Stow J). Bennett 5 Hill, 303 148 
 
 Stow«. Russell 36 111. 18 250 
 
 Suggettc. Cason 26 Mo. 331 57 
 
 Sweeney v. Franklin Ins. Co 30 Pa. St. 337 16T 
 
 T. 
 
 Tallman «. Coffin 4KT. 134 319 
 
 Taylor «. Taylor 8 How. 183 158 
 
 Terrell 0. Bennett 18Ga.404 151 
 
 Tliallheimer 1). Brinkerlioff 3 Cow. 647 178 
 
 Tliomasi). Dickerson 14 Barl). 90 57 
 
 Thompson v. Reynolds 73 111. 11 17S 
 
 Thompson B. Lee .31 Ala. 393 151 
 
 Tliorne «). Torlz 4Cal. 321.. IS* 
 
 Thrall «. Newall 19 Vt. 203 242 
 
 Tone V. Wilson 81 111. 531 151 
 
 Towne ■». Wiley 23 Vt. 354 106 
 
 Townsend ». Cowles 31 Ala. 438 148. 
 
 Trains. Gold 5 Pick. 380 61 
 
 Tracy ■». Talmadge 14 jST.Y. 163 190 
 
 Trcngel v. Miller 37 Ind. 1 151 
 
 Tuck V. Downing 76 111. 71 144 
 
 Turner v. Hnbbell 2 Day, 457 54 
 
 Tupper o. Caldwell 13 Met. 563 104 
 
 Tuttles. Love 7 Johns. 470 12 
 
 Twitchcll V. Mears 6 Rep. 40 73 
 
 Twitchell«. Bridge 43 Vt. 68 151 
 
XXX TABLE OF AMERICAN CASES. 
 
 CASE. KBFEKKNCE. •pAGB. 
 
 Underwood «. Brockman 4 Dana, 309 148 
 
 Ungers. Boas 13 Pa. St. 601 189 
 
 Union Nat. Bank®. Matthews. .98 U. S. 134 113 
 
 Updike ®. Titus 13 N. J. Bq. 131 73 
 
 Updike V. Armstrong 3 Scam. 564 57 
 
 Upton!). Tribilcock 91 U. 8. 45 148 
 
 Urquart ». Brayton 18 Alb. L. Jour. 871 73 
 
 V. 
 
 Vanatta v. McKinley 1 Har. (N. J.) 235 98 
 
 Vassare. Camp IIN.Y. 441 21 
 
 Vasse B. Smith/ 6 Cranch, 236 106 
 
 Violett 9. Powell 10 B. Mon, 347 49 
 
 Vilas B. Downer 21 Vt. 419. 98 
 
 Voorhess. DeMyer 3 Barb. 87 243 
 
 W. 
 
 "Waldo V. Belcher 11 Ired. L. 609 59 
 
 Walker ®. Jeffries 45 Miss. 160 185 
 
 Walker «. Gregory 36 Ala. 180 178 
 
 Ward®. Morrison 25 Vt. 593 208, 309 
 
 Warren v. McNulty 3 Gilm. 355 307 
 
 Waring ». Mason 18 Wend. 435 49, 51 
 
 Watrouss. Chalker 7 Conn. 224 57 
 
 Watson D. McLaren 19 Wend. 537 50 
 
 Watts «. Shepherd 3 Ala. 435 344 
 
 Welborn ». Weaver 17 Ga.367 310 
 
 Welles ®. March 30N.Y. 844. 333 
 
 Wells®. Cook 16 Ohio St. 67 153 
 
 Wentworth v. Blaisdell 17 N. Y. 375 189 
 
 West®. Moore 14 Vt. 447 105 
 
 Western Un. R. R. Co. ■». Smith.7o 111. 496 337 
 
 Western R. R. Co. ■». Babcock...6 Met. 346 133 
 
 Wheaton b. Wheaton ..9 Conn. 96 148 
 
 Wheaton v. Olds 30 Wend. 174 138 
 
 White's Ex. ■». Commonwealth. .39 Pa. St. 167 323 
 
 White V. Miller 33 Vt. 380 41 
 
 White®. Bass 3 Cush. 448 184 
 
TABLE OF AMERICAN CASES. xxxi 
 
 CASE. BEFBTIBNCB. *PAGH. 
 
 Whitmarsh o. Walker 1 Met. 313 55 
 
 Wilcox V. Iowa Wes. Univ. 83 Iowa, 367 151 
 
 Wilkinson v. Scott 17 Mass. 249 41 
 
 Will V. Walsh 6 Watts. 9 106 
 
 Wilson «.Barr 25 Wend. 386 98 
 
 Wittew. Derby Fishing Co 2 Conn. 260 46 
 
 Wood V. Pugh 7 Ohio, Ft. 3, 156 197 
 
 Woodbury «. Fisher 22 Ind. 387 17 
 
 Woodford «. McClenahan 4 Gilm. 85 331 
 
 Worthington «. Hylyer 4 Mass. 205 237 
 
 Wroten«. Armat 8 Va. L. J. 233 113 
 
INDEX OF ENGLISH CASES. 
 
 A. 
 
 CASE. KEFERENCB. *PAGB. 
 
 Adams «. Lindsell 1 B, & Aid. 681 20 
 
 Adamson ■!) Jarvis 4 Bing. 66 336 
 
 Alexanders. Gibson 2 Camp. 555 331?i 
 
 Allen I). Rescous 2 Lev. 174 173 
 
 Andersons.PacificInsuranceCo-L. R. 7 C. P. 65 144 
 
 Archer D. Hudson 7 Boav. 560 158 
 
 Armstj-ong 1). Stokes .L. R. 7 Q. B. 603 387 
 
 Arundel B. Trevilian Rep. in Chancery, 47 179 
 
 A ui. r^ ■ o -D- u (L. R. 9 Exch. 224) ._ _. ... 
 Ashhury Carnage Co. v. Riche-j t tj « tt j ggg f US, 182, 201 
 
 Asiatic Banking Corp. Vspasrte.L. R. 2 Ch. 397 211 
 
 Atherfold ». Beard 2 T. R. 610 189 
 
 Atkins B. Banwell 2 East, 504 93 
 
 T, K (6H. &N. 778) ... 
 
 Atkinson D. Denby j 7 H. & N. 934( 
 
 Atleee. Backhouse 3 M. & W.683 156 
 
 Avery ®. Bowden 5 E. & B. 714 272,273 
 
 Ayerst ». Jenkins L. R. 16 Eq. 275 178 
 
 Aylesford (Earl of) v. Morris ...L. R. 8 Ch. 490 157, 161 
 
 Azemar v. Casella L. R. 3 C. P. 191 & 167. .291, 293 
 
 B. 
 
 Baileys, de Crespigny L. R. 4 Q. B. 180 315 
 
 Bailey ■». Sweeting .9 C. B. N. S. 843 50 
 
 Bannerman «. White 10 C. B. N. S. 844 136, 137 
 
 Baring b. Corrie 2 B. & Aid. 143.... 333 
 
 Barry B. Croskey 2 J. & H. 1 151 
 
 Baxter «. Burfleld .2 Str. 1266 233 
 
 3 (xxxiii) 
 
xxxiv INDEX OF ENGLISH CASES. 
 
 CASE. REFEBBNCE. *PAGB. 
 
 B&jleyv. Homan 3 Bing. N. C. 920 - 307 
 
 Beaucliamp (Earl) v. "Winn L. R. 6 H. L. p. 333... 339 
 
 Beaumont «. Greathead -3 0. & B. 494 J 301 
 
 Beaumont «. Reeve 8 Q. B.483 179,189 
 
 Beckham J). Drake 9 M. & W. 98 337 
 
 Bej,'bie «. Phosphate Sewage Co.L. B. 10 Q. B. 499 173, 190 
 
 (IB. &S. 877) (133,183,139,370 
 Behn «. Bumess -jg g_ ^ g ^^^ ^--j ggg^ ^gg^ ^^^ 
 
 Bettini v. Gye L. R. 1. Q. B. D. 187. ...384, 297 
 
 Beverley^. Lincoln Gas & Coke K ^ ^ j, gg,^ ggg 
 
 Co --) 
 
 Beynone. Cook L. R. 10 Ch. 389 161 
 
 Biikmyr v. Darnell 1 Sm. L. C. 310 -. 53 
 
 Blades 5. Free 9 B. & C. 167 835 
 
 Blair J). Bromley .5 Hare, 559 310 
 
 Blatchford «. Preston ...ST. R. 89 176 
 
 Bloomer ». Bernstein L. R. 9 0. P. 588 283 
 
 Bloxam 8. Sauders 4B. & C. 941 386, 289 
 
 Bolton ». Madden 9 Q. B. 55 64 
 
 Boone D. Eyre 1 H. Bl. 273 ra 390 
 
 Boulton V. Jones 3 H. & N. 564 119 
 
 Bourne ». Mason 1 Ventr. 6 200 
 
 Bowman B. Taylor 3 A. E. 278 40 
 
 Boyd V. Hind 1 H. & N. 988 79 
 
 Boyd ®. Mangles .3 Ex. 395 310 
 
 Boydells. Drummond 11 East. 143 50, 239 
 
 T5 IP .^ T> 1 * ( 8 Ir. C. L. 468 j .q 
 
 Bradford B. Roulston .-< t j „ ,-^ ^ ,enr 88 
 
 I Langdell Contr. 450 J 
 
 Brady B. Todd 9 C. B. N. 8. 593 331 
 
 Brashfords.Buckingham&wife.Cro. Jac. 77 107 
 
 BrayshawB. Eaton 7 Scott, p. 187 105 
 
 Bret B.J. S. and wife 1 Cro. 755 72 
 
 British & American Telegraph K ^ g ^^ ^^g 2^ 
 
 Co. V. Colson j 
 
 Brittain ». Lloyd 14 M. & "W. 763 84 
 
 Brogdeno.MetropolitanRailw'y.L, R. 2 App. Ca. 691 2, 15 
 
 Brown v. Byrne 3 B. & B. 716 238 
 
 Brown v. Duncan 10 B. & C. 43 164 
 
 Bryant v. Flight 5 M. & "W. 114 
 
 Burges «. Wickham 3 B. & S. 669.. 234, 235, 236 
 
 Burgess 11. Eve L. R. 18 Eq. 457 • 144 
 
 Burnard «. Haggis 14 C. B. N. S. 45 106 
 
 Burrell's Case L. R. 1. Ch. D. 553 147 
 
 Butler and Baker's Case Coke, Rep. iii. 26 b 16 
 
 Buxton V. Rust L. R. 7 Exch. 279 49 
 
INDEX OF ENGLISH CASES. xxxv 
 
 C. 
 
 CASE. EEPBKBNCE. *PAaE. 
 
 Cannaii v. Bryce 3 B. & Aid. 179 184, 185 
 
 Card V. Hope. 3 B. & C. 661... 175 
 
 Cartwright v. Cartwright 3 D. M. & G. 983 179 
 
 Chamberlain «. Williamson 3 M. & S. 408 333 
 
 Chrtnter «. Hopkins... 4 M. & W. 399 393, 395 
 
 Charnley s. Winstanley. 5 East, 366 335 
 
 Clay B.Yates. .1 H. & N. 73 173, 186 
 
 Clifford V. Watts L. R. 5 C. P. 577 74, 395, 313 
 
 Clough.. London & N. W. R. K ^^ , j,^ g^ ^g, 
 
 R. Co j 
 
 Coggs «. Bernard 1 Sm. L. C 335 
 
 Coles V. Trecothick 9 Yes 334.. 65, 158 
 
 J 7 E. & B. 301 ) 
 |8E.&B.647r 
 
 Oollen^. Wright "^ « t.' * t,' «. J 395-838 
 
 Collins «.Blautern.. 1 Sm. L. C. 369 43 
 
 Conflans Quarry Co. «. Parker.. L. R. 3 C. P. 1 319 
 
 Cooko. Oxley 3 T. R. 633 18 
 
 Cook B.Wright 1 B. & S. 559 69 
 
 Cooper e. Phibbs L. R. 2 H. L. 170 123, 148 
 
 Cope s. Rowlands 3 M. & W. 149 164 
 
 Cornish «. Stubbs L. R. 5 C. P. 339 319 
 
 Cort V. Ambergate Railway Co..l7 Q. B. 137 270, 374 
 
 Couch ». Goodman 3 Q. B. 597 39 
 
 Couturiers. Hastie 5 H. L. C. 673 131 
 
 Cowan «. Milborn L. R. 3 Exch. 330 186, 187 
 
 Crouch B. Credit Poncier of ^ ^ g ^ gg^ ^^g 
 
 England. j 
 
 Cumbers. Wane 1 Sm. L. C. 351 307 
 
 Cundy «. Lindsay L. R. 3 App. Cas. 465 119 
 
 Curries. Misa L. R. 10 Exch. 163. . 61 
 
 Cutter V. Powell 6T. R. 330 & S. M. L. C. ii. 1. 383 
 
 Cuxon ■». Chadley 3 B. & C. 591 206 
 
 D. 
 
 Dalbys. The Lon. Life Assur.Co.l5 C. B. 365 173 
 
 Daltons. Mid. Conn. Railw'yCo.13 C. B. 478 107 
 
 De Bussche v. Alt L. R. 8 Ch. D. 310 335 
 
 Denton s. Great North. Railway.5 E. & B. 860 28 
 
 Dickenson s. Dodds L. R. 3 Ch. D. 463 18 
 
 " « " 475 33 
 
xxxvi INDEX OF ENGLISH CASES. 
 
 CASE. KEFBRENCB. *PAQB. 
 
 Dickson v. Eeuter's Telegr'h Co.L. R. 3 C. P. D. 1 148 
 
 Dimmock v. Hallett... L. R. 3 Ch. 27 144 
 
 Dixon V. Clarke 5 C. B. 370 264 
 
 Dobell'i). Hutchinson 3 A. & B. 355. 49 
 
 Dobson V. Espie 3 H. & N. 79 248 
 
 Deed. Garnonso. Kniglit 5 B. & C. 671 16 
 
 Donellan v. Read 3 B. & Ad. 899 56 
 
 Drake «. Beckham 11 M. & W. 319 324 
 
 Dresser «. Norwood 14 C. B. N. S. 574 337 
 
 Dunlop V. Higgins 1 H. L. C. 381 21 
 
 Dunford v. Messiler 5 M. & S. 446 197 
 
 Dulton s. Poole 2 Lev. 210 73 
 
 E. 
 
 Ear) ®. Oliver 2 Exch 71 90 
 
 Eastland v. Burchell L. R. 3 Q. B. D. 433 108 
 
 Eastwood V. Kenyon 11 A. & E. 446 78, 92, 94 
 
 Edwards ». Aberayron Ins. Soc.L. R. 1 Q. B. D. 596 177, 280 
 
 Egerton v. Brownlow 4 H. L. C. 1 175 
 
 Eicholz V. Bannister 17 C. B. N. S. 708 395 
 
 Elderton i>. Emmens 4 C. B. 493 87 
 
 Eley «. Positive Life Assur. Co..L. R. 1 Ex. D. 88 (C. A.) 301 
 
 Eliason v. Henshaw 4 Wheaton, 335.... 38 
 
 Ellen V. Topp ..: 6 Exch. 424 299 
 
 England e. Davidson 11 A. & E. 857. 84 
 
 England B. Marsden L. R. 1 C. P. 539 336 
 
 Erskine e. Adeane L. R. 8 Ch. 766 234 
 
 Evans «. Collins 5 Q.B. 804,830 149 
 
 Exall ®. Partridge 8 T. R. 308 836 
 
 F. 
 
 Fairlies. Denton 8 B. & C. 400 206 
 
 Faulkner ®. Lowe 3 Exch. 595 5 
 
 Featherstone «. Hutchinson Cro. Eliz. 199 183 
 
 Felthousei). Bindley 11 C. B.N. S. 869 15 
 
 Ferguson v. Wilson L. R. 3 Ch. 89 Ill 
 
 Pindon v. Parker 11 M. & W. 682. 178 
 
 Fisher®. Bridges ..8 E. & B. 643.. 187 
 
 Fishmonger's Co. «. Robertson. .5 M. &. Gr. 193 46 
 
 Fitch V. Jones 5 E. & B. 346 170, 189 
 
 Fitch V. Sutton 5 East. 3-30 78 
 
 Fleet V. Murton L. R. 5 Q. B. 131 836 
 
INDEX OF ENGLISH CASES. xxxvii 
 
 CASE. BEFEEENCE. *PAGE. 
 
 Fleet !). Perrin L. R. 4 Q. B. 500 233 
 
 Flight B. Bolland 4 Russ. 398 304 
 
 Flight V. Booth 1 Bing. N. 0. 370 141 
 
 Flights. Reed 1 H. & C. 703 91 
 
 Ford®. Beech 11 Q. B. 866. 341 
 
 Foster D. Bates 13M. & W.336 331 
 
 Foster v. Charles 7 Bing. 105 130 
 
 Fosters. Dawber 6 Exch. 839 .77, 249 
 
 Foster ». Jolly. 1 C. M. & R. 808 330 
 
 Foster v. Mackinnoa L. R. 4 C. P. 704 117 
 
 Fosters. Wells 8 M. & "W. 149.. 176 
 
 Fowkes V. Manchester Assur. j 3 ^^ g g^g ^^^ 
 
 Asso. J 
 
 Fowler ». Fowler 4 D. & J. 250... 240 
 
 Freeth®. Burr L. R. 9 C. P. 314 283 
 
 Frost «. Knight L. R. 7 Ex. 114 372 
 
 Or. 
 
 Oa: Iner B. Walsh ..5 E & B. 89 319 
 
 GarnonsDoe d. k. Knight 5 B. & C. 671 16 
 
 Garrard ®. Frankel 30Beav.445 137,340 
 
 GeipelD. Smith L. R. 7 Q. B. 401 355 
 
 Gervas e. Edwards 3 Dr. & War. 80 305 
 
 Gibsons. Carruthers 8 M. & W. 339 316 
 
 Gilbert e.Sykes 16 East. 150 168,175 
 
 Glaholm v. Hayes 3 M. & G. 357 134 
 
 Glazebrooks. Woodrow.. 8 T. R. 366 380 
 
 Godsall®. Baldero 9 East, 72 173 
 
 GoodB. Cheesman 2 B. & Ad. 538. 79 
 
 Goode V. Harrison .5 B. & Aid. 159 100 
 
 Goodman v. Chase 1 B. & Aid. 297 54 
 
 Goman v. Salisbury 1 Vern. 240 258 
 
 Goss V. Lord Nugent 5 B. & Aid. 65 259 
 
 Graham ». Johnson L. R. 8 Eq, 38 210 
 
 Grant v. Johnson Langd. Cases on Cont'ct, 620. 280 
 
 Graves B. Legg 9 Exch. 716 285,298 
 
 Gray u. Malhias 5 Ves. 286. 179 
 
 Gray B. Pearson L. R. 5 C. P. 568 203 
 
 Great North. Rail. Co.s.Witbam.L. 9 C. P. 16 66 
 
 Gregorys. Williams 3 Mer. 583 201 
 
 Grisowoods. Blane 11 C. B. 538 171 
 
 Gurney v. Behrend 3 E. & B. 622 317 
 
 Guthings. Lynn 2 B. & Ad. 232 14 
 
xxxviii INDEX OF ENGLISH CASES. 
 
 CABB. KEPERENCE. *PAGB. 
 
 Hadley B. Baxendale 9 Exch. 354 302 
 
 Haigh V. Brooks 10 A. & B. 309 64, 343 
 
 Halifax «. Barker -3 Dyer, 273 a; Oro. Eliz. 741. 89 
 
 Hall V. Warren 9 Ves. 605: 114 
 
 Hamilton v. Watson -12 CI. & F. 109 143 
 
 Hamlin v. Qreat North. Rail. Co.! H. & N. 408 302 
 
 Hampden v. Walsh L. R. 1 Q. B. D. 189 193 
 
 Hancock «. Lablache L. K. 3 C. P. D. 197 110 
 
 Hansard v. Robinson 7 B. & C. 90 319 
 
 Harrington v. Victoria, etc., Co.L. R. 3 Q. B. D.549 176ra 
 
 Harris' Case L. R. 7 Ch. 587 31 
 
 Harris ®. Nickerson L. R. 8 Q. B. 286 37 
 
 Harris ». Pepperell L. R. 5 Eq. 1 2i0 
 
 Harris «. Rickett 4 H. & N. 1 239 
 
 Hart D.Alexander 3 M. & W. 484. 353 
 
 Hart V. Miles 4 C. B. N. S. 371 70 
 
 Hart V. Mills 15 M. & W. 87 33, 88 
 
 Hartley v. Ponsonby 7 E. & B. 872 76 
 
 Hartley ». Rice 10 East, 33 179 
 
 Harvey®. Gibbons 2 Lev. 161-. 74 
 
 Harvey e. Mount 8 Beav. 439. 159 
 
 Harvey®. Young 1 Yelv. 21 147 
 
 Hawken v. Bourne 8 M. & W. 708 333 
 
 Hayes ffl. Warren 3 Str. 933 333 
 
 Head v. Tattersall L. R. 7 Exch. 7 353, 254, 384 
 
 Henderson v. Stevenson L. R. 3 Sc. App. 470 34 
 
 Hickman ®. Haynes L. R. 10 C. P. 606 351 
 
 Higgen's Case 1 6 Co. Rep. 45 6 318 
 
 Higgins t. Senior 8 M. & W. 834 49, 51, 336 
 
 Hill V. Wilson L. R. 8 Ch. 888 3 
 
 Hills®. Evans 81 L. J. Ch.457 338 
 
 Hills V. Sugbrue 15 M. & W. 353. 313 
 
 Hirschfleld..Lond-n Brighton, ^ ^ ^ ^ ^ ^ ^^ 
 
 & South Coast Railway Co.. j 
 
 Hitchcock®. Coker 6 Ad. &E. 438 180 
 
 Hoadley ®. McLaine 10 Bing. 483 58, 83 
 
 Hochster ®. Delatour 2 E. & B. 678 371 
 
 Hoghton®. Hoghton 15 Beav. 299 157 
 
 Holmes ®. Bell 3 M. & G. 213 818 
 
 Honeyman ®. Marryat 6 H. L. 0. 112 15 
 
 Hopkins v. Logan 5 M. & W. 241 325 
 
 Home ®. Midland Railway Co..L. R. 8 C. P. 131 303 
 
INDEX OF ENGLISH CASES, xxxix 
 
 CASE. KEPEKENCB. *PAaB. 
 
 Horsfall v. Thomas 1 H, & 0. 90 152 
 
 HouseholdFire,etc.,Co.D.Grant.34 Weekly Rep. 858 21?i 
 
 Hudson B. Revett ..5 Bing. 387 40 
 
 Huguenin v. Bazely 14 Ves. 273 159 
 
 Hulle V. Heiglitman 2 East, 145 269 
 
 Humphreys D. Werner ..2 M. & G. 853 23 
 
 Humble e. Hunter 13 Q. B. 317 204, 337 
 
 HuntB. Bate ..3 Dyer, 372a- 86 
 
 Hunt J!. Wimbledon Local Board.L. R. 3 C. P. D. 214 46 
 
 Hunter «. Walters L. R. 7 Oh. 84 117, 118 
 
 Huscombe «. Standing Cro. Jac. 187 155 
 
 Hussey B. Home Payne L. R. 8 Ch. D. 670 15 
 
 Hutton B. Warren 1 M. & W. 466. 238 
 
 Hyde «. Wrench 3 Beav. 336 15 
 
 I. 
 
 Imperial GasCo.o.Lond'nGaaCoilOExch. 38 310 
 
 lonides v. Pacific Insurance Co.L. R. 6 Q. B. 686 125 
 
 lonides v. Pender L. R. 9 Q. B. 537 140 
 
 Ireland v. Livingston ' L. R 5 H. L. 408 333 
 
 Irving a. Veitch 3 M. & W. 106 335 
 
 Jackson v. Colegrave .(16D4) Carthew, p. 338 167 
 
 Jackson D.Union Marine Ins. Co-L. R. 10 C. P. p. 148 294 
 
 Jennings B. Rundall 8 T. R. 335 105 
 
 Jervis B. Berridge -.L. R. 8 Ch. 351 232, 233 
 
 Jewry v. Busk 5 Taunt. 303 
 
 Johnson v. Gallagher -.3 D. F. & J. 494 110 
 
 Johnson 0. Royal Mail Steam )_ t, o <-i t> .lo one 
 
 Packet Co. ( 
 
 Jolly J). Rees 15 C. B. N. S. 628. 334 
 
 Jones V. Ashburnham -4 East, 463 67 
 
 Jones B. Edney 3 Camp. 285 142 
 
 Jones V. Just L. R. 3 Q. B. 197 ...124, 391, 293 
 
 Joslings. Kingsford 13 C. B. N.S. 447 293 
 
 Kaye v. Dutton 7 M. & Gr. 807 86, 197 
 
 Keates v. Lord Cadogan 10 C. B. 591 146 
 
xl INDEX OF ENGLISH CASES. 
 
 CASH. BBFEKENCB. *PAGB. 
 
 Keir e. Leeman 6 Q. B. 321 & 9 Q. B. 395... 177 
 
 Kekewich «. Manning 1 D. M. G. 188 '. 157, 304 
 
 Kelly e. Solari 9 M. & W. 58 138 
 
 Kelner ». Baxter L. R. 3 C. P. 638 334 
 
 Kemblee. Farrin 6 Bing. 147 344,345 
 
 Kempi). Findon .13 M. & W. 433 335 
 
 Kennedy v. Broun 13 C. B. N. S. 677 87,98 
 
 Keppel B. Baily 3 Mylne & Keen, 517 230 
 
 Kibble's Case L. R 10 Ch. 373 103 
 
 King®. Qillett 7 M. &W. 55 248 
 
 Kirkham v. Marter 3 B. & Aid. 613 54 
 
 Laing ®. Fldgeon 6 Taunt. 108 291 
 
 Lampleigh v. Braithwaith....] Jj^^^^J^'^^^^*^ [ 84, 86 
 
 Langridge«. Levy .-&M. &W. 519 151 
 
 Law «. London Indisputable K ^^ ^ ^^^ ^^^ 
 
 Life Policy Co ) 
 
 Leask v. Bcott L. R. 3 Q. B. D. 876 69 
 
 Le Blanche 0. L. & N. W. R. Co . . . L. R. 1 C. P. D. 386, 311 .26, 27, 296 
 
 Lee V. Giiffln 1 B. & S. 373 69 
 
 Lee V. Jones 17 C. B. N. S. 503 143 
 
 Lee V. Muggeridge 5 Taunt. 36 90, 93 
 
 Lennon «. Napper 3 Sch. & L. 684.. 343 
 
 Leroux v. Brown. 13 C. B. 801 56 
 
 Lewis®. Nicliolson 18 Q. B. 503... 837 
 
 Liclibarrow ®. Mason... 3 Sm. L. C. 835 216 
 
 Lindsay Petroleum Co. o.Huid.L. R. 5 P. C. 343. 147 
 
 Littlefield B. Sliee 2 B. & Ad. 811 92 
 
 Liversidge v. Broadbent 4 H. & N. 603 206, 207 
 
 "rS'^^'i'T°7-^°°'^°°^L-R-7H.L. 567 808 
 
 & N. W. Railway Co j 
 
 Loudon Assurance v. Mansel 41 Law Times, 245 143 
 
 Lovelock v. Franklyn 8 Q. B. 371 273, 374 
 
 Lowe V. Pears 4 Burr. 3235 179 
 
 Lumley ». Gye 3 E. & B. 216 198 
 
 Lumley ®. "Wagner 1 D. M. & G. 604 805 
 
 M. 
 
 McAndrew®. Chappie L. R. 1 C. P. 643 294 
 
 M.icdonald ». Longbottom 1 E. & E. 977 835 
 
INDEX OF ENGLISH CASES. xli 
 
 CASK. REFERENCE. *PAGE. 
 
 Mackenzie ». Coulson L. R. 8 Eq. 375. 340 
 
 McKianell e. Robinson 3 M. & W. 435 184 
 
 McManus «.Bark L. R. 5 Ex. 65 307 
 
 Maddick®. Marshall 16 0. B. N- S. 387 — 334 
 
 Mahony v. Kekuli 14 C. B. 398. 339 
 
 Making). Watkinson L. R. 6 Ex. 35... .C... 388 
 
 Mallalieu «. Hodgson 16 Q. B. 689 173 
 
 Mallan D.May _..ll M. & W. 665 43, 180, 341 
 
 Manby 8. Scott 3 Smitb, L. 334 
 
 Mangles «. Dixon ..3 H. L. C. 785 .209, 310 
 
 Marriotts. Hampton. 3 Sm. L. C. 356 337 
 
 Martini). Hewson 10 Excb. 737 l 193 
 
 Matthews ». Baxter ..L. R. 8 Ex. 133 114 
 
 Mattock V. Kinglake 10 A. & E. 50 380, 381 
 
 Mavor®. Pyne .3 Bing. 285 24,369 
 
 Mayor of Kidderminster «. ^ ^ ^ ^^ ^ ^ 
 
 Hardwicke j 
 
 Melhado ®. Porto Alegre Rail. Oo.L. R. 9 C. P. 503 301 
 
 Mertens v. Winnington .1 Esp. 113 197 
 
 Meyer B. Drener 16 C. B. N.S. 646 238 
 
 Minett B. Forester 4 Taunt. 54 335 
 
 MinshuU®. Oakes 3 H. & N. 808 319 
 
 Mody«. Gregson L. R. 4 Ex. 49 393 
 
 Mollett ®. Robinson < r R 7 H L SO'l ^^^' ^^^ 
 
 Molton «. Camroux 3 Exch. 489 &4Exch. 17.118, 119 
 
 Morgans. Birnie ..9 Bing. 673 387 
 
 Mortimore B. Wright 6 M. & W. 483 78 
 
 Morton v. Lamb 7 T. R. 135 380, 289 
 
 Moses V. Maoferlan 2 Burr. 1108, 1110 334, 326 
 
 ^ , (L. R. 7Q. B. 202) 
 Mountstephen B. Lakeman ■< j. t? 7 ji L 17 f 
 
 Moxon B.Payne L. R. 8 Ch. 881 163 
 
 Murray ■». Parker 19 Beav. 305. 340 
 
 N. 
 
 Nash V. Armstrong 10 C. B. N. S. 359 358 
 
 New Brunswick Railway Co. ^ ^^^ g^ gg^ ^^, 
 
 V. Muggeridge j 
 
 New York Bowery Fire Ins. Co. )^.^^^^ ggg ^^ 
 
 ■». New York Fire lus. Co... ) 
 
 Nichols ®. Golds .--10 Exch. 191 391 
 
 Nicholson 0. Bradfleld Union . . L. R. 1 Q. B. 620 45 
 
xlii INDEX OF ENGLISH CASES. 
 
 CASE. KEFBRBNCB. *PAGB. 
 
 Noble V. Ward L. R. 3 Exch. 135-- 259 
 
 Norden Steam Co. v. Dempsey..L. R.. 1 0. P. D. 658 238 
 
 North British Ins. Co. v. Lloyd. 10 Exch. 533 143 
 
 N. W. Rail. Co. ■!). McMichael_-5Ex. 114 100 
 
 Nowlan^ Ablett 3 C. M. & R. 54 256 
 
 Nugent V. Smith L. R. 1 C. P. D. 19, 438. .355, 356 
 
 Nunn V. Fabian L. R. 1 Ch. 35 57 
 
 T. , TT ( L. R. 2 Q. B. 375 1 
 Ogle.. Earl Vane j^ ^ ^ ^ ^ ^^^^ 251 
 
 Oldershaw v. King 2 H. & N. 517 69 
 
 O'Mealy ». Wilson 1 Camp. 483 97 
 
 0'Rorke«. Bolingbroke L. R. 2 App. Ch. 814, 823-157, 161 
 
 Ormrod«. Huth 14M. & W.650 149 
 
 Palmer ®. Temple 9 A. & E. 531 288, 308 
 
 Paradine «. Jane Aleyn, 36 314 
 
 Parker v. Ibbelson 4 C. B. N. S. 347 257 
 
 Pattinson v. Luckley L. R. 10 Ex. 330 319 
 
 Payne v. Haine 16 M. & W.541 236 
 
 Payne®. Maytjr of Brecon 3 H. & N. 579 188 
 
 Paynter v. Williams 1 C, & M. 810 23,94 
 
 Pearce ». Brooks L. R. 1 Exch. 313.. 179, 185 
 
 Peek V. Garney {^'m^&Sl^ [-^^^' ^^^' ^^°' ^°^ 
 
 Peter®. Compton 1 Sm. L. C. 3-35 55 
 
 Phillips V. Foxall .L. R. 7 Q. B. 666 143 
 
 Picard v. Hine L. R. 5 Ch. 277 110 
 
 Pickering®. Ilfracombe Rail w'y.L. R. 3 C. P. ^50 182 
 
 Pigot's Case 11 Co. Rep. 37 181 
 
 Pilkington ®. Scott 15 M. & W. 060... 63 
 
 Pillans®. van Mierop 3 Burr. 1673 & 1663 35, 62 
 
 Pinnel's Case -.5 Co. Rep. 117 77 
 
 Planch^ V. Colburn 8 Bing. 14 & 24... 270, 376 
 
 Polhill «). Walter 3 B. & Ad. 114 130,150 
 
 Potts ®. Bell 8 Tr. 548 173 
 
 Poulton ®. Lattimore 9 B. & 0. 259 293 
 
 Powles ®. Innes 11 M. & W. 10 206 
 
 Price ®. Easton 4 B. & Ad. 433 300 
 
INDEX OF ENGLISH CASES. xliii 
 
 CASE. KEFERENCE. *PAaB. 
 
 Printing Co. v. Sampson L. R. 19 Eq, 463 175 
 
 Prosser«. Edmonds 1 Y. & C. 499 178 
 
 Pulsford V. Ricbards 17 Beav. 95 153 
 
 Pul vertoft V. Pulvertoft 18 Vesey, 84 208 
 
 PustB. Dowie 33 L.J. Q. B. 179 298 
 
 Pyke's Case. L. R. 8 Ch. D. 756 185 
 
 Pym B.Campbell 6 E. &B. 370 & 374.. 331, 333, 333 
 
 R. 
 
 Raffles «. Wiekehaus 3 H. & C. 906 133 
 
 Ramsgate Hotel Co. v. Monteflore.L. R. 1 Exch. 109 23 
 
 Rann D. Hughes .7 T. R. 350 35, 63 
 
 Reader 11. Kingham 13 C. B. N. S. 344 53 
 
 ReeseRiver Mining Co. e.Smith.L. R. 4 H. L. 64 & 79 ...181, 149 
 
 Reg. V. Downes L. R. 1 Q. B. D. 34 73 
 
 Reuss«. Picksley L. R. 1 Excli. 343 48 
 
 Reynell«. Sprye.. 1 D. M. & G. 660 190 
 
 Richards 1). Ricliards 3 B. & Ad. 453 221 
 
 ^tfo. RaS^:::":!!^"! [^ «• ^- «^« ^«« 
 
 Ritchie v. Atkinson.. 10 East, 395 381, 383, 393 
 
 River Steamer Co., /n re L. R. 6 Ch. 828 316 
 
 Roberts «. Hardy 3 M. & S. 533 97 
 
 Robinson «. Davison L. R. 6 Exch. 369 317 
 
 Robinson i>. Harman 1 Ex. 855 301 
 
 Robinson v. Reade ..9 B. & C. 455 264 
 
 Robson & Sharpe v. Drummond.3 B. & Ad. 303 305 
 
 Rogers®. Spence 13 M. &W. 580 333 
 
 Roper ®. Johnson. L. R. 8 C. P. 167 303 
 
 Roscorla «. Thomas 3 Q. B. 234 85 
 
 Rumball v. Metropolitan Bank..L. R. 3 Q. B. D. 194 212 
 
 T> .5 w u 11 (L. R. 3 Exch. 90) ... 
 
 Ryder.. Wombwell j L. R. 4 Exch. 33 f ^^^ 
 
 Sanderson ®. Piper 5 Bing. N. C. 435 -237 
 
 Bangers. Sanger.. L. R. 11 Eq. 470 333 
 
 Sard B.Rhodes 1 M. & W. 153 263 
 
 Sayer B. Wagstaffe 5 Beav. 423... 263,264 
 
 SchmalingB. Tomlinson 6 Taunt. 147 197 
 
 Scotson ». Pegg ..6H. &N. 295 80,81 
 
 Scott «. Avery 5 H. L. C. 811 177 
 
Xliv INDEX OF ENGLISH CASES. 
 
 CASE. KBFEnBNCE. *PA&E. 
 
 Scott «. Littledale - 8 E. & B. 815 136 
 
 Seegers. Duthie 8 C. B. N.S. 45 134 
 
 Semple v. Pink.... 1 Exch. 74 69 
 
 Shadwell «. Sh:idwell 9 C. B. N. S. 159 80 
 
 Simpsons. Crippin L. R. 8 Q. B. 14 283 
 
 Simpson v. L. & N. W. R. Co...L. R. 1 Q. B. D. 274 303 
 
 Skeet«. Lindsay .L. R. 2 Ex. D. 817 311 
 
 Slads's Case 4 Co. Rep. 93 323 
 
 Slater D. Jones L. R. 8 Ex. 193 79 
 
 SlimD.Croucher.. 1 D. P. & J. pp. 528, 534... 153 
 
 Smith «. Hughes L. R. 6 Q.B. 60.5, 607.130, 125, 153 
 
 Smith «. Kay 7 H. L. C. 750, 779 159, 160 
 
 Smith ». Mawhood 14 M. & W. 468 164 
 
 Smith D. Wilson 3 B. & Ad. 728 238 
 
 Snook i). Watts 11 Beav. 107 114 
 
 South of Ireland Colliery Co. v. 
 
 :(- 
 
 T^ , ,, r-'-R.SC. P. 469.... 
 
 Waddle . ' 
 
 Southwell v. Bowditch L. R. 1 C. P. D. 374 336 
 
 Spencer's Case 1 Sm. L. C. 1. 73, 74 218 
 
 Sprye ». Porter 7E & B. 81 178 
 
 Stanley «. Jones 7 Bing. 369 178 
 
 Startup n. Macdonald 6 M. & G. 593 264 
 
 Stavers b. Curling 3 Bing. N. C. 355 296 
 
 Stewart «. Eddowes L. R. 9 C. P. 314. 48 
 
 Stilk V. Meyrick ...3 Comp. 317 76 
 
 Stockport Waterw'ksCo.«.Potter.3 H. & C. BOO 320 
 
 Stocks®. Dobson 4 D. M. & G. 15 & 17 209 
 
 Street v. Blay 3 B. & Ad. 456 295 
 
 Strickland v. Turner 7 Exch. 317 131, 812 
 
 Tarrahochia ». Hickie 1 H. & N. 183 134 
 
 Taylors. Best 14 0. B. 487... 97 
 
 Taylors. Bowers L. R. 1 Q. B. D. 300 191 
 
 Taylors. Brewer 1 M. & S. 290 14 
 
 Taylor ». Caldwell .8 B. & S. 836 316 
 
 Taylors. Laird 35 L. J. Ex. 839 16,34,83 
 
 Taylors.Merohant'sFireIns.Co.9 Howard, 390 20 
 
 Thomas s. Cadwallader Will es 496 279 
 
 Thomas s. Hayward L. R. 4. Exch. 811 219 
 
 Thomas ®. Thomas 3 Q. B. 851 71, 73 
 
 Thompson s. Davenport 2 Smith, L. C. 879 837 
 
 Thornett s. Haines 15 M. & W. 367 27 
 
INDEX OF ENGLISH CASES. xlv 
 
 CASE. EEFERBNCB. *PAGE. 
 
 ThornWll?). Neats 8 0. B. N. S. 831 351 
 
 Thornton «. Kempster 6 Taunt. 786 123 
 
 Thoroughgood's Case 3 Co. Kep. 9 117 
 
 Thorpe «. Thorpe 13 Mod. Rep. 455 378 
 
 Touche .. Metrop. Warehot.s-K ^ g ^^ ^^^ 
 
 ingCo j ' 
 
 Townson v. Tickell 3 B. & A. 37 13 
 
 Trueman «. Loder 11 A. & E. 589 49, 336 
 
 Truman v. Fenton Cowp.544 90 
 
 Tulk«.Moxhay 3 Fh. 774 331 
 
 Turner®. Owen 8 F. & F. 177 76 
 
 lVeddle«. Atkinson 1 B. & S. 898 73,300, 301 
 
 Varney v. Hickman 5 C. B. 271. 191 
 
 Venezuela Railway Co. ■B.Kisch-L. R. 2H. L. p. 113 143 
 
 W. 
 
 "Wade «. Simeon .3 C. B. 548 68,76 
 
 Wain D. Warlters 5 East, 10 50, 64 
 
 Wake V. Harrop 6 H. & N. 768, 775 ..327, 238, 335 
 
 Ward B.Byrne 5 M. & W.561 180 
 
 Ward?). Hobbs., L. R. 3 Q B. D. 150 146 
 
 Ware«. Chappell Style, 186 378,379 
 
 Warlow «. Harrison 1 E. & E. 395 27 
 
 Waters D. Tompkins 3 C. M. & R 811 
 
 Watson v. Swann 11 C. B.,N. S. 769 331 
 
 Watson v. Turner Buller, Nisi Prius, 147 93 
 
 Waugh V. Morris L. R. 8 Q. B. 202 183 
 
 Webster B. Cecil ..80Beav. 63 123, 128, 339 
 
 WeekB. Tibold Roll. Abr. p. 6.. 14 
 
 Weir B.Bell L. R. 3 Ex. D. 343 149 
 
 WellsB.The Mayor of Kingston- 1 j^ R 10 C P 403 45 
 
 upon-HuU ) 
 
 Western Bank of Scotland b.) ^ ^ ^ ^^^^^ ^^^^ __ ^g^ 
 
 Addie ) 
 
 Wheelton b. Hardisty 8 E. & B. 233, 399 141 
 
 White B. Bluett 33 L, J. Exch. 36 75 
 
 Whittaker, ex parte L. R. 10 Ch. 446. 148 
 
 Wigglesworth b. Dallison 1 Sm. L. C. 598 237 
 
 Wilkinson B. Johnson 8 B. & C. 438 819 
 
 Wilkinson®. Oliveira 1 Bing. N. C. 490 87 
 
xlvi ABBREVIATIONS USED. 
 
 CASE. KEFEBBNCE. *PAGB. 
 
 Williams v. Bayley L. R. 1 H. L. 230 176 
 
 Williams v. Carwardine 4 B, & Ad. 621 26 
 
 Williams B. Jones 13M.& W 638 38,325 
 
 Williams v. Lake 2 E.& E. 849 49 
 
 Williams ». Moor 11 M. & W. 268 90, 99 
 
 Williams*. Sorrell 4 Vesey, 889 268 
 
 Williams v. Wheeler 8 C. B. N. S. 316 260 
 
 Wilson 1). Finch-Hatton L. B. 2 Ex. D. 386 147 
 
 Wilson D. Tumman 6 M. & G. 236 880 
 
 Wing «. Mill 2 B. & A. 105 93 
 
 Withers v. Reynolds 2 B. & Ad. 882 283 
 
 Wolverhampton Railway Co. ».) - t, ^„-ry ^ ,„« 
 
 London & N. W. Rail Co... f ^- ^- ^^ ^"l- ^* P" ^^ ^^^ 
 
 Wood®. Abrey... 8 Haddock, 423 158 
 
 Woolfe V. Home L. R. 2 Q. B. D. 355 333 
 
 X. 
 Xenos V. Wickham L. R. 2 H. L. 296 12, 16, 39 
 
 T. 
 Young V. Cole 3 Bing. N. 0. 724 293 
 
 SOME ABBEEVIATIONS USED IN REFERENCE. 
 
 REPORTS.' 
 
 A. &E Adolphus and Ellis Q. B. 1834-1841 
 
 B. & Ad Barnwall and Adolphus K. B. 1880-1834 
 
 ' Reference to the Law Journal reports have not been given 
 throughout the ensuing pages because the system of marginal 
 references Imposed certain limits as to space. The reports cited 
 are accessible to any student at Oxford, and it is hoped that the 
 information given as to the Court in which the case was decided, 
 and the date of the report to which reference is made, will enable 
 those who can only refer to the Law Journal to discover the cases 
 with little difficulty. 
 
ABBREVIA.TIONS USED. xlvii 
 
 B. & Aid Barnwall and Alderson. K. B. 1817-1823 
 
 B. & C Barnwall and Creswell K. B. 1822-1830 
 
 B. &S Best and Smith Q. B. 1851-1865 
 
 Beav Beavan Rolls Court, 1838-1866 
 
 ^I'^S------ Bingham ) 0. P. 1824-1840 
 
 Bing. N. Bingham'sNew Cases j 
 
 Burr.. Burrows K. B. 1756-1773 
 
 Camp Campbell, K. B. & C. P. nisi prius, 1807-1818 
 
 C. B. Common Bench [^ ^ 1845-1865 
 
 C. B. N. S Common Bench, New Series j 
 
 CI. & F ..Clark and Finelly. House of Lords, 1831-1846 
 
 C. & M .Crompton and Meeson !^^ 1834-1836 
 
 C. M.&R Crompton, Meeson and Roscoe ) 
 
 Co. Rep Coke's Reports Eliz. and James 
 
 Cowp Cowper K. B. 1774^1778 
 
 Cro. Ellz. orl Cro..Croke, of the reign of Elizabeth. 
 Cro. Jac. or 3 Cro.. " " James. 
 
 D. & J .De Gex and Jones Ch. App. 1857-1859 
 
 D. F. & J De Gex, Fisher, and Jones " 1859-1863 
 
 D. M. &G-. DeGex,Macnaghten and Gordon " 1851-1857 
 
 Dr. & Sm Drewry and Smale.V.C.Kindersley, 1859-1866 
 
 Dr. «& War Drury and Warren Chancery, 1841-1843 
 
 E. & B Ellis and Blackburn Q. B. 1853-1858 
 
 E. & E ...Ellis and Ellis Q. B. 1859-1861 
 
 Exch Exchequer 1847-1856 
 
 P. & F \^°^'^^. p°f J'°^''°'' ^^''' "' }- - 1856-1867 
 
 H. Bl Henry Blackstone. C. P. 1776-1788 
 
 H. & C Hurlstone and Coltman Ex. 1862-1865 
 
 H. & N Hurlstone and Norman Ex. 1856-1863' 
 
 H. L. C House of Lords' Cases 1846-1866 
 
 Ir. C. L. Irish Common Law Reports. 
 
 J. & H (Johnson and Hemming V. C.) ___ ^^^^_^^^^ 
 
 ( Page Wood j 
 
 K. & J Kay and Johnson V. C. Page Wood, 1854-1856 
 
 L. J. Exch Law Journal, Exchequer J 
 
 L. J. Q. B " " Queen's Bench |- ---1838- 
 L. J. Ch " " Chancery ) 
 
 L. B. Q. B Law Reports, Queen's Bench 
 
 L. R. C. P " " Common Pleas 
 
 L. R. Ex " " Exchequer 
 
 L. R. Eq. " " Equity 
 
 L. R. Ch " " Chancery Appeals 
 
 L. R. H. L " " English & Irish Appeals 
 
 L. R. Sc. App " " Scotch Appeals 
 
 L. R. Q. B. D •' " Queen's Bench Division 
 
 1865- 
 
xlviii TEXT BOOKS, 
 
 L. R. C. P. D Law Reports, CommonPleasDivisi'n ' 
 
 L. R. Ex. D.. " " Exchequer DivisioQ 
 
 L. R. Ch. D " " Chancery Division 1-1865- 
 
 L. B. App. Ca " " Appeal Cases 
 
 L. R. P. C " " Privy Council Cases 
 
 Lev Levinz K. B. & C. P. 1660-1696 
 
 Mad -Maddock .Vice Chancellor's Court, 1817-1829 
 
 M. &G Manning and Granger C. P. 1840-1845 
 
 M. & S Mauleand Selwyn K. B. 1813-1817 
 
 M. & W Meeson and Welsby Ex. 1836-1847 
 
 Mer Merivale Chancery, 1813-1817 
 
 Mod. Rep Modern Reports 
 
 Common Law and Chancery, 1660-1702 
 
 M. & K Mylne and Keen Chancery, 1833-1837 
 
 Ph Phillips.. " 1841-1849 
 
 Q.B Queen's Bench 1841-1852 
 
 Rep. in Ch Reports in Chancery 1GS5-1688 
 
 Rolle Abr Rolle's Abridgement. 
 
 Russ Russell Chancery, 1826-1839 
 
 Sch. & L Schoales and Lefroy. Irish Chancery, 1802-1806 
 
 Sm. L.'C Smith's Leading Cases. 
 
 Str Strange ..1737-1748 
 
 T. R r'^.^l'^'f V' °r^°'"n.K. B. 1785-1796 
 
 j and East's Reports j 
 
 Ventr .Ventris K. B. 1660-1685 
 
 Vern Vernon Chancery, 1680-1718 
 
 T. & C Young&CollyerV.C. Knight-Bruce, 1834-1843 
 
 TelT. Telverton .K. B. 1601-1613 
 
 TEXT-BOOKS. 
 
 _ JSavigny, System des heutigen Romischen 
 
 ^ I Rechts. 
 
 Sav. Obi ..Savigny Obligationenrecht. 
 
 j Pollock on the Principles of the English Law 
 
 I of Contract. Second edition, 1878. 
 
 Benjamin on Sale. .Second edition, 1878. 
 
 ^ , ( Leake's Elementary Digest of the Law of 
 
 Leake J. ,, , . ,„,„ •' " a 
 
 I Contract. 1878. 
 
 ., „ , ( Selection of Cases on the Law of Contract, by 
 
 ^^°S^^" 1 C. 0. Langdell. 
 
PART I. 
 
 INTEODUCTION. 
 
 THE PLACE OP CONTRACT IN JURISPRUDENCE. 
 
 In commencing an inquiry into the principles of Outline of 
 the law, of Contract it i^ well to consider what are the ^'^^J®''*' 
 main objects of the inquiry and in what order they 
 arise for discussion. 
 
 It would seem that the first thing to be considered Nature of 
 is the relation of contract to other legal conceptions ; ^°'^ 
 if this can be ascertained, we get some definite notion 
 of the nature of the subject of our inquiries. 
 
 Having ascertained what a contract is,- we next ask Its forma, 
 how it is made; in other wor(Js, what are the various ^°'^ 
 elements necessary to the Formation of a valid con- 
 tract? 
 
 The next question should be, Whom does a con- itsoperation. 
 tract, when made, affect; or what is the Operation of 
 contracti 
 
 After this we shall consider the Interpretation of Its interpre- 
 contract, or the mode in which the terms of a contract ^^^°'^- 
 are dealt with when they come before the Courts for 
 consideration. 
 
 It will then remain to deal with the Discharge of Itsdischarge. 
 contract, the various processes by which the con- 
 tractual tie is loosed and the parties restored to their 
 fortner position as regards their legal relations to one 
 another. 
 
 We wiU begin then by considering the nature of 
 Contract. 
 1 
 
2 INTRODUCTION. Part I. 
 
 Contract is "V^Te may regard Contract as a combination of the 
 
 springmV'*'^ two ideas of Agreement and Obligation. It is that 
 
 from agree- form of Agreement which directly contemplates and 
 
 results in an Obligation. We should therefore 
 
 *2 try to get at the meaning of Agreement and 
 
 Obligation ; and Savigny's analysis of these two 
 
 legal conceptions may with advantage be considered 
 
 here with reference to -the rules of English Law. 
 
 § 1. Agreement. 
 
 Nature of 1. Agreement requires for its creation at least two 
 
 Sav!^^stem P^'i'ties. There may be more than two, but inasmuch 
 s. 140 4 as agreement is necessarily the outcome of consenting 
 minds, the idea of plurality is, essential to it. 
 
 2. The parties must have a distinct intention, and 
 that intention must be common to both. Where there 
 is doubt, or difference, there cannot be agreement. 
 Such communications as these will illustrate the pro- 
 position : 
 
 Doubt. "Will you buy my horse if I am in- 
 clined to sell it?" 
 " Very possibly." 
 Difference. " Will you buy my horse for £50?" 
 " I will give you £20 for the horse." 
 
 3. There must be a communication by the parties 
 See dicta of to one another of their common intention. A secret . 
 burn ll^^'s ^*'°®P^^'^*^® ^^ ^ proposal cannot constitute an agree- 
 App.'ca.691."ment. Por instance, A writes to X proposing to buy 
 
 ' In the case of Brogden v. Metropolitan Railway Qompcmy, in 
 the House of Lords. The case is not reported in the Courts ' 
 below, but it appears, from the report referred to, that Lord ; 
 Coi/HRIDGB, C. J., and Bbett, J., had, in giving judgment in the 
 Common Pleas, used language which might suggest that a mere 
 mental consent uncommunicated to the other party might create 
 a binding agreement. Lords Sblboenb and BjiACKBURN express 
 their dissent from such a proposition, the latter very fully and 
 decidedly. 
 2 
 
§ 1. PLACE OF CONTRACT IN JURISPRUDENCE. 3 
 
 X's horse for £50. X makes up his mind to accept, Borland v. 
 but never tells A of his intention. He cannot com- Grant (Pa.) 
 plain if A buys a horse elsewhere. Cases, 394 
 
 4. The intention of the parties must refer to legal 
 relations. The assumption of legal rights and duties 
 must be the object of agreement, as distinguished 
 from a dinner engagement or a promise to take a 
 walk. For the purposes of English law we may *3 
 take it, as a test of this reference to legal rela- 
 tions, that the intention of the parties must have to 
 do with " something which is of some value in the 
 eyes of the law," something which can be assessed at 
 a money value. 
 
 5. The consequences of Agreement must affect the 
 parties themselves. Otherwisp the verdict of a jury 
 or the decision of a cou'rt sitting m l)ano would answer 
 the foregoing requisites of agreement. 
 
 Agreement then is the expression by two or more ■ 
 persons of a common intention to affect the legal 
 relations of those persons. 
 
 But this would clearly include much more than Agreement 
 Contract. Under the definition of Agreement at^^^^^g^^ 
 which we have arrived would fall — contract 
 
 (1) Agreements which pass property from one of 
 two parties to another simultaneously with the expres- 
 sion of their common consent. Such are conveyances As to gifts, 
 and gifts, where the agreement of the parties operates ^^i^^ £ R 
 at once as a transfer of rights in rem, and leaves no 8 Ch. 888. 
 obligation subsisting between them. 
 
 (2) Agreements which effect a change of status 
 immediately upon the expression of the consent of 
 the parties, such as Marriage, which, when consent is 
 expressed before a competent authority, alters at once 
 the legal relations of the parties in many ways. 
 
 (3) Agreements which, though intended to affect 
 legal relations, " are nevertheless not enforceable at 
 
 3 
 
INTRODUOTIOlSr. 
 
 Part I. 
 
 A promise 
 
 law. Such would be a gratuitous promise to transfer 
 property. 
 
 It would seem then that Agreements the effect of 
 which is immediate in creating rights in rem, or in 
 effecting a change of status, are not such as we ordi- 
 narily term Contracts. Nor, again, are Agreements 
 to be called Contracts which, though intended to affect 
 legal relations, fail to do so, because they do not fulfill 
 some requirements of the positive law of the country 
 
 in which they are made. 
 *4 Agreement being a term of wider meaning 
 
 than Contract, we have to ascertain the charac- 
 teristic of Contract as distinguished from other forms 
 of Agreement. 
 
 "We are always in the habit of considering that an 
 
 feauireln^a essential feature of a contract is a promise by one 
 
 contract. 
 
 Jurispru- 
 dence, 939. 
 
 party to another, or by two parties to one another, to 
 do or to forbear from doing some specified acts. Aus- 
 tin in fact speaks of a contract as a promise, meaning 
 thereby an accepted promise, as distinguished from 
 that which he calls a pollicitation, an u^aifcepted 
 promise, or offer. 
 
 A promise which a man is legally bound to perform 
 creates an obligation or right in personam against 
 him in favor of the party to whom the promise is 
 made. It follows, therefore, that we should 'consider 
 the nature of Obligation and try to distinguish the 
 contractual from other forms of Obligation. 
 
 § 2. Obligation. 
 
 Obligation is a power of coiilrol, exercisable by one 
 
 person over another, with refereuce to future and 
 
 Sav. Obi. oh. specified acts or forbearances. The characteristics of 
 
 ' ■ ■ Obligation would seem to be these: 
 
 1. Two par- !• There must be two persons, or groups of persons, 
 
 ties, one or one or both of whom is invested with a controlling 
 both invested . 
 
 Kature of 
 obligation. 
 
§ 3. PLACE OP CONTRACT IN JURISPRUDENCE. 5 
 
 power which he is capable of exercising over the acts with control 
 of. the other, while that other so far suffers a diminu- °f ^t'ji^°^^°^_ 
 tion of his ordinary freedom of action. These persons 
 or groups are thus bound to one another by this pecu- 
 liar and special relation ; they are connected by what 
 the Koman lawyers called vinculum juris, a legal tie. 
 
 It is obvious that such a relation necessitates two 
 parties; a man cannot be under an obligation to him- 
 self, nor even to himself in conjunction with others. 
 "Where a man borrowed money from a fund in which 
 he and others were jointly interested, and cov- 
 enanted to repay the money to the joint account, *5 
 it was held that he could not be sued upon his Faulkner v. 
 
 covenant. "The covenant, to my mind, is senseless," 595 ;EaBtman 
 said Pollock, C. B. "I do not know what is meant '^. "fright, 6 
 in point of law by a man paying himself." (a) 
 
 2. The second feature of an Obligation is that it 3. The con- 
 relates to certain definite acts. The freedom of the ^'g°^^?/g**^^g^(^'' 
 person bound is not generally curtailed, but is limited 
 in some special matters and with reference to some 
 particular act, or series, or class of acts. To use 
 Savigny's illustration, Obligation stands in a relation 
 to individual freedom similar to that in which ser- 
 vitude stands to dominium or the indefinite rights of 
 ownership. For instance, I am owner of a field; my ^ 
 proprietary rights are general and indefinite; my 
 neighbor has a right of way over my field ; my rights 
 are to that extent curtailed by his, but his rights are 
 very definite and special. So with Obligation. My 
 individual freedom is generally unlimited and inde- 
 finite. As with my field so with myself: I may do 
 what I like with it so long as I do not infringe the 
 rights of others. But if I enter into a contract to do 
 a work for A by a certain time and for a certain 
 reward, my general freedom of action is abridged by 
 
 {a) (The remedy in this case would be by bill in chancery.) 
 
 K 
 
6 INTRODUCTION. Part I. 
 
 the special right of A to the performance by me of 
 the stipulated work; and A again is similarly obliged 
 to receive the work, and to pay the reward, 
 8. And these 3. The thing to be done must be such as possesses, 
 duofwe tea °^ ^^ reducible to, a pecuniary value. This is needed 
 pecuniary in order to distinguish legal from moral and social 
 relations. If a man saves me from drowning I am 
 under a moral obligation to him, but neither my life 
 nor my gratitude can be estimated at a money value. 
 If two friends agree to pursue certain studies together, 
 it is again impossible to estimate in money the advan- 
 tage which they may derive from their mutual employ- 
 ment, or the disappointment which one may experience 
 if the other should break his promise. ' 
 
 These then are the principal features of Obli- 
 
 *6 gation. It gives to one man a control over the^ 
 
 actions of another, definite in character, and 
 
 capable of being reduced to a pecuniary value. 
 
 Distinguish But before discussing the various kinds of Obliga- 
 
 fr^o senses of ^Jqjj j^ jg y^gH ^ ^Q^g |.]jg double meaning in which 
 
 the term is used by Austin and Bentham, and the 
 desirability of keeping clearly before the mind the 
 sense in which it is most convenient that it should be 
 employed for our present purposes. 
 
 g.) General Obligation is indiscriminately used (1) as meaning 
 f^%' • ^°y ^^^ imposed by law, (2) as meaning that special 
 tie. Eight and Duty which create a vinculum juris 
 
 between two persons or groups of persons. 
 
 It is in the second sense only that the word should 
 be employed. In its first sense it merely means the 
 general duty which the law imposes, to respect such 
 rights as the law sanctions. This duty is not an 
 obligation, for no two definite persons pr groups are 
 bound together by it. I have a right to my good 
 name, a right in rem, against all persons subject to 
 the laws which sanction my right. But I am tiot 
 thereby bound in any special manner to the indi- 
 6 
 
§ 3. PLACE OF CONTRACT IN JURISPRUDENCE. 7 
 
 viduals constituting the political society in whicli I 
 live. I cannot be bound to a whole community. If 
 X libels me, my right is broken by a definite indi- 
 vidual; an obligation at once springs up and binds us 
 to one another; a vinculum juris encircles us, and is 
 not loosed till ray injured right is made good. It will 
 very much assist the consideration of Contract if we 
 keep always before us this conception of a legal tie 
 binding the parties to certain definite acts, and binding 
 them, once it is truly formed, until the obligation is 
 discharged. 
 
 Having thus obtained a general idea of Obligation, Kinds of 
 we may try to distinguish the various modes in which obligation. 
 Obligation originates. 
 
 1. Obligation may originate in Agreement. Here i. ex oon- 
 we find that form of agreement which constitutes tractu. 
 
 a contract; a voluntary consent to the creation *7 
 of an Obligation by the parties who are to be 
 bound. The agreement, being such as we have de- 
 scribed it, has for its object the creation of an Obliga- 
 tion, a legal tie by which the parties to the agreement 
 are bound to one another in respect of some future 
 acts or forbearances. 
 
 2. Obligation may arise frbm Delict. This occurs 2. Ex delicto, 
 where a right has been violated and the wrong-doer is 
 
 bound to the injured person to make good the con- 
 sequences of his breach of Duty. Such an obligation 
 is not created by the free will of the parties, but 
 springs up immediately upon the occurrence of the 
 wrongful act or omission. 
 
 3. Obligation may ari^e from Quasi Contract, a 3 Quasi 
 convenient term for a multifarious class of legal rela- contractual, 
 tions possessing this common feature, that one of two 
 
 parties has obtained some pecuniary advantage, to 
 which he is not entitled, at the expense of the other. — 
 The process by which this advantage has been gained 
 is, roughly speaking, that A lias made a payment 
 7 
 
8 INTRODUCTION. Part I. 
 
 whicli X onglit to have made, or that X has received 
 money which A ought to have received. The modes 
 in which this relation arises in English law will be 
 dealt with briefly at a later stage. It is enough to 
 note here that the law imposes upon the parties the 
 contractual relation, assuming a binding promise by 
 X to make good to A the advantage which he has 
 gained at A's expense. ' 
 
 4. On breach 4- Again, Obligation may arise from a breach of 
 of contract Contract. While A is under promise to X, X has a 
 
 right against A to the performance of his promise 
 when performance becomes due, and to the mainte- 
 nance up to that time of the contractual relation. 
 But if A breaks his promise, the right of X to the 
 performance has been violated, the contract is dis- 
 charged, and a new obligation springs up, a right of 
 Action, exactly similar in kind to that which arises 
 upon a delict or a breach of a Duty. 
 
 5. Judgment. 5. The judgment of a Court of competent 
 
 *8 jurisdiction, ordering something to be done or 
 forborne by one of two parties towards the other, 
 is also a source of Obligation. It is an Obligation of 
 this character which is unfortunately styled a "Con- 
 tract of Eecord" in English law. Unfortunately, 
 because the Obligation does not spring directly from 
 Agreement, but is imposed on the parties ab extra. 
 
 6. Miscella- 6. Lastly, there is a class of Obligation which it is 
 neous. sometimes hard to distinguish from Contract. A 
 
 trustee and his cestui que trust, a husband and wife, 
 an executor and legatee, have rights one against the 
 other which are, strictly speaking, obligations or jura 
 in personam. The real distinction between these 
 cases and the contractual obligation is twofold. In 
 the case of the trustee and the executor, the accept- 
 ance of the obligation, though voluntary on the part 
 of him on whom the bulk of its duties fall, need not, 
 or cannot, be the result of an agreement between the 
 8 
 
§ 3. PLACE OF CONTRACT IN JURISPRUDENCE. 9 
 
 parties bound. Even where the obligation springs 
 from Agreement, its creation is not the direct object 
 of the transaction. 
 
 The object of the creation of a trust is to transfer 
 rights in rem as well as to create rights in personam. 
 The object of marriage is to effect a change of status. 
 The object of becoming an executor or administrator 
 is to acquire in great measure the legal existence of 
 the deceased, and not merely obligations towards 
 legatees. Obligations of this kind are merely inci- 
 dental to a creation or transfer of a group of rights 
 and duties. The creation of an obligation is the one 
 object which the parties have in view when they enter 
 into that form of Agreement which is called Contract. 
 
 We may now attempt to define Contract, or the Attempted 
 result of this concurrence of Agreement and Obliga- definition of 
 tion. 
 
 Contract is an Agreement enforceable at law, made 
 between two or more persons, by which rights are 
 acquired by one or both to acts or forbearances on the 
 part of the other. 
 
 And it may be as well to add that there are agree- 
 ments, such as marriage, the creation of a trust, 
 a conveyance of land with covenants annexed, a *9 
 sale of a chattel with a warranty, in which con- 
 tractual obligations arise incidentally to the main 
 purposes of the transaction. Where the contractual 
 obligation can be easily severed from the bulk of the 
 rights and duties created by the Agreement it is pos- 
 sible to regard it as a part of our subject: the warranty 
 or the covenants may be so dealt with. But in the 
 other cases the obligation is so involved in the mass 
 of rights and duties created, and so entirely incidental 
 to the rest of the transaction, that it is better to 
 exclude it from the present discussion. 
 9 
 
10 
 
 FORMATION OP CONTRACT. 
 
 Part II. 
 
 *10 
 
 PART II. 
 
 THE FORMATION OP CONTRACT. 
 
 Elements 
 necessary to 
 a valid con- 
 tract. 
 
 Results of 
 their ab- 
 sence. 
 
 Hating ascertained the particular features of con- 
 tract as a juristic conception, the next step is to ascer- 
 tain how contracts are made. A part of the definition 
 of contract is that it is an agreement enforceable at 
 law; it follows, therefore, that we must try to analyze 
 the elements of a contract such as the common law will 
 hold to be binding between the parties to it. 
 
 These elements appear to consist: 
 
 1. In a distinct communication by the parties to 
 one another of their in*-3ntion; in other words, in 
 Proposal and Acceptance. 
 
 2. In the possession of one or other of those marks 
 which the law requires in order that an agreement 
 may aflFect the legal relations of the parties. These 
 marks are Form and Consideration. 
 
 3. In the Capacity of the parties to make a valid 
 contract. 
 
 4. In the Genuineness of the consent expressed iii 
 Proposal and Acceptance. 
 
 5. In the Legality of the objects which the contract 
 proposes to effect. 
 
 Where all these elements co-exist, a valid Contraet,' 
 is the result: where any one of them is absent, the 
 agreement is in some cases merely unenforceable, in 
 some voidable at the option of one of the parties, in 
 some absolutely void. 
 10 
 
Chap. I. PROPOSAL AND ACCEPTANCE. H 
 
 CHAPTEE T. *11 
 
 • PEOPOSAL AND AOOEPTANCE, 
 
 EvEEY expression of a common intention arrived at Agreement 
 by two or more parties is ultimately reducible to ques- ^ate'in^pf o- 
 tion and answer. In speculative matters this would posal and 
 take the form, "Do you think so and so?" "I do."^'^'^^ ^''^°^' 
 In practical matters and for the purpose of creating 
 obligations it may be represented as, " Will you do so 
 and so? " " I will." If A and X agree that A shall 
 shall purchase from X a property worth £50,000, we 
 can trace the process to a moment at which X says to 
 A, " Will you give me £50,000 for my property? " and 
 A replies, " I will." If A takes a sixpenny book from 
 X's book-stall the process may be represented thus: 
 X in displaying his wares says in act though not in 
 word, "Will you buy my goods at my price? " and A, 
 taking the book with X's cognizance, virtually says, 
 " I will." And so the law is laid down by Blackstone: Comm. bk.S 
 " If I take up wares from a tradesman without any ''•. ^*** 
 agreement of price, the law concludes that I con- 
 tracted to pay their real value." 
 
 In order to create a voluntary obligation there must 
 be a promise binding the person subject to the obliga- 
 tion ; and in order to give a binding force to the prom- 
 ise the obligation must come within the sphere of 
 Agreement. There must be an acceptance of the 
 promise by the person to whom it is made, so that by 
 their mutual consent the one is bound to the other. 
 A Contract then springs from the offer of a promise- 
 and its acceptance. Let us now see what forms this 
 process may assume. 
 11 
 
12 FORMATION OP CONTilACT. Part II. 
 
 How pro- *12 The simple and obvious form just described is 
 posal and applicable in English law only to such contracts 
 
 mustbemade as are made under seal. For in English law no promise, 
 form a^con- '^^ich is not under seal, is binding unless the promisor 
 tract. obtains some benefit in return for his promise, and this 
 
 benefit is called " Consideration." 
 
 Bearing this necessity in mind, we may say that 
 proposal may assume two forms, the offer of a prom- 
 ise, and the offer of an act. Acceptance may assume 
 three forms, simple assent, the giving of a promise, or 
 the doing of an act. 
 
 And thus a contract may originate in one of four 
 ways. 
 
 1. In the offer of a promise and its acceptance by 
 simple assent: which in English law applies only to 
 contracts under seal. 
 
 2. In the offer of an act for a promise,* as if a man 
 offers services which when accepted bind the acceptor 
 to reward him for them. 
 
 3. In the offer of a promise for an act, as when a 
 man offers a reward for the doing of a certain thing, 
 which being done he is bound to make good his 
 promise to the doer. 
 
 4. In the offer of a promise for a promise, in which 
 case when the offer is accepted by the giving of the 
 promise, a contract arises consisting in outstanding 
 obligations on both sides. 
 
 Some simple illstrations will explain these forms of 
 
 proposal and acceptance. 
 
 Illustrations. !• A promises X under seal that he will do a certain 
 
 See on this act or pay a certain sum. "When X has assented to 
 
 P"w- ^f^°^ the proposal both are bound, and there is a contract. 
 V. Wickham, r f . ,„ , . , .„ ■• 
 
 L. R. 2 H. L. Till he has assented there is an offer, which, as will be 
 
 ^^®' noted presently, is irrevocable so far as A is concerned, 
 
 Tiokell 3 B. owing to the particular form in which it was made, ' 
 &A.37; Tuujj^t which cannot bind X until he has assented to it. 
 Johns 470.' Eor a man cannot be forced to accept a benefit. 
 12 
 
Chap. I. PROPOSAL AND ACCEPTANCE. 13 
 
 2. A man gets into a public omnibus at one end of 
 Oxford street and is carried to the other.. The 
 
 ■presence of the omnibus is a constant offer by *13 
 its proprietors of such services upon certain 
 terms; they offer an act for a promise; and the man 
 who accepts these services promises by his acceptance 
 to pay the fare at the end of the journey. 
 
 3. The man who loses his dog offers by advertise- (Freeman v. 
 ment a reward of £5 to any one who will bring the gg°? °^' ^ ' 
 dog safe home; he offers a promise for an act; and 
 
 when X brings the dog safe home the act is done and 
 the promise becomes binding. 
 
 4. A offers X to pay him a certain sum of money 
 on a future day if X will promise to perform certain 
 services for him before that day, When X makes the 
 promise asked for, he accepts the promise offered, and 
 both parties are bound, the one to do the work, and 
 the other to allow him to do it and to make the 
 payment. , 
 
 It will be observed that cases 2 and 3 differ from i Difference 
 in an important respect. In 2 and 3 the contract is co^Y^cts on 
 formed by one party to it doing all that he can be executed and 
 required to do under the contract. It is performance cons?dera^ 
 on one side which makes obligatory the promise of the tions. 
 other; the outstanding obligation is all on one side. 
 In 4 each party is bound to some act or forbearance 
 which, at the time of entering into the contract, is 
 future: there is an outstanding obligation on each 
 side. ^ ^-^ 
 
 Where the benefit in return for which the promise 
 is given, is done contemporaneously with the promise 
 acquiring a binding force; where it is the doing of the 
 act which concludes the contract, then the act so done 
 is called an execided or present consideration for the 
 promise. Where a promise is given for a promise, 
 each forming the consideration for the other, such a 
 consideration is said to be executory or future. 
 13 
 
14 FORMATION OF CONTRACT. Part II. 
 
 We may now lay down briefly the rules whicli gov- 
 em Proposal and Acceptance, or the communication 
 of the common intention to create an obligation. 
 
 Rule 1. Pro-*14 § 1. The proposal must he mtended to affect, 
 Fntendedto'^ ^'"^ CQ^aSZs of affecting, legal relations^ 
 
 affect legal 
 relations. I A proposal to be made binding by acceptance, must 
 
 I be made in contemplation of legal consequences; a 
 mere statement of intention made in the course of 
 conversation will not constitute a binding promise, 
 though it be acted upon by the party to whom it was 
 Roll. Abr. p. made. Thus in the case of Week v. Tibold, the 
 defendant told the plaintiff that he would give £100 
 to him who married his daughter with his consent.. 
 Plaintiff married defendant's daughter with his cop- 
 sent, and afterwards claimed the fulfillment of the 
 promise and brought an action upon it. It was held 
 not to be reasonable that a man " should be bound by 
 general words spoken to excite suitors." 
 , And a proposal must be capable of affecting legal 
 relations, that is to say it must not be so indefinite 
 or illusory as to make it hard to say what it was that 
 Guthing V. 'w^as promised. Thus where A bought a horse from 
 A^°2'-{2 ■^^ * ^ a'"^ promised that " if the horse was lucky to him 
 he would give £5 more or the buying of another 
 horse," it was held that such a promise was too loose 
 and vague to be considered in a court of law» 
 
 And so where A agreed with X to do certain ser- 
 vices for such remuneration as should be deemed right, 
 it was held that there was no promise on the patt of 
 X which was sufficiently definite to be capable of 
 
 Taylor v. enforcement. " It seems to me,"' said one of the 
 
 Brewer 1 ^I 
 
 & S. 290. jidges, " to be merely an engagement of honor," [a) 
 
 (a) The action in the case cited in the text was brought to re- 
 cover for work done by plaintiff by virtue of a resolution of 
 defendants, who were a committee for the management of a lot- 
 14 
 
Chap. I. § 3. PROPOSAL AND ACCEPTANCE. 15 
 
 § 2. AooeptanGe must he absolute, and identical with 
 the terms of the proposal. 
 
 Unless this is so the intention expressed by one of Acceptance 
 the parties is either doubtful in itself or different from ^^^^ ^^ ^^^°- 
 that of the other. If A offers to X to do a definite 
 thing and X accepts conditionally, or introduces 
 a new term into the acceptance, his answer is *15 
 either a mere expression of willingness to treat, (Carr v. Du- 
 
 or it is in effect a counter proposal,. I~^: ^^ ■^^*- 
 
 A proposed to sell a property to X, X accepted Honeymanv. 
 "subject to the terms of a contract being arranged " ^*q'^^^*j^ ^• 
 between his solicitor and A's. Here it was held that 
 there was no agreement, for the acceptance was not (Slaymaker 
 final, but subject to a discussion to take place between ^^^7/ ogt \ 
 the agents of the parties. 
 
 A proposed to sell a farm to X for £1,000, X said Hyde v. 
 he would give £950. A refused this offer, and then ^^^""^^g^ 
 X said that he was willing to give £1,000. A was no 
 longer ready to adhere to his original proposal and X and identical 
 endeavored to obtain specific performance of the con- J^ims of the 
 tract. But it was held that his offer to buy at £950 in proposal, 
 apswer to A's offer to sell for £1,000 was a refusal of 
 the offer of A and a counter proposal, and that he And see Hus- 
 could not after this hold A to his original offer. pLle^L^^ 
 
 8 Ch. b. 670! 
 tery. The resolution was as follows : " Resolved, That any ser- 
 vices to be rendered by Walsh shall, after the third lottery, be 
 taken into consideration, and such remuneration be made as shall 
 be deemed right," The court held that the import of the resolu- 
 tion ■was, that the committee was to be the judge whether 
 plaintifif was to have any recompense, and if so, how much. If 
 one party has agreed with another to do a" piece of work for what 
 was right, there is no doubt that he would now be permitted to 
 recover the value of the work upon a quantum meruit. Black, 
 stone's Com., book 3, p. 161 ; Chitty on Pleadings, 16 Am. Ed., 
 vol. 1, 353. Bryant v. Flight, 5 M. & W. 114 j Jewry s. Bulk, 5 
 Taunt. 303.) 
 15 
 
16 FORMATION OF CONTRACT. Part II. 
 
 Till accept- § 3. ^ proposal which has not been accepted does not 
 
 ance no afect the rights of the parties. 
 
 nghts arise. "^ ri j r 
 
 If a qualified acceptance does not make a proposal 
 binding it would seem to follow naturally that a pro- 
 posal which was not accepted at all will not bind either 
 the proposer or the person to whom his ofier is ad- 
 Lord Sel- dressed. In the case of contracts which are made by 
 borne, L. R. 3 the acts of the parties, and not by proposal and accept- 
 (Boriand v. ' ance in words, it would appear that silence must give 
 Or^Tc^ consent, but then it must be silence coupled with some 
 394.) overt acquiescence. 
 
 The two following cases will serve to illustrate the 
 
 rule. A offered by letter to buy X's horse for £30 15«., 
 
 Felthouse v. adding " if I hear no more about him I consider the 
 
 BindlCT.ii 0. ]iorse is mine at £30 15s." No answer was returned 
 
 to the letter and it was held that there was no contract. 
 
 Seepost,p.23. -^ person making a proposal may, as it will appear, 
 
 prescribe a form of acceptance, but he may not turn 
 
 the absence of communication into an acceptance, and 
 
 compel the recipient of his offer to refuse it at peril of 
 
 being construed to have accepted it. 
 *16 A very similar case, in which the offer was acted 
 35 L. J. Ex. and not written, was the case of Taylor v. Lai/rA. 
 
 839. There the plaintiff, unasked, helped to work the de- 
 
 _ fendant's vessel home. When he came home iie 
 
 mew V. Jack- claimed reward for his services. But it was held tliat 
 son, 30 Johns, gjjjjjg ^^ defendant had never had the option of reject- 
 ing the services while they were being rendered, and 
 did in fact repudiate them when he became aware of 
 them, he was not liable for their value. The plaintiff 
 had in fact made an offer which, uncommanicatedand 
 unaccepted, could give him no rights against the party 
 to whom it was addressed. 
 
 The cases just quoted show that a man cannot by any, 
 form of offer bind the person to whom it is made 
 before he has expressed his assent. It is almost 
 16 I 
 
Chap. I. § 3. PROPOSAL AND ACCEPTANCE. 17 
 
 equally true to say that his proposal until it is accepted Except In the 
 does not bind himself, but this last proposition must^^^® "^j^^^j, 
 be taken subject to some reservations in the case of seal, 
 promises made under seal. 
 
 There is no doubt tliat a grant under seal may be Doe d. G-ar- 
 binding on the grantor and those who claim under him, ^^!j.^t g g 
 though it has never been communicated to the grantee, & C. 671 ; 
 if it has been duly delivered to a third party. And it^|"({enTi^^''' 
 would seem that a deed purporting to create an out- Johns. Chy. 
 standing obligation would stand on the same footing. 
 " If A make an obligation to B and deliver it to C, this 
 is the deed of A presently. But if C oifers it to B, Butler and 
 then B may refuse it in pais, and thereby the obliga- Baker's Case, 
 tion will lose its force." The position of the parties, ill. 26, b. 
 where the obligation is not communicated to the party 
 iri whose favor it is made, is a somewhat curious one. 
 
 Agreement there can be none, for there is no mutual 
 assent, and it is open to the one to refuse the obliga- 
 tion which the other would create in his favor. It 
 would seem that he who has made and delivered the 
 deed is in the position of a man who has made an offer 
 of a promise which he may not revoke, but which is 
 not a contract till it is assented to by the promisee. 
 
 The point was much discussed in Xenas v. L. R. 3 H. L. 
 
 Wickham, in which a policy of marine insur- *17 rarv.Brfdgesi 
 9,nce " signed, sealed and delivered " by the 5 Humph, 
 
 defendants, the insurers, was never accepted by the^ ^'^^'' ' 
 plaintiff, the insured, but remained in the defendant's 
 office. It was held in the House of Lords that the 
 assent of the person insured at the time of delivery 
 was not necessary to entitle him, when -he became 
 aware of the loss of his ship, to the benefit of the pol- 
 icy. "The efficacy of a deed depends on its being 
 sealed and delivered by the maker of it; not on his 
 ceasing to retain possession of it." (a) 
 
 (a) (The facts of the case cited would seem to show that it waa 
 IT— 2 
 
17 FORMATIOK OF CONTRACT. Part II. 
 
 Revocability § 4. ^ 'proposal may he revoked hefore acceptance lut 
 of proposal. ^^^ after; an acceptance is irrevocalle. 
 
 This rule follows from what has gone before. A 
 proposal creates no legal rights ; an acceptance of a 
 proposal makes a binding contract, unless there be 
 wanting some of the elements already mentioned as 
 necessary to the Formation of Contract. As a pro- 
 decided upon other grounds than those given in the text. The 
 statement shows that the ship owner applied to an insurance broker, 
 to obtain for him an insurance upon a vessel, for six months, in 
 certain seas. The custom among underwriters and brokers was, for 
 the broker to make a memorandum of the description of the 
 vessel, the voyage, etc., and submit it to the underwriter who 
 marked the amount of risk it was willing to take upon the vessel. 
 This broker was not in the habit of paying the premium on each 
 risk, but kept an account with the insurer, and settled at stated 
 times. When the risk was accepted the policy was made out from 
 the slip containing the memorandum. In this case the under- 
 ■writer's clerk marked the slip for £3,000, but before the policy 
 was written, the owner changed his mind and desired to insure 
 for a year and in all seas, and a new slip was made out instead 
 of the old one, and marked for £1,000, and the policy was made 
 out, signed, sealed, and delivered, as shown upon its face, but it 
 remained at the underwriter's office. The premium was paid to 
 the broker, but had not been paid by him to the insurer, when the 
 broker, by mistake, ordered the policy to be canceled and a mem- 
 orandum of cancellation was written upon the margin of the 
 policy and it was delivered to the broker, that he might get the 
 stamp duty refunded. The broker discovered his mistake, and 
 then requested that the memorandum should be erased, but the 
 underwriter refused to do so except upon the condition that the 
 vessel was then safe and not in the Baltic. The vessel had been 
 lost at that time, and the owner sued the underwriter. 
 
 The House of Lords held that the plaintiff was entitled to 
 recover, as the contract had been made and the broker had no 
 authority to order the policy cancelled. 
 
 The question of assent or acceptance of the policy by the ship 
 owner does not seem to have arisen in this case, and from the 
 facts we cannot declare the principle that an offer made under 
 seal would be construed to remain open after the loss it was pro- 
 posed to guard against had actually occurred. Upon the necessity 
 of acceptance by grantee, see WoodBiury v. Fisher, 20 Ind., 387.) 
 18 
 
Chap. I. § 4 PROPOSAL AND ACCEPTANCE. 18 
 
 posal creates no legal rights, it is obvious that it may 
 be withdrawn before acceptance; but as respects the 
 communication of the withdrawal or revocation to the 
 party to whom the offer is made, a distinction exists 
 which needs to be noted, and which may be stated thus: 
 (a) Where the parties are in immediate communi- 
 cation a proposal may be revoked without notice 
 to the person to whom it has been made.^ 
 (J) Where the parties communicate by correspond- 
 ence, notice of revocation, in order to be valid, 
 must reach the person to whom the proposal i 
 made before he has accepted. 
 (a) Two cases will illustrate the rule that when the Where par- 
 parties are in immediate communication no notice d'^V" ™°^^ 
 
 of revocation is necessary. The first is , the *18 munication, 
 well-known case of Cook v. Oxley. The case needei*'* 
 
 was decided on the pleadings. Oxley offered to sell 
 goods to Cook, and promised to keep his offer open* till' 
 4 o'clock in the afternoon. Cook signified his accept- 
 ance before 4 o'clock, and when Oxley failed to deliver 
 the goods brought an action against him. But it was 
 held that if he sued on a promise to keep the offer 
 open tiU 4 o'clock he must fail, because there was no 
 consideration for the promise; and that if he relied on 
 his acceptance as constituting a binding contract he 
 must fail, because he did not state in his declaration that 
 Oxley had not sold the goods, and so substantially 
 revoked his offer, before the time of acceptance. The 
 Court thus clearly contemplated a revocation of the 
 offer of the defendant as possible at any time before 
 acceptance, and di'd not regard notice to the plaintiff as ^oqIj y qx- 
 essential to the validity of the revocation. ley, 3 T. R. 
 
 ' Mr. Pollock, in his work on Contract, p. 10, lays it down that 
 " a proposal is revoked only when the intention to revoke it la 
 communicated to the other party." We venture however to think 
 that this rule must be received with the limitations suggested by 
 the cases cited in the text. 
 19 
 
19 FORMATION OP OONTRAOT. Part II. 
 
 L.R2Ch.D. Similar in point is Dickinson v. Dodds, which was 
 
 ton & M^ne^" attempt to obtain specific performance of a contract 
 
 R. R. V. Bart- under the following circumstances. The defendant on 
 
 325) ''^ June 10th, 1874, gave the plaintiff a memorandum in 
 
 writing as follows: " I hereby undertake to sell to Mr. 
 
 George Dickinson the whole of the dwelling-houses, 
 
 garden ground, stabling, and outbuildings thereto 
 
 belonging, situate at Croft, belonging to me, for the 
 
 sum of £800. As witness my hand this 10th day of 
 
 June, 1874. 
 
 £800. (Signed) John Dodds." 
 
 " P. S. This offer to be left over until Friday, 9 
 o'clock, A.M. J. D. (the twelfth) 12th June, 1874. ^ 
 
 (Signed) J. Dodds. ' 
 
 On the 11th of June he sold the property to another 
 person without notice to the plaintiff. The plaintiff 
 gave notice before the stipulated time, but after the 
 sale, that he accepted the offer to sell, and sued for 
 specific performance of what, he alleged to be a bind- 
 ing contract. But the Court of Apppeal, reversing 
 the judgment of Bacon, Y. C, held that no contract 
 had been concluded. James, L. J., deals thus. 
 *19 with the promise to keep the offer open, and with 
 the fact that no notice had been given of its 
 revocation: — "It is clear settled law, on one of the 
 clearest principles of law, that this promise being a 
 mere nudum pactv/m was not binding, and that at 
 any moment before a complete acceptance by Dick- 
 inson of the offer, Dodds was as free as Dickinson 
 himself. "Well, that being the state of things, it is 
 said that the only mode in which Do^ds could assert 
 that freedom was by actually and distinctly saying to 
 Dickinson, " Now I withdraw my offer." I apprehend 
 that there is neither principle nor authority for the 
 proposition that there must be an express and actual 
 withdrawal of the offer, or what is called a retractation. 
 It must, to constitute a contract, appear that the two' 
 20 
 
Chap. I. § 4. PROPOSAL AND ACCEPTANCE. 20 
 
 minds were at one at the same moment of time, that is, 
 tliat there was an oifer continuing up to the moment 
 of acceptance. If there was not such a continuing 
 offer, then the acceptance comes to nothing." 
 
 (5) Where the parties are at a distance from one Where par- 
 another and communicate their intention by corre- ^?pg^^°™^'g^ 
 spondence a different rule prevails. Unless the ac- distance, 
 ceptor has received notice of revocation before his reach accept 
 acceptance, the revocation is inoperative. This is °^ before ao- 
 perhaps a broader statement of the rule than actual 
 decisions in English Courts may justify; but it is a 
 fair inference from the language of the court in the 
 leading case upon the subject, and is supported by an 
 American case which is directly in point. Two illus- 
 trations will show in what respect the rule as laid down 
 exceeds the limits of the English cases: 
 
 On the 1st of January A writes to X offering to 
 sell goods: on the 3rd he writes to revoke his offer, but 
 X has already written on the 2nd a letter of accept- 
 ance which A receives on the 4th. Here there is no 
 doubt that A would be bound by the acceptance. 
 
 On the 1st of January A writes to X offering to 
 sell goods: on the 2nd he writes to revoke his 
 offer, but, before his letter reaches X, X has *20 
 written to accept. Here the intentions of the Adams v. 
 
 parties are not ad idem at the moment of acceptance, ^'^|^1^' ^ ^• 
 but it is nevertheless probable that " A would be re- 
 garded in law as making, during every instant of ^^^.|.^^a2i,g 
 the time his letter was traveling, the same identical Fire Insur- 
 offer" to X, and that he would be bound by the^°^^^^^°-'3^Q. 
 acceptance though made after he had changed his (Hamilton v. 
 mind. There is no donbt that by the rules of Amer- j^g'^'J^^'^^p^ 
 ican law such ati acceptance would be binding. St. 339.) 
 
 The reasoiis for this rule are obvious. It is neces- irrevoca- 
 sary, wliere parties are contracting at a distance, to fix ^i^ity of ao- 
 some moment of time when the contract should be 
 complete, for otherwise a man who accepted an offer 
 21 
 
21 FORMATION OF CONTRACT. Part II. 
 
 made to him and acted npou it immediately might be 
 exposed to serious loss if the proposer could revoke 
 his offer at any moment before the actual receipt of 
 the acceptance. Nor, on the other hand, would it con- 
 duce to the conduct of business if the acceptor was 
 forced to postpone acting upon the contract until he 
 heard that his letter had reached the proposer. It is 
 necessary therefore to fix a moment for the conclusion 
 of the contract; this moment is the moment when he 
 to whom the offer is made signifies his acceptance; and 
 the acceptance is signified when the acceptor has done 
 all that he can to communicate his intention. In other 
 words, the moment of acceptance is the moment of 
 despatch. An acceptance once despatched is irrevo- 
 cable, for the contract is then made. 
 1 B. & Aid. '^^^ leading case on this subject is Adams v. Lini- 
 681. sell. In that case the defendant offered to sell wool to 
 
 the plaintiff by letter dated Sept. 2nd, 1817. The 
 letter was misdirected, and so did not reach the plain- 
 tiff till Sept. 5th: he accepted by letter posted that 
 evening, but the defendant had in the meantime sold 
 the wool to others. The plaintiff sued for non-deliv- 
 ery of the wool, and it was argued on behalf of the 
 defendant that no contract could arise until the 
 *21 plaintiff's answer reached him. But the court 
 said " that if that were so no contract could ever 
 be completed by the post. For if the defendants were 
 not bound by their offer, when accepted by the plain- 
 tiffs, till the answer was received, then the plaintiffs 
 ought not to be bound till after they had received the 
 notification that the defendants had received their an- 
 swer and assented to it. And so it might go on ad 
 infinitum. The defendants must he considered in law 
 as making, during every instant of the time their 
 letter was traveling, the same identical offer to the 
 plaintiffs; and then the contract is concluded by the 
 acceptance of it by the latter." 
 22 
 
Chap. I. § 4. PROPOSAL AND ACCEPTANCE. 22 
 
 The law as laid down in this case has been followed 
 in several others down to the present time. Bat tlie 
 rights of the parties where the letter of acceptance is 
 lost or unreasonably delayed, are not altogether satis- 
 factorily settled. 
 
 In Dunlop v. Higgins, Lord CorrENHAM appears to 1 H. L. C. 
 have held, though the point was not necessary to the y^camiril'" 
 decision of the case, that the posting of an acceptance N. Y. 441.) 
 absolutely concluded the contract, whatever might 
 afterwards become of the letter. This view was dis- 
 cussed and some limitations to it suggested by the 
 Court of Exchequer in the British and American L. R. 6 Ex. 
 Telegraph Company y. Oolson. But the law on the ^*'^' 
 subject perhaps finds its best expression in the judg- 
 ment of Mellish, L. J., in Harris^ Case, in which he L. R. 7 Ch. 
 says that " although the contract is complete at the 
 time when the letter accepting the offer is posted, yet 
 it may be subject to a condition subsequent, that if the 
 letter does not arrive in due course of post, then the 
 parties may act on the assumption that the offer has 
 not been accepted." {a) 
 
 The framers of the Indian Contract Act do not ap- 
 pear to have thought it necessary that the moment of 
 acceptance should be fixed as that at which the contract 
 acquires an irrevocably binding force. Section 4 of 
 that Act provides as follows : 
 
 " The communication of a proposal is complete *22 Indian Con. 
 
 when it comes to the knowledge of the person to tract Act, 
 
 , . , . J sec. 4 lays 
 
 whom it IS made. down a dif. 
 
 "The communication of an acceptance is complete ^®'^^^'™'^' 
 
 as against the proposer, when it is put in a course of 
 
 {a) (The latest adjudication of the English courts upon this sub- 
 ject is found in Household, Fire and Carriage Accident Co. v. 
 Qrant, 24 Weekly Reporter, 858, where the Court of Appeals 
 refuses to follow the doctrine of the Harris Case, and holds that 
 the contract is still binding, though the letter of acceptance is 
 never delivered, as it is completed by mailing the letter.) 
 23 
 
23 FORMATION OF CONTRACT. Part II. 
 
 transmission to him so as to be out of the power of 
 the acceptor; as against the acceptor, when it comes 
 to the knowledge of the proposer. 
 
 " The communication of a revocation is complete as 
 against the person who makes it, when it is put into a 
 course of transmission to the person to whom it is 
 made, so as to be out of the power of the person who 
 makes it; as against the person to whom it is made, 
 when it comes to his knowledge." 
 
 It is perhaps sufficient to note the divergence from 
 English law without commenting on its propriety; but 
 it may be worth while to consider whether, from a 
 practical as well as from a scientific point of view, it 
 is desirable that in the formation of a contract there 
 should be a period in which one party is bound while 
 the oth'er remains free. 
 
 Other modes § 5. A proposal may lapse otherwise than hy revoca- 
 
 in which pro- tion as follows : 
 
 posal may "' 
 
 lapse {a) By lapse of a prescribed time for acceptance. 
 
 An offer to sell goods " receiving your answer in course 
 of post " would lapse upon failure to accept in course 
 of post, i. e., by return of post, and the proposer wouM 
 be relieved from liability upon a subsequent acceptance. 
 (5) By lapse of a reasonable time for acceptance. 
 What is a reasonable time- must needs depend on the 
 nature of the proposal. The best illustration of the 
 L. R. 1 Exch. rule is the Bamsgate- Hotel Company v. Montefiore, 
 109. (Beclt- The defendant offered to purchase shares by letter on 
 er, 1 Foster, the 28th of June; no communication was made to him 
 *^-) until the 23rd of ISTovember, when he was informed 
 
 that shares were allotted to him. He declined to ac- 
 cept them, and it was held that the proposal had 
 lapsed, without notice of revocation, by efflux of a 
 
 reasonable time for acceptance. 
 *23 (c) By failure to comply with a condition in 
 the proposal as to the mode of acceptance. 
 24 
 
Chap. I. § e. PROPOSAL AND ACCEPTANCE. 24 
 
 A offered to sell flour to X, the answer to be sent by- 
 return of the wagon which brought the offer: X sent 
 a letter of acceptance bj' mail to another place, which 
 was not the destination of the wagon, having reason 
 to think that so his answer would reach A more Eliason v. 
 speedily. It was held that A was not bound by an ^heaton ' * 
 acceptance so sent. 325. 
 
 id) By death of the proposer before acceptance. 
 
 This operates as an absolute revocation, so that even Per Mellish, 
 
 though the acceptor has acted upon the contract before ^ngon y'^^"'^' 
 
 he knew of the death of the proposer he cannot ac- Dodds, L. R. 
 
 quire rights against the representatives of the proposer, (pj-itiiv Law- 
 
 (e) By death of the acceptor before acceptance. rence, 1 
 \^i , ,. „ ^ i I, re ■ Paige, 434.) 
 
 Ihe representatives oi a person to whom an otter is 
 
 made are not capable of acting upon it, if the deceased Humphrey v. 
 
 had not accepted it in his lifetime. > ^ q ggg 
 
 § 6. Proposal and acceptance need not necessarily l>e Contracts 
 
 written or spoken, hut may ie acted, wholly, or co^^uct^'^"™ 
 in part. 
 
 If A sends goods to X's house and X accepts and 
 uses the goods, X will be liable on an implied contract 
 to pay for them. The proposal is made by sending fjart v. Mills, 
 the goods, the acceptance by their use or consumptionj ^^ M. & W. 
 which is in fact a promise to pay their price. 
 
 Similarly, if A ask X to work for him for hire, X may 
 accept simply by doing the work, unless A has in his 
 proposal prescribed any form of acceptance. Or, again, 
 if A allows X to work for him under such circum- 
 stances that no reasonable man would suppose that X 
 meant to do the work for nothing, A will be liable to 
 pay. The doing of the work is the proposal, the per- Paynter v. 
 mission or acquiescence in the doing it is the acceptance, ^'^'^qiq 
 
 And this rule has been applied to cases where there (Abbott v. 
 has been a verbal offer and acceptance which is Greenl.'l31.) 
 
 invalid for non-compliance with the requirements *24- 
 of the Statute of Frauds. A part performance 
 . 26 
 
24: FORMATION OF CONTRACT. Part II. 
 
 of Buch an agreement has been held to create a bind- 
 ing contract to pay for so much as has been accepted 
 of the performance. The original agreement is invalid- 
 the performance under it creates a fresh proposal; the 
 Mavor v. acquiescence in such performance a fresh acceptance, 
 Py°^'|.Bing- so far as the performance . has gone; and a new and 
 McEwen, 37 binding contract thus takes the place of the first invalid 
 Ala. 184) agreement. 
 
 But it must be remembered that contracts of this 
 
 nature are subject to the same rules as to Proposal and 
 
 Acceptance, as those which govern contracts made in 
 
 Taylor V. words or writing. If the acts which constitute the 
 
 J*Exoh^339 P^POS^l ^7 ^ ^^6 °o* brought to the knowledge of X, 
 
 there is no communicated offer. If so soon as he 
 
 knows of them he repudiates liability in respect of 
 
 them, there is no acceptance. And the same rule ap- 
 
 Hendersonv. plies to cases such as the contract between a passenger 
 
 R^S Sc°a' ^ ^^^ ^ railway company, which arises from an accept- 
 
 470. (Beck- ance by conduct of an offer comprised in various writ- 
 
 Shoule 5 *®° terms. The acceptor is not bound by terms as to 
 
 Rawle, 179.) which he has received no notice. 
 
 § 7. .4 proposal need not he made to an aseertamed , 
 person, hut no contract cam, arise until it has 
 heen accepted by an ascertained person. 
 
 An offer may The proposition is best understood by an illustra- 
 
 be made to |.Jqjj_ ^^q proposal bv way of advertisement of a re- 
 all the world. , . „ . . J J J 
 A contract ward for the rendering of certain services, adaressea 
 
 from*it UlHt *« *^® public at large, becomes a contract to pay the 
 is accepted reward so soon as an individual renders the services, 
 ^ °'^^' but not before. 
 
 To hold that any contractual obligation exists before 
 the. services are rendered, would amount to saying that 
 a man may be bound by contract to an indefinite and 
 unascertained body of persons, or, as it has been ex- 
 pressed, that a man may have a contract with the 
 26 
 
Chap. I. § 7. PROPOSAL AND ACCEPTANCE. 25 
 
 whole world. This would be contrary to the 
 notions both of Agreement and Obligation, which *25 
 we have ascertained to co-exist in Contract. 
 Agreement is the expression of a common intention, and 
 there can be none while intention is expressed on one 
 side only; nor can we say. that Obligation in the sense 
 of a vinculum juris exists between a definite proposer 
 and an indefinite mass of persons to whom it is open to 
 accept his proposal. The matter would have seemed Savigny's 
 beyond doubt if it were not that Savigny considered '^^^'^' 
 that an obligation of this indefinite character was cre- 
 ated by such a proposal as we have described. From 
 the difficulties which would arise, owing to the obliga- 
 tion being incurred to unascertained persons, he would 
 allow no right of action to accrue, but, upon the per- 
 formance of the condition, he put the promisor in the 
 position of a man who owes a debt of honor which is Sav. Obi 3, 
 not recoverable in a Court of Law. This view has^®*''"^^* 
 never been seriously entertained in English law; the 
 promise is regarded as being made, not to the many 
 who might accept the offer, but to the person or per- 
 sons who do accept it. One may think, with submis- 
 sion to the great authority of Savigny, that his mode 
 of dealing with this subject arises from a disregard or 
 forgetfulness of the principle that the pre-eminent 
 features of Obligation is the binding together of definite 
 Tpersonshj vinouhmi juris/ that until the parties have 
 emerged from the mass of mankind the bond cannot 
 attach to them. 
 
 The difficulties which have arisen in English law are Difficulties 
 of a somewhat different character, but are capable, it j'^ English 
 shouid seem, of a satisfactory solution. They spring 
 from two sources. (1) The acceptor may not, at the 
 time of his doing what amounts to an acceptance, 
 realize all the terms of the offer: can he afterwards 
 take advantage of them? (2) It is sometimes difficult 
 to distinguish representations of intention to act in a 
 2T 
 
26 FORMATION OF CONTRACT. Part II. 
 
 particular way, from invitations which, if accepted, 
 become binding promises. 
 (1) Motive of Tiie first difficulty is well illustrated by the 
 
 Tb^&^Aa' *^^ ^^^^ ^^ Williams v. Carwardine. Eeward was 
 631. offered by the defendant for information which 
 
 [Jamison v. the plaintiff supplied, though not with a view to the 
 Ex^t'^-'ls N I'eward. It was held that the defendant was liable as 
 H. 483.'] ' upon a contract concluded by the supply of the infor- 
 mation asked for. {^, 
 
 If it appeared clearly from the facts of this case as 
 reported that the plaintiff was unaware of the defend- 
 ant's offer, it might be asked, whether that could be 
 an agreement in which one of the parties knew noth- 
 ing of the intention of the other. But the only point 
 ursed in the argument for the defendant was that the 
 reward was not the motive which induced the plaintiff 
 to supply the information, and the Court held that the 
 motive was immaterial, and that " there was a contract 
 with the person who performed the condition mentioned 
 in the advertisement." [But the Court of Appeals of 
 !New York held that, when information which led to 
 the arrest was given by plaintiff before notice of the 
 offdr of the reward, he was not entitled to the reward, 
 [Fitch ▼. although he afterward procured important evidence in 
 N Y*24s'n^^ the case, upon the ground that there could be no accept- 
 ance of an offer of which the party had no knowledge.] 
 Intimation The second difficulty has been suggested as arising 
 
 of course of jjj gases where a public body, or an individual, a rail- 
 conduct as ^ J 1 1 
 distinct from way company, or the manager ot a theater, makes a 
 
 invitation, standing offer to the public at large to carry them, or 
 
 Polloclc on to entertain them in a certain manner and subject to 
 
 contract, 181. certain terms. And it has been asked, in substance, 
 
 whether an acceptance of the general offer in such'a 
 
 case binds the proposer to fulfill all his terras. 
 
 dmeTabie ^'^^ instance, does the existence of its published 
 
 [See Gordon time-table bind a railway company to carry passengers 
 
 63 NH 5961^'^°^^*^^"o ^0 its terms? 
 28 
 
Chap. I. § 7. PROPOSAL AND ACCEPTANCE. 27 
 
 The answer is that the time-table is not, as Mr. Pol- p. 181. 
 lock seems to suggest, the offer ot a separate promise, 
 but a term in the general contract to carry: and the LeBlanche v. 
 judicial interpretation put upon this term is, that ^- q^'i^' 
 when a passenger has accepted the general offer byP-D. 286; , 
 demanding a ticket, he becomes entitled to reasonable ^^asterJk R. 
 efforts being made on the part of the company to 14 Allen 433.] 
 ensure punctuality. 
 
 Similarly it might be said, though the question may Announce- 
 probably never arise, that the manager of a ™^°* °f P^^- 
 theater offers to any one who takes tickets for a *27 a theatre, 
 particular play, that reasonable diligence shall 
 be used to secure the performance of the piece adver- 
 tised. If the disappointed playgoer can show a failure 
 of such diligence, and should think it worth while to 
 sue for the price of his ticket, it is not impossible that 
 he might recover upon the principle laid down in JLe 
 Blanche v. London and North Western . Railway l. r. i o. P. 
 Company. D- 286. 
 
 But there are some cases of more real difficulty than 
 these; cases in which it is hard to distinguish general 
 offers the acceptance of which by individuals constitutes 
 a contract, for declarations of intention upon which 
 persons may act without affecting their legal relations. 
 
 The two following cases will well illustrate the fine- Of a sale by 
 ness of the distinction. In Harris v. Nicker son an ^""'lo'^- 
 advertisement by an auctioneer, that a sale of certain ^■^- 8 Q- B. 
 articles would take place on a certain day, was held 
 not to bind the auctioneer to sell the goods, nor to 
 make him liable upon a contract to indemnify persons 
 who were put to expense in order to attend the sale. 
 Blackbubn, J., said: "Unless every declaration of 
 intention to do a thing creates a binding contract with 
 those who act upon it, and in all cases after advertis- 
 ing a sale the auctioneer must give notice of any arti- 
 cles that are withdrawn, we cannot hold the defendant 
 
 liable." 
 29 
 
28 FORMATION OF CONTRACT. Part II. 
 
 On the other hand, the advertisement of a sale with- 
 IE.&B. 295. out reserve was held, in Warlow v. Harrison, to create 
 a binding contract between the auctioneer and the 
 highest bidder that the goods should be knocked down 
 to him. " The sale," said Maktin, B., " was announced 
 bjf them (the auctioneers,) to be 'without reserve.' 
 This, according to all the cases both at law and in 
 equity, means that neither the vendor nor any person 
 in his behalf shall bid at the auction, and that the 
 property shall be sold to the highest bidder, whether 
 the sum bid be equivalent to the real value or not: 
 15 M. &. W. Thomett v. Haines. We cannot distinguish the case 
 of an auctioneer putting up property for sale 
 *28 upon such a condition from the case of the loser 
 of property offering a reward, or that of a rail- 
 way company publishing a time-table stating the times 
 when, and the places to which, the trains run. It has 
 been decided that the person giving the information 
 advertised for, or a passenger taking a ticket, may sue 
 5 E. &B. 860. as upon a contract with him : Denton v. Great North- 
 ern Railway Company. Upon the same principle, it 
 seems to us that the highest bona fide bidder at an 
 Warlow v. auction may sue the auctioneer as upon a contract that 
 E*&E°316- *^^® ^^^ sh.sW. be without reserve." Such was the 
 [8Ain.L. opinion of a majority of the Court of Exchequer 
 Reg-241-] Chamber. 
 
 The substantial difference between the eases seems 
 to lie in this, that not merely the number, but the 
 intentions of the persons who might attend the sale 
 must be unascertainable, nor could it be certain that 
 their legal relations would be eventually altered by the 
 fact of their attendance. A might come intending to 
 buy but might be out-bid, B might come with a half- 
 formed intention of buying if the goods went cheaply, 
 C might come merely for his amusement. It would 
 be impossible to hold that an obligation could be estab- 
 lished between the auctioneer and this indefinite body 
 30 
 
Chap. I. § 7. PROPOSAL AND ACCEPTANCE. 28 
 
 of persons, or that their losses could be ascertained so 
 as to make it reasonable to hold him liable in dam- 
 ages. The highest bidder, on the other hand, is an 
 ascertained person, fulfilling the terms of a definite 
 offer. The distinction therefore bears out the prop- 
 osition laid down at the commencement of this 
 discussion. 
 31 
 
29 
 
 FORM AND CONSIDERATION. 
 
 Part II. 
 
 «29 
 
 CHAPTEE II. 
 
 FOEM AND CONSIDEEATIOir. 
 
 Necessity for 
 one of these 
 marks in 
 English law. 
 
 History of 
 the matter. 
 
 Common 
 features in 
 histoiy of 
 
 We have now dealt with the mode in which the 
 common intention of the parties shall be communi- 
 cated by the one to the other so as to form the basis of a 
 contract. But it is not enough that such communication 
 should be made as we have described, or even that the 
 parties should intend it to refer to legal consequences. 
 Most systems of law require certain marks to be pres- 
 ent in the agreements which they will recognize as 
 contracts, and if those marks are absent the intention 
 of the parties will not avail to create an obligation 
 between them. In English law there are two such 
 marks — Form and Consideration ; sometimes one, 
 sometimes the other, sometimes both are required to 
 be present in the contract to make it enforceable. By 
 Eorm we may be taken to mean some peculiar solem- 
 nity attaching to the expression of Agreement which 
 of itself gives efficacy to the contract; by Considera- 
 tion some gain to the party making the promise, aris- 
 ing from the act or forbearance, given or promised, of 
 the promisee. 
 
 In English, as in Koman, law. Form, during the 
 infancy of the system, is the most important ingre- 
 dient in Contract, Consideration is an idea which, 
 though not unknown, is at any rate imperfectly devel- 
 oped. It would not be desirable here to enter upon 
 an antiquarian discussion, which is nevertheless of 
 considerable interest. It is enough to say that English 
 law, and also, we m&,y venture to say, Eoman law, 
 32 
 
Chap. II. FORM AND CONSIDERATION. 30 
 
 starts with two distinct conceptions of Contract. *30 Roman and 
 One is, that Form of a certain kind will make English law. 
 
 any promise binding; the other is, that the acceptance 
 of benefits of a certain kind will imply such a prom- 
 ise to repay them as the law will enforce. Tlie theory 
 that the Roman Contracts developed out of Convey- 
 ance in an order of moral progression seems to rest on 
 no sure evidence; and there is reason to believe that 
 the Stipulatio, or solemn promise elicited by a formal 
 question, and the informal contract Re, which arose 
 from the lending or deposit ot money, or goods, were 
 the most ancient of the contracts known to Koman law. gee App. A, 
 At any rate, in English law, we find that before the* 
 end of the thirteenth century two kinds of contract 
 were enforceable: one Formal, the contract under 
 seal, answering to the Stipulatio , one informal, aris- 
 ing from sale and delivery of goods, loan of money, 
 and the like, in which the consideration had been exe- 
 cuted upon one side, and an implied or expressed prom- 
 ise to repay would support an action of Debt. Except 
 in these limited cases, the idea of enforcing an in- 
 formal promise, simply because a benefit was accruing 
 or was about to accrue to the promisor by the act or 
 forbearance of the promisee, does not appear to have 
 been entertained before the middle or end of the 
 fifteenth century. 
 
 The Formal Contract of English law is the Contract 
 under Seal. In no other way than by the use of this 
 Form could validity be given to executory contracts, 
 until the doctrine of consideration began to make way. 
 We have to bear in mind that it is the Form which 
 makes this. eon tract binding; the consensus of the par- 
 ties has not emerged from the ceremonies which sur- 
 round its expression. Courts of Law will not trouble 
 themselves with the intentions of parties who have not 
 couched their agreement in the solemn Form to which 
 the law attaches legal consequences. Nor, on the other 
 33—3 
 
31 FORMATION OF CONTRACT. Part II. 
 
 hand, where Form is present will they ask for 
 *31 further evidence as to intention. Later on, 
 owing in a great measure we suspect to the in- 
 fluence of the Court of Chancery, the intention of the 
 parties begins to engage the attention of the Courts, 
 and the idea of the importance of Form undergoes a 
 curious change. When a contract comes before the 
 Courts, evidence is required that it expresses the gen- 
 uine intention of the parties; and this evidence is 
 found either in the solemnities of the Contract under 
 Seal, or in the presence of Consideration, that is to 
 Bay, in some benefit to the promisor or loss to the 
 promisee, granted or incurred by the latter in return 
 for the promise of the former. Gradually Considera- 
 tion comes to be regarded as the important ingredient 
 in Contract, and then the solemnity of a deed is said 
 to make a contract binding because it " imports con- 
 sideration," though in truth it is the Form which, 
 apart from any question of consideration, carries with 
 it legal consequences. 
 
 Before considering in detail the classes of contract 
 which English law recognizes, it is well to conclude 
 the historical outline of the subject of Form and Con- 
 Bideration. 
 
 We have stated that the only contracts which 
 English law originally recognized, were the Formal 
 contract under Seal, and the informal contract in 
 which Consideration was executed upon one side. 
 How then do we arrive at the modern breadth of 
 doctrine that any promise based upon Consideration is 
 binding upon the promisor? This question resolves 
 itseli into two others. How did informal executory 
 contracts become actionable at all? How did Consid- 
 eration become the univeral test of their actionability? 
 
 To answer the first question we must look at the 
 remedies which, in the early history of our law, were 
 open to persons complaining of the breach of a prom- 
 34 
 
Chap. II. FORM AND CONSIDERATION. 32 
 
 ise, express or implied. The only actions of this 
 nature, during the thirteenth and fourteenth centuries 
 were the actions of Covenant, of Debt and of Detinue. 
 Covenant lay for breach of promises made under seal: 
 Debt for liquidated or ascertained claims, arising 
 either from breach of covenant, or from non- *32 
 payment of a sum certain due for goods sup- 
 plied, work done, or money lent: Detinue^ lay for the 
 recovery of specific chattels kept back by the defend- 
 ant from the plaintift'. These were the only remedies 
 based upon contract. An executory agreement, there- 
 fore, unless made under seal, was remediless. 
 
 The remedy by which such promises were eventually 
 enforced is a curious instance of the shifts and turns 
 by which practical convenience evades technical rules. 
 The breach of an executory contract, until quite recent 
 times, gave rise to a form of the action of Trespass on 
 the case. 
 
 This was a development of the action of Trespass : Spence, 
 Trespass lay for injuries resulting from immediate ^io- ju^sdict 
 lence: Trespass on the case lay for the consequences of 1, 241. 
 a wrongful act, and proved a remedy of a very extensive 
 and flexible character. 
 
 This action came to be applied to contract in the Origin of 
 following way: It lay originally for a malfeasance, or assump^sk 
 the doing an act which was wrongful ab initio: it next 
 was applied to misfeasance, or improper conduct in 
 doing what it was not otherwise wrongful to do, and 
 in this form it applied to promises part-performed and Reeves, ed. 
 then abandoned or negligently executed to the detri- 395 '396°' "" 
 ment of the promisee: finally, and not without some 
 
 ■ The Court of Appeal has very secently decided that the ac- 
 tion of Detinue is founded in tort, Bryant v. Herbert. But though l, r. 3 q. p. 
 the wrongful detention of goods is the cause of action, the rem- D. 389. 
 edy may apply to cases in which the possession of the goods 
 originated in the contract of Bailment. [See judgment of Bbbtt, 
 L. J., at p. 393.] 
 36 
 
33 FORMATION OF CONTRACT. Part II. 
 
 resistance on the part of the Courts, it came to be 
 applied to a non-feasance, or neglect to do what one 
 was bound to do. In this form it adapted itself to 
 Pollock, 128. executory contracts. The first reported attempt so to 
 apply it was in the reign of Henry IV., when a car- 
 penter was sued for a non-feasance because he had 
 undertaken, quare assumpsisset, to build a house and 
 had made default. The judges in that case held that 
 the action, if any, must be in covenant, and it 
 *33 did not appear that the promise was under seal. 
 Reasons for But in course of time the desire of the King's 
 
 its extension, ggnch to extend its jurisdiction, the fear that the Com- 
 mon Pleas might develop the action of Debt to meet 
 the case of execiatory promises, or that the Court of 
 Chancery might extend its extraordinary powers, and 
 by means of the doctrine of consideration, which it had 
 already applied to the transfer of interests in land, 
 enlarge its' jurisdiction over contract, operated to pro- 
 duce a change in the attitude of the Common Law 
 Courts, Before the end of the reign of Henry VII. 
 it was settled that the form of Trespass on the case 
 known henceforth as the action of Assumpsit would 
 lie for the non-feasance, or non-performance of an 
 exectitory contract; and the form of writ by which 
 this action was commenced, continued to perpetuate 
 this peculiar aspect of a breach of a promise until 
 recent enactments for the simplification of procedure. 
 It is not at all improbable that the very difiiculty 
 of obtaining a remedy for breach of an executory con- 
 tract led in the end to the breadth and simplicity of 
 the law as it stands at present. If the special actions 
 ex contractu had been developed to meet purely execu- 
 tory informal engagements, they would probably have 
 been applied only to engagements of a particular sort, 
 and a class of contracts similar to the consensual con- 
 tracts of Eoman law, privileged to be informal, might 
 have been protected by the courts, as exceptions to the 
 36 
 
Chap. II. FORM AND CONSIDERATION. 34 
 
 general Kule that Form or executed Consideration was 
 needed to support a promise. 
 
 But the conception that the breach of a promise was 
 something akin to a wrong, the fact that it could be 
 remedied only by a form of action which was originally 
 applicable to wrongs, had a somewhat peculiar result. 
 The cause of action was the non-feasance of that which 
 one had undertaken to do, not the breach of a partic- 
 ular kind of contract; it was therefore of universal 
 application. Thus all promises would become 
 binding, and English law was saved the techni- *34: 
 calities which must needs arise from a classifica- 
 tion of contracts. "Where all promises may be action- 
 able, it follows that there must be some universal test 
 of actionability, and this test was supplied by the 
 doctrine of Consideration. 
 
 It is no easy matter to say how Consideration came brgin of 
 to form the basis upon which the validity of informal f.onsidera- 
 promises might rest, it is suincient for the purpose of actiona- 
 of the present work to say that the idea of Colisidera- cert'^^ ^^ 
 tion, or a " quid pro quo " as it is styled in some of 
 the early reports, was probably borrowed by the Com- 
 mon Law Courts from the Chancery. 
 
 For the Chancellor was in the habit of enquiring 
 into the intentions of the parties beyond the Form, or 
 even in the absence of the Form in which, by the rules 
 of Common Law, that intention should be displayed, 
 and he would find evidence of the meaning of men in 
 the practical results to them of their acts or promises. 
 It was thus that in the region of conveyance, the Cov- 
 enant to stand seized and the Bargain and Sale of 
 Lands came to be enforced in the Chancery before the 
 Statute of Uses, and the doctrine once applied to simple 
 contract was found to be of great practical convenience. 
 When a promise came before the Courts they asked no 
 more than this, " Was the party making the promise 
 to gain anything from the promisee, or was the prom- 
 37 
 
35 FORMATION OF CONTRACT. Part 11. 
 
 isee to Bustain any detriment in return for the promise?" 
 if so, there was a " quid pro quo " for the promise, 
 and an action might be maintained for the breach of it. 
 Gradual So silent was the development of the doctrine that 
 
 ^otrine? Consideration was the universal requisite of contracts 
 not under seal, and so marked was the absence of any 
 express authority for the rule in its broad and simple 
 application, that Lord Mansfield was able in the mid- 
 dle of the last century to raise the question whether, 
 in the case of commercial contracts made in writ- 
 *35 ing, there was any necessity for Consideration to 
 support the promise. In the case of Pillans r. 
 Van Mierop he held, and the rest of the Court of 
 8 Burr. 1673. King's Bench concurred with him, that the custom of 
 merchants would give efficacy to a written promise for 
 which no consideration could be shown. The case was 
 decided on another point, and the doctrine was em- 
 phatically disclaimed in the opinion of the judges de- 
 7 T. R 850. livered not long afterwards in the House of Lords, in 
 Bradley°7 ^' ^^^^^ v- Sicqhes/ but the question raised serves to 
 Conn. 67.] show that the breadth of the law upon this subject was, 
 until comparatively recent times, hardly realized by 
 those who had to administer it. 
 38 
 
Chap. II. CLASSIFICATION OF CONTRACTS. 36 
 
 CLASSIFICATION OF CONTRACTS. *36 
 
 There is but one Formal Contract in English law, Contracts 
 the Deed or Contract under seal; all others are simple oj^gf^pfe^^ 
 contracts depending for their validity upon the pres- 
 ence of Consideration. The Legislature has, however, 
 imposed upon some of these simple contracts the ne- 
 cessity of some kind of Form, and these stand in an 
 intermediate position between the Deed to which its 
 Form alone gives legal force, and the Simple Contract 
 which rests upon Consideration and is free from the 
 imposition of any Statutory Form. In addition to 
 these a certain class of Obligation has been imported 
 into the Law of Contract under the title of Contracts 
 of Eecord, and though these obligations are wanting 
 in the principal features of Contract, it is . necessary, 
 in deference to established authority, to treat of them 
 here. 
 
 The Contracts known to English Law may then be 
 divided thus: — 
 
 A. Formal. 
 
 i. 6. dependent for 
 their validity 
 upon their Form _ 
 
 B. Svmple. 
 
 i. 6. dependent for 
 their validity 
 upon the pre- 
 sence of Con- 
 sideration. 
 
 Classiflca- 
 
 1. Contracts of Kecord. tion of con. 
 
 tracts. 
 
 2. Contracts under Seal. 
 
 3. Contracts required by 
 law to be in some 
 form other than un- 
 der Seal. 
 
 4. Contracts for which 
 no form is required. 
 
 It will be best to deal first with the essentially formal 
 contracts, then with those forms which are superim- 
 posed upon simple contracts, and then with Considera- 
 tion, the requisite common to all simple Contracts. 
 39 
 
37 
 
 FOBMATION OF CONTRACT. 
 
 Partn. 
 
 *37 
 
 FOEMAL CONTEAOT. 
 
 § 1. Contracts of Record. 
 
 Contracts of 
 Record. 
 
 (l)Judg. 
 ment. 
 
 How it 
 originates. 
 
 Its charac- 
 teristics. 
 
 The obligations which are styled Contracts of Rec- 
 ord are Judgment, Kecognizance, Statutes Merchant 
 and Staple, and Kecognizances in the nature oi Statute 
 Staple. 
 
 And first as to Judgment. The proceedings of 
 Courts of Record are entered upon parchment rolls, 
 and upon these an entry is made of the judgment in an 
 action when that judgment is final. A judgment 
 awarding a sum of money to one of two litigants, 
 either by way of damages or for costs, lays an obliga- 
 tion upon the other to pay the sum awarded. This 
 obligation may come into existence as the final result 
 of litigation when the Court pronounces judgment, or 
 it may be created by agreement between the parties 
 before litigation has commenced, or during its contin- 
 uance. In such cases the obligation results from a 
 contract for the making of which certain formalities 
 are required ; this contract is either a warrant of attor- 
 ney, by which one party gives authority to the other 
 to enter judgment upon terms settled, or a cognovit 
 actionem, by which the one party acknowledges the right 
 of the other in respect of the pending dispute and then 
 gives a similar authority. ' 
 
 The characteristics of an obligation of this nature 
 may be shortly stated as follows: 
 
 1 Its terms admit of no dispute, but are conclusively 
 proved by production of the record. 
 
 2. So soon as it is created the previously existing 
 rights with which it deals merge or are extinguished 
 in it: for instance, A sues X for breach of contract or 
 for civil injury: judgment is entered in favor of X 
 either by consent or after trial: A has no further 
 40 
 
Chap. II. § 1. CONTRACTS OF RECORD. 38 
 
 rights in respect of his cause of action, he only be- 
 comes creditor of X for the sum awarded. 
 
 3. The creditor, as we may conveniently call 
 the party in whose favor judgment is given, has *38 
 certain advantages which an ordinary creditor 
 does not possess. He has a double remedy for his 
 debt; he can take out execution upon the judgment 
 and so obtain directly the sum awarded, and he can 
 also bring an action for the non-fulfillment of the obli- 
 gation. For this purpose the judgment not only of a 
 Court of Eecord, but of any Court of competent Willlama v. 
 jurisdiction, British or foreign, is treated as creating ^°^^'g28 
 an obligation upon which an action may be brought 
 for money due. 
 
 Recognizances have been aptly described as " con- (3) Reoogni- 
 tracts made with the Crown in its judicial capacity." ^^'^°®" 
 A recognizance is a writing acknowledged by the party 
 to it before a judge or officer having authority for the 
 purpose, and enrolled in a Court of Kecord. It may 
 be a promise, with penalties for the breach of it, to 
 keep the peace, or to appear at the assizes. "^ 
 
 Statutes Merchant aud Staple and Kecognizances in (3) Statutes 
 the nature of a Statute Staple are chiefly of interest ^nd^s^ple. 
 to the student of the history of Eeal Property Law. 
 They have long since become obsolete, but they were 
 once important, inasmuch as they were acknowledg- 
 ments of debt which, when made in accordance with 
 • Statutory provisions and enrolled of Eecord, created a 
 charge upon the lands of the debtor. 
 
 It will easily be seen how little there is of the true 
 nature of a contract in the so-called Contracts of Eec- 
 ord. Judgments are obligations dependent for their 
 binding force, not on the consent of the parties, but 
 upon their direct promulgation by the sovereign 
 authority acting in its judicial capacity. Recogni- 
 zances are promises made to the sovereign with 
 whom, both by the technical rules of English Law *39 
 41 
 
39 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 and upon the theories of Jurisprudence, the suhject 
 cannot contract, (a) Statutes Merchant and Staple 
 share the characteristics of judgment. We may 
 therefore dismiss these obligations altogether from our 
 consideration. 
 
 Contract 
 under seal. 
 
 How made. 
 
 3heppard, 
 Touchstone, 
 33. 
 Signed. 
 
 Dooch V. 
 (Joodman, 3 
 3- B. 597. 
 
 § 2. Contract under Seal. 
 
 The only true Formal Contract of English law is the 
 Contract under Seal, sometimes also called a Deed 
 and sometimes a specialty. It is the only true Formal 
 Contract, because it derives its validity from its Form 
 alOne, and not from the fact of agreement, nor from 
 the consideration which may exist for the promise of 
 either party. It will be convenient in dealing with 
 the contract under seal to consider (1) how it is made; 
 (2) what are its chief characteristics as distinguished 
 from simple contracts; (3) under what circumstances 
 it is necessary to contract under seal.^ 
 
 (1) A deed must be in writing or printed on paper 
 or parchment. It is often said to be executed, or made 
 conclusive as between the parties, by being " signed, 
 sealed and delivered." Of these three the signature is 
 a matter as to the necessity of which there is some 
 doubt, though no one, unless ambitious of giving his 
 name to a leading case, would omit to sign a deed. (5) 
 But that which identifies a party to a deed with the 
 
 (a) [In this country recognizances are usually given in criminal 
 cases. They are generally taken in open court, and no suit is 
 necessary upon a breach of the condition. A judgment of forfeit- 
 ure is rendered, and if there are sureties, the usual process for 
 collecting the penalty is by issuing a writ of scire facias to show 
 cause why exertion should not issue on the judgment of forfeit- 
 ure.] 
 
 (J) [All sealed instruments which are required by the provisions 
 of the Statute of Frauds to be in writing, must be signed, either 
 by the party to be charged or his authorized agent.] 
 42 
 
Chap. II. § 3. CONTRACT UNDER SEAL. 4,0 ^ 
 
 execution of it is the presence oi his seal;{a) that Sealed, 
 which makes the deed operative, so far as he is con- 
 cerned, is the fact of its delivery by him. Delivery is Delivered, 
 effected either by actually handing the deed to the other 
 party to it, or to a stranger for his benefit, or by vt'orda 
 indicating an intention that the deed should become 
 operative though it is retained in the possession of the 
 party executing. In the execution of a deed under Xenos v. 
 ordinary circumstances, seals are aflSxed beforehand, ^ j^g'jj'jj^ 
 and the party executing the deed signs his name, 396. 
 places his finger on the seal intended for him, and 
 utters the words " I deliver this as my act and *40 
 deed." Thus he at once identifies himself with 
 the seal, and indicates his intention to deliver, that is, 
 to give operation to the deed. 
 
 A deed may be delivered subject to a condition, it Escrow, 
 then does not take effect until the condition is per- 
 formed: during this period it is termed an escrow, but 
 immediately upon the fulfillment of the condition it 
 becomes operative and acquires the character of a deed. Shepp. 
 (5) There is an old rule that a deed, thus condition- °"^° " " 
 ally delivered, must not be delivered to another party 
 to it, else it takes effect at once, on the ground that a 
 
 (ffl) [By statute in most States, a scroll, either written or printed, 
 stands for a seal, and in a few States the distinction between 
 sealed and unsealed instruments has been abolished.] 
 
 (&) [There seems to be some conflict of authority as to the rights 
 of an innocent purchaser who buys land, when a deed placed in 
 the hands of a third party to hold as an escrow, is delivered by 
 him to the grantor without a compliance with the conditions. 
 The Circuit Court of the United States for the District of Indiana, 
 in the recent case of Bailey v. Orim, 8 Reporter, 455, held that the 
 case was within the principle that when one of two innocent par- 
 ties does some act by which he places it in the power of a third 
 pai-ty to deceive and injure the other, the negligent one should 
 suffer rather than the other. 
 
 But the Supreme Court of Wisconsin, in Evarta v. Agnes, 4 
 Wis., 343, holds that no title passes by the fraudulent act of the 
 depositary, and that a So/jas fide purchaser is not protected aa 
 against the grantor.] 
 43 
 
4-1 FORMATION OF CONTRACT. Part II. 
 
 Hudson ▼. delivery in fact outweighs verbal conditions. Bat the 
 Bewett, 5 modern cases appear to show that this technical rule 
 will not be adhered to, if the intention of the parties is 
 clear that the deed should be delivered conditionally.(a) 
 Indenture The distinction between a Deed 'poll and an Indent- 
 sad, deed ^y,g jg ^q longer important since 8 and 9 Yict. c. 106. 
 s. 5. Formerly a deed made by one party had a polled 
 or smooth-cut edge, a deed made between two or more 
 parties was copied for each on the same parchment, 
 and the copies cut apart with indented edges, so as to 
 enable them to be identified by fitting the parts 
 together. Such deeds were called Indentures. The 
 statute above mentioned provides that an indented 
 edge shall not be necessary to give the efiect of an 
 Indenture to a deed purporting to be such. (5) 
 
 Charaoteris- (2) A contract under seal differs from a simple con- 
 
 liactlnder- tract in many ways. 
 
 seal. 
 
 (fl) Estoppel, (a) Statements made in a simple contract, though 
 strong evidence against the parties to the contract, are 
 not absolutely conclasive against them.. Statements 
 made in a deed are absolutely conclusive against the 
 parties to the deed in any legal proceedings between 
 
 Per Taunton, them taken upon the deed. "The principle is that 
 
 maiTv T^y- '^^^^e a man has entered into a solemn engagement by 
 
 lor,3A.&B. and under his hand and seal as to certain 
 
 278 
 
 *41 facts, he shall not be permitted to deny any mat- 
 
 [(C) [The following cases support the old English rule: Miller 'v. 
 Fletcher, 27 Gratt. (Va.) 403; Duncan y. Pope, 47 Ga. 445; Foley 
 V. Gowgill, 5 Blackf. (Ind.) 18; Badcock v. Steadman, 1 Boot, 87; 
 Braman v. Bingliam, 26 N. Y. 483 ; Chravea v. Tucker, 10 Sm. & 
 M. (Miss.) 9; Gibson v. Partee, 3 Dev. and Bat. L. (N. Car.) 530; 
 Hagood v. Marley, 8 Rich. L (S. Car.) 325. But see Crarni v. Hvich- 
 inaon, 3 Bradwell, (App. Ct. 111.) 80.] 
 
 (6) [It is not necessary that a deed be actually indented to make 
 it an indenture. It is suflacient if it purports on its face to be an 
 indenture. Gurrie v. Donald, 2 Wash. (U. S. C. C), 58.] 
 44 
 
Chap. II. § 2. CONTRACT UNDER SEAL. 41 
 
 ter he has so asserted." Such a prohibition to deny 
 facts is termed an estoppel, {a) 
 
 (5) "Where two parties have made a simple contract (6) Merger, 
 for any purpose, and afterwards have entered into an 
 identical engagement by deed, the simple contract is 
 merged in the deed and becomes extinct. This extinc- 
 tion of a lesser in a higher security, like the extinction 
 of a lesser in a greater interest iil lands, is called 
 merger. 
 
 (o) A right of action arising out of simple contract (?) Limita- 
 is barred if not exercised within six years. actions. 
 
 A right of action arising out of a contract under 
 seal is barred if not exercised within twenty years. (5) 
 
 These general statements must be taken with some See Part V. 
 qualifications to be discussed hereafter. ^ ' "*" 
 
 (d) Eemedies have been and are possessed by the (d) Reme- 
 creditor by deed against the estate of the debtor, ^^^^^j^^^^'°^* 
 which are not possessed by the creditor of a simple estate, 
 contract debt, and which mark the importance attached 
 to the Formal contract. In administering the personal 
 estate of a testator or intestate person, creditors by 
 speciality were entitled to a priority over creditors by 
 simple contract. Their privilege in this respect is 
 taken away by 32 & 33 Vict, c. 46. 
 
 As regards the real estate of a debtor, the creditor 
 by speciality was also preferred. If the debtor bound 
 himself and his heirs by deed, the Common Law gave 
 to the creditor a right, to have his debt satisfied by the 
 heir out of the lands of his ancestor; the liability thus 
 
 (a) [The estoppel in a deed extends to its recitals. Stowe v. 
 Wyse, 7 Conn. 214; Jackson v. Parkhurst, 9 Wend.'(N. Y.) 209; 
 Carver v. Jackson, 4 Pet. (U. S. S. C.) 1. 
 
 But the recital of the amount or kind of consideration may be 
 contradicted by parol if the explanation does not defeat the op. 
 eration of the deed. MOr'ea v. Purmort, 16 Wend. (N. Y.) 460; 
 WJiiteY. Miller, 22 Vt. 380; Wilkinson y. Scott, 17 Mass. 249; 
 Pritehard v. Brown, 4 N. H. 397.] 
 
 (6) [This depends upon the statutes of the various States.] 
 45 
 
42 FOKMATION OF CONTRACT. Part II. 
 
 imposed on the heir was extended to the devisee by 
 3 & 4 Will. & Mary, c. 14 s. 2. This statute was 
 repealed by 11 Geo. lY. & 1 Will. lY. c. 47, only for 
 the purpose of extending the creditor's remedy to 
 some cases not provided for by the previous Act. 
 During the present century, however, creditors by 
 simple contract have also acquired a right to have 
 their debts satisfied out of the lands of the 
 *42 debtor; but it should be noted that the creditor 
 by speciality can claim against heir or devisee 
 of real estate without the intervention of the Court 
 of Chancery, the creditor by simple contract must get 
 the estate administered in Chancery in order to make 
 good his claim. When the estate is so administered 
 the creditor by speciality has, since 32 & 33 Yict. c. 
 46, no priority over the simple contract creditor, 
 whether it be realty or whether it be personalty that 
 is administered by the Court, (a) 
 («) Gratuit- (e) A gratuitous promise, or promise for which the 
 under sealTs promisor obtains no consideration present or future, is 
 binding. binding if made under seal, is absolutely void if made 
 verbally, or in writing not under seal. It has already 
 been mentioned that this characteristic of contracts 
 under seal is often accounted for on the ground that 
 their solemnity imports consideration, and that this 
 supposition is historically untrue, inasmuch as it is 
 the Form alone which gives effect to the deed. The 
 doctrine of Consideration is, as we have seen, of a 
 much later date than that at which the Contract under 
 Seal was in full efficacy, an efficacy which it owed 
 entirely to its Form. And the doctrine of Considera- 
 tion, as it has developed, has steadily tended to limit 
 
 (a) [The remedies for the enforcement of speciality debts are 
 governed by the statutes of the different States, but the tendency 
 of those statutes is to abolish the priority in favor of speciality 
 debts over debts by simple contract, when the speciality is not a 
 lien upon property.] 
 
Chap. II. § 2. CONTRACT UNDER SEAL. 43 
 
 the peraliarity of the Contract under Seal with which 
 
 we are now dealing, and to introduce exceptions to 
 
 the general rule that a gratuitous promise made by 
 
 deed is binding, (a) 
 
 Even at Common Law, in the case of contracts made 
 
 in restraint of trade, consideration is necessary, though Mallan v. 
 
 the contract be under seal; and although this instance ^^' ggg^' 
 
 is exceptional, yet if there be a consideration for a [See Palmer 
 
 contract under seal, it is open to the party sued upon pick^ Tss.] 
 
 such a contract to show that the consideration was Collins v. 
 
 illegal, or immoral, in whicli case the deed will be Blantern, 1 
 
 . J Sm. L. 0. p. 
 
 void. 369. *" 
 
 But it is in the Court of Chancery that we find this 
 privilege most encroached upon. The idea of Con- 
 sideration as a necessary element of Contract as well 
 as of Conveyance, if it did not actually originate 
 in the Chancery, has always met with peculiar *43 
 favor there. It was by the weight given to the 
 presence of Consideration, or by inferences drawn 
 from its absence, that the Covenant to stand seized, 
 the Bargain and Sale of lands, and the resulting Use 
 first acquired validity. And in the department of Equitable 
 Contract, Equity has developed similar principles. It^'''^ of ab- 
 will not extend its peculiar remedies to gratuitous sideration. 
 promises, even though they be under seal. Specijio See part T. 
 performance of a gratuitous promise is therefore un- '^^' "^' 
 enforceable, whether the promise is or is not made by 
 deed. And further. Equity not merely refuses to 
 compel specific performance of a gratuitous promise 
 though made by deed, but it looks behind the Form 
 and endeavors to ascertain, where Consideration is 
 absent, whether the consent of the parties was genu- 
 ine or not ; that is to say, it is ready to regard the 
 absence of Consideration as evidence of Undue Influ- 
 
 (a) [In many of the States a plea of want or failure of con- 
 sideration is allowed in suits on instruments under seal for the 
 payment of money or property.] 
 47 
 
44: FORMATION OF CONTRACT. Part II. 
 
 ence or Fraud ; upon sufficient proof of these it will 
 altogether aroid the deed. 
 
 Bonds. The best illustration of a gratuitous promise under 
 
 seal is supplied by a Bond. A Bond may be techni- 
 cally described as a promise defeasible upon condition 
 subsequent; that is to say, it is a promise by A to pay 
 a sum of money, which promise is liable to be de- 
 feated by a performance by A of a condition stated in 
 the bond. The promise, in fact, imposes a penalty for 
 uhe non-performance of the condition which is the 
 real object of the bond. The condition desired to be 
 secured may be the payment of a sum of money or 
 the doing or forbearing from some act. In the first 
 case the instrument is called a common money bond; 
 in the second a bond with special conditions. 
 
 A promises X that on the ensuing Christmas Day 
 he will pay to X £500, with a condition that if before 
 that day he has paid to X £250 the bond is to be void. 
 A promises X that on the ensuing Christmas Day 
 he will pay to X £500, with a condition that if before 
 that day M has faithfully performed certain duties the 
 bond is to be void. 
 
 Legal aspect *44 Common law has differed from Equity in its 
 
 " * *"^ ■ treatment of bonds much as it did in its treat- 
 
 ment of mortgages. 
 
 Equitable Common law took the Contract in its literal sense 
 
 and enforced the fulfillment of the entire promise 
 upon breach of the Condition. 
 
 Equity looked to the object which the bond was 
 intended to secure, and would retain the promisee 
 from obtaining more than the amount of money due 
 under the condition or the damages which accrued to 
 him by its breach. 
 
 8 & 9 Will. The rights of the promisee are now limited by stat- 
 48 
 
Chap. II. § 2. CONTRACT UNDER SEAL. 45 
 
 ute to the amount of loss actually sustained by breach III. 0. 11 ; 4 
 of the condition, (a) f'J^'"S.%^- 
 
 ^ ' 16 ; S3 & 34 
 
 (3) As a general rule it :s optional to the parties to Vict. C. 136. 
 a contract to employ or not to employ the form of a 
 deed. But there are a few cases in which a deed is 
 essential to the validity of a contract. 
 
 The Common Law rules on this subject are import- Common 
 ant. They are two. _ ^--1-- 
 
 (a) A gratuitous promise or contract for which Gratuitous 
 there is no consideration must be made by deed, other- promises, 
 wise it will be void. This matter has already been 
 dealt with as furnishing a distinguishing characteristic 
 of Pormal as opposed to simple Contracts. 
 
 (5) As to contracts made with corporations, the Contract 
 general rule on this subject is, that a corporation '^^^^j^'^'^'^^°^' 
 aggr,egate can onl/y he iound hy contracts under the 
 seal of the corporation. Tlie reason assigned 
 for the rule is that, as a corporation is only a *45 
 fictitious and not a natural person, some evi- 
 dence is required that the aggregate of persons com- 
 posing it is really bound to that which the contract 
 purports to promise. This evidence is supplied by 
 the use of the seal common to the corporation. There 
 are, however, numerous exceptions to the general rule, 
 exceptions which may be classified under two heads, 
 as (1) cases in which the rale would defeat the objects 
 for which the corporation was created, and (2) cases in 
 which the operation of the rule would occasion great 
 and constant inconvenience. 
 
 The first head applies more particularly to trading South of Ire- 
 corporations, which as the law now stands may through 0°. y^^Wadl^ 
 
 die, L. R. 3 
 
 C. P. 469. 
 (a) [Although the English statutes referred to are of a later date 
 
 than that of the settlement of this country, the rule given in the 
 
 text is adopted almost unanimously in the various States either 
 
 by statute or usage. See Buekmaster v. Grundy, 1 Scam. (111.) 
 
 810; Moss V. Wood, R. M. Charlton, (Ga.) 43; Hopkins v, Towell, 
 
 5 Terg. (Tenn.) 305.] 
 
 49—4 
 
46 FORMATION OF CONTRACT. Part II. 
 
 their agents enter into simple contracts relating to the 
 objeets and purposes for which the body was incorpor- 
 ated; and if these objects make it expressly necessary, 
 may even issue negotiable instruments. 
 
 The second head applies more particularly to non- 
 trading cases, and may be taken to include: 
 Nicholson v. Matters of trifling importance or daily necessary 
 Union! L. R. occurrence, as the hire of an inferior servant, or the 
 1 Q. B. 620. supply of coals to a workhouse. 
 
 Matters of urgent necessity, admitting of no delay; 
 
 as where a municipal corporation possessed a dock and 
 
 made agreements from time to time for the admission 
 
 of ships, it was held that such agreements need not he 
 
 L. R. 10 C. P. under seal. Wells v. The Mayor of Kingston upon 
 
 402- Hull. 
 
 In addition to these exceptions at Common Law, 
 the Legislature has in some cases freed corporations 
 from the necessity of contracting under seal, and pro- 
 vided special forms in which they may express their 
 common assent. 
 
 It has been questioned whether, when a corporation 
 enters into a contract not under seal, and the contract 
 has been executed in part, such execution gives rights 
 to the parties which they would not have possessed if 
 the contract had remained executory. It seems 
 *46 that where a corporation has done all that it was 
 bound to do under a simple contract it may sue 
 the other party for a non-performance of his part — 
 5 M. & G-. R. Fishmonger's Com,pany v. Robertson; but that the 
 193. mere fact that something has been done under the con- 
 
 Mayor of tract will not make it actionable, if it is not made un- 
 
 Kiddermin- (jgj. ggg,] unless the contract be of a nature to admit 
 
 ster v. Hard- ' 
 
 wicke, L. R. ot an action for specific performance. («) 
 
 9 Ex. 24; 
 
 Wimbledon (*) [^"^ ^^ United States, where no form is prescribed by the 
 Local Board, charter, a corporation may contract in the same manner as an 
 L. R. 3 C. P. individual. Bank v. Poitiaux, 3 Rand. (Va.) 136 ; Selma v. Mid- 
 ^- ^^^ leu, 46 Ala. 411 ; Bank of Columbia v. Patterson, 7 Cranoh. (U. S. 
 
 50 
 
cnnsidera- 
 
 tiOQ. 
 
 Chap. II. § 3. SIMPLE CONTRACTS. 47 
 
 Simple Conteaot. 
 § 3. Simple Contracts required to he in writing. 
 
 "We have now dealt with the contract which acquires Simple con. 
 validity by reason of its Form alone, and we pass to 
 the Contract which depends for its validity upon the 
 presence of Consideration. In other words, we pass All require 
 from the Formal to. the Simple Contract, or from the^j. 
 Contract under seal to the parol Contract, so called 
 because, with certain exceptions to wliich reference 
 will now be made, it can be entered into by word of 
 mouth. 
 
 In the case of certain Simple Contracts the law re- Some are 
 requires written evidence of the nature of the agree- ^cidiUon to 
 ment and of the parties to it, in order to make it Jie expressed 
 enforceable; but Form is here needed, not as giving form, 
 efficacy to the contract, but as, evidence of its exist- 
 ence. Consideration is here as necessary as in those 
 cases in which no writing is reqniredt "if contracts [See post, p. 
 be merely written and not specialties, they are parol ^ Mase.^15''^ 
 and consideration must be proved." La.Ann.l97.] 
 
 "We are now dealing with Simple Contracts, which 
 must fulfill the ordinary requirements ot Simple Con- 
 tracts; but in addition to this the law demands that 
 written evidence of a certain kind shall be produced 
 concerning them, otherwise the courts will not regard 
 or enforce them. 
 
 The only requirement of Form in Simple Contract Common 
 which can be said to exist at Common Law is in mrnts'^'^^"'^ 
 
 the case of Bills of Exchange and Promissory *47 
 
 S. 0.) 299 ; Oarrol v. Knapp, 9 Pet. (U. 8 S. C.) 541 ; Canal Bridge 
 Gordon, 1 Pick. (Mass.) 297. And even when they are granted 
 the privilege of acting in a specific manner, this does not prevent 
 them from acting in any other way not prohibited. Witte v. Derby 
 Fishing Go., 2 Conn. 260.] 
 61 
 
48 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 Statute of 
 Frauds. 
 
 Notes, wliicli by the custom of merchants, adopted into 
 the Common Law, must be in writing. JXT 
 
 The statutory requirements of Form in Simple Con- 
 tract are mainly to be found in the 29 Car. II. c. 3, the 
 famous Statute of Frauds. There are some others, 
 however, and we may deal with them shortly. 
 S. Sec. 4955.] Assignments of copyright must be in writing. 
 Lindley on The transfer of shares in a company is usually re- 
 ?1?'^®^^^^P' quired to be in a certain form by^the statutes of the 
 various States which govern companies generally, or 
 refer to particular companies. 
 
 The Statute of Frauds, 29 Car. II. c. 3, contains two 
 sections, the 4th and 17, which affect the form of cer- 
 tain Simple Contracts and which require careful con- 
 Section 4. J sideration. The 4th Section enacts : " That no action 
 shall he hrought whereby to charge any executor or 
 administrator upon any special promise to answer dam- 
 ages out of his own estate or whereby to charge the 
 defendant upon any special promise to answer for the 
 debt, default or miscarriage of another person, or to 
 charge any person upon any agreement made in con- 
 sideration of marriage, or upon any contract or sale of 
 lands, tenements or hereditaments, or any interest in 
 or concerning them 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 
 shall be in writing, and signed by the party to be 
 charged therewith or some other person thereunto by 
 
 him lawfully authorized. 
 *48 The discussion of these sections falls naturally 
 into three heads. 
 
 (1) The form required by the section. 
 
 (2) The nature of the contracts specified in it. 
 
 (3) The effect upon such contracts of a breach of its 
 provisions. 
 
 52 
 
Chap. II. § 3. SIMPLE CONTRACTS. 49 
 
 (1) 
 
 The form required by the terms of the section is the 
 first point to be considered. "What is meant by the 
 requirement that " the agreement or some memoran- 
 dum or note thereof shall be in writing and signed by 
 the party to be charged therewith or by some other 
 person thereunto by him lawfully authorized " ? 
 
 We may, with regard to this part of the subject, lay 
 down the following rules :i 
 
 {a) The Form required does not go to the existence The form is 
 of the Contract. The Contract exists though it may ^^^Jjf ^ ^'^■ 
 not be clothed with the necessary Form, and the effect 
 of this departure from the provisions of the statute is 
 simply that no action can be brought until the omission . 
 is made good. 
 
 Thus the memorandum or note in writing may be 
 made, so as to satisfy the statute, at any time between 
 the formation of the contract and the commencement 
 of an action. , 
 
 So too a party to the contract may sign a rough draft 
 of its terms, and acknowledge his signature when the 
 draft has been corrected and the contract is actually 
 concluded. Stewart v. Eddowes. Or again, a pro- L. R. 9 C P. 
 posal containing the names of the parties, and tl\e 
 terms of the suggested contract, and signed by the 
 proposer will bind him though the contract is concluded 
 by a subsequent parol acceptance. Reuss v. Picksley. L. R. 1 Bxch. 
 In the former of these two cases the signature of the y^ste^rr^S 
 party charged — in the latter not the signature Sanf. 101.] 
 
 only but the entire memorandum — was made *4:9 
 before the contract was concluded. This is per- 
 haps sufficient to show that the Form is an evidentiary 
 
 ' With the exception of rules {a) and («Z), what is said under 
 this head may be taken to apply to the 17th as well as to the 4th 
 section. 
 
 63 
 
49 FORMATION OF CONTKACT. Part II. 
 
 matter only, and is not, as in the case of a deed, an 
 
 integral part of the contract itself. 
 The parties (5) The memorandum of the contract must show 
 mus appear. ^^^ ^^^ ^j^^ parties to it. For instance, A pi'omised 
 
 X that he would answer for the debt or default of M; 
 
 the memorandum of the promise, though signed by A, 
 
 did not contain the name of X. It was held to be 
 3 E. & B. insufficient. Williams v. Lake. " IsTo document," it 
 burne V '^' ^^® ®^^*^ ^'^ ^^^ <ia,?,e, "can be an agreement or a memo- 
 Shaw, 1 N. randum of one which does not show on its face who 
 ■■' the parties making the agreement are." 
 
 It is settled, however, that a description of one of 
 
 the contracting parties, though he be not named, will 
 
 let in parol evidence otherwise inadmissible to show 
 
 Trueman v. his identity. This may occur where A as agent for 
 
 &'b^589. '^ enters into a contract with X in his own name ; X 
 
 Higgins V. may prove that he has really contracted with M, who 
 
 Ifw^'g^ has been described in the memorandum in the charac- 
 
 rwaring v. ter of A. {a) On the otlier hand, A is not permitted 
 
 Werid!'435.] *o prove that he is not the real party to the contract. 
 
 The terms (c) The memorandum may consist in various letters 
 
 lected from ^^ papers, but they must be connected, consistent and 
 
 various doc- complete. 
 uments; 
 
 (<i) [The American cases seem to he in conflict upon this point 
 The Court of Massachusetts in Lerned v. Johns, 9 Allen, 419, over- 
 ruling some former cases, hold the rule as laid down in the text, 
 as do those of Kentucky in Violett v. Powell, 10 B. Monroe, 347, 
 ■while those of New Tork,in Mina/rd v. Mead, 1 Wend. 68; New- 
 comb V. Clark, 1 Denio, 226, hold that parol evidence cannot be 
 received to prove that where a party signs his own name he did 
 so as agent for another. The language of the opinion in Hypes 
 V. Oriffin, 89 111. 134, seems to uphold the view of the Massachu- 
 setts cases, though not necessary to the decision. Where the con- 
 tract has been executed so that the suit need not be on the writ- 
 ing, the unnamed principal may be sued — Muntingdon v. Kno3$ 
 7 Cush. (Mass.) 371 — and the unnamed principal may maintain 
 an action upon a written instrument made by an agent in his 
 own name. JSicbbert v. Borden, 6 Wheat. 79 ; Brooks v. Mintem, 
 1 Cal. 481.] 
 
 54: 
 
Chap. II. § 3. SIMPLE CONTRACTS. 60 
 
 The only signature required is that of the party to Dobell v. 
 be charged: it is not therefore the fact of agreement, ^2'°^"^^°°' 
 but the terms, and all the terms, of the agreeHient 855- Buxton 
 that the statute requires to be expressed in writing. \ t'^bV' 
 
 The terms need not all be expressed in the same 279.' [Fir- 
 document, and it is permissible to prove a memoran- ^jer lo" ** " 
 dum from several papers, or from a correspondence, ^l^^'^ 332.] 
 but the connection of the various terms miist be made but must be 
 out from the papers themselves, and may not be shown o^^^ce^of 
 by parol evidence. ""§— the docu- 
 
 A issued a prospectus ^af Illustrations of Shakes- ™^giieiit ,n 
 peare, to be published on terms of subscription there- 15 ^t- 686.] 
 in set out. X ente^-ed his name in a book entitled' 
 " Shakespeare Subscribers, tlieir signatures," in *50 
 A*s shop. X afterwards refused to subscribe. 
 He was sued upon his promise to do so, and it was 
 held that ;there was no documentary evidence to con- 
 nect the subscription book with the prospectus, so as 11 East, 143. 
 
 to make a sufficient memorandum of the contract, and '^^^'^r-'i^^ 
 
 ' V. McMulan, 
 
 that the deficiency might not be made good by parol 7 Porter, 
 evidence. Boydell v. Drummond. ^' ■' 
 
 To say that the terms of the contract must be con- Must be 
 sistent with one another is merely to reiterate what '^"''*'®''^'^''' 
 has been said under the head of proposal and accept- 
 ance. But although the various documents in which 
 the terms of a contract are found must be perfectly 
 consistent with one another, yet if the contract is fully 
 set out in writing it will not be affected by a repudia- 
 tion of it contained in the same writing; the parties 
 have agreed, and the statutory evidence is supplied: ag c. B. N. 8. 
 
 repudiation is not within the power of either to make, ^*?; Parry 
 
 ^ "^ 'v. Coonibe, 
 
 and its expression is wholly nugatory. Bailey v. i Pet. 640.] 
 
 Sweeting. 
 
 Again, the terms must be complete in writing, jjugt 1,3 
 
 Where a contract does not fall within the statute, the complete. 
 
 parties may either (1) put their contract into writing, 
 
 (2) contract only by parol, or (3) put some of the terms 
 
 65 
 
51 FORMATION OF CONTRACT. Part II. 
 
 in writing and arrange others by parol. In the latter 
 
 case, although that which is written may not be varied 
 
 by parol evidence, yet the terms arranged by parol are 
 
 proved by parol, and they then supplement the writ- 
 
 ino-. and so form one entire contract. But where a 
 
 contract falls within the statute, all its terms must be 
 
 in writing, and parol evidence of terms not appearing 
 
 [Fowler V. ^^ t^e writing would altogether invalidate the contract, 
 
 Beuflican, as showing that it was something other than that which 
 52 111. 405.] J V ^, .^^ ^ •, 
 
 appeared in the written memorandum. 
 
 Consldera. (<^) Tlie consideration must appear in writing as well 
 
 tion must as the terms of the promise sued upon, (a) This 
 
 vnulng^ rule does not extend to the 17th section, but it has 
 
 Wainv. been settled with regard to the 4th since the year 
 
 Warlters, 5 - „„ , 
 
 East, p. 10. IS*^*- 
 
 ■ Signature of *51 («) The memorandum must be signed h^ the 
 
 ]inrty or party charged or his , g^ent. 
 
 Seu Ben- ^^ ^'^^^ "^"^ follow therefore that the contract is 
 
 jamin on enforceable at, the suit, of either party; it may be 
 
 Ed. chap. 8.) optional to the party who has not signed to enforce 
 it against the party who has. The signature need 
 not be an actual subscription of the party's name, 
 it may be a mark ; nor need it be in writing, it may 
 printed or stamped ; nor need it be placed at the end 
 of the document, it may be at the beginning or in the 
 middle. 
 
 (a) [While the courts of New York uphold the English rule, the 
 weight of authority seems to be strongly upon the other side. 
 See Packard v. Richardson, 17 Mass. 122, where the subject is very 
 fully discussed ; also, Sage v. Wilcox, 6 Conn. 81 ; Beed v. Evans, 
 17 Ohio, 128 ; Oilligan v. Boardman, 20 Me. 79 ; Silking v. Watson,, 
 13 Tex. 199 ; How v. Kimball, 2 McLean, (U. S. C. C.) 103. Some 
 of the cases are based upon the substitution of the word " con- 
 tract " or " promise," instead of the word " agreement," which is 
 used In the English statute. Where the courts hold the English 
 rule it is held to be sufficient if the consderation can be deduced 
 from the whole contract, and that the words "value received" 
 are sufficient. Watson v. MeLa/ren, 19 Wend. (N. Y.^ 657; Eddm 
 V. Gough, 5 Gill. (Md.; 101.] 
 56 
 
Chap. 11. § 3. SIMPLE CONTRACTS. 52 
 
 But it must be intended to be a signature, and as 
 such to be a recognition of the contract, and it must 
 govern the entire contract. 
 
 These rules are established by a number of cases 
 turning upon difficult questions of evidence and con- 
 struction. The principal cases are elaborately set forth 
 in Benjamin on Sales, pp. 188-196, but a further dis- 
 cussion of them would here be out of place. 
 
 Similar questions arise in dealing with the subject 
 of agency m relation to the signature of contracts; 
 bat without going into detail it may suffice to lay 
 down these rules. If A signs a contract professing 
 himself to be the agent for X it is a question of fact 
 whether he was or was not authorized by X to do so. 
 If A ^igns a contract on behalf of X, but without 
 stating that he signs it as an agent; the other party to 
 the contract has the option of enforcing it against A or 
 X; but A having held himself out as a principal is See chapter 
 bound by the contract if the other party choose to °^ Agency, 
 enforce it against "him, and he will not be allowed to Higgins v. 
 prove that he signed only as an agent. Certain t.^w'^Rqi''^ 
 
 classes of persons are presumed by law to be *52 [Waring v. 
 agents for both parties_, and their signature is w ^°i'^l 
 
 binding on both unless the presumption be rebutted 
 by contrary evidence. Such persons are auctioneers at 
 a public sale, and brokers. 
 
 (2) 
 
 Having dealt with the form required under the 4th 
 section for all the contracts included therein, it will 
 be well to note briefly the characteristics of the five 
 sorts of contract specified in the section. 
 
 Special promise iy am, executor or administrator to 
 answer damages out of his own estate. 
 
 The liabilities of an executor or administrator in 
 respect of the estate of a deceased person are of two 
 
 57 
 
53 FORMATION OF CONTRACT. Part 11. 
 
 kinds. At Common Law he may sue and be sued 
 upon obligations devolving upon him as representa- 
 tive of the deceased. In Equity he may be compelled 
 to carry out the directions of the deceased in respect 
 of legacies, or to give effect to the rules of law relat- 
 ing to the division of the estate of an intestate. In 
 neither case is he bound to pay anything out of his 
 own pocket: his liabilities are limited by the assets of 
 the deceased. But if, in order to save the credit of 
 the deceased, or for any other reason, he choose to 
 promise to ansvmr dmnages out of his own estate, that 
 promise must be in writin^ogether with tlie consid- 
 eration for it, and must be s^ned by him or his agent. 
 It is almost needless to add that in this, as in all other 
 contracts under the section, the presence of writing 
 will not atone for the absence of consideration. 
 
 A'nA/ promise to answer for the debt, default or 
 miscarriage of another person. 
 
 Without entering upon a detailed discussion of the 
 contract of suretyship, it is well to note the following 
 points relating to the promise to which the statute 
 applies. 
 The promise (a) It must be distinguished from an indemnity, or 
 indemnity™ promise to save another harmless from the results of 
 a transaction into which he enters at the instance of 
 
 the promisor. 
 *53 In other words, there must be three parties in 
 contemplation; M, who is actually or prospect- 
 ively liable to X, and A, who in consideration of some 
 act or forbearance on the part of X promises to answer 
 for the debt, default, or miscarriage of M. 
 13 0. B. N S. An illustration is furnished by the case of Reader 
 Beaman^v ^' ^^ngham. X, a bailiff, was about to arrest M. A 
 Russell, s promised to pay a sum of £17 on a given day to X if 
 ■■' he would forbear to arrest M. This was held an inde- 
 58 
 
Chap. II. § 3. SIMPLE CONTRACTS. 54 
 
 pendent promise of indemnity from A to X which 
 need not be in writing. 
 
 (5) There must be a liability actual or prospective Necessitates 
 of a third party for whom the promisor undertakes to^[™*'^^^'^ 
 answer. If the promisor make himself primarily third party, 
 liable the promise is not within the statute. 
 
 " If two come to a shop and one buys, and the other, 
 to gain him credit, promises the seller '■If he does not \ 
 fay you, I will^ this is a collateral undertaking and 
 void without writing by the Statute of Frauds. But Per Curiam 
 if he says, '•Let him have the goods, I will he 2/0'^^v°Darcell^'l 
 paymaster,'' or '/ will see you paid,'' this is an under- Sm. L. 0. 
 taking as for himself, and he shall be intended to jg '^ \^^_ 
 
 be the very buyer and tlie other to act as but his °er, 88 111. 
 
 *» 561.] 
 
 servant." ^ 
 
 (c) Although the liability may be prospective at the And a real 
 
 time the promise is made, yet it must feome into exist- ^^^^^^" 
 
 enee at some time, else the contract of suretyship falls 
 
 to the ground, and the promise, though not in writing, per Lord 
 
 will nevertheless be actionable. " There can be no ?^"^"'°^ ^^ 
 
 Mount 
 
 suretyship unless there be a principal debtor, who of Stephen v. 
 course may be constituted in the course of the trans- j^^;^^^'jl^'. 
 action by matters ex post facto, and need not be so at and see judg- 
 the time, but until there is a principal debtor there Exch. Cham, 
 can be no suretyship." ^. R. 7 Q. B. 
 
 {d) If there be an existing debt for which a third 
 party is liable to the promisee, and if the promisor 
 undertake to be answerable for it, still the contract 
 need not be in writing if its terms are such that it 
 affects an extinguishment of the original liability. 
 In other words, the liability of the third party And contin- 
 
 must be a continuing liability in order to bring *54°'^*- 
 the promise within the statute. A promise to a 
 creditor to pay a debt in consideration of his doing 
 that which would extinguish his claims against thelB. &Ald. 
 original debtor, would be an illustration of the kind v^Brown!^5^ 
 of promise here spoken of. Ooodman v. Chase. Cush. 488.] 
 
 69 ■ 
 
65 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 May arise 
 from wrong. 
 
 2B. &AW. 
 613. [Turner 
 V. Hubbell, 
 2 Day 457.] 
 
 Considera- 
 tion need not 
 be expressed. 
 
 See p. 51. 
 
 (e) The debt, default, or miscarriage spoken of in 
 the statute will include liabilities arising out of wrong 
 as well as out of contract. So in Zirhham v. Marter, 
 M wrongfully rode the horse of X without his leave, 
 and killed it. A promised to pay X a certain sum in 
 consideration of his forbearing to sue M. Held to be 
 a promise to answer for the miscarriage of another 
 within the meaning of the statute. 
 
 {/) This contract is an exception to the general 
 rule that "the agreement or some memorandum or 
 note thereof," which the statute requires to be in 
 writing, must contain the consideration as well as the 
 promise. 
 
 Agreement made in consideration of Marriage. 
 
 Not a prom- It is sufficient to note that the agreement here 
 [Clark"v"^ meant is not the promise to marry, (the consideration 
 Pendleton, for this is the promise of the other party,) but the 
 495.]°'"*' promise to make a payment of money or a settlement 
 
 of property in consideration of, or conditional upon a 
 
 marriage actually taking place. 
 
 Contract or sale of lands or hereditaments, or amy 
 interest in or concerning them. 
 
 What is an 
 interest in 
 land. 
 
 It is not always easy to say what is an interest in 
 land within the meaning of this section, but it is per- 
 haps safe to say that the contract must be for a sub- 
 stantial interest in land, and not for arrangements 
 preliminary to the acquisition of an interest, or for a 
 remote and inappreciable interest. 
 
 An agreement to pay costs of an investigation 
 *55 of title would not be within the operation of 
 the section; nor would an agreement to transfer 
 shares in a railway company which, though it pos- 
 sesses land, does not give any appreciable interest in 
 that land to its individual shareholders. The whole 
 60 
 
Chap. II. § 8. SIMPLE CONTRACTS. 66 
 
 sabject is one wliicli belongs to the sale and purchase 
 of Eeal Property rather than to the law of Contract. 
 
 The principal question of interest with special Fructus in- 
 reference to the subject relates to the sale of crops. A ^^j^"^^j^gg^ ®* 
 distinction has been drawn as to these between what 
 are called emblements or fructus indusi/riales, and 
 growing grass, timber, or fruit upon trees, which are 
 called fruGtus naturales, 
 
 Fructus industriales do not under any circum- 
 stances constitute an interest in land. Fructus natu- [See Whit- 
 rales are considered to do so if the sale contemplates ^a^i^7 1 
 the passing of the property in them before they are Met 313; 
 severed from the soil. Where property is to pass after osbom 67 
 severance, both classes of crops are goods, wares, and I^- 108.] 
 merchandise within the meaning of section 17 of the 
 Statute of Frauds; but where property m fructus in- 
 dustriales is intended to pass before severance, it is See Ben- 
 doubtful whether they fall within the meaning of s^^s. "[Am. 
 section 17, though it is certain that the sale is not Ed. Book 1, 
 governed by section 4. 
 
 Agreement not to he performed within the space of 
 one yea/r from the making thereof. 
 
 Two points should be noted with regard to this form 
 of agreement. 
 
 {a) In order to fall within the section the parties It must con- 
 must contemplate that it should not be performed n^^g,.foj.m, 
 within the year. The fact that it may not be, or is ance within 
 not performed within the year does not bring it ^y^*""' 
 within the operation of the statute unless " it appears Peter v. 
 by the whole tenor of the agreement that it is to be g^™L °C.' 
 performed after the year." 335. [Lyon 
 
 (5) The agreement does not fall within the section Met. 4ii.] 
 if that which one of the parties is to do, is all to be And by both 
 done within the year. So where A being tenant parties, 
 
 to X under a lease of twenty years, promised *56 
 verbally to pay an additional £5 a year during 
 61 
 
56 FORMATION OF CONTRACT. Part II. 
 
 Donellanv. tlie remainder of the term in consideration that X 
 iTm ^' * ^^^^ °^* ^^^ ^" alteration, A was held liable upon his 
 [Holbrook V. promise, the consideration for it having been executed 
 f™?£5 withm the year, 
 
 •/-- . '\ 
 
 It remains to consider what is the position of parties 
 
 who have entered into a contract specified in section 4, 
 but have not complied with its provisions. The terms 
 of the section do not render such a contract void, but 
 they prevent it being enforced by action. The con- 
 tract, therefore, though it cannot be sued upon, is yet 
 available for some purposes. Two illustrations will 
 suffice to explain this. 
 13 0. B. 801. In the case of Xeroux v. Brown, the plaintiff sued 
 Dennv^v^^^ upon a contract not to be performed within the year, 
 Williams, 5 made in France and not reduced to writing. French 
 Dacosta'v. ^^^^ ^'^^^ ^°* require writing in such a case, and by 
 Davis, 4 the rules of private international law the validity' of a 
 319.] ' contract, so far as regards its formation, is determined 
 by the lex loci contractus. The procedure, however, 
 in trj'ing the rights of parties under a contract, is 
 governed by the l&xfori, and the mode of proof would 
 thus depend on the law of the country where action 
 was brought. If, therefore, the 4th section avoided 
 contracts made in breach of it, the plaintiff could 
 have recovered, for his contract was good in France, 
 where it was made, and the lex loci contractus would 
 have been applicable. If, on the other hand, the 4th 
 section affected procedure only, the contract, though 
 not void, was incapable of proof. The plaintiff tried 
 to show that his contract was void by English law, in 
 which case he would have been successful, for there 
 would have then been nothin;; to hinder his proving 
 first the contract and then the French law which made 
 it valid. But the Court of Common Pleas held that 
 the 4th section dealt with procedure only, that the 
 62 
 
Chap. II. § 3. SIMPLE CONTRACTS. 57 
 
 existence of the contract was not affected by *57 
 
 the section, but that it was rendered incapable 
 
 of proof, and the plaintiff therefore could not recover. 
 
 For some purposes, therefore, the contract is in exist- 
 ence, and if one party should do all that he is bound to 
 do under the contract, equity will consider that such 
 part performance takes it out of the operation of the 
 statute, and will grant specific performance of the 
 residue, {a) " It is every day's practice in the courts Honyman 
 of equity to enforce the performance of contracts not Le^Ro'J,x r 
 in writing where there has been part performance." Brown. 
 
 So in Nunn v. Fabian. A landlord agreed by word L. R. 1 Ch. 
 of mouth with his tenant to grant him a lease for 21 
 years at an increased rent upon certain terms. The 
 landlord died before the lease was executed, but the 
 tenant had previously paid a quarter's rent at the in- 
 creased rate. It was held that he was entitled to an 
 execution of the lease on the ground that a part per- 
 formance had taken place, although the contract would 
 otherwise have been unenforceable as not satisfying 
 the Statute of Frauds. (5) 
 
 Contracts within the seventeenth section. 
 
 The seventeenth section enacts " that no contract for Section 17. 
 the sale of any goods, wares and merchandises for the 
 
 {d) [The Courts of Connecticut and Missouri uphold the Eng- 
 lish rule. See Noyes v. Moor, 1 Root, 143 ; Watrous v. Ohalker, 
 7 Conn. 224, and Buggett v. Cason, 26 Mo. 231. But a number of 
 courts hold the opposite doctrine. See Lane v. Shackford, 5 N. 
 H. 130; Thomas v. Bickerson, 14 Barb. 90.] 
 
 (b) (Some American cases hold that verbal contracts for the sale 
 of lands will not be enforced in equity unless the purchaser has 
 taken possession under the contract, paid the purchase money, 
 and made valuablie improvements. TJpdilce v. Armstronig, 8 Scam. 
 564; Granger v. Fry, 17 Penn. St. 491. But see Lowry v. Tew, 
 3 Barb. Chy. (N. T.) 407; Ehodea v. Blwdes, 3 Sanf. Chy. (KT.) 
 379 ; BaHy v. Oaldwell, 5 Day, (Conn.) 67, and Fitzsimmons v. 
 Allen, 39 111. 440, where a more relaxed rule is upheld.) 
 63 
 
5S FORMATION OF CONTRACT. Part II. 
 
 , price of £10 sterling or upwards sliall 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 
 
 I bargain be made and signed by the parties to be 
 
 charged by such contract, or their agents thereunto 
 
 lawfully authorized." 
 
 The same qiiestions present themselves here as pre- 
 sented themselves under the fourth section. (1) What 
 is the form required, (2) what are the contracts for 
 which such form is required, and (3) what are the 
 effects of the absence of the statutory requirements. 
 
 *58 (1) 
 
 Difference as "With- regard to the form required, where, in absence 
 See 4^ "" of a part acceptance and receipt or part payment, a 
 note or memorandum in writing is resorted to, it is 
 suificient to say that the rules applicable to contracts 
 tinder section 4: apply to contracts under section 17, 
 with this exception, that it is not necessary under sec- 
 tion 17 that the consideration for the sale should appear 
 in writing. Since the 17th section only applies to con- 
 tracts for the sale of goods, it will be presumed, in the 
 absence of. a specified consideration for the sale, that 
 there is a promise or undertaking to pay a reasonable 
 Hoadley V. price, provided always that there has been no express 
 Kne*^!' ^^ verbal agreement as -to price which would rebut the 
 presumption of a promise to pay what was reasonable. 
 
 (2) 
 
 Nature of The question as to the nature of a contract for the 
 Sale!'^**^' °^ ^^^® °^ goods, wares, a;nd merchandise can only be an- 
 swered by a discussion on the Contract of Sale_idi 
 English law which would not be in place here. 
 These points however must be borne in mind. 
 64 
 
Chap. II. § 8. SIMPLE CONTRACTS. 69 
 
 The contract of Sale in English law has the effect 
 of a conveyance, it passes the property in the thing 
 sold; but in order to have this effect, it must be a con- 
 tract for the sale of a specific chattel to which nothing [Handletter 
 remains to be done by the vendor by way of comple- J\ Tj^l°^*°' 
 tion, weighing, measuring, or testing. Such a contract 400.] 
 is called an executed contract of sale. 
 
 It is quite possible, however, that a contract may be Sale of chat- 
 made for the sale of goods which are not specific— A gp'_^°*^Pj"- 
 may agree to buy any 10 sheep of X's flock. Or not complete, or 
 complete — A orders a table which he sees making in tained value. 
 X's shop. Or of goods to which something 
 remains to be done by way of ascertainment of *59 
 price — A buys X's stack of hay, the price to be 
 determined as the hay is taken down and weiglied. 
 
 In these cases the property does not pass, the buyer 
 does not acquire a right in rem to the thing agreed to 
 be sold, but only a right in personam against the 
 seller, (a) In like manner, the seller holds at his owa 
 risk the chattels sold, he is not divested of his prop- 
 erty. This is called an executory contract of sale. 
 
 It was long questioned whether the 17th section Does Sec. 17 
 applied to the executory contract of sale, and the mat- ecutary°con- 
 ter was not set at rest till more than 150 years after tracts of 
 the passing of the Statute of Frauds, {b) ^* ® 
 
 The effect of s. 7, ch. 14 of Lord Tenterden's Act, 
 9 Geo. lY., is to bring executory contracts for the sale 
 of goods within the I7th Section of the Statute of 
 Frauds. 
 
 A further question has arisen, in cases where skilled 
 
 {a) (But if it is shown that it was the intent of the parties that 
 the property should pass, some courts hold that the intention 
 shall govern. Biddle v. Varnwm, 30 Pick. 280. But see contra, 
 Waldo V. Belcher, 11 Iredell, L. 609.) 
 
 (J) (The American courts hold that executory contracts are 
 within the statute. Bennett v. EvU, 10 Johns. (N. Y.) S64; Lamb 
 v. Crcrft, 12 Met. (Mass.) 350; Carson v. Cheely, 6 Ga.554; Sawyer 
 T. Warre, 36 Ala. 675.) 
 65—5 
 
60 FORMATION OF CONTRACT. Part II, 
 
 Difference labor has to be expended upon the thing sold before 
 between con- |.jjg contract is executed and the property transferred, 
 and for work whether the contract is one for work and labor, which 
 and labor. ^^^-^^ ^^^ f^U ^^^^^ ^-^^ jY^j^ section; or for goods, 
 
 wares, and merchandise within the meaning of the 
 section. After some conflict of judicial opinion it has 
 1 B. & 8. 373. hpen laid down in Zee v. Giffin that where the 
 
 *60 contract is " such that a chattel is ultimately to be 
 delivered by the plaintiff to the defendant, when 
 it has been sent, then the cause of action is goods sold 
 and delivered," (per Ceompton, J.) And Blackbuen 
 said, " If the work and labor be bestowed in such a 
 manner as that the result would not be anything which 
 would properly be the subject of sale, then an action 
 for work and labor is the proper remedy. . . . I do not 
 think that the relative value of the labor and of the 
 materials on which it is bestowed can in any case be 
 the test of what is the cause of action; and that if 
 Benvenuto Cellini had contracted to execute a work of 
 art for another, much as the value of the skill might 
 exceed that of the materials, the contract would have 
 been none the less for the sale of a chattel." (a) 
 
 (3) 
 
 It remains to note that if there be no acceptance and 
 receipt, no part payment, and no memorandum or note 
 in writing of a sale falling within the section, the 
 effect of the section is to avoid the contract altogether, 
 and not merely, as in the case of the 4th section, to bar 
 the remedy of the party wishing to enforce the 
 contract. 
 
 (a) (It is not probable that the doctrine of the text would be up- 
 held by the American courts, but that they would hold that if 
 work is to be done on an article it would not be a sale but a con- 
 tract for labor, and not within the statute. Hight v. Bipley, 19 
 Me. 137; OrooMiarik v. Burrell, 18 Johns. (N. T.) 58 j Mixer v. 
 Eowarth. 31 Pick. (Mass.) 305.)' 
 66 
 
Chap. II. § 3. SIMPLE CONTRACTS. 60 
 
 As "we are here dealing witli the Form of contracts 
 it is not necessary or desirable to speak of acceptance, 
 receipt, and part payment, for these are strictly part of 
 a separate subject, the formation of a special contract 
 — the Contract of Sale. 
 67 
 
 x: 
 
i 
 
 61 FORMATION OF CONTRACT. Part II. 
 
 ; *61 § 4. OONSIDEEATIOM'. 
 
 Consideration has already been touched upon so far 
 as regards the history of the doctrine in English law, 
 and it has been stated that it is the universal requi- 
 site of contracts not under seal. What has now to be 
 said must therefore be understood to apply to those 
 contracts the discussion of which has just been con- 
 cluded, those contracts which, though not under seal, 
 are required by law to be expressed in certain forms. 
 Definition of , It will be well perhaps to take some general defini- 
 tion!^ ^^^ ^^^^ ^^ consideration which may serve to explain in 
 outline what it is which we are now proposing to dis- 
 cuss, and then to lay down certain principles upon 
 which the doctrine has been dealt with in English law. 
 The fullest definition of consideration is that given by 
 the Court of Exchequer Chamber in Currie v. Misa. 
 L. B. 10 " A valuable consideration in the sense of the law may 
 rTraiii v ' consist either in some right, interest, profit or benefit 
 Gold, 5 Pick, accruing to one party, or some forbearance, detriment, 
 loss, or responsibility given, suffered, or undertaken 
 by the other." 
 
 Such being the definition of consideration, we may 
 ^proceed to state: 
 General 1. That consideration is necessary to the validity of 
 
 consldeV^ ®^e^y promise not under seal. 
 
 tion. 2. That Courts of law will not inquire whether the 
 
 consideration is adequate to the promise, but will in- 
 sist that it should be something of some value in the 
 eye of the law. 
 3. That consideration must be legal. 
 68 
 
Chap. II. § 4. CONSIDERATION. 62 
 
 4. That con sideration may be present or f aturSj *62 
 executed or executory, but must not be past. 
 
 1. Consideration is necessary to the validity of every Considera. 
 
 simple contract. Ii°v^?^^lt™ 
 
 -t^ sary to every 
 
 The peculiar case of Pillans v. Van Mierop has'^^?.^® •=°''- 
 already been noticed, and it will be remembered that 3 Burr. 1663. 
 Lord Mansfield, C. J., and "Wilmot, J., there expressed Doubt as to 
 an opinion that, among merchants, a promise put in *^® doctrine, 
 writing was binding without consideration. That case 
 was decided in 1765 ; and not many years afterwards, in 
 1778, a somewhat similar point arose in the case oiBann Settled in 
 T. JSughes. There the defendant, as administratrix of gu^^Js 
 the estate of one J. Hughes, promised in writing " to? T. B. 850. 
 answer damages out of her own estate." There was 
 no consideration for the promise, and it was contended 
 that the writing required by 29 Car. II., c. 3, s. 4 ren- 
 dered consideration unnecessary. The view encour- 
 aged by Lord Mansfield in Pillans v. Van Mierop 3 Burr. 1668. 
 appears to have been, that the presence of considera- 
 tion was one mode among others for supplying evi- 
 dence of the intention of the parties to form a contract; 
 and that if the terms of the contract were reduced to 
 writing either by reason of commercial custom or of 
 statutory enactment, that evidence was sufficient with- 
 out consideration. But this view of the law was, once 
 for all, declared to be incorrect b}' Setnnee, 0. B., deliv- 
 ering the opinions of the judges in the House of Lords 
 in Rann v. Hughes. 
 
 " It is undoubtedly true that every man is, by theS T. R. 350. 
 law of nature, bound to fulfill his engagements. It is Bradley 7 
 equally true that the law of this country supplies no Conn. 57.] 
 means nor affords any remedy to compel the perform- 
 ance of an agreement made without sufficient consid- 
 eration. Such agreement ia ^ riudum pactum, ex quo 
 non oritur actio; ' and whatever may be the sense 
 of this maxim in the civil law, it is in the last sense 
 
63 FORMATION OF CONTRACT. Part II. 
 
 *63 only that it is is to be understood in our law. 
 
 All contracts are by the laws of Eng- 
 
 [Stafler v. land distinguished into agreements by specialty and 
 rnT'Sf t' "^ agreements by parol; nor is there any such third class 
 (Md.) 384] as some of the counsel have endeavored to maintain, 
 as contracts in writing. If they ie merely written 
 and not specialties, they are parol and a considera- 
 tion must he proved." 
 Bills of ex- Bills of exchange and promissory notes are an appa- 
 
 change and ^.g^j ^,^^ j^^^ ^ ^^^ exception to the universality of this 
 promissory ^ _ ■' 
 
 notes no real rule. In contracts of this nature consideration is pre- 
 excep ion. gmjjgij ^ exist and need not be proved by the plaintifi. 
 The burden of proof rests on the party disputing the 
 validity of the contract. If, however, he can show 
 that, as between himself and the party suing, no consid- 
 eration was given for the making or endorsement of the 
 bill or note, the promise fails, as it would do in any other 
 case of simple contract under like circumstances. [But 
 the rule is different where a party gives a note to 
 another as an accommodation, to enable him to raise 
 money by sale or discount. In that case the maker 
 cannot defend upon the ground that no consideration 
 passed between the maker and payer, if the note is 
 sued on by an indorser who paid value for the note, 
 even if he knew of the fact that it was given as accom- 
 modation paper. The payment of the money to the 
 indorser is a sufficient consideration to charge the 
 maker.] (a) 
 Oonsldera- 2. Courts of law will not inquire whether or no 
 be adequate ^^ consideration be adequate to the promise, but they 
 but must be will insist that it he somsthing of some value in the 
 eye of the law. In other words, the consideration 
 need not be adequate, but must be real. 
 
 (a) [City Bank of Oolumlma v. Beach, 1 Blatchf. (U. S. C. C.) 438 ; 
 Molaon v. Hawley, lb. 409 ; Perry v. Crammond, 1 Wash. C. C. 
 100; Kitchell v. Schenk, 39 N. T. 515; Marr v. Johnson, 9 Terg. 
 (Tenn.) 1.] 
 70 
 
Chap. II. § 4. CONSIDERATION. 64 
 
 So long as a man gets what he has bargained for, 
 courts of law will not ask what its value may be to 
 him, or whether its value is in any proportionate to 
 his act or promise given in return. This would be 
 "the law making the bargain, instead of leaving the Per Alder, 
 parties to make it." Further than this, they will not pjj^?'^'^^^ 
 ask whether the thing which forms the consideration v. Scott, 15 
 does in fact benefit the promisor, or a third party, or ggg [Law- 
 is of any substantial value to any one. It is enough rence v. Mc- 
 that something is promised, done, forborne, or suifered How. 426.] 
 by the party to whom the promise is made, as consid- Adequacy of 
 sideration for the promise made to him. tion?*^*^'^ 
 
 The following case will illustrate tliis principle: *6i 
 
 A and X were both subscribers to a charity. Bolton v. 
 
 The objects of the charity were elected by the sub-^*g^°^-'^-_ 
 scribers, and each subscriber possessed votes propor- 
 tionate to the amounts of his subscription. A and X 
 agreed that if as the next election A would give 28 
 votes to a candidate favored by X, X would at the suc- 
 ceeding election give 28 votes to a candidate favored 
 by A. A fulfilled his promise, but X when called on 
 to vote for A's candidate declined to do so. A there- 
 upon increased his subscription to such an extent as 
 would give him 28 additional votes, and sued X for 
 the amount he had thus been compelled to pay. 
 
 It was argued that the promises of A and X were 
 no consideration for one another, inasmuch as a man 
 must be supposed to give his votes to the candidate 
 whom he thought the best; and that if A did so he 
 sustained no detriment. But the court appears to have 
 thought that as a subscriber to a charity may give his 
 votes as he pleases, so the limitation of the choice of each 
 promisee formed, an appreciable consideration, and laid 
 it down that " the adequacy of the consideration is for 
 the parties to consider at the time of making the 
 agreement, not for the Court when it is sought to be 
 enforced." 
 71 
 
65 FORMATION OF CONTRACT. Part II. 
 
 10 A. & E. A stronger authority is the case of Haigh v. Brooks. 
 309. ijij^g defendant in that ease promised payment of cer- 
 
 tain bills accepted by M in consideration that the plain- 
 tiff would return to the defendant a guarantee which 
 he had given for the payment of £10,000 by M to the 
 plaintiff. The guarantee was returned: it then turned 
 out to be unenforceable under 29 Oar. II., c. 3, s. 4, and 
 the defendant argued that it was therefore no consid- 
 eration for his promise. Lord Denman, however, in 
 giving judgment for the plaintiff, said, " Whether or 
 no the guarantee could have been available within the 
 5 East. 10. doctrine of Wain v. Warlters, the plaintiff's were in- 
 Harlan" 20 duced by the defendant's promise to part with 
 
 Penn. St. *65 something which they might have kept, and the 
 defendant obtained what he desired by means of 
 that promise. Both being free and able to judge for 
 themselves, how can the defendant be justified in break- 
 ing this promise, by discovering afterwards that the 
 thing in consideration of which he gave it did not pos- 
 sess that value which he supposed to "belong to it? It 
 cannot be ascertained that that value was what he 
 most regarded: he may have had other motives and 
 objects, and of their weight he was the only judge. 
 Inadequacy Equity so far takes adequacy of consideration into 
 ^^""j^^""*' account in dealing with contracts, that if a contract is 
 equity. sought to be avoided on the ground of Fraud or Undue 
 
 influence, inadequacy of consideration will be regarded 
 as strong corroborative evidence in support of the suit. 
 It has even been held that inadequacy of consideration 
 is a ground upon which specific performance may be 
 resisted. But in spite of some conflict of judicial 
 opinion upon this point, it is probably safe to adopt 
 Coles V. the view of Lord Eldon, that mere inadequacy of con- 
 J Ve°''23?' sideration, unless so gross as " to shock the conscience 
 and amount in itself to conclusive evidence of fraud," 
 72 
 
Chap. II. § 4. CONSIDERATION. 66 
 
 is not alone a sufficient ground for refusing specific And see Pot 
 performance, {a) ^"°^' ^^^• 
 
 Although Courts of Law will not inquire into the Considera- 
 the adequacy of consideration, they will insist that it t^J^^ "I'lst be 
 should not be illusory or unreal. At first sight this 
 looks like saying that a consideration must be a con- 
 sideration; but it may not be useless to inquire into 
 some of the various forms which consideration may 
 assume, and to note the grounds upon which certain 
 alleged considerations have been held to be of no real 
 value in the eye of the law. 
 
 The consideration of a promise may be an act or a Considera- 
 forbearance, or a promise to do or to forbear. acT forbear- 
 
 When a promise is given for a promise the contract ance or 
 is said to be made upon an executory consideration ; promise, or 
 the obligations created by it rest equally upon executory 
 
 both parties ; each, is bound to a future act. The *6Q tion. 
 simplest illastration of such a contract is the 
 case of mutual promises to marry, in which the consid- 
 eration for A's promise to marry X is X's promise to 
 marry A, while A's promise forms in like manner the 
 consideration for X's. 
 
 "When the consideration for a promise is an act or An act or 
 forbearance, the contract is said to be made upon con- or'^gongi^era. 
 sideration executed. This arises when either the offer tion exe- 
 or the acceptance is signified by one of the parties 
 doing all that he is bound to do under the contract so 
 created. The validity of consideration, as regards its 
 relation to the promise in time, may be discussed pres- 
 ently. We are at present concerned with the nature 
 of consideration, and will note some of its aspects 
 which are worth observation. 
 
 Where the consideration for a promise is a promise, Contingent 
 the whole contract may be contingent and may never contracts. 
 
 (a) [See Osgood v. Franklin, 3 Johns. Chy. 23 ; Follett v. Rose, 3 
 McLean, C. C. 312; Bobinson v. Schly, 6 Ga. 515.] 
 73 
 
66 FORMATION OF CONTRACT. Part II. 
 
 come into effect save at the will of one of the parties. 
 
 For instance A offers X to supply at a certain price 
 
 such goods as X may choose to order. X accepts this 
 
 offer. If X calls upon A to supply goods on the 
 
 terms fixed, A cannot refuse to do so on the ground 
 
 that X is not bound to order any goods at all. The 
 
 G. N. Rail- contract may be put in this form: In consideration 
 
 \7itlim\ ^^^^ -^ promises to pay A a certain price for his goods 
 
 R. 9 C. P. 16. if he requires them, A promises to supply goods at 
 
 that price if called upon to do so.^ 
 
 The peculiarity of the case just cited consists in the 
 option given to one of the parties to bring the contract 
 
 ' It is nnticeaWe that Brett, J., in his judgment in the case 
 cited in the text, leaves it uncertain whether he regards the con- 
 tract as based upon mutual promises dependent upon a contin- 
 gency for their coming into effect, or whether he rests it upon an 
 outstanding offer to supply goods which each successive order 
 accepts and so turns into a contract pro tanto. Mr. Leake, ed. 3, 
 p. 46, takes tlie latter view. 
 
 [The facts of the case and the language of the judges would seem 
 to leave no doubt that the opinion of Mr. Leake is the correct one, 
 and that the case does not bear out the text. The plaintiff had ad- 
 vertised for bids for supplies, and the defendant had sent in a bid, 
 in which he offered to furnish them at a certain price, if wanted by 
 plaintiff. The plaintiff had sent two orders, which had been 
 filled by defendant, and plaintiff ordered a third lot, which de- 
 fendant refused to supply at the agreed rates, and it was held that 
 plaintiff" was entitled to recover; buttwoof the judges expressly say 
 that they do not mean to hold that the defendant would have been 
 liable if he had notified plaintiff that he would furnish no more 
 before he had received the last order. The American cases which 
 hold that an offer may be rescinded at any time before it has been 
 accepted are not in any way in conflict with the case cited. See 
 Craig v. Harper, 3 CuSh. (MaSs.) 158. It is true that there miglit 
 be a contingent contract, in which one party would be bound and 
 the other not; as if A should agree to sell B from 700 to 1,000 
 bushels of corn, and B should agree to take what he wished to 
 sell, which should be not less than the 700 nor more than the 1,000 
 bushels. In this case, while A would only be required to furnish 
 the smaller sum, yet B could be compelled to take the larger or 
 pay the damages if he refused to take it all. See Bishorough v. 
 Neihon, 3 Johns. Cases, (N. Y.) 81.] 
 74 
 
Chap. II. § 4. CONSIDERATION. 67 
 
 into operation, or to leave it dormant irrespective of 
 the wishes of the other. But the consideration 
 is not altogether illusory. The promisee need *67 
 not bring the contract into effect at all, but if 
 he do so, he is bound by its terms as to price. 
 
 Similar in character are the considerations which 
 consist in conditional promises. A promises to do 
 something for reward, but X only binds himself to 
 pay for it upon the happening of an event which may 
 not be under the control of either party. Such would 
 be the case in a building contract, where the promise 
 to pay for work to be done is made conditional on the 
 certified approval of an architect. Or again, the prom- 
 ise may be conditional on something not happening; 
 such are the promises in a charter party which are not 
 to take effect if certain specified risks occur. 
 
 In the one case the promise depends upon a condi- 
 tion precedent, in the other it is liable to be defeated 
 by a condition subsequent: in neither case does its con- 
 tingent or conditional character prevent it from form- 
 ing a good consideration for promises given i^ return. 
 
 The abandonment of a right, or a promise to forbear Forbear- 
 from exercising it, is good consideration for a promise. ^'^°®" 
 The right may be legal or equitable, certain or doubt- 
 ful; it may exist against the promisor, or against a 
 third party. But the right foreborne or agreed to be 
 foreborne must at least be doubtful; forbearance to 
 enforce an unenforeable claim can be no consideration 
 for a promise. The case of Jones v. Ashhurnkam is 4 East. 453. 
 an illustration of this principal. * There the plaintiff ^^ack'^so' 
 sued on a promise to pay money,, the consideration Ala. 1^. 8. 
 being a promise by him not to sue for a debt due from "■' 
 a third party who had died leaving no assets. "How," 
 said Lord Ellenboeough, " does the plaintiff show any 
 damage to himself by forbearing to sue, when there 
 was no fund which could be the object of suit, where 
 it does not appear that any person in rerum natv/ra 
 75 
 
68 FORMATION OP CONTRACT. Part II. 
 
 was liable to him ? No right can exist in this vagtie^ 
 
 abstract way." 
 Compro- The commonest form in which a forbearance appears 
 
 mise of suits. ^^ consideration for a promise is in the compro- 
 
 *68 mise of an action. A the plaintiff promises X 
 the defendant that in consideration of certain 
 
 things to be done by X he will forbear to prosecute 
 
 his suit; and this is good consideration for the act or 
 Plaintiflf promise by X. But here, in order to make the for- 
 
 must believe bearance a consideration, the plaintiff must believe in 
 
 in his case. -^ , . . m , 
 
 2 C. B. 548. ^^^® case. In Waae v. bimeon, the plaintm sued upon 
 
 [McKinleyv. a promise by the defendant to pay £2,000, with inter- 
 lU 140 1' ®®* ^^'^ costs, in consideration of the abandonment by 
 the plaintiff of an action brought to recover that sum. 
 It appeared, from the mode in which the case came 
 before the Court, that the plaintiff admitted that he 
 knew he had originally no cause of action in respect 
 of the £2,000. And Tindal, C. J., said: 
 
 " It is almost contra ionos mores, and certainly con- 
 trary to all the principles of natural justice, that a 
 man should institute legal proceedings against another 
 when he is conscious that he has no cause of action. 
 In order to show a binding promise the plaintiff must 
 show a good consideration, something beneficial to the 
 defendant or detrimental to the plaintiff. Detrimental 
 to the plaintiff it cannot be if he has no cause of 
 action, and beneficial to the defendant it cannot be, for 
 in contemplation of law the defense upon such an ad- 
 mitted state of facts must be successful; and the 
 defendant will recover costs, which must be assumed 
 to be full compensation for all the legal damage he sus- 
 tains. The consideration therefore altogether fails." 
 It is not necessary that the plaintiff should have a 
 good case, but he must believe that he has a case, and 
 must intend hona fide to maintain it by action. If 
 he does so, the fact that he has in truth no cause of 
 action, and that the defendant knows that he has none, 
 76 
 
Chap. II. § 4. CONSIDERATION. 69 
 
 will not invalidate a compromise, whether made before 
 or after the commencement of litigation. Where a 
 man was threatened with legal proceedings because the 
 plaintiff believed that he was liable, and he, though 
 he knew that he was not liable, gave promissory notes 
 to avoid being sued, he was held to be bound by 
 his promise. The plaintiff had abandoned a *69 
 claim which he believed to be enforceable and 
 meant to try and enforce: the defendant escaped the 
 inconvenience and anxieties of litigation, and the com- 
 promise was deemed to be a sufficient consideration 
 for the notes. Cook v. Wright. 1 B, & 8. 550. 
 
 Questions have been raised as to the length of time P^^^T'Trj. 
 over which a forbearance to sue must extend in order 483.]' 
 to constitute a consideration. It has even been held 
 that a promise of forbearance for an unspecified time 
 was no considei'ation, as in Semple v. Pink. But it 
 may now be regarded as settled that a promise of for- 1 Exch. 74. 
 bearance, in order to form a consideration, need not be 
 a promise of absolute forbearance, nor even of forbear- 
 ance for a definite time; where no time is mentioned, 
 a reasonable time will be implied, Oldershaw v. King,' 2 H. & N. 
 and where no express promise is made, an actual y^Kusselrs 
 "staying of the hand of the creditor" is consideration Watts. 313.] 
 for the transfer of documents of title. The most recent 
 
 authority for this proposition is the case of Leash v. L. R. 2 Q. B. 
 Q„ f^ D.876. [See 
 
 '^OOU. Mecorney v. 
 
 The defendants were vendors of a cargo of nuts. X, Stanley, 8 
 the purchaser of the cargo, was indebted in large sums "^ " •' 
 to the plaintiffs, and, on applying for a further advance, 
 he was told that it could only be made if he would 
 promise to give cover, *. e., security. X promised 
 cover, received an advance, and some days after depos- 
 ited with the plaintiff, among other securities, the bill 
 of lading for the cargo of nuts. X became insolvent, 
 and the defendants sought to stop the nuts in transitu. 
 The right of stoppage in transitu cannot be exercised 
 77 
 
70 FOKMATION OF CONTRACT. Part II. 
 
 against the transferee of a bill of lading for consid- 
 eration. It was urged for the defendants that the con- 
 sideration in this case was past, being the advance 
 made some days previous to the assignment of the bill 
 of lading: but the Court of Appeal held that there 
 was a present consideration for the assignment. "An 
 action would lie for not covering. Therefore the 
 assignor for such a consideration as this always gets 
 
 the benefit of j^erforming his contract and so 
 *70 saving himself from a cause of action." The 
 
 consideration for the assignment of the bill of 
 lading was in effect a forbearance to sue for an indef- 
 inite and unspecified time: the assignment being part 
 performance of a contract on which action might be 
 brought at any time, " it stayed the hand of the 
 creditor." 1 
 
 Bailment. Among cases where an act is the consideration for a 
 
 promise, it is worthwhile to notice the kind of contract 
 which arises upon the mere placing or leaving of prop- 
 erty in the bands of a bailee or depositary. This will 
 create an implied promise to use reasonable care in the 
 safe custody of the property, and will support an 
 express promise to undertake certain services in respect 
 of it. Thus, where A allowed two bills of exchange 
 to remain in the hands of X, and X promised to get 
 
 ' The case cited, though a good illustration of forbearance aa a 
 consideration, is by no means free from diflSculty. If " the cred- 
 itor " was entitled to an immediate performance of the promise 
 to give cover, the debtor, in endorsing to him the bill of lading, 
 did no more than he was legally bound to do. If this be so, there 
 was no consideration for the forbe^ance, and the whole of the 
 contract, in which the forbearance is the consideration for the 
 assignment of the bill of lading, seems to fall to pieces. It might 
 have seemed a more simple solution of the difficulty to have 
 regarded the performance of the promise to give cover as a part 
 of the consideration for the advance, for although it took place as 
 a matter of fact on a later day, it was substantially part of the 
 same transaction. 
 78 
 
Chap. II. § 4. CONSIDERATION. 71 
 
 the bills disconnted and to pay the money to A's 
 account, this promise was held to be made upon good 
 consideration, namely the permission given to the 
 
 defendant to retain the bills. Hart v. Miles. 4 0. B. N. S. 
 
 371. [Rob- 
 To discuss further the forms which consideration J?^°°y- .„ 
 may assume would be to enter upon an analysis of the 13 Ired. L. 
 possible subjects of contract. An attempt has been ^"^ 
 made to point out some of the forms which best 
 illustrate the nature of consideration in general; itUureal oon- 
 remaius to point out certain semblances of considera- ^' ^"^^ ^°'^*' 
 tion which the Courts have refused to allow to sup- 
 port a promise. They may be said to fall, roughly 
 speaking, under three heads. 
 
 {a) Cases in which motive has been confounded *71 (a) Motive, 
 with consideration, that is to say, cases where a 
 man has promised to do a thing, not for any benefit to 
 himself, but because he wished it to be done or thought 
 that it ought to be done. 
 
 (5) Cases in which the alleged consideration. has(b) Impossi- 
 been a promise to do a thing obviously impossible in yagi^ness. 
 fact or in law; or a promise the performance of which, 
 from its vague and illusory character, it is impossible 
 to secure. 
 
 (c) Cases in which the alleged consideration has(c) Offering 
 been the doing or promising to do what a man was^g™*^^j_* 
 already bound to do, so that the promisor got nothing ready legally 
 but what he was already entitled to get before the con- 
 sideration was offered. 
 
 (a) Cases have arisen which make it necessary to (a) Motive, 
 distinguish motive from consideration. " Motive is Patterson, J., 
 not the same thing with consideration, consideration ^'^q^j^J'^j^^g* 
 means something which is of some value in the eye of 3 Q B. 851. 
 the law, moving from the plaintiff." The confusion GreemgeJ' 
 between motive and consideration has taken two forms; 13 Wall. 570.] 
 the distinction which once existed between good and 
 valuable consideration; and the view once maintained 
 79 
 
72 FORMATION OF CONTRACT. Part U. 
 
 that a moral obligation was sufficient to support a 
 jjromise. 
 Good consid- The first of these probably originated in the Chan- 
 era ion. eery, where a covenant to stand seized was held (before 
 27 Hen. VIII. the Statute of Uses) to raise a use, if the person in 
 ^' whose favor the covenant was made stood within a cer- 
 
 tain degree of consanguinity to the covenantor. Sncli 
 In the case relationship was of itself a consideration for the cov- 
 to stand"*'^* enant, and blood or good consideration came to be dis-- 
 seized. tinguished from money or valuable consideration which 
 
 supported the use arising from Bargain and Sale. At 
 the present day, although a covenant to stand seized 
 would, by virtue of the Statute of Uses, create a legal 
 estate, an estate cognizable by the Common Law 
 Hayes on Divisions of the High Court, the consideration of 
 inTT^a'n"' ^^"^^ or good consideration is still required to support 
 
 the covenant. 
 As applied *72 In some early cases it was attempted to extend 
 to contract. ^j^jg principle to the law of contract. The mere 
 
 existence of natural affection as a motive for a promise 
 Bret. V.J. S. was never held to amount to a consideration: "natural 
 and wife, 1 affection is not sufficient to raise an assumpsit without 
 [Kirkpatrick a quid pro quo.^' But it was at one time laid down 
 111^207^' ^ *^^* where A made a binding promise to X to do 
 something for the benefit of X's son or daughther, the 
 Button V. nearness of relationship would entitle the person in 
 2 °°^®' ^ ^^^- whose favor the contract was made to sue upon it. 
 
 This however is no longer law. Nearness of rela- 
 Tweddle v. tionship to one of two contracting parties, and the fact 
 B*&°S°398 *^^* *'^® contract was made for the benefit of theplain- 
 and see Part tiff, give no cause of action if the plaintiff was no 
 III. ch. 1. party to the contract, (a) 
 
 (a) [In this country the decided weight of authority is in 
 opposition to the text and in favor of the doctrine that wlien a 
 simple contract is made by two parties for the benefit of a third, 
 the person for whose benefit it was made can maintain the suit 
 for its violation. Bristow v. Lane, Zl 111.194; Lawrence y. Fox, 
 80 
 
Chap. II. § 4 CONSIDERATION. 73 
 
 The point is connected rather witii the effect of a 
 contract, than with the nature of consideration, but it 
 serves to illustrate the form which the doctrine of ^ooc^ 
 consideration took in the Common Law Courts, and to 
 explain the saying quoted above, that consideration 
 mitst nwoefrom the plaintiff. The phrase means no 
 more than this, that when a man sues upon a promise 
 he must show that the consideration for which the 
 promise was made was some benefit conferred or detri- 
 ment sustained by himself; in other words, that stran- 
 gers to a contract acquire no right to sue upon it sim- 
 ply because they are interested in its performance. 
 3^ Moral obligation, under certain aspects, was once Moral obli- 
 regarded as a consideration for a promise. A man° 
 may believe himself to be under a moral obligation 
 either because he has received actual benefits in the 
 past, or from motives of piety, delicacy, or friendship. 
 Now a past consideration is in truth no consideration 
 at all, inasmuch as the promisor does not receive either 
 a benefit, or the prospect of a benefit, in return for his arising from 
 promise. There are certain cases however in which an ^^* ^^^ ' 
 advantage derived in the past will support a subse- 
 quent promise. These shall be dealt with when we 
 come to draw the distinction between executed 
 and past consideration. It is suflacient to say *73Seep. 93. 
 here that the validity of such promises wilf be 
 found to rest upon another basis than that of moral 
 obligation, and that the phrase, which was of common 
 use in the Common Law Courts at the end of the last 
 and beginning of the present century, has had an un- 
 happy and obscuring influence upon this branch of the 
 
 20 N. T. 268; Burr v. Been, 2i N. T. 175; Twitchell v. Mears, 
 (U. S. C. C. N. Dist. 111.) 6 Reporter, 40 ; Urquart v. Braytm. (Sup. 
 Ct. R. I.) 18 Alb. Law Jour., 371 ; Brice v. King, 1 Head. (Tenn.) 
 152 ; Felton v. Dickerson, 10 Mass. 237 ; Mason v. Hall, 30 Ala. 
 699 ; Allen v. Thomas, 3 Mete. (Ky.) 198; Bohanan v. Pope, 42 Me. 
 93 J Crampton v. Ballard, 10 Vt. 251.1 
 81—6 
 
73 FORMATION OF CONTRACT. Part II. 
 
 law of contract. The question was settled once for all 
 
 xL^V^u?' in the case of Eastwood v. Kenyon, and a final blow 
 4:00. [JLnle V. . 1 1 • 1 1 » 
 
 Juclson,24 given to the doctrine that past benefits would support 
 1 Wend. 97.] ^ subsequent promise on the ground of the moral 
 obligation which rested on the promisor. " The doc- 
 trine," said Lord Denman, "would annihilate the 
 necessity for any consideration at all, inasmuch as the 
 mere fact of giving a promise creates a moral obliga- 
 tion to perform it." 
 Arising from If the actual receipt of a benefit in the past does 
 conscientous "0* constitute consideration for a subsequent promise, 
 scruples. still less will such duties of honor, conscience or friend- 
 ship as a man may conceive to be incumbent on him. 
 A man may be said to be morally bound to support 
 his children in a manner suited to his own condition 
 
 Mortimore v. and expenditure, but the law creates no such oblisa- 
 Wright, 6 M. , . J •. • ■ A ^1, ^ • u i- <.!, X 
 
 & W. 483 & *io°j ^nd it IS conceived that a promise by a lather to 
 
 l^-Y-Downes, his son to pay the son's debt would not be binding, (a) 
 
 d'. 34. ' • ' A man is bound in honor to pay money lost in a wager, 
 
 8 & 9 Vict. c. but inasmuch as the law has declared wagers to be void, 
 
 '^ ' a promise to pay such a debt would be unenforceable 
 
 for want of consideration: and in like manner a pious 
 
 wish on the part of the executors to carry out what 
 
 Patterson, J., they knew to be the intentions of the testator, afibrds 
 
 ThomaTs^Q no consideration for a promise made by them for such 
 
 B. 851. an object. 
 
 . It is worth noting that the Indian Contract Act, in 
 
 dealing with this subject, diflfers from the rule of 
 
 English law in two particulars. It upholds promises 
 
 Indian Con- made in consideration of natural love and afiection 
 
 tact Act, s. ^here the parties are nearly related and the promise 
 
 (a) [The weight of authorities in this country uphold the doc- 
 trine of the text. See Mills v. Wyman, 3 Pickering, 207; Cook 
 v. Bradley, 7 Conn. 57; Shepherd v. Mhodes, 7 R. I. 470; 6Wv. 
 Cowd&ry, 40 Vt. 35 ; Updike v. Titus, 13 N. J. Eq, 151. But, see 
 Montgomery v. Lampton, 3 Mete. (Ky.) 519 ; Musser v. Ferswi(m,55 
 Pa. St. 475 ; Commissioners v. Perry, 5 Ohio, 58.] 
 82 
 
Chap. II. § 4. CONSIDERATION. 74 
 
 written and registered. It also upholds informal 
 promises to make compensation to persons who 
 have already conferred some benefit upon the *74 
 promisor, or voluntarily done something which 
 the promisor was legally compellable to do. It thus re- 
 cognizes the motives of natural affection (subject to 
 certain forms,) and gratitude as forming consideration 
 for a promise. 
 
 In French law, cause, the equivalent for considera- 
 tion, has a yet wider meaning; it includes not merely 
 motives of gratitude, but sentiments of honor and Dalloz, Re- 
 scruples of conscience. It may, however be regarded, 33^^ '15^ 
 as certain that, in English law, motive, whether it take 
 the form of natural affection, gratitude for past ser- 
 vices, feelings of honor or piety, is in no case such con- 
 sideration as will support a simple contract, 
 
 (J) Courts of law will also hold a consideration to Impossi- 
 be unreal if it be impossible upon the face of it, or so yag^nes^ 
 vague in its terms as to be practically impossible to 
 enforce. 
 
 In dealing with impossibility regarded from this 
 point of view, we must guard against being understood 
 to mean ajjything more than a 'prima facie legal im-Per Brett, J., 
 possibility, or a thing physically impossible " accord- w {^"^l^j} \ 
 ing to the state of knowledge of the day." Practical 5, C. P, 588. > 
 impossibility unknown to the parties when they en- 
 tered into their contract may avoid it on the ground 
 of Mistake. Impossibility of performance arising sub- 
 sequent to the making of the contract may under cer- 
 tain circumstances operate as a Discharge. But we 
 are here concerned with promises to do a thing so ob- 
 viously impossible that the promise can form no real 
 consideration. 
 
 For a legal impossibility we may take the case of 3 Lev. 161. 
 Harvey v. Gthhons. There the plaintiff was bailiff to 
 J. S. and the defendant was debtor to J. S. to the amount 
 83 
 
75 FORMATION OP CONTRACT. Part II. 
 
 of £20. The defendant in consideration that the plain- 
 tiff would discharge him the £20 due to J. S. prom- 
 —y i,' -: J ised to lay out £40 on a barge of the plaintiff. 
 
 / «Yg ijj^g Court held that the consideration was " ille- 
 
 ' ~ "^ / gal," for a servant cannot discharge a debt due 
 
 ' ^ .; ^ '-J -;>(->, to ^is master. By illegal we must understand legally 
 " ] impossible, for illegality, in the strict sense of the term, 
 there was none. 
 
 Of contracts void because the consideration for the 
 promise involves the physical impossibility we can fur- 
 nish no decided case. Gains gives us asgood au illus- 
 Gaius, 3, 97. tration as any : " Si quis rem quae in rerum naiura 
 non est aut esse non potest velut hippocehtaurum 
 stipuletur, inutilis est stipulatio." {a) The Indian 
 Contract Act supplies another. 
 
 Ind. Cont. A agrees with X to discover treasure by maeic. The 
 Act, s. 56. t. • -A J s, 
 
 agreement is void. 
 
 Vagueness. Again, a consideration may be unreal on the ground 
 of impossibility where it is a promise so vague as to 
 be virtually unenforceable. The case of Wfiiie v. 
 
 23 L. J. Bluett exemplifies this rule. This was an action 
 ^° ■ ' brought by executors upon a promissory note made 
 payable to the testator by his son, the defendant in 
 the action. The son pleaded a promise made by his 
 father to discharge him from all liability in respect of 
 the note in consideration of his ceasing to make cer- 
 tain complaints, which he had been in the habit of 
 making, to the effect that he had not enjoyed as many 
 advantages as the other ch^dren. It was said by the 
 Court that the promise given by the son was no more 
 
 Per Parke, B. than a promise " not to bore his father," and was too 
 vague to support the father's promise to discharge the 
 son from liability on the note. " A man might com- 
 
 (a) " If one should make a contract concerning a thing which 
 neither does nor can exist, as, for instance, a hippocentaur, the 
 contract is invalid." 
 84 
 
Chap. II. § 4 CONSIDERATION. 
 
 plain that another person nsed the highway more than 
 he ought to do, and that other might say ' do not com- 
 plain and I will give you £5.' It is ridiculous to sup- Per Bullock, 
 pose that such a promise could be binding." ' ' 
 
 (c) Another form of unreality of consideration has Promise to 
 arisen where the alleged consideration is the promis- j^^^^^j^^ * 
 ing to do, or actually doing what a man is already bound to do. 
 bound by law to do for the promisor. The prom- Nugent, 35 
 
 isor thus gets nothing more than he is already *76 ^°'^- ^^S-] 
 entitled to. Thus where in the course of a voy- Stilk v. Mey- 
 
 age from London to the Baltic and back two seamen g'^^^^' ^^"''P' 
 deserted, and the captain, being unable to supply their 
 place, promised the rest of the crew that if they would 
 work the vessel home the wages of the two deserters 
 sliould be divided among them, this promise was held 
 not to be binding. " The agreement," said Lord El- 
 LENBOEOUQH, " is void for want of consideration. There 
 was no consideration for the ulterior pay promised to 
 the mariners who remained with the ship. Before they 
 sailed from London they had undertaken to do all they 
 
 could under the emergencies of the voyage The 
 
 desertion of a part of the crew is to be considered an 
 emergency of the voyage as much as their death; and 
 those who remain are bound by the terms of their 
 original contract to bring the ship in safety to her 
 destined port, (a) 
 
 Here then there was a promise on the part of the 
 
 (a) [Whether a promise to pay one an increased compensation 
 for doing a work he was about to abandon, when he had before 
 made a contract to perform it for a definite sum, is valid, or 
 whether it is invalid for want of consideration, is a question upon 
 which the American authorities seem to be in direct conflict. 
 The case of Monroe v. Perkins, 9 Pick. (Mass.) 305, and that of 
 Ooolce V. Murphey, 70 111. 96, hold that it may be enforced, while 
 Ayres v. Ohieago, etc., R. R. Go., Supt. Ct. Iowa, (8 Cent. L. Jour. 
 405,) holds that it is without consideration and void; and this 
 view is also taken by Reynolds v. Nugent, 25 Ind. 338.] 
 85 
 
77 FORMATION OF CONTBACT. Part II. 
 
 sailors to do what their contract already bound them 
 lartleyv. to do. It would have been otherwise if risks had 
 !)"& 3*^2 arisen which wore not contemplated in the contract. 
 For instance, such a contract as that which the seamen 
 had entered into in the case just cited contains an im- 
 plied condition that the ship shall be seaworthy. So 
 that where a seaman had signed articles of agreement 
 to help navigate a vessel home from the Falkland Isles, 
 Turner V. and it turned out that the vessel was not seaworthy, a 
 fc F. 177. promise of extra reward to induce him to abide by his 
 
 contract has been held to be binding, 
 'romise not "We have spoken hitherto of cases in which a man 
 Qan^irgaUy ^^^ promised to do that which he is already under con- 
 aunotdo. tract or otherwise legally bound to do. It must be 
 borne in mind that a promise not to do what a man 
 I O. B. 548. legally cannot do is an equally bad consideration for a 
 ones l" promise. The case of Wade v. Simeon, cited in dis- 
 Jouglas cussing forbearance as a consideration, is a sufficient 
 
 ■' ■-' illustration of this point. 
 Joing that It is somewhat more difficult to deal with the same 
 B boiind™^° ^^^^ when it has to be applied to the doing of 
 
 do. *77 that which you are legally bound to do. The 
 
 simplest illustration of the rule is that which 
 has been most severely commented upon, and is the 
 one which we will use for the purpose of discussion. 
 Jenness v. The payment of a smaller sum in satisfaction of a 
 Ws!?' ^ larger is not a good discharge of a debt. It is in fact 
 doing no more than a man is already bound to do, and 
 it is no consideration for a promise, express or im- 
 plied, to forego the residue of the debt. There must 
 That which be something different to that which the recipient is 
 ?e di&rent. ©i^titled to in the thing done or given in order to sup- 
 port his promise. The difference must be real, but 
 the fact that it is slight wiU not destroy its efficiency 
 in making the consideration good, for if the Courts 
 were to say that the thing done in return for a promise 
 was not sufficiently unlike that to which the promisor 
 86 
 
Chap. II. § 4. CONSIDERATION. 78 
 
 was already bound, they would in fact be determining 
 
 the adequacy of the consideration. Thus, the giving 
 
 a negotiable instrument for a money debt, or " the gift 
 
 of a horse, a hawk or a robe, in satisfaction, is good. 
 
 For it shall be intended that a horse, a hawk or a robe Pinnel'scase, 
 
 might be more beneficial to the plaintiff than money, ii7°-|-Brooks 
 
 in respect of some circumstance, or otherwise the v. White, 2 
 
 plaintiff would not have accepted it in satisfaction." ^' "-^ 
 
 The application of this rule, as described, has been 
 said to involve " an absurd paradox," but it seems in Pollock, p. 
 truth to be a necessary result of the doctrine of con- ^^^ 
 sideration. A contract may be discharged by the If not, where 
 consent of the parties in one of two ways. g?,'^® 5"°' 
 
 If it is wholly executory, if the liabilities of both for the prom- 
 parties remain unfulfilled, it can be discharged byi^^'O'^^'^go' 
 mutual consent, the acquittance of each from the 
 other's claims being the consideration for the promise 
 of each to waive his own. 
 
 A contract in which A, one of the parties, has done Foster v. 
 his part, and X, the other, remains liable, capnot (ex- S'^^i'cjjf' ^ 
 cept in the case of bills of exchange or promissory [Kidder v. 
 notes) be discharged by mere consent, but it may bep^^gj'''7g|l 
 discharged by the substitution of a new agreement. 
 A has supplied X with goods according to a See Part V. 
 
 contract. X owes A the price of the goods. If *78 ^^- ** ' 
 A waives his claim for the money, where is the 
 consideration for his promise to waive it? If A and 
 X substitute a new agreement, to the effect that X on 
 paying half the price shall be exonerated from paying 
 the remainder, the same question must be repeated: 
 where is the consideration for A's promise to waive 
 the payment of half the sum due to him? The new 
 agreement must have a consideration; there must be 
 some benefit to A or detriment to X in return for A's 
 promise. Detriment to X there can be none in pay- 
 ing half of a sum the whole of which he may at any 
 time be compelled to pay; and benefit to A there can 
 87 
 
79 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 [See Sey- 
 mour V. Min. 
 turn, 17 
 Johns. 169.] 
 
 Apparent 
 exceptions. 
 
 Composition 
 with, cred- 
 itors. 
 
 5 East. 230. 
 
 Considera- 
 tion for com- 
 position is an 
 agreement 
 
 be none in receiving a portion of a sum the payment 
 of which he can at any time compel. Unless A 
 receives something different in kind, a chattel, or a 
 negotiable instrument, or a iixed for an uncertain sum, 
 his promise is gratuitous and must be made under J 
 seal. 
 
 There are some apparent exceptions to this rule 
 which it may be well to discuss, if for no other reason, 
 on the ground that they illustrate the rule itself. 
 
 A composition with creditors appears at first sight 
 to be an infraction of the rule, inasmuch as each cred- 
 itor undertakes to accept a less sum than is due to 
 him in satisfaction of the greater. But the promise 
 to pay, or the payment of a portion of the debt, is not 
 the consideration upon which the creditor renounces 
 the residue. That this is so is apparent from the case 
 of Fish V. Sutton. There the defendant, a debtor, 
 compounded with his creditors and paid them Is. in 
 the pound ; he promised the plaintiff, who was one of 
 the creditors, that he would pay him the residue when 
 he could; but the plaintiff nevertheless gave him a 
 receipt of all claims which he might have against 
 him "from the beginning of the world to that day." 
 The plaintiff subsequently brought an action for the 
 residue of his claim; the defendant pleaded the accept- 
 ance of Is. in the pound in full of all demands; but 
 this was held to be no answer to the plaintiff's 
 *79 claim. " It is impossible," said Lord Ellbn- 
 BOEOTJGH, "to contend that acceptance of £17 
 10s. is an extinguishment of a debt of £50. There 
 must be some consideration for a relinquishment of 
 the residue; something collateral, to show a possibility 
 of benefit to the party relinquishing his further claim, 
 otherwise the agreement is nudum factum.^'' 
 
 The consideration in a composition with creditors 
 must therefore be something other than the mere 
 acceptance of a smaller sum in satisfaction of a larger; 
 88 
 
Chap. II. § 4. CONSIDERATION. 80 
 
 it is the substitution of a new agreement with new between dit 
 parties and a new consideration. The Common Law |F®'^* P"" 
 on this point (apart from the Bankruptcy Acts of 1861 
 and 1869) was settled in the case of Good, v. Ghees- 3 B. & Ad. 
 man. There the defendant, a debtor who had com-^^^- 
 pounded with his creditors, set up as against an 
 individual creditor suing for the whole of his debt, 
 not a separate promise by that creditor to forego the 
 residue, but a composition made with all the creditors. 
 The composition was held to be a good defense to the 
 action, and the consideration which supported each ' 
 creditor's promise to accept a lesser sum in satisfac- 
 tion of a greater was thus stated by Paeke, J. : " Here (jood v. . 
 
 each creditor entered into a new agreement with the S'^^^^IPP' * 
 
 " . . B. & Ad. ' 
 
 defendant (the debtor), the consideration of which, to 335. 
 
 the creditor, was a forbearance by all the other credit- 
 ors, who were parties, to insist upon their claims." It 
 is in effect the substitution of a new agreement with gee Boyd v. 
 different parties for a previous debt, and not the pay- S'^'^'gL^' 
 ment of a portion of the debt, which forms the Slater v. 
 consideration in the case of a composition 'with g'^|®'j93 
 creditors, (a) [SeeBigeiow 
 
 The composition with creditors is therefore no ex- ^Qray 245S 
 ception to the general rule, inasmuch as the debtor 
 not only pays the creditor a portion of the sum due, 
 but procures a promise by each of his other creditors, 
 or by a certain number of them, that each will be 
 content with a similar proportionate payment if the 
 others will forbear to ask for more. And creditor X 
 not merely gets payment of 10s. in the pound 
 from his debtor A, but gets a promise from cred- *80 
 itors Y and Z that they too will be content with 
 a payment of 10s. in the pound. 
 
 A more difficult class of cases to reconcile with the Promise to 
 general rule are those in which it has been held that a fg^ting ^^^ 
 
 tract, 
 (ffl) [The facts in the two cases being nearly the same the ques- 
 tion was one of pleading.] 
 89 
 
81 FORMATION OF CONTRACT. Part II. 
 
 contract is binding whicli is made in consideration of 
 a performance or promise of performance by one of 
 the parties, of a contract already subsisting between 
 himself and a third party. The circamstanees under 
 which such a case may arise may be stated thus: "A 
 man may be bound by his contract to do a particular 
 Per Wilde, thing; but while it is doubtful whether or no he will 
 son V. Pegg ^o ^*'5 if ^ third person steps in and says, ' I will pay 
 6 H. & N. you if you will do it,' the performance is a valid con- 
 sideration for the payment." 
 
 The matter is not very easy to understand upon 
 principle; it has been said that the promise is based 
 Pollock, 163. on the creation " of a new and distinct right " for the 
 promisor, in the performance of the contract between 
 his promisee and the third party. But this is in fact 
 to assume that a right is created, which would not be 
 the case if the consideration for the promise were bad. 
 
 9C. B. N. S. In Shadwell v. xSAac^ioeZZ the question arose thus: 
 159. 
 
 The plaintiff had been under promise of marriage to 
 
 X; his uncle promised in writing that if he would 
 perform his engagement he should receive during his 
 (the uncle's) lifetime £150 a year. The plaintiff mar- 
 ried X; the annuity fell into arrear; the uncle died, 
 and the plaintiff sued his executors. The Court 
 differed as to the existence of the consideration for 
 the uncle's promise. Eele, C. J., and Keating, J., 
 thought that the marriage would support the promise, 
 which was in fact an offer capable of becoming a bind- 
 ing contract when the marriage took place. Byles, J., 
 held that the plaintiff had only done what he was 
 legally bound to do, in performing his promise to 
 marry; that this was no consideration for the uncle's 
 promise, and he dissented from the majority of the 
 
 Court, (a) 
 *81 Whether the promise is conditional on the 
 
 {a) [Tlifi doctrine of the dissenting opinion is adopted in John- 
 sm v. Sellers, 33 Ala. 265.] 
 90 
 
Chap. II. § 4. CONSIDERATION. 81 
 
 performance of tlie contract, or whether it is given 
 in return for a promise to perform, does not seem 
 to make any difference in principle. If we say that 
 the consideration for it is the detriment to the prom- 
 isee in exposing himself to two suits instead of one 
 for the breach of his contract, we beg the question, 
 for we assume that an action would lie on such a prom- 
 ise. If we say that the consideration is the promisor's 
 desire to see the contract carried out, we run the risk 
 of confounding motive and consideration. The judg- 
 ment of "Wilde, B., in Scotson v. Pegg, seem to leave 6 H. & N. 
 no doubt that in the opinion of the learned Baron a 
 promise is binding which is made on such a consider- 
 ation; the dilBculty is to reconcile these decisions with 
 the general principle laid down above and constantly 
 aiBrmed by the Courts. 
 
 The case may however be put in this way: that an Possible ex- 
 executory contract may always be discharged by agree- S|^'^**'°,? °^ 
 ment between the parties; that A and M, parties to Shad well, 
 such an agreement, may thus put an end to it at any 
 time by mutual consent; that if X says to A, " do not 
 exercise this power; insist on the performance by M 
 of his agreement with you, and I will give you so and 
 so," the carrying out by A of his agreement, or his 
 promise to do so, would be a consideration for a prom- 
 ise by X. A in fact agrees to abandon a right which 
 he might have exercised in concurrence with M, and 
 this, as we have seen, has always been held to be See ante, p. 
 consideration for a promise. 
 
 3. Consideration must he legal. 
 
 It is well to state this rule as indicating a necessary Legality of 
 
 element in consideration, but inasmuch as the consid- potisldera. 
 
 , . lion* 
 
 eration for a promise is the object for which one of the 
 
 parties makes the contract, the legality of considera- 
 tion must form a part of a subsequent discussion, and 
 will be treated when we come to consider, as an 
 91 
 
82 
 *82 
 
 FORMATION OF CONTRA.CT. 
 
 Part II. 
 
 Considera- 
 tion. 
 
 executory, 
 executed, 
 
 and past. 
 
 Executoiy 
 considera. 
 tiou: see 
 ante, p. 65. 
 
 ■Executed 
 considera- 
 tion. 
 
 Leake on 
 Contracts, 
 p. 33. 
 
 See, on Pro- 
 posal and 
 Acceptance, 
 ante, p. 13. 
 
 Offer of an 
 act for a 
 promise. 
 
 element in the Formation of Contract, the legal- 
 ity of the objects for which the parties to a 
 contract enter into it. 
 
 4. Consideration Tnay he executory or executed, it 
 must not he past. 
 
 "We now come to deal with the relation of the con- 
 sideration to the promise in respect of time. The con- 
 sideration for a promise may be executory, and then it 
 is a promise given for a promise; or it may be exe- 
 cuted, and then it is an act or forbearance given for a 
 promise, the act or forbearance constituting at once 
 the proposal or acceptance and the consideration for 
 the promise given in respect of it; or it may be past, 
 and then it is a mere sentiment of gratitude or honor 
 prompting a return for benefits received; in other 
 words, it is no consideration at all. 
 
 As to executory considerations nothing remains to 
 be added to what has been said with regard to the 
 nature of considerations in general. It has been 
 shown that a promise on one side is good considera- 
 tion for a promise on the other. 
 
 A contract arises upon executed consideration wheii 
 one of the two parties has either in the act which 
 amounts to a proposal or the act which amounts to an 
 acceptance done all that he is bound to do under the 
 contract, leaving an outstanding liability on one side 
 only. The two forms of consideration thus suggested 
 are described by Mr. Leake as "acceptance of an 
 executed consideration," and "consideration executed 
 upon request." They arise when, as described above, 
 the proposal is an offer of an act for a promise, or an 
 oifer of a promise for an act. 
 
 In the first case a man ofifers his labor or goods 
 
 under such circumstances that he obviously expects to 
 
 be paid for them, the contract arises when the labor or 
 
 goods are accepted by the person to whom they are 
 
 92 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 83 
 
 offered, and lie by his acceptance becomes bound to 
 pay a reasonable price for them. " It I take up 
 wares from a tradesman without any agreement *83 Per Tindal, 
 of price, the law concludes that I contracted to & '^^l'^ 
 
 pay their real value." So in JSari v. Mills the de- MoLimJ" 
 fendant had ordered four dozen of wine and the plain- ^^ ^^"^S- 483. 
 tiff sent eight, the defendant retained thirteen bottles 
 and sent back the rest, and the plaintiff sued him on 
 the original contract for the purchase of four dozen. 
 It was held that the retention of thirteen bottles was 
 not an acquiescence in the misperformance of the orig- 
 inal contract, but a new contract arising upon the ac- 
 ceptance of goods tendered, and that the plaintiff could 
 only recover for thirteen bottles. "The defendant 
 orders two dozen of each wine and you send four: then Hart v. Mills, 
 he had a right to send back all; he sends back part.g^^-*^- 
 What is it hut a new contract as to the pari he 
 Tcee-psf " 
 
 It must however be borne in mind that where the 
 person to whom such an offer is made has no oportu- 
 nity of accepting or rejecting the things offered, an 
 acceptance which he cannot help will not bind him. 
 For instance, A agreed with X to command his ship 
 during a voyage; in the course of the voyage he threw 
 up his command but helped to work the vessel home. 
 Afterwards he sued X, among other things, for service 
 thus rendered in bringing back the ship. But the 
 Court would not admit a claim for such services: evi- 
 dence of " a recognition or acceptance of services may Taylor v. 
 be sufficient to show an implied contract to pay for^^"'"^-^^ I'- 
 them if at the time the defendant had power to accept 33. 
 or refuse the services. But in this case it was not so. 
 The defendant did not know of the services until the 
 return of the vessel, and it was then something past, 
 which would not imply — perhaps would not support 
 — a promise to pay for it." And the difficulty which 
 would arise, should such an enforced acceptance create 
 93 
 
84 FORMATION OF CONTRACT. Part II. 
 
 a promise, is forcibly stated by Pollock, 0. B.: " Sup- 
 pose I clean your property withont your knowledge, 
 have I then a claim on you for payment? One cleans 
 another's shoes; what can the other do but put them 
 on? Is that evidence of a contract to pay for the 
 cleaning?" 
 Offer of a *84: The "consideration executed upon request," or 
 aQ°a«r^ ^°'" *^® contract which arises on the acceptance by act 
 
 of the offer of a promise, is best illustrated by the case of 
 an advertisement of a reward for services which makes 
 a binding promise to give the reward when the service 
 is rendered. Under these circumstances it is not the 
 proposer, but the acceptor who has done his part as soon 
 as he becomes a party to the contract. Thus if Amakes 
 England v. a general offer of reward for information and X sup- 
 A*& £"856 P^i®s the information, A's offer is turned into a bind- 
 [Loring v. ing promise by the act of X, and X at once concludes 
 7 Met. 411.] ^^^ contract and does all that he is bound to do under it. 
 And this form of consideration will support an im-v 
 plied as well as an express promise where a man is 
 asked to do some service which will entail certain lia- 
 bilities and expenses. In such a case the request for 
 Buch services implies a promise, which becomes bind- 
 ing when the liabilities or expenses are incurred, to 
 make good his loss to the promisee. Thus where the 
 defendant employed an auctioneer to sell her estate, 
 and the auctioneer was compelled in the course of the 
 proceedings to pay certain duties to the Crown, it was 
 held that the fact of employment implied a promise 
 by the defendant to repay the amount of the duties, 
 Brittainv. and entitled the auctioneer to recover them. "Whether 
 & W. 763. *'^® request be dii-ect, as where the party is expressly 
 desired by the defendant to pay, or indirect, as where 
 he is placed by him under a liability to pay, and does 
 ^ pay, makes no difference." 
 
 It is probably on this principle, the implication of 
 a promise in a request, and not on the theory that a 
 94 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 85 
 
 subsequent and distinct promise to make a return for 
 things done on a mere request relates back to the 
 request, that the case of Lampleigh v. Braithwait is l Sm. L. 0. 
 is capable of explanation. But this falls to be dealt ^*^' 
 with shortly. 
 
 Having explained the nature of an executed consid- Present dis- 
 eration, it remains to distinguish present from past fj-o^pas^t 
 
 consideration. considera- 
 
 tion, 
 
 A past consideration is, in effect, no consid- *85 
 eration at all ; that is to say, it confers no benefit 
 on the promisor, j,nd involves no detriment to the 
 promisee in respect of his promise. A past consider- 
 ation is some act or forbearance in time past by which 
 a man has benefited without thereby incurring any 
 legal liability. If afterwards, whether from good feel- 
 ing or interested motives, it matters not, he makes a 
 promise to the person by whose act or forbearance he 
 has benefited, and that promise is made upon no other 
 consideration than the past benefit, it is gratuitous and 
 cannot be enforced; it is based upon motives, and not 
 upon consideration. 
 
 The rule that a past consideration will not support 
 a subsequent promise is only another mode of saying 
 that every promise, whether express or implied, must, 
 in order to be binding, be made in contemplation of a 
 present or future benefit to the promisor. 
 
 A purchased a horse from X, and afterwards, in con- 
 sideration of the previous sale, promised that the horse 
 was sound and free from vice. It was in fact a vicious 
 horse. It was held that the sale created no implied 
 warranty or promise that the horse was not vicious; 
 that the promise must therefore be regarded as inde- Rosoorio v. 
 pendent of the sale, and as an express promise based b. 334*^' 
 upon a previous transaction. It fell therefore " within fBulkley v. 
 the general rule that a consideration past and executed 3 Conn! 404.] 
 95 
 
86 FORMATION OF CONTRACT. Part II. 
 
 will support no other promise tlian such as would be 
 ^^j^plied by law." 
 
 To the general rule thus laid down certain excep- 
 tions are said to exist ; and it is proposed to endeavor 
 to ascertain the nature and limits of these exceptions, 
 which are perhaps fewer and less important than is 
 sometimes supposed. 
 
 Considera- (a) A past consideration will, it is said, support a 
 by previous subsequent promise, if the consideration was given at 
 request. the request of the promisor. 
 
 1 Sm. L. C. *86 In Zampleigh v. Braithwait, which is re- 
 "'• garded as the leading case upon this subject, the 
 
 plaintiff sued the defendant for £120 which the de- 
 fendant had promised to pay to him in consideration 
 of services rendered at his request. The court here 
 agreed " that a mere voluntary courtesy will not have 
 consideration to uphold an assumpsit. But if that 
 courtesy were moved by a suit or request of the party 
 that gives the assumpsit, it will bind; for the promise, 
 though it follows, yet it is not naked, but couples itself 
 Hobart, 105. with the suit before, and the merits of the party pro- 
 cured by that suit." 
 
 The case of Lampleigh v. Braiihwait was decided 
 in the year 1615, and for some time before and after 
 See cases ool- that decision, cases are to be found which go to show, 
 note° to'Hunt "^^o""^ '^'" ^®^^ definitely, that a past consideration if 
 V. Bate. moved by a previous request will support a promise. 
 [Booth vt But from the middle of the seventeenth century until 
 SB 'v'^rsn' *^^ present time no direct authority for the rule can 
 be discovered, with the exception ot the case of Brad- 
 ford V. Boulston, decided in the Irish Court of Ex- 
 chequer in 1858. The rule is frequently mentioned as 
 existing, but in the few modern cases which have inci- 
 dentally dealt with it, it appears to be regarded as open 
 to question or to be susceptible of a different interpre- 
 tation to that which is placed upon it in text-books. 
 96 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 87 
 
 Thus in Kaye v. Button, Tihdal, C. J., first lays7M.&Gr.807. 
 down the rule that where a consideration executed im- 
 plies a promise of a particular sort, a subsequent 
 promise based on the same consideration is not bind- 
 ing. By this he means that where, from the acceptance 
 of consideration executed, the law implies a promise 
 by the acceptor to make a return, the consideration is 
 exhausted upon that promise. There is nothing farther 
 to support a subsequent and independent promise. 
 
 He then goes on to say, " The case may perhaps be 
 different where there is a consideration from which no 
 promise would be implied by law: that is, where the 
 party suing has sustained a detriment to himself 
 or conferred a benefit on the defendant at his *87 
 request under circumstances which would not 
 raise any implied promise. In such cases it appears to 
 have been held in some instances that the act done at 
 the request of the, party charged is a sufficient consid- 
 eration to render binding a promise afterwards made 
 by him in respect to the act so done. . . .But it is not 
 necessary to pronounce any opinion on that point." 
 
 The interpretation of the rule which Tindal, C. J., 
 regarded as open to question is further narrowed by 
 Matjle, J., in Elderton v. Emmens. "An executed 4 C. B. 493. 
 consideration will sustain only such a promise as the 
 law will imply." And again in Kennedy v. Broun, 
 Erle, 0. J., puts the case of Zam/pleigh v. Braithwait, 13 C. B. N. S. 
 from a modern point of view. " It was assumed," he^''"'^" 
 says, " that the journeys which the plaintiff performed 
 at the request of the defendant and the other services 
 he rendered would have been sufficient to make any 
 promise binding if it had been connected therewith in 
 one contract: the peculiarity of the decision lies in 
 connecting a subsequent promise with a prior consid- 
 eration after it had been executed. Probably at the 
 present day, such service on such a request would have 
 raised a promise by implication to pay what it was 
 97— 
 
88 FORMATION OF CONTRACT. Part II. 
 
 worth ; and the subsequent ^promise of a sum certain 
 would, have heen evidence for the jury to fix the 
 amountP 
 1 Bing. N. C. This would seem to be the ratio decidendi in Wil- 
 hinson v. Oliveira, where the plaintiff, at tlie defend- 
 ant's request, gave him a letter for the purposes of a 
 lawsuit. The letter proved the defendant's case, by 
 which means he obtained a large sum of money, and 
 he subsequently promised the plaintiff £1,000. Here 
 the plaintiff evidently expected something in return 
 for giving up the letter, and the defendant's request 
 for it amounted in effect to an offer that if the plain- 
 tiff would give him the letter he would pay a sum to 
 be hereafter fixed. 
 
 Eegarded from this point of view the rule which we 
 are discussing amounts to this: where a request is 
 made which is in substance an offer of a promise 
 *88 upon terms to be afterwards ascertained, and ser- 
 vices are rendered in pursuance of that request, 
 a subsequent promise to pay a fixed sum is either to 
 be regarded as a part of the same transaction, or as 
 evidence to assist the jury in determining what would 
 be a reasonable sum. 
 8Ir.O.L.468, In opposition to this view stands the case of Brad- 
 Coni- 450 ford v. Roulston, the only case in modern times in 
 Bee. ed. 433. which the rule in Lampleigh v. Braithwait has come 
 before the courts for express decision. In that case 
 Bradford, who had a ship to sell, was introduced by 
 Eoulston to two persons who were willing to purchase 
 it. At the time of executing the bill of sale of the 
 ship the purchasers were £55 short of the money 
 agreed to be paid. Bradford nevertheless executed the 
 bill of sale at the request of Roulston, and in consid- 
 eration of this, Eoulston upon a subsequent day guar- 
 anteed the payment of the balance of £55 still due. 
 There seems to have been some evidence that the 
 guarantee was given at the time of the sale and was 
 98 
 
Chap. II. § 4. CONSIDERATlOlSr EXECUTED. gg 
 
 subsequently put into writing, but the court felt it 
 necessary to give an express decision, on the supposi- 
 tion that the consideration was wholly past, to the 
 effect that the execution of the bill of sale to third 
 parties upon the request of the defendant was consid- 
 eration for a subsequent promise by him to answer for 
 their default. The authorities were elaborately reviewed 
 and the rule in Lamfleigh v. Braithwait was adhered 
 to in its literal sense. 
 
 It is submitted, however, that this decision must be 
 received with some hesitation. The dictum of Eele, 
 C. J., in Kennedy v. Broun was not adverted to; the 
 the case of Wilkinson v. Oliveira was regarded as a 
 direct authority for the rule in its most extended sense, 
 a view which, upon the facts ot that case, is certainly 
 open to question; and the great gap in the chain of 
 express decisions on the point does not appear to have 
 impressed the court. 
 
 The practical difficulties to which such an interpre- 
 pretation of the rule would give rise are obvious. 
 Is any limit to be assigned to the time which *89 
 may elapse between the act done upon request 
 and the promise made in consideration of it? This 
 difficulty pressed upon the court in one of the oldest 
 cases upon this subject, Halifax v. Barker, where a 3 Dyer, p. S73 
 promise was held not to be binding which was given gee'^Cro' sfiz 
 npon consideration of a payment made upon request 741. 
 a year before. This suggests that the true solution is 
 to be found in the supposition that the subsequent 
 promise is only binding when the request, the con- 
 sideration, and the promise form substantially one 
 transaction. 
 
 Another difficulty would arise as to the definition of 
 "a request." Let us suppose that a man dangerously 
 ill is informed by his physician that his state is so crit- 
 ical as to justify desperate remedies; the physician 
 advises him to try a remedy which he believes may 
 99 
 
90 FORMATION OF CONTRACT. Part II. 
 
 possibly restore him to health, but if it does not do so, 
 will probably kill him in a few hours; the remedy is 
 of the physician's own invention, and he asks the 
 patient in view of his desperate condition to allow 
 him to make the experiment. The patient takes it 
 and is cured; the fame of the cure makes the fortune 
 of the physician, and a year or two afterwards, finding 
 himself in good circumstances, he promises to his 
 former patient a sum of money in consideration of 
 the acceptance of his remedy at his request. It is 
 hardly possible to suppose that an action would lie 
 upon such a promise. Yet it is a logical deduction 
 from the decision of the Court in Bradford v. Boul- 
 ston, and from the statement therein contained " that 
 where there is a past consideration, consisting of a 
 previous act done at the request of the defendant, it 
 will support a subsequent promise." (a) 
 
 And so we are driven to the conclusion that, nnlesB 
 the request is virtually an offer of a promise the pre- 
 cise extent of which is hereafter to be ascertained, or 
 is so clearly made in contemplation of a promise to be 
 given by the maker of the request that a subsequent 
 
 promise may be regarded as a part of the same 
 *90 transaction, the rule in Lampleigh v. Braithwait 
 
 has no application. And it may not be presump- 
 tiouB to say that in spite of the cases decided between 
 
 (a) [It could scarcely be called a request where a party, as in the 
 case supposed by the author, gives advice to another for his ben- 
 efit alone, and if the person acts upon that advice and is benefited, 
 the fact that tlie advisor is also incidentally benefited would be 
 no reason for treating tlie advice as a request, and making it a 
 consideration for a future promise which might be based upon 
 such incidental benefit. The question whether there was a prior 
 legal Request would be decided by considering whether the 
 parties expected or supposed that the one who was asked to do 
 the act was, under any circumstance to be rewarded, and if 
 neither party had such an idea, no liability could arise from the 
 compliance with the request.] 
 100 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 91 
 
 1568 and 1635, of the continuous stream of dicta in 
 text-books, and of the decision in Bradford v. Bouls- 
 ton, the rule cannot be received in such a sense as to 
 form a real exception to the principle that a promise, 
 to be binding, must be made in contemplation of a 
 present or future benefit to the promisor. 
 
 (5) A more substantial exception to the general rule Real excep- 
 is to be found in the cases in which a person has been erli rSir**' 
 held capable of reviving an agreement' by which he 
 has benefited, but which by rules of law since re- 
 pealed, incapacity to contract no longer existing, or 
 mere lapse of time, is not enforceable against him. 
 The principle upon which these cases rest is, "that 
 where the consideration was originally beneficial to 
 the party promising, yet if he be protected from lia- 
 bility by some provision of the statute or common law, 
 meant for his advantage, he may renounce the benefit PerParke,B., 
 of that law; and if he promises to pay the debt, which 5?.'''® \ 
 is only what an honest man ought to do, he is then Exch. 71. 
 bound by the law to perform it." 
 
 The following illustrations of the principle are to be 
 found in the Eeports. 
 
 A promise by a person of full age to satisfy debts Illustrative 
 contracted during infancy was binding upon him be- ''^^^^■ 
 fore 37 and 38 Yict. c. 62. Williams v. Moor. 11 M. & W. 
 
 A promise made by a bankrupt discharged from3jjgg^ Pgj._ 
 debts by a certificate of bankruptcy to satisfy the ryman, 1 
 whole or part of debts due to a creditor was binding °*"'' '■' 
 before 12 and 13 Vict. c. 102, § 204. Truma/n v.rMaxi'av.' 
 
 Fenton. ^--Jt.] 
 
 A debt barred by the Statute of Limitations is con- 
 sideration for a subsequent promise to pay it. 
 
 In Lee v. Muggeridge a married woman gave a bond [Lonsdale v. 
 for money advanced at her request to her son by a for- y^T^'Q q 
 mer husband. Aftewards when a widow, she 86.] STaunt. 
 
 promised that her executors should pay the prin- *91 " 
 101 
 
91 FORMATION OP CONTRACT. Part II. 
 
 cipal and interest secured by the bond, and it was held 
 that this promise was binding. 
 
 1H.&O.703. In Flight v. Beed bills of exchange were given by 
 the defendant to the plaintiff to secure the repayment 
 of money lent at usurious interest while the usury 
 laws were in force. The bills were therefore void as 
 between the plaintiff and defendant. After the repeal 
 of the usury laws by 17 a,nd 18 Vict. c. 90, the defend- 
 ant renewed the bills, the consideration for renewal 
 being the past loan, and it was held that he was liable 
 upon them. 
 
 Common There are certain features common to all these cases. 
 
 elemenfa in ;Each in its origin presents the essential elements of 
 all the cases. , , 
 
 agreement, and in each one of them one of the parties 
 
 has got all that he bargained for. The other party can- 
 not obtain what he was promised, either because he 
 made an agreement with one who was incapable of 
 contracting, or because a technical rule of law forbids 
 the agreement to be enforced. If the party who has 
 received the benefit which he expected from the agree- 
 ment afterwards acquires capacity to contract, or if the 
 rule of law is repealed, as in the case of the Usury 
 Acts, or, as in the case of the Statute of Limitations, 
 admits of a waiver by the person whom it protects, 
 then a new promise based upon the consideration 
 already received is binding. 
 Ttey do not The rule thus regarded seems a plain and reasonable 
 rest upo^ exception to the general doctrine that a past consider- 
 gation. ation will not support a promise. Unfortunately, while 
 
 the rule was in the course of establishment it rested 
 for a time upon the support of the moral ohligation 
 ■which was supposed to bind the person benefited and 
 to give efficacy to his promise. It would have seemed 
 enough to have said that when two persons have made 
 an agreement, and one has got all the benefit which he 
 expected from it, and is protected by technical rules of 
 law from doing what he had promise to do in return, 
 102 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 92 
 
 he will be bound if, when those rules have ceased to 
 operate, he renews his original promise. But 
 when once the law of contract was brought into *92 
 the cloudland of moral obligation, it became ex- 
 tremely hard to say what promises might or might not 
 be enforced. The phrase was far larger than the cir- 
 cumstances needed, and the lang-uage used in some of 
 
 ? DO 
 
 the cases cited above was calculated to make the valid- 
 ity of contracts turn upon a series of ethical problems. 
 In Lee v. Muggeridge, Mansfield, C. J., says: "It Per Mans- 
 has long been establislied, that where a person is mor-?®'"' 9j/"' 
 ally and conscientiously bound to pay a debt, though geridge, 5 
 not legally bound, a subsequent promise to pay will ^^^ ' ' 
 give a right of action. The only question therefore is 
 whether upon this declaration there appears a good 
 moral obligation." 
 
 This case affords perhaps the strongest example of 
 the mode in which the phrase was employed. Its effect, 
 after it had undergone some criticism from Lord Ten- Littlefieldv. 
 TEEDEN, was finally limited by the decision in East-^^^^^^^^- ^ 
 wood v. Kenyan. The doctrine of the suiBciency of ^i ^ ^ ^ 
 moral obligation to support a pi'omise was there defl-446. 
 nitely called in question. The plaintiff, as guardian 
 and agent of the defendant's wife, had, while she was 
 a minor, laid out money upon the improvement of her 
 property: he did this voluntarily; and in order to do 
 so was compelled to borrow money, for wliich he gave 
 a promissory note. "When the minor came of age she 
 assented to the transaction, and after her marriage 
 her husband promised to pay the note. Upon this 
 promise he was sued. The moral duty to fulfill such 
 a promise was insisted on by the plaintiff's counsel, 
 but was held by the Court to be insufiicient where 
 the consideration was wholly past. "Indeed," said 
 Lord Denman in delivering judgment, " the doctrine 
 would annihilate the necessity for any consideration at 
 103 
 
93 FORMATION OF CONTRACT. Part II. 
 
 all, inasmuch as the mere fact of giving a promise 
 creates a moral obligation to perform it." 
 
 Voluntarily (c) There is but one other so-called exception to the 
 ano"he7wa*s general rule. We find it laid down that "where the 
 legally plaintiff voluntarily does that wherennto the 
 
 bound to do. ^jgg defendant was legally compellable, and the de- 
 Smith, L. C. fendant afterwards, in consideration thereof, 
 ^^- expressly promises," he will be bound by such a 
 promise. 
 
 It is submitted that the authority of this rule fails 
 altogether so far as it rest on the cases which are habit- 
 ually cited in support of it. Curiously enough, all turn 
 upon the liability of parish authorities for medical 
 attendance upon paupers who are settled in one parish 
 but resident in another. 
 Buller, Nisi Watson v. Turner (1767) was decided on the ground 
 Prius, 147. ^^1^ ^jjg moral obligation resting upon overseers of a 
 But see Sel- parish to provide for the poor would support a promise 
 
 wyn's Nisi xosAe by them to pay for services previously rendered 
 
 Pnus,p.51, 1, J- 1 
 
 n. 11. to a pauper by a medical man. 
 
 2 East, 604. In Atkins v. Banwell (1802) it was held that the 
 moral obligation resting upon the parish in which a 
 pauper is settled, to reimburse another parish, in which 
 the pauper happened to be taken ill, for expenses in- 
 curred in medical attendance, is not sufficient to create 
 a legal liability without an express promise. 
 
 IB.&A. 105. In Wing v. Mill (1817), the pauper was also resid- 
 ing out of his parish of settlement; but that parish 
 acknowledged its liability for his maintenance by mak- 
 ing him a weekly allowance. The pauper fell ill and 
 died: during his illness he was attended by the plain- 
 tiff, an apothecary, who, after the pauper's death, was 
 promised payment of his bill by the defendant, over- 
 seer of the parish of settlement. The Court held the 
 defendant liable. 
 
 It is not easy to collect from the judgments of Lord 
 104 
 
Chap. II. § 4. CONSIDERATION EXECUTED. 94. 
 
 Ellenboeough, C. J., and Batlet, J., what were the 
 grounds of their decision. Some sentences suggest 
 that they held on the authority of Watson v. Turner, 
 that a moral obligation will support a promise; others 
 suggest that they held that there was a legal obligation 
 cast on the parish of residence to do that which the 
 parish of settlement might legally have been com- 
 pelled to do, and that a quasi-contractual relation *94 See ante, p. 6. 
 thus arose between the parties ; others again sug- 
 gest that the allowance made to the pauper by the 
 parish of settlement showed a knowledge that the pau- 
 per was being maintained at their risk, and amounted 
 to an implied authority for bestowing the necessary 
 medical attendance. This last is the view entertained 
 as to the ratio decidendi in Wing v. Mill by the Court 
 of Exchequer in the only case remaining for examin- 
 ation. 
 
 In Paynter v. Williams (1833) the facts were sim 5C.&M.818k 
 ilar to those in Wing v. Mill, with this very import- 
 ant exception, that there was no subsequent promise 
 to pay the apothecary's bill. The defendant parish, 
 the parish of settlement, was nevertheless held liable 
 to pay for medical attendance supplied by the parish 
 of residence. The payment of an allowance by the 
 parish of settlement was held by Lord Lyndhuest, C. 
 B., to amount " to a request on the part of the ofBcers 
 that the pauper shall not be removed, and to a promise 
 that they will allow what was requisite." 
 
 It would seem then, that in the cases which are said 
 to furnish this supposed rule the promise was either 
 based upon a moral obligation, which, since the decis- 
 ion in Eastwood v. Kenyon, would no longer be suf- 11 A. & B. 
 ficient to support it, or was merely an acknowledg- ^^• 
 ment of an existing liability arising from a contract 
 which might be implied by the acts of the parties, — a 
 liability which, on the authority of Paynter v. Will- 
 105 
 
95 FORMATION OF CONTRACT. Part II. 
 
 iams, existed apart from the fact of a subsequent 
 promise. 
 
 And this is stated to be the true ground upon which 
 the decision in Watson v. Turner may be supported, 
 p. 61, n. 11. in the note to Selwyn'a Nisi Prius above referred to. 
 " The defendants, being bound by law to provide for 
 the poor of the parish, derived a benefit from the act 
 of the plaintiff, who afforded that assistance to the 
 pauper which it was the duty of the defendants to 
 have provided: this was the consideration, and the 
 subsequent promise by the defendants to pay for 
 *95 such assistance was evidence from which it might 
 he inferred that the consideration was performed 
 hy the plaintiff with the consent of the defendants, and 
 consequently sufficient to support a general indebitatus 
 assumpsit for work and labor performed by the plain- 
 tiff yb?" the defendants, at their request." 
 
 It may not be safe to say that the rule as habitually 
 laid down is non-existent, but the cases cited in sup- 
 port of it seem to fail, on examination, to bear it out. 
 It seems strange that it should have been so often reit- 
 erated upon such scanty and unsatisfactory authority. 
 s. 25, subs. 3. It has however been adopted in the Indian Contract 
 & 8, BUbs. (d.) Act, which also, in its definition of consideration, in- 
 cludes the " consideration executed upon request " of 
 Lampleigh v. Braithwait. It is perhaps unfortunate 
 that the framers of that Act should have so readily 
 abandoned so satisfactory a test of the validity of sim- 
 pie contracts as the English doctrine of Consideration ~ 
 has proved itself to be. 
 106 
 
Chap, III. CAPACITY OF PARTIES. 96 
 
 CHAPTEE III. *96 
 
 OAPACITT OF PARTIES. 
 
 We have hitherto dealt with the Contract itself and Further 
 those elements in its structure which are essential to i^q|j®jj*^_ "^ 
 give it even a prima facie validity. Definite Pro- 
 posal and Acceptance, and Form, or Consideration are 
 necessary to an agreement, the effect of which is to be 
 entertained by courts of law; but when we have con- 
 structed an apparently binding contract, it is necessary 
 before we can pronounce finally upon its validity, that 
 we should look to the parties to it, and ask who made 
 it, under what circumstances, and with what object. 
 In other words, we have to enquire whether the par- 
 ties were capable of contracting, whether their appa- 
 rent consent was genuine, and whether their objects 
 were such as the law will admit. 
 
 And, first, as to the capacity of parties. Capacity of 
 
 There are certain persons' whom the law regards as^^J^^^jj^ 
 incapable, wholly or in part, of binding themselves by be affected, 
 promise, or of enforcing a promise made to them. 
 And this incapacity may arise from the following 
 causes: 
 
 (1) Political or professional status, 
 
 (2) Touth which, until the age of 21 years, is sup- 
 posed to imply an immaturity of judgment which the 
 law will protect, (a) 
 
 (3) The merger or absorption, at any rate for con- 
 tractual purposes, of the status of one person in that 
 
 {a) [In some of the American States females become of age at 
 eighteen.] 
 
 107 
 
97 FORMATION OF CONTRACT. Part II. 
 
 of another, whicli arises in the 'case of a married 
 woman upon and during her marriage. 
 
 *97 (4) Artificiality of construction, such as that 
 of corporations, which being given a personality 
 
 by law, take upon it such terms as the law imposes. 
 (5) The permanent or temporary mental aberration 
 
 of lunacy or drunkenness. 
 
 § 1. Political or Professional Status. 
 
 An alien. An alien has all power of contracting whicli a nat- 
 
 ural born British subject has, except that he cannot 
 acquire property in a British ship. 
 An alien An alien enemy, or British subject adhering to the 
 
 enemy. King's enemies, i cannot, without license from the 
 
 y^WsoxJl' Crown, make any fresh contract or enforce any exist- 
 Camp. 483> ing contract during the continuance of hostilities; but 
 waddington, his rights as to outstanding contracts made before the 
 ^J?*'"^.-^!- commencement of war are suspended, not annulled, 
 Cranch. 155.] and can be enforced upon the conclusion of peace. 
 Foreign Foreign States and sovereigns and their representa- 
 
 and thwr tives, and the ofiicials and household of their represen- 
 representa- tatives, are not subject to the jurisdiction of the courts 
 Taylor v °^ *^^® country unless they submit themselves to it. 
 Best, 14 C.B. A contract entered into with such persons cannot there- 
 ^' ■ fore be enforced against them unless they so choose, 
 
 although they are capable of enforcing it. 
 Felon un- A person convicted of treason or felony cannot, 
 
 senfe°ncf during the continuance of his conviction, make a 
 83 & 34 Vict, valid contract; nor can he enforce contracts made pre- 
 c. 28, ss. 8, 9, vious to conviction ; but these may be enforced by 
 
 ' It does not seem to be clearly settled that anything short of 
 residence in a hostile country for trading purposes constitutes 
 adherence to the king's enemies. The case of JSoberts v. Ha/rdy, 
 8 M. & S. 533, exhibits the reluctance of the courts to draw con- 
 clusions from the mere fact that a man was resident in a hostile 
 country when it was possible for him to have removed. 
 108 
 
Chap. III. § a. INFANTS. gg 
 
 an administrator appointed for the purpose by the 
 Crown, {a) 
 
 A Barrister cannot sue for fees due to him for *98 Barrister, 
 services rendered in the ordinary course of his 
 professional duties, whether the action be framed as Kennedy v. 
 arising upon an implied contract to pay for services ^"'^"^ ^|^C!. 
 rendered on request, or upon an express contract to ' ' 
 pay a certain sum for the conduct of a particular 
 business.(J) 
 
 A physician, until the year 1858 was so far in the Physician, 
 position of a barrister that the rendering of service on 
 request raised no implied promise to pay for them, 
 though the patient might bind himself by express 
 contract; but now, by 21 & 22 Yict. c. 90, every phy- 
 sician may sue on such an implied contract, subject to 
 the right of the College of Physicians to regulate this 21 & 23 Vict, 
 right by law.(c) c- 90. s- 31. 
 
 § 2. Infants 
 
 The rules of law relating to the rights and liabilities 
 of infants upon contracts entered into by them during 
 infancy have been considerably modified by recent leg- 
 islation. It win be therefore well to state the rules of 
 
 (a) [In some of the States there are constitutional provisions 
 that no conviction shall work corruption of hlood or forfeiture 
 of estate.] 
 
 (6) [In most States the office of attorney and that of counsellor 
 or barrister is united in the same person, and recompense can be 
 recovered for services rendered in either capacity. Newman v. 
 Washington, Martin, Yerg. (Tenn.) 79 ; Wilson v. Burr, 35 Wend. 
 (N. Y.) 386 ; Vilas^. Downer, 31 Vt. 419, and Gray v. Braekinridge, 
 2 Pen. & Watts, (Pa.) 75. But in New Jersey counsel fees as such 
 are not recoverable, Vanatta v. McEinley, 1 Harrison L. 235, 
 and Bldke'Y. City of Elizabeth, 3 N. J. Law Journal, 328.] 
 
 (c) [There is no such rule in the United States, but some States 
 require a license from some authority, as a condition of practic- 
 ing as a physician, Hewitt v. Wilcox, 1 Met. (Mass.) 154; Judah 
 V. McNama, 3 Blackf. (Ind.) 269, and Mooney v. Lloyd, 5 Serg. & 
 K. (Pa.) 416.] 
 109 
 
99 
 
 FOKMATION OF CONTRACT. 
 
 Part II. 
 
 General rule 
 of Common 
 Law. In- 
 fant's con- 
 tract void- 
 able. 
 
 (1) Ratifica- 
 tion. 
 
 Pollock on 
 Contracts, 
 pp. 36, 41. 
 
 IIM.&W. 
 256. [Conk- 
 liu V. Os- 
 born, 7 Ind. 
 653.] 
 
 Ratification 
 of two kinds. 
 37 & 38 Vict. 
 c.6a. 
 
 Contracts 
 valid until 
 rescinded. 
 [Blanken- 
 Bhip V. Stout, 
 25 111. 132.] 
 
 Common Law upon the subject, and then to consider 
 the modification in historical order. 
 
 The general rule of Common Law is, that an infant's 
 contract is voidable at his option, either before or after 
 he has attained his majority. And this rule is thus 
 affected : 
 
 (1) The contract ceases to be voidable if it be rati- 
 fied upon the attainmenb of 21 years of age. 
 
 (2) The contract cannot be avoided if it be for neces- 
 saries. 
 
 We will deal with these two exceptions in order. 
 
 (1) Ratification. 
 
 Mr. Pollock, in an exhaustive and convincing argu- 
 ment, has shown clearly that the better opinion has 
 ever been that the contract of an infant is not void but 
 voidable at his option. Being so voidable, the in- 
 *99 fant may (apart from statutory restrictions) ratify 
 his contract when he attains his majority, and as- 
 sume the rights and liabilities arising from it. " The 
 general doctrine is," said the court in Williams v. Moor, 
 " that a party may, after he attains the age of 21 years, 
 ratify and so make himself liable on contracts entered 
 into during infancy." It may be well to remind the 
 reader that such a ratification is, or was, an illustration 
 of the limited class of cases in which a past consideration 
 has been allowed to support a subsequent promise. 
 
 But it would seem that ratification is of two kinds. 
 And it may perhaps be said that, before the Infant's 
 Relief Act, the ratification required to make the infant 
 liable upon contracts entered into by him during in- 
 fancy differed, in correspondence with a certain difler- 
 ence in kind in the contracts to which he became a 
 party. Some of these are valid unless rescinded, oth- 
 ers invalid until ratified. It would seem that where 
 an infant acquires an interest in permanent property 
 to which obligations attach, or enters into a contract 
 which involves continuous rights and duties, benefits 
 110 
 
Chap. III. § 2. INFANTS. JOO 
 
 and liabilities, and has taken benefits under the con- 
 tract, he would be bound unless he expressly disclaimed 
 the contract. On the other hand, a promise to perform 
 some isolated act, or a contract wholly executory, would 
 not be binding upon the infant unless he expressly 
 ratified it upon coming ot age. 
 
 Illustrations of contracts which required a special 
 disdaimer to avoid them — which were valid unless Interests in 
 rescinded — may be found in the following cases : realty. 
 
 An infant lessee who occupies until majority is liable Rolle, Abr. 
 for arrears of rent which accrued during his minority. ''^^■^• 
 Shareholders who become possessed of their shares 
 during infancy are liable ior calls which accrued while 
 they were infants. " They have been treated therefore in corporate 
 as persons in a different situation from mere contract- P^P^'^'J* 
 ors, for then they would have been exempt; but in 
 truth they are purchasers who have acquired an 
 interest, not in a mere chattel, hut in a subject *100 
 of a permanent nature, either by contract with 
 the company, or purchase or devolution from those 
 who have contracted, and with certain obligations at- 
 tached to it which they were bound to discharge, an4 
 have thereby been placed in a situation analogous to 
 an infant purchaser of real estate who has taken pos- 
 session, and thereby becomes liable to all the obliga- 
 tions attached to the estate; for instance, to pay rent 
 in the case of a lease rendering rent, and to pay a fine 
 due on the admission in the case of a copyhold to which 3 Burr. 1717. 
 an infant has been admitted, unless they have elected 
 to waive or disagree to the purchase altogether, either N. W. R. Co. 
 during infancy or at full age, at either of which times ^^^^l^^' 
 it is competent for an infant to do so.(a) 
 
 Similarly an infant may become a partner, and at in partner- 
 Common Law may be entitled to benefits, though not^^'P' 
 
 (o) [For a full discussion of this subject, see Story on Contracts, 
 5th ed., note 4 to Sec. 118.] 
 Ill 
 
104 FORMATION OF CONTRACT. Part II. 
 
 liable for debts arising from the partnership during 
 his infancy. Equity, however, would not allow an 
 infant, in taking the partnership accounts, to claim to 
 Lindley, I. be credited with profits and not debited with losses. 
 But what is important for our present purpose to note 
 is, unless there be an express rescission and disclaimer 
 of the partnership which was entered into after infancy, 
 the partner will be liable for losses accruing aftej he 
 came of age. 
 
 Where an infant held himself out as in partnership 
 
 with X, and continued to act as a partner till shortly 
 
 before he came of age, and then, though ceasing to act 
 
 as a partner, did nothing to disaffirm the partnership, 
 
 Goodev.Har-he was held liable on debts which accrued after he 
 
 Ald^iso^ * came of age, to persons who snpplied X with goods. 
 
 [Miller V. " Here," said Best, J., " the infant, by holding hira- 
 
 fa^' 2 Hill, self out as a partner, contracted a continual obligation, 
 
 and that obligation remains till he thinks proper to 
 
 put an end to it If he wished to be understood as 
 
 no longer continuing a partner, he ought to liam 
 notified it to the world.'" 
 
 Although the liabilities incurred by the infant 
 *101 are somewhat diflFerent in these different cases, 
 yet there is this feature com mon to all ot them, 
 that nothing short of express disclaimer will entitle a 
 man, on attaining his majority, to be free of obliga- 
 Contracts tions such as we have described. It is otherwise in 
 ratmed ^ contracts which are not thus continuous in the opera- 
 tion. The infant is not bound unless he expressly 
 ratify them. 
 (2.) Necessa- *104 (2) We must now consider the liability of an 
 
 nes— wkat infant for necessaries. 
 
 are they. , „ 
 
 And we must first ascertam what are " necessaries.' 
 
 It has always been held that an infant may bind 
 
 himself by contract for the supply to him not merely 
 
 of the necessaries of life, but of such things as are 
 
 suitable to his station in life and to his particular cir- 
 
 112 
 
Chap. III. § 3. INFANTS. 105 
 
 cumstances at the time. The best discussion of the 
 subject of necessaries is to be found in the judgment 
 of Beamwell, B., in Ryder v. Wombwell — a judg- L. B. 3 Exch. 
 ment the conclusions of which were adopted by the®''" 
 Excliequer Chamber. The diflficulty which has arisen L. E. 4 Exch. 
 in respect of them consists mainly in determining the ^^Qg^'J^PIj®' 
 provinces of the court and the jury in ascertaining 13 Met. 563.^ 
 thefn, and the rules applicable to the matter may per- 
 haps be stated thus: 
 
 (a) Evidence being given of the things supplied and 
 the circumstances of the infant, the court determines 
 whether the things supplied can reasonably be con- 
 sidered necessaries at all; and if it comes to the con- 
 cluclusion that they were not, the case may not be 
 submitted to the jury at all. 
 
 Things may obviously be incapable of being neces- 
 saries. A wild animal, or a steam roller, could hardly, 
 under any circumstances, be considered to be such. 
 
 Things may be of a useful character, but the quality 
 or quantity supplied may take them out of the char- 
 acter of necessaries. Elementary text-books might be 
 necessary to a student of law, but not a rare edition 
 of " Littleton's Tenures," or eight or ten copies 
 of " Stephen's Commentaries." Things neces- *105 
 sary to a person in one station in life would not 
 be necessary to a person in a diiferent station; or, 
 again, things not usually necessary may become so from 
 the circumstances of the infant. 
 
 Medical attendance and expensive articles of food 
 may ordinarily be dispensed with, but may become 
 necessary in case of ill-health. 
 
 It does not follow therefore that, because a thing ia 
 of a useful class, a judge is bound to allow a jury to 
 say whether or no it is a necessary under all the cir- 
 cumstances of the case. 
 
 (b) If the judge conclude that the question is an Provinces 
 open one, and the things supplied are such as may^n^'jufy 
 
 113—8 
 
106 FORMATION OF CONTRACT. Part II. 
 
 reasonably be considered to be necessaries, he leaves it 
 
 to the jury to say whether, under the circumstances 
 
 of the case, the things supplied were necessaries as a 
 
 fact. And the jury determines this point, taking into 
 
 consideration the character of the things supplied, the 
 
 extent to which the infant was already supplied with 
 
 them, and the actual circumstances of the infant. We 
 
 Bay " actual circumstances," because a false impression 
 
 which the infant may have conveyed to the tradesman 
 
 as te his station and circumstances will not affect his 
 
 Brayshaw v. liability. If a tradesman supplies expensive goods to 
 
 Scott°'at p. ^^ infant because he thinks that the infant's circum- 
 
 187. stances are better than in fact they are, he does so at 
 
 his peril, 
 of Court in (c) The ruling of the court and the finding of the 
 of'ApTeal. i^^^y ^^® ^^^^ alike subject to review by the Courts of 
 Appeal. 
 
 Infant may An infant is liable for wrong, but a breach of con- 
 
 chareed tract may not be treated as a wrong so as to make the 
 
 upon con- infant liable; the wrong must be more than a misfea- 
 
 as a tort. sance in the performance of the contract, and must be 
 
 Jennings v. separate from and independent of it. Thus where an 
 
 8 t" R 335. infant hired a mare to ride and injured her by 
 
 [West V. *106 over-riding, it was held that he could not be 
 
 447 1 ' ■ made liable upon the contract by framing the 
 
 action in tort for negligence. Nor can an infant be 
 
 made liable for goods sold and delivered by charging 
 
 him in trover and conversion, [except where the con- 
 
 [Badger v. tract was made and the goods obtained by fraud, in 
 
 Mass°359 1^ which case the agreement will be voidable, and no title 
 
 to the goods will pass. J 
 
 but may for . But when an infant hired a horse expressly for Hd- 
 
 Sgh""^'' ^^S ^°d °ot for jumping, and then lent it to a friend 
 
 originating who jumped the horse and killed it, he was held liable; 
 
 '^ ^ ' " for what was done by the defendant was not an abuse 
 
 114 
 
Chap. III. § 3. MAKRIED WOMEN. 107 
 
 of the contract, but was the doing of an act which he Burnard v. 
 was expressly forbidden by the owner to do with the ^ '^■^S g* •^_*^' 
 animal."(a) 
 
 § 3 Mmried Women. 
 
 It may be stated as a general rule that the contract Their con- 
 
 of a married woman is void. ^"p^^** ^^^ 
 
 The exceptions to this rule vary in the extent to Exceptions 
 
 which they affect the capacity of married women to *° "^® ''".'^ 
 •! a J give various 
 
 contract; and they vary in this way: In some cases a degrees of 
 married woman can make a valid contract, but she can- °^P*''* y* 
 not sue or be sued apart from her husband ; in others 
 she can sue, but cannot be sued alone; in others she 
 can both sue and be sued alone. 
 
 (1) There is a group of exceptions which go to this A married 
 extent, that a married woman can under certain cir- ^"JJ^h^^*^ 
 cnmstances acquire contractual rights, which may be chose ia 
 taken advantage of by the husband alone, or, if the 
 husband please, by the joint action of husband and 
 wife: these rights, unless the husband has so dealt with 
 them as to have made them his own, survive to the 
 wife, and do not pass to his executors. Such rights 
 appear to arise where a promise is made to the wife in 
 consideration of her personal services, or where a Ghos9 
 in action has been assigned to her which the 
 husband does not " reduce into possession," or *107 
 make his own by some act evidencing his 
 intention to deal with the right as his. 
 
 Thus, in an old case, a married woman was prom- When she Is 
 ised £10 in considration of her curing a wound. Shej.jf,„g cause' 
 effected the cure, and an action was brought for the of action.' 
 
 (a) [The American authorities seem generally to uphold the 
 position taken in the text. Gampbell v. Stokes, 3 Wend. (N. Y.) 
 187; Green v. Sperry, 16 Vt. 390; Town v. Wiley, 33 Vt. 354; Ho- 
 .Mr Y. Thwing, 3 Pick. (Mass.) 492; Vasse v. Smith, 6 Cranch, (tJ. 
 8. S. C.) 238. But, see Wilt v. Welsh, 6 Watts. (Pa.) 9, and Penrose 
 v. Gurran, 3 Rawle, (Pa.) 351.] 
 115 
 
 V ' 
 
108 FORMATION OF CONTRACT. Part II. 
 
 money by lier husband and herself. It was objected 
 
 that she should not have been joined, as having no 
 
 Brashfordv. rights independent of her husband during coverture; 
 
 and wiff ^°b"* the Court of Exchequer Chamber held « that she 
 
 Cro. Jao. 77. was the cause of the action, and so the action brought 
 
 Cushman^e ^^ ^otli their names was well enough; and such an 
 
 Gush. 20.] action shall survive to, the Feme." 
 
 Where a So again, where a married woman has received a 
 
 action 'is promissory note, it can be sued upon jointly by herself 
 
 assigned to and her husband, and will survive to her unless reduced 
 
 into possession by the husband in his lifetime. The 
 
 woman is not a party to the original contract, but the 
 
 rights arising under it are assigned to her, and she is 
 
 thus capable of acquiring them, and, subject to the 
 
 exercise of her husband's rights in the matter, of 
 
 enjoying them. 
 
 Similarly, a married woman can become a registered 
 holder of shares, and has a right of action jointly with 
 her husband, if he choose to join her, and a right to 
 the chose in action after her husband's decease if he 
 Dalton V. have not previously reduced it into possession. " It is 
 B.'co.'is'c. settled law, that a married woman, though incapable 
 B. 478. of making a contract, is capable of having a chose in 
 
 action conferred upon her, which will survive to her 
 on the death of her husband unless he shall have inter- 
 fered by doing some act to reduce it into possession." 
 It would seetti from this case that, when a married 
 woman has acquired a negotiable instrument or assign- 
 able chose in action, the courts do not look further into 
 the matter and ask whether she obtained it in virtue of 
 a contract which she was incapable of making. They 
 regard it as her property, subject always to the right of 
 her husband to make it his if he choose to do so. 
 *108 (2) A married woman can stand to her hus- 
 band in the relation of agent to principal, so as 
 to bind him by contracts which she may make under 
 certain circumstances. 
 116 
 
Chap. III. § 3. MARRIED WOMEN. 108 
 
 Where husband and wife are living together the Implied au- 
 wife has an implied authority to bind her husband by ^^"j^^ ** 
 contract for necessaries for herself and her household. 
 The rules for the interpretation of necessaries are sim- 
 ilar in principle to those which govern the meaning 
 of the term in the case of an infant. Beyond this the 
 wife has no presumed authority as a wife, though she Special au- 
 may receive an express or implied authority for the ^^"agent.* 
 purpose of trade or otherwise to act as agent for her 
 husband. But this is a part of the general law of 
 agency, and has no special relation to the status of 
 married women. 
 
 Where husband and wife are living apart there is no Husband 
 
 such presumption of authority in favor of the wife as ^^j^^^'^'^^^j.^ 
 
 was described above, and a tradesman who supplies her Eastland v. 
 
 with goods under such circumstances does so at his 5"I^''!i,®^ij -t 
 * R. 3 Q B. D. 
 
 own risk. For if she be supplied by her husband with 433. [See 
 an adequate allowance (the adequacy of which is a gt°,Ydevant 4 
 question for the jury ;) or if she have made terms with Den. 467 ; 
 her husband upon separation, or if she be living apart kgy, 25 111.' 
 by her own fault, her husband is not liable upon any 503 ; Evans v. 
 
 . ^ -i, 1 t . ^ ' -^ Fisher, 5 
 
 contract she may make, even tor necessaries. Gilm. 569.] 
 
 (3) The wife of the King of England " is of capacity wife of the 
 to grant and to take, sue and be sued, as a fome 50?e, '^^"S- 
 
 at the common law." 133, a. 
 
 (4) Tiie wife of a man civiliter mortuus has similar Wife of a 
 rights. Civil death arises from outlawry, or from be-™^^'^''*^ ^^ 
 ing under conviction for felony, and formerly from 
 
 being " professed in religion." 
 
 (5) By the custom of the City of London a married Custom of 
 woman may trade, and may for that purpose make lo^(J°jj_ 
 valid contracts. She cannot bring or defend an action 
 
 upon these, unless her husband is joined with her as a 3 Burr. 1776, 
 party, but she does not thereby involve her husband "^^ ^' 
 ill her trading liabilities, {a) 
 
 (a) [The common law is modified so variously upon this subject 
 117 
 
Ill FORMATION OF CONTRACT. Part II 
 
 Separate *110 (8) Property may'in equity be settled upon 
 estate ia ^ married woman for her separate use. Such 
 
 separate estate becomes liable upon separate engage- 
 ments entered into by the married woman with refer- 
 ence to it: and the presumption appears to be extremely 
 Pioardv. strong that every engagement entered into by a mar- 
 Ch?377.' " ^i^*^ woman is entered into with reference to her sep- 
 arate estate. 
 
 The law upon this sbject is exhaustively set forth in 
 3 D. F. & J. the judgment of Tuenbk, L. J"., in Johnson v. Oalla- 
 gher. " Courts of Equity," he says, " have through the 
 medium of trusts created for married women rights 
 and interests in property, both real and personal, sep- 
 arate from and independent of their husbands. To 
 the extent of the rights and interests thus created a 
 married woman has, in Courts of Equity, power to 
 alienate, to contract, to enjoy. She is considered a 
 feme sole in respect of property thus settled or 
 secured to her separate use." 
 
 It is only to the extent of the rights and interests 
 which are created for her, that a married woman can 
 bind herself, or rather her estate, for equity does not, 
 any more than law, allow her to bind herself by con- 
 tract. The remedy given to the creditor is not given 
 against her but against her estate. "When she 
 *111 by entering into an agreement allows the sup- 
 Per Lord position to be made that she intends to perform 
 
 Picard^^^'^ the agreement out of her property, she creates a debt 
 Hine, L. R. 5, which may be recovered, not by reaching her, lut hy 
 
 reaching her property." 
 How far a The liabilities, therefore, which attach to the sepa- 
 tion.*^"^^ rate estate of married women are hardly to be num- 
 bered among the genuine exceptions to the incapacity 
 of married women to bind themselves by contract. 
 
 by statute that we can only refer the reader to the statutes of the 
 dififerent States. The tendency of the legislation is to clothe 
 married women with the same rights to contract as if sole.] 
 118 
 
Chap. III. § 4. CORPORATIONS. 112 
 
 But the separate estate, whether statutory or equita- 
 ble, does furnish an exception to the general rule to 
 this extent, that in virtue of it a married woman can 
 by her independent agreement create an obligation, 
 altliough the obligation binds her property and not 
 herself. 
 
 § 4. Corporations. 
 
 A corporation is an artificial person created by law. 
 Hence the limitations to the capacity of a corporation 
 for entering into a conti-act may be divided into neces- 
 sary and express. The very nature of a corporation 
 
 imposes some necessary restrictions upon its contract- 1. Necessary 
 
 , J iu J. c -J. ■ i- limits to its 
 
 ual power, and the terms or its incorporation may contractual 
 
 impose others. capacity. 
 
 A corporation is an artificial entity, apart from the 
 persons who compose it; their corporate rights and Must con- 
 liabilities are something distinct from their individual ^^^^^^ ^ 
 rights and liabilities, and they do not of themselves Per Lord 
 constitute the corporation, but are only its members SpJ-^gg^ y 
 
 for the time being. Since then a corporation has this Wilson, L. R. 
 
 . . » 2 Ch 80 
 
 ideal existence apart from its members, it follows that r^njover 
 
 it cannot personally enter into contracts, it must con- etc., Turn- 
 tract by means of an agent. It " cannot act in its own y. Hay, 7 
 person, for it has no person." Mass. 102.] 
 
 And the Common Law rule that a corporation can Cannot make 
 only contract under seal puts this further limit upon indumenta, 
 its contractual powers, that it cannot as a rule make 
 negotiable instruments, {a) For by the law merchant 
 an instrument under seal is not negotiable, and there- 
 fore, unless the making of bills of exchange and prom- 
 issory notes be part of the ordinary business 
 of a trading corporation, they cannot be made *112 
 by these artificial persons. 
 
 The express limitations upon the capacity of corpo- 3. Express 
 rate -bodies must vary in every case by the terms of "^* ^ ^'^^^' 
 
 (a) [See page 46, note.] 
 119 
 
113 FORMATION OF CONTRACT. Part II. 
 
 their incorporation. Much has been and still may be 
 said as to the effect of these terms in limiting the con- 
 tractual powers of corporations, but it is not a part of 
 the objects of this book to discuss the doctrine of 
 L. R. 7, H. L. " ultra vires." The question whether the terms of 
 " ■ incorporation are the measure of the contracting pow- 
 
 ers of the corporation, or whether they are merely 
 prohibitory of contracts which are inconsistent with 
 them, was discussed in the much litigated case of the 
 InExch. C\i. Ashhury Carriage Company v. Rlche, and the ques- 
 234. ' ^*^ " ^^'^'^ '^^^ *^"® stated and answered by Blackburn, J.: 
 " I take it that the true rule of law is, that a corpo- 
 ration at Common Law has, as an incident given by 
 law, the same power to contract, and subject to the 
 same restrictions, that a natural person has. And this 
 is important when we come to construe the statutes 
 creating a corporation. For if it were true that a cor- 
 poration at Common Law has a capacity to contract to 
 the extent given it hy the agent creating it and no 
 further^ the question would be, Does the statute cre- 
 ating the corportion by express provision or necessary 
 implication show an intention in the legislature to con- 
 fer upon this corporation capacity to make the contract? 
 But if a body corporate has, as incident to it, a gen- 
 eral capacity to contract, the question is, Does the 
 statute creating the corporation by express provision 
 or necessary implication show an intention in the 
 legislature to prohibit, and so avoid the making of a 
 contract of this particular kind?" 
 
 The House of Lords appear not to have dissented 
 
 from the view of the general powers of corporation! 
 
 expressed by Blackbtjen, J., but they differed from him 
 
 and overruled his judgment upon the interpret? tion of n 
 
 the statute under consideration; holding that a 
 
 *113 company incorporated under the Companies' 
 
 Act of 1862 is so far bound by the terms of its 
 
 memorandum of Association that it may make no con- 
 
 120 
 
Chap. III. § 4. CORPORATIONS. 113 
 
 tracts which are either inconsistent with or foreign to 
 the objects expressed in that memorandum, (a) 
 
 A contract made ultra vires is void; it is sometimes Contracts 
 said to void on the ground of illegality, but I^ord^^^^^l^ 
 Caiens in the case above cited takes exception to this illegality, 
 use of the term " illegality," pointing out that it is capacity?" 
 
 [a) [The courts of this country seem to differ upon the question 
 as to what the penalty shall be if a corporation docs an act not 
 expressly authorized or prohibited by the charter. 
 
 In the case of Orand Lodge v. Waddill, 36 Ala. 313, the court 
 held that a corporation could not recover even in the Common 
 Courts on a contract whereby it lent a sum of money without 
 authority and took a note for the repayment of the loan. In Orr 
 V. Dicy, 3 Dougl. 330, the Supreme Court of Michigan held that 
 the contract of a corporation unauthorized or prohibited by its 
 charter is void, and this doctrine is also upheld by the Courts of 
 Missouri in Blair v. Perpetual Insurance Company, 10 Mo. 559, 
 and in Matthews v. Union, National Bank, which was reversed on 
 error by the Supreme Coiirt of the United States. Union Nat. 
 Bank v. Maithem, 9S U. S.'l34. This doctrine seems to be car- 
 ried to/an extrepe in New Torlj in Life and Fire Ins. Go. v. Me- 
 chanica' \Fwe Ins. Co., T Wend. 31; North River Ins. Co. v. Laie- 
 renee, b iWfind.^48'2'; and Beach v. Fulton Bank, 3 "Wend. 573. 
 
 Anothet class of cases hold that even if a certain class of con- 
 tract is prohibited by the act of incorporation, yet unless the act 
 makes the contract unenforceable, that the defendant cannot de- 
 feat a recovery, but the "^vernment can only take advantage of 
 the violation of the act by forfeiting the charter of the corpora- 
 tion. See Union Nat. Bank v. Matthews, 98 U. 8. 134, sup.; Wro- 
 ten V. Armot, 3 Va. Law Journal, 333 ; Southern Life Ins. & Trust 
 Co. V. Lavier, 5 Fla. 110 ; The Bank v. Hammond, 1 Rich, (S. C.) 
 381. 
 
 The Supreme Court of Illinois In Fridley v. Bowen, which was 
 a case where a mortgage had been taken by a national bank in 
 the name of one of its officers to secure a contemporaneous loan, 
 held that taking the mortgage in the name of the oflScer was the 
 same as though it had been taken in the name of the bank, and 
 refused to enforce the security ; but this doctrine is contrary to 
 that of the Supreme Court of the United States in Union Nat- 
 Bank V. Matthews, sup. It seems to be more consistent with jus. 
 tice not to allow an individual to refuse to repay money loaned 
 to him merely because the corporation had no express power to 
 make the loan.] 
 121 
 
114 FORMATION OF CONTRACT. Part 11. 
 
 not the objects of the contracting parties, but the 
 incapacity of one of them, that avoids the contract. 
 
 § 6. Lunatic and drunken persons. 
 
 The contract The law with regard to contracts made with lunatics 
 ^°* * ^' and persons in a state of intoxication may bS said to 
 be now settled as follows. The contract of a lunatic 
 or drunken person is voidable at his option if it can 
 be shown that at the time of making the contract he 
 "was absolutely incapable of understanding what he was 
 doing and that the other knew of his condition. [But 
 contracts of lunatics for necessaries, if fair, can be 
 enforced.] It seems doubtful, even in the case of 
 [Richardson executory contracts, whether the transaction can be 
 Ired. (1^'c.) avoided on the ground of lunacy or drunkenness as 
 106.] against a contracting party who had no reason to sup- 
 
 pose that he was dealing with an incapable person. (») 
 But it seems settled that where a contract has been 
 executed in part, so that the parties cannot be restored 
 to their former positions, proof of the actual insanity 
 of one of the parties at the time of making the con- 
 [But see Gib- tract, unaccompanied by any proof that the other 
 6°Gray 279^l' ^'^^^ °^ ^^^ condition, will not suffice to avoid the 
 contract. 
 
 Thus in Molton v. Cant'p&uai, a lunatic purchased 
 
 annuities of a society, paid the money, and died. His 
 
 SExch. 489; administratrix sued the society to recover back the 
 
 , f ■ / money on the ground that the contract was void. The 
 wiiBtnGr 01 c/ , , . ■ cj 
 
 lunatic; j^fy foqnd that atthe time of the purchase the vendee 
 
 was ihsanej and incompetent to manage his affairs, 
 
 but that there was nothing to indicate this to the 
 
 Company, and that the transaction was bona 
 
 4 Exch. 19. *114 fide. It was held that the money could not 
 
 be recovered. "The modern cases show," said 
 
 Patteeson, J., "that when that state of mind was 
 
 .(a) But, see Loomis v. Spencer, 3 Paige, Chy. 6 N. T. 158. 
 122 
 
Chap. III. §5. DRUNKEN PERSONS. 114 
 
 unknown to the other contracting party, and no ad- 
 vantage was taken of the lunatic, the defense cannot 
 prevail, especially where the contract is not merely 
 executory, but executed in the whole or in part, and 
 the parties cannot be restored to their original po- 
 sition." 
 A lunatic, so found by commission, is not therefore Per Lord 
 
 T /I 1 "IW 
 
 absolutely incapable of contracting, but the presump- r "fnook v!^' 
 tion is very strong in such a case that the contract was Watts, 11 
 not made during a lucid interval, and that the other i977' * ^' 
 contracting party was aware of the mental condition Hall v. War- 
 of the lunatic, (a) 695:^^''' 
 
 A contract made by a person in a state of intoxica- or drunkea 
 tion may be subsequently avoided by him, but if con-^®'^"'^" 
 firmed is binding on him. In the case of Mattheios'L.'R.i'&xdh. 
 V. Baxter, a man, while drunk, agreed at an auction to 
 make a purchase of houses and land. Afterwards, when 
 sober, he affirmed the contract, and then repented of 
 his bargain, and when sued on the contract pleaded 
 that he was drunk at the time he made it. Bat the 
 Court held that although he had once had an option 
 in the matter and might have avoided the contract, he 
 was now bound by his affirmation of it. " I think," 
 said Maettn', B., " that a drunken man, when he recov- 
 ers his senses, might insist on the fulfillment of his 
 bargain, and therefore that he can ratify it so as to bind 
 himself to a performance of it." 
 
 The rules of equity are in accordance with those, of « 
 common law in this respect. Under such circumstances 
 as we have described. Courts of Equity will decree spe- 
 cific performance against a lunatic or a person who 
 entered into a contract when intoxicated, and will on 
 similar grounds refuse to set aside their contracts. 
 
 (fls) In New York and Massachusetts the presumption is held to 
 be absolute. FUahugh v. Wilcox, 18 Barb. 335 ; Leonard v. Leon- 
 ard, 14 Pick 380. But, see Qangwere'a Estate, 14 Penn. St. 417. 
 123 
 
115 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 *115 
 
 CHAPTEE IT. 
 
 BEALTTY OF CONSENT. 
 
 Mistake. 
 
 Misrepre- 
 sentation. 
 
 Fraud. 
 
 Duress. 
 
 The next feature in the Formation of Contract which 
 has to be considered is Genuineness or Eealitj of Con- 
 sent; and the question which, under this head, recurs 
 in various forms is this: Given an apparent Agree- 
 ment, possessing the element of Form or Considera- 
 tion, and made between parties capable of contracting, 
 was the consent of both or either given under such 
 circumstances as to make it no real expression of 
 intention? 
 
 And where this question has to be answered in the 
 affirmative there may be various causes for unreality 
 of consent. 
 
 (i) The parties may not have meant the same thing; 
 or one or both may, while meaning the same thing, 
 have formed untrue conclusions as to the subject mat 
 ter of the agreement. This i.s Mistake. 
 
 (ii) One of the parties may have been led to form 
 untrue conclusions respecting the subject-matter of 
 the contract by statements innocently made, or facts 
 innocently withheld by the other. This is Misrepre- 
 sentation. 
 
 (iii) These untrue conclusions may have been in- 
 duced by representations of the other party made with 
 a knowledge of their untruth and with the intention 
 of deceiving. This is Fraud. 
 
 (iv) The consent of one of the parties may have 
 been extorted from him by the other by actual or 
 threatened personal violence. This is Duress. 
 124 
 
Chap. IV. § 1. MISTAKE. 116 
 
 (v) One of the parties may from circumstances be Undue influ- 
 morally incapable of resisting the will of the ^^'^^^ 
 
 other, so that his consent is no real expression *116 
 of intention. This is Undue Influence. 
 
 And first let us deal with Mistake. 
 
 1. Mistake. 
 
 We must preface our remarks on Mistake by calling Mistake of. 
 attention to a division of the subject which makes it distinct from 
 fall into two distinct chapters of the law of Contract, mistake of 
 Mistake may be Mistake of intention, or Mistake of ^^P'^^^^'"''- 
 expression. With the latter we have, nothing to do 
 here. As a general rule men are bound by what they 
 say or write, and cannot be heard afterwards to say 
 that their intentions were wrongly expressed; but in 
 certain cases, where the parties have been genuinely 
 agreed, and the terms in which their agreement is 
 couched would hinder or pervert its operation, they 
 are permitted to explain, or the courts are willing to 
 correct, the error. This however is a part of the Inter- 
 pretation of Contract. We are here concerned with 
 its Formation, and have to consider how far Mistake 
 will vitiate an apparently valid agreement. 
 
 The cases in which Mistake have this efiect are ex- 
 ceptions to the general rule that a man is bound by an 
 agreement to which he has expressed his assent in un- 
 equivocal terms uninfluenced by falsehood, violence or 
 oppression. And it is perhaps safe to say that unless 
 Mistake goes ,to the root of the contract, and is such 
 as to negative the idea that the parties were ever ad 
 idem, it will be inoperative. The cases in which Mis- 
 take does invalidate a contract may be conveniently 
 dealt with under the following heads: 
 
 Mistake as to the nature of the transaotion. 
 
 This must needs be of rare -ccurrence, for men are Mistake as 
 12o 
 
117 FOKMATION OF CONTRACT. Part II. 
 
 to nature of not apt to enter into engagements as to the na- 
 
 transaotion. *ii7 ture of which they are wholly in the dark. It 
 must also arise almost of necessity from the 
 What makes misrepresentation of a third party. For if a man he 
 It operative, capable of understanding the nature of a document, 
 Hunter v. he' cannot avoid its operation by saying that he did 
 R Vch.'84. ^°* ^PP^y ^i^ mind to its contents, or that he did not 
 suppose that it would have any legal effect. He must 
 therefore have been induced to contract by some deceit 
 which ordinary diligence could not penetrate. And 
 and distinct this, in order to result in Mistake, must, ex vi termini, 
 from fraud, proceed from some third party, for otherwise the con- 
 tract would be voidable for misrepresentation or fraud, 
 and would not be void on the ground of Mistake. 
 Illustrations. The two following cases will be found to furnish the 
 2 Co. Rep. 9. best illustrations of Mistake of this nature. In Thor- 
 oughgoocfs case the plaintiff executed a deed which he 
 was told was a release of arrears of rent, though in 
 fact it was a release of all claims He was an illiterate 
 man, the deed was not read to him, and when its effect 
 was misrepresented to him in the manner described, 
 he said, " if it be no otherwise I am content," and 
 executed the deed. It was held that the deed was void. 
 L. R. 4 C. P. In Foster v. Mackinnon the acceptor of a bill of ex- 
 ett V. Joner' change induced the defendant to indorse it, telling him 
 73111.318.] that it was a guarantee. The plaintiff was a subse- 
 quent T>onafide indorsee of the bill, for value. It was 
 held that the defendant's signature did not bind him. 
 The court said that it was " plain on principle and on 
 authority that if a blind man or a man who cannot 
 read, or who for some reason (not implying negligence) 
 forbears to read, has a written contract falsely read 
 over to him, the reader misreading to such a degree 
 that the written contract is of a nature altogether dif- 
 ferent from the contract pretended to be read from the 
 paper which the blind or illiterate man afterwards 
 Bigns; then, at least if there be no negligence, the sig- 
 126 
 
Chap. IV. § 1. MISTAKE. Hg 
 
 nature so obtained is of no force. And it is invalid, 
 not merely on the ground of fraud, where fraud 
 exists, but on the ground that the mind of the *118 
 signer did not aoGonvpany the signature; in 
 other words, that he never intended to sign, and there- 
 fore in contemplation of law never did sign, the contract 
 to whicli his name is appended." 
 
 But it will be noted that the absence of negligence 
 is strongly dwelt upon by the court, and that the jury 
 
 ; had expressly negatived its existence in the circum- 
 stances of this particular case. Hunter v. Walters L. R 7 Ch. 
 seems to show that if a man executes a deed which be^^jjfj^"!?'®^ 
 might have read and was capable of understanding, he 111- 552J 
 cannot avoid it on the ground that he did not read it 
 or was misinformed of its contents and intended ap- 
 
 \ plication, or that he understood that it was a mere 
 form. 
 
 Mistake as to the person with whom the contract ia 
 made. 
 
 Mistake of this nature arises where A enters into a Mistake of 
 contract with X under the belief that he is entering P^^'^' 
 into a contract with M. It can only arise where A 
 has in contemplation a definite person with whom he 
 desires to contract, it naturally cannot affect general 
 offers which any one .may accept, as, for instance, con- 
 tracts by advertisement, or'sales for ready money. 
 
 But where A intends to' contract with M, X cannot why it inval- 
 give himself a right under the contract by substituting Jj.^p^^*''''^' 
 himself for M. And the reason for this rule is toler- 
 ably clear. When one man enters into a contract with 
 another, he generally has some reason for dealing with 
 that man in preference to others ; his - character, his 
 solvency, or the convenience of dealing with him, may 
 be important elements in the motive which induced 
 the contract. If, then, where A intends to contract 
 with M, X substitutes himself for M, A not only loses 
 127 
 
119 
 
 FORMATION OF CONTRACT. 
 
 PiU't II. 
 
 Uundy V. 
 Lindsay, L. 
 R. 3 App. 
 .Cas. 465. 
 (18 Alb. L. 
 Jour. 53.) 
 2 Monthly 
 Jurist, 143. 
 
 3 H. & N. 
 664» 
 
 Per Chan- 
 nell,B. 
 
 whatever advantages he expected to gain by dealino- 
 with M in preference with others, but he is not a 
 
 consenting party to the contract. 
 *119 Thus in a case in which X, by imitating the 
 signature of M, induced A and B to supply him 
 with goods under the belief that they were supplying 
 M, it was held that no contract had ever arisen between 
 A and B and X. " Of him," says Lord OAifiNS, " they 
 knew nothing, and of him they never thought. With 
 him they never intended to deal. Their minds never 
 even for an instant of time rested upon him, and as 
 between him and them there was no concensus of mind 
 which could lead to any agreement or contract what- 
 ever. As between him and them there was merely 
 the one side to a contract, where, in order to froduce 
 a contract, two tides would he required^ 
 
 In the case referred to, the mistake was induced by 
 fraud, but the case of Boulton v. Jones shows that 
 innocent mistake may produce the sanie effects. There 
 the plaintiff succeeded to the business of one Brockle- 
 hurst with whom the defendant had been accustomed 
 to deal. The defendant sent an order for goods to 
 Brocklehurst, and the plaintiff supplied the goods 
 without any notification of change. It was held that 
 he could not recover their price. " In order to entitle 
 the plaintiff to recover he must show that there was a 
 contract with himself." {a) 
 
 And it will be remarked that this was not like a case 
 of an offer made by sending the goods and accepted by 
 the use of them, else the defendant would have been 
 liable for their price: but it was the acceptance by the 
 plaintiff of a proposal addressed to Brocklehurst, so 
 that the defendant had not the option of refusiiig an 
 offer made by the plaintiff, but was allowed by him to 
 act upon an acceptance which he supposed to have pro- 
 
 (a) [In this case Brocklehurst was indebted to defendant, who 
 claimed that he had the right to set off the debt against the claim.] 
 128 
 
Chap. IV". § 1. MISTAKE. 120 
 
 ceeded from BrocMehurst. It may therefore be laid 
 down that where X, without any fraudulent intention, 
 substitutes himself for M so that A contracts with X 
 under the belief that he is contracting with M, the 
 contract is void. If the Mistake be induced by the 
 fraud of X, certain consequences flow from it, 
 other thari those in ordinary cases of fraud, and *120 
 these shall be noticed hereafter. 
 
 Mistake as to the subject matter of the oontract. 
 
 It is in cases of mistake of this nature that really Mistakes as 
 difficult questions arise. If a man can show that, ^^^^^jf °* 
 without any fault of his own, he has entered into a 
 contract of a nature wholly different to anything that 
 he intended, it is not difficult to see that the element 
 of consent is entirely wanting in such a transaction. 
 If, while intending to contract with A, he has been 
 subjected to a substitution of X for A as the party 
 with whom the contract is made, it is again obvioua 
 that there has been no community of intention be- 
 tween him and X. But when two persons, intending 
 to bind themselves to one another by a contract of a 
 particular kind, carry out that intention. Mistake as- 
 to the subject matter of the contract can seldom affect 
 their riglits. 
 
 Wliere a man has entered into an explicit agreement why gener- 
 the nature of which he understood, he cannot be heard ^iy^''^°P®™' 
 to say that his meaning is not expressed by his words, 
 and that he intended and expected to bargain for some- 
 thing different to that which his words would naturally 
 indicate. Contracts would never be concluded if in- 
 definite variations of meaning coiild be introduced by 
 subsequent explanation, and so it may be taken to be 
 a general rule that the unconditional acceptance of an 
 explicit proposal binds both parties, even though tliey 
 may show that they meant something different to what 
 they said or wrote. " If, whatever a man's real inten- 
 129—9 
 
121 FORMATION OF CONTRACT. Part II. 
 
 Per Black: tion may be, he so conducts himself that a reasonable 
 
 Smitii v.''^ ™^^ would believe that he was assenting to the terms 
 
 Hughes, L. proposed by the other party, and that other party upon 
 
 at p.' 607. ' t'^^t belief enters into the contract with him, the man 
 ^tof "ou ^ '° *^^^ conducting himself would be equally bound as 
 
 Contracts, if be had intended to agree to the other party's 
 
 Sec. 643.] terms." 
 
 *121 Mistake as to the subject matter of a con- 
 tract will only avoid it in three cases. 
 
 (a) Mistake as to the existence of the subject matter. 
 
 {b) Mistake as to the identity of the subject matter. 
 
 (g) Mistake of one party known to tiie other, as to 
 the quality of the thing promised. 
 
 Mistake as (a) Mistake as to the existence of the subject matter 
 
 to existence ^ ^ j •/ j 
 
 of subject "Z « contract. 
 matter 
 
 If A agrees with X in respect of a thing which, 
 unknown to both parties, is non-existent at the time 
 of entering into the contract, the mistake goes to the 
 may amount root of the matter and avoids the contract. Such mis- 
 dent impos. t^^6 is in fact a phase of the subject of impossibility 
 sibility. of performance. But, inasmuch as the thing agreed 
 upon has ceased to be possible before the agreement 
 was made, such impossibility prevents a contract from 
 ever having arisen and does not operate, as impossi- 
 bility arising subsequent to the contract will some- 
 times operate, as a form of discharge. One of the 
 5 H. L. 0. leading cases on this subject is Cout^irier v. Hadie, 
 V. ilam ^^ arising out of the sale of a cargo of corn which was 
 mond, U, supposed by the parties to be, at the date of sale, on 
 its voyage from Salonica to England, but which had in 
 fact, prior to the date of sale, become so heated on the 
 voyage that it had to be unloaded and sold. It was held 
 that the contract was void, inasmuch as it "plainly im- 
 ports that there was something which was to be sold 
 at the time of the contract and something to be pnr- 
 130 
 
 V. 
 
Chap. IV. § 1. MISTAKE. 122 
 
 chased," whereas the object of the sale had ceased to 
 exist. 
 
 So too in StricMand v. Turner, the plaintiff pur- 7 Exoh. 217. 
 chased an annuity which at the time of purchase had 
 already failed owing to the death of the annuitant. It 
 was held that he could recover the price which he had 
 paid for the annuity.. 
 
 In cases where the non-existence of a right is con- Mistake as 
 earned, it may be suggested that mistake of this nature ^f a^ril^"t°* 
 is mistake of law, and that to allow a man to avoid a is not'igngr- 
 contract on the ground that he mistook his " 
 
 right is an infringement of the rule ignorantia *122 
 juris havd excusat. But a distinction is drawn 
 by Lord Westbuet in Cooper v. Pliibbs, which was a L. R. 3 H. 
 case of mistaken rights, between two senses in which 
 the word_/ws is used with reference to that rule. " It ia 
 said ignorantia juris haud eoncusat; but in that maxim 
 the word jus is used in the sense of denoting general 
 law, the ordinary law of the country. But when the 
 word jus is used in the sense of denoting a private 
 right, that maxim has no application. Private right 
 of ownership is a matter of fact; it may be the result 
 also of matter of law; but if parties contract under a 
 mutual mistake and misapprehension as to their rela- 
 tive and respective rights, the result is that that agree- 
 ment is liable to be set aside as having proceeded upon 
 a common mistake."(a) 
 
 (S) Mistake as to the identity of the subject matter 
 of a contract. 
 
 An agreement may be void on the ground of mis- Mistake of 
 take where two things have the same name, and the ' '''^'^'y* 
 two parties enter into contract in which each means a 
 
 (a) [This doctrine seems to be upheld by the case of Fitzgerald 
 V. Peek, 4 Litt. (Ky.) 135, though the weight of authority seems 
 to be the other way. See note a page 148, post.} 
 131 
 
123 FORMATION OF CONTRACT. Part 11. 
 
 different thing, while, owing to the identity oif the 
 names of the things, the same terms apply to the 
 meaning of each party. 
 
 Under such circumstances there is a mistake in the 
 identity of the thing contracted for, the minds of the 
 parties really never meet, and there is no true consent. 
 Tlius where A agreed to buy of X a cargo of cotton 
 Riffles V. " to arrive ex Peerless from Bombay," and there were 
 2 h! & C."^' *^° ships of that name, and the buyer meant one and 
 906. [See the seller the other, it was held that there was no con- 
 anaugli, 103 tract, and that the buyer was not bound to accept a 
 Mass. 356.] cargo which, though it came " ex Peerless from Bom- 
 bay," did not come in the vessel of that name which 
 was present to his mind when he made the agreement, 
 distinct from It is clear that if the buyer had meant a ship of a 
 mere con u- different name he would be bound by the terms 
 
 *123 of his contract; for unless the description of 
 the subject matter of the contract admits of 
 more meanings than one, the party setting up mistake 
 can only do so by showing that he meant something 
 other than that which he said ; and this, as we have 
 seen, he may not do. On the other hand, the case of 
 or misnomer. I onides v. TJie Pacific Insurance Company shows 
 L. R. 6 Q. B. that a- mere misnomer of the subject of the contract 
 will not entitle either party to avoid it if its con- 
 tract itself contains such a description of the subject 
 matter as practically identifies it. 
 
 (c) Mistake as to the quality of the thing promised,, 
 known to the party promising. 
 
 Mistake as This is the only form in which mistake as to the 
 
 to quality of „„alitv or quantity of the thing promised can affect 
 
 ised. the validity of a contract. All other mstances in whicH 
 
 a contract has been avoided at law, or refused specific 
 
 performance in equity, seemingly on the ground of 
 
 mistake as. to quantity or quality of the thing prom- » 
 
 ised are either cases in which the proposal and accept- 
 
 132 
 
Chap. IV. § 1. MISTAKE. 124 
 
 ance never agreed in terms; or cases in winch equity Thornton v. 
 will not exact the performance of a promise offered in ff^J^'ig^ 
 terms which are the result of a manifest inadvertance, 
 but leaves the parties to their legal rights and reme- 
 dies. Thus where A offered to sell an estate to X, 
 but by a mistake in adding up the prices of the va- 
 rious plots offered it for £1,000 less than he meant, Webster v. 
 
 the court would not enforce tlie contract. Bat it does S®"^^- ^^ 
 „ „ f 1 . rseav. 63. 
 
 not follow from this that the plaintiff could not have [Western R. 
 
 recovered at law such damages as he might have J^o^^' ^oe' 
 sustained. • Met.'346.] 
 
 The quantity of an article bought, or the price to\ 
 be paid for it, are points not usually misstated by con- 
 tracting parties, but their statements must be taken 
 to be conclusive against themselves. The quality of 
 the article is a matter which the parties must look to ' 
 themselves: they cannot ask courts of law to correct 
 their errors of judgment. 
 
 That an article should come up to a certain *124 Responsibil- 
 
 standard of quality must be the subiect of ex- ^^^°^ ^^IV 
 
 -.TT, , , , ^* '° quality, 
 
 press warranty. Where the buyer is unable to inspect 
 
 the thing purchased, the law protects him by the intro- Jonesv. Jrist, 
 duction of implied warranties, which secure to him in ^( p 205^" ^' 
 substance that he shall obtain the kind of thing hefBabcockv. 
 bargained for, and that of a marketable quality; but43()T' 
 anything more than this must be a question of terms. 
 If the buyer cannot inspect the article before purchase, 
 he must protect himself by the terms of his bargain; 
 if he can inspect it, he must exercise his judgment; 
 and if he has no confidence in his own judgment, he 
 may further seek to bind the seller by terms. A sel- 
 ler is not bound to depreciate his wares even though 
 he knows that the buyer is forming an undue estimate 
 of their quality. 
 
 Nor is the seller affected by such impression as the and as to 
 buyer may form of the nature of his promise. If t^& promised. 
 buver thinks he is being promised a quality of article 
 133 
 
125 FORMATION OF CONTRACT. Part II. 
 
 which the seller does not intend to warrant, the con- 
 tract will nevertheless hold. If the buyer wants to 
 bind the seller to supply an article of a particular 
 quality he should make it a term of the contract. But 
 if the seller knows that the buyer understands his 
 promise in a different sense from that in which he 
 gives it, the case is different. The contract is void be- 
 cause the apparent consent indicated by the agreement 
 of the parties to common terms is shown to be unreal, 
 by the fact that one of the parties knew the difference 
 of intention between himself and the other. 
 
 Let us illustrate these propositions by an imaginary 
 sale: 
 Ulustrations. A sells X a piece of china. 
 
 ' i^- I (a) X thinks it is Dresden china, A thinks it is not. 
 Each takes the consequences. X may get a better 
 thing than A intended to sell, or he may get a worse 
 thing than he intended to buy, and in neither case is 
 
 the validity of the contract affected. 
 *125 (5) X thinks it is Dresden china. A knows 
 that X thinks so, and knows that it is not. 
 
 The contract holds. So long as A does nothing to 
 deceive X, he is not bound to prevent X from deceiv- 
 ing himself as to the quality of the article sold. 
 
 (tf) X thinks it is Dresden china and thinks that A 
 intends to sell it as Dresden china; and A knows it is 
 not Dresden china, but does not know that X thinks 
 that he intends to sell it as Dresden china. The con- 
 \ tract says nothing of Dresden china, but is for a sale 
 
 of china in general terms. 
 
 The contract holds. The misapprehension hjXof 
 the extent of A^s promise, unknown to A, has no effect. 
 It is not A's fault that X omitted to introduce terms 
 which he M^ished to formpart of the contract. 
 
 {d) X thinks it is Dresden, and thinks that A in- 
 tends to sell it as Dresden china. A knows that X 
 134 
 
Chap. IV. §1. MISTAKE. ]26 
 
 thinks he is 'promising Dresden china, but does not 
 mean to promise china more than in general terms. 
 
 The contract is void. X's error was not one of judg- 
 ment, as in (5,) but regarded the intention of A, and 
 A, knowing that his intention was mistaken, allowed 
 the mistake to continue. 
 
 The last instance given corresponds to the rule laid 
 down in Smith v. Hughes. In that case the defend- L. R. 6 Q. 
 ant was sued for refusing to accept some oats which he 
 liad agreed to buy of the plaintiff, on the ground that 
 he had intended and agreed to buy old oats, and that 
 those supplied were new. The jury were told that if 
 the plaintiff knew that the defendant thought he was 
 buying old oats, then he could not recover. But the 
 Court of Queen's Bench held that this was not enough 
 to avoid the sale; that in order to do so the plaintiff, 
 must have known that the defendant thought he was 
 being promised old oats. It was not knowledge of 
 the misapprehension of the quality of the oats, but 
 the misapprehension of the quality promised, which 
 would disentitle the plaintiff to recover. 
 
 In his judgment in this case, Blackbuen, J., *126 Mistake of 
 lays down the law upon the subject thus: "In quaHtvTo? 
 
 this case I agree that on the sale of a specific article, known to 
 
 . seller 
 
 unless there be a warranty making it part of the bar- 
 gain that it posseses some particular quality, the pur- 
 chaser must take the article he has bought though it 
 does not possess that quality." (This is instance a.) 
 
 "And I agree that even if the vendor was aware Mistake of 
 that the purchaser thought the article possessed that "^f',y^ ** 
 quality, and would not have entered into the contract known to 
 unless he had so thought, still the purchaser is bound, gee Livings- 
 unless the vendor was guilty of some fraud or deceit ^.o"* ^-^^"1 
 upon him, and that a mere abstinence from disabusing Paige, 390.] 
 the purchaser of that impression is not fraud or deceit; 
 for whatever may be the case in a court of morals, 
 there is no legal obligation on the vendor to inform 
 135 
 
127 FORMATION OF CONTRACT. Part II. 
 
 the purchaser that he is under a mistake, not induced 
 by the act of the vendor." (This is instance 5.) 
 Mistake of And Hannen, J., said: "It is essential to the crea- 
 quamy ^ ° ^^'^^ ^^ ^ contract that both parties should agree to the 
 promised not same thing in the same sense. . . .But one of the par- 
 seller, ties to an apparent contract may, by his own fault, be 
 precluded from setting up that he had entered into it 
 in a different sense to that in which it was understood 
 by the other party. Thus in a case of sale by sample, 
 it was held that the contract was not avoided by this 
 8 B. & B. 815. error of the vendor." Soott v. Littledale.'^ (This 
 
 cori'esponds to instance c.) 
 Mistake of And further he says : " If in the present case, the 
 to quaUty plaintiff knew that the defendant, in dealing with him 
 promised for oats, did so on the assumption that the plaintiff 
 seller. was contracting to sell him old oats, he was aware 
 
 that the defendant apprehended the contract in 
 *127 a different sense to that in which he meant it, 
 and he is thereby deprived of the right to insist 
 that the defendant shall be bound by that which was 
 the apparent, and not the real bargain. (This corre- 
 sponds to instance d.) 
 30 Beav. 445. In the case of Garrard v. Frankel the point insisted 
 Application on in Smith v. Hughes arose in equity. The plaintiff 
 equity. ^'"^ defendant signed a memorandum of agreement by 
 
 whicli the plaintiff promised to let certain premises to 
 the defendant at the rent of £230 in all respects on 
 the terms of the within lease; and this memorandum 
 accompanied a draft of the lease referred to. The plain- 
 tiff, in tilling in the blank in the draft for the amount of 
 rent to be paid, inadvertantly entered the figuresi£130 in- 
 stead of £230; and the lease was engrossed and executed 
 
 ' This case puts, from tlie seller's point of view, tlie principle 
 Tvhicli we have been illustrating from the point of view of the 
 buyer. The seller means to promise one thing; he in fact prom- 
 ises another; the fact that he thinks he Is promising something 
 less than he does promise has no effect on the validity of the sale, 
 136 
 
Chap. IV. § 1. MISTAKE. 128 
 
 •witli this error. The Court was satisfied, upon the evi- 
 dence, that the defendant was aware of the discrepancy 
 between the rent which she was promising to pay and 
 the rent which the plaintiff believed her to be prom- 
 ising to pay; and she was given the option of retain- 
 ing the lease, amended so as to express the real inten- 
 tion of the parties, or giving it up, paying at the rate 
 of £230 per annum for such use and occupation of the 
 premises as she had enjoyed. 
 
 The rule which these two cases establish comes in 
 substance to this: that where there is mistake, not as 
 to the subject matter of the contract, but as to the 
 terms of the contract, and one party " being at the time PerRomilly, 
 cognizant of the fact of the error, seeks to take ad- ^'^' \ 
 vantage of it," the contract will be treated as void Frankel. 
 both in law and equity. SO Beav. 451. 
 
 The effect of Mistake, where it has any operation at all Effects of 
 is to avoid the contract. The Common Law tlierefore ™^^"'*^®' 
 offers two remedies to a person who has entered into an 
 agreement void on the ground of Mistake. If it be still 
 executory he riiay repudiate it and successfully defend 
 an action brought upon it; or if he have paid money 
 under the contract, he may recover it back upon 
 the general principal that " where money is paid *128 
 to another under the influence of a mistake, that Kelly v. 
 
 is, upon the supposition that a specific fact is true ^§."^'^'53 
 which would entitle the other to the money, but which [Wheaton v. 
 fact is untrue, an action will lie to recover it back." wend. 174.] 
 
 In equity the victim of mistake may resist specific 
 performance of the contract, and may sonletimes do Webster v. 
 so successfully when he might not have been able to^g^^'gg 
 defend at law an action for damages arising from his 
 breach. He may also as plaintiff apply to a court of 
 equity to get the contract declared void and to be 
 freed from his liabilities in respect of it. 
 137 
 
129 FORMATION OF CONTRACT. Part II. 
 
 § 2. MiSEEPEESENTATIOK. 
 
 Misrepre- The subject of misrepresentation is beset witli vari- 
 
 easy^io'dis!." '^^^^ difficulties. One difficulty arises from the wide 
 
 tinguish use of the the term Fraud to cover mirepresentations 
 
 ^ ■- of fact which vary very widely in their nature and 
 
 consequences. 
 
 or from con- Another difficulty arises from the desire of the 
 
 * ^"°' Courts to exclude mere representations which do not 
 
 form part of the. terms of a contract from all eflFect 
 
 upon its validity. If a representation is to affect the 
 
 formation or discharge of a contract it must either be 
 
 made with a fraudulent motive, or it must occur ia 
 
 the case of certain special contracts, or it must be a 
 
 term or integral part of the contract. 
 
 And this brings us to the third difficulty. If a rep- 
 resentation forms an integral part of a contract it is 
 virtually placed on a level with a promise. If it turns 
 out to be false its untruth does not affect the forma- 
 tion of the contract, but operates either to discharge 
 the injured party from his liabilities or to give him a 
 right of action as upon the failure of a promise. ' 
 
 We have, therefore, to distinguish representation, 
 ■whether innocent or fraudulent, which affects the valid- 
 ity of a contract, from representation which affects the 
 performance of a contract. And the termin- 
 *129 ology of this part of the subject is extraordina- 
 rily confused. Kepresentation, condition, war- 
 ranty, independent agreement, implied warranty, war- 
 ranty in the nature of a condition, are phrases which 
 it is not easy to follow through the various shades of 
 meaning in which they are used. 
 
 It will perhaps clear the ground if we begin with 
 
 three general statements whicli attempt to meet the 
 
 three difficulties suggested. 
 
 General (a) The practical test of fraud as opposed to misrep- 
 
 '^®°" resentation is that the first does, and the second does 
 
 138 
 
Chap. IV. § 3. MISREPRESENTATION. 130 
 
 not, give rise to an action ex delioto. The first is a 
 wrong, and may be treated as such, besides being a 
 vitiating element in contract. The second may inval- 
 idate a contract but will not give rise to the action ex 
 delicto, the action of deceit. 
 
 (5) Misrepresentation made prior to the formation 
 of a contract, not constituting a terra in the contract, 
 will only affect its validity in certain special cases. 
 These are contracts of marine or fire insurance, con- 
 tracts for the sale of land, and contracts for the pur- 
 chase of shares in companies. 
 
 (c) Where representations made prior to the conclu- 
 sion of a contract have any effect, they affect the form- 
 ation of the contract and make it voidable. Where 
 statements which form part of the contract turn out to 
 be false they entitle the party to whom they were made, 
 either to rescind the contract and be discharged from 
 it, or to bring an action for a breach of one of its 
 terras. In the one case the contrapt has never been 
 effectually formed, in the other it has been formed and 
 broken. 
 
 Let us now consider these statements more in detail. 
 
 (1) The distinction which has been suggested be- How to dls- 
 tween fraud and misrepresentation is practical rather *'°S"'^'* 
 than scientific: we describe thera not by their nature sentation 
 but by their results. The procedure open to the injured frai»« 
 party is made the test of the character of the act 
 by which he is injured. But rights are sometiraes *130 
 to be found most clearly defined in the reme- 
 dies which exist for the breach of them; and the exact- 
 itude of the pleadings now disused is often a valuable 
 aid to the ascertainment of the legal relations of the 
 parties. Fraud is a wrong apart from contract, and 
 damages arising from it may be recovered in the action 
 of deceit. But fraud which gives the action of deceit 
 need not involve dishonest motives where there is a 
 139 
 
131 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 Per Tindal, 
 C. J., Foster 
 V. Charles, 7 
 Bing. 105. 
 
 3 B. & Ad. 
 114. 
 
 Fraud with- 
 out dishon- 
 est motive. 
 [Story oa 
 Con. Sec. 
 632.J 
 
 See Ben- 
 jamin on 
 Sales, Am. 
 Ed. page 
 389. [Mer- 
 win V. Ar- 
 buckle,81 
 111. 501.] 
 
 knowledge that the statement made is false; nor if 
 dishonest, or at any rate self-seeking, motives be pres- 
 ent is it necessary that there be a clear knowledge that / 
 the statement made is false. ^ 
 
 " It is fraud in law if a party make representations 
 which he knows to be false and injury ensues, although 
 the motives from which the representation proceeded 
 may not have been bad." Thus in Polhill v. Walter 
 the defendant accepted a bill of exchange drawn on 
 another person representing himself to have authority 
 from that other to accept the bill, and honestly believ- 
 ing that the acceptance would be sanctioned, and the 
 bill paid by the person for whom he professed to act. 
 The bill was dishonored at maturity, and an indorsee, 
 who had given value for the bill on the strength of the 
 defendant's representation, brought against him an 
 action of deceit, or in the more familiar language of 
 modern pleading, sued him for false and fraudulent 
 misrepresentation. It was held that he was liable, and 
 Lord Tenterden in giving judgment said: "If the 
 defendant, when he wrote the acceptance, and, thereby 
 in substance, represented that he had authority from 
 the drawee to make it, knew that he had no such 
 authority (and upon the evidence there can be no 
 doubt that he did,) the representation was untrue to 
 his knowledge, and we think that an action will lie 
 against him by the plaintiff for the damage sustained 
 in consequence." It will be observed that in this case 
 there was a rejjresentation of facts known to be false; 
 that the knowledge of tlie untruth of the statement 
 
 was the ground of the decision: it is therefore 
 *131 clearlj' distinguishable from a class of cases in 
 
 which it has been held, after some conflict of 
 judicial opinion, that a false representation believed 
 to be true by the party making it will not give rise to 
 the action of deceit. 
 
 It is not necessary, however, to constitute fraud, 
 
 140 
 
Chap. IV. § 3. MISREPRESENTATION. 132 
 
 that there should be a clear knowledge that the state- Reckless 
 
 ment made is false. Statements which are intended "Ji^l''^''^ 
 
 ment. 
 
 to be acted upon, if made recklessly, and with no rea- 
 sonable ground of belief, bring their maker within 
 the remedies appropriate to fraud. 
 
 Tlie Westeran Bank of Scotland v. Addie was an L. L. 1 
 action of deceit brought against a company by a share- °°^'cn, App. 
 holder who had been deceived by a report of the di- 
 rectors and suffered loss. The House of Lords held 
 that such an action must be brought against the di- 
 rectors and could not be brought against the company, 
 for a reason to be explained hereafter; but Lord See App. B. 
 Chelms^'Oed held that " if the directors took upon 
 themselves to put forth in their reports statements of 
 importance in regard to the affairs of the bank, false 
 in themselves, and which they did not believe or had 
 no reasonable ground to believe to be true, that would 
 be a misrepresentation and deceit." Lord Ceanwoeth, See p. 168. 
 in giving judgment in the same case, qualifies the force 
 of this proposition, expressing an opinion that it goes 
 too far, but it is substantially confirmed by Lord Caiens Reese River 
 in a later case, in which he laj's it down as the settled ^ 'g^ifi, jj 
 rule of law that if persons take upon themselves toR-4H. L. 64. 
 make assertions as to which they are ignorant whether itjchards, 13 
 they are true or not, they must in a civil point of view ^^^ 26.] 
 be held as responsible as if they had-asserted that which 
 they knew to be untrue,^ 
 
 If then neither the intent to defraud nor deliberate 
 assertion of untruth are necessary elements in fraud, 
 the nearest approach which we can make to a distinc- 
 tion between misrepresentation and fraud is that the 
 former is an innocent misstatement of facts, while the 
 latter consists in representations known to be 
 false, or made in such reckless ignorance of their *132 
 truth or falsehood as to entitle the injured party 
 to the action of deceit. 
 141 
 
lj}3 FORMATION OF CONTRACT. Part II. 
 
 Innocent (2) In dealing with innocent misrepresentation and 
 
 mentd^oes non-disclosure of fact, we may say generally that nn- 
 
 not inval- less they occur in the particular kinds of contract 
 
 tract unless ^^^'^ady mentioned they do not affect the validity of 
 
 (1) the con- consent. The strong tendency of the courts has been 
 tract be of a ^ , . . „ ., , , . , » 
 
 special class; to bring, it possible, every statement which, from its 
 
 \, iJ importance could affect consent, into the terms of the 
 1 "*) ( ' contract. If a representation cannot be shown to have 
 
 had so material a part in determining consent as to 
 have formed, if not the basis of the contract, at any 
 rate an integral part of its terms, such a representa- 
 tion is set aside altogether. Most contracts are of a 
 somewhat complex character, and consist of statements 
 that certain things are, and promises that certain things 
 shall be. It is here that difficulties begin. If a rep- 
 resentation is not part of a contract, its truth, except 
 in the excepted cases and apart from fraud, is imma- 
 or (2) it terial. If it be part of a contract it receives the name 
 a condition, ^f a Condition or a "Warranty, its nntruth does not 
 affect the formation of the contract but operates to dis- 
 charge the injured party from his obligation, or gives 
 him. a right of action, ex contractu, for loss sustained 
 by the untruth of a statement which is regarded in the 
 light of a promise. We shall get a clearer notion of 
 these various phases of representation from the case 
 3 B. & S. 751. of Behn v. Burness. 
 
 The action was brought upon a charter party dated 
 the 19th day of Oct., 1860, in which it was agreed that 
 the plaintiff's ship then in the port of Amsterdam 
 should proceed to Newport and there load a cargo of 
 coals which she should carry to Hong Kong. At the 
 date of the contract the ship was not in the port of 
 Amsterdana and did not arrive there until the 23rd. 
 When she reached Newport the defendant refused to 
 load a cargo and repudiated the contract, upon which 
 action was brought. The question for the court 
 *133 was whether the words now in the port of 
 142 
 
Chap. IV. § 3. MISREPRESENTATION. 133 
 
 Amsterdam amounted to a condition the breach of 
 
 which entitled the plaintiff to repudiate the contract, 
 
 or whether they only gave him a right, after carrying 
 
 out the contract, to sue for such damaares as he hadBehnv. 
 
 sustained. "Williams, J., in giving judgment in the b"& s^ OT« 
 
 Exchequer Chamber, thus distinguishes the various 3 B. «fc 8. 751. 
 
 parts or terms of a contract: 
 
 "Properly speaking, a representation is a statement Representa. 
 or assertion made by one party to the other, before or [erm'in coit 
 at the time of the contract, of some matter or eircum- tract, 
 stance relating to it. Though it is sometimes con- 
 tained in the written instrument, it is not an integral 
 part of the contract; and, consequently, the contract 
 is not broken though the representation proves to be 
 untrue; nor (with the exception of the case of policies 
 of insurance, at all events, marine policies, which stand 
 on a peculiar anomalous footing) is such untruth any 
 cause of action, nor has it any efficacy lohatever unless 
 the representation was made fraudulently, either hy 
 reason of its heing made with a knowledge of its un- 
 truth, or by reason of its being made dishonestly, with 
 a reckless ignorance whether it was true or untrue , ... 
 Though representations are not usually contained in 
 the written instrument of contract, yet they sometimes 
 ar6. But it is plain that their insertion therein can- 
 not alter their nature. A question, however, may arise 
 whether a descriptive statement in the written instru- 
 ment is a mere representation, or whether it is a sub- 
 stantive part of the contract. This is a question of 
 construction which the Court and not the jury must 
 determine. If the Court should come to the conclu- 
 sion that such a statement by one party was intended 
 to be a substantive part of his contract, and not a mere 
 representation, the often-discussed question may, of 
 course, be raised, whether this part of the contract ia 
 a condition 'precedent, or only an independent agree- 
 ment, a breach of which will not justify a repudiation 
 143 
 
134: FORMATION OF CONTRACT. Part II. 
 
 of the contract, but will only be a cause of action for 
 
 a compensation in damages. 
 
 *134: " In the construction of charter parties, this 
 
 question has often been raised, with reference to 
 
 stipulations that some future thing shall be done or shall' 
 
 happen, and has given rise to many nice distinctions. 
 
 Glaholrav. Thus a statement that a vessel is to sail, or be ready to 
 
 & G%j7^ receive a cargo, on or before a given day, has been held 
 
 Beegei-T. to be a condition, while a stipulation that she shall 
 
 B. N. S. 45. ^^^^ with all convenient speed, or within a reasonable 
 
 time, has been held to be only an agreement. 
 Tarrabochia "But with respect to statements in a contract de- 
 H (fe'lf'^iss scriptive of the subject-matter of it, or of some mate- 
 rial incident thereof, the true doctrine, established by 
 principle as well as authority, appears to be, generally 
 speaking, that if such descriptive statement was in- 
 tended to be a substantive part of the contract, it is to 
 be regarded as a warranty, that is to say, a condition 
 on the failure or non-performance of which the other 
 party may, if he is so minded, repudiate the contract 
 m toto, and so be relieved from performing his part 
 of it, provided it has not been partially executed in 
 his favor. If, indeed, -he has received the whole or any 
 substantial part of the consideration for the promise 
 on his part, the warranty loses the character of a con- 
 dition, or, to speak perhaps more properly, ceases to be 
 available as a condition, and becomes a warranty in 
 the narrower sense of the word, viz., a stipulation by 
 way of agreement, for the breach of which a compen- 
 sation must be sought in damages." 
 
 The Court ultimately held that the statement that 
 the ship was in the port of Amsterdam at the time of 
 making the contract was intended by the parties to be 
 a Condition, and that the breach of it discharged the 
 charterer from the obligation to perform what he had 
 promised. 
 The judgment in this case has been cited at some 
 14i 
 
Chap. IV. § 3. MISREPRESENTATION. 135 
 
 length, not only because it is the fullest judicial anal- 
 ysis of the terms of a contract, but also because it 
 affords a good illustration of the provoking confusion 
 of the terminology of this part of .the subject. 
 It will be observed tliat Condition is used in two *135 Varioua 
 senses, as meaning a statement that a thing is, concfuion 
 
 and a promise that a thing shall be; in either case the and war- 
 statement or promise is of so important a nature that '" 
 the untruth of the one or the breach of the other dis- 
 charges the contract. 
 
 Warranty also is used in several senses. It is first 
 made a convertible terra with a Condition; it is then 
 used "in the narrower sense of the word," in which 
 sense it means (1) a subsidiary promise in the contract, 
 the breach of wliich could under no circumstances do 
 more than give rise to an action for damages, and (2) a 
 Condition the breach of which mia^ht have discharged 
 the contract had it not been so far acquiesced in as to 
 lose its effect for that purpose, though it may give rise 
 to an action for damages. 
 
 Yet in spite of this verbal confusion the judgment 
 gives us a clear idea of the various terms in a contract. 
 
 (a) Representations, made at the time of entering Representa- 
 into the contract but not forming a part of it, may*^"''* 
 affect its validity in certain special eases but are other- 
 wise inoperative. When they do operate their false- 
 hood prevents the contract from ever having been 
 effectually formed. 
 
 {b) Conditions are either statements, or promises ConditioiL 
 which form the basis of the contract. Whether or not 
 a term in the contract amounts to a Condition must 
 be a question of construction, to be answered by ascer- 
 taining the intention of the parties from the wording 
 of tlie contract and the circumstances under which it 
 was made. But when a term in the contract is ascer- 
 tained to be a Condition, then, whether it be a state- 
 ment or a promise, the untruth, or the breach of it, 
 145—10 
 
136 
 
 FOKMATION OF CONTRACT. 
 
 Part II. 
 
 Warranty 
 ab initio. 
 
 / 
 
 Warranty 
 es post facto. 
 
 Vi 
 
 V'^ 
 
 Bannerman 
 V. White, 10 
 C. B. N. S. 
 844. 
 
 Eepresenta- 
 tion made 
 anterior to 
 contract: 
 held a con- 
 dition. 
 
 will entitle the party to whom it is made to be dis- 
 charged from his liabilities under the contract. 
 
 (c) Warranties, used in " the narrower sense," are 
 independent subsidiary promises, tlie breach of which 
 
 does not discharge the contract, but gives to the 
 *136 injured party a right of action for such damage 
 
 as he has sustained by the failure of the other 
 to fulfill his promise. 
 
 (d) A condition may be broken and the injured party 
 may not avail himself of his right to be discharged, 
 but continue to take benefit under the contract, or at 
 any rate to act as though it were still in operation. In 
 Buch a case the condition sinks to the level of a war- 
 ranty, and the breach of it, being waived as a dis- 
 charge, can only give a right of action for the damage 
 sustained. 
 
 We have dwelt thus at length upon a subject which 
 would seem to be more appropriately discussed under 
 the head of Discharge of Contract, because it appeared 
 necessary to point out the distinction between the Rep- 
 resentation which in special cases affects the validity 
 of a contract, and Statements which are introduced 
 into the terms of the contract as Conditions, the un- 
 truth of which operates as a discharge. And it will 
 be well before leaving this part of the discussion to 
 illustrate by another case the desire of the Courts to 
 include within the terms of the contract every state- 
 ment of fact, which, apart from fraud, is in any way 
 to affect it. 
 
 The case of Bannerman v. White arose out of a sale 
 of hops by tlie plaintiff to the defendant. Before com- 
 mencing to deal for the hops the defendant asked the 
 plaintiff if any sulphur had been used in the treat- 
 ment of that year's growth of hops. The plaintiff 
 said " no." The defendant said that he would not even 
 ask the price if any sul phur had been used. After this 
 the parties discussed the price and the defendant 
 146 
 
Chap. IV. § 2. MISREPRESENTATION. 137 
 
 agreed to purchase the growth of that year. He after- 
 wards repudiated the contract on the ground that sul- 
 phur had been used in the treatment of the hops. 
 The plaintiff sued for their price. It was proved that 
 sulphur had been used by the plaintiff over five acres, 
 the entire growth consisting of 300 acres. He had 
 used it for the purpose of trying a new machine, had 
 afterwards mixed the whole growth together, 
 and had either forgotten the matter or thought *137 
 it unimportant. The jury found that the rep- 
 resentation made by the plaintiff as to the use of sul- 
 phur was not willfully false, and they further found that 
 " the afiirmation that no sulphur had been used was 
 intended by the parties to be part of the contract of 
 sale, and a warranty by the plaintiff." The Court had 
 to consider the effect of this finding, and came to the 
 conclusion that the representation of the plaintiff was 
 a part of the contract and a preliminary condition, the 
 breach of which entitled the defendant to be discharged 
 from liability. 
 
 Eele, C. J., said, "We avoid the term -warj-an^y Bannermaa 
 because it is used in two senses, and the term condi- J; ^^'xt'^'s^ 
 tion because Ihe question is whether that term is ap- 860. 
 plicable, then, the effect is that the defendants required 
 and that the plaintiff gave his undertaking that no 
 sulphur had been used. This undertaking was a pre- 
 liminary stipulation; and, if it had not been given, 
 the defendants would not have gone on with the treaty 
 which resulted in the sale. In this sense it was the 
 condition upon which the defendants contracted; and 
 it would be contrary to the intention expressed by this 
 stipulation that the contract should remain valid if 
 sulphur had been used. 
 
 "The intention of the parties governs in the making 
 and in the construction of all contracts. If the par- 
 ties so intend, the sale may be absolute, with a war- 
 ranty superadded; or the sale may be conditional, to 
 147 
 
138 FORMATION OP CONTRACT. Part II. 
 
 be null if the warranty is broken. And, upon this 
 statement of facts, we think that the intention appears 
 that the contract should be null if sulphur had been 
 used: and upon this ground we agree that the rule 
 should be discharged." 
 
 It is worth noticing with regard to these words — 
 Firstly, that the Chief Justice notes the confusion, 
 which has arisen from the double meaning of the word 
 Warranty; and further expresses a doubt whether the 
 term Condition is applicable to a statement such as 
 
 the one in question. Secondly, that the intro- 
 *138 duction of the representation into the contract 
 
 as one of its conditions shows more markedly 
 than the judgment in Behn v. Burness that state- 
 ments, which go to the validity of a contract, are 
 placed on a level with promises. For in the one case 
 the statement was definitely introduced into the char- 
 ter party, in the other it was made even before the 
 parties commenced bargaining. 
 Reason for The determination of the Courts to exclude repre- 
 
 limiting the ggntations from affecting a contract unless they form a 
 effect of rep- . °. . , . 
 
 resentations. part of its terms, is an instance oi the practical wis- 
 dom which marks the English Law of Contract. The 
 process of coming to an agreement is generally sur- 
 rounded by a fringe of statement and discussion, and 
 the Courts might find their time occupied in endless 
 questions of fact if it were permitted to a man to repu- 
 diate his contract, or bring an action for the breach of 
 it, upon the strength of the words used in conversation 
 preceding the agreement. When, therefore, the valid- 
 ity of a contract is called in question, or the liabilities 
 of the parties said to be affected by reason of repre- 
 sentations made at the time of entering into the con- 
 tract, the effect of such representations may be said to 
 depend on the answer that can be given to three ques- 
 tions — 1. Were the statements in question a part of 
 the terms of the contract? 2. If not, were they made 
 148 
 
Chap. IV. § 3. MISREPRESENTATION. 139 
 
 fraudulently? 3. If neither of these, was the contract, 
 in respect of which they were made, one of those which 
 we will call for convenience contracts uherrimw fideif 
 If all these questions are g,nswered in the negative, the 
 representation goes for nothing. 
 
 (3) One result of this introduction into the body of Its effect in 
 a contract of such statements as are allowed to be op- J.gpjg°g^f™_'^ 
 erative is that their untruth, instead of being a vitiat- tion a mode 
 ing element in the Formation of contract, becomes a° * "^^ ' 
 form of Discharge. "We have therefore to distinguish 
 between Misrepresentation which makes a contract 
 •voidable because entered into under such circum- 
 stances as preclude true consent, from a failure 
 of a descriptive statement which amounts to a *139 
 breach of contract, either discharging the in- 
 jured party or giving him a right of action for dam- 
 ages sustained. 
 
 The difference is not of any great practical import- 
 ance, though it somewhat interferes with a systematic 
 arrangement of the subject. In the one case the par- 
 ties have never been completely bound to one another 
 for want of genuineness of consent: in the other case 
 there has been a vinculum juris in all respects com- 
 plete; it has been broken, and one of the parties, if he 
 so please, is discliarged, and a new obligation, a right 
 of action, takes the place of the old one. 
 
 In the case of such a Condition as that in Behn v. 3 B.&S.751. 
 Bumess, it would have seemed to accord more truly 
 with the attitude of the parties if the defendant were 
 allowed to say "you told me that your vessel was at 
 Amsterdam ; if I had not thought it was there I would 
 not have contracted with you : my consent was obtained 
 by misrepresentation of material facts and so was un- 
 real. I never really contracted at all." But instead 
 of this he is made to say, "in stating that your ship 
 was at Anisterdtoi you must be supposed to have prom- 
 149 
 
 \ 
 
140 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 isedme that if it was not there I should be discharged: 
 it was not there and I am discharged." As regards 
 the rights of the parties the difference is not very ma- 
 terial, but it would have been simpler to attach the 
 natural meaning to the words of men, and better to 
 have avoided the introduction of implied conditions 
 and warranties which are apt to give a air of unreal- 
 ity and artifice to the subject of the fulfillment and 
 breach of contract. 
 
 Contracts 
 uberrimae 
 fldei. 
 
 3Iarinein» 
 suraace. 
 
 Per Black, 
 burn, J., in 
 In lonides v. 
 Pender, L. 
 B. 9 Q B. 
 537. [Lewis 
 V. Eagle Ins. 
 Co., 10 Gray 
 608.] 
 
 Contracts affected iy Misrepresentation. 
 
 It remains to consider the special contracts which 
 are affected in their formation by misrepresentation or 
 non-disclosure. These are contracts sometimes said to 
 be uherrimcB fidei, and their characteristics in 
 *140 this respect is that one of the parties must, 
 from the nature of the contract, rely upon state- 
 ments made by the other, and is placed at a disadvan- 
 tage as regards his means of acquiring knowledge 
 upon the subject. 
 
 (a) Contracts of marine and fire insurance. 
 
 In the contract of marine insurance the insured is 
 bound to give the underwriter all such information as 
 would be likely to determine his judgment in accepting 
 the risk; and misrepresentation or concealment of any 
 Buch matter, though unaccompanied by fraudulent in- 
 tention, avoids the policy. " It is perfectly well estab- 
 lished that the law as to a contract of insurance differs 
 from that as to other contracts, and that a concealment 
 of a material fact, though made without any fraudu- 
 lent intention, vitiates the policy." So in the case 
 here quoted, where goods were insured upon a voyage 
 for an amount considerably in excess of their value, it 
 was held that although the fact of over-valuation 
 •would not affect the risks of the voyage, yet being a 
 fact which underwriters were in the habit of taking 
 into consideration, its concealment vitiated the policy. 
 160 
 
Chap. IV. § 3. MISREPRESENTATION. 141 
 
 In tlie contract of fire insurance the description of Fire insur- 
 
 the premises appears to form a representation on the ^^'^^' 
 
 truth of which the validity of the contract depends. 
 
 American authorities go further than this, and hold 
 
 that the innocent non-disclosure of any material fact 
 
 vitiates the policy. In a case quoted by Blackbiten, 
 
 J., in the judgment above cited, " the plaintiffs had New York 
 
 insured certain property against fire, and the president j-^g^^g^pg''® 
 
 of the company heard that the person insuring with Co. v. New 
 4-u /t <- ^ ii, 1, 1 V, York Fire 
 
 them, or at least some one oi the same name, had been insurance 
 
 so unlucky as to have had several fires, in each of which ^^^'^^ 
 he was heavily insured. The plaintifis reinsured with 
 the defendants, but did not inform them of this. A 
 fire did take place, the insured came upon the plain- 
 tifis, who came upon the defendants. The judge 
 directed the jury, that if this information given 
 to the president of the plaintiffs was intention- *14:1 
 ally kept back, it would vitiate the policy of 
 reinsurance. The jury found for the plaintiff's, but the 
 Court, on appeal, directed a new trial on the ground 
 that the concealment was of a material fact, and 
 whether intentional or not, it vitiated the insurance." 
 
 The contract of life insurance differs from those of Distinction 
 marine and fire insurance in this respect. Untruth in J^° 11^^^^* 
 the representations made to the insu^rer as to the life surance. 
 insured will not affect the validity of the contract un- 
 less they be made fraudulently, or unless their truth 
 be made an express condition of the contract. Thus 
 in Wheelton v. Hardisiy, an insurance office was held S E. & B. 
 liable on a policy entered into on representations 
 falsely and fraudulently made by a third party as to 
 the health and habits of the person whose life was in- 
 sured, which representations were made to the pel-son 
 insuring the life and innocently supplied by him to the 
 insurance office. The Court of Exchequer Chamber 
 expressly distinguished the case from that of marine 
 policies: "There is nothing in law," said Willes, J., 
 151 
 
142 FOKMATION OP CONTRACT. Part II. 
 
 E. & B. " to make the truth of the statement a condition pre- 
 ^ Db ifv ^sdent to the liability of the defendants upon the pol- 
 Tew Eng- icy, unless it were untrue to the knowledge of the 
 8°Mass' °'plfiintiffs, and therefore fraudulent: the mere untruth 
 81.] of it would not avoid any policy in whicli it was intro- 
 
 duced, the policy containing no express stipulation to 
 that effect. "(/) 
 
 (h) Contracts for the sale of land, 
 lale of land. In agreements of this nature a misdescription of 
 tlie premises sold or of the terms to which they are 
 subject, though made without any fraudulent intention, 
 will vitiate the contract. A single instance will illus- 
 trate the operation, and the rationale of the rule. In 
 Bing. N. C. Flight v. Booth, leasehold property was agreed to be 
 purchased by the defendant. The lease contained re- 
 strictions against the carrying on of several trades, of 
 which the particulars of sale mentioned only a few; 
 and TiNDAL, C. J., in holding that the plaintiff could 
 recover back money paid by way of deposit on 
 *142 the purchase of the property, said, " We think 
 it is a safe rule to adopt, that where the mis- 
 description although not proceeding from fraud, is, in 
 a material and substantial point, so far affecting the 
 subject-matter of the contract, that it may reasonably 
 be supposed that, but for such misdescription the pur- 
 chaser might never have entered into the contract at 
 all: in such cases the contract is avoided altogether, 
 and the purchaser is not bound to resort to the clause 
 of compe^atiou. Under such a state of facts, the 
 purchaser may be considered as not having purchased 
 the thing which was really the subject of the sale; as in 
 
 (J) Bnt, see London Assurance v. Mmuel, 41 Law Times, 225, 
 ■which says: ''The M. R. was of the opinion that there was no 
 dirt'erence in principle between a case of life insurance and fire, 
 marine, or any other insurance, and that in all, the greatest good 
 , faith was required on the part of the proposer, and that in the case 
 of the concealment of any material fact on his part, the contract 
 would not be binding on the assurers." 
 152 
 
Chap. IV. § 3. MISREPRESENTATION. 143 
 
 Jones V. Edney, where the subject-matter of the sales Camp. 285. 
 ■was described to be ' a free public house,' while the 
 lease contained a proviso, that the lessee and his as- 
 signs should take all their beer from a particular brew- 
 ery; in which case the misdescription was held to be 
 fatal." 
 
 Equity, however, will endeavor to adjust the rights 
 of the parties with reference to the materiality of the 
 misdescription, and according to the circumstances of 
 the case will refuse to compel the purchaser to con- 
 clude the sale, or will enforce the sale subject to com- • 
 pensation to be made by the vendor; but it will only Pollock on 
 adopt this last course where the misdescription is °o n°''^™^5'g 
 more than a detail of the transaction, and does not 
 aflPect the substance of the contract. 
 
 (e) Contracts for the purchase of shares in Com- Purchase of 
 
 • „ shares influ- 
 
 Panies. ^ enced by 
 
 The rules with respect to the candor and fullness of projector's 
 statement required of projectors of an undertaking in ^ ^ '^'^^'^ ^' 
 which they invite the public to join cannot be better 
 stated than in the judgment of Kindeeslet, Y. C, in 
 the case of the Uew Brunswick and Canada Rail- 1 Dr. & Sm. 
 way Company v. Muggeridge. ^ ^' 
 
 " Those who issue aprospectus holding out to the pub- 
 lic the great advantages which will accrue to persons who 
 will take shares in a proposed undertaking, and inviting 
 them to take shares on the faith of the representations 
 therein contained, are bound to state everything 
 with strict and scrupulous accuracy, and not only *14:3 
 to abstain from stating as fact that which is not 
 60, but to omit no one fact within their knowledge the 
 existence of which might in any degree affect the na- 
 ture, extent or quality of the privileges and advantages 
 which the prospectus holds out as inducement to take 
 shares." These dicta are quoted with approval by 
 153 
 
144 FORMATION OF CONTRACT. Part II. 
 
 L. R. 3 H. L. Lord Chelmsford in The Yenezuela Railway Com- 
 
 at p. 113. ^asny v. Kisch. 
 
 In a later case Lord Caiens points out the dis- 
 tinction between Fraud and such non-fraudulent Mis- 
 representation as makes a contract of this, nature void- 
 able. He intimates that mere non-disclosure can never 
 amount to fraud unless accompanied with such sub- 
 stantial representations as give a false air to facts, but 
 
 L. R. 6 H. L. that " it might be a ground in a proper proceeding and 
 
 In Peck V. ^* ^ proper time for setting aside an allotment or pur- 
 
 Gurney. chase of shares." 
 
 Contract of The contract of suretyship is sometimes treated as 
 knoTtfter- ^^i^g One of this particular class of contracts; but as 
 
 rimaefidei in regards the formation of the contract it is safe to say 
 
 Its inception. . i . . i . • 
 
 N B 't h ^® "° ^°" 
 
 Insurance It has been explicitly laid down in more than one 
 
 Io'bx 523''- ' ^^^® ^^^^ ^^^ rules applicable to marine insurance do 
 Hamilton v. not apply to the contract entered into hetween the 
 CI. & f! 109. creditor and the surety of the debtor. Non -disclosure 
 or misrepresentation by the former must amount to 
 fraud in order to invalidate the contract, tliough it 
 17 C. B. N. would appear from the decision in Lee v. Jones that 
 ^* P" in contracts of this nature very slight evidence is re-' 
 
 garded as material upon which a jury may found an 
 inference of fraud, 
 but becomes But once the contract of suretyship has been entered 
 once'made ^°*°' ^^® surety is entitled to be informed of any agree- 
 ment which alters the relations of creditor and debtor, 
 or any circumstance which might give him a right to 
 L. R. 7 Q. B. avoid the contract. So in Phillips v. JFoxall, the de- 
 Ev ''v''^ fendant had guaranteed the honesty of a servant in the 
 Kneeland, 9 employ of the plaintiff; the servant was guilty 
 
 ^^- -J *144 of dishonesty in the course of his service, but 
 the plaintiff continued to employ him and did 
 not inform the defendant of what had occurred. Sub- 
 Bequently the servant committed further acts of dis- 
 154 
 
Chap. IV. § 3. MISREPRESENTATION. 144 
 
 honesty, and the plaintiff came upon the defendant to 
 make good the loss. It was held that as the defendant Bnrgess v. 
 would have an equitable right to revoke a guarantee f^Ea.'^r. 
 of this nature upon the first intelligence of the ser- 
 vant's dishonesty, the concealment from him of what 
 had occurred released him from all liability for loss 
 which had subsequently accrued. 
 
 Even in contracts of the nature just described there Expressions 
 
 is a hniit to the effect of statements made with refer- S^ "P"non 
 
 do not 
 
 ence to the subject matter of the contract. A mere amount to 
 expression of opinion will not amount to a representa- [fj^^^*"^'^ 
 tion tlie falsehood of which invalidates the contract. 
 Thus in a contract of marine insurance the insured 
 communicated to the insurers a letter from the master 
 of his vessel stating that in his opinion the anchorage 
 of the place to which the vessel was bound was safe 
 and good. The vessel was lost there: but the Court 
 held that the insured, in reading the master's letter to[Tucfev. 
 the insurers, communicated to them all that he him-R?TjY^' 
 self knew of the voyage, and that the expressions con- Anderson v. 
 tained in the letter were not a representation of fact, syra'nce Co 
 but an opinion which the insurers could act upon or L- R- 7 O.P. 
 not as they pleased. 
 
 In like manner commendatory expressions, such as Nor do corn- 
 men habitually use in order to induce others to enter ^.^^.^ffPyy 
 into a bargain, are not dealt with as serious represen- 
 tations of fact. A certain latitude is allowed to a man 
 who wants to gain a purchaser. Thus at a sale by 
 auction a statement that land was "very fertile and 
 improvable," whereas in fact it was in part abandoned Dimmockv. 
 as useless, was held not to amount to a representation r'*2 Ch^t 
 or misdescription such as would invalidate a sale of p. 27. [Tuck 
 land, it was said to be " a mere flourishing description ^g iu^ti.]^' 
 by an auctioneer." 
 155 
 
14:5 FORMATION OP CONTliACT. Part II. 
 
 *145 §3. Feato. 
 
 raud. In dealing -witli the subject of Fraud, we must en- 
 
 deavor to confine ourselves to a few very simple and 
 general rules, lest we should be led into a discussion 
 beyond the scope of this treatise, and perhaps of ethi- 
 cal rather than legal significance. It is idle to attempt 
 to frame a definition of Fraud which should cover every 
 aspect of so multiform a conception; nevertheless we 
 may put together in a set of words what may be con- 
 sidered to bo the essential characteristics of Fraud 
 such as will give rise to the action of deceit. 
 s essential Fraud is a false representation of fact, made with a 
 a ures. knowledge of its falsehood, or in reckless disregard 
 wliether it be true or false, with the intention that it 
 should be acted upon by the complaining party, and 
 actually inducing him to act upon it. 
 
 Let us consider these characteristics in detail. 
 
 here must Fi'aud is a false representation. 
 
 i a repre- 
 
 intation, j^. ^jjg'gj.g ^^ |.]^jg respect from non-disclosure such 
 
 ilse m Itself, . . ^ . . ^ -, • ^ 
 
 ■ combined ^^ ™^J vitiate a contract uberrimae jidei; there-must 
 
 ith sup- be some active attempt to deceive either by statement 
 uth. whicli is false, or by a representation, true so far as it 
 
 goes, but accompanied with such a suppression of facts 
 as make it convey a misleading impression. Conceal- 
 ment of this kind is sometimes called "active," "ag- 
 gressive," or "industrious;" but perhaps the word 
 itself, as opposed to non-disclosure, suggests the active 
 element of deceit which coiistitutues fraudulent mis- 
 representation. And the distinction between the mis- 
 representation by non-disclosure, which has no legal 
 consequences except in the case of contracts ulerrimm 
 fidei, and the misrepresentation which would give rise 
 . E. 6 H. L. to an action of deceit, is most clearly pointed out by 
 ; p. 403. j^Qj,^ Caiens in the case of Peelc v. Qurney. "Mere 
 166 
 
Chap. IV. § 3. FRAUD. 116 
 
 non-disclosure of material facts, however mor- 
 ally censurable, however that non-disclosure *14:6 
 might be a ground in a proper proceediiig at a 
 proper time for setting aside an allotment or pur- 
 chase of shares, would, in my opinion, form no ground 
 for an action in the nature of an action for misrep- 
 resentation. There must, in my opinion, be some active 
 misstatement of fact, or, at all events, such a partial 
 and fragmentary statement of fact, as that the with- 
 holding of that which is not stated malces that which 
 is stated ahsohitely false." 
 
 I Disclosure then is not in the case of ordinary con- Non-disclos- 
 tracts incumbent on the parties. A vendor is under "j.^^^^^.'^"* 
 no liability to communicate the existence even of latent 
 defects in his wares unless by act or implication he 
 i represents such defects not to exist. In the case of 
 Ward V. Ilohis, the defendant sent to a public market L. R. 3 Q. B. 
 pigs which were to hi^ knowledge suffering from a con- ^^ppeal °^ 
 tageous disease, and his sending them to the market was Afflimecl in 
 a breach of 32 & 33 Yict. c. 78, s. 67. The plaintiff fs^^s?^"'"' 
 bought the pigs, no representation being made as to Contagious 
 their condition. The greater number died: other pigs .^^'j|!^^2g\ 
 belonging to the, plaintiff were also infected, and so Act. 
 were the stubble fields in which they were turned out 
 to run. It was urged that the exposure of the pigs in 
 the market amounted to a representation, under the 
 circumstances,- that they were free of any contagious 
 disease. Cotton, L. J., in his judgment said, "What 
 is relied upon here as a representation is this: that the 
 defendant, knowing the pigs had an infectious disease, 
 sent them to market. Is that evidence on which a [But see Jef- 
 jury could find, properly, that the defendant repre- 1^\^ 13 '^^ 
 sented that the pigs had not, to his knowledge, any Wend. 518.] 
 infectious disease?" And the Court held, overruling 
 the judgment of the Court of Queen's Bench, that it 
 was not. 
 So too in the case of £^mt8 v. Zord Cadogan, where 10 0. B. 591. 
 157 
 
147 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 oster V. 
 lyser, 9 
 Lsh. 242.] 
 
 )rex- 
 ■ession of 
 )iiiioii: 
 
 arvey v. 
 nung, 1 
 elv. 21. 
 
 tlie plaintiff sued for damages arising from the defend- 
 ant's fraud in letting to the plaintiff a house^ 
 *147 which he knew to be required for immediate 
 occupation, without disclosing that it was in a 
 ruinous condition, it was held that no such action 
 would lie. 
 
 " It is not pretended," said Jbevis, 0. J., " that there 
 was any warranty, expressed or implied, that the house 
 was fit for immediate occupation; but, it is said, that, 
 because the defendant knew that the plaintiff wanted 
 it for immediate occupation, and knew that it was in an 
 unfit and dangerous state, and did not disclose that 
 fact to the plaintiff, an action of deceit will lie. The 
 declaration does not allege that the defendant made 
 any misrepresentation, or that he had reason to sup- 
 pose that the plaintiff would not do, what any man in 
 his senses would do, viz., make proper investigation, 
 and satisfy himself as to the condition of the house 
 before he entered upon the occupation of it. There is 
 nothing amounting to deceit." 
 
 The representation must be a representation ojfact. 
 
 It is hardly necessary to repeat what was said on the 
 subject of misrepresentation, that a mere expression 
 of opinion, which turns out to be unfounded, will not 
 invalidate a contract; but a good illustration of tiie 
 contrast between opinion and representation may be 
 found in the difference between the vendor of property 
 saying that it is worth so much, and his saying that 
 he gave so much for it. The first is an opinion which 
 
 ' The house was leased for a term of years. The law is other- 
 wise where a furnished house is hired for a short period, as for 
 instance the London season. In such a case immediate occupa- 
 tion is of the essence of the contract, and if the house is unin- 
 habitable the lessee is discharged, not only on the ground of 
 fraud, but because " he is offered something substantially differ- 
 ent from that whioh was contracted for." 
 158 
 
Chap. IV. § 3. FRAUD. 148 
 
 the buyer may adopt if he will; the second is an asser- Lindsay Pe- 
 
 tion of fact which, if false to the knowledge of the *J"{|^,"^ ^°- 
 
 seller, is also fj-audulent. R. 5 P. C. at 
 
 Again, an expression of intention does not amount ^ggrp^g^]^^'^ 
 
 to a statement of fact, nor does a promise, and we must Downing, T6 
 
 III 77 1 
 distinguish a representation that a thing is, '. 
 
 from a promise that a thing shall be. Yet, *148 ion of inten- 
 
 though the intention expressed in a promise Jf'^' 
 
 cannot usually be regarded as a statement of facts, we case, L R. 
 
 must note that there is a distinction between a promise ^{^' ■'-'• f^J' 
 
 which the promisor intends to perform, and one which ),am v. Statej 
 
 the promisor intends to break. In the first case he 5„9''J° ^'^ 
 
 , 1 . . . , , . 380, for law 
 
 represents truly enough his intention that somethmg of false pre- 
 
 sliall take place in the future: in the second case he^"^*^^' *'^''' 
 
 misrepresents his existing intention,; he not merely Bridges, 3 
 
 makes a promise which is ultimately broken, but when sygT'^ ' 
 
 he makes it he represents his state of mind to be some- Wilson v. 
 
 thing other than it really is. And so it has been laid ^'^ "^jj," ^^^'g 
 
 down that if a man buy goods, not intending to pay Ex. D. 336. 
 
 for them, he makes a fraudulent misrepresentation. [G^-ge v. 
 .... . 1 , ■ ■ ^1 1 Lewis, 63 
 
 Again, it IS said that misrepresentation ot law does in. 664.] 
 
 not give rise to tlie action of deceit, nor even make a 1° ^^ P^irte 
 . -Ill • i ii 1 • ii Wliittaker, 
 
 contract voidable as against the person making the l. li. lO Cli. 
 
 statement. There is little direct authority upon the'^^^- 
 subject, but it may be submitted that tlie distinction 
 drawn in Cooper v. JPhibis as to the difference between L. R 2 H. L. 
 ignorance of general rules of law and ignorance of tlie 
 existence of a right would apply to the case of a fraud- 
 ulent misrepresentation of law, and that if a man's 
 riglits were concealed or misstated knowingly, he might Hirschfield 
 sue the person who made the statement for deceit. ItB,.i'J;'"i';X* 
 seems clear, from a late sti'ong expression of opinion and South 
 in the Queen's Bench Division, that a fraudulent rep- .^y'^y^Qo ^L." 
 resentation of the efi'ect of a deed can be relied on asR- 2 Q. B. 
 a defense in an action upon the deed, (a.) 
 
 (a) [The general rule in this country, as well as in England, is 
 that ignorance or mistake of law, or misrepresentation of the 
 159 
 
149 FORMATION OF CONTRACT. Part II. 
 
 The representation must be made with Jcnowledge 
 of its falsehood or in reckless disregard of its truth. 
 
 There must Unless this is so, a representation which is false gives 
 e&e&at ' "0 right of action to the party injured by it. Thus 
 falsehood ; where a Telegraph Company, by a mistake in the trans- 
 Reuter's Tel- ™i^^ion of a message, caused the plaintiff to ship to 
 ^graph Co. England large quantities of barley which were 
 
 p! D. 1. " *149 not required, and which, owing to a fall in the 
 market, resulted in a heavy loss, it was held 
 that the representation, not being false to the knowl- 
 edge of the Company, gave no right of action to the 
 plaintiff. "The general rule of law," said Beamwell, 
 L. J., "■ is clear that no action is maintainable for a 
 mere statement, although untrue, and although acted 
 upon to the damage of the person to whom it is made, 
 unless that statement is false to the knowledge of the 
 person making it." And this rule is to be qualified, 
 or rather supplemented by the words of Lord Oaikns 
 in the Reese River Mining Company v. Smith, " that 
 or disregard if persons take upon themselves to make assertions as 
 ° ^ ' to which they are ignorant, whether they are true or 
 
 legal effect of a contract, will not be ground for the avoidance of 
 the contract in the absence of fraud, or where a relation of con- 
 fidence exists between the parties. See Upton v. Tribilcock, 91 U. 
 S. 45 ; Fish V. Clelland, 33 111. 238 ; Glne v. JTewcastle M B. Go., 
 9 Ind. 488; Townsend v. Gowles, 81 Ala. 438; Stow v. Bennett, 5 
 Hill, (N. Y.) 303; Bussellv. BranJiam, SBVicM.ilad.) 377; People 
 V. Supervisors, etc., 37 Cal. 655 ; BanJc of U. 8. v. Daniel, 13 Pet. 
 (U. S. B.C.) 33; Shotmll^. Murray,! Johns. Chy. fN. Y)503; 
 Jones V. Watkins, 1 Stew. (Ala.) 81; Wheaton-v. Wlieaton. 9 Conn 
 90 ; Pinklmm v. Qreer, 3 N. H. 163 ; Hubbard v. Martin, 8 Yerg. 
 (Tenn.) 498; Sufas v. McConnell, 17 111. 212; Ohristy v. Sullioan, 
 50 Cal. 337. There are a few cases which recognize the distinciion 
 made in the text, of which the best considered seems to be Under- 
 wood V. Brockman, 4 Dana, (Ky.) 309. See, also , Fitzgerald v. Peck, 
 4 Lift. (Ky.) 125, and Lowndes v. GMslwlm, 2 McCord Chy. (8. 
 Car.) 455. Ignorance of a foreign law is considered as ignorance 
 of fact, and the laws of the various States are treated as foreign 
 to the citizens of other States. Havenr. Foster, 9 Pick. (Mass.) 113.] 
 160 
 
Chap. IV. § 3. FRAUD. 150 
 
 not, they must, in a civil point of view, be held as re- 
 sponsible as if they had asserted that wliich they knew 
 to be untrue." Therefore if a man makes a false rep- L. R. 4 R. L 
 resentation in ignorance of its falsehood he is not ^^ 
 liable as for fraud, unless in the case of such reckless - 
 ness of statement as would suggest mala fides. 
 
 The enunciation of the law on the subject by Beam- 
 WELL,'L. J., is so clear and decisive that it is not neces- 
 sary to go into a series of conflicting decisions between 
 the years 1832 and 1814, in some of which i^^as laid 
 down that a false statement made in good faith 
 amounted to " fraud in law." ^ It is now settled *150 
 that a statement made with iona fide belief in 
 its truth cannot be treated as fraudulent; but the reck- 
 less assertions spoken of by Lord Oaiens are on the 
 borderline, which it is hard to draw accurately between 
 truth and falsehood. There may well be occasions in 
 the course of business when a man is tempted to assert 
 
 ' The term. " fraud in law," or legal as opposed to moral fraud, 
 seems now to be finally condemned. It had a meaning so long as 
 some judges were disposed to hold, as Lord Dbnman held in 
 Evans v. Collins, that the author of a misstatement which caused 5 Q. B. 805. 
 loss to the plaintiflf, " though charged neither with fraud nor with 
 negligence, mitst have been guilty of some fault when he made a 
 false representation." But since that, decision was reversed by 
 the Court of Exchequer Chamber, on the express ground that a 5 Q. B. 830, 
 statement made honestly and in a full belief of its truth could ^.nd see Orm. 
 afford no cause of action, the term legal fraud has ceased to mean jS at' a-'uit'' 
 anything. Its final condemnation is to be found in the judgment ggo_ * 
 of Bkamwell, L. J., in the case of Weir v. Bell, in which, after l. r_ 3 Ex. 
 saying that to make a man liable for fraud, moral fraud must be 243. 
 proved against him, he adds, " I do not understand legal fraud. 
 To my mind it has no more meaning than legal heat or legal cold, 
 legal light or legal shade. There never can be a well founded 
 complaint of legal fraud or of anything else except where some 
 duty is shown, and correlative right and some violation of that 
 duty and right, and when these exist, it is much better that they 
 should be stated and acted on, than that recourse should be had 
 to a phrase illogical, and unmeaning, with the consequent uncer- 
 tainty." 
 
 161—11 
 
151 FORMATION OF CONTRACT. Part II. 
 
 for his own ends that which he wishes to be true, which 
 he does not know to be false, but which he strougly 
 suspects to have no foundation in fact. Such state- 
 cannot be regarded as honafide, and the maker of them 
 must be held responsible if they turn out to be false, 
 though the But there is another aspect of fraud in which the 
 not be^ fraud- fr^'Udulent intent is absent but the statement made is 
 ulent. known to be untrue. Such is the case of Polhill 
 
 Bee ante, p. ^^ Walter cited above. And the decision in that case 
 is practically confirmed by the judgment of Lord 
 L. R. vi. H. Caiens in the case of Peek v. Gurney. The plaintiff 
 in that case had purchased shares from an original 
 allottee on the faith of a prospectus issued by the di- 
 rectors of a Company, and he brought an action of 
 deceit against the directors. Lord Caiens, in his judg- 
 ment compared the statement in the prospectus with 
 the facts of the condition of the Company at the time 
 they were made, and came to the conclusion that the 
 statements were not justified by the facts of the case. 
 He then proceeded to point out that though these state- 
 ments were false, yet the directors might well have 
 thought, and probably did think, that the undertaking 
 would be a profitable one. " But," he says, " in a civil 
 proceeding of this kind all that your Lordships have 
 to examine is the question, "Was there or was there not 
 misrepresentation in point of fact? And if there was, 
 however innocent the motive may have been, your 
 Lordships will be obliged to arrive at the conse- 
 *151 quences which would properly result from what 
 was done." And the reason for such a rule of 
 law is obvious : if a man chooses to assert what he knows 
 or even suspects to be false, hoping or even believing 
 that all will turn out well, he cannot be permitted to 
 urge upon the injured party the excellence of the mo- 
 tives with which he did him a wrong, but must submit 
 162 
 
Chap. IV. § 8. FRAUD. 151 
 
 to the natural inferences and results which follow upon 
 his conduct, (a) 
 
 The representation must be made with the intention 
 that it should be acted upon hy the injured party. 
 
 "We may divide this proposition into two parts. 
 Firstly, the representation need not be made to the in- 
 jured party; but, secondly, it must be made with the 
 intention that he should act upon it. 
 
 In Langridge v. Levy, the defendant sold a gun to 3 M. & W. 
 
 the father of the plaintiff for the use of himself and 1^^' 
 
 The stSite- 
 
 his sons, representing that the gun had been made by ment need 
 
 not be made 
 totheiniured 
 (a) [The weight of authority in courts of equity seems to be party. 
 
 upon the side of permitting a party to rescind a contract which 
 he was induced to enter into by reason of false representations 
 of the opposite party, even if the falsehood was not known to the 
 party making the representations, and some courts go so far as 
 to hold that the good faith of the party who makes the false rep- 
 resentations will be no defense, as the mere fact that a party 
 made a contract under a mistake of fact, induced by the act or 
 word of the other party, will be ground for the revocation of the 
 contract, when the falsehood or mistake is discovered. See 
 Thompson v. Lee, 31 Ala. 393; Foords v. McOomb, 13 Bush. (Ky.) 
 723 ; Elder v. Allison, 45 Geo. 10 ; Converse v. Blumrich, 14 Mich, 
 109 ; Bankhead v. Alloway, 8 Cold. (Tenn.) 56 ; Wilcox v. Iowa 
 Wes. Univ., 83 Iowa, 367; Twitchell v. Bridge, 43 Vt. 68; Trengel 
 V. Miller, 37 Ind. 1 ; Allen v. Emi, 73 111. 104. But, see Tone v. 
 Wilson, 81 111. 539; » 
 
 In a number of States it is held that to maintain an action on the 
 case for deceit in making false representations, it is sufficient to 
 prove that a party, with intent to deceive, made representations as 
 true which he d id not know to be true, and which were, in fact, false. 
 See Odbot v. OhrisUe, 43 Vt. 131 ; Fisher v. Mullen, 103 Mass. 503 ; 
 Litchfield v. Hutchinson, 117 Mass. 195 ; Marsh v. Falker, 40 N. 
 T. 563; Indianapolis B. B. Co. v. Tyng, 63 N. T. 653; Bristol v. 
 Braidwood, 38 Mich. 191. But in other States it is held that the 
 knowledge of the falsity of the representations must be alleged 
 and proved. See Wilcox v. Iowa Wes. TTnii)., 33 Iowa, 367 ; Mer- 
 win V. Arbuclde, 81 111. 501 ; Terrell v. Bennett, 18 Geo. 404; Hop. 
 per V. lAsh, 1 Ind. 176 ; Holmes v. GlarTt, 10 Iowa, 433 ; Pettigrem 
 V. OMlis, 41 N. H. 95; Mortm v. Scull, 33 Ark. 389.] 
 163 
 
152 FORMATION OF CONTRACT. Part II. 
 
 Nock, and was "a good, safe and secure gun:" the 
 plaintiff used the gun; it exploded, and so injured his 
 hand that amputation became necessary. He sued the 
 defendant for the false representation, and the jury 
 found that the gun was unsafe, was not made by Nock, 
 and found generally for the plaintiff. It was urged, 
 in arrest of judgment, that the defendant could not be 
 liable to the plaintiff for a representation not made to 
 him ; but the Court of Exchequer held that, inasmuch 
 as the gun was sold to the father to be used by his 
 sons, and the false representation made in order to 
 effect the sale, and as " there was fraud and damage, 
 the result of that fraud, not from an act remote and 
 consequential, but one contemplated by the defendant 
 at the time as one of its results, the party guilty of the 
 fraud is responsible to the party injured." 
 
 But the limitation of this liability is marked by 
 2 J. «& H. 1. "Wood, V. C, in Barry v. Croskey. " Every man 
 must be held liable for the consequence of a 
 but must be *152 false representation made by him to another 
 the hitln-^ upon which a third person acts, and so acting 
 
 tion that he is injured or damnified, provided it appear that such 
 upon it.^'^ false representation was made with the intent that it 
 should he acted upon by such third person in the man- 
 ner that occasions the injury or loss. But to bring it 
 within the principle, the injury, I apprehend, must be 
 the immediate and not the remote consequence of the 
 L. R. vi. H. representation thus made." Therefore in Pcse^y. (Tm?"- 
 L 377. [See ney, a body of directors who would have been liable 
 Cook, lb to original allottees of shares for false statements con- 
 Ohio St. 67.] tained in the prospectus of the Company were held 
 not to be liable to persons who subsequently purchased 
 shares which came into the market, on the ground that 
 their intention to deceive could not be supposed to ex- 
 tend beyond the first applicants for shares. So soon 
 p. 410. as these had been allotted, " the prospectus had done 
 
 its work: it was exhausted." 
 164 
 
Chap. IV. § 3. FRAUD. I53 
 
 The representation must actually deceive. 
 
 This would seem to be clear enough, and there is peceitwhicb 
 J. , . - ° .._ does not de- 
 
 direct authority tor the proposition. In Horsfall v. ceive is not 
 
 Thomas, the plaintiff sued the defendant upon a bill \^^'c^ 
 of exchange accepted by him in payment for a cannon 
 which he had bought of the plaintiff. The cannon 
 had a defect which made it worthless, and the plain- 
 tiff had endeavored to conceal this defect by the inser- 
 tion of a metal plug into the weak spot in the gun. 
 The defendant never inspected the gun ; he accepted 
 it and upon using it for the purpose for which he 
 bouglit it the gun burst. It was held that the at- 
 tempted fraud having had no operation upon the mind 
 of the defendant did not exonerate him from paying 
 for the gun. " If the plug, which it was said was put 
 in to conceal the defect, had never been there, his po- '''%'^4^''?"tt 
 sition would have been the same; for, as he did not&C.'99.' 
 examine the gun or form any opinion as to whether it See dicta of 
 was sound, its condition did not affect him." This j., in Smith ' 
 judgment has been severely criticised by high r^^^^b"''*' 
 
 authority, but it is submitted that it is founded *153p.605. [Mor- 
 in reason. Deceit which does not affect con- "^Everett 9 
 
 duct can hardly create liabilities; and it would seem Paige, 168.] 
 as reasonable to defend an action brought for the price 
 of goods on the ground that the seller was a man of 
 immoral character, as to maintain that a contract was 
 voidable by reason of a deceit practised by one party 
 which in no way affected the judgment of the other. 
 
 We are now in a position to consider what is i^Ae Efifects of 
 effect of Fraud, such as we have described it to be/'^*^*^* 
 upon rights ex contractu. 
 
 "We may observe, in passing, that the person injured 
 by Fraud such as we have described has the action at 
 Common Law for deceit, and may recover by that 
 165 
 
154 FORMATION OF CONTRACT. Part II. 
 
 means such damage as he has sustained ; and there is 
 authority for saying that Courts of Equity will simi- 
 larly grant relief from misrepresentation or fraud by 
 Sllmv. compelling the defendant to make good the loss sus- 
 
 D^f' &!r'DD t*'°^^ '^y ^^^ plaintiff. These remedies are not confined 
 633, 534 to cases of fraud by one of two contracting parties upon 
 the other, but to any fraudulent statement which leads 
 the person to whom it is made to alter his position for 
 the worse. 
 
 But we are concerned with rights arising ex con- 
 tractu, and have to consider the particular remedies in 
 ■respect of affirmation or avoidance of the contract 
 which are open to the injured person when he disvov- 
 ers the fraud ; and the rules with regard to these mat- 
 ters may be shortly stated thus: 
 
 Eight to (1) He may affirm the contract and ask to have the 
 
 ^^'"^ representations by which he was induced to enter into 
 
 it made good so far as may be possible. The principles 
 upon which his claim to the exercise of this equitable 
 right depends are thus laid down in the case of I'uls- 
 
 17 Bear. 95. jford v. Richards; " The distinction between the cases 
 where the person deceived is at liberty to avoid 
 *154 the contract, of where the Court will affirm it, 
 giving him compensation only, are not very 
 clearly defined. The question usually rises on the spe- 
 cific performance of contract for the sale of property; 
 and the principle which I apprehend governs the cases, 
 although it is in practice of very difficult application, 
 
 ' and leads to refined distinction, is the following, viz., 
 
 that if the representation be one that can be made 
 good, the party to the contract shall be compelled, or 
 may be at liberty to do so; but if the representation 
 made be one which cannot be made good, the person 
 deceived shall be at liberty, if he please, to avoid the 
 contract." 
 
 But if the contract be affirmed, the affirmation brings 
 166 
 
Chap. IV. § 3. FRAUD. 155 
 
 with it all the liabilities of the contract, and the fraud 
 can no longer be set up a ground of relief. 
 
 (2) He may avoid the contract, and so may 
 
 (a) resist an action brought upon it at Com- Right to 
 monLaw; rescind, 
 
 (5) resist specific performance when sought 
 
 in Equity; 
 (e) obtain a judicial avoidance of the contract 
 
 in Equity, 
 
 (3) His right to avoid the contract is limited in cer- Limits of 
 
 tain ways. It is true that a man may keep the con- refdnd* 
 
 tract open until he is sued upon it, and that a plea of dough v. 
 
 fraud then set up is a sufficient rescission of the con-|;?°^°5L*?' 
 •■^ W. R. Co., L, 
 
 tract; but so long as he keeps it open he does so at his R. 7 Ex. 85. 
 
 own risk. His right to avoid it may be determined ^a^^^i"^ ^' 
 
 either by his accepting some benefit under the con- Denio, 69.] 
 
 tract, or otherwise acting upon it after he has become 
 
 aware of the fraud; or by the subject-matter of the 
 
 contract being so dealt with that the parties cannot be 
 
 reinstated in their former position; or by innocent 
 
 third parties acquiring an interest for value under the 
 
 contract. 
 
 A lapse of time, although it does not other- 
 wise affect his right to rescind, is evidence to *155 
 show that he intended to affirm, increasing in 
 strength as the rescission is delayed. 
 
 It must be borne in mind that the contract, until the 
 defrauded party has made his election, is voidable, and 
 not void. It is therefore possible for innocent third 
 parties to acquire rights under it of which they cannot 
 be deprived by a subsequent avoidance on the part of 
 the person defrauded. A sale of goods procured by 
 fraud cannot be rescinded so as to revest the property 
 in the vendor if in the meantime the goods have been 
 sold to a hona fide purchaser. If, for the reasons 
 167 
 
166 FORMATION OF CONTRACT. Part II. 
 
 described, the person upon whom the fraud has been 
 practiced has lost his right of avoidance, he must then 
 be left to his action ex delicto. 
 
 ' An exception to this rule occurs when the fraud goes 
 
 not to the quality of goods, or circumstances of the 
 sale but to the identity of the person contracted with. 
 
 See ante, p. The case Cundy v. Lindsay, cited above, shows that 
 where A is induced to send goods to B under the im- 
 pression that he is contracting with X the transaction 
 is absolutely void, and a hona fide purchaser from B , 
 acquires no property in the goods. 
 
 § 4. DuEESS. 
 
 A contract is voidable at the optioi of one of the 
 parties if he have entered into it under Duress. 
 In what it Duress consists in actual or threatened violence or 
 consis . imprisonment; the subject of it must be the contract- 
 ing party himself, or his wife, parent or child; and it 
 must be inflicted or threatened by the other party to 
 1 RoUe, Abr. the contract, or else by one acting with his knowledge 
 
 and for his advantage. 
 Must affect A contract entered into in order to relieve a third 
 promisor. person from duress is not voidable on that ground: 
 
 JtlllSCOniDB V« o ' 
 
 Standing, ' though a simple contra,ct, the consideration for 
 
 Cro. Jac. 187. *156 which was the discharge of a third party by the 
 7gf ^ ' ^' promisee from an illegal imprisonment, Would 
 
 be void for unreality of consideration. 
 Atleev.Back- Nor is a promise voidable for duress which is made 
 W^ess ^ ^^ consideration of tlie release of goods from deten- 
 and must be tion. If the detention is obviously wrongful the prom- 
 personal, jgg ^ould be void for want of consideration; if the 
 [See Spaids . ' . 
 
 V. Barrett, 57 legality of the detention was doubtful the promise 
 
 II . 289.] xnight be supported as a compromise. But money 
 paid for the release of goods from wrongful detention 
 
 See App. A. may be recovered back in virtue of the quasi-contractual 
 relation created by the receipt of money by one person 
 which rightfully belongs to another. 
 168 
 
Chap. IV. § 5. UNDUE INFLUENCE. 157 
 
 § 5. ITndtie Infltjenoe. 
 
 We have described the kind of Fraud which gives Undue influ- 
 rise to the action of deceit, and the effect of Fraud of ^'^°®- 
 that description upon the validity of a contract. But 
 it may well be that persons may be induced to enter 
 into contracts not by any specific statement of a fraud- 
 ulent character, but by reason of circumstances placing 
 it in the power of others to engage them in disadvan- 
 tageous bargains or promises. 
 
 Courts of Equity have always gone further than arises from a 
 Courts of Law in the interpretation which they have '^°^^^^ ?^ 
 given to the term Fraud. Looking beyond definite the circum- 
 false and fraudulent statements, they have inferred ^^g'^refa^yong 
 from a long course of conduct, from the peculiar rela- of the parties, 
 tions of the parties, or from the circumstances of one finite state- 
 of them, that an unfair advantage has been taken of ™ent 
 the promisor, and that his promise ought not in equity 
 to bind him. The taking of such an unfair advantage 
 is sometime called Fraud; but it is more convenient, 
 for the purpose of distinguishing it from the kind of 
 Fraud with which we have already dealt, to call it the 
 exercise of " Undue Influence." 
 
 The subject is one which can only be dealt with *1 57 
 in the most general way ; it depends upon the 
 view taken by a Court of Equity of the general tendency 
 of transactions, often extending over some time, and con- 
 sisting of many details, whether or no relief is granted. 
 It is significant of the nicety of the questions of fact 
 involved in cases of this description, that in a recent 
 judgment of the House of Lords on appeal from the O'Rorke v. 
 Irish Court of Chancery, Lord Hathbelet differed ?°U°|^f°'^®' 
 from Lords Blaokbuen and Gordon as to the pro- Ca. 814. 
 priety of granting relief, and the whole Court differed 
 from Lord Justice Christian as to the moral character 
 of the acts complained of. 
 169 
 
158 FOKMATION OF CONTRACT. Part II. 
 
 Definition It is well to try to obtain some sort of definition of 
 influence. Undue Influence before endeavoring to classify the sets 
 of circumstances whicli have been held to suggest its 
 existence. The best is to be found in the judgment of 
 L. R. 8 Ch. Lord Sblboene in The Earl of Aylesford v. Morris. 
 In speaking of the sort of cases, " which, according to 
 the language of Lord Haedwicke, raise from the cir- 
 cumstances and conditions of the parties contracting 
 a presumption of fra/ud" he says, "Fraud does not 
 here mean deceit or circumvention; it means aw im- 
 consaientious use of the power arising out of these cir- 
 cumstances and conditions; and when the relative 
 position of the parties is such as prima facie to raise 
 this presumption, the transaction cannot stand unless 
 the person claiming the benefit of it is able to repel 
 the presumption by contrary evidence, proving it to 
 have been, in point of fact, fair, just and reasonable." 
 
 In attempting to ascertain the principles upon which 
 this presumption is raised, we may note at starting: 
 Kekeijicli v. (a) that equity will not enforce a gratuitous prom- 
 D^M G^188.^^® even though it be under seal; 
 Hoghton v. (i) that the acceptance of a voluntary dona- 
 
 §°Sii'"°. 15 *268 tion throws upon the person who accepts it the 
 necessity of proving " that the transaction is 
 righteous ; " 
 Woodv. (c) that inadequacy of consideration is regarded as 
 
 dock^^^ ^^^ element in raising the presumption of Undue Influ- 
 ence or Fraud ; 
 Coles V. Tre- {d) but that mere inadequacy of consideration will 
 v'^^^sfe^ not (according to the strong tendency of judicial opin- 
 ion,) amount to proof of either. 
 
 We may therefore frame the question which we have 
 to discuss somewhat in this way: When a man appears 
 in a Court of Equity, either as plaintiff or defendant, 
 eeeking to escape the effect^ of a grant which he has 
 made gratuitously or a promise which he has given 
 170 
 
Chap. IV. § 5. UNDUE INFLUENCE. 169 
 
 upon a very inadequate consideration, what must he 
 show in addition to this in order to raise the presump- 
 tion that Undue Influence has been at work? 
 
 One class of circumstances calculated to raise this Certain rela- 
 presumption appears to be that the party benefited ^J^^f ^^' 
 stood in some such relation to him as to render him 
 peculiarly subject to influence. Parental or quasi- [Taylor v. 
 parental relations subsisting between promisor and jjo^_ ]'83 1 
 promisee will raise this presumption. In Archer v. 7 Beav. 560. 
 Hudson, a young lady who had just attained her ma- 
 jority became security for her uncle who was desirous 
 of overdrawing his account at his banker's. The Mas- parental; 
 ter of the Rolls adverting to the fact that the security 
 was obtained through the influence of a person stand- 
 ing in loco parentis from the object of his protection 
 and care, said, •' This is a transaction which under ordi- 
 nary circumstances this Court will not allow 
 
 This Court does not interfere to prevent an act even 
 of bounty between parent and child, but it will take 
 care (under the circumstances in which the parent and 
 child are placed before the emancipation of the child,) 
 that such child is placed in such a position as will enable 
 him to form an entirely free and unfettered judgment, 
 independent altogether of any sort of control." 
 
 And one may extend the term " parental re- *159 
 lations " to all cases in which one member of a 
 family exercises a substantial preponderance in the Harvey v. 
 family councils either from age or from character or^g"^"*^!^ 
 from circumstances. 
 
 The power which a spiritual adviser may acquire spiritual; 
 over persons subject to his influence is also looked H^^genin v. 
 upon as raising the presumption of mala fides; andvesey,'373. 
 to this may be added a number of relations which it 
 is somewhat hard to define, but which may generally 
 be termed " confidential." Solicitor or advocate and confidential, 
 client, guardian and ward, doctor and patient, trustee 
 and cestui que trust, are some of these. 
 171 
 
160 FORMATION OF CONTRACT. Part II. 
 
 Or influence, But the Courts have shown themselves unwilling to 
 quired may ^i'^^it o^* define the relations which they will regard as 
 raise pre- raising the presumption of influence, being more in- 
 sumptionof ,. , , i. Ii 1^.1 ? 
 
 unfair deal- ciiuea to reserve to themselves the power 01 enquiring 
 
 i°g- whether influence was in fact exercised, than to reject 
 
 Contracts'^ the possibility of such exercise because the parties did 
 2nd ed. 534- not stand in certain special relations. The principle 
 applies to every case where " influence is acquired and 
 abused, where confidence is reposed and betrayed." 
 7 H. L. 0. In Smith v. ^ay the defendant, who had barely 
 
 attained his majority, had incurred liabilities to the 
 plaintiiT by the contrivance of an older man who had 
 acquired a strong influence over him, and who pro- 
 fessed to assist him in a career of extravagance and 
 dissipation. It was held that influence of this nature, 
 though it certainly could not be called parental, spir- 
 itual, or fiduciary, entitled the plaintiff to the protec- 
 tion of the Court. 
 
 "It is not," said Lord Kingsdown, "the relation of 
 solicitor and client, or trustee and cestui que trust, 
 which constitutes the sole title to relief in these cases, 
 and which imposes upon those who obtain such secu- 
 rities as these the duty, before they obtain their con- 
 firmation, of making a free disclosure of every cir- 
 cumstance which it is important that the individual 
 who is called upon for the confirmation, should 
 *160 be apprised of. The principle applies to every 
 case where influence is acquired and abused, 
 where confidence is reposed and betrayed. The rela- 
 tions with which the Court of Chancery most ordina- 
 rily deals are those of trustee and cestui que trust, and 
 such like. It applies specially to those cases, for this 
 reason, and for this reason only, that from those rela- 
 tions the Court presumes confidence put and influence 
 exerted. Whereas in all other cases where those rela- 
 tions do not subsist, the confidence and the influence 
 must be proved extrinsically/ but where they are 
 172 
 
Chap. IV. § 5. UNDUE INFLUENCE. 161 
 
 proved extrinsically, the rules of reason and common 
 
 sense and the technical rules of a Court of Equity are 
 
 just as applicable in the one case as the other." 7 H. L. C. 
 
 779. 
 
 The doctrine has been extended to a class of cases Or personal 
 from which the element of personal influence is alto- may be'^ab- 
 gether absent. It remains to consider the character- sent, 
 istics of these cases 
 
 Tliey all appear to possess these common features: as in catch- 
 the promisor encumbers himself with heavy liabilities ^'^Sl'8'''gaina. 
 
 for the salie of a small, or, at any rate, an inadequate 
 present gain; and the promisee takes advantage either 
 of the improvidence and moral weakness, or else of the 
 ignorance and unprotected situation, of the promisor. 
 
 In former times the law attempted to guard in two Attempts to 
 ways against advantage being taken of persons in such ^^^^^j^g®.*^"^ 
 a situation. Usury Laws provided that a promise to by statute; 
 pay interest beyond a certain rate per cent, should be 
 void, and thus prevented extortionate loans of money, by judicial 
 And the Court of Chancery adopted a rule that the decisions, 
 purchaser of any reversionary interest might always 
 be called upon to show that he had given full value for 
 his bargain, so that he might not take advantage of a 
 man's present necessities to deprive him of his future 
 estates without reasonable return. 
 
 The Usury Laws are repealed, and the 31 Yict. c. 4 
 abrogates the rule of law as to reversionary 
 interests in all cases of purchases made hona *161 
 fide and without fraud or unfair dealing. But 
 if a man takes advantage of the present poverty of an Modern rule 
 expectant heir to extort from him an exorbitant and Pg°[^°'^ j^^j^, 
 ruinous rate of interest, he is liable to have the bar- lq,.^ Ayles- 
 gain set aside, and to be remitted to his claim for so ^?''*\j';^g''' 
 much money as he has actually advanced, with the ch. 484. 
 legal rate of interest upon it. 
 
 And, on similar grounds, a man who bargains on 
 terms of inequality as to age or knowledge with the 
 173 
 
162 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 person in 
 present dis- 
 tress, 
 
 Ol S 
 
 promisee is considered to be entitled to the protection 
 of the Court of Chancery. " In ordinary cases each 
 party to a bargain must take care of his own interest^ 
 and it will not be presumed that undue advantage or 
 contrivance has been resorted to on either side; but in 
 the case of the ' expectant heir,' or of persons under 
 or ignorant pressure without adequate protection, and in the case of 
 dealings with uneducated, ignorant persons, the burden 
 of showing the fairness of the transaction is thrown 
 the person who seeks to obtain the benefit of the 
 tract." 
 The Court will look not merely to the acts of the 
 parties, but to the reasonableness of the transaction 
 under all the circumstances of the case; and if it 
 appear that one has taken advantage of the unpro- 
 tected condition of the other to drive a hard bargain, 
 the transaction will not be allowed to rstand. 
 
 The rules respecting the right to rescind contracts 
 
 entered into under Undue Influence follow, so far as 
 
 equity is concerned, the rules which apply to Fraud, 
 
 but with one noticeable qualification. In the case of 
 
 Fraud, so soon as the Fraud is discovered the parties 
 
 are placed on equal terms, and an affirmation of the 
 
 contract binds the party who was originally defrauded. 
 
 But in the case of Undue Influence it is not a partic-^ 
 
 ular statement, but a combination of circumstances 
 
 which constitutes the vitiating element in the contract; 
 
 and unless it is clear that the will of the injured 
 
 *162 party is relieved from the dominant influence 
 
 under which it has acted, or that the imperfect 
 
 knowledge with which he entered into the contract is 
 
 Payne L. R. supplemented by the fullest assistance and information, 
 
 8 Ch. 881i an afiirmation will not be allowed to bind him. 
 
 174 
 
 and ill- 
 advised. 
 Per Lord 
 Hatherley i 
 O'Rorke v. 
 Bolingbroki 
 L. K. 3 Ap, 
 Ca. at p. 8! 
 [Seldon v. 
 Myers, 30 
 How. 506.] 
 Beynon v. 
 Cook, L. R, 
 10 Oil. 389. 
 
 Limits of 
 right to 
 rescind. 
 
Chap. V. § 1. LEGALITY OF OBJECT. 163 
 
 CHAPTEE Y. *163 
 
 LEGALITY OF OBJECT. 
 
 There is one more element in the formation of con- 
 tract whicli remains to be considered — the object of 
 the parties. Certain limitations are imposed by law 
 upon the freedom of contract. Certain objects of con- 
 tract are forbidden or discouraged by law; and though 
 all other requisites for the formation of a contract be 
 complied with, yet if these objects are in contempla- 
 tion of the parties when they enter into their agree- 
 ment, the law will not enforce it. 
 
 Two matters of inquiry present themselves in respect Two Bub- 
 of this subject. The first is the nature and classifica- J^?*^ °^ ^ 
 tion of the objects regarded by law as illegal. The (i) the 
 second is the effect of the presence of such objects ?2j*th|'effects 
 upon the contracts in which they appear. of illegality. 
 
 § 1. Natuee of Illegality in Conteaot. 
 
 The modes in which the law expresses its disapproval i. What is 
 of certain objects of contract may roughly be described illegality? 
 as follows: 
 
 • (i) Prohibition by Statute. 
 
 (ii) Prohibition by express rules of Common Law. 
 (iii) Prohibition through the interpretation by the 
 Courts of what is called " the policy of the 
 law." 
 So that illegal agreements may be (1) agreements in 
 breach of Statute, (2) agreements in breach of express 
 rules of Common Law, (3) agreements contrary to 
 public policy. 
 176 
 
164 
 
 FORMATION OF CONTRACT. 
 
 Part, 11. 
 
 *164: These last two are not always very easy to 
 distinguish, for frequent decisions upon certain 
 matters upon public policy have caused tolerably 
 definite and express rules regarding them to grow up; 
 and these are in eifect rules of Common Law as ex- 
 press, or nearly so, as those with which we shall deal 
 under class 2. 
 
 Illegality 
 from statu- 
 tory prohi- 
 bitioa. 
 
 Illegality 
 from impo- 
 sition of a 
 penalty, 
 
 how ascer- 
 tained. 
 
 Brown v. 
 Duncan, 10 
 B. & C. 43. 
 
 Is penalty 
 imposed for 
 revenue 
 purposes f 
 
 Per Parke, 
 B., in Cope v. 
 Rowlands, 3 
 M. & W. 149. 
 
 Is it con- 
 tinuous ? 
 Smith V. 
 Mawhood, 14 
 M. i& W. 463. 
 [See Pang- 
 born V. West- 
 lake, 80 
 Iowa, 646.] 
 
 (i) Contracts which are made in Ireaoh of Statute. 
 
 A statute may render an agreement illegal in one of 
 two ways — by express prohibition, or by penalty. It 
 may say, in so many words, that contracts of a certain 
 sort are illegal, or void, or both; and where it thus 
 expressly avoids a contract or makes it illegal, no doubt 
 can arise as to the intention of the Legislature. 
 
 But where the statute does no more than impose a 
 penalty upon the cari'ying out of the objects of a con- 
 tract, a question may arise whether or no the penalty 
 amounts to a prohibition. Two marks may assist as 
 to determine the intention of the Legislature. The 
 first of these is the object of the penalty. If it be " a 
 protection to the public as well as the revenue," if it 
 be designed to further objects of public policy in rela- 
 tion to some trade or business, then a penalty amounts, 
 without doubt, to a prohibition. If it be solely to 
 facilitate and secure the collection of the revenue, then 
 it is possible that the contract, though penalized, is 
 not prohibited. The soundness of this distinction has 
 however been called in question, and a more important 
 mark is to be found in the continuity of the penalty. 
 
 Where a statute forbids the carrying on of a trade 
 except under certain conditions, on pain of incurring 
 a specified penalty once for all, it has been held that 
 contracts made in breach of such provisions are not 
 vitiated. But where the penalty is recurrent upon 
 every breach of the provisions of the statute, then 
 there can be no doubt that the objects of the contract 
 176 
 
Chap. V. § 1. LEGALITY OF OBJECT. 165 
 
 are intended to be regarded as illegal, and the *165 
 contract itself void. 
 
 The law upon this point may then be conveniently Result of 
 summarized thus. "Where a penalty is inflicted by''"®^^' 
 statute xipon the carrying on of a trade or business in 
 a particular manner, we may assume 'prima facie that 
 contracts made in breach of such statutory provisions 
 are illegal and void. But if it appear that the penalty 
 is imposed, not for the benefit of the public in general, 
 but for the security of the revenue, it is possible that 
 the contract was only intended to be penalized and not 
 prohibited. And if, in addition to this, it appear that 
 the penalty is imposed once for all upon the offending 
 trader, and not upon each successive contract continu- 
 ously, it is highly prohable, if not certain, that con- 
 tracts so made are not intended to be vitiated. 
 
 It is not necessary or desirable to discuss here in Objects of 
 
 any detail the various statutes by which certain con- stamtorjr 
 i , , -T -, 1 T -1 rr,, , , . prohibition. 
 
 tracts are prohibited or penahzed. They relate (1) to 
 
 the security of the revenue; (2) to the protection of 
 the public in dealing with certain articles of commerce, 
 (3) or in dealing with certain classes of traders; (4) 
 to the regulation of the conduct of certain kinds of 
 business. An excellent summary of statutes of this 
 nature is to be found in the work of Mr. Pollock, and Pollock, 
 it is not proposed to deal further with them here. PP- S4S-34S. 
 
 There is however one class of contracts which, from 
 its peculiar character, and from the various forms in 
 which it has been dealt with by the Legislature, it is 
 worth while to examine more particularly. These con- 
 tracts are Wagering Contracts. The subject has been Wagering 
 somewhat confused by the use of the word wager as a °°'^''*''*'^' 
 term of reproach, so that some contracts not permitted 
 by law have been called wagers, as opposed to others 
 which, while precisely similar in their nature, comply 
 with certain special conditions and so enable Courts 
 of Law to enforce them. 
 177—12 
 
166 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 What is a 
 wager t 
 
 Marine In- 
 surance is 
 a wager, 
 
 *166 A wager is a promise to pay money, or trans- 
 fer property upon the determination or ascer- 
 tainment of an uncertain event; the consideration for 
 such a promise is either a present payment or transfer 
 by the other partj', or a promise to pay or transfer 
 upon the event determining in a particular way. 
 
 The event may he uncertain because it has not hap- 
 pened, or it may be uncertain because it is not ascer- 
 tained, at any rate to the knowledge of the parties. 
 Thus a wager may be made upon the length of St. 
 Paul's, or upon the result of au election which has 
 already happened, though the parties do not know in 
 whose favor it has gone. The uncertainty then resides 
 in the minds of the parties, and the subject of the wager 
 may be said to be rather the accuracy of each man's 
 judgment than the determination of a particular event. 
 
 It is obvious that a wager may be a purely gambling 
 or sporting transaction, or it may be directed to com- 
 mercial objects. A man who bets against his horse 
 winning the Derby is precisely in the same position 
 as a man who bets against the safety of his own cargo. 
 Tet we should not hesitate to call the one a wager, 
 while the other is called a contract of marine insur- 
 ance. A has a horse likely to win the Derby, and 
 therefore a prospect of a large return for money laid 
 out in rearing and training the horse, in stakes and 
 in bets; he wishes to secure that he shall in no 
 event be a loser, and he agrees with X that, in consid- 
 eration of X promising him £4,000 if his horse loses, 
 he promises X £7,000 if his horse wins. 
 
 The same is his position as owner of a cargo; here 
 too he has a prospect of large profits on money ex- 
 pended upon a cargo of silk, here too he wishes in no 
 event to be a loser, and he agrees with X, an under- 
 writer, that in consideration of his paying X £ — , X 
 promises to pay him £ — if his cargo is lost by certain 
 specified perils. 
 178 
 
Chap. v. § 1. LEGALITY OF OBJECT. 167 
 
 The law forbids A to make such a contract *167 though there 
 unless he has what is called "an insurable in- be 'insurable 
 
 terest " in the cargo, and contracts in breach of this 
 rule have been called mere wagers, while those which 
 conform to it have been called contracts of indemnity. 
 But such a distinction is misleading. It is not that 
 one is and the other is not a wager: a bet is not the 
 less a bet because it is a hedging bet; it is the fact that 
 one wagering contract is and the other is not permit- 
 ted iy law which makes the distinction between the 
 two. Apart from this there is no real difference in the 
 nature of the contracts. 
 
 A life insurance is in like manner a wager. Let us Life instir. 
 compare it with an undoubted wager of a similar kind. ^"^Mr* * 
 A is about to commence liis innings in a cricket match, 
 and he agrees with X that if X will promise to give 
 him £1 at the end of his innings, he will pay X a shil- 
 ling for every run he gets. A may be said to insure 
 his innings as a man insures his life; for the ordinary 
 contract of life insurance consists in this, that A 
 agrees with X that if X will promise to pay a fixed sum 
 on the happening of an event which must happen 
 sooner or later, A will pay to X so much for every 
 year that elapses until the event happens. In each of 
 these cases A sooner or later becomes entitled to a sum 
 larger than any of the individual sums which he agrees 
 to pay. On the other hand, he may have paid so many 
 of these sums before the event takes place that he is 
 ultimately a loser by the transaction, (a) 
 
 Let us now turn to the history of the law respecting History of 
 
 wagering contracts. LtasT"'' 
 
 (a) [In this country a person must have an insurable interest in "^'^Sfi^^' 
 the property insured or the policy will be invalid. Busch v. Ins. 
 Go., 38 Ind. 64; Sawyer v. Mayhew, 51 Me 398; Fowler v. New 
 York Ins. Co., 36 N. Y. 433; Sweeney v. FranJclin Ins. Co., 30 Pa. 
 Stat. 337. And in life insurance the insurer must have interest ia 
 the life of the life assured. Bewn v. Gonn. Mut. Ins. Co., 33 
 Conn. 344.] 
 1T9 
 
172 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 Jackson v. 
 Colegrave 
 (1694), Car- 
 thew, p. 33e 
 
 Gilbert v. 
 Sykes (1813), 
 16 East, 150. 
 
 Per Bayley, 
 J., in Gilbert 
 Y, Sykes. 
 
 Life insur- 
 ance differs 
 from other 
 contracts of 
 insurance. 
 
 At Common Law wagers are enforceable, and, until 
 the latter part of tlie last century, were only discour- 
 aged by the Courts by the imposition of some trifling 
 difficulties of pleading. Gradually however the Courts, 
 finding that frivolous and sometimes indecent matters 
 were brought before them for decision, estab- 
 *168 lished the rule that a wager was not enforceable 
 if it led to indecent evidence, or was calculated 
 to injure or pain a third person; and in some cases 
 general notions of public policy were introduced to 
 the effect that any wager which tempted a man to 
 offend against the law was illegal. Strange, and some- 
 times ludicrous, results followed from these efforts of 
 the Courts to discourage the litigation of wagers. A 
 bet upon the duration of the life of JSTapoleon was held 
 to be unenforceable, as tending, on the one side, to 
 weaken the patriotism of an Englishman, on the other, 
 to encourage the idea of the assassination of a foreign 
 ruler, and so to provoke retaliation upon the person of 
 our own sovereign. But it is evident that the sub- 
 stantial motive which pressed upon the judges was 
 "the inconvenience of countenancing idle wagers in 
 courts of justice," the feeling that " it would be a good 
 rule to postpone the trial of every action upon idle 
 wagers until the Court had nothing else to attend 
 
 to." {a) 
 *172 A policy of life insurance differs in an im- 
 portant respect from a policy of marine or fire 
 insurance. "Policies of insurance against fire or ma- 
 rine risks are contracts to recoup the loss which par- 
 ties may sustain from particular causes. When such 
 a loss is made good aliunde, the companies are not 
 liable for a loss which has not occurred; but in a life 
 policy there is no such provision. TAe policy never 
 refers to the reason for effecting it. It is simply a 
 
 (a) [The general tendency of the statutes of the various States 
 is to make all wagers void.] 
 180 
 
Chap. V. § 1. LEGALITY OF OBJECT. 173 
 
 contract that in consideration of a certain annnal pay- 
 ment, the company will pay at a future time a fixed Per Wood, 
 sum, calculated by them with reference to the value of London ^-'^" 
 the premiums which are to be paid, in order to pur- disputable 
 1,^.1 ^ A 4. J) Life Policy 
 
 chase the postponed payment." Co., l K. & 
 
 Thus, though in a life policy the insured is required ''^- 239. 
 to have an interest at starting, that interest is nothing 
 as between him and the company who are the insurers. 
 " The policy never refers to the reason for effecting it." 
 The insurer promises to pay a large sum on the hap- 
 pening of a given event, in consideration of the insured 
 paying lesser sums at stated intervals until the happen- 
 ing of the event. Each takes his risk of ultimate loss, 
 and the statutory requirement of interest in the insured 
 has nothing to do with the contract. And so if a cred- 
 itor effects an insurance on his debtor's life, and after- 
 wards gets his debt paid, yet still continues to pay the 
 insurance premiums, the fact that the debt has been 
 paid is no answer to the claim which he may make 
 against the Company. This rule has been established 
 in Daliy v. The London Life Assurance Company, 15 0. B S65. 
 overruling Godsall v. Baldero, in which Lord Ellen- j^^gi^inj" 
 BOEOUGH had held that a contract of life insurance, like Co., 6 Gray, 
 one of marine or fire insurance, was a contract of in- g jj'Jgf ijg^ 
 demnity, and that it could not be enforced if the loss 
 insured against had not in fact occurred. 
 
 (ii) Contracts which are made in hreach of defi- *173 
 nlte rules of Common Law. 
 
 It is hardly necessary to state that an agreement to Agreement 
 commit a crime or indictable offense would be made*°^?™™'* 
 on an illegal consideration : but it is diincult to find an 
 instance which is not at the same time a breach of 
 some statutory prohibition. 
 
 Again, a contract with an alien enemy is illegal to trade 
 and void, and is stated, in the leading case upon the^'^igg^*^ 
 subject, to be void, not on any ground of public policy 
 
 181 
 
174 FORMATION OF CONTRACT. Part II. 
 
 Potts V. Bell, but because "it was a principle of the Common Law 
 
 r(^"i^o^d^ that trading with an enemy without the king's license 
 
 waddington, was illegal in British subjects." 
 
 Jo ns.57.] rpj^g commonest form of contracts in breach of rules 
 to commit - ^ _ . . ^ . . 
 
 a civil 01 Common Law is an agreement to commit a civil 
 
 ■"'rong. wrong. Thus in Allen v. Rescous an agreement in 
 
 [See Davis v. which one of the parties undertook to beat a man was 
 Arteelyc, 3 ]jeld void. An agreement which involves the publica- 
 Car.) 170.] tion 01 a libel is in like manner void. Agreements to 
 Clay V.Yates, commit fraud upon a third party have not unfrequently 
 ■ come before the Courts. Thus in the case of Malla- 
 16 Q. B. 689. lieu v. Hodgson, a debtor making a composition with 
 Clark ^36 ^ ^ ^^^ creditors of 6s. ^d. in the pound, entered into a 
 N. Y. 128.] separate contract with the plaintiff to pay him a part 
 of his debt in full. This was held to be a fraud on the 
 other creditors, each of whom had promised to forego 
 a portion of his debt in consideration of the others fore- 
 going theirs in a like proportion. " Where a creditor 
 in fraud of the agreement to accept the composition 
 stipulates for a preference to himself, his stipulation is 
 altogether void." 
 
 Thus too where the plaintiff purchased from the 
 defendants an exclusive right to use a particular scien- 
 tific process, and it turned out that they had no such 
 exclusive right as they professed to sell, it was held 
 that the plaintiff could not recover, because upon his 
 Begbie v. own showing, it appeared that he had purchased 
 
 S^wa^e Co *^'^^ *^^^ right in order to float a company from which 
 L. R. 10 ' he expected to make a profit by defrauding the 
 
 ^•^•^^^- shareholders, {a) 
 
 Fraud and It is worth noticing here a diflSculty sometimes intro- 
 
 illegality. (Jaced into this part of the law of contract arising from 
 
 a confusion of illegality and fraud. Fraud is a civil 
 
 wrong, and an agreement to commit a fraud is an 
 
 (o) [Plaintiff had knowledge of the worthlessness of the patent 
 and having paid his money to get it to use for a fraudulent pur- 
 pose it was held he could not recover it back.] 
 182 
 
Chap. V. § 1. LEGALITY OF OBJECT. I75 
 
 agreement to do an illegal act. But fraad as a civil 
 wrong must be kept apart from fraud as a vitiating 
 element in contract. Fraud may vitiate a contract for 
 a reason other than the fact that it constitutes a civil 
 wrong: as between the parties to a contract the fraud 
 of one prevents the consent of the other from beino- 
 genuine. If the fraud is discovered and the discovery 
 acted upon in time, the contract can be avoided, not 
 because the fraud is an illegality, but because the con- 
 sent of the defrauded party was unreal : if the con- 
 tract has been executed, the defrauded party must rely 
 upon his remedy in tort and can sue for damages for 
 the wrong he has sustained. But as between the par- 
 ties to a contract, while still executory, the fraud of 
 one affects it because the consent of the other is not 
 genuine. We may say then that if A is induced to 
 enter into a contract with X by the fraud of X the 
 contract is voidable, because A's consent is not gen- 
 ,uine. If A and X make a contract the object of which 
 is to defrad M the contract is void, because A and X 
 have agreed to do what is illegal. The subject would As ia Smith 
 be ranch obscured if we allowed ourselves to confuse 2° ^°°.''"°*^ 
 reality of consent with legality of object. 
 
 (iii) Contracts which are made in breach of the policy 
 * of the law. 
 
 The policy of the law, or public policy, is a phrase PubHo 
 of frequent occurrence and somewliat attractive sound, P°^'*'y' 
 but it is very easily capable of introducing an unsat- 
 isfactory vagueness into the law. It would be difiScult General ap. 
 to find its earliest application ; most likely agreements Plication, 
 which tended to promote litigation, or to restrain 
 trade or marriage were the first to elicit the *175 
 principle that the Courts would look to the 
 interests of the public in giving eSicacy to contracts. 
 Wagers, while they continued to be legal, were doubt- 
 less a frequent provocative of judicial ingenuity on 
 183 
 
176 FORMATION OF CONTRACT. Part II. 
 
 , tliis point, as is suiBeiently shown by the case of Gil- 
 16 East. 150. tert v. Sykes quoted above: but it cannot be said with 
 confidence that the doctrine of public policy originated 
 in the endeavor to elude their binding force. What- 
 ever may have been the origin of the doctrine, it was 
 applied very frequently, and not always with the hap- 
 piest results, during the latter part of the last and the 
 Egerton v. commencement of the present century. Modern de- 
 ^w 4 H^° cisions, however, while maintaining the duty of the 
 L. C. 1. Courts to consider the public advantage, have tended 
 
 to limit the sphere within which this duty has been 
 exercised, and the modern view of the subject is per- 
 Printing Co. haps best expressed by Jessel, M. E,. : " Ton have this 
 L It°l9^°°' paramount public policy to consider, that you are not 
 Eq. 463. lightly to interfere with the freedom of contract." 
 
 There are some subjects, however, which have fallen 
 under tolerably definite rules making agreements of 
 certain kinds illegal, not as breaking express rules, but 
 as infringing established principles or tendencies of 
 the law. "We will endeavor to arrange them under a 
 few convenient heads. 
 
 Agreements tending to injure the public service. 
 
 The public has an interest in the proper perform- 
 ance of their duty by public servants, and Courts of 
 Bale of Law hold contracts to be illegal which have for their 
 
 offices. [Car- Q^jg^); ^jjg g^le of public offices or the assignment of 
 Page, 6N. the salaries of such ofBces. Tliis principle was carried 
 Tr^ A r fifii ^° ^^^ ^^^^ ^^ Card v. Hope a deed was held to be void 
 by which the owners of the majority of shares in a 
 ship sold a portion of them, a part of tlie considera- 
 tion for the sale being a covenant that the purchaser 
 should have the command of the ship at sea, and that 
 in the event of his death the sellers would appoint on 
 the nomination of his executors. The jndg- 
 *176 'ment proceeded not merely on the ground that 
 the ship was in the service of the East India 
 184 
 
Chap. V. § 1. LEGALITY OF OBJECT. 176 
 
 Company, which had been held equivalent to being in Blaohford v. 
 the public service, but on the ground that the public ^ g^'g ^ 
 had a right to the exercise by the owners of any ship 
 of their best judgment in selecting officers for it. 
 
 This is perhaps an extreme case. But there can be 
 no doubt that the sale of public offices is contrary to 
 the rules of Common Law, as it is also subject to stat- 5& 6 Ed. VI. 
 utory prohibition on the ground that the public has a9g^QgQ jj-t 
 right to some better test of the capacity of its servants o. 136. 
 than the fact that they possess the means of purchasing 
 their offices, {a) 
 
 On a somewhat different principle the same rule ap- Assignment 
 plies to the assignment of salaries or pensions. " It salaries, 
 is fit," said Lord Abingee, in Foster v. Wells, " that 8 M. & W. 
 the public servants should retain the means of a decent y^Hooker'"^ 
 subsistence and not be exposed to the temptations of 19 Barb. 435.] 
 poverty." And in the same case, Paeke, B., lays or pensions, 
 down the limits within whicli a pension is assignable. 
 " When a pension is granted, not exclusively for past 
 services, but as a consideration for some continuing 
 duty or service, then, although the amount of it may 
 be influenced by the length of service which the party 
 has already performed, it is against the policy of the 
 law that it should be assignable." 
 
 Agreements which tend to pervert the course ofjtistice. 
 
 These most commonly appear in the form of agree- stifling pros- 
 ments to stifle prosecutions, and we can hardly do ®'^''''^°'^^' 
 
 (a) [It is also held that an agreement to pay a public officer for 
 his influence in securing a government contract is illegal. Tool 
 Co. V. Norris, 3 Wall. (U. S. S. C.) 45. And the same principle is 
 applied to an agreement by an employer to induce his employee 
 to enter into a contract in favor of the promisor. Harrington v. 
 Victoria Oraining Dock Co., L. R. B, Q. B. D. 549. 
 
 It has also been held when a sheriif had agreed to appoint a 
 person his deputy, and the person had sold his farm and put him- 
 self to great expense on the faith of the agreement, that it could 
 not be enforced. Eager v. Oatlin, Sup. Ct. New York, 1 Weekly 
 Jurist, 607.] 
 185 
 
177 FORMATION OF CONTRACT. Part II. 
 
 better than adopt Lord Westbuet's statement of the 
 Williams v. law in one of the latest cases on the subject. " Tou 
 1 ^. II' 320. shall not make a trade of a felony. If you are aware 
 [Chandler V. that a crime has been committed you shall not convert 
 39 Ga. 89.] that crime into a source of profit or benefit to your- 
 except where self." Bat the rule thus laid down must be taken sub- 
 criminalrem- j^^* ^'^ ^^^^ qualification, that where civil and criminal 
 edies co- remedies co-exist, a compromise of a prosecution is 
 admissible. " We shall probably be safe in lay- 
 *177 ing it down that the law will permit a compro- 
 mise of all ofibnses though made the subject 
 of a criminal prosecution, for which off'enses the in- 
 PerLord jured party might sue and recover damages in an 
 J.^KeLp°v. action. It is often the only manner in which he can 
 Leeman, 6 Q. obtain redress. But, if the ofiense is of a public na- 
 see 9 Q. B. ture, no agreement can be valid that is founded on the 
 395- consideration of stifiing a prosecution for it." 
 
 Reference to Again, agreements to refer matters in dispute to ar- 
 arbitration. ijitj-ation are regarded as attempts to " oust the juris- 
 diction of the Courts," and are not necessarily enforced. 
 When a contract contains a condition which provides 
 that disputes arising out of it shall be referred to arbi- 
 tration, the validity of such a condition depends upon 
 rather a fine distinction. Where the amount of dam- 
 Scott V, age sustained by a breach of the contract is to beascer- 
 Avery 5 tained by specified arbitration before any right of 
 ' action arises, the condition is good; but where all mat- 
 Edwards V. ters in dispute, of whatever sort, are to be referred to 
 Aberayron g^j.^j ti-ators and to them alone, such a condition is illegal. 
 Society, 1 The one imposes a condition precedent to a right of 
 %r^y v' ^^^" action accruing, the other endeavors to prevent any 
 
 Wilson, 4 rieht of action accruing at all. 
 Watta, 39.] * ° 
 
 Contracts which tend to encourage litigation. 
 
 The rules respecting maintenance and champerty 
 are really based upon this consideration of public pol- 
 icy. It is not thought well that one should buy an 
 186 
 
Cliap. V. § 1. LEGALITY OF OBJECT. 178 
 
 interest in another's quarrel, or should incite to litiga- 
 tion by offers of assistance for which he expects to be 
 paid. 
 
 Maintenance has been defined to be " when a man Com. Dig. 
 maintains a suit or quarrel to the disturbance or ^°^" ^' P* ^^• 
 hindrance of right." 
 
 Cliamj)erty is where "he who maintains an- *178 
 other is to have by agreement part of the land, 
 or debt, in suit." 
 
 Maintenance, as above described, hardly appears in Main- 
 
 the reports of recent times. The mere maintaining*®''^'^''®* 
 
 or assisting another person in a suit would not now 
 
 avoid a contract entered into for such a purpose unless 
 
 there were something vexatious in the maintenance. 
 
 " The law of maintenance," says Lord Abingee in Fin- \\ u. & 'w. 
 
 don V. Parker. " as I understand it upon the modern ^?^- [Tliall- 
 
 ' , ^ himer v. 
 
 constructions, is coniined to cases where a man im- Briukerhoff, 
 
 properly and for the purpose of stirring up litigation ^°w-°*"-J 
 
 and strife encourages others either to bring actions or 
 
 to make defenses which they have no right to make." 
 
 But champerty, or the maintenance of a quarrel for Champerty. 
 
 a share of the proceed, has been repeatedly declared to 
 
 avoid an agreement made in contemplation of it. Its 
 
 most obvious form, a promise to supply evidence or 
 
 conduct a suit in consideration of receiving a portion 
 
 of the money or property be recovered, was held illegal 
 
 in Stanley v. Jones and Sprye v. Porter. Its less 7 sing. 369. 
 
 obvious form, a purchase, out and out, of a right to^^^*^-^^' 
 
 sue has been placed on the footing of an assignment Coyne, 10 
 
 of a chose in action, invalid at Common Law, but en- fr^^^^\ 339. 
 
 forceable in Equity under certain circumstances. The Thompson v. 
 
 enforceability of such an agreement would depend i\^il.^ but 
 
 upon the purchase including any substantial interest see Duke v. 
 
 ^ ^ , ■,. . if L • 1 1 i Harper, 3 
 
 beyond a mere right to litigate. If property is bought mo. App. 1.] 
 
 to which a right to sue attaches, that fact will not Prosser v. 
 
 avoid the contract, but an agreement to purchase a 1^^*0.499! 
 
 bare right would not be sustained. 
 
 187 
 
179 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 Ayerst v. 
 Jenkins, 16 
 Eq. 275. 
 [Walker v. 
 Uregory, 
 36 Ala. 180.] 
 Gray v. 
 Matliias, 
 5 Ve3. 286. 
 Beaumont v. 
 Reeve, 
 8 Q. B. 483. 
 Peai'ce v. 
 Brooks, L. R. 
 1 Exch. 213. 
 [See Com- 
 monwealth V. 
 Harrington, 
 3 Pick. 29.] 
 
 Restraint of 
 marriage, 
 
 Lowe V. 
 Pears, 4 
 Burr. 2225. 
 
 Hartley v. 
 
 Rice, 
 
 10 East, 32. 
 
 or of freedom 
 of clioice. 
 Arundel v. 
 Trevillian, 
 Rep. in Cli. 
 47. [Craw- 
 ford V. Rus- 
 sell, 62 
 Barb. 92.] 
 Agreements 
 for separa- 
 tion. 
 
 Agreements which a/re contrary to good morals. 
 
 The only aspect of immorality with which Courts 
 of law have dealt is sexual immorality; and the law 
 upon this point may be shortly stated. 
 
 A promise made in consideration of future illicit co- 
 habitation is given upon an immoral consideration, and 
 
 is void whether made by parol or under seal. 
 *179 A promise made in consideration of past 
 illicit cohabitation is not taken to be made on 
 an illegal consideration, but is a mere gratuitous 
 promise, binding if made under seal, void if made by 
 parol. 
 
 And an agreement innocent in itself will be vitiated 
 if intended to further an immoral purpose and known 
 by both parties to be so intended. 
 
 Agreements which affect the freedom or security of 
 'marriage. 
 
 Such agreements, in so far as they restrain the free- 
 dom of marriage, are discouraged on political grounds 
 as injurious to the increase of the population and the 
 moral welfare of the citizen. So a promise under seal 
 to marry no one but the promisee on penalty of pay- 
 ing her £1,000 was held void, as there was no promise 
 of marriage on either side and the agreement was 
 purely restrictive. So too a wager in which one man 
 bet another that he would not marry within a certain 
 time was held to be void, as giving to one of the par- 
 ties a pecuniary interest in his celibacy. 
 
 "What are called marriage brocage contracts, or prom- 
 ises made upon consideration of the procuring or 
 bringing about a marriage, are held illegal on various 
 social grounds. 
 
 Agreements providing for separation of husband 
 and wife are valid if made in prospect of an immediate 
 separation. But if such agreements provide for a fos- 
 188 
 
Chap. Y. § 2. LEQALITT OF OBJECT. 180 
 
 Bible separation in the future tliey are illegal, whetlier 
 made before or after marriage, because they give in-Cartwrishtv. 
 dueements to the parties not to perform " duties in the 3 ^'^'^ o 
 fulfillment of which society has an interest." 983. 
 
 Agreements in restraint of trade. 
 
 It is against the .policy of the law that a man should Eestraint of 
 deprive himself of the means of exercising his skill *^ 
 and earning his living. The trade of the country and 
 the individual himself may alike be sufferers. 
 The law upon this subject would fill a consid- *180 
 erable space, but it is enough for our present 
 purposes to give the simplest and most general rules 
 to which it can be reduced. 
 
 (1) Consideration is required to support a promise Eules re- 
 in restraint of trade, even though the promise be madeS*'''^'°g i*- 
 under seal. Mallan v. May. Indeed it was one time 11 M. & W. 
 thought that the Courts would inquire into the ade-°"^" 
 quacy, as well as the existence of the consideration, 6 Ad. & E. 
 but this has been settled not to be so since the case ^^?;, [pf =» 
 of Jlitchcoch V. Coker (1837). 8 Mass. 233.] 
 
 (2) The restraint may be unlimited as to time, but 
 must not be unlimited as to space. A man may prom- 
 ise that he will never carry on a certain trade within Ward v. 
 ten miles of London and the promise would be good ; &^^"'56i. " 
 but if he promised that he would not carry on the [Lawrence 
 trade anywhere for five years it would not be uphelfl. 10 Barb. 653.] 
 
 (3) The restriction as to space must be reasonable in 
 the judgment of the Court. Beyond this no definite 
 rule as to the extent of restriction permissible can be 
 laid down. The cases since 1854 turning upon this 
 
 point have been excellently summarized by Mr. Pollock. Pollock, 315. 
 189 
 
181 FORMATION OF CONTEACT. Part II. 
 
 § 2. Effect of Illegality upon CoiifTEACTS in which 
 
 IT EXISTS. 
 
 What is the We now come to the second branch of the subject 
 illegality. ^^ Illegality in Contract, its effect upon the validity 
 of a contract. The effect of illegality upon the valid- 
 ity of contracts in which it appears must of necessity 
 vary according to circumstances. It may affect the 
 whole, or only a part of a contract, and the legal and 
 illegal parts may or may not be capable of separation. 
 The direct object of a contract may be the doing of an 
 illegal act, or the direct object may be innocent though 
 the contract is designed to further an illegal purpose. 
 The parties may both be ignorant, or both be aware 
 of the illegality which remotely or directly affects 
 *181 the transaction, or one may be innocent of the 
 objects intended by the other. Securities may 
 be given for money due upon or money advanced for 
 an illegal purpose, and the validity of such securities 
 depends upon various considerations. The most that 
 can be done here to elucidate a very complex and 
 lengthy breach of the law is to lay down some rules 
 which will answer roughly, but it is hoped not inac- 
 carately, the questions thus suggested. 
 
 When the contract is divisible. 
 
 Legal parts (i) "Where the contract consists of several parts, so 
 to be° evered ^^^^ ^^^'"^ ^^^ several promises based on several cou- 
 if possible siderations, the fact that one or more of these consid- 
 roin 1 ega . gj-g^^JQug jg illegal will not avoid all the promises if those 
 whicli were made upon legal considerations are sever- 
 able from the others. This is an old rule of law ex- 
 Pigot's Case, plicitly laid down in Cote's Eeports, " That if some of 
 11° 27^^' *^'® Covenants of an Indenture or of the conditions 
 endorsed upon a bond are against law, and some good 
 and lawful, that in this case the covenants or condi- 
 190 
 
Chap. V. § 3. LEGALITY OF OBJECT. 182 
 
 tions which are against law are void ah initio, and tho 
 others stand good." 
 
 The rule applies whether the illegality exist by Stat- 
 ute or at Common Law, though at one time the judges 
 held differently, and fearing lest statutes might be 
 eluded, laid it down that " the S(tatute is like a tyrant, 
 where he comes he makes all void, but the common law 
 is like a nursing father, makes all void that part where 
 the fault is and preserves the rest." This distinction 
 has however been held in several modern cases to be 
 without foundation. 
 
 The most frequent illustrations of the general propo- 
 sition are to be found in cases where a corporation 
 has entered into a contract some parts of which are 
 ultra vires, and so, in a sense, unlawful. In such cases 
 it has always been held that "where you cannot 
 sever the illegal from the legal part of a cov- *182 Per Willes, 
 enant the contract is altogether Void, but where j^'^" uirL ' 
 
 you can sever them, whether the illegality be created combe Rail- 
 by statute or common law, you may reject the bad part y^p_ [gee 
 
 and retain the good."i Robinson v. 
 
 ° Green, d 
 
 Met. 159.] 
 When the contract is indivisible. 
 
 (ii) Where there is one promise made upon several 
 considerations, some of which are bad and some good, 
 the promise is wholly void, for it is impossible to say 
 whether the legal or illegal portion of the considera- 
 tion most affected the mind of the promisor and in- 
 duced his promise. An old case which may be quoted 
 in its entirety will illustrate this proposition. 
 
 The grounds of action were stated to be, " That Featherstone 
 
 • V. Hutcliin- 
 
 ' These cases may serve as an illustration of the proposition ^j?^ ^qq 
 before us, but it must be borne in mind that Lord Cairns, in The t tj 7 h L 
 AsKbwry Carriage Go. v. Biche, has pointed out that contracts of 553, 
 this nature are invalidated not so much by the illegality of their 
 object as by the incapacity of the corporation to bind itself by 
 agreement for purposes beyond its statutory powers. 
 191 
 
183 FORMATION OF CONTRACT. Part II. 
 
 whereas the plaintiff had taken the body of one H in 
 execution at the suit of J S by virtue of a warrant 
 directed to him as special bailiff, the defendant in 
 consideration, he would permit him to go at large, and 
 of two shillings to the defendant paid, promised to pay 
 the plaintiff all the money in which H was condemned: 
 and upon assum.psit it was found for the plaintiff: and 
 it was moved in arrest of judgment, that the consider- 
 tion is not good, being contrary to the statutes of 23 
 H. 6, and that a promise and obligation was all one. 
 And though it be joined with another consideration 
 of two shillings, yet being void against the statute in 
 part it is void in all." 
 
 Where the direct ohjeot is unlawful hut the mtention 
 innocent. 
 
 Direct object (iii) "Where the direct object of the parties is to do 
 the c^nu-act ' an illegal act tlie contract is void. It does not 
 
 is void, *183 matter whether or no they knew that their object 
 was illegal, " ignorance of the law excuseth 
 none." 
 unless illegal But the knowledge of the parties may become im- 
 sentlncHhe' po^tant if the contract admits of being performed, and 
 contract can is in fact performed in a legal manner, though the per- 
 perfofmed. formance unknown to the parties would have directly 
 L. R. 8 Q.B. resulted in a breach of the law. In Waugh v. Morris 
 Phllbricls ^^^ defendant chartered the plaintiff's ship to take a 
 7 N. H. 836.] cargo of hay from Trouville to London. The cargo 
 was to be taken from the ship alongside, and was in- 
 tended to be landed at a wharf in Deptford Creek. 
 Under 32 & Unknown to the parties an Order in Council had for- 
 s^Ts'^^Con^^' ^3"^*^^" tl^® landing of French hay. The defendant, on 
 tagious Dis- learning this, took the cargo from alongside the ship 
 mafsVAct'" without landing it, and exported it. The vessel was 
 1800. delayed beyond the lay-days and the plaintiff sued for 
 
 the delay. The defendant set up the illegal intention 
 as avoiding the contract, but without success. "We 
 192 
 
Chap. V. § 3. LEGALITY OF OBJECT. 184 
 
 agree, said Blackbuen, J., in delivering the judgment 
 of the Court, "that wliore a contract is to do a thing 
 ■which cannot be performed witiiout a violation of the 
 law, it is void whether the parties knew the law or not. 
 But we think that in order to avoid a contract which 
 can be legally performed, on the ground that there was 
 an intention to perform it in an illegal manner, it is 
 necessary to show that there was the wicked intention 
 to break the law; and if this be so, the knowledge of 
 what the law is becomes of great importance." 
 
 "Where the direct object is innocent but the intention 
 unlawful. 
 
 (iv) "Where the object of a contract is innocent in Illegality of 
 itself, but is designed to further an illegal purpose, the°^'J'^jf|"'°'.*^f 
 contract is vo,id if both parties knew of the illegal innocent 
 purpose at the time tlie contract was entered into. contract 
 
 There is nothing illegal in a loan of money or a sup- 
 ply of goods; but if these are known to be 
 intended to further an illegal purpose, neither *184: 
 the money lent nor the goods supplied can form 
 the subject of an action. The whole transaction ig 
 void. The law upon this subject rests mainly upon 
 three cases which will furnish convenient illustrations 
 of the rule. The first of these is Cannan v. ^/'ycesB. &Ald. 
 (1819), in which the assignees of a bankrupt sued for^'^'^* 
 the proceeds of goods which they asserted to be a part 
 of the bankrupt's property. The goods had been as- 
 signed by the bankrupt to the defendant in part satis- 
 faction of a bond which was to secure to the defendant 
 the payment of money lent by him to the bankrupt to 
 meet losses arising from stock-jobbing transactions 
 which were illegal under 7 Geo. II. c. 8. It was held 
 that the lending of the money, the bond, and the as- 
 signments under the bond (which were made after 
 bankruptcy,) were all alike void, and that the plain- 
 tiffs could recover the proceeds of the goods. There 
 193—13 
 
•^ ' 
 
 185 FORMATION OF CONTRACT. Part II. 
 
 was no doubt that the defendant knew the illegal 
 object to which his money was to be applied; and 
 Abbott, 0. J., in giving judgment, said, " Then as the 
 statute has absolutely prohibited the payment of 
 money for compounding differences, it is impossible 
 to say that the making snch payment is not an unlaw- 
 ful act: if it be unlawful in one man to pay, how can 
 it be lawful for another to furnish him with the means 
 of payment? It will be recollected that / am speak- 
 ing of a case wherein the means were furnished with 
 a full knowledge of the ohjeot to which they were to 
 ie applied, and for the express purpose of accom- 
 plishing that object.'" 
 
 M. &W.435. The second case is McKinnell v. Bohinson (1888). 
 
 Kss's^ciish Here an action was brought to recover a sum of 
 
 448] money lent, as the plaintiff knew, for the purpose of 
 
 playing at " Hazard," a game which, apart from 9 Anne, 
 c. 14, is prohibited by 12 Geo. 11. c. 28. It was held 
 that the plaintiff could not recover, on the principle 
 "that the repayment of money lent for the express 
 purpose of accomplishing an illegal object cannot be 
 enforced." 
 
 L-B. lExch.*185 The third case is Pea/rce v. ^wofo (1866). 
 
 813. The action was brought by coach builders to re- 
 
 cover payment for the hire of a brougham engaged by a 
 prostitute. Evidence was given that the plaintiffs knew 
 the character of the defendant, and from this, and from 
 the nature of the article supplied, the jury found that 
 the plaintiffs knew that it was supplied for .the further- 
 ance of an immoral purpose. Upon this it was held that 
 
 p. S30. the -plaintiffs could not recover. " My difficulty was," 
 
 said Bramwell, B., " whether, though the defendant 
 hired the brougham for that purpose, it could be said 
 that the plaintiffs let it for the same purpose. In one 
 sense it was not for the same purpose. If a man were 
 to ask for duelling pistols, and to say, ' I think I shall 
 fight a duel to-morrow,' might not the seller answer, 
 194 
 
Chap. v. § 2. LEGALITT OF OBJECT. 186 
 
 ' I do not want to know your purpose; I have nothing 
 to do with it; that is your business; mine is to sell 
 the pistols, and I look only to the profit of trade.' 
 No doubt the act would be immoral, but I have felt a 
 doubt wliether it would be illegal; aud I should feel 
 it still but that tlie authority of Gannan v. Bryce and 
 McKlnnell v. Robinson concludes the matter." These 
 words exactly indicate the distinction between this 
 class of contracts and those described in (iii). It is 
 not necessary the parties to & corAvz.Q'i prima facie in- 
 nocent should bind themselves to adapt it to an illegal 
 purpose in order to avoid it. It is enough that the [See Spur- 
 one party knows the unlawful intent of the other, and |;^^iQ g^* 
 knows that the contract is intended to be applied to Ohio, 444.] 
 carry it out. {a) 
 
 But a loan of money, designed to satisfy debts aris- Distinction 
 ing from a past illegal transaction, is distinguishable ^gJYs%'as1: 
 
 from the cases iust cited. In Oannan v. Bryce the stat- 3 B. & Aid. 
 
 ... 179 
 ute had forbidden, not only stock-jobbing transactions 
 
 of a certain sort, but advances of money to pay debts 7 Geo. II. c. 8. 
 
 arising from them ; in the other two cases the illegality 
 
 was still in contemplation when the contract was made. 
 
 And so in Pyke' case a loan of money intended L. R. 8 Ch. 
 
 to pay lost bets was held to be recoverable from *186 ArmstmrPg v. 
 
 the estate of the bankrupt borrower. " The mis- Toler, 11 
 
 chief had been completed," said Jessel, M. R., " the ille- ^*" '•' 
 
 gal act had been carried out, before the money was 
 
 lent. The money was advanced to enable the borrower 
 
 {a) [There is a direct conflict of authority in this country upon 
 the question whether a person can recover the price of goods sold 
 or work done in nniaking an article, when he knew that the article 
 was to be used for an illegal purpose, but did nothing to assist in 
 that act. See Socquemoe v. Allomy, 33 Tex. 401, and Oxford Iron Co. 
 V. Spradetng, which hold that the contract cannot be enforced, aud 
 Michael v. Bacon, 49 Mo. 474; Gordon v. Barger, 4 Heisk. (Tenn.) 
 688; Walker v. Jcff'ries.'Lo Miss. 160; Armfield v. Tole,^ Ired. 259; 
 Kreiss v. Seligman, 8 Barb. (N. Y) 429, which hold the opposite 
 view.] 
 
 195 
 
'~^"y 
 
 186 FORMATION OF CONTRACT. Part IL 
 
 to pay the bets which he had already made and lost, 
 ■which seems to me an entirely different thing from a 
 loan of money to enable a man to make a bet." 
 
 Where the unlawful intention is on one side only. 
 
 (v) "Where one of two parties intends a contract, 
 
 Innocent innocent in itself, to further an illegal purpose, and 
 
 avoid "^^^ ^^^ other enters into the contract in ignorance of his 
 
 contract. intention, the innocent party may, while the contract 
 
 is still executory, avoid it at his option. In Cowcm v. 
 
 L. R. 3 Exch. J/^Y(5lO'M?•r^, the plaintiff sued the defendant for breach 
 
 280 
 
 ' of an agreement to let him a set of rooms. It ap- 
 
 peared that the plaintiff intended to use the rooms for 
 the purpose of delivering lectures which were unlaw- 
 ful, as being blasphemous within the meaning of 9 & 
 10 Will. III., c. 32. The defendant was not aware of 
 the use to which the plaintiff meant to put the rooms 
 at the time the agreement was made; and he subse- 
 quently refused to allow the plaintiff to use them, 
 though he did not at first allege the character of the 
 
 an(1 see Clay lectures as the ground of his refusal. It was held 
 
 &1{''78 ^ ^ ^^'^'' ^® ^^® entitled to avoid the contract, and was not 
 bound to give his reasons, {a) 
 
 Securities for money due on illegal transactions. 
 
 Sccuriticsfor (vi) Where a promise has been given to secure the 
 '""nie Ir payment of money due or about to become due upon 
 U-ansauLion. an illegal transaction, the validity of such a promise 
 is based upon two considerations: 
 
 a. Whetlier the transaction is illegal or void. 
 
 h. Whether or no the promise is made under seal. 
 
 Where the promise is given in the form of a nego- 
 
 {a) [When the plainliff was ignorant of the evil design of the 
 defendant in making the contract, the wrong doer, wlien sued, 
 cannot set up tlie defense that the contract was entered into by 
 liimself for an illegal purpose. Quirk v. Thomai, 6 Mich. 70.] 
 196 
 
Chap. V. § 3. LEGALITY OF OBJECT. 187 
 
 tiable instrument, & further question arises as to 
 its value in the hands of third parties, and this is *187 
 affected by the answer to the first of the con- 
 siderations above stated. 
 
 There is a difference, not very easy to analyze but 
 of considerable practical importance, between cases in 
 which Common Law or Statute make an object illegal, 
 and cases in which they make a transaction void. The 
 distinction has been thus stated: " A thing may be un- Per Bram- 
 lawful in the sense tliat tlie law will not aid it, and yet Q^^^nv"* 
 that the law will not immediately punish it; " but this Milbourn, 
 dictum does not exactly describe the difference between 330. ' ^° ' 
 the eases, inasmuch as it does not cover all the cases Distinction 
 in which the difference exists. A bet upon a cricket f'^j'iJ^®!^, 
 matcli, for example, is not punishable, but it is more and 'void.' 
 than merely void, as has already been explained. 
 
 The effect of the difference is this, that in the one The ' taint of 
 case the promise is regarded as given upon an illegal il^^S^l^'y- 
 consideration, in the other upon no consideration at 
 all; in the one case everything connected with the Per Cunam 
 transaction is "tainted with illegality," in the other g|.j(j'^gg®g^* 
 collateral contracts arising out of the avoided transac- E. & B. 643. 
 tion are under certain circumstances supported. 
 
 In cases where the transaction is illegal, a promise Effect of 
 under seal given to secure the payment of money due?^°'[jjg*^2^ 
 upon it is void. This was decided in the case ofss. &B.648. 
 Fisher v. Bridges by the Court of Exchequer Cham- 
 ber, reversing the judgment of the Court of Qneen'a 
 Bench. The pkintiff sued the defendant upon a cov- 
 enant to pay a sura of money. The defense was, that 
 the covenant was security for the payment of a sum 
 of money due upon a purchase of land agreed to be 
 sold for a purpose declared to be illegal by Statute. 13 Geo. IL 
 The Court of Queen's Bench held that the defendant °- ^^• 
 was bound, inasmuch as there was nothing unlawful in 
 a simple promise to pay money. The Court of Ex- 
 197 
 
188 FORMATION OF CONTRACT. Part II. 
 
 chequer Chamber held that the illegality when proved 
 
 tainted the subsequent promise, and that this 
 
 *188 was not a simple promise to pay money, but that 
 
 it " sprang from and was the creature of an 
 
 illegal transaction." 
 
 If a promise under seal would be void under these 
 
 circumstances, it is obvious that a parol contract, even 
 
 if based in part upon some new consideration, would 
 
 be void also. 
 
 Negotiable In the case of negotiable instruments we have to 
 
 howaflfected ^^^^i^^®^ ^0* only the effect of the illegality as between 
 
 by contract the original parties to the contract, but its effect upon 
 
 oemg illegal, subsequent holders of the instrument. In these cases, 
 
 as we have already noticed, the ordinary presumption 
 
 in favor of the holder of such an instrument does not 
 
 exist. Upon proof of the illegality whicli tainted the 
 
 instrument in its inception, the holder is liable to have 
 
 to show that he is a holder for value; that is to say, 
 
 that he gave consideration for the bill: and even then, 
 
 if he can be proved to have been aware of the illegality, 
 
 he will be disentitled to recover. 
 
 Eflfect of Where the consideration is not illegal but the trans- , 
 
 contract action is void, a promise given to pay money due upon 
 ' such a transaction is based upon no consideration at 
 all. If made under seal it is binding, if by parol it is 
 void. A good illustration of this rule is to be found 
 in the case of contracts from which some formality 
 necessary to the validity of the contract has been 
 omitted, A covenant to pay money due upon a con- 
 o. on promise tract of this nature is binding. Thus where a corpor- 
 under seal; ^tion borrowed money upon mortgage without having 
 first obtained the approbation of the Lords of the 
 S&eWill. Treasury, they did what the Municipal Corporations 
 lY. c. 76. ^(.(j declared to be " unlawful; " but having received 
 the mortgage money and entered into a covenant to re- 
 pay it, they were held bound by their covenant: " Al- 
 198 
 
Chap. V. § 3. LEGALITY OP OBJECT. 189 
 
 though the mortgage may be invalid, that is no reason Payne v. 
 why the corporation should not be liable upon their B,!^^°n°| h. 
 covenant to repay the mortgage money." So too in & N. 579. 
 the case of promises of payment made in consideration b. on parol 
 of past illicit cohabitation, such promises are contracts; 
 
 invalid if made by parol, not on the ground that *189 Beaumont v. 
 the consideration is illegal, but because there is B°483' ^ ^ 
 
 in fact no consideration at all. But a bond given upon Ayerstv. 
 such past consideration would be binding. B 16E^' 275 
 
 Negotiable instruments given upon such considera- «. on nego. 
 tions are, as between the original parties to them, void, '''^^'^ '°- 
 for the reason just stated, that they are simple con- 
 tracts in which the promise is made in consideration 
 of a transaction which raises no legal obligation, and 
 therefore cannot support it. But where the negotiable 
 instrument has passed into the hands of a subsequent 
 holder, such a holder is not afteeted by the fact that as 
 between the original parties the promise is voluntary. 
 In Fitch V. Jones, a promissory note was given by the 5 E. & B. 245. 
 defendant to X in payment of a bet made on the 
 amount of hop duty in the year 1854. X indorsed 
 the note to the plaintiff. The main question for the 
 Court was, " whether the plaintiff was bound on proof 
 of tlie origin of the note to show tliat he had given 
 consideration for the note, or whether it was for the 
 defendant to show that he had given none." 
 
 " I am of opinion," said Lord Campbell, " that the 
 note did not take its inception in illegality within the 
 meaning of the rule. The note was given to secure 
 payment of a wagering contract, which, even before 
 Stat. 8 & 9 Yict. c. 109, the law would not enforce:^ 
 but it was not illegal: there is no penalty attached to 
 such a wager; it is not in violation of any statute, nor 
 
 ■ It had been held in a previous case, Atherfold v. Beard, that a 3 T. R. 610. 
 wager on the amount of hop duty was against public policy; be- 
 cause the evidence at the trial would expose to the world the 
 amount of the public revenue. 
 199 
 
190 FORMATION OF CONTRACT. Part II. 
 
 of the Common Law, but is simply void, so that the 
 consideration was not an illegal consideration, but 
 equivalent in law to no consideration at all." {a) 
 
 Can a man he relieved from a contract which he knew 
 to he unlawful? 
 
 Illegality (vii) It remains to consider whether a party to au 
 
 the'tiine! no illegal contract can under any circumstances 
 
 ground for «190 make it a cause of action. "We may lay down 
 
 &VOldfLD.C6 
 
 Beebie v ' without hesitation the rule that a party to such 
 
 Phosphate a contract cannot come into a Court of Law and ask to 
 
 L rTu) q!' h^^^ ^lis illegal objects carried out; nor can he set up 
 
 B. 499. a case in which he must necessarily disclose an illegal 
 
 purpose as the groundwork of his claim. The general 
 
 rule is well expressed in the maxim, " m pari delicto 
 
 potior est condition defedentisP 
 
 But there are some exceptional cases in which a man 
 
 may be relieved of an illegal contract into which he 
 
 has entered, cases to which the maxim just quoted does 
 
 not apply. These would appear to group themselves 
 
 unless plain- into two classes: (1) cases in which the plaintiff has 
 
 i^^L"?!'!.!" been induced to enter into the contract under the in- 
 
 or a locus fluence of fraud or strong pressure; (2) cases in which 
 
 poenitentiae ^j^g contract being unperformed, money paid or ffoods 
 remams. or j j r o 
 
 (a) [The decided weight of American authorities is to the effect 
 that when a note is m<ide void by statute it cannot be collected by 
 an innocent holder for value who purchased before maturity. 
 See Farria v. King, 1 Stew. (Ala.) 355 ; Aurora v. West, 23 Ind. 88; 
 Biryleyr. Tdber, 5 Mass. 386; Bridge y. Hubbard, 15 Mass. 96; 
 Unger v. Boas, 13 Pa. St. 601 ; 3Iordeoai v. DawMiis, 9 Rich. (8. C.) 
 L. 263; Andrews v. Hoxie, 5 Texas, 171; Graves v. Clark, 21 Li. 
 Ann. 567, But, see Foe v. Justices, Dudley (Ga.) contra. But 
 when the note is not made void by statute it can be collected by 
 a bona fide holder even if the consideration is illegal. Thome v. 
 Tortz, 4 Cal. 321 ; Meadow v. Bird, 33 Ga. 346 ; Johnson v. Dickson, 
 1 Blackf. (Ind.) 256; Enox v. White, 30 La. Ann. 336; Wentworth 
 V. Blaisdell, 17 N. Y. 275; Bochwood v. Charles, 3 Hill, (N. y.)499. 
 But see, contra, Brisbane v. Lestorjette, 1 Bay. (S. C.) 113 j LuoM 
 V. Waul, 13 Sm. & M. (Tenn.) 157.] 
 
 200 ^ 
 
Chap. V. §3. LEGALITY OF OBJECT. 191 
 
 delivered in furtherance of it have been held recov- 
 erable. 
 
 The first class of cases are best illustrated by the 
 decisions in Reynell v. Sprye and Aihinson v. Denby. 1 D. M. & G. 
 In the first case the plaintiff had been induced, by the^^ . ^ 
 fraud of the defendant, to make a conveyance of prop- 778, 
 erty in pursuance of an agreement which was illegal 
 on the ground of champerty. He sought to get the 
 conveyance set aside in Chancery. It was urged tliat 
 the parties were in pari delicto, and that therefore hi3 
 suit must fail ; but the Court being satisfied that he had 
 been induced to enter into the agreement by the fraud of 
 the defendant, considered that he was entitled to relief. 
 " Where the parties to a contract against public policy, 
 or illegal, are not in pari delicto (and they are not 
 always so), and where public policy is considered as 1 D. M. G. 
 advanced by allowing either, or at least the moreP^^^p' 
 
 excusable of the two, to sue for relief against theTalmadscU 
 
 ■ ■ NY 163 1 
 
 transaction, relief is given him." ' " '■' 
 
 The case of Atkinson v. Denby is a peculiar 6H.&N.778. 
 
 one, and appears almost to indicate an approach *191 7 H-& N. 934. 
 
 on the part of the Common Law Courts to the 
 
 equitable doctrine of Undue Influence. The plaintiff, 
 
 a debtor, offered his creditors a composition of 5s. in 
 
 the pound. The defendant was one of the creditors, 
 
 and his acceptance or rejection of the offer was known 
 
 to be certain to determine the decision of several other 
 
 creditors. He refused to assent to the composition 
 
 unless the plaintiff would make him an additional 
 
 payment of £50, in fraud of the other creditors. This 
 
 was done: the composition arrangement was carried 
 
 out, and the plaintiff sued to recover the £50, on the 
 
 ground that it was a payment made by him under 
 
 oppression and in fraud of his creditors. It was held 
 
 that he could recover; and the Court of Exchequer 
 
 Chamber, in afiirming the judgment of the Court of 
 
 Exchequer, said, " It is said that both parties are m, 
 
 201 
 
192 
 
 FORMATION OF CONTRACT. 
 
 Part II. 
 
 1 L. R. & Q. 
 B. D. 300. 
 While the 
 illegal pur- 
 pose is 
 executory 
 there is a 
 locus poeni- 
 tentiae. 
 
 1 L. R., Q. B, 
 D. 189. 
 
 Varney v. 
 Hickman, 5 
 0. B. 271. 
 Martin v. 
 Hewson, 10 
 Ex.737. 
 
 pari delicto. It is true that both are in delicto, be- 
 cause the act is a fraud upon the other creditors; but 
 it is not par delictum, because the one has power to 
 dictate, the other no alternative hut to submit." 
 
 Tlie second exception to the general rule may best 
 be stated in the words of Mellish, L. J., in Taylor v. 
 Bowers. " If money is paid or goods delivered for an 
 illegal purpose, the person who had so paid the money 
 or delivered the goods may recover them back before 
 the illegal purpose is carried out, bnt if he waits till the 
 illegal purpose is carried out, or if he seeks to en- 
 force the illegal transaction, in either case can he main- 
 tain an action ; the law will not allow that to be done." 
 The case was one of a fictitious assignment of goods 
 to a third party with a view to defraud the creditors. 
 The goods were then assigned to the defendant, and 
 the plaintiff, the debtor, demanded them back. Noth- 
 ing had been done towards carrying out the fraudulent 
 intention of the parties, and the plaintiff was held 
 entitled to recover. The rule seems to come to this, 
 that until an illegal purpose is carried out there is a 
 
 locus poenitentiae for one who has contributed 
 *192 goods or money for such a purpose. The case 
 
 of Hampden v. Walsh is another illustration of 
 the same rule. The plaintiff and another person each 
 deposited £500 with the defendant to abide the decis- 
 ion of two scientific men as to the shape of the earth; 
 the decision went against the plaintiff, but before the 
 money was paid over he claimed it back, and it was 
 held that he was entitled to recover it. He had repu- 
 diated the wager before the money had left the liands 
 of the stakeholder, and the Court held, on the author- 
 ity of several cases, that the 8 & 9 Vict. c. 109. s. 18 
 did not deprive a party to a contract, thereby rendered 
 void, from repudiating the contract and recovering the 
 money advanced before it had been paid. 
 
 202 
 
Part III. OPERATION OP CONTRACT. 193 
 
 PART III. *i93 
 
 THE OPERATION OP CONTRACT. 
 
 "We have now concluded the subject of the Forma- 
 tion of Contract. We have noted the various elements 
 which must needs co-exist in a A'alid contract, and we 
 have further noted the effect which the absence of one 
 of such elements produces upon the validity of a con- 
 tract; making it void, as in the case of a mistake, or 
 voidable, as in the case of fraud, or simply unenforce- 
 able, as in the case of the neglect of certain statutory 39 Car. IL 
 forms. 0.3,8.4 
 
 We come now to deal with the effects of a valid 
 contract when formed. We have to regard the con- 
 tract as possessing the needed elements of agreement 
 and obligation, and we have to ask, To whom does the 
 obligation extend? Who have rights and liabilities 
 under a contract? And then this further question 
 arises, Can these rights and liabilities be assigned or 
 pass to others than the original parties to the contract? 
 
 We may lay down two general rules, which we will 
 proceed to explain and illustrate. 
 
 (1) No one but the parties to a contract can be bound 
 by it or entitled under it. 
 
 (2) Under certain circumstances the rights and lia- 
 bilities created by a contract may pass to a person or 
 persons other than the original parties to it, and this 
 may take place, either (a) by act of the parties, (5) by 
 rules of law operatins' in certain events. 
 
 203 
 
^ 
 
 194 OPEKATION OF CONTRACT. Part III. 
 
 *194: These two rules seem at first to look like one 
 rule subject to certain exceptions, but tliey are 
 in fact distinct. The obligation binds only the parties 
 to the agreement; but these parties, having created the 
 obligation which binds them to one another, may in 
 certain ways and under certain circumstances be re- 
 placed by others who assume their rights or liabilities 
 under the contract. The rules may perhaps be made 
 clearer by an illustration: 
 
 (1) If John Doe make a contract with Eichard Eoe, 
 that contract cannot impose liabilities or confer rights 
 upon John Styles. 
 
 (2) But there are circumstances under which John 
 Doe or Eichard Eoe may substitute John Styles for 
 himself as a party to the contract, and there are cir- 
 cumstauces under which, given certain relations be- 
 tween John Doe and John Styles, the latter would 
 acquire the rights and liabilities of the former by 
 operation of law. 
 
 204: 
 
Chap. I. CONTRACTUAL OBLiaATION. I95 
 
 CHAPTER I. «195 
 
 THE LIMnS OF THE CONTEACTgAL OBLIGATION. 
 
 "We may safely lay down the general rule that a per- Contract can. 
 son, who is not a party to a contract, cannot be included "^^^ '^° ^' 
 in the rights and liabilities which the contract creates 
 60 as to enable him to sue or be sued upon it. This 
 is not only established by decided cases, but seems to 
 flow from the very conception which we form of con- 
 tract. A contract is an agi-eement between two or 
 more persons, by which an obligation is created, and 
 those persons are bonnd together thereby. If the ob- rights 
 ligation takes the form of a promise by A to X, to 
 confer a benefit upon M, the legal relations of M are 
 nevertheless unaffected by that obligation. Jle was 
 not a party to the agreement. He was not bound by 
 the vinculum juris which it created,- and the breach 
 of that legal bond cannot affect the rights of a party 
 who was never included in it. (a) 
 
 Nor, again, can liability be imposed on such a third or liabilities 
 party unless he be a party to the contract. One char- p!Jj.L 
 acteristic of the contractual as opposed to other forms 
 of oblijration consists in tliis, that the restraint which 
 it imposes on individual freedom is voluntarily created 
 by those who are subject to it, is, in fact, the creature 
 of agreement. 
 
 To this rule there are some apparent exceptions Apparent 
 which it may be well to dismiss before proceeding to '^^''^P"°^^* 
 illustrate the rule from decided cases. 
 
 (a) [See note on page 72.] 
 205 
 
196 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 Principal 
 and agent 
 
 See App. B. 
 on Agency. 
 
 Trustee and 
 cestui que 
 trust 
 
 The relation of principal and agent forms an appa- 
 rent exception to the rule just laid down. The prin- 
 cipal incurs liabilities and acquires rights under 
 *196 contracts which are made between his agent and 
 other parties. But the exception is no more 
 than apparent. The agent is, in reality, only the ser- 
 vant, or the moutlipiece of the principal. The prin- 
 cipal acquires his rights and liabilities because he 
 authorized the contract before, or ratified it after the 
 agent made it. If the agent exceeds such authority 
 as is actually or presumably given, he cannot bind the 
 principal without ratification, nor then unless he has 
 acted professedly as agent. It is true that if the agent 
 contracts in his own name he may be made liable upon 
 the contract, but so may his principal, and it would 
 seem in cases of this nature that it is the principal 
 who is the primary contracting partj', but that the 
 agent has by his conduct entitled the person with 
 whom he dealt to afiix upon him the liabilities of the 
 contract. 
 
 In the case of principal and agent therefore we must 
 regard the two as one in the eye of the law, and the 
 apparent exception which they present to the rule as 
 having no real existence. 
 
 A trust has this in common with contract, that it 
 originates in agreement, and that among its other ob- 
 jects it aims at creating obligations. If we could 
 really place a trust upon the footing of a contract we 
 might say that it formed a very real and substantial 
 exception to tlie general rule which we have laid down. 
 There can be no doubt that the creator of a trust and 
 the trustee do, by agreement, bring rights into exist- 
 ence which a third party, the cestui que trust, may en- 
 force. But it is better at once to set aside trusts from 
 the discussion, and for this reason. Contract difiers 
 from other forms of agreement in having for its sole 
 and direct object the creation of an obligation. The 
 206 
 
Chap. I. § 1. CONTRACTUAL OBLIGATION. 197 
 
 contractual obligation differs from other forms of ob- 
 ligation mainly in taking its origin in tbe voluntary 
 act of the parties obliged. A trust and the obliga- 
 tions resulting from a trust correspond to neither of 
 these characteristics. The agreement which creates 
 a trust has many other objects besides the cre- 
 ation of obligations, these objects may include *197 
 conveyance, and the subsequent devolution of 
 property. The (Migation wliich exists between trustee 
 and cestui que trust does not come into existence by 
 the act of the parties to it. It is better, therefore, 
 having noted the similarities between the contractual 
 and the fiduciary obligation, to. dismiss the latter alto- 
 gether from our inquiries. 
 
 We may now proceed to illustrate the general propo- 
 sition laid down at the commencement of this chap- 
 ter: and it will appear from what has gone before that 
 the proposition is susceptible of a twofold division. A 
 man cannot incur liabilities, and again, a man cannot 
 acquire rights, from a contract to which he is not a 
 party. 
 
 %1. A man cannot incur Uahilties from a contract to Contract 
 which he was not a party. cannot ira- 
 
 This proposition is a part of a wider rule to the effect nurj par^r. 
 that liability ex contractu or quasi ex contractu cannot 
 be imposed upon a man otherwise than by his act or 
 consent. A cannot by paying X's debts unasked, make 
 X his debtor; "a man cannot, of his own will, pay Dumford v. 
 another man's debt without his consent and thereby ^'•'^^''i^^'''| 
 convert himself into a creditor." {a) and see App. 
 
 And in like manner A and M cannot, by any con- ^J^' ^^^^ 
 
 kaye v. Dut- 
 (a) [But by the law merchant where a bill of exchange has been t"",^ 7 Man. 
 protested for non-payment a third party may pay it for the honor "J 
 
 of prior parties and charge them. Mertens v. Wilmington, 1 Esp. 
 112; Wood V. Pugh, 7 Ohio, Pt. 3, 156; Boring v, Clark, 19 Pick. 
 (Mass.) 320.] 
 207 
 
198 
 
 OPEEATION OF CONTRACT. 
 
 Part III. 
 
 tract into which they may enter, thereby impose liabil- 
 ities upon X. An illustration of this rule is afforded 
 6 Taunt. 147. in the ease Schmaling v. Tomlinson. The defendants 
 in that case employed X, a Urm of brokers, to trans- 
 port a quantity of cocoa from London to Amsterdam. 
 X agreed with the plaintiff to put tlie whole conduct 
 of tlie transport into his hands; he did the work and 
 sued the defendants for his expenses and commission. 
 It was held that the defendants were not liable, inas- 
 much as there was no privit}' between them and the 
 plaintiff; that is to say, that there was nothing either 
 by writing, words, or conduct to connect them with 
 the plaintiff in the transaction. X was employed by 
 
 the defendants to do the whole work for them, 
 *198 and there was held to be " no pretence that the 
 
 defendants ever authorized them to employ any 
 other to do the whole under them: the defendants 
 looked to X only for the performance of the work, and 
 X had a right to look to the defendants for payment, 
 and no one else had that right." 
 
 A contract then cannot impose the burdens of an 
 obligation upon one who is not a party to it, but the 
 case oiLumley v. Gye raises the question whether it can 
 impose a duty, upon persons extraneous to the obliga- 
 tion, not to interfere with its due performance. We 
 use the term duty as opposed to obligation as signify- 
 ing that necessity wliich rests upon all alike to respect 
 the riglits wliich the law sanctions, while obligation 
 signifies a special tie binding together definite and 
 assignable members of the community. 
 2E.&B. 216. Ii Lumley v. Gye the plaintiff, being the manager 
 of an opera house, engaged a singer to perform in his 
 theater. The defendant induced her to break her con- 
 tract. The plaintiff sued the defendant for procuring 
 this breach, and the questions raised took the follow- 
 ing form: It was argued that an action would lie 
 against one who procured the breach of any kind of 
 
 208 
 
 But does a 
 contract im. 
 pose a. duty 
 on third 
 parlies 1 
 
Chap. I. § 1. CONTRACTUAL OBLIGATION. 199 
 
 contract, but that if that were not so an action would 
 lie, at any rate, for inducing a servant to quit the 
 service of his master. 
 
 It may be taken that the relations of master and ser- Peculiar 
 vant have always been held to involve a right on the ''^l'''io"3 <^ 
 part of the master to bring an action against any one servant, 
 who enticed away his servant, and so the Court was 
 called upon to answer two questions: Does an action How far ap. 
 lie for procuring a breach of any contract? if not, then P^''=*^)^^*° 
 does the exceptional rule applicable to the contract of ley v. Gye. 
 master and servant apply to the manager of a theater 
 and the actors whom he engages to perform? 
 
 The majority of the Court answered both these ques- 
 tion in the affirmative. Coleridge, J., in an elaborate 
 dissenting judguient answered both in the negative, 
 holding that the action "could not be main- 
 tained, first, merely to induce or procure a free *199 
 contracting party to break his covenant, whether 
 done maliciously or not, to the damage of another is 
 . . not actionable; second, that the law with regard to 
 seduction of servants from their masters' employ, in 
 breach of their contract, is an exception, the origin of 
 which is known,! and that that exception does not 
 reach the case of a theatrical performer." 
 
 The case stands alone (it was decided in 1853), and Singulari4y 
 no reported attempt has since been made to bring an °^ *'^^ '^^^ 
 action for a like cause. But it is important to bear in 
 mind that a considered judgment of the Court of 
 Queen's Bench has laid it down that a contract confers 
 upon the parties to it rights im rem as well as rights 
 m personam/ that it not only binds together the par- 
 ties by an obligation, but that it imposes upon all the 
 world a duty to respect the contractual tie. 
 
 ' The exception which the law of Master and Servant seems to 
 have engrafted upon the Common Law in this matter is ti-aced 
 by the learned Judge, in a detailed historical argument, to the 
 Statutes of Laborers. 
 209—14 
 
200 OPERATION OF CONTRACT. Part III. 
 
 § 2. ^ Tnan cannot acquire rights under a contract to 
 which he is not a party. 
 
 Contract can- This is a rule which admits of fuller illustration 
 riffMs 0^^' *^^^ *^^ °°® which we have just been discussing. It 
 third party, is contrary to the common sense of mankind that M 
 should be bound by a contract made between X and A. 
 But if A and X make a contract in wliich X promises 
 to do something for the benefit of M, all three may be 
 willing that M should have all the rights of an actual 
 contracting party; or if A, and a group of persons 
 which we will call X, enter into a contract, it might 
 be convenient that M should be able to sue on behalf 
 of the multitude of which X consists, 
 at Common Where a contract is made by A and X for the bene- 
 ^*^' fit of M it is certain that M cannot sue at Common 
 
 Law; and the current of judicial opinion runs strongly 
 against his being able to sue in equity, (a) 
 4 B. & Ad. *200 In Price v. Easton the plaintifi" sued upon a 
 ^^- promise made by the defendant to X that in 
 
 consideration that X would work for him he would 
 pay the plaintiff a sum of money. It was held by 
 the Court of Queen's Bench that the plaintiff could 
 not recover because he was not a party to the contract, 
 the members of the Court stating in di|fferent forms 
 the same reason for their decision. Lord Denmah, 0. 
 J., said that the declaration did not " show any consid- 
 eration for the promise moving from the plaintiff to 
 defendant." Littlbdale, J., said, " ISTo privity is shown 
 between the plaintiff and the defendant." Taunton, 
 J., that it was "consistent with the matter alleged in 
 the declaration that the plaintiff may have been en- 
 tirely ignorant of the arrangement between X and the 
 defendant:" and Patteson, J., that there was '■'■no 
 promise to the plcmitiff alleged.'" 
 
 (a) [See note to page 73.] 
 210 
 
Chap. I. § 2. CONTRACTUAL OBLIGATION. 201 
 
 It was at one time thought that if the person who not even if 
 was to take a benefit under the contract was nearly ^ th°pTOm^ 
 related by blood to the promisee a right of action isee. 
 would vest in him. But this doctrine was finally over- 
 ruled in the case of Tweedle v. AtJcinson by the Court 1 B. & S. 893. 
 of Queen's Bench. The facts of that case were as fol- 
 lows: M and N married, and after the marriage a con- 
 tract was entered into between A and X, their respec- 
 tive fathers, to the effect that each should pay a sum 
 of money to M, a7^d that M should home power to sue 
 for such SU7IIS. After the death of A and X, M sued 
 the executors of X for the money promised to him. 
 It was held that the action would not lie, and Wight- 
 man, J., said, "Some of the old decisions appear to 
 support the proposition that a stranger to the consid- 
 eration of a contract may maintain an action upon it, 
 if he stands in such a near relationship to the party 
 from whom the consideration proceeds, that he may 
 be considered a party to the consideration. The 
 strongest of those cases is that cited in Bourne v. lyentr. 6 
 Mason, in which it was held that the daughter of a 
 physician might maintain assumpsit upon a promise 
 to her father to give her a sum of money if he 
 performed a certain cure. But there is no mod- *201 
 ern case in which the proposition has been sup- 
 ported. On the contrary, it is now established that no 
 stranger to the consideration can talte advantage of I'B.SsB.Wl. 
 a contract, although made for his ienefit." 
 
 Until very recently there was no doubt that a third The doctrine 
 
 party could not sue alone in equity for benefits in- ^"^ ^l^i'y- 
 
 tended to be conferred upon him by the contract, 
 
 although there is authority for saying that he could 
 
 join as co-plaintiff in a suit brought by the actual Gregory v. 
 
 Williams, 
 promisee. 3 jier. 583. 
 
 The mode in which the question has most commonly 
 been raised of late is in the case of articles of associa- 
 tion of a Company, in which the directors are empow- 
 211 
 
202 OPERATION OF CONTRACT. Part III. 
 
 ered by the shareholders to pay a sum of money to an 
 original promoter of the Company, or to one who has 
 given labor or money towards the starting of its ex- 
 istence. 
 Melhado v. The Common Law Courts have been unhesitating 
 RailwOT ^^o* in their decision that no right of action accrues to the in- 
 
 L. R. 9 C. P. tended beneficiary under such a provision. Bat in the 
 503 
 
 Court of Appeal in Chancery it has, in one case, been 
 
 Touche V. held that ho can sue, and Lord Hatheelet is reported 
 
 ten'ware-' ^^ ^^^® ^^^'^ ^^^^ *^® °^®® came " within the authority 
 housing Co., that where a sum is payable by A B for the benefit of 
 gij^_ ■ ■ C D, C I) can claim under the contract as if it had 
 been made with himself." 
 
 But the most recent decision on this subject seems 
 to place the relation of the parties on a footing which 
 makes the above quoted dictum inapplicable to this 
 L. R. 1 Ex. class of case. In Eley v. Positive Qovernment Se- 
 ' ' curity Life Assurance Company, one of the articles 
 of association of the defendant Company provided that 
 the plaintiff should be employed as its permanent so- 
 licitor. The action was brought for a breach of con- 
 tract in not employing the plaintiff. Lord Caiens, in 
 delivering the judgment of the Court of Appeal, says, 
 See Ashbury " Articles of association, as it is well known, follow the 
 V Riclfe L°' memorandum, which states the objects of the 
 
 R. 7 H. L. at *202 Company, while the articles state the arrange- 
 ^* ■ ment between the members. They are an agree- 
 
 ment inter socios, and in that view if the introduc- 
 tory words are applied to Article 118, it becomes a 
 covenant between the parties to it that they will employ 
 the plaintiff. Now so far as that is concerned it is 
 res inter alios acta, the plaintiff is no party to it. l^o 
 doubt he thought that by inserting it he was making 
 his employment safe as against the Company; but his 
 relying on that view of the law does not alter the legal 
 effect of the articles. This article is either a stipula- 
 tion which would bind the members, or else a man- 
 212 
 
Chap. I..§ 2. CONTRACTUAL OBLIGATION. 203 
 
 date to the directors. In either ease it is a matter 
 between the directors and shareholders, and not between 
 them and the plaintiff." 
 
 This decision appears to be conclusive on this spe- 
 cial aspect of the general rule. Nevertheless the 
 breadth of the language used by the Court in Touchers L. R. 6 Ch. 
 case makes it impossible to say that there is no doubt 
 as to the operation of the rule in excluding the acqui- See Pollock 
 sition by third persons of equitable rights under g, Jgg^"'"'''*''*^' 
 contract. 
 
 Attempts have been made, but without success, to Attempts to 
 break the general rule in the case of unincorporated t^?^p*ply 
 companies and societies who wish to avoid bringing to sue for 
 action in the names of all their members. To this contractors 
 end they introduce into their contracts a term to the 
 effect that their rights of action shall be vested in a 
 manager or agent. Such a case is that of Crray v, L. R. 5 0. P. 
 
 568. 
 
 uni- 
 
 Pearson, where the managers of a Mutual Assu ranee j^^^'g 
 Company, not being members of it, were authorized, formly 
 by powers of attorney executed by the members of 
 the Company, to sue upon contracts entered into by 
 them as agents on behalf the Company. They sued 
 upon a contract so entered into, and the Court of Com- 
 mon Pleas held that they could not maintain the action, 
 " for the simple reason — a reason not applicable merely 
 to the proceedure of this country, but one affecting all 
 sound proceedure — that the proper person to bring 
 an action is the person whose right has been violated." Per Willes, 
 And Montague Smith, J., said, "This is an J-, at p. 574 
 
 attempt to do what has been frequently but *203 
 fruitlessly attempted before, viz., to get rid of 
 the difiBculty of a large number of people suing in 
 their own names — to appoint a public officer without 
 obtaining an Act of Parliament or a Charter of Incor- 
 poration. 
 213 
 
204 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 *204 
 
 OHAPTEE II. 
 
 THE ASSIGNMENT OF CONTEACT. 
 
 Assignment We now come to discuss the cases in which the con- 
 of contract, tractual obligation may pass to one who was not a 
 party to the original agreement.— We have seen that 
 a contract cannot affect any but the parties to it; but 
 the parties to it may under certain circumstances drop 
 out and others take their places, and we have to ask, 
 first, how this can take place by the voluntary act of 
 the parties themselves, or one of them. 
 
 § 1. Assignment l>y act of the pa/rties. 
 
 This part of the subject also falls into two divisions, 
 the assignment of liabilities and the assignment of 
 rights, and we will deal with them in that order. 
 
 Assignment of Udbilities. 
 
 A man cannot assign his liabilities under a contract. 
 
 Or we may present the matter from the point of view 
 of the other party to the contract, and say that a man 
 cannot be compelled to accept performance of the con- 
 tract from one who was not originally a party to it. - 
 
 The rule seems to be based on sense and convenience. 
 It is not merely that a man is entitled to know to 
 whom he is to look for the satisfaction of his rights 
 under a contract; but, to use the language of Lord 
 13 Q. B. 817. Dknman, in Humble v. Hunter, " you have a right 
 to the benefit you contemplate from the character, 
 credit, and substance of the person with whom you 
 contract." 
 214 
 
 Llalllities 
 cannot be 
 assigned. 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 205 
 
 The rule is well illustrated by the case of *205 3 B. & Ad. 
 Bohson (& Sharpe v. Drummond. Sharpe un- v!^Wil^^*F^ 
 
 dertook to supply the defendant with a carriage and Daly, 259.] 
 keep it in repair, on certain annual payments, for five 
 years. Eobson was in fact the partner of Sharpe, but 
 the defendant contracted with Sharpe alone. After 
 three years had expired Sharpe retired from business, 
 and the defendant was informed that Kobson was 
 thenceforth answerable for the repaid of the carriage, 
 and would receive the payments. The defendant re- 
 fused to accept the substitution of Eobson for Sharpe, 
 and threw up the contract. ., Upon this Kobson and 
 Sharpe sued him, but the Oourt held that so far as 
 Sharpe was concerned, he had put an end to the con- 
 tract, and that his liabilities could not be transferred to 
 Eobson without the defendant's consent. "The de- Reason for 
 fendant," said Lord Tenterdkn, " may have been in-'"^^" 
 duced to enter into this contract by reason of the per- 
 sonal confidence which he reposed in Sharpe. . . .The 
 latter, therefore, having said it was impossible for him 
 to perform the contract, the defendant had a right to 
 object to its being performed by any other person, and 
 to say that he contracted with Sharpe alone and not 
 with any other person." 
 
 There are however two exceptions to this rule. The Exceptions 
 first is more apparent than real, and occurs when a*f *^^.™^®' 
 party liable under a contract substitutes another forgtUuted by 
 himself with the consent of the party to whom lie isaffreement; 
 liable. But this is in eflPect the rescission, by agree- ties to' Ao^' 
 ment, of one contract and the substitution of a new tions, 235. 
 one in which the same acts are to be performed 
 by different parties. The second arises where an tranfer of 
 interest in land is transferred, and such contractual J°jj|^^^ 
 obligations as attach to the enjoyment of the interest 
 pass with it. from the transferor to the transferee. 
 This however is a matter to be discussed separately, 
 for there are certain features connected with the obli- 
 215 
 
206 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 gations attached to land which distinguish them from 
 other promises and call for particular attention. . 
 
 *206 
 
 Assignabil- 
 ity of the 
 beneftt of a 
 contract : 
 
 Powlos V. 
 Innes, 11 M. 
 & W. 10. 
 [McKinney 
 V. Alvis, 14 
 111. 33.] 
 at common 
 law only by 
 substituted 
 agreement ; 
 
 Per Lord 
 Tenterden, 
 0. J., Fairlie 
 V. Denton, 8 
 B. & C. 400. 
 [Heaton v. 
 Angier, 7 N. 
 H. 397.] 
 
 in cases of 
 debt; 
 
 Cuxon V. 
 Chadley, 3 
 B. & C. 591. 
 
 Assignment of rights. 
 (i) At Common Law. 
 
 At Common Law, apart from the customs of the 
 Law Merchant, the benefit of a contract, or a chose in 
 action, cannot be assigned so as to enable the assignee 
 to sue upon it in his own name. He must sue in the 
 name of the assignor or his representatives; or rather, 
 the Common Law so far takes cognizance of such equi- 
 table rights as are created by the assignment that the 
 name of the assignor may be used as trustee of the 
 benefits of the contract for the assignee. . 
 
 The only mode by which the rights under a con- 
 tract can be really transferred is not, strictly speaking, 
 by assignment at all, but by means of a substituted 
 agreement. 
 
 If A owes M £100, and M owes X £100, it may be 
 agreed between all three that A shall pay X instead 
 of M, who thus terminates his legal ■ relations with 
 either party. In such a case the consideration for A's 
 promise is the discharge by M; for M's discharge of 
 A, the extinguishment of his debt to X; for X's prom- 
 ise, the substitution of A's liability for that of M. 
 
 But there must be ascertained sums due from A to 
 M and from M to X; and it is further essential that 
 there should be a definite agreement between the par- 
 ties, for it is the promise of each which is the consid- 
 eration for those given by the others. Thus it is not 
 enough that A should say to X " I will pay you in- 
 stead of M," and should afterwards suggest the 
 arrangement to M and receive his assent. 
 
 JS^or it is enough that M should in writing author- 
 ize A to pay to X the debt due from A to himself, and 
 216 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 207 
 
 that A should write " acknowledged " at the foot ot 
 the document: X cannot sue A for the money. These 
 were the facts in Liversidqe v. Broadhent. JM owed 4 H. & N. 
 money to the plaintiff who required security for 
 his debt. M thereupon, being owed money by *207 
 the defendant, gave to the plaintiff a paper 
 authorizing the defendant to pay the money to him 
 (the plaintiff); this paper the defendant " acknowl- 
 edged " in writing; but on his being sued for the money, 
 the Court of Excliequer held that such an acknowledg- 
 ment gave no right of action. 
 
 It will be observed that in neither of these cases 
 was there such an agreement as amounted to a dis- 
 charge by M of the debt due to him from A; there 
 was therefore no consideration for A's promise to pay 
 X, and on that ground X would be unable to maintain 
 an action against A. 
 
 In the case last mentioned, Maetin, B., thus gave 
 reasons for holding that X could not recover: 
 
 " There are two legal principles which, so far as I 
 know, have never been departed from : one is that, at 
 Common Law, a debt cannot be assigned so as to give 
 the assignee a right to sue for it in his own name, ex- 
 cept in the case of a negotiable instrument; and that 
 being the law, it is perfectly clear that M could not 
 assign to the plaintiff the debt due from the defendant 
 to him .... The other principle which would be in- 
 fringed by allowing this action to be maintained is the 
 rule of law that a bare promise cannot be the founda- 
 tion of an action .... 'So doubt a debtor may, if he 
 thinks fit, promise to pay his debt to a person other 
 than his creditor; and if there is any consideration for 
 the promise he is bound to perform it. But here there 
 was none whatever. There was no agreemeat to give 
 time, or that the debt of M should he extinguished — 
 no indulgence to him or detriment to the plaintiff. 
 There was nothing in the nature of a consideration 
 217 
 
20S OPERATION OF CONTRACT. Part III. 
 
 Per Martin, moving from the plaintiff to the defendant, but a mere 
 Sdse^v^'' promise by the defendant to pay another man's debt." 
 Broadbent, It is thus apparent that a contract cannot be assigned 
 610. ^* Common Law except (1) by an agreement between 
 
 [McKinney the original parties to it and the intended assignee, 
 111. 33.] ' which is subject to all the rules for the forma- 
 
 *208 tion of a valid contract, and which is limited 
 or by custom in its operation to the transfer of a debt; or (2) 
 
 chante' ^7 *^® ^^^^^ °^ *^^ ^^^ Merchant under circumstances 
 to be noted presently. 
 
 (ii) In EQmTT. 
 
 Aflsignabil- Equity will permit the assignment of a chose m ao- 
 frac^s ■'°'^' ^^'^^^j or the rights which a man possesses under a con- 
 equity, tract, whenever the contract is not for exclusively 
 personal services; and a suit in equity may be main- 
 tained by the assignee in his own name, 
 is subject to But certain conditions affect the rights of the as- 
 certain con- oiCTriPP 
 ditlons. signee. ^ .„ 
 
 (a) The assignment will not be supported unless 
 consideration has been given by the asssignee. (a) 
 
 {h) It will not bind the person liable until he has 
 received notice, although it is effectual as between 
 assignor and assignee from the moment of the assign- 
 ment. 
 
 (c) The assignee takes subject to all such defenses 
 as might have prevailed against the assignor. In 
 other words, the assignor cannot give a better title 
 than he has got. 
 
 These last two propositions require some illustration. 
 
 Notice. 
 Notice. It is fair upon the person liable that he should know 
 
 (a) [But see Pulvertoft v. Pulvertoft, 18 Vesey, 84; Mayor. Car- \ 
 rington, 19 Grattan, 134, where it is held that the consideration 
 can only be questioned by the assignor.] 
 218 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 209 
 
 to whom his liability is due. So if he receive no no- 
 tice that it is due to another than the party with whom 
 he originally contracted, he is entitled to the benefit 
 of any payment which he may make to his original 
 creditor. A convenient illustration is furnished in the 
 case of covenants to pay interest on a mortgage debt. 
 If the mortgage be assigned by tlie mortgagee without 
 notice to the mortgageor, and interest be afterwards 
 paid by the mortgageor to the duly authorized agent 
 of the mortgagee, the money so paid, though due to 
 the assignee, cannot be recovered by him from the Williams v. 
 debtor. "We may put the case thus: Money is due at yg'g®^^'g|g 
 regular intervals from A to X, and is ordinarily [Ward v. 
 
 paid by A to the agent of X: X assigns his *209 vt'mf ^^ 
 interest in the debt to M. A receives no notice 
 but continues to pay the money to X's agent: the 
 money so paid cannot be recovered by M from A. 
 
 The rationale of the rule is thus expounded by Tur- 
 ITEE, L. J., in Stocks v. Dohson: " The debtor is lia-4 D. M. & G. 
 ble at law to the assignor of the debt, and at law must yf MoSson 
 pay the assignor if the assignor sues in respect of it. 35 Vt. 595.] 
 If so, it follows that he may pay without suit. The 
 payment of the debtor to the assignor discharges the 
 debt at law. The assignee has no legal right, and can 
 only sue in the assignor's name. How can he sue if 
 the debt has been paid? If a Court of Equity laid 
 down the rule that the debtor is a trustee for the as- 
 signee, without having any notice of the assignment, 
 it would be impossible for a debtor safely to pay a debt 
 to his creditor. The law of the Court has therefore 
 required notice to be given to the debtor of the assign- 
 ment in order to perfect the title of the assignee.''^ 
 
 And the same case is authority for this further prop- 4 D. M. & G. 
 osition, that " equitable titles have priority according *' P* 
 to the priority of notice." The successive assignees of 
 an obligation rank as to their title, not according to 
 the dates at which the creditor assigned his rights to 
 219 
 
210 OPERATION OF CONTRACT. Part III. 
 
 them respectively, but according to the dates at which 
 they gave notice to the party to be charged. 
 
 Title. 
 Assignee " The general rale, both at law and in equity, is that 
 
 to e^qulties^°' '^'^ person can acquire a title, either to a chose in action 
 Crouch V. or any other property, from one who has himself no 
 
 c^^r'^L^R^S *^*^® *° '*•" -^"^ further, " if a man takes an assign- 
 
 Q. B. 380. ment of a chose in action, he must take his chance 
 
 Mangles -v. 3,3 to the exact position in which the party giving it 
 
 L. C. 735. ' stands." 
 
 Johns. Chy. illustration of this proposition. 
 
 ■-I M chartered half his vessel to X, using the 
 
 *210 other half himself and taking half the risks of 
 the adventure. The form in which the agree- 
 ment between the parties was expressed was this: M 
 and X executed a charter party whereby X appeared 
 as sole charterer: by a second document a clerk of M 
 undertook the payment of half the freight and half the 
 risk of the adventure; and by a third document M. 
 guaranteed to X the performance by his clerk of the 
 undertaking contained in the second document. The 
 whole arrangement was bona fide, and its peculiarities 
 arose from the difficulty created by M being the char- 
 terer of a portion of his own vessel. 
 
 Subsequently M assigned the charter to A for a large 
 sum, without communicating to him the accompany- 
 ing documents which divided both the profits and the 
 risks between the owner M and the charterer X. A 
 sued at Common Law in the name of M and recovered 
 the whole freight, the Court of Exchequer holding that 
 X was bound on the true construction of the agree- 
 ments to pay over the freight to M in the first instance 
 Boyd V. Man- and afterwards settle the balance of profit and loss. X 
 395^' ^ ^^' applied to the Court of Chancery to have an account 
 taken in respect of the joint adventure, and to restrain 
 220 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 212 
 
 A from proceeding on the Common Law judgment. 
 
 It was held by the House of Lords that A must stand 
 
 in the same position with M as to the whole agreement, 
 
 that he was not entitled to more than a moiety of the Mangles v. 
 
 freight, and was liable for half the losses of the ad- £' c° toI °' 
 
 venture. 
 
 In like manner, if one of two parties be induced to 
 enter into a contract by fraud, and the fraudulent party 
 assign his interest in the contract for value to X, who Graham v. 
 is wholly innocent in the matter, the defrauded party r ^°Eq°'38 
 may get the contract set aside in equity in spite of the 
 interest acquired in it by X. 
 
 It is possible, however, that two parties to a eon- This rule 
 tract may stipulate that if either assign his rights ^u^eefbT" 
 under it, such an assignment shall be "free express 
 
 from equities;" that is to say, that the assignee *211 
 shall not be liable to be met by such defenses Ex parte 
 
 as would have been valid against his assignor. ltg^^j'j° 
 is questionable, however, whether such a stipulation Corporation, 
 would protect the assignee against the effects of at p. 397 
 Fraud, or any vital defect in the formation of the 
 original contract* 
 
 Negotiability. *212 
 
 So far we have dealt with the assignability of con- Assignabil- 
 tracts at Common Law and in Equity, and it would Jlaguigi^ed^ 
 appear that under the most favorable circumstances 
 the assignment of a Contract binds the party charge- 
 able to the assignee only when notice is given to him, 
 and subject always to the rule that a man cannot give 
 a better title than he possesses in himself. 
 
 We now come to deal with a class of promises the from negotia- 
 benefit of which is assignable in such a way that the * ^'^' 
 promise may be enforced by the assignee of the benefit 
 without previous notice to the promisor, and without 
 the risk of being met by defenses which would have 
 been good against the assignor of the promise. In 
 221 
 
213 
 
 OPERA.TI0N OF CONTRACT. 
 
 Part III. 
 
 Features^ 
 of negotia- 
 bility. 
 
 other words, we come to consider negotiable insiru- 
 ments as distinguished from assigmible contracts. 
 
 The essential features of negotiability appear to be 
 these : 
 
 Firstly, the written promise gives a right of action 
 to the holder of the document for the time being, 
 though he and his holding may be alike unknown to 
 the promisor. 
 
 Secondly, the holder is not prejudiced by defects in 
 the title of his assignor; he does not hold subject to 
 such defenses as would be good against his assignor. 
 
 JSegotiability would seem to exist partly by custom 
 and partly by statute. 
 
 Certain contracts are negotiable by the custom of 
 merchants recognized by the Courts ; such are bills of 
 exchange, foreign and colonial bonds expressed to be 
 transferable by delivery, and scrip certificates which 
 entitle the bearer to become a holder of such bonds 
 or of shares in a company. 
 
 Certain other contracts have been made negotiable 
 by statute as promisory notes by 3 & 4 Anne, c. 9, 
 [which has been substantially re-enacted by the Legis- 
 latures of the different States.] 
 
 *213 Eills of lading, which are affected both by 
 the law merchant and by statute, possess some 
 18 & 19 Vict, characteristics which will call for a separate consider- 
 «•"!• ation. 
 
 Bills of exchange and promissory notes figure so 
 constantly in the law of contract, and are so aptly illus- 
 trative of the nature of negotiability, that we will 
 shortly consider their principal features. 
 
 A bill of exchange usually takes the form of a writ- 
 ten order addressed by M to X, directing X to pay a 
 How drawn. Bum of money to A or order, or to A or bearer. Mis 
 then called the drawer of the bill, and by drawing it 
 222 
 
 Negotiabil- 
 ity by cus- 
 tom. 
 
 Eumball v. 
 Metropol- 
 itan Bank, 
 L. R. 3 Q. B. 
 D. 194. 
 by statute. 
 
 A bill of 
 excbange, 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 214 
 
 he promises to pay the sum specified to A or any sub- 
 sequent holder if X do not accept the bill or, having 
 accepted it, fail to pay. 
 
 Until acceptance, X, upon whom the bill has been How ac 
 drawn, is called the drawee. "When X has assented to ''^P*®"" 
 pay the sum specified, he is said to become the acceptor. 
 [Such assent is usually expressed by writing the word 
 " accepted," with the date and the name of the acceptor 
 across the face of the bill; but the name of the ac- 
 ceptor alone is sufiicient. In the absence of statutory 
 regulations, an oral acceptance is valid ; (a) and a parol 
 promise to pay the bill will be treated as an accept- 
 ance. (5) By accepting- the bill the acceptor becomes 
 primarily liable, and will be held for its payment even 
 if he has no funds of the drawer in his hands, (c)] 
 
 If the bill be payable to A or bearer, it may be 
 transferred from one holder to another by mere deliv- 
 ery: if it is payable to A or order, it may be trans- 
 ferred by indorsement. 
 
 Indorsement is an order, written upon the bill, and How In. 
 signed by A, in favor of D. Its eftect is to assign to °'8^''* 
 D the right to demand acceptance or payment of the 
 bill from X when due, and in the event of default by 
 X to demand it of M, the original drawer, or of A, 
 against whom he has a concurrent remedy as being to 
 all intents a new drawer of the bill. 
 
 If the indorsement be simply to D, or to D or order, specially, 
 the bill may be assigned by D to whomsoever he will 
 in the same manner as it was assigned to him. 
 
 If the indorsement be the mere signature of A, it in blank. 
 is indorsed in blank, and the bill then becomes pay- 
 able to bearer, that is, assignable by delivery. 
 A has given his order and that addressed to no *214: 
 
 (a) [Iieona/rd v. Mason, 1 Wend. 523.] 
 (5) [Jones y. State Bh. of Imoa, 34 III. 313.] 
 (c) [Gronise v. Kellogg, 30 III. 11.] 
 223 
 
214 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 A promis- 
 sory note. 
 
 Assignabil- 
 ity distin- 
 guished 
 from nego- 
 tiability. 
 
 Considera- 
 tion pre- 
 sumed. 
 Notice not 
 needed. 
 Tlie assignee 
 may have a 
 better title 
 than the 
 assignor. 
 
 one in particular; the bill is in fact indorsed over to 
 any one who becomes possessed of it. 
 
 A promissory note is a promise in writing made by 
 X to A, that he will pay a specified sum at a specified 
 time or on demand to A or order, or to A or bearer. 
 X, the maker of the note, is in a similar position to 
 that of an acceptor of a bill of exchange; and the rules 
 as to assignment by delivery or indorsement are sim- 
 ilar to those relating to a bill of exchange. 
 
 "We may now endeavor to distinguish, by illustration 
 from the case of instruments of this nature, the differ- 
 ence between assignability and negotiaiility. 
 
 Let ns suppose that X makes a promissory note pay- 
 able to A or order, and that A indorses it over to D. 
 D calls upon X to pay the value of the note, and sues 
 him upon default. 
 
 In the case of an ordinary contract, D would, at the 
 least, be called upon to show that he had given con- 
 sideration to A for the assignment; that notice of the 
 assignment had been given by him to X; and he would 
 then have no better title than A. 
 
 In the case of negotiable instruments Consideration 
 is presumed to have been given until the contrary is 
 shown, and notice of assignment is not required. 
 
 But suppose it turn out that the note was given by 
 X to A for a gambling debt, or was obtained from him 
 by fraud. The position of D is then modified to this 
 extent, (a) 
 
 As between A and X the note would be void or void- 
 able according to the nature of the transaction, but 
 this does not affect the rights of a bona fide holder for 
 value, that is, a person who gave consideration for the 
 note, and had no notice of the vitiating elements in 
 its origin. The presumptions of law under these cir- 
 
 (a) [See Peters v. Balistier, 3 Pink. 495 ; Gonard v. Atlantic Ins. 
 Co., 1 Pet. 386, and note A page 189.] 
 224 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 215 
 
 cumstances are, (1) that D did not give value for the 
 bill, but (2) that he was ignorant of the fraud or ille- 
 gality, for fraud or participation in an illegal act, 
 is never presumed. It will be for D to show *215 
 that he gave value for the bill, but for X to 
 show that D knew that the bill was tainted in its ori- Byles on 
 gin. If D proves his point and X fails to prove, his, p ilg^*^' ^ 
 then D can recover in spite of the defective title of A 
 his assignor. 
 
 The case of Crouch v. Credit Fonder of England L. R. 8 T. B, 
 furnishes an illustration both of the nature of nego- °"^ 
 tiability and the limits within the ci-eation of nego- 
 tiable instruments is permissible. 
 
 A debenture assignable under the Companies Act An instra- 
 and expressed to be payable to the bearer was stolen ; ^a° is^not' 
 the thief sold it to the plaintiff, and he sued the Com- negotiable, 
 pany for non-payment; the jury found that he was a 
 hona fide holder for value of the debenture, but the 
 Court held that he could not recover, because, in spite 
 of the wording of the debenture, it was an instrument 
 under seal, and therefore could not be, what it pur- 
 ported to be, a negotiable instrument assignable by 
 delivery. The plaintiff therefore suffered for the 
 defective title of his assignor, {a) 
 
 Had the debenture been a negotiable instrument, 
 the plaintiff could have recovered ; for, as Blackbuen, 
 J., said, in speaking of such contracts, " the person 
 who, by a genuine indorsement, or where it it is pay- 
 able to bearer, by a delivery, becomes holder, may sue 
 in his own name on the contract, and if he is a iorM 
 fide holder for value, he has a good title notwithstand- 
 ing any defect of title in the party (whether indorser l. R. 8 Q. B. 
 or deliverer) from whom he took it." p. 383. 
 
 But the case farther goes to show that a man can- 
 
 (o) [In a number of the States the defense of want or failure 
 of consideration is allowed by statute in an action upon a sealed 
 instrument for the payment of money or property.] 
 225—15 
 
216 OPERATION OF CONTRACT. Part III. 
 
 not, by merely making an instrument payable to 
 bearer, make it thei-eby negotiable, if the custom of 
 the law merchant does not recognize it as such; or 
 if, being so recognized by the custom of merchants, 
 the character of the instrument preclude its negotia- 
 bility. For it had been the custom of merchants to 
 treat these debentures as assignable by delivery; yet 
 
 when one of them came before the Courts it was 
 *216 at once denied the incidents of negotiability as 
 
 incompatable with its character of an instrument 
 under seal. 
 
 Bill of It would not be desirable to go further into the sub- 
 
 laamg. j^^^. ^^ negotiable instruments than is necessary to 
 
 exliibit the essential features of negotiability. "We 
 may however notice the character of " bills of lading," 
 as possessing some peculiar marks. A bill of lading is 
 called " a document of title," " a symbol of property;" 
 What is it and the meaning of these phrases is this : The bill of 
 lading is a receipt by the master of a ship for goods 
 bailed to him for delivery to X or his assigns. Of this 
 receipt three copies are made, each signed by the mas- 
 ter. One is kept by the consignor of the goodsj one 
 by the master of the ship, and one is forwarded to X, 
 the consignee, who on receipt of it acquires a property 
 in the goods which can only be defeated by the exer- 
 cise of the vendor's equitable right of stoppage in 
 transitu.^ 
 What rights The assignment of the bill of lading by indorse- 
 menrcoa- ™6°t by the consignee to a holder for value gives to 
 fers. that holder a better right than the consignee himself 
 
 possessed. He has a title to the goods which overrides 
 
 ' Stoppage in transitu is the right of the unpaid vendor upon 
 
 learning the insolvency of the buyer, to retake tlie goods before 
 
 they reach the buyer's possession. For the history of this right 
 
 the reader is referred to the judgment of Lord Abingeb, C. B., in 
 
 8 M. & W. Oibson v. Caruthers, for its applicatioa to Benjamin on Sales, bb. - 
 
 339. Y, part 1. 
 
 226 
 
Chap. II. § 1. ASSIGNMENT OF CONTRACT. 217 
 
 the vendor's right of stoppage in transitu, and gives Lickbarrow 
 him a claim to them in spite of the insolvency of the g,n L°c'^ 
 consignee and the consequent loss of the price of his 825. 
 goods by the consignor. 
 
 His right, however, wliich in this respect is based By law mer- 
 upon the law merchant, is a right of property only. priSary'"" 
 The assignment of the bill of lading gives a right to rights, 
 the goods. It did not at Common Law give any 
 right to sue on the contract expressed in the bill of 
 lading. 
 
 As regards the negotiability of a bill ot *217 
 lading, it differs in some important respects 
 from the instruments with which we have just been 
 dealing. 
 
 Its assignment transfers rights in rem, rights to 
 specific goods, and these to a certain extent wider than 
 those possessed by the assignor; therein it differs from 
 negotiable instruments which only confer riglits in 
 personam. 
 
 But though the assignee is relieved from one of the but not inde- 
 
 liabilities of the assignor, he does not acquire proprie-P^"'^^°'°^ 
 ; _ , ° ' -\ r r assignors 
 
 tary rights independently of his assignor's title: a bill title. 
 of lading stolen, or transferred without the authority S",''"''^^^ 
 of the person really entitled, gives no rights even to a e. & B. 633. 
 iona fide indorsee. And again, the contractual rights 
 conferred by statute are expressly conferred subject to 
 equities. A bill of lading then may be called a con- 
 tract assignable without notice, partaking in some 
 respects of the character of conveyance, inasmuch as 
 it gives a title to property, but incapable of giving a 
 better title, whether proprietary or contractual, than is 
 possessed by the assignor, subject always to this excep- 
 tion, that one who takes from an assignor with a good 
 title is relieved from liability to the vendor's right of 
 stoppage in transitu which might have been exercised 
 against the original consignee. 
 22T 
 
218 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 Assignment 
 of interests 
 in laud. 
 
 Marriage. 
 
 § 2. Assignment of contractval rights and liabilitieg 
 hy operation of law. 
 
 "We have hitherto dealt with the mode in which the 
 parties to a contract maj' by their own acts assign to 
 others the benefits or the liabilities of the contract. 
 There are, however, certain circumstances in which 
 rules of law operate so as to transfer to one person the 
 rights or the liabilities of another. 
 
 If A by purchase or lease acquire an interest 
 *218 in land of M upon certain terms which bind 
 them by contractual obligations in respect of 
 their several interests, the assignment by either party 
 of his interest to X will within certain limits operate 
 as a transfer to X of those obligations. Marriage, 
 again transfers to the 'husband the rights and liabili- 
 ties of the wife, not absolutely, but conditionally. 
 Representa- Kepresentation, whether, in the case of death or bank- 
 tion. ruptcy, operates to confer in the one case upon the 
 
 executors or administrators of the deceased, in the 
 other upon the assignees of the bankrupt, his rights 
 and liabilities; but here the assignment of contractual 
 obligations is merely a mechanical contrivance for con- 
 tinuing up to a certain point and for certain purposes 
 the legal existence of the deceased or the bankrupt. 
 They to whom the contract is assigned take no benefit 
 by it, nor are they personally losers by the enforcement 
 of it against them. They merely represent the orig- 
 inal contracting party to the extent of his estate and 
 no more. 
 
 Assignment of obligations upon the transfer of 
 interests im, land. 
 
 a. Covenants affectiing leasehold interests. 
 
 Covenants At Common Law these are said to "run with the 
 affecting jg^^^ ^^^ ^qj. ^j|.j^ ^j^g reversion," that is to say they 
 228 
 
Chap. IL § 2. ASSIGHiTMENT OP CONTRACT. 219 
 
 pass upon an assignment of a lease, but not upon an leasehold 
 
 assignment of the reversion If the lessee assigned [^^^^ 
 
 his lease, the man to -whom he assigned it would be 
 bound to the landlord by the same liabilities and 
 entitled to the same rights as his assignor, to this 
 extent: 
 
 (1) Covenants in a lease which " touch and concern if they con- 
 the thing demised" pass to the assignee of the lessee °^r° *^® 
 whether or no thej are expressed to have been made mised. 
 with the lessee " and his assigns.'* Such are covenants ^^^, '^^^^f . 
 
 COllSCtfid IQ, 
 
 to repair, or to leave in good repair, or to deal with noie to Spen- 
 the land in any si^eciiied manner. ?®g^ °t^^A 
 
 (2) Covenants in a lease, which relate to some- 1, 73, 74 
 thing not in existence at the time of the lease, *219 
 
 are said to bind the assigns only if named, that 
 is to say if the covenant be expressed as made with [Tallman v. 
 heirs and assigns. But although this rule is laid down Y^si t 
 in the leading case upon the subject, it has been so Minshull v. 
 unfavorably commented xipon in a modern decision 2^'^®®'^_ H- 
 that its validity is extremely questionable. [See Hunt v. 
 
 (3) In any case the assignee of the lessee does notp^J'ip'p''^^ 
 
 acquire benefit or liability i'rom merely personal or col- 592.] 
 
 lateral covenants made between his assignor and his ''o* if P,"'"^^?' 
 
 ._ , , , . . personal, 
 
 landloi'd. X the lessee covenanted to use his premises 
 
 as a public house. A the lessor covenanted not to 
 
 build or keep any house for the sale of beer or spirits Thomas v. 
 
 within half a mile of the demised premises. X as- R.'^f Esfh. 
 
 signed his lease to M. It was held that the benefit of 311. 
 
 A's covenant did not pass to M. 
 
 The reversioner or landlord does not, at Common Covenants 
 Law, by the assignment of his interest in the land ^°j^" j^™"^ 
 convey his rights and liabilities to the assignee. reversion 
 
 It was not till 32 Hen. VIII. c. 34 that the law inf,^a'tute. ^ 
 this respect was changed, a change probably due to the 
 dissolution of the monasteries. By that act the as- 
 signee of the reversion is enabled to take the benefits, 
 229 
 
220 
 
 OPERATION OF CONTRACT. 
 
 Part III. 
 
 Sm, L. 0. 1 
 
 Per Wines, 
 J., CDrnisli 
 V. Stubbs, L. 
 R. 5 C. P. 
 339. 
 
 Covenants 
 with owner. 
 
 Dicey, Par- 
 ties to Ac- 
 tions, 130-5. 
 
 Covenants 
 hj/ owner. 
 
 Stockport 
 Waterworks 
 Co. V. Potter, 
 3 H. & C. 
 800. 
 
 8 Mylne & 
 Keen, 617. 
 
 and also incurs the liabilities, of covenants entered into 
 ■with his assignor: and it has been settled that the rules 
 as to the connection of the covenants with the thing 
 demised apply to such as run with the reversion equally 
 with those that run with the land The act only ap- 
 plies to leases under seal, but in the case of leases from 
 year to year, payment of rent and the acceptance of it 
 is held to be evidence from which a jury may infer " a 
 consent to go on, on the same terms as before." 
 
 i. Covenants affecting freehold interests. 
 
 At Common Law, covenants entered into with the 
 owner of land, that is to say, promises under seal made 
 to the owner of land, and for his benefit, pass 
 *220 to his assignees provided they touch and con- 
 cern the thing demised and are not merely 
 personal. 
 
 X a vendor of land covenants with A the purchaser 
 that he has a good right to convey the land; the benefit 
 of such a covenant would pass from A to his assignees. 
 It would be otherwise if a covenant were introduced 
 into the conveyance relating to some matter purely 
 personal between A and X. 
 
 On the other hand, covenants entered into 8y the 
 owner of land which restrict his enjoyment of the land 
 do not at Common Law bind his assignees, except he 
 thereby create certain well known interests, such as 
 easements and profits, recognized by law. 
 
 If a man endeavor to create restrictions on his land 
 which are not included in the circle of rights in re 
 aliena known to the Common Law, he cannot aflix 
 those rights to the land so as to bind subsequent own- 
 ers. The cases which deal with attempts to create "an 
 easement in gross" illustrate this proposition, the prin- 
 ciple of which is thus enunciated by Lord Bkotjgham 
 in Keppel v. Baily: " it must not be supposed that 
 incidents of a novel kind can be devised and attached 
 230 
 
Chap. II. § 2. ASSIGNMENT OP CONTRACT. 221 
 
 to property, at the fancy or caprice of the owner. . . Common 
 
 Great detriment would arise and much confusion of ^'^^^^* 
 
 rights, if parties were allowed to invent new modes of 
 
 holding and enjoying real property, and to impress 
 
 upon their lands and tenements a peculiar character, 
 
 which should follow them into all lands, however 
 
 remote." 
 
 But Courts of Equity have established a class of Equitable 
 
 exceptions to this general rule, and althouffh these have enforcement 
 " , ° ° of restrictive 
 
 been mainly confined to covenants in the case of land covenants. 
 
 sold for building purposes, it is difficult to see what 
 limitations can be introduced to the j^rinciple on which 
 they are enforced. The view taken by the Courts of 
 Equity may be thus illustrated: A sells land to X and 
 covenants that he, A, being possessed of adjoining 
 land, will never use it otherwise than in a particular 
 way. A sells his land to M with notice of the 
 covenant, and M's enjoyment of the land is *221 
 then limited by the terms of the covenant. The 
 principle is thus stated by Lord Oottenham: "That 
 this Court has jurisdiction to enforce a contract be- 
 tween the owner of land and his neighbor purchasing 
 a part of it, that the latter shall either use or abstain 
 from using the land purchased in a particular way, is 
 what I never knew disputed .... It is said that the 
 covenant, being one which does not run with the land, 
 this Court cannot enforce it; but the question is not 
 whether the covenant runs with the land, hut. whether 
 a party shall ie permitted to use his land in a man- 
 ner inconsistent xolth the contract entered into T>y his Tulk v. Mox. 
 vendor, and with notice of which he purchased.^' 5f^' ^ ^^• 
 
 Assignment of contractual ohligation upon marriage. 
 
 When a woman marries, having bound herself by Leake, pp. 
 contract while feme sole, and being entitled thereby to contracts of 
 benefits, or subject to liabilities, the effect of her mar- married 
 riage is to disable her from acquiring the benefits of ^^^^j^ 
 231 
 
222 
 
 OPERA.TION OF CONTRAlC!T. 
 
 Part HI. 
 
 Husband's 
 rigktsy 
 
 sucli contracts and to vest them conditionally in her 
 husband; to protect her from the liabilities of such 
 contracts and pass them, with some limitations, to her 
 husband. She is disabled from acqxiiring the benefit 
 of her contracts, for if she sue alone upon contracts 
 made by her before marriage, she may be met by an 
 application to the summary jurisdiction of the High 
 Court. 
 
 ■ 3|he husband takes the benefit of contracts made by 
 the wife ^ii,m sola, if he does any act which amounts 
 to a reduGti'o'fi into possession of the chose in action. 
 He does this, in the case of a contract executed on the 
 part of the wife, by receiving or authorizing another 
 to receive payments due in respect of such contracts. 
 He may do this also by suing jointly with the wife 
 for whatsoever may be due to her upon her contracts. 
 Whatever is thus obtained passes absolutely to the hus- 
 band, like all other personal property of which the 
 Richards v- wife was previously possessed. If the husband do not 
 B^&'Ad^452 ' '^"''ii'g *^^ coverture reduce into possession the 
 
 Fleet V. Per- *222 choses in action of the wife, they survive to her 
 riiij^L. R. 4 if ]je (jje first, or pass to her representatives if 
 
 she die in his lifetime. 
 
 The husband acquires the liabilties of the wife to 
 this extent; at Common Law he was liable to be sued 
 jointly with his wife upon any contracts made by her 
 before marriage, {a) 
 
 Q. B. 500. 
 
 and liabili- 
 ties. 
 
 Representa- 
 tives acquire 
 all contract- 
 ual rig-hts 
 •whicli affect 
 personal 
 estate, 
 
 Assignment of contractual oiligation iy death. 
 
 Death passes to the executors or administrators of 
 the deceased all his personal estate, all rights of action 
 which would affect the personal estate, and all liabili- 
 
 (a) [The rules of the common law upon the subject of the re- 
 spective rights and liabilities of husband and wife have been 
 modified so variously in the different States by statute that we 
 can only refer the student to those statutes for the law in any 
 particular State.] 
 232 
 
Chap. II. § 3. ASSIGNMENT OP CONTRACT. 223 
 
 ties wliich are chargeable upon it. Thus covenants 
 which are attached to leasehold estate pass, as to ben- 
 efit and liability, with the personalty to the executor 
 or administrator, while covenants affecting freehold, 
 as covenants for title in a conveyance of freeliold prop- 
 erty, pass to the heir or devisee of the realty. 
 
 The rights and liabilities of the executors and ad- if not de- 
 ministrators are farther limited in this way, that per- personal"'^ 
 formance of such contracts as depend upon the per- skill or 
 sonal services or skill of the deceased cannot bervvhite's 
 demanded of his executors, nor can they insist upon Exeontors v. 
 ofifering such performance. Contracts of personal ser- wealth, 39 
 vice then expire with either of the parties to them : an ^*- ^'- ^^'^•i 
 apprenticeship contract is thus terminated by the death Bax+er v. 
 of the master, and no claim to the services of the^g^Qg ' 
 apprentice survives to the executor. 
 
 In like manner a breach of contract which 
 involves a purely personal loss does not confer *223 
 a right of action upon executors. In Ohamier- 
 lam V. Williamson, an executor sued for a breach of 3 M. & S. 
 promise to marry the deceased, the promise having |jj^g^'-p^l_ 
 been broken and a right of action having accrued in mer, 1 Pick, 
 the lifetime of the testatrix. But the Court held that 
 such an action could not be brought by representatives 
 of a deceased person, inasmuch as it did not clearly 
 appear that the breach of contract had resulted in dam- 
 age to the personal estate. " Although marriage may 
 be regarded as a temporal advantage to the party as 
 far as respects personal comfort, still it cannot be con- 
 sidered as an increase of the transmissible personal 
 estate." 
 
 Assignment of Goni/ractual ohligation iy hanJcruptcy. 
 
 The Bankruptcy Act of 1869 provides a machinery 33 & 33 Vict 
 whereby the creditors in the case of bankruptcy or ^ ' * 
 liquidation by arrangement may appoint a trustee of or liquida^ 
 the property of the bankrupt for the purpose of get- *^°'^* 
 233 
 
224 OPERATION OF CONTRACT. Part III. 
 
 ting in and dividing the property for the benefit of the 
 Trustee's or creditors. Such a trustee acquires " not only what may 
 
 Assignee's ^^ strictness be called the property and debts of the 
 powers: . . 
 
 bankrupt, but also those rights of action to which he 
 
 was entitled for the purpose of recovering in specie 
 Rogers v. real or personal property, or damages in respect of 
 M'^&°w'^at *^^* which has been unlawfully diminished in value or 
 p. 580. taken from him." The trustee thus acquires, like the 
 
 representatives of a deceased person, rights to the per- 
 formance of executory contracts and rights of action 
 for contracts broken, 
 their extent, The trustee of the bankrupt acquires in a fuller and 
 more independent manner than the personal represent- 
 atives, the rights of the person whose legal character 
 he for the time assumes. In some ways he acquires a 
 wider power than the bankrupt would have possessed 
 in respect of his obligation. He takes all the prop- 
 erty, real as well as personal, of the bankrupt, and 
 obligations in respect of each; and, as his duty is not 
 merely to represent the bankrupt, but to rep- 
 *224 resent him with special reference to the inter- 
 est of his creditors, he is able to disclaim and 
 83& 33 Vict, so discharge such executory contracts as he thinks will 
 c. 71, s. 23. jjQ^ jjg beneficial to the estate. 
 
 and limits. But, like the representative of a deceased person, he 
 
 Drake v. is excluded from suing for " personal injuries arising 
 
 11 M. & W. out of breaches of contract, such as contracts to cure 
 
 319. [Smith or to marry." 
 V. Sherman, oqa 
 
 4 Cush. 408. ^^^ 
 
Part IV. INTERPRETATION OF CONTRACT. 226 
 
 PART IV. *225 
 
 THE INTERPRETATION OF CONTRACT. 
 
 After considering the elements necessary to the Interpreta- 
 formation of a contract, and the operation of a con- tJact.° '^°^ 
 tract as regards those who are primarily interested 
 under it, and those to whom interests in it may be as- 
 signed, it seems that the next point to be treated is 
 the mode in which a contract is dealt with when it 
 comes before the Courts in litigation. In considering In what the 
 the interpretation of contract we require to know howgj^gtgf^ *''"** 
 its terms are proved ; how far, when proved to exist in 
 writing, they can be modified by evidence extrinsic 
 to that which is written; what rules are adopted for 
 construing the meaning of the terms when fully before 
 the Court. 
 
 The subject then divides itself into rules relating to Rules relat. 
 evidence and rules relating to construction. Under ^gnggaad 
 
 the first head we have to consider the sources to which (2) to con- 
 » ,, „ .••.!, struction. 
 
 we may go lor the purpose oi ascertaming the expres- 
 sion by parties of their common intention. Under 
 the second we have to consider the rules which exist 
 for construing that intention from expressions ascer- 
 tained to have been used. 
 235 
 
226 
 
 INTERPRETATION OF CONTRACT. Part IV. 
 
 *226 
 
 OHAPTEE I. 
 
 EULES EELATINQ TO EVIDENOB. 
 
 Provinces of 
 Court and 
 Jury. 
 
 See p. 125. 
 
 Why oral 
 contracts 
 need not be 
 discussed. 
 
 If a dispute should arise as to the terms of a con- 
 tract made by word of mouth, it is necessary in the 
 j&rst instance to ascertain what was said, and the cir- 
 camstances under which the supposed contract was 
 formed. These would be questions of fact to be deter- 
 mined by a jury. When a jury has found, as a matter 
 of fact, what the parties said, and that they intended 
 to enter into a contract, it is for the Court to say whether 
 what they have said amounts to a contract, and, if so, 
 what its eifect may be. "When a man is proved to have 
 made a contract by word of mouth upon certain terms, 
 he cannot be heard to allege that he did not mean 
 what he said. 
 
 The same rule practically applies to contracts made 
 in writing. Where men have put into writing any 
 portion of their terms of agreement they cannot alter 
 by parol evidence that which they have written. When 
 the writing purports to be the whole of the agreement 
 between the parties, it can neither be added to nor 
 varied by parol evidence. 
 
 We may, as regards rales of evidence, dismiss purely 
 oral contracts from our consideration. For the proof 
 of a contract made by word of mouth is a part of the 
 general law of evidence; the question whether what 
 was proved to have been said amounts to a valid con- 
 tract is a question to be answered by reference to the 
 formation of contract; the interpretation of such a con- 
 236 
 
Chap. I. RULES RELATINQ TO EVIDENCE. 227 
 
 tract when proved to have been made may be *227 
 dealt with presently under the head of rules of 
 construction. 
 
 We will confine our consideration of rules relating Three mat. 
 to evidence to their effect upon written contracts under j^" "J 
 seal; and we may say that admissible evidence extrinsic 
 to such contracts falls under three heads. 
 
 (1) Evidence as to the fact that there is a document 1. Proof of 
 purporting to be a contract, or part of a contract. document"^ 
 
 (2) Evidence that the professed contract is in truth a. Of fact of 
 what it professes to be. It may lack some element ^sreetnent; 
 necessary to the formation of contract, or be subject 
 
 to some parol condition upon which its existence as a 
 contract depends. 
 
 (3) Evidence as to the terms of the contract. These 3. Of terms 
 may require illustration which necessitates some ^x- °'^''^*°*" 
 trinsie evidence; or they may be ambiguous and then 
 
 maybe in like manner explained; or they may com- 
 prise, unexpressed, a usage the nature and effect of 
 which has to be proved. 
 
 We are thus obliged to consider (1) evidence as to 
 the existence of a document, (2) evidence that the doc- 
 ument is a contract, (3) evidence as to its terms. 
 
 Before going further, we should note that there is Difference 
 this difference between contracts under seal and writ- for^al'and 
 ten contracts, a difference suggested by what has been simple con- 
 said before. A contract under seal is a formal con- on 
 
 p. d9. 
 
 tract, deriving its validity from the form of the instru- 
 ment in which it finds expression: therefore if the 
 instrument is proved the contract is proved, unless it In the first 
 can be shown to have been executed under circum- menUa'the 
 stances which preclude the formation of a contract, or contract. 
 to have been delivered under conditions which have 
 remained unfulfilled, so that the deed is no more than 
 an escrow. 
 
 But "a written contract not under seal is not the "Wake v. 
 contract itself, but only evidence, the record of the con- SD^^'ris 
 237 
 
229 
 
 IljTERPRETATION OF CONTRACT. Part IV. 
 
 In the sec- 
 ond the 
 writing is 
 only evi- 
 dence of the 
 contract. 
 
 Wake V. 
 Harrop, 6 H, 
 & N. 775. 
 [Lewis V. 
 Gray, 1 
 Mass. 397.] 
 
 Proof of 
 contract 
 under seal. 
 
 Ante, p. 37. 
 
 Of simple 
 contract 
 
 tract." Even where statutory requirements for writing 
 exist, as under 29 Car. II. c. 3, § 4, the writing is no 
 more than evidentiary of a previous or contem- 
 *228 poraneous agreement. A written offer contain- 
 ing all the terms of the contract signed by A and 
 accepted by performance on the part of B, is enough 
 to enable B to sue A under that section. And where 
 there is no such necessity for writing, it is optional to 
 the parties to express their agreement by word of 
 mouth, by action or by writing, or partly by one, and 
 partly by another of these processes. 
 
 It is always possible therefore that a simple contract 
 may have to be sought for in the words and acts, as 
 well as in the writing of the contracting parties. But 
 in so far as they have reduced their meaning to writ- 
 ing, they cannot adduce evidence in contradiction or 
 alteration of it. " They put on paper what is to bind 
 them, and so make the written document conclusive 
 evidence against them." 
 
 § 1. Proof of Document. 
 
 "We now come to the first heading: to the proof of 
 the document which purports to be the contract, or to 
 be a memorandum of its terms. 
 
 A contract under seal is proved by evidence of the 
 sealing and delivery. [In the absence of statutory pro- 
 visions it is] necessary to C3,ll one of the attesting wit- 
 nesses where a contract under seal is attested. A war- 
 rant of attorney and a cognovit afford instances of in- 
 struments to which attestation is necessary. 
 
 The mode of proof of a simple contract is by evi- 
 dence of the signature of the parties if it be signed by 
 them, or by evidence that it is in fact a written expo- 
 sition of the contract, or of so much of it as 
 *229 ia in writing, i 
 
 And oral evidence must of 
 
 ' As a matter of practice, written contracts are commonly ad- 
 mitted by the parties, either upon the pleadings, or upon notice 
 238 
 
Chap. I. § 1. RULES RELATINa TO EVIDENCE. 229 
 
 course supplement the writing where the writing only Supplement- 
 constitutes a part of the contract. For instance: AB dence where 
 in Oxford writes to X in London, " I will give £50 contract 
 for your horse; if yon accept send it by next train j^'^palif °'' ^ 
 to Oxford. (Signed) AB." To prove the conclusion 
 of the contract it would be necessary to prove the 
 despatch of the horse. And so if A puts the terms 
 of an agreement into a written offer which X accepts 
 by word of mouth; or if, where no writing is neces- 
 sary, he puts a part of the terms into writing and ar- 
 ranges the rest by parol with X, oral evidence must be Harris v. 
 given in both these cases to show that the contract was 5^^°{*' 
 concluded upon those terms by the acceptance of X. 
 
 So too where a contract consists of several docu- or where 
 ments, but their connection does not appear from the of "pans'do 
 contents of the documents, oral evidence may be given not appear 
 to connect them one with another. This last rule does menta, 
 not apply to contracts required to be in writing under 
 29 Car. II., q. 3, § 4. There the connection of the 
 documents must need no oral evidence to establish its 
 existence, as is apparent from the case of Boydell v. Ante, p. 50. 
 Drummond. But that case was distinguished from 
 ordinary simple contracts in writing in a recent judg- 
 ments in the Queen's Bench Division ot the HighL. RIQ. B. 
 Court. "That o.Sise,''^ {Boydell v. Drummond) said ' ' .„ 
 Brett, J., " was decided on the Statute of Frauds. [Ide v. Staa.. 
 The ground of decision was that separate documents ggg'-i'*" 
 in writing could not be joined together to make a mem- 
 orandum in writing within that statute, unless there 
 was a sufficient reference from one writing to another 
 contained in the documents themselves to show that 
 they were intended to be jointly the memorandum, 
 
 being given by one party to the other to admit such a document. 
 Or one party may call upon the other to produce certain docu- 
 ments, and upon his failing to do so, and upon proof having been 
 given of the notice to produce, the party calling for the produc- 
 tion may give secondary evidence of the contents of the document. 
 239 
 
230 INTERPRETATION OF CONTRACT. Pan IV. 
 
 without being obliged to have recourse to parol evi- 
 dence to show such intention; for otherwise the 
 *230 danger from parol evidence would arise, which 
 it was the intention of the statute to obviate. 
 That ground of decision is applicable only when the 
 question is, whether there is or is not a suflSeient mem- 
 orandum within the Statute of Fi-auds. It does not 
 seem to me to be applicable to a question whether there 
 is a sufficient policy of assurance in writing, or as to 
 Edwards v. what documents form that policy. I see no reason why 
 Mu^ua'n'n- P^rol evidence should not be admitted to show what 
 
 surance Soci- documents were intended by the parties to form an 
 ety, L. R. 1 ,, , ,. i. j7 ■ „ 
 
 Q. B. D. 587. alleged contract oi insurance. 
 
 There are circiimstances, such as the loss or inacces- 
 sibility of the written contract, in which parol evidence 
 of the contents of a documeut is allowed to be given, 
 but these are a part of the general law of evidence. 
 The reader is referred for a summary of the rules ex- 
 Am. Ed., ty isting upon this subject to Sir J. Stephen's Digest of 
 A^uTl.*^'' *^^ ^^^ 0^ Evidence. 
 
 § 2. Evidence as to fact of Agreement 
 
 Thus far we have dealt with the mode of bringing 
 a document, purporting to be an agreement, or part 
 of an agreement, before the Court. But extrinsic ev- 
 idence is admissible to show that the document is not 
 in fact a valid agreement, or that it is not the whole 
 of an agreement. 
 
 It may be shown that incapacity of one of the par- 
 ties, want of genuine consent, or illegality of object 
 made the agreement of the parties unreal, or such as 
 the law forbids to be carried into effect. In the case 
 of a simple contract it may be shown, where the prom- 
 ise only appears in writing, that no consideration was 
 Per Alderson given for the promise. Such evidence is constantly 
 B., Poster V. admissible to contradict the presumption of value 
 M & R 708 given for a bill of exchange or promissory note. But 
 240 
 
Chap. I. § 3. RULES RELATING TO EVIDENCE. 231 
 
 this must be distinguished from evidence which may [Staokpoley. 
 be given as to the total failure of consideration prom-^™" ^'.^i 
 ised, for this mode of discharge. See Part V. 
 
 Similarly in the case of a deed, where fraud *231 ^^'^nh ^" ^' 
 or undue influence is alleged, the absence or 
 inadequacy of consideration may be adduced in dero- 
 gation of the deed. 
 
 But even where none of these circumstances exist, Evidence of 
 
 extrinsic evidence may be given to the effect that the gugpen'dine 
 
 document was made under conditions which show that operation of 
 
 it was not intended to be a contract. It may be proved ^ »v 
 
 ■' ^ In the case 
 
 in the case of a deed that the delivery was made sub- of a deed: 
 ject to a condition, and that until the condition hap- 
 pened, the deed was never intended to be operative. 
 Until such time as the condition is fulfilled the deed 
 remains an escrow, and the terms subject to which it See p. 40. 
 was delivered may be proved by oral or documentary 
 evidence extrinsic to the sealed instrument. 
 
 And it maybe so with a written contract. Evidence of a simple 
 may be given to the effect that a document purporting ooi^tract. 
 to be a contract is not so in fact. For though appa- 
 rently absolute in its terms, it may be dependent upon 
 a condition unexpressed in the document, and the 
 terms to which the parties actually agreed may have 
 been that, until the condition happened, the written 
 contract was to remain inoperative. Tims in Pym v. 6 E. &. B. 
 Campbell the defendants agreed to purchase from the^^*^- 
 plaintiffs a portion of the benefits to be derived from a 
 mechanical invention made by the plaintiffs. The pur- 
 chase was to be made if one X approved of the invention, 
 but before this approval had been given they signed a 
 memorandum of agreement on the express understand- 
 ing that they did so for convenience only and that the 
 agreement was not to bind them until the approval of 
 one Abernethie had been intimated. Abernethie did 
 not approve of the invention. The plaintiffs never- 
 theless contended that the agreement was binding and 
 241—16 
 
232 IKTERPRETATION OF CONTRACT. Part IV. 
 
 that the verbal condition was inad missible in evidence, 
 because it was an attempt to introduce a new term 
 into a written contract. But the Court held that tiie 
 evidence was admissible, not to vary a written con- 
 tract but to show that there had never ieen a 
 *232 contract at all. The following is the judgment 
 of Eele, J.: " The point made is that this is a 
 written agreement, absolute on the face of it, and that 
 evidence was adduced to show it was conditional; and 
 if that had heen so it would have been wrong. But I 
 am of opinion that the evidence showed that in fact 
 there was never an agreement at all. The production 
 of a paper j)urporting to be an agreement by a party, 
 with his signature attached, affords a strong presump- 
 tion that it is his written agreement; and it in fact he 
 did sign the paper animo contrahendi, the terms con- 
 tained in it are conclusive, and cannot be varied by 
 parol evidence: but in the present case the defense 
 begins one step earlier: the parties met and expressly 
 stated to each other that, though for convenience they 
 would then sign the memorandum of the terras, yet 
 tliey were not to sign it as an agreement until Aber- 
 nethie was consulted. I grant the risk that such a 
 defense may be set up without ground; and I agree 
 that a jury should therefore always look on such a 
 defense with siispicion ; but, if it be proved that in 
 fact the paper was signed with the express intention 
 that it should not be an agreement, the other party 
 cannot iix it as an agreement iipon those so signing. 
 The distinction in point of law is, that evidence to 
 vary the terms of an agreement in writing is not ad- 
 
 Pymv. missible, hut evidence to show that there is not an 
 
 CampbeR 6 agreement at all is admissible." 
 
 Evidence of Evidence too is admissible to show that a document 
 supplement- purporting to be an agreement is only a portion of that 
 which was, in fact, agreed upon. This is not at vari- 
 242 
 
Chap. I. § 3. RULES RELATING TO EVIDENCE. 233 
 
 ance with the rules just laid down. If two parties 
 enter into a contract, and then for certain purposes put 
 some of its terms into writing, evidence may be given, 
 not to vary those terms, but to show tliat they did not 
 compose the entire contract. An illustration of this 
 rule is afforded by the case of Jervis v. Berridge. Tlie L. R 8 Ck 
 plaintiff agreed to assign to the defendant a contract ^^^' 
 for the purchase of lands from M: the assign- 
 ment was to be made upon certain terms, but a *233 
 memorandum was drawn up for tlie purpose of 
 obtaining a conveyance of the lands from M to the de- 
 fendant, in which, at the request of the latter, nothing 
 was stated but the assignment, and various terms in 
 favor of the plaintiff were omitted. The defendant 
 obtained a conveyance of the lands and afterwards 
 refused to fulfill the terms which were in favor of the 
 plaintiff. The plaintiff' then applied to the Court of 
 Cliancery to get the assignment set aside and a con- 
 veyance of the lands made to him. The defendant set 
 up the memorandum from which the terms in favor 
 of the plaintiff had been excluded, and contended that 
 the original agreement being verbal, and so unenforce- 
 able, under 29 Car. II. c. 3, § 4, the memorandum, 
 which complied with the terms of the statute, must 
 prevail. Eut the Court held that this was not so: 
 that the memorandum was a " mere piece of machinery per Selbome 
 obtained by the demurring defendant as subsidiary ^o^:^->*''P' 
 cmd for the purposes of the verbal and only real 
 agreement under circumstances which would make the 
 use of it for any purpose inconsistent with that agree- 
 ment dishonest and fraudulent." 
 
 Thus we find that extrinsic evidence as to the fact Summary, 
 of agreement is admissible, not only where vitiating 
 elements are alleged to exist in the formation of the 
 contract, but (1) where a memorandum of a contract Pym v. 
 is shown to have been signed in dependence upon an ^ &''n 37? 
 unfulfilled condition, and without the animus contra- 
 243 
 
234 
 
 INTERPRETATION OF CONTRACT. Part IV. 
 
 ridge, L. R. 
 8 Cli. 351 
 
 hendi; and (2) where a document is shown to be only 
 Jervis v. Ber- a part of a larger agreement of which some of the 
 terms have been reduced to writing for the conven- 
 ience of the parties. But these sets of circumstances 
 come alike to the same result, that there has not been 
 such an agreement between the parties as the docu- 
 ment produced would appear to suggest. 
 
 Evidence as 
 to terms. 
 
 General rule 
 
 Per Black- 
 burn, J., in 
 Burges v. 
 Wickham; 3 
 B. & S. 669. 
 Exceptions. 
 
 § 3. Evidence as to the terms of the Contract. 
 
 We now come to extrinsic evidence as affecting the 
 terms of a contract, and here the admissibility of such 
 extrinsic evidence is narrowed to a small com- 
 *234: pass: for "according to the general law of 
 England the written record of a contract must 
 not be varied, or added to by verbal evidence of what 
 was the intention of the parties." 
 
 We find exceptions to this rule — 
 
 (a) in cases where one of the parties gives a prom- 
 ise collateral to the main agreement in consideration 
 of the other concluding that agreement; 
 
 ih) in cases where explanation of the terms of the 
 contract is required; 
 
 (c) in the introduction of usages into the contract; 
 
 id) in the application by equity of its peculiar rem- 
 edies in the case of mistake. 
 
 Collateral 
 terms. 
 
 {a) Evidence may be given of a verbal agreement 
 collateral to the contract proved, and, in fact, making 
 it subject to a term unexpressed in its contents. Such 
 a term however can only be enforced if it be not con- 
 trary to the tenor of the written agreement. Thus 
 where a farmer executed a lease upon the promise of 
 the lessor that the game upon the land should be killed 
 down, it was held that he was entitled to compensa- 
 tion for damage done to his crops by a breach of such 
 a verbal promise though no reference to it appeared in 
 the terms of the lease. Mellish, L. J., in giving judg- 
 2M 
 
Chap. I. § 3. EULES RELATING TO EVIDENCE. 235 
 
 ment said, " No doubt, as a rule of law, if parties enter 
 into negotiations affecting the terms of a bargain, and 
 afterwards reduce it into writing, verbal evidence will 
 not be admitted to introduce additional terms into the 
 agreement; but, nevertheless, what is called a collat- 
 eral agreement, where the parties have entered into an 
 agreement for a lease or for any other deed under seal, 
 may be made in consideration of one of the parties 
 executing that deed, unless, of course, the stipulation Erskine v. 
 contradicts the terms of the deed itself. I quite agree ^'^Q^nh at n 
 that an agreement of that kind is to be rather closely 766. [Fust- 
 watched, and that we should not admit it without see- ^"^ \^ ^^' , 
 ing clearly that it is substantially proved." 163.] 
 
 (5) Explanation ot terms may merely amount *235 Explanation 
 
 to evidence of the identity oi the parties to the °^ terms; 
 
 , , n . 1 to identify 
 
 contract, as where two persons have the same name, parties, 
 
 or where an agent has contracted in his own na,me but Wake v. 
 on the understanding that he does so as an agent. Or^^ i7gg_ 
 it may be a description ot the subject-matter of the or subject 
 contract, as in a case in which A agreed to buy of X '^^''''^^* 
 certain wool which was described as " your wool," and 
 the right of X to bring evidence as to the quality and 
 quantity of the wool was disputed. The Court held 
 that it was admissible, and Ekle, J., thus stated the 
 grounds of decision: 
 
 "I am of opinion that the plaintiffs are entitled to 
 succeed. I assume that they must prove a written 
 contract, and that that contract must contain all the 
 material terms. The contract here is most explicit: 
 it is to purchase of the plaintiffs ' your wool,' at 16s, 
 a stone, to be delivered at Liverpool. The oral evidence 
 is no doubt admissible to identify the subject-matter 
 of the contract, and to show what ' your wool ' really 
 was. The judge who has to construe the written doc- 
 ument, cannot have judicial knowledge of the subject- jiacdonald 
 matter; and evidence has been invariably allowed tp[o^°°^E°& 
 identify it." E. 977. 
 
 245 
 
236 INTERPRETATION OF CONTRACT. Part IV. 
 
 Explanation of terms may be an explanation o' 
 8ome word not describing the subject-matter of the 
 contract, but the amount and character of the respon- 
 sibilitj which one of the parties takes upon himself 
 to show ap- as to the conditions of the contract. Where a vessel 
 phrases.'^ ° ^^ warranted " seaworthy," a house promised to be kept 
 in " tenantable " repair, a thing undertaken to be done 
 in a "reasonable" manner, evidence is admissible to 
 show the application of these phrases to the subject- 
 matter of the contract, and so to ascertain the inten- 
 tion of the parties. 
 8B.&S.669. In Surges v. Wickham, a vessel called the Ganges, 
 intended for river navigation upon the Indus, was sent 
 upon the ocean voyage to India, having first been tem- 
 porarily strengthened so as to be fit to meet the perils 
 of such a voyage. Her owner insured her, and 
 *236 in every policy of marine insurance there is an 
 implied warranty by the insured that the ves- 
 sel is "seaworthy." The Ganges was not seaworthy 
 in the sense in which that term would be ordinarily 
 applied to an ocean going vessel, but her condition was 
 made known to the underwriters, and though her ad- 
 venture was more dangerous than an ordinary voyage 
 to India, there appeared to be a reasonable probability 
 of its being brought to a safe ending. At any rate, 
 the underwriters took the risk in full knowledge of the 
 facts. The Ganges was lost, and the owner sued the 
 underwriters; they defended the action on the ground 
 that the vessel was unseaworthy in the ordinary sense 
 of the word as applied to an ocean voyage, and main- 
 tained that evidence could not be admitted to show 
 that, with reference to this particular vessel and voy- 
 age, the term was understood in a modified sense. It 
 was held that such evidence was admissible. The 
 grounds on which it was admissible are stated by 
 Blackburn, J., in a judgment which explains the rule 
 with the utmost clearness : 
 246 
 
Chap. I. § 3. RULES RELATING TO EVIDENCE. 237 
 
 "It is always permitted to give extrinsic evidence 
 to apply a written contract, and sliow what was the 
 subject matter to which it refers. When the stipula- 
 tions in the conti-act are expressed in terras which are 
 to be understood, as logicians say, not simplioiter, sed 
 secundem quid, the extent and the obligation cast 
 upon the party may vary greatly according to what 
 the parol evidence shows the subject matter to be; but 
 this does not contradict or vary the contract. For • 
 
 example, in a demise of a house with a covenant to 
 keep it in tenantable repair, it is legitimate to enquire 
 whether the house be an old one in St. Giles' or a new 
 palace in Grosvenor-square, for the purpose of ascer- 
 taining whether the tenant has complied with his cov- 
 enant, for that which would be repair in a house of the 
 one class is not so when applied to a house of the 
 other (see Payne v. Uaine). So, suppose a sale of a 6 M. «& W. 
 horse warranted to go well in harness; the qualities ^^'^^ 
 necessary to constitute a good goer in harness 
 would be different in a pony fit to draw a lady's *237 
 carriage or a dray horse; or in a lease of White- 
 acre for a year with an express contract to cultivate it 
 in a proper manner, the quantity of labor and manure 
 which the tenant would have to bestow must be diiferent 
 according as Whiteacre consists of hop gardens or mea- 
 dows. In each of these cases you legitimately inquire 
 what is the subject matter of the contract, and then the 
 terms of the stipulation are to be understood, not sim- 
 pliciter, but seov/ridem quid. The two last instances 
 I have supposed are not, as far as I know, decided 
 cases; but I give them to explain my meaning as 
 examples of a general rule. Now, according to theBurgesv. 
 view already expressed, seaworthiness is a term rela- g '^'^g^Mo' 
 tive to the nature of the adventure, it is to be under- [See Gray v. 
 stood, not sivipliciter, but secundem quid." Story'' 5741 
 
 Oases of the sort we have just described are called 
 cases of latent ambiguity, and are sometimes distin- 
 247 
 
238 INTERPBETATION OP CONTRACT. Pai-t IV. 
 
 guished from 'patent ambiguities, where words, are 
 omitted, or contradict one another: in such cases ex- 
 Sanderson v.planatory evidence is not admissible. Thus, where a 
 Bm^l^N. C. "^''1 of exchange was drawn for " two hundred pounds " 
 ^3. [See but the figures at the top were '• 24:5," evidence was 
 V. Hylycr, 4 not admitted to show that the bill was intended to be 
 Mass. aOo.] drawn for the larger amount. 
 
 Evidence of (o) Evidence is admissible of the usage of a trade or 
 
 usage. ^ locality which may add a term to a contract, or may 
 
 attach a special and sometimes non-natural meaning to 
 
 Usage to one of its terms. As an instance of a usage which 
 
 dente^ '^'^^' annexes a term to a contract we may cite the warranty 
 
 of seaworthiness just mentioned, which by custom is 
 
 always taken to be included in the contract of marine 
 
 insurance, though not specially mentioned. 
 
 Wiggles- Similarly in the case of agricultural customs a usage 
 
 Hson iSui *'''^'' *^^ tenant, quitting his farm at Candlemas or 
 
 L. C. 598. Christmas, was entitled to reap the corn sown the pre- 
 
 ernUnion R. Ceding autumn was held to be annexed to his lease, 
 
 R. Co. V. although the lease was under seal, and was silent on 
 Bmitli, 75 111. ° , , . ^ ' 
 
 496.] .the subject. 
 
 *238 The principle on which such usages are an- 
 
 1 M. & W. nexed is stated by Pakke, B., in Htttton v. War- 
 
 A. j,^^ Ten. to rest on the "presumption that in such transac- 
 
 At p. 475. ' ^ ^ '^ 
 
 And see tions, the parties did not mean to express m writmg 
 
 judgment of the whole of the contract by which they intended to 
 
 J., in Mollettbe bound, but to contract with reference to those 
 
 L R^Vc "p ^«°«'" "sages." 
 
 at p. 111. The admissibility of evidence of usage to explain 
 
 To explain pbrases in contracts, whether commercial, agricultural 
 or otherwise subject to known customs, might be 
 exemplified by reference to very numerous cases. The 
 principle on which such explanation is admitted has 
 been stated to be, " that words perfectly unambiguous 
 in their ordinary meaning are used by the contractors 
 in a different sense from that. In such cases the evi- 
 248 
 
Chap. I. § 3. RULES RELATING TO EVIDENCE. 239 
 
 dence neither adds to, nor qualifies, nor contradiots the Brown v. 
 existing contract; it only ascertains it by expounding ly^"^™'!! -^^ 
 the language." 
 
 Thus in commercial contracts in the case of charter 
 parties in which the days allowed for unloading the 
 ship "are to commence running 'on arrival' at the ship's Per Cole- 
 port of discharge, evidence may be given to show what jj^^f^g^ ' ^'' 
 is commonly understood to be the port. Some ports are Steam Co. v. 
 of large area, and by cnstora 'arrival' is understood jj^'^q^^'p 
 to mean arriving at a particular spot in the port." 658. 
 
 In like manner a covenant by the lessee of a rabbit 
 warren that he would leave 10,000 rabbits on the war- Smith v. 
 ren was explained by evidence of a usage of the locality ^^^"-vol ^' 
 that 1,000 meant 1,200. 
 
 Closely connected with the principal that usage may 
 explain phrases is the admissibility of skilled evidence Hills v. 
 to explain terms of art or technical phrases when used j ^ch^V^l ^ 
 in documents. 
 
 In order to afifect a contract a usage must be con- Per Erie, C. 
 
 sistent with rules of law. "A universal usage cannot ^''p'^^.g^g^'^Jg 
 
 be set up against the general law." And it must also C. B. N. S. 
 
 be consistent with the terms of the contract, for ,, \.,. 
 
 . , . ' Conditions 
 
 it is optional to the parties to exclude the usage, *239 under which 
 it they think fit, and to frame their contract so at^s^^ °^^'' 
 
 as to be repugnant to its operation. 
 
 (<^) In the admission of extrinsic evidence Equity Treatment of 
 goes further than Common Law, and, from the various |qu|ty* ^°' 
 processes by which it can deal with a contract, is 
 enabled to admit degrees of such evidence according 
 to the circumstances of the case, the negligence or the 
 bad faith of the parties. 
 
 A offered to X several plots of land for a round Proved 
 6um; immediately after he had dispatched his offer he ^.'j^^'JI^®^*^, 
 discovered that by a mistake in adding up the prices refusing 
 of the plots he had offered his land for a lower total ^rmance. 
 sum than he intended. He informed X of the mis- 
 249 
 
240 
 
 INTERPRETATION OF CONTRACT. Part IV. 
 
 Webster v. 
 Cecil, 30 
 Beav. 63. 
 
 take without delay, but not before X had concluded 
 the contract by acceptance. Evidence was admitted 
 to show tliat A's ofl'er was made by inadyertance, and 
 specific performance of the contract was refused. X 
 was left to such remedy by way of damages as the 
 Common Law Courts might give him. 
 
 In this case evidence extrinsic to the contract was 
 admitted to show that one of the parties was disen- 
 titled, by the mistake of the other, to specific perform- 
 ance. But where a parol contract has been reduced to 
 writing, or where a contract for a lease or sale of lands 
 has been performed by the execution of a lease or con- 
 [McLennon veyance, Equity will still admit evidence to show that 
 60 in'soe l' ^ term of the contract is not the real agreement of the 
 parties. And it will admit such evidence for two 
 purposes and under two sets of circumstances. 
 
 "Where a contract has been reduced into writing, or 
 a deed executed, in pursuance of a previous agreement, 
 and the writing or deed, owing to mutual mistake, fails 
 to express the intention of the parties, Equity will 
 rectify the written instrament in accordance with their 
 true intent. This may be done even though the par- 
 ties can no longer be restored to the position which 
 
 contract was 
 
 Rectifica- 
 tion of doc- 
 uments. 
 
 Earl Beau- 
 champ V. 
 Winn, L. R. 
 
 6 H. L. at p. they occupied at the time when the 
 made. 
 
 Murray v. 
 Parker, 19 
 Bead 305. 
 [Sargent v. 
 Adams, 3 
 Gray. 73.] 
 
 L. R. 8 Eq. 
 375. 
 
 4 D. &. J. 
 350. 
 
 [Emory v. 
 Moliler, 69 
 111. 331.] 
 See case 
 cited in Pol- 
 
 *240 Should the original agreement be ambiguous 
 in its terms, extrinsic, and, if necessary, parol 
 evidence will be admitted to ascertain the true intent 
 of the parties. 
 
 But there must have been a genuine agreement 
 {Mackenzie v. Coulson): its terms must have been 
 exressed under 'mutual mistake {Fowler v. Fowler): 
 and the oral evidence, if the only evide;ice, must be 
 uncontradicted. 
 
 Where mistake is not mutual, Equity will only ad- 
 
 lock, 453. mit extrinsic evidence in certain cases which appear to 
 Correction of be regarded as having something of the character of 
 250 
 
Chap. I. § 3. RULES RELATING TO EVIDENCE. 240 
 
 Fraud, and will admit it for the purpose of offering to mistake 
 the party seeking to profit by the mistake an option of ^'utuai'^''°* 
 abiding by a corrected contract or having the contract 
 annulled. 
 
 Instances of snch cases are Garrard v. Frarikel, SO Beav. 445. 
 cited above, or Harris v. Pepperell, in which the ®® P' 
 mistake of the one party was caused by the other, 
 though not with any fraudulent intent, and known Harris v. 
 to him before his position had been affected by the ^''^•'•^"''j' ^ 
 contract. 
 
 It would seem that, in such cases. Equity will not 
 use its corrective powers unless the parties can be 
 placed in the same position as if the contract had not 
 been made. 
 251 
 
24:1 INTERPRETATION OF CONTRACT. Part IV. 
 
 *241 CHAPTEE II. V^ 
 
 EULES EELATING TO COKSTEUCTION. 
 
 § 1. General Rules. 
 
 So FAR we haver dealt witli the admissibility evidence 
 in relation to contracts in writing. We now come to 
 deal with the rules of construction which govern the 
 interpretation of the contract as it is found to have 
 been made between the parties. 
 
 (1) Words to (1) The first rule to lay down is that words are to be 
 stood in.'^' understood in their plain and literal meaning. And 
 their plain this rule is followed even though its consequences may 
 meaning. ^^^ "^^-^q been in the contemplation of the parties, sub- 
 ject always to admissible evidence being adduced of a 
 usage varying the usual meaning of the words, and 
 subject to the next rule which we proceed to state. 
 
 Mallan v. (2) " An agreement ought to receive that construc- 
 
 & W 517 ^^^"^ which will best effectuate the intention of the par- 
 [Ricker v. ties to be collected from the whole of the agreement.^^ 
 40 Me. 431 " ^•'^^^^^ regard is to be had to the clear intention of 
 Ford V. the parties than to any particular words which they 
 
 B 86«' ™^y have used in the expression of their intent." 
 
 [Cleveland Y. These two rules would seem sometimes to be in con- 
 Story '2801 ^'^^^i l^ut they come substantially to this; men will be 
 
 (2) Subject taken to have meant precisely what they have said, 
 of inte'nt^o^ unless, from the whole tenor of the instrument, a defi- 
 from the nite meaning can be collected which gives a broader 
 meni^ °°"^' interpretation to specific words than their literal mean- 
 
 252 
 
Chap. II. § 1. RELATING TO CONSTRUCTION. 242 
 
 ing would bear. The Courts will not make *2i2 
 an agreement for the parties, but will ascertain 
 what their agreement was; if not by its general pur- 
 port, then by the literal meaning of its words. Sub- General 
 sidiary to these main rules there are various others, all j?ui'e'g"of ° 
 tending to the same end, the aifeeting of the intention construction, 
 of the parties so far as it can be discerned. 
 
 Thus Courts, both of Law and Equity, will correct 
 obvious mistakes in writing and grammar. 
 
 They will restrain the meaning of general words by 
 more specific and particular descriptions of the sub- 
 ject matter to which they are to apply. 
 
 Tliey assign to words susceptible of two meanings 
 that which will make the instrument valid. Thus in 
 Haigh v. Brooks, a document was expressed to be 10 A. & E. 
 given to the plaintiffs "in consideration of your ^^'-^^'y j^ewaH 19 
 in advance " to J. S. It was argued that this showed Vt. 203.] 
 a past consideration, but the Court held that the words 
 might mean a prospective advance, and be equivalent 
 to " in consideration of your heooming in advance," 
 or "ora condition of your being in advance." 
 
 They will construe words most strongly against the 
 party who used them. The principle on which this 
 rule is based seems to be that a man is responsible forFowkes v. 
 ambiguities in his own expression, and has no right to ¥'^"';|'^®'®'' 
 induce another to contract with him on the suppo- Association, 
 sition that his words mean one thing while he hopes j^j' ygg' 
 the Court will adopt a construction which thev would [Deblois v. 
 mean another thing, more to his advantage. I, ggj 
 
 § 2. Hales of Law and Equity as to Time and 
 Penalties. 
 
 There are two points of construction on which law 
 and equity differ. These have reference to terms 
 respecting time and penalties. 
 
 At law, " time was always of the essence of the con- Time, 
 tract." If A made a promise to X whereby he under- of the es- 
 253 
 
244 
 
 INTERPRETATION OF CONTRACT. Part lY. 
 
 sence of the 
 contract at 
 Common 
 Law. 
 
 Not so in 
 Equity. 
 
 Lennon v. 
 Napper, 3 
 Soli. & L. 
 684. 
 
 tVoorhes v. 
 )eiVIyer, 2 
 Barb. 37.] 
 
 PeMalties. 
 
 Penalty and 
 
 liquidated 
 
 damages. 
 
 took to do a certain thing by a certain day in 
 *243 consideration that X would thereupon do some- 
 thing for him, X was discharged from his prom- 
 ise if A had not fulfilled his by the date named in the 
 contract. Equity, however, looked further into the 
 intention of the parties, so as to ascertain whether in 
 fact the performance of the contract was meant to de- 
 pend upon A's promise being fulfilled to the day, or 
 whether a day was named in order to secure perform- 
 ance within a reasonable time. If the latter was found 
 to be the intention of the parties, equity would not 
 refuse to A the enforcement of X's promise if his own 
 was performed within a reasonable time. It is never- 
 theless open to the parties to make time of the essence 
 of the contract by express agreement. 
 
 Penalties have been regarded always by Courts of 
 Equity, and for a long time past by Courts of Law, 
 as open to questions of construction of the following 
 character: 
 
 Where the parties aiSx a penalty to the non-perform- 
 ance of his promise by one, or each of them, they may 
 have intended to effect either of two purposes; to assess 
 the damages at which they rate the non-performance 
 of the promise, or to secure its performance by the 
 imposition of a penalty in excess of the actual loss 
 likely to be sustained. 
 
 If the former was their intention, the sum named is 
 recoverable as "liquidated damages."^ If the 
 *244 latter, the amount recoverable is limited to the 
 loss actually sustained, in spite of the sum under- 
 taken to be paid by the defaulter. In construing con- 
 tracts in which such a term is introdnced, the Courts will 
 not be guided by the name given to the sum to be paid. 
 
 Bull en & 
 Leake, Free, 
 of I'lead- 
 ings, 188. 
 
 'Liquidated damages are "the sum agreed upon in the con- 
 tract by the parties themselves as the damages of a breach of it." 
 Unliquidated damages are such as are left to be assessed by a jury 
 according to the loss sustained. 
 254 
 
Chap. II. § 3. RELATING TO CONSTRUCTION. 245 
 
 If it be in the nature of a penalty they will not allow 
 it to be enforced although the parties have expressly 
 stated that it is to be paid as liquidated damages and 
 not as a penalty. 
 
 The leading case upon this subject is Kemhle v. CBing. 147. 
 Farren, and from it the following rules may be 
 ded uced : 
 
 If the contract is for a matter of certain value and 
 a sum is fixed to be paid on breach of it which is in [TBearden v. 
 excess of that value, then the sum fixed is a penalty jj™'^ hg qn 
 and not liquidated damages. L. 554.] 
 
 If the contract is for a matter of uncertain value 
 and a sum is fixed to be paid on breach of it, the sum 
 is recoverable as liquidated damages. There is " noth- 
 ing illegal or unreasonable in the parties, by their Per Tindal, 
 mutual agreement, settling the amount of damages, H^' '£.™' 
 uncertain in their nature, at any sum upon which they [Chase v. 
 may agree. q^.^^^ ^2.] 
 
 If the contract contains a number of terms some of 
 which are of a certain value and some are not, and the 
 penalty is applied to a breach of any one of them, it 
 is not recoverable as liquidated damages, however [Watts v. 
 strongly the parties may have expressed their intention ^'Ja^^n' ^ 
 that it shall be so. 
 
 Thus in Kemble v. Farren the defendant agreed to 6 Bing. 147. 
 act at Covent Garden theater for four consecutive sea- 
 sons and to conform to all the regulations of the thea- 
 ter, and the plaintiif promised to pay the defendant 
 £3 Qs. %d. every night, during that time, that the 
 theater should be open for performance, and to give 
 him one benefit night in each season. 
 
 It was further agreed that fur a breach of any term 
 , of this agreement by either party, the one in default 
 should pay the other £1,000, " to which sum it was 
 thereby agreed that the damages sustained by 
 any such omission, neglect or refusal, should *24:5 
 amount; and which sum was thereby declared 
 255 
 
243 INTERPRETATION OF CONTRACT. Part IV. 
 
 by the said parties to be liquidated and ascertained 
 damages and not a penalty, or penal sum, or in tlie 
 nature thereof." The defendant refused to act during 
 the second season, the jury put the damages for his 
 breach of contract at £750, and the plaintiif moved 
 for a rule to raise them to £1,000. 
 
 But the Court held, that in spite of tlie explicit 
 statement of the parties that the sum was not to be 
 regarded as a penalty, it must be so regarded. If the 
 penal clause had been limited to breaches uncertain in 
 their natui-e and amount, it was thought that it might 
 have had the effect of ascertaining the damages, for 
 the reason above cited. " But," said Tindal, C. J., 
 " in the present ease the clause is not so confined ; it 
 extends to the breach of any stipulation by either . 
 party. If, therefore, on the one hand, tlie plaintiff had 
 neglected to make a single payment of £3 6s. id. per 
 day, or on the other hand, the defendant had refused 
 to conform to any usual regulation of the theatre, how- 
 ever minute or unimportant, it must have been con- 
 tended that the clause in question, in either case, would 
 have given the stipulated damages of £1,000. But that 
 a vei'y large sum should become immediately payable, 
 in consequence of the non-payment of a very small 
 sum, and that the former should not be considered as 
 KemWe V. a penalty appears to be a contradiction in terms; the 
 Farren, 6 ^^^^ being precisely that in which courts of equity 
 For a full have always relieved, and against which courts of law 
 fhis subject '' •'■'^'^®' ^" modern times, endeavored to relieve, by 
 see Story on directing juries to assess the real damages sustained 
 
 Chaii 76 ^J ^^ breach of the agreement." 
 256 
 
Party. DISCHARGE OP CONTRACT. 246 
 
 PART V. *246 
 
 DISCHARGE OP CONTRACT. 
 
 We have now dealt with the elements which go to Discliarge of 
 the formation of Contract, with the operation of Con- '^°'*"'*°'" 
 tract when formed, and with its interpretation when 
 it comes into dispute. It remains to consider the 
 modes in which the contractual tie may be loosed, and 
 the parties wholly freed from their rights and liabili- 
 ties under the contract. And in dealing with this 
 part of the subject it will be proper to consider, not 
 merely the mode in which the original contract may 
 be discharged, but, in case of its being discharged by 
 breach, the mode in which the right of action arising 
 thereupon may be extinguished. 
 
 The modes in which a contract may be discharged how effected, 
 would seem to be these: 
 
 {a) It may be discharged by the same process which Agreemeat 
 created it, mutual agreement. 
 
 (5) It may be performed; and all the duties nnder- Performp 
 taken by either party may be thereby fulfilled, and all*'^'^®" 
 the rights satisfied. 
 
 (e) It may be broken; upon this a new obligation Breach, 
 connects the parties, a right of action possessed by the 
 one against the other. 
 
 {d) It may become impossible by reason of certain Tmpossl. 
 circumstances which are held to exonerate the parties "'"'y- 
 from their respective obligations. 
 
 (e) It may be discliarged by the operation of rules Operatiou of 
 of law upon certain sets of circumstances, to be here- ^^^' 
 after mentioned. 
 257—17 
 
247 
 
 DISCHARGE OF CONTRAOT. 
 
 PartV. 
 
 *247 
 
 CHAPTEE I. 
 
 DISCHAEGB OF CONTEAOT BT AGEEEMENT. 
 
 Forms of We have often noted, as the essential feature of the 
 
 ^^^^^^f^j^y contractual obligation, that it is the result of the vol- 
 untary act of the parties, expressed by their agreement. 
 As it is their agreement which binds them, so by their 
 agreement they may be loosed. 
 
 And this mode of discharge may occur in one of 
 three forms : waiver, substituted agreement, condition 
 subsequent. 
 
 § 1. Waiver. 
 
 Waiver. A contract may be discharged by express agreement 
 
 that it shall no longer bind either party. This pro- 
 cess is called a waiver, cancellation, or rescission of 
 the contract. 
 
 An agreement of this nature is subject to the rule 
 
 which governs all simple contracts, with regard to 
 
 consideration. And the consideration for the promise 
 
 of eachv party is the abandonment by the other of his 
 
 rights under the contract. The rule, often stated, that 
 
 Byleaon "a simple contract may, "before breach, be waived or 
 
 Bills, 197. discharged, without a deed and without consideration," 
 
 must be taken to mean that, where the contract is 
 
 executory, no further consideration is needed for an 
 
 agreement to rescind, than the discharge of each party 
 
 by the other from his liabilities under the contract. 
 
 Mere waiver There seems to be no authority for saying that a 
 
 of contract- contract, executed upon one side, can be discharged 
 
 invalid. before breach, without consideration; that where A 
 
 258 
 
Chap. I. § 1. BY AGREEMENT. 248 
 
 has done all that he was bound to do and the 
 time for X to perform his promise has not yet *248 
 arrived, a bare waiver of his claim by A would 
 be an effectual discharge to X. 
 
 In fact, English law knows nothing of the abandon- 
 ment of such a claim, except by release under seal, or 
 for consideration. The plea of " waiver " under the Bullen and 
 old system of pleading was couched in the form of an of p[padiMS 
 
 agreement between the parties to waive a contract, an Tit. Waiver; 
 
 UsscissioQi 
 agreement consisting of mutual promises, the con- 
 sideration for which is clearly the relinquishment of a 
 right by each promisee. Where a discharge by waiver 
 is alleged as a defense in an action for breach of con- 
 tract, the cases tend to show that the defendant must 
 set up, in form or substance, a mutual abandonment 
 of claims, or else a new consideration for the waiver. 
 
 In King v. Gillett, the plaintiff sued for breach of 7M.&W. B5. 
 a promise of marriage; the defendant pleaded that 
 before breach he had been exonerated and discharged 
 by the plaintiff from the performance of his promise. 
 The Court held that the plea was allowable in form; 
 " yet we think," said Aldeesoit, B., " that the defend- 
 ant will not be able to succeed upon it, . . . unless he 
 proves a proposition to exonerate on the part of the 
 plaintiff, acceded to hy himself; and this in effect will 
 be a rescission of the contract." 
 
 In Dohson v. Espie, the plaintiff sued the defend- 3 H. & N. 79. 
 ant for non-payment of deposit money due upon a sale 
 of land. The defendant pleaded that, before breach 
 of his promise to pay, the plaintiff had given him 
 leaoe and license not to pay. The Court held that 
 such a plea was inapplicable to a suit for the breach 
 of a contract, and that the defendant should have 
 pleaded an exoneration and discharge; but it is diffi- 
 cult to see why the pleader should not have adopted 
 the latter form of plea, unless it were that (according 
 to the reasoning of Alderson, B., in King v. Gillett) 
 259 
 
249 DISCHARGE OF CONTRACT. PartV. 
 
 an exoneration means a promise to exonerate, which 
 like any other promise needs consideration to support 
 it. It is clear that in Dohson v. JEspie the plaintiff 
 was to obtain nothing for his alleged waiver; 
 *249 neither the relinquishment of a claim, nor any 
 fresh consideration. 
 Finally, we have the express authority of Paeke, 
 6 Exch. 839. B., in Foster v. Dawier, for saying that an executed 
 contract, i. e., a contract in which one of the parties 
 has performed all that is due from him, cannot be dis- 
 charged by a parol waiver. But this case illustrates 
 anotlier feature of the matter under discussion, to 
 which we will now proceed. 
 Peculiarity To the general rule which we have laid down there 
 exchange ^^ ^"^ important exception in tlie case of bills of ex- 
 and promis- change and promissory notes. The rights of the holder 
 sory no es. ^^ such instruments may be waived and discharged 
 without any consideration for sucli waiver. The point 
 6 Exch. 839. arose in the case of Foster v. Daxober. The plaintifi 
 was executor of one J. C, to whom the defendant had 
 given promissory notes for £1,000 as security for a 
 loan of tliat amount. Afterwards J. 0. had given the 
 defendant a discharge for the promissory note. It was 
 held that the discharge, though unsupported by con- 
 sideration, was valid. 
 
 The Court said, " It is competent for both parties to 
 an executory contract, by mutual agreement, without 
 any satisfaction, to discharge the obligation of that 
 contract. But an executed contract cannot he dis- 
 cliarged except iy a release under seal, or htj perform- 
 ance of the obligation, as by payment, where the obli- 
 gation is to be performed by payment. But a prom- 
 issory note or a bill of exchange appears to stand on a 
 
 different footing to simple contracts The rule 
 
 of law has been so often laid down and acted upon, 
 although there is no case precisely on the point as be- 
 tween immediate parties, that the obligation on a bill 
 260 
 
Chap. I. § 3. BY AGREEMENT. 250 
 
 of exchange may be discharged by express waiver, thate Exch. 851. 
 
 it is too late now to question the propriety of that 
 
 rule." 
 
 And it was further held that the rule as to bills of 
 
 exchange, originating in the law merchant by which 
 
 those instruments are almost entirely governed, 
 
 would apply to promissory notes which derive *250 
 
 their negotiable character from statute. The [But see con- 
 
 Statute 3 & 4 Anne, c. 9, makes the same law appli- ^"^ ^^J'ls!'*'""'^ 
 
 cable to both instruments. paugh, 13 
 
 Johns, 87.] 
 
 § 2. Substituted Contract. 
 
 A contract may be discharged by an alteration in Substituted 
 its terms which, in effect, substitutes a new agreement ^""^''^ct, 
 for the old one. The difference between this and the how differ- 
 first mentioned mode of discharge by agreemont lies ^°''. ^^°^ 
 
 o Jo waiver; 
 
 in the fact that the Erst is a total obliteration of the 
 contract, the second is a substitution of a new bond 
 between the parties in place of the old one. 
 
 And it operates as a rescission in this way, that if it [Stow v.Rus- 
 does not in terms express an intention that the orig- jji j^l^-i 
 inal contract should be waived, it indicates such an 
 intention by the introduction of new terms or new 
 parties. The change of rights and liabilities, and con- may be an 
 sequent extinction of those which before existed, forms "^^ree'^ ^^ 
 the consideration on each side for the new contract. 
 
 But the intention to discharge the original contract but the Im. 
 must distinctly appear, from the inconsistency of the^J,gj'^g'^ 
 new terms with the old ones. If there be a mere post- clear, 
 ponement of performance, for the convenience of one [Bacon v. 
 of the parties, the contract is not thereby discharged. jj"^^,j ^^ 
 
 The question has often arisen in contracts for thcHowdiffer- 
 sale and delivery of goods, where the delivery is to ent from 
 extend over some time. The purchaser requests amentofper- 
 postponement of delivery, then refuses to accept the ^^™^''''®' 
 goods at all, and then alleges that the contract was dis- 
 charged by the alteration of the time of performance; 
 261 
 
251 DISCHARGE OF CONTRACT. Part V. 
 
 that a new contract was thereby created, and that the 
 new contract is void for non-compliance with the 17th 
 section of the Statute of Frauds. 
 
 But the Courts have always recognized " the distinc- 
 tion between a substitution of one agreement 
 Hickman v. *251 for another, and a voluntary forbearance to de- 
 rToo.P." -^^^^^ ^* *^^^ request of another," and will not 
 
 606. regard the latter as affecting the rights of the parties 
 
 further than this, that if a man asks to have perform- 
 ance of his contract postponed, he does so at his own 
 risk. For if the market value of the goods which he 
 should have accepted at the earlier date has altered at 
 the latter date, the rate of damages may be assessed, 
 Ogle V. Earl as against him, either at the time when the perform- 
 2 cT^B 275 ^^'^^ should have taken place, and when by non-per- 
 L. R. 3 Q. B. formance the contract was broken, or when he ulti- 
 mately exhausted the patience of the vendor and 
 definitely refused to perform the contract. 
 
 The contract is discharged by alteration of its terms 
 
 when (a) what is to be done is so far altered as to be 
 
 inconsistent with it and to amount to a new contract, 
 
 or (b) when a new party is substituted for a previous 
 
 one by agreement of all three. 
 
 (a) Substi- A good illustration of the first of these modes of 
 
 8*0 V^lTs discharge is afforded by the case of Thornhill v. Meats. 
 
 831. A undertook certain building operations for X, which 
 
 rence ^T' 'Were to be completed by a certain date, or a sum to' be 
 
 Dale, 3 paid as compensation for delay. While the building 
 
 Johns. 6 N. ^ . ^ / J u . *r, 
 
 T. 33.] w^s in progress an agreement was made between the 
 
 ' 'WrLiiES, J., in giving judgment in the Exchequer Chamber 
 L. R. 3 Q. B. in the case of Ogle v. Earl Vane, holds that by the forbearance 
 273. on the part of the plaintiff, at the request of the defendant, to in- 
 
 sist upon delivery of the goods at and after the time for the per- 
 formance of the contract, an agreement arose which, though for 
 want of consideration for the forbearance it could not furnish a 
 cause for action, was nevertheless capable of att'ecting the mea 
 Bure of damages. He calls it an Accord without a satisfaction. 
 As to the nature of Accord and Satisfaction, see p. 306, 
 262 
 
Chap. I. § 3. BY AGREEMENT. 252 
 
 parties for additional work, by whicli it became impos- 
 sible that the whole of the operations should be con- 
 cluded within the stipulated time. It was held that 
 the subsequent agreement was so far inconsistent with 
 the first as to amount to a waiver of the sum stipu- 
 lated to be paid for delay. 
 
 A conti-act may be discharged by the introduction (b) Substi- 
 of new parties into the original agreement, "^ ® parties, 
 
 whereby a new contract is created, in which the *252 
 terms remain the same, but the parties are 
 different. 
 
 This may be done either by express agreement such See Part IIL 
 as was described in a previous chapter, or by the con- p '^^^' ' 
 duct of the parties, indicating acquiescence in a change 
 of liability. 
 
 If A has entered into a contract with X and M, and 
 X and M agree among themselves that M shall retire 
 from the contract and cease to be liable npon it, A 
 may either insist npon the continued liability of M, or 
 he may treat the contract as broken and discharged by 
 the renunciation of his liabilities by one of the parties 
 to it. 
 
 If however A, after he becomes aware of the retire- 
 ment of M from the contract, continues to deal with 
 X as though no change had taken place, he will be 
 considered to have entered into a new contract to 
 accept the sole liability of X, and will not be entitled 
 to hold M to his original contract. 
 
 The case of Sart v. Alexander illustrates this rule. 2 M. & W. 
 The plaintiff employed the defendant with other mem- 
 bers of a firm as his bankers; the defendant retired; 
 notice, in various forms, of his retirement from the 
 firm was shown to have reached, or to have been acces- 
 sible to, the plaintiff, who nevertheless contined to 
 employ the firm. Finally, the firm became bankrupt: 
 the plaintiff sued the defendant as liable to him upon 
 the original contract, as being one of the members of 
 263 
 
253 
 
 DISCHARGE OF CONTRACT. 
 
 Part Y. 
 
 [But see 
 Smitli V. 
 Rogers, 17 
 Johns. 340.] 
 
 the firm whom he had retained as his bankers. The 
 jury found that the defendant's retirement was suflS- 
 ciently brought to the notice of the plaintiff, and as 
 the firm had nevertheless been continuously employed 
 by him, tlie Court held that a new contract had been 
 formed between the plaintiff and the firm of which 
 the defendant was no longer a member. "I apprehend 
 the law to be now settled," said Paeke, B., '' that if 
 one partner goes out of a firm and another comes in, 
 the debts of the old firm may, by the consent of all 
 the three parties — the creditor, the old firm, and the 
 
 new firm — be transferred to the new firm." 
 *253 Thus a change of liabilities, accepted by the 
 
 plaintiff, rescinded the original contract by the 
 creation of a new one to which the defendant was not 
 a party. 
 
 § 3. Provisions for Discharge. 
 
 A contract may contain within itself the elements 
 of its own discharge, in the form of express provisions 
 for its determination under certain circumstances. 
 These circumstances may be the non-fulfillment of a 
 specified term of the contract; the occurrence of a 
 particular event; or the exercise by one of the parties 
 of an option to discontinue the contract. 
 
 Discharge 
 optional on 
 non-fulfill- 
 ment of a 
 term. 
 
 In the first of tliese three cases, that in which the 
 non-fulfillment of a specified term of the contract 
 gives to one of the parties the option of treating the 
 contract as discharged, we seem to be approaching 
 very near to the subject of the discharge of contract 
 by hreach. For this too may arise from the non-ful- 
 fillment of a term which the parties consider to be 
 vital to the contract. 
 
 But there is a marked difference between a non- 
 fulfillment contemplated by the parties, the occurrence 
 of which shall, it is agreed, make the contract deter- 
 264 
 
Chap. I. § 3. BY AGREEMENT. 254 
 
 minable at the option of one, and a hreach, or non- 
 fulfillment not contemplated or provided for by the 
 parties. In the one case the parties have, in the other 
 they have not, looked beyond the immediate objects 
 of the contract: in the one case the default which is 
 to constitute a discharge is specified by the agreement 
 of the parties; in the other it must always be a ques- 
 tion of fact or of construction whether or no the i 
 default was in a matter vital to the contract, so as to 
 operate as a discharge by breach. 
 
 A good illustration is afforded by the case of Head L. R T. 
 V. Tattersall of such a condition, or provisional dis- '^^ * 
 charge of a contract introduced into its terms. 
 
 A bought a horse of X. The contract of *254 
 sale contained, among others, these two terms : 
 that the horse was warranted to have been hunted 
 with the Bicester hounds, and that if it did not answer 
 to its description the buyer should be at liberty to 
 return it by the evening of a specified day. It turned 
 out that the horse did not answer to its description 
 and had never been hunted with the Bicester hounds. 
 The horse was returned by the day named, but as it 
 had in the meantime been injured, though by no fault 
 of A, X disputed the right of A to return it. It was 
 held that he was entitled to do so. " The effect of the 
 contract," said Cleasby, B., " was to vest the property 
 in the buyer subject to a right of rescission in a partic- 
 ular event, when it would revest in the seller. I think 
 in such a case that the person who is eventually en- 
 titled to the property in the chattel ought to bear anj 
 loss arising from any depreciation in its value caused 
 by an accident for which nobody is in fault. Here XHead v. Tat- 
 is the person in whom the property revested, and liei^^^^J/j^^^^" 
 must therefore bear the loss." 
 
 The parties may introduce into the terms of their Occurrence 
 contract a provision that the fulfillment of a condition eventf ^'^ * 
 265 
 
255 DISCHARGE OF CONTRACT. Part V. 
 
 or the occurrence of an event shall discharge them 
 both from further liabilities under the contract. 
 Condition of Such a provision is called a condition subsequent, 
 °° ■ and is well illustrated by the case of a Bond, which is 
 
 a promise subject to, or defeasible upon a condition 
 expressed in the Bond. 
 Excepted Such a provision may be further illustrated by the 
 
 chaner^ " excepted risks " of a charter-party. In a contract of 
 party. that nature the ship-owner agrees with the charterer 
 
 to make the voyage on the terms expressed in the con- 
 tract, " the act of God, Queen's enemies, restraints of 
 princes and rulers, fire, and all and every other dangers 
 and accidents of the seas, rivers, and navigation, of 
 whatsoever nature or kind, during the said voyage 
 always excepted." The occurrence of such an 
 *255 excepted risk releases the ship-owner from the 
 strict performance of the contract; and if it 
 should take place while the contract is wholly execu- 
 tory, and amount to a frustration of the entire enter- 
 prise, the parties are altogether discharged. 
 L. R 7 Q. B. In Geipel v. Smith, the plaintiff had chartered the 
 defendant's vessel to go to a spout, load a cargo of 
 coals, and proceed thence to Hamburg; the contract 
 contained the iisual excepted risks. Before anything 
 was done under the contract a war broke out between 
 France and Germany, and the port of Hamburg was 
 blockaded by the French fleet. The defendant there- 
 upon, regarding a blockade as a " restraint of princes," 
 refused even to load a cargo, and treated the contract 
 as being at an end. The plaintiif sued him for not 
 having fulfilled so much of the contract as would not 
 have involved the risk; but the Court held that as a 
 performance of the main object of the contract had 
 become impossible by the occurrence of an excepted 
 risk, the defendant was not bound to attempt a fulfill- 
 ment of his preliminary duties. 
 266 
 
 404, 
 
Chap. I. § 3. BY AGREEMENT. 256 
 
 Another illustration may be drawn from the contract Limitations 
 entered into by a common carrier. A common carrier jiabijity^'^ ^ 
 is said to warrant or insure the safe delivery of goods 
 entrusted to him; and by this we mean that he makes 
 an almost unqualified promise to bring the goods safely 
 to their destination or to indemnify the owner for their 
 loss or injury. His promise is, however, not wholly 
 unqualified; it is defeasible upon the occurrence of 
 certain excepted risks, — " The act of God and of the 
 Queen's enemies," and injuries arising from defects 
 inherent in the thing carried. This qualification is an Kugent v. 
 implied term in every contract made with a carrier, -^q'p' j^ 
 and the occuri-ence of tlie risks exonerates him from 423. 
 liability for loss incurred through their agency. 
 
 The Act of God is a phrase which needs some 
 explanation, but which has not until very recently 
 received any judicial exposition. 
 
 The case of Nugerd v. Smith, however, affords *256 L. K. 1 0. P. 
 
 a good definition of its meaning, so far as its „ .' 
 
 ° . . ., , J. , ,. . r -r 1 , Meaning of 
 
 meaning is susceptible oi dennition. in that case the phrase 'Act 
 
 defendant, a common carrier by sea, received from the°^ ^°'^-' 
 plaintiff a mare to be carried from London to Aber- 
 deen. In the course of the voyage the ship met with 
 rough weather, and the mare, being much frightened 
 and struggling violently, suffered, injuries of which she 
 died. JMo negligence was proved against the defend- 
 ant, but the Court of Common Pleas held him to beL. R 1 0. P. 
 liable on the ground that the rough weather was not ^- ■^®* 
 60 violent and unusual as to amount to " the Act of 
 God," nor was the struggling of the mare alone enough 
 to show that it was from her inherent vice that she was 
 injured. But the Court of Appeal reversed this deci- 
 sion, and endeavored to frame an intelligible definition 
 of such an " irresistible cause of loss " as is described 
 by the term "Act of God." The difference between 
 the two decisions comes to this: The Court of Com- 
 mon Pleas held that to constitute the " Act of God," 
 26T 
 
26T 
 
 DISCHARGE OF CONTRACT. 
 
 Part V. 
 
 Per Brett, J., a loss must arise from "such a direct and violent and 
 
 P' sndden and irresistible act of nature" as could not be 
 
 foreseen, or, if foreseen, prevented; the Court of Ap- 
 peal held " that it is not necessary to prove that it was 
 absolutely impossible for the carrier to prevent it, but 
 that it is sufHcient to prove that hy no reasonable 
 
 PerMeliish, precaution under the circumstances could it have heen 
 
 L. J., p. 441. ^^.g^^ntedP 
 
 This exception from the general liability of the car- 
 rier of goods is a known and understood term in every 
 contract which he makes. The discharge hence arising 
 must be distinguished from discharge arising from a 
 subsequent impossibility of performance not expressly 
 provided against in the terms of the contract. With 
 this we shall deal hereafter. 
 
 Discharge 
 optional 
 •witli notice. 
 Nowlan V. 
 Ablett, 3 C. 
 M. & R. 54. 
 
 Parlcer v. 
 Ibbet-<on, 4 
 C. B. N. S. 
 347. 
 
 [Bee Briclg- 
 port Bank v. 
 Dyer, 19 
 Conn. 137.] 
 
 Thirdly, a continuing contract may contain a pro- 
 vision making it determinable at the option of one of 
 the parties upon certain terms. Such a provision ex- 
 ists in the ordinary contract of domestic service, 
 *257 the servant can terminate the contract by a 
 month's notice, the master by a month's notice 
 or the payment of a month's wages. And similar 
 terms may be incorporated with other contracts 
 between employer and employed, either expressly or 
 by the usage of a trade. 
 
 A was engaged by X to serve him for a year as 
 agent in his business of a woolen merchant, but was 
 dismissed in the course of the year at a month's notice. 
 He sued X for breach of contract. It was proved to 
 be a custom of the trade tliat all such engagements 
 were determinable at a month's notice. Tiie jury 
 found that the custom existed, but they further found 
 that it did not form a part of the contract. The Court, 
 however, decided that, having been found to exist, the 
 custom must be taken to form a part of the contract, 
 and that it was not for the jury to construe the con- 
 268 
 
Chap. I. § 3. BY AGBEEMENT. 258 
 
 tract so as to exclude it. X. was therefore held to be 
 entitled to determine the contract in virtue of this 
 implied terra, although the engagement was to have 
 lasted a year had he not exercised the option given to 
 him by the custom. 
 
 It remains to consider the form in which it is neces- Form of dis. 
 sary to express an agreement purporting to discharge agreement. 
 a contract already existing. 
 
 The general rule is, that a contract must be dis- FLoach v. 
 charged in the same form as that in which it is made. j|^'""'"'-i~ 
 A contract under seal can only be discharged by agree- Weekly 
 ment if that agreement is also under seal: a contract i^ 93. ' 
 entered into by parol may be discharged by parol. 
 
 Parties to a deed cannot, therefore, discharge their (1) Id case 
 obligations by a parol contract; but it is possible for "^^g "gg^°' 
 them to make a parol contract which creates obliga- discharge 
 tions separate from, and yet substp,ntially at variance™"?'.''^ , 
 , with tlie deed. 
 
 If M and X enter into a contract under seal, they hut a parol 
 cannot meet and by word of mouth or by writing ^^""j "5^*^15 
 waive their respective rights under the contract. ButtiiougU at 
 they may make such a contract as does in effect y^m^ deed, 
 
 contravene the terms of the deed, and gives a *258 
 right of action to which the deed furnishes no 
 answer. M and X entered into a contract under seal, by Nash v. Arm- 
 which M let to X certain rooms for a certain time at agJ*J^°^ q-g 
 rent to be ascertained in a certain way. M died, and A, [See Bab- 
 his administrator, agreed with X by parol, that in con- ^^^s, 23 Vt. ' 
 Bideration of £70 to be paid by X and to be taken as S**!-] 
 a reasonable rent, neither party should be called upon 
 to perform his part under the deed. X failed to make 
 tlie payment agreed upon, and A sued him upon the 
 parol contract. It was urged on behalf of X that the 
 parol contract was an attempt to vary the deed by an 
 instrument not under seal; and that a performance of 
 this contract, being no discharge of the deed, would 
 269 
 
259 DISCHARGE OF CONTRACT. Part V. 
 
 leave him liable to his previous obligation. But tlie 
 Court held that the parol contract created a new obli- 
 gation, and was not an attempt to vary an old one; 
 See per that a performance of this new contract would furnish 
 3g3 IS, J., p. ^ gQQ(j equitable answer to an action brought upon the 
 contract under seal; and that therefore A was entitled 
 to bring action upon the parol contract. 
 (3) In case of A parol or simple contract may be discharged by writ- 
 tracts.*'"'^' iiig or by word of mouth, whether or no the original con- 
 tract be in writing; and this follows from what has been 
 said before, that the writing is not the agreement but the 
 evidence of it, and that as tlie essentials of agreement 
 lie in the expressed intention of the parties and not 
 in the writing wliich is the instrument of that expres- 
 sion, the contract may be discharged " eo Ugamine quo 
 ligatum est,'" by a valid expression of the intention to 
 put an end to it. 
 Under 39 But an exception must be made where a contract is 
 
 s. 4 '°' ' required by Statute to be in writing. In such a case 
 Go man v. there appears to be authority for saying that an abso- 
 Vern^p' 240 ^"''® 'iischarge of the contract may take place by word 
 [ArringtDQ v. of mouth. But if the discharge be not a simple rescis- 
 Ala 7^4- ^^'^'^ o'" cancellation, if it be such an implied discharge 
 Gutiirie v. as arises from the making of a new agreement 
 
 Oregon 353.1 *259 inconsistent with the old one, then there must 
 be writing such as would satisfy the enactment 
 which governs the original contract. 
 
 The most recent authority upon this point is the 
 L. R. 2 Exch. case of Noble v. Ward. There a contract was made 
 
 rSee Bacon ^*^^ *^® ^^'■^ °^' g'^o*^^ upon the 18th of August, in 
 V. Cobb, 45 which it was asrreed that tlie goods should be delivered 
 
 111 47 1 m 
 
 ■■' within a certain time. This contract was in writing 
 
 and satisfied the requirements of 29 Car. II. c. 3, s. 
 
 17. On the 27th of September a verbal agreement 
 
 was made extening the time for delivery. An action 
 
 was brouglit by tlie vendors for non-acceptance of the 
 
 goods, and " the defendants contended that the efiect 
 
 270 
 
 s. 
 
Chap. I. § 3. BY AGREEMENT. 260 
 
 of the contract to extend the time for delivery was to 
 rescind the contract of the 18th of August." But the 
 agreement of the 27th of September, being made by 
 word of mouth, was invalid, and could not operate as a 
 new contract for the sale of the goods. The defendants, 
 nevertheless, contended that though invalid to create a 
 new contract, it was valid to rescind the existing one, 
 but this contention the Court would not allow. It was, 
 in fact, laid down " that no rescission could take place 
 by an invalid contract." 
 
 The same rule has been applied to contracts under 
 the 4th, and contracts under the 17th sections of the Goss v. Lord 
 Statute of Frauds, and yet it should seem that a dif- &f |°^g^ ^* 
 ferent principle might have been applied to the two 
 sections. If A and X make a contract in writing 
 under the 17th section and afterwards attempt to vary 
 it by word of mouth, they make a new and, strictly 
 speaking, a void contract, one which the Statute says 
 shall not " be held to be good." A worthless agree- 
 ment is obviously as incapable of rescinding existing 
 obligations as it is of creating new ones. But a con- 
 tract made in breach of the 4th section is not invalid, 
 but incapable of proof, and so unenforceable. If there- 
 fore A and X make a contract which satisfies the 
 requirements of the 4th section and afterwards at- 
 tempt to vary it by word of mouth, they make a new 
 contract which, though it cannot be sued upon, 
 is still effectual for some purposes. It is at any *260 Leake on 
 rate so far a valid expression of the intention Cmitracts, 
 
 of the parties, as that a part performance of it will gee ante p. 
 imder certain! circumstances give a right to specific ^''^• 
 performance in equity; thus it is not easy to see, upon 
 principle, why it should not operate as an agreement 
 which, though unenforceable in regard to the liabili- 
 ties which it creates, is valid as an expression of inten- 
 tion to rescind an existing contract. However, the law 
 is otherwise, and inasmuch as the distinction which 
 271 
 
2C0 DISCHARGE OF CONTRACT. PartV. 
 
 has been made between the effect of the two sections 
 
 of the Statute of Frauds has been more than once 
 
 commented npon with disapprobation by the late Mr. 
 
 ■Williams v. Justice "Willes, it is not probable that further conse- 
 
 C. B. N.'s. <l"ences will be deduced from the difference between 
 
 316. the unenforceability created by the 4:th section and the 
 
 invalidity created by the 17th section. 
 
 272 
 
Chap. II. BY PERFORMANCE. 261 
 
 CHAPTEE II. *261 
 
 DISCHARGE OF OONTEACT BY PEEFOEMANOE. 
 
 Tins branch of our subject need not detain us long, 
 but there are some aspects of performance which will 
 call for a brief notice. 
 
 We must distinguish performance which discharges Kinds of per. 
 one of two parties from further liabilities under a con- formance: 
 tract, and performance which amounts to an extinc- 
 tion of the obligation. 
 
 "Where a promise is given upon an executed consid- where 
 eration, the performance of his promise by the prom- PFo^'se is 
 isor discharges the contract; all has been done on both executed 
 sides that could be required to be done under the ^°°®.''^®'^ 
 contract. 
 
 Where one promise is given in consideration of an- where 
 other, performance by one party does not necessarily Pf°™'se is 
 discharge the contract, though it discharges him who promise, 
 has performed his part from doing more. Each must 
 have done his part to make performance a solutio ob- 
 ligationis, and so if one has done his part and not 
 the other, it is still possible that the contract may be 
 discharged in any one of the ways we have mentioned. 
 
 Whether or no a contract has been performed is a 
 matter which, so far as the person performing the con- 
 tract is concerned, must be answered by reference to 
 the operation of contract,' so far as the performance 
 is concerned, must be answered by reference to the 
 construction of contract. If there be a failure of 
 273—18 
 
262 
 
 DISCHARGE OF CONTRACT. 
 
 Part V. 
 
 *262 performance, partial or total, then the contract 
 is broken; whether the breach amounts to a 
 discharge is a question to be discussed hereafter. 
 
 But there are two aspects of Performance which 
 we may shortly dwell upon: these are, Payment and 
 Tender. 
 
 Payment. 
 
 Payment as In dealing with payment as a form of discharge, we 
 
 discharge, must place it under the head of performance, although 
 
 payment is intimately connected with the discharge 
 
 of contract and of the rights arising from breach of 
 
 contract, by means of a substituted agreement. 
 
 If in a contract between A and X the liability of 
 X consists in the payment of a sum of money in a 
 certain way or at a certain time, such a payment dis- 
 charges X by the performance of his agreement. 
 
 If, again, X being liable to perform various acts un- 
 der his contract, wishes instead to pay a sum of money, 
 or, having to pay a sum of money, wishes to pay it in 
 a manner at variance with the terms of the contract, 
 he must agree with A to accept the proposed payment 
 in lieu of that to which he may have been entitled 
 under the original contract. Payment is then a per- 
 formance of X's duties under the new agreement, and, 
 BO far as he is concerned, a consequent discharge, [the 
 new agreement and payment under it making an 
 accord and satisfaction.] 
 
 Again, where one of two parties has made default 
 in the performance of his part of the contract, so that 
 a right of action accrues to the other, the obligation 
 formed by this right of action may be discharged by 
 accord and satisfaction, an agreement the consideration 
 for which is usually a money payment, made by the 
 party against whom the right exists, and accepted in 
 discharge of his right by the other. 
 
 Payment is Payment, then, is the performance of a contract, 
 
 274 
 
 See Part V. 
 ch. iii. 8. 4, 
 p. 306. 
 
Chap. II. BY PERFORMANCE. 263 
 
 whether it be a performance of an original, or of a perform- 
 substituted contract, or of a contract in which *'^°®" 
 
 payment is the consideration for a forbearance *263 
 to exercise a right of action which may have 
 arisen from the breach of an agreement. 
 
 It remains to notice some points which arise when Negotiable 
 a negotiable instrument is given in payment of a sum aa^payment- 
 due, whether as the performance of a contract or in 
 satisfaction for the breach of it. 
 
 The giving of such an instrument in payment of a 
 liquidated or unliquidated claim is in effect a substi- 
 tution of a new agreement for the old one, but it may 
 affect the relations of the parties in either one of two 
 different ways. 
 
 If X makes a payment to A either in performance 
 of an existing contract, or in satisfaction of a broken 
 contract, and that payment takes the form of a nego- 
 tiable instrument, X may be discharged from his pre- 
 vious obligation either absolutely or conditionally. 
 
 A may take the bill or note, and promise, in consid- may be an 
 eration of it, expressly or impliedly, to discharge X * so u e, 
 altogether from his existing liabilities. A then relies Sard v. 
 upon his rights conferred by the instrument, and if it j^m^^W 
 be dishonored, must sue on it, and cannot revert to the 153. 
 original cause of action. But the presumption, where 
 a negotiable instrument is taken in lieu of a money 
 payment is, that the parties intended it to be a condi- 
 tional discharge. The position of the parties then is or condi- 
 this: A having certain rights against X, has agreed t0g^°^gg_'^ 
 take a negotiable instrnment instead of immediate Sayer v. 
 payment, or immediate enforcement of his right of B^gaf^'4^' ^ 
 action, and H has so far satisfied A's claim. But if [Peter v. 
 the bill be dishonored at maturity, the consideration p|[.®633!] 
 for A's promise has wholly failed and his original 
 rights are restored to him. The agreement is "defea- 
 sible upon condition subsequent; " the payment by X 
 which is the consideration for the promise by A is not 
 275 
 
264 DISCHARGE OF CONTRACT. Part V. 
 
 absolute, but may turn out to be, in fact, no payment 
 
 at all. 
 
 Payment then consists in the performance either of 
 
 an original or substituted contract by the delivery of 
 
 money, or of negotiable instruments conferring 
 
 *264: the right to receive money; and in this last 
 
 event the payee may have taken the instrument 
 
 in discharge of his right absolutely, or subject to a 
 
 Seejudg- condition (which will be presumed in the absence of 
 
 p^'k ° R expressions to the contrary) that, if payment be not 
 
 Robin'sottV. made when the instrument falls due, the parties revert 
 
 & C 455 ^^ their original rights, vfhether those rights are, so 
 
 far as the payee is concerned, rights to the perform- 
 
 Sayer v. ance of a contract or rights to satisfaction for the breach 
 Wagstaffe,5 f 
 Beav. 423. 
 
 We have dwelt thus upon Payment because it is 
 
 often so involved with the subject of substituted agree- 
 ment as to cause some obscurity. 
 
 Tendee. 
 
 Tender. . We now come to an attempted Performance, or Ten- 
 
 der. The word is applied to performance of two kinds, 
 and to attempts to perform which are not similar in 
 Is of two their results. It is applied to a performance of a 
 kinds. promise to do something, and to a performance of a 
 
 promise to pay something. In each case the perform- 
 ance is frustrated by the act of the party for whom the 
 Tender by performance is to take place. Where in a contract for 
 delivery. ^jjg gg^^g ^f goods the vendor satisfies all the require- 
 Startup V. ments of the contract as to delivery, and the purchaser 
 6^m'&'g nevertheless refuses to accept the goods, the vendor is 
 593._ Ben- discharged by such a tender of performance, and may 
 ^S^aTes^bk iv either maintain or defend successfully an action for the 
 part 3, p. 563. breach of the contract. 
 
 Tender of But where the performance due consists in the pay- 
 
 payment ment of a sum of money, a tender by the debtor, 
 although it may form a good defense to an action by 
 276 
 
Chap. II. BY PERFORMANCE. 265 
 
 the creditor, does not constitute a discliarge of the Dixon v. 
 J 1 i. Clarke, 5 0. 
 
 "*^"''- . B. 876. 
 
 If the creditor will not take the money due to him 
 
 when he has a right to demand it, he puts himself at 
 
 a certain disadvantage in trying to recover it by action; 
 
 but the debtor must, in order to defend himself 
 
 successfully by a plea of tender, continue always *265 Dixon v. 
 
 ready and willing to pay the debt. Then when B.%ie.' 
 
 he is sued upon it, he can plead that he tendered it, [Colby v. 
 , ,, /, ' , ^ . , , 'Stevens, 38 
 
 but he must also pay the money into court. N. h. 191.] 
 
 If he 'proves his plea, the plaintiff gets nothing but 
 the money which was originally tendered to him, the 
 defendant gets judgment for his costs of defense, and 
 is so placed in as good a position as he held at the 
 time of the tender. 
 
 Tender, to be a valid performance to this extent, 
 must observe exactly any special terms which the con- 
 tract may contain as to time, place and mode of pay- 
 ment. Besides these requirements the tender must be 
 an oifer of money produced and accessible to the cred- 
 itor, not necessarily of the exact sum, but of such a 
 sum as that the creditor can take exactly what is due 
 without being called upon to give change. 
 
 Legal tender, as regards coinage and notes, is regu- 
 lated by [the Constitution of the United States and the 
 acts of Congress.] 
 
266 
 
 DISCHARGE OF CONTRACT. 
 
 Part v. 
 
 *266 
 
 OHAPTEE III. 
 
 DISCHAEGB OF CONTEACT BY BREACH. 
 
 Breach of 
 contract. 
 
 Its result 
 
 Breach 
 always 
 gives right 
 of action, 
 not always 
 a discharge. 
 
 If one of two parties to a contract breaks through 
 the obligation which the contract imposes, a new ob- 
 ligation will in every case arise, a right of action con- 
 ferred upon the party injured by the breach. Besides 
 this, there are circumstances under which the breach 
 will discharge the injured party from- such perform- 
 ance as may still be due from him. We must, how- 
 ever, bear in mind that, though every breach of the 
 contractual obligation confers a right of action upon 
 the injured party, every breach does not necessarily 
 discharge him from doing what he has undertaken to 
 do under the contract. The contract may be broken 
 wholly or in part; and if in part, the breach may or 
 may not be sufficiently important to operate as a dis- 
 charge; or, if it be so, the injured party may choose 
 not to regard it as a breach, but may continue to carry 
 out the contract, reserving to himself the right to 
 bring action for such damages as he may have sustained 
 by the breach. It is often very difficult to ascertain 
 whether or no a breach of one of the terms of a con- 
 tract discharges the party who suffers by the breach. 
 
 By discharge we must understand, not merely the 
 right to bring an action upon the contract because the 
 other party has not fulfilled its terms, but the right to 
 consider oneself exonerated from any further perform- 
 ance under the contract — the right to treat the legal 
 relations arising from the contract as having come to 
 an end, and given place to a new obligation, a right of 
 
 action. 
 
 278 
 
Chap. III. § 1. BY BREACH. 268 
 
 The discharge of contract is indicated with *267 Discharge 
 some precision by the pleadings in use before oic/forms of 
 
 the Judicature Acts. Many of the cases which illus- pleading, 
 trate this part of the subject turn upon questions of 
 pleading, and we shall find that the understanding of 
 the remedy, as often happens, is a material assistance 
 to the ascertainment of the right. At the risk of a 
 digression we will turn for a moment to this aspect 
 of the question before us. 
 
 § 1. Position of Paeties where a Conteaot is 
 Discharged by Breach. 
 
 In a contract between A and X, a breach by XBxonera- 
 might be considered to be a discharge of the contract pgjij^^j^ 
 if A, in bringing action upon it, was not required toance. 
 allege that he had performed or endeavored to perform 
 that which was still due from him under the contract; 
 or if X could not successfully use such non-perform- 
 ance by A either as a cause of action or a ground of 
 .defense. 
 
 Further, where X made default after A had done all Right to sno 
 or a part of that which he promised, the contract was 'aammplit!^ 
 discharged by such default if A could sue for the value 
 of that which he had done in indebitatus assumpsit, 
 or upon a new and distinct contract arising upon the 
 acceptance of money, goods, or services offered by the 
 plaintiff and accepted by the defendant. 
 
 This needs a short explanation. 
 
 Where an action is brought upon a contract arising 
 on consideration executed, that is a promise, acted or 
 uttered, to pay for money, goods, or services offered 
 and accepted, the plaintiff may state his case in certain 
 short forms known as the indebitatus counts. These, Nature of 
 which are an adaptation of the action of As- ^ counts!* 
 
 sumpsib to the subject-matter of the action of *268 
 Debt, do no more than state a money claim 
 279 
 
268 DISCHARGE OF CONTRACT. Part V. 
 
 See App. A. existing for money due, goods supplied, or services 
 P- ^^^- rendered. 
 
 Whenappli- In certain cases these counts are applicable to a 
 Bpecial°con- claim arising out of a special contract, that is a con- 
 tract, tract arising upon express promises made on either 
 side, but they are so applicable only where the contract 
 was discharged ly 'breach. 
 
 If A has performed all that he promised in a con- 
 tract made with X, and there remains only a money 
 payment due from X resulting in a present liability 
 in which X made default by non-payment, A may sue 
 X in the form of an indebitatus count. This means 
 that A may sue upon a new and distinct contract, 
 arising upon the offer and acceptance of that which 
 he had performed. The performance of the original 
 contract was so far completed that nothing remained 
 to be done but a payment to be made by X to A: the 
 payment was presently due; default discharged the 
 contract, and A may sue, not on the special contract 
 as having been made and broken, but upon a contract 
 arising from conduct, from the offer of an act, its ac- 
 ceptance, and a consequent imj^lied promise to pay its 
 worth, such as we described in speaking of executed 
 Ante, p. 83. consideration. 
 
 " The principle as to the proper form of declaring 
 where the original contract has been executory, but the 
 period of credit has expired, or condition has been per- 
 formed, is, not that the law alters the mode of declaring 
 on the original contract and states it not according to 
 the fact, but that it conclusively infers that simple 
 contract to fay the price for goods sold and delivered 
 which would arise upon the facts of a sale and deliv- 
 ery without any special circumstances accompanying 
 them. He who seeks to disturb that inference must 
 not content himself with merely showing conditions, 
 Per Cur., or other special provisions forming part of the con- 
 Beveriey V. |.j.g^g(. ^^ ^.j^g ^j^g ^^ j^^g jjejug entered into: he must 
 280 
 
Ohap. III. § 1. BY BREACH. 269 
 
 show them in existence and operation at the time of Light & 
 action hrought: if not, they must be struck out a°& E°837 
 
 of consideration and the contract treated as *269 [SeeLanev. 
 originally simple, unconditional, and executed." lii.*169.] 
 
 A similar practice prevails where, A having done a. K quantum 
 part, though not all that he was bound to do under the '"*™*'*' 
 contract, X committed a breach which amounted to a 
 discliarge. If that wliich A has done could be repre- 
 sented in a claim for money payment, A is entitled to 
 sue, not only on the special contract, but in indebitatus 
 assumpsit, for a quantum meruit or the value of so 
 much as he had done. 
 
 " If a man agrees to deliver me one hundred quar- 
 ters of corn, and after I have received ten quarters, / Per Best, 0. 
 decline talcing any more, he is at all events entitled pyne^g"' ^' 
 to recover against me the value of the ten that I have Bing. 288. 
 received." 
 
 But the right to sue in this form on a quantum l^h&n it m&j 
 
 meruit IB frequently and emphatically stated to depend ^®^^®*^ 
 
 on the fact that the contract has been discharged. On Hulle v. 
 
 the other hand, it is laid down " as an invariably true jF^'S^*?-.'?' 
 , , « , . 2 East, 145. 
 
 proposition, that wherever one of the parties to a 
 
 special contract not under seal has in an unqualified 
 
 manner refused to perform his side of the contract, or 
 
 has disabled himself from performing it by his own 
 
 act, the other party has thereupon a right to elect to 3 Sm. L. C. 
 
 rescind it, and may, on doing so, immediately sue on ^^ 
 
 & quantuTn meruit, for anything which he had done Brown, 38 ' 
 
 under it previously to the rescission." 111.493.] 
 
 It is possible that A may have done nothing under 
 
 the contract which can be estimated at a money value, 
 
 or that the default made by X is not such as can be 
 
 stated in the form of a money claim. Then if the 
 
 breach amount to a discharge, A is exonerated from [See Cast v. 
 
 Buch performance as may still be due from him, and is^°^' ^ ^'^• 
 
 281 ■' 
 
270 DISCHARGE OF CONTRACT. Part V. 
 
 entitled to sue at once upon the special contract for 
 such damages as he has sustained. 
 
 Bights of *270 Thus where a contract between A and X is 
 lh%et discharged by the default of X, A may — 
 
 (a) Consider himself exonerated from any further 
 Behnv. Bur- performance which may have been due on his part; 
 ness^^a B. & ^^^^ successfully defend an action brought for non- 
 
 performance: 
 
 (5) Sue at once upon the contract for such damages 
 Cort V. Am- as he has sustained by its breach, without being obliged 
 B^ifway Co *° show that such performance has been done or tend- 
 17Q.B.137:'eredbyhim: 
 
 (c) Lastly, if he has done all or a portion of that 
 
 which he promised, so as to have a claim to a money 
 
 payment for such performance, he may deal with such 
 PlanchS v. a claim as due upon a different contract arising upon a 
 Bing^-u! promise understood from the acceptance of an executed 
 
 consideration. 
 
 § 2. FOEMS OF DiSOHAEGE BY BbEACH. 
 
 We are now in a position to ask, What are the cir- 
 cumstances which confer the rights just mentioned? 
 What is the nature of the breach which amounts to a 
 discharge? 
 Modes in A contract may be broken in any one of three ways: 
 
 rights may^ ^ party to a contract may (1) renounce his liabilities 
 under it, (2) may by his own act make it impossible 
 that he should fulfill them, (3) may totally or partially 
 fail to perform what he has promised. 
 
 Of these forms of breach the first two may take 
 place while the contract is still wholly executory, i. e., 
 before either party is entitled to demand a perform- 
 ance by the other of his promise. The last can, of 
 course, only take place at or during the time for the 
 performance of the contract. We will therefore deal 
 first with renunciation and impossibility created by 
 282 
 
 arise. 
 
Chap. III. § 3. BY BREACH. 271 
 
 the act of one party 'before performance is due, then 
 with such renunciation and impossibility so 
 created in the course of performance, and then *271 
 witli simple failure in performance. 
 
 (1) Discharge iy renunciation before performance is 
 
 due. 
 
 The parties to a contract which is wholly executory (1) Breach 
 have a right to something more than a performance of fopmaiKie^' 
 the contract when the time arrives. They have a right is due, 
 to the maintenance of the contractual relation up to 
 that time, as well as to a performance of the contract 
 when due. 
 
 It is now settled that a renunciation of a contract by renuncia- 
 by one of the parties before the time for performance '°°' 
 has come, discharges the other, if he so chooses, and 
 entitles him at once to sue for a breach. 
 
 Hochster v. Delaiour is the leading case upon this 3 B. & B. 678. 
 subject. A engaged X upon the 12th of April to enter ^™.' g^^""' 
 into his service as courier and to accompany him upon Barb. 378.] 
 a tour; the employment was to commence on the 1st 
 of June, 1852. On the 11th of May A wrote to X to 
 inform him that he should not require his services. X 
 at once brought an action, although the time of per- 
 formance had not arrived. The Court held that he 
 was entitled to do so. " "Where there is a contract to p. 689. 
 do an act on a future day, there is a relation consti- 
 tuted between the parties in the meantime by the con- 
 tract, and they impliedly promise that in the meantime 
 neither will do anything to the prejudice of the other 
 inconsistent with that relation. As an example, a 
 man and woman engaged to marry are affianced to one 
 another during the period between the time of the 
 engagement and the celebration of the marriage. In 
 this very ease, of traveler and courier, from the day of 
 hiring till the day of employment was to begin they 
 were engaged to each other; and it seems to be a 
 283 
 
272 DISCHARGE OF CONTRACT. PartV. 
 
 breach of an implied contract if either of them 
 renounces his engagement." 
 
 It seems hardly necessary to have created an 
 *272 implied contract in order to give the plaintiff 
 in this case a right of action. 
 If X makes a binding promise to A, the obligation 
 comes into existence at once, and consists in X's prom- 
 ise as well as in his performance of that promise. In 
 other words, the contract is a contract from the time 
 it is made, and not from the time that performance of 
 it is due; and if this is so, it seems hardly in accord- 
 ance with reason to introduce into every contract an 
 implied promise that, up to a certain period of its exist- 
 ence, it shall not be broken. 
 Frost V. The sense of the rule is very clearly stated by Cock- 
 
 ?°i^]^*' ^" BUEN, C. J., in a case which offers a somewhat further 
 
 a. 7 JiXCn. ' ' r-r J 7-17 
 
 114, in Excli. development of the rule in Hochster y. Delatour. 
 &B™78 ' ^^ '^^'^'^ '^^^^ ^ time was iixed for performance, and 
 is a dis- before it arrived the defendant renounced the contract, 
 ?^*'"So '^'■si In Frost v. Knight performance was contingent upon 
 ance be con- an event which might not happen within the lifetime 
 tingent. ^f ^j^^ parties. 
 
 A promised to marry X upon his father's death, and 
 during his father's lifetime renounced the contract; X 
 was held entitled to sue upon the grounds explained 
 L. R. 7 Exch. above. " The promisee," said Cockbuen, C. J., " has 
 fBurtis V ^^ inchoate right to the performance of the bargain, 
 Thompson, which becomes complete when the time for perform- 
 ■■' ance arrives. In the meantime he has a right to have 
 the contract Tcept open as a subsisting and effective 
 contract. Its unimpaired and unimpeached efficacy 
 may be essential to his interests." 
 The pi-om- The promisee may therefore treat the contract as 
 treat™enun ^^o^^"^? ^^ soon as the promisor has announced his 
 ciatioii aa a intention to break it; but if he will not accept the 
 ISC arge. renunciation, but continues to iusist on the perform- 
 ance of the promise, the contract remains in existence 
 ■ 284 
 
Chap. III. § 2. BY BREACH. 273 
 
 for the benefit and at the risk of both parties, and if 
 anything occur to discharge it from other causes, the 
 promisor may take advantage of such discharge. 
 
 Thus in Avery v. Bowden, A agreed with X by 5. E. & B. 
 charter party that his ship should sail to Odessa 
 and there take a cargo from X's agent, which *273 
 was to be loaded within a certain number of 
 days. The vessel reached Odessa, and her master de- 
 manded a cargo, but X's agent refused to supply one. 
 Although the days within which A was entitled to 
 load the cargo had not expired, his agent, the master 
 of the ship, might have treated this refusal as a breach 
 of contract and sailed away. A would then have had 
 a right to sue upon the contract. But the master of 
 the ship continued to demand a cargo, and before the 
 running days were out — before, therefore, a breach by 
 non-performance had occurred — a war broke out be- 
 tween England and Kussia, and the performance of 
 the contract became legally impossible. Afterwards A 
 sued for breach of the charter party, but it was held 
 that as there had been no actual failure of perform- 
 ance before the war broke out (for the running days 
 had not then expired), and as the renunciation of the 
 contract had not been accepted as a breach by A'sAveryv. 
 agent, X was entitled to the discharge^of the contract ^"^'^^"^^ ^■ 
 which took place upon the declaration of war. 
 
 (2) Impossibility created hy one party before per- 
 formance is due. 
 
 If a renunciation of his contract by A discharges X (3) By 
 and gives him a right of action before the time for ^^j^'^°J, P®""' 
 performance has arrived, it would appear that a for- impossible. 
 tiori a similar discharge and right of action accrues to 
 Xif A, before the time for performance arrives, makes 
 it impossible that he shall perform his promise. A 
 promised X that within seven years from the date of 
 the promise he would assign to X all his interest in a 
 285 
 
274 
 
 DISCHARGE OF COKTRACT. 
 
 Party 
 
 Lovelock V. 
 Franklyn, 8 
 Q. B. 371. 
 
 Lovelock V. 
 
 Franklyn, 8 
 
 Q. B. at p. 
 
 378. 
 
 [See Clark v. 
 
 Crandall, 3 
 
 Barb. 613.] 
 
 Renuncia- 
 tion during 
 perform- 
 ance. 
 
 lease which he held. Before the end of seven years A 
 assigned his whole interest to another person. It was 
 held that X could sue at once, without waiting until 
 the end of seven years. " The plaintiff has a right to 
 
 say to the defendant, You have placed yourself 
 *274: in a situation in which you cannot perform 
 
 what you have promised; you promised to be 
 ready during the period of seven years, and during 
 that period I may at any time tender you the money 
 and call for an assignment, and expect that you should 
 keep yourself ready; but if I now were to tender you 
 the money, you would not be ready; this is a breach 
 of the contract." 
 
 The cases just cited illustrate the rule that contract 
 may be broken while it is yet executory, and before 
 any performance on either side has fallen due. They 
 are comparatively simple, because the circumstances 
 leave no doubt of the intention of the party in default; 
 their interest lies in the enforcement of the principle 
 that performance of a promise is not all that a prom- 
 isee is entitled to, that the continuous liability of the 
 promisor, until the time for performance arrives, is a 
 substantial element in the rights arising from the con- 
 tract, and that a refusal to maintain this liability is an 
 immediate breach and confers an immediate right of 
 action. 
 
 (3) lienunciation in the course of performance. 
 
 The forms of breach with which we have just been 
 dealing may occur at a later stage in the history of the 
 contract. It is possible that in the course of perform- 
 ance one of the parties may by word or act deliber- 
 ately and avowedly refuse performance of his part. 
 He may do this by renouncing the contract, or by ren- 
 dering it impossible of performance. The other party 
 is then exonerated from a continued performance of 
 his promise, and is at once entitled to bring action. 
 286 
 
Chap. III. § 3. BY BREACH. 275 
 
 An illustration of such a discharge by renunciation 
 of the contract is furnished by the case of Cart v. The 11 Q. B. 137 
 Amhergate Railway Company. The plaintiffs con- 
 tracted with the defendant Company to supply them 
 with 3,900 tons of railway chairs at a certain 
 price. The chairs were to be delivered in cer- *27o 
 tain quantities at specified dates. The plain- 
 tiffs delivered 1,787 tons according to contract; the 
 defendants then desired them not to deliver more as 
 they would not be wanted. The plaintiffs sued the ^ 
 defendants upon the contract, averring that they had 
 been ready and willing to perform their part, and had 
 been prevented from doing so by the Company. The 
 plaintiffs having obtained a verdict, a new trial was 
 moved for on behalf of the Company, on the ground 
 that the plaintiffs should have proved not merely read- 
 iness and willingness to deliver, but an actual delivery 
 of the chairs; but the Court of Queen's Bench held 
 that where a contract was renounced by one of the 
 parties to it, the other party need not do more than 
 show that he was willing to have performed his part. 
 " In common sense," said Lord Campbell, C. J., " the 
 meaning of such an averment of readiness and will- 
 ingness must be that the non-completion of the con- 
 tract was not the fault of the plaintiffs, and they were 
 disposed and able to complete it, if it had not been 
 renounced by the defendants. What more can reason- 
 ably be required by parties for whom the goods are to 
 be manufactured? " 
 
 And he thus states the principle on which the Court 
 decided in favor of the plaintiff: 
 
 "Upon the whole we think we are justified, on prin- 
 ciple and without trenching on any former decision, 
 in holding that, when there is an executory contract 
 for the manufacturing and supply of goods from time 
 to time, to be paid for after delivery, if the purchaser, 
 having accepted and paid for a portion of the goods 
 287 
 
276 DISCHARGE OF CONTRACT. Part Y. 
 
 contracted for, gives notice to the vendor not to manu- 
 facture any more as he has no occasion for them and 
 will not accept or pay for them, the vendor having- 
 been desirous and able to complete the contract, he 
 may, without manufacturing and tendering the rest 
 of the goods, maintain an action against the purchaser 
 for breach of contract; and that he is entitled to a 
 verdict on pleas traversing allegations that he 
 Cort V. *276 was ready and willing to perform the contract,, 
 
 Ambergate ^-^^^ ^-^^ defendant refused to accept the residue- 
 
 Railway J T 1 
 
 Company, 17 of the goods, and that he prevented and discharged 
 Q. B. 137. ^^^ plaintiff from manufacturing and delivering them. 
 
 (i) Impossibility created iy one party in the course 
 of ferformance. 
 
 Impossi- The rule of law is similar in cases where one party 
 
 during'per^* has by his own act made the contract impossible of 
 
 formance. performance. 
 
 8Biiig.l4. J.n Planche v. Colburn the plaintiff was engaged' 
 by the defendants for £100 to write a treatise on- 
 " Costume and Ancient Armor " to be published in a 
 serial called '.'The Juvenile Library." The plaintiff 
 incurred expense in making researches with a view to- 
 his work and actually completed a portion of it, hut 
 before it was delivered to the defendants they had' 
 abandoned the "Juvenile Library" on the ill-success 
 of its first numbers. The plaintiff sued the defend- 
 ants on the special contract and also on a quantum 
 meruit for the work and labor expended by him on 
 his treatise. He thus set up two distinct contracts, 
 the original executory contract for the breach of which 
 he claimed damages, and a contract arising from the 
 execution of work upon request, nnder which he 
 claimed the value of so much work as was done before 
 the contract was put an end to by the plaintiff. It- 
 was argued that he could not recover upon this latter 
 aspect of his claim because, his part of the original' 
 288 
 
Chap. III. § 3. BY BREACH. 277 
 
 contract being unperformed, that contract was not Ante, p. 269. 
 wholly at an end: but the Court held that the aban- 
 donment of the publication in question did put an 
 end to the contract and affect a discharge. 
 
 " I agree," said Tijstdal, 0. J., " that, when a special 
 contract is in existence and open, the plaintiff cannot 
 sue on a quantum meruit; part of the question here, 
 therefore, was, whether the contract did exist or 
 not. It distinctly appeared that the work was *277 
 finally abandoned ; and the jury found that no 
 new contract had been entered into. Under these cir- 
 cumstances, the plaintiff ought not to lose the fruit 
 of his labor; and there is no ground for the applica- 
 tion that has been made." 
 
 (5) Breach iy failure of performance. 
 
 In the two cases of discharge last dealt with it ia 
 apparent that X has in word or act so dealt with the 
 contract as to intimate to A that a further performance 
 on his part is needless. The Courts have been asked 
 in these cases to decide whether A is bound to tender 
 a performance which he well knows that X will not or 
 cannot receive, and they have decided that he is not so 
 bound. 
 
 But where the breach of contract by X does not Breach by 
 make the contract wholly incapable of performance, or p^rfo^^ 
 is not accompanied with any overt expression of inten- ance, how 
 tion to abandon his rights, it is not always easy to ® ^'^'^"^^ 
 determine whether A is thereby discharged or whether 
 he merely acquires a right of action from the breach. 
 W'e have to look to the terms of the contract and en- 
 deavor to ascertain the intention of the parties as to 
 the nature of their respective promises; and the difS-Byindepend. 
 cultiea resolve themselves into this question. Were t'l^ditionalchar 
 promises of the parties independent of, or conditional acter of 
 •wpon, one another? promises. 
 
 289—19 
 
278 DISCHARGE OF CONTRACT. 
 
 Independent Peomises. 
 
 PartV. 
 
 An independ- 
 ent promise 
 may be abso< 
 lute, 
 
 divisible in 
 respect of 
 performance, 
 
 Subsidiary. 
 
 A promise may be independent in several ways. 
 
 (a) A promise may be absolute. 
 
 A's promise to X may be wholly unconditional upon 
 the performance by X of his promise to A. In such 
 a case a failure of performance by X would not dis- 
 charge A, but would only furnish ground for an action 
 against X. 
 
 (h) The performance of a promise may be divis- 
 ible. 
 *278 The promise may be susceptible of more or 
 less complete performance, and the damage 
 sustained by an incomplete performance or partial 
 breach may be apportioned according to the extent of 
 failure. The promise is in fact regarded as a number 
 of promises to do a number of similar acts, and a 
 breach of one of these does not discharge the prom- 
 isee. 
 
 (c) A promise may be subsidiary. 
 
 The breach committed by one of the parties may be 
 a breach of a term of the contract only, and of a term 
 which the parties have not, upon a reasonable con- 
 struction of the contract, regarded as vital to its 
 existence. The injured party is then bound to con- 
 tinue his performance of the contract, but may bring 
 action to recover such damages as he has sustained by 
 the default of the other. 
 
 Absolute Promises. 
 
 If A made a promise to X in consideration of a 
 promise made by X to A, and A has not, in express 
 
 In absolute 
 
 promises, 
 
 one party , 
 
 relies on the terms, or upon a reasonable construction of the con- 
 
 not Us^pe^r-*^ tract, made the performance of his promise depend 
 
 formance by upon the performance of X's promise, a breach of his 
 
 promise by X will not discharge A. The position of A 
 
 is this — his promise is given in consideration of X's 
 
 290 
 
Chap. III. § 3. BY BREACH. 279 
 
 promise, not in consideration of the performance by 
 X of his promise: in other words, he has been content 
 with X's liability, and has not insisted upon X's per- 
 formance as a security for his promise. 
 
 Some of the old cases upon this subject turn upon 
 very technical constructions of terms: if A made a 
 promise to X in consideration of its being " agreed" B,olle, Ma. I. 
 that X do something for A, each promise is regarded "' 
 as absolute and independent of the other; if the prom- 
 ise be made "provided " that X do something for A, 
 the promise of A is conditional, and is discharged 
 upon breach by X. 
 
 A case of the year 1649 will furnish a strong illus- Ware v. 
 tration of such absolute promises. "Ware B^le^lSB. 
 
 brought an action of debt for £500 against *279 
 Chappell upon an indenture of covenants be- 
 tween them, viz.: that Ware should raise 500 soldiers 
 and bring them to such a port, and that Chappell 
 should find shipping and victuals for them to trans- 
 port them to Galicia ; and for not providing the ship- 
 ping and victuals at the time appointed was the action 
 brought. The defendant pleaded that the plaintiff had 
 not raised the soldiers at that time; and to this plea 
 the plaintiff demurs. Kolle, 0. J., held that there 
 was no condition precedent, but that they are distinct 
 and mutual covenants, and that there may be several 
 actions brought for them : and it is not necessary to 
 give notice of the number of men raised, for the num- 
 ber is known to be 500 ; and the time for the shipping 
 to be ready is also known by the covenants; and you 
 have your remedy against him if he raise not the 
 men, as he hath against you for not providing the Style, 188. 
 shipping." 
 
 The reason for holding such promises to be absolute Reasons 
 is thus stated by Holt, 0. J.: " What is the reason ^^^^^^nf^ 
 that mutual promises shall bear an action without per- Holt, 0. J.; 
 formance? One's bargain is to be performed accord- 
 291 
 
280 
 
 DISCHARGE OP CONTRACT. 
 
 Part V. 
 
 Thorpe v. 
 Thorpe, 13 
 Mod. Rep. 
 455. 
 
 by Willes, 
 C.J. 
 Willes, 496. 
 
 Tendency 
 of modern 
 deqisions. 
 
 8 T. R. 366. 
 
 Per Gard- 
 iner, J., in 
 Grant v. 
 Johnson. 
 [6N.Y.347.] 
 
 ing as he makes it. If he makes a bargain, and I'ely 
 on the other's covenant or promise to have what he 
 would have done to him, it is his own fault. If the 
 agreement be, that A shall have the horse of B and A 
 agree that B shall have his money, they may make it 
 so; and there needs no averment of performance to 
 maintain an action on either side; but if it appear by 
 the agreement that the plain intent of either party 
 was to have the thing to be done to him performed 
 before his doing what he undertakes of his side, it 
 must then be averred; as where a man agrees to give 
 so much money for a horse, it is plain he meant to 
 have the horse first, and, therefore, he says the money 
 shall be given for the horse." 
 
 And another reason is suggested by "Willes, 0. J., 
 in Thomas v. Cadwallader, namely, " When two cov- 
 enants in a deed hav.e no relation to each other, 
 *280 I was clearly of opinion that the non-perform- 
 ance of one could not be pleaded iu bar to an 
 action brought for the breach of another covenant in 
 the same deed; and for this plain reason amongst 
 others, that the damages sustained by the breach of 
 one such covenant may not be at all adequate to the 
 damages sustained by the breach of the other." ^ 
 
 The cases dating from the close of the last century 
 seem to show a tendency of the Courts not to construe 
 promises to be independent of one another where they 
 form the whole consideration for one another unless 
 there be some very definite expression of the intention 
 of the parties to that effect. " The older eases," saya 
 Geose, J., in Glazebrook v. Woodrow, " lean to con- 
 strue covenants of this sort to be independent, contrary 
 
 ' But this view of the matter is certainly open to the criticism 
 passed upon it by an American judge : " Courts are not required 
 to speculate upon the inequality of loss to the parties, or to look 
 beyond the agreement to its performance in order to ascertain its 
 character as suggested by some judges and commentators." 
 292 
 
Chap. III. § 3. BY BREACH. 281 
 
 to the real sense of the parties and the true justice of 
 
 the case;" and the interpretation of such promises 
 
 may now be taken to rest upon " the good sense of the Per Lord 
 
 case and the order in which the things are to be done." j^j'q j^jgrton 
 
 The order in which the things are to be done would v- Lamb, 7 T. 
 
 appear now to be the main test of the existence of [gee Biddle 
 
 sucli absolute promises. 3'h""^'\ 
 
 Tiius where X makes a promise to A, the date of 377.] 
 performance not being fixed, and A in consideration 
 thereof promises to pay a sum of money to X at a 
 fixed date, the payment is independent, of perform- 
 ance. 
 
 In March, 1879, A agrees to purchase land of X and 
 covenants to pay a sum of money on the 1st of April, 
 1879. X covenants in turn to convey the lands to A, 
 but no day is fixed for the execution of the convey- 
 ance. So soon as the 1st of April is past, X can sue 
 A for the money, and it is no answer to his claim that 
 he has never conveyed, or offered to convey the land 
 toX. 
 
 The reason of the rule is thus stated in the lo A. & E. 
 
 case of Mattock v. Kinylake, the facts of which *281 ^*'' 
 were similar to those just described: 
 
 "A time being fixed for payment, and none for Per Little- 
 doing that wliich was the consideration for the pay- ^lattcxlk^v 
 ment, an action lies for the purchase money without Kinglake, 10 
 averring performance of the consideration." TRobb v 
 
 But, upon the whole, it may be safe to say that, in Montgom- 
 the absence of very clear indications to the contrary, ggn, 15.] 
 promises each of which forms the whole consideration 
 for the other will not be held to be independent of one 
 another. A failure to perform the one will exonerate 
 the promisee from a performance of his part, {a) 
 
 (a) [See Parsons on Contracts, 6th ed. vol. 3, p. 539, note, for a 
 full discu<!sion of this subject.] 
 293 
 
282 DISCHAKGE OF CONTRACT. Part Y. 
 
 Promises the performanGe of wMoh is dwisible. 
 Where per. Contracts frequently occur in whicli the promise of 
 S^ibte ^ ^°® ^^ ^°*^ parties admits of a more or less complete 
 performance; such would be a contract by way of char- 
 ter party to load and deliver a complete cargo; or a 
 contract for the sale of goods in which delivery and 
 acceptance are to take place by installments extending 
 over a considerable period of time. 
 a partial In contracts of this nature it may be laid down as a 
 
 dischMffe"'' general rule, that a breach which only deprives the 
 promisee of a part of that to which he was entitled, 
 does not discharge him from such performance as may 
 be due from him. 
 10 East, 305. In Bitohie v. Atkinson the plaintiff promised to 
 v^FinneyS™ *^^® ^^^ ^''^^P *o ^^t. Petersburgh and there load a Gom- 
 a Watts & plete ca/i'go of hemp and iron, and to deliver the same 
 ■•' on being paid freight at specified rates. He came 
 away with an incomplete cargo, under a mistaken im- 
 pression that an embargo was about to be laid on Brit- 
 ish ships, and the defendant refused to pay any freight, 
 on the ground that the completeness of the cargo was 
 a condition precedent to any payment being due. 
 Lord Ellenboeough said that whether it was so, or 
 no, depended " not on any formal arrangement 
 *282 of words, but on the reason and sense of the 
 thing as it is to be collected from the whole con- 
 tract:" and with regard to the promise before us, he 
 held that " where the freight is made payable upon an 
 indivisible condition, such as the arrival of the ship 
 with her cargo at her destined port of discharge, such 
 arrival must be a condition precedent; because it is 
 incapable of being apportioned : hut here the delivery 
 of the cargo is in, its nature divisible, and therefore 
 I think it is not a condition precedent; but the 
 BltcMe V. plaintiff is entitled to recover freight in proportion to 
 EastaQS,' *^® extent of such delivery; leaving the defendant to 
 his remedy in damages for the short delivery." 
 294 
 
Ohap. III. § 2. BY BREACH. 283 
 
 The case of Simpson v, Grippin was decided upon L. R. 8 Q. B. 
 similar grounds. In thatcase A agreed with X to sup- " 
 ply him with a given quantity of coal to be delivered 
 in equal monthly installments for twelve months. X 
 agreed to send wagons to receive the coal. X did not 
 during the first month send wagons to receive one- 
 twefth of the coal. A rescinded the contract. It was 
 held that he was not entitled to do so, inasmuch as X 
 was willing to continue the contract as to the remain- 
 ing installments, and it did not appear to have been 
 the intention of the parties to determine the contract 
 upon the failure of one of the parties to fulfill one of 
 a series of terms. 
 
 And in the case of Freeth v. Burr, in which the same L. R. 9 0. P. 
 point arose, Keating, J., said, " It is not a mere refusal 
 or omission of one of the contracting parties to do 
 something which he ought to do, that will justify the 
 other in repudiating the contract; but there must be 
 an absolute refusal to perform his part of the contract." 
 
 Thus it will be noted that if a default in one item unless it 
 of a continuous contract of this nature be accompa-^^^^g^^ ° 
 nied with an announcement of intention not to per- contract, 
 form the contract upon the agreed terms, the other ^ynoidJ'a 
 party may treat the contract as being at an end. And B. & Ad. 883. 
 in like manner, if non-payment of one installment of 
 goods be accompanied by circumstances which 
 give the seller reasonable ground for thinking *283 Bloomer v. 
 that the buyer will not be able to pay for the r g°a P.' ^ 
 
 rest, he may take advantage of the one omission to 588. 
 repudiate the contract. 
 
 It must be further noted that the general rule ap- or be made 
 plicable to contracts of this sort may be contravened w ie^mTof 
 by express stipulation. It is always open to the par- oonti-act. 
 ties to agree that the entire performance of a consider- 
 ation, in its nature divisible, shall be a condition pre- 
 cedent to the right to a fulfillment by the other party 
 of his promise. In such a case nothing can be ob- 
 295 
 
284 DISCHARGE OF CONTRACT. PartV. 
 
 tained either upon the contract or upon a quantum 
 6 T. R. 320, meruit for what has been performed. Thus in Cutter 
 iT C^ H ^l"^' ^- Powell, a sailor being at Jamaica, took a promissory 
 and notes' note from the master of liis ship to the following effect: 
 [See^Hansell " Ten days after the ship Governor Parry, myself mas- 
 V. Erickson, ter, arrives at Liverpool, I promise to pay to Mr. T. 
 ■ ^ Cutter tlie sum of thirty guineas, ^TOVic?e^Ae^roc«e(7«, 
 continues and does his ditty as second mate in the 
 said ship from hence to the port of Liverpool. Kiugs- 
 ton, July 31st, 1793." The sum agreed to be paid was 
 larger than the ordinary wages of a mate. The ship 
 sailed on the 2nd of August, and reached Liverpool 
 on the 9th of October; the sailor did his daty as sec- 
 ond mate until the 20th of September, when he died. 
 It was held that his representatives could not recover 
 upon the express contract, for its terms were unful- 
 filled ; nor could they recover upon a quantum meruit 
 for such services as he had rendered, because the terms 
 of the express contract excluded the arising of any 
 Buc.h implied contract as would form the basis of a 
 claim upon a quantum meruit. " It may fairly be 
 considered," said G-eose, J., "that the parties them- 
 selves understood that if the whole duty were per- 
 formed the mate was to receive the whole sum, and 
 that he was not to receive anything unless he did 
 continue on board during the whole voyage." 
 
 *284 Subsidiary promises. 
 
 Subsirliai'y We shall have to speak, in a later portion of this 
 Promises: chrpter, of subsidiary promises, or waranties as we 
 will venture to call them, as distinct from conditions 
 or terms on which the right to performance depends. 
 Eut it is desirable to illustrate here the difl'erence 
 which exists between a subsidiary promise the breach 
 of which cannot under any circumstances operate as a 
 a discharge, and a promise such as we have described, 
 which admits of being performed with more or less 
 296 
 
Chap. III. § 3. BY BREACH. 285 
 
 completeness, but which may be so completely broten 
 as to discharge the promisee. 
 
 A good instance of such a subsidiary promise is to 
 be found in the case of Bettini v. Gye. There the L. R. 1 Q. B. 
 plaintiff, a professional singer, entered into a contract 
 with the defendant, director of the Royal Italian Opera 
 in London, for the exclusive use of his services as a 
 singer in concerts and operas for a considerable time, 
 and upon a number of terms, one of which was as 
 follows: 
 
 " (7.) M. Bettini agrees to be in London without fail 
 at least six days before the commencement of his en- 
 gagement, for the purpose of rehearsals." 
 
 The plaintiff broke this term by arriving only two 
 instead of six days before the commencement of the 
 engagement, and the defendant treated this breach as 
 as discharge of the contract. The Court held that in 
 the absence of any express declaration that the term 
 was vital to the contract, it must "look to the whole how distin- 
 contract, and see whether the particular stipulation ji^'^'q^^^j, 
 goes to the root of the matter, so that a failure to per- tions. 
 form it would render the performance of the rest of 
 the contract by the plaintiff a thing different in sub- 
 stance from what the defendant has stipulated for; 
 or whether it merely partially affects it and may he 
 compensated for in damagesP And it was decided 
 that the term did not go to the root of the matter, so 
 as to require to be considered a condition pre- 
 cedent. And generally it may be said that *285 
 where a promise is to be performed in the 
 course of the performance of the contract and after 
 some of the consideration, of which it forms a part, 
 has been given, it will be regarded as subsidiary, and 
 its breach will not effect a discharge unless there be 
 words expressing that it is a condition precedent, 
 or unless the performance of the thing promised be 
 plainly essential to the contract. "Where a person ^7~ 
 297 
 
286 DISCHARGE OF CONTRACT. PartV. 
 
 has received part of the consideration for which he en- 
 tered into the agreement, it would be unjust that, 
 because he had not the whole, he should therefore be 
 permitted to enjoy that part without either payment 
 or doing anything for it. Therefore the law obliges 
 Per Parke, him to perform the agreement on his part, leaving him 
 V LegK 9^^^ *° ^^^ remedy to recover any damages he may have sus- 
 Ex. 716. tained in not having received the whole consideration." 
 Warranty of Another illustration of a subsidiary promise of this 
 when sub- nature is to be found in the warranty of quality in a 
 sidiary. sale of goods. 
 
 "Where a contract of sale iS executory, so that the 
 property in the chattel has not passed to the buyer, 
 and the terms of the sale include a promise that the 
 chattel shall possess a particular quality, the accept- 
 ance of the chattel by the buyer is conditional on its 
 possessing that quality. Having promised to take, 
 and pay for an article of a particular sort, he is not 
 
 Benjamin on obliged to receive one which is not of the sort he bar- 
 Sale. [Sec. ^^.^^^ fo^_ 
 
 But if the contract of sale be executed, as being in 
 Ante, p. 58, its inception such a bargain and sale, of a specific 
 ^amin \k?H. chattel as was described in an earlier chapter, the prom- 
 ch. 1, a. ise as to quality becomes subsidiary. For, the property 
 
 having passed, the buyer can only reject the goods if 
 
 there be an express condition that he should do so, (as 
 L. R. 7 Ex. 7. in Head v. TattersaV), or possibly in the event of the 
 
 goods being different in description to the terms of 
 the agreement, or wholly worthless in quality. 
 See post, *286 The promise as to quality is then a warranty in 
 P' ' the strict sense of the term, "a stipulation by 
 
 Behn v. way of agreement, for the breach of which compensa- 
 3 B™& s p *^°^ must be sought in damages," in other words, a 
 755. promise to indemnify against failure to perform a term 
 
 in the contract, (a) 
 
 (a) [The decisions in this country are not in harmony upon 
 this question. The cases of Kase v. John, 10 Witts. (Pa.) 107; 
 298 
 
Chap. III. § 3. BY BREACH. 287 
 
 Conditional Pbomises. 
 
 We now come to deal with conditional promises. Conditional 
 and before we touch upon the sort of condition which o/°hreT "* 
 is especially connected with the subject of discharge, kinds, 
 it may be well to speak shortly of conditions in general. 
 
 If A makes a promise to X which is not an abso- 
 lute promise, but subject to a condition, that condition 
 must, as regards its relation to the promise in time, 
 be either subsequent, concurrent or precedent. 
 
 In the case of a condition subsequent, the rights of Condition 
 X under A's promise are determinable upon a speci- ^^ sequen . 
 fied event. The condition does not affect the com- 
 mencement of X's rights, but its occurrence brings 
 them to a conclusion. We have already dealt with 
 conditions of this nature in speaking of the discharge See ante, 
 of contract by agreement. ^' 
 
 In the case of a condition concurrent, the rights of Condition 
 X under A's promise are dependent upon his doing, or *'°'^°'"''^'<*'i*- 
 being prepared to do, something simultaneously with 
 the performance of his promise by A. Such a condi- 
 tion exists in the case of a sale of goods where no time 
 is specified for the payment of the price; payment and Per Bayley, 
 delivery are concurrent conditions, and the right of the ^"'g^jj^g^g*™ 
 seller to receive the price, and that of the buyer to4B.& 0.941. 
 receive the goods are dependent upon the readiness Haight,^8 ^' 
 of each, the one to deliver and the other to pay. Barb. 338.] 
 
 In the case of a condition precedent, the *287 Condition 
 
 precedenl^ 
 
 Muller V. Eno, 14 N. T. 597, and Houdleye v. House, 33 Vt. 179, 
 holding that where there was an executed contract of sale of per- 
 Bonal property, and a breach of warranty of quality, that if the 
 article is of the kind bargained for, in the absence of fraud, the 
 purchaser cannot return the article unless it has been expressly 
 stipulated he mS,y do so ; but the courts of Massachusetts, in Bryant 
 y.Iaimrgh, 13 Gray, 607, hold the contrary doctrine. But in all casea 
 of fraud the sale may be rescinded and the article returned. 
 EoVarodk v. Bun, 33 Pick. 046; Blyih v. Bpeake, 38 Texas, 439.] 
 299 
 
287 
 
 DISCHARGE OF CONTRACT. 
 
 Part V. 
 
 (1) which 
 do not 
 discharge. 
 
 rights of X under A's promise do not arise until 
 Bomething has been done, or has happened, or some 
 period of time has elapsed. But in dealing with 
 conditions of this nature we must note that they are 
 of two kinds, and that with one of these we are not 
 here immediately concerned. 
 
 Floating or 
 suspensory- 
 conditions. 
 
 The happen- 
 ing of an 
 event. 
 
 Morgan v. 
 Birnie, 9 
 Bing. 672. 
 [Smitli V. 
 Briggs, 3 
 Denio, 73.] 
 
 The lapse of 
 time. 
 
 The act of the 
 promisee. 
 
 "We must distinguish conditions which suspend the 
 operation of a promise until they are fulfilled, from 
 conditions the non-fulfillment of which is a cause of 
 discharge. It is perhaps permissible to call the former 
 floating conditions, as opposed to conditions the per- 
 formance of which is fixed by time or circumstances. 
 It may be well shortly to illustrate the character of 
 such conditions. 
 
 A promise may be conditional on the happening of 
 an uncertain event, as in the case of the underwriter 
 whose liability accriies upon the loss of the vessel 
 insured. Or it may depend upon the act of a third 
 party, as in the case of a promise in a building con- 
 tract to pay for the work upon receiving a certificate 
 of approval from the architect. Such promises might 
 be called contingent rather than conditional, for they 
 depend for their operation on events which are beyond 
 the control of the promisee, and which may never 
 happen. 
 
 Again, a promise may be conditional in the sense 
 that its operation is postponed until the lapse of a cer- 
 tain time — as in the case of a debt for which a fixed 
 period of credit is to be given — or until the happen- 
 ing of an event that is certain to happen, as in the case 
 of an insurance upon life. 
 
 Or again, a promise may be conditional in the sense 
 that its operation awaits the performance of some act 
 to be done by the promisee. If no time is specified 
 within which the act is to be. done, the non-fulfillment 
 of the condition merely suspends and does not dis- 
 300 
 
Chap. III. § 3. BY BREACH. 288 
 
 charge the rights of the promisee. Common illustra- 
 tions of such conditions are furnished by cases of 
 promises conditional upon demand or notice. 
 A may promise X that he will do something *288 
 upon demand: he cannot then be sued until 
 demand has been made. Or A may promise X that 
 he will do something upon the happening of an event, 
 and he may stipulate that notice shall be given to him 
 of the event having happened. Or it may be that the 
 happening of the event is peculiarly within the knowl- Makin v. 
 edge of X, and then an implied condition would be rJ'^R'^i ^""25 
 imported into the contract tliat notice must be given 
 to A before he can be sued upon his promise. 
 
 In all these cases it would appear than an action 
 brought upon the promise, before the fulfillment of 
 the condition, would be brought prematurely; and 
 though neither the non-fulfillment of the condition, Palmer v. 
 
 nor the action brought before it was fulfilled, would T®S?P'^', ^ ^ 
 ° ' & E. 521. 
 
 discharge the contract, the condition suspends, accord- 
 ing to its terms, the right to the performance of the 
 promise. 
 
 But tije conditions with which we are concerned (2) Condi- 
 
 effect a discharge of contract by their breach, if not *'"°f Pr^°^ 
 „ • . . . dent wliicU 
 
 performed at.a fixed time or within a reasonable time may ettect 
 
 from the makW of the contract; and the breach of '^^^'^'^'^'^'S^- 
 
 such a conditio^ is the breach of a term expressly 
 
 made, or necessarily implied in the contract, whereby 
 
 one party loses either the whole or an essential part of 
 
 that in consideration of which he made his promise. 
 
 And so we may say that where A's promise to X is 
 a conditional and not an absolute promise, he may be 
 discharged — 
 
 (1) By the failure of X to perform a " concurrent 
 condition," i. e., to do something or to be ready to do 
 something which should be simultaneous with the 
 performance of his promise by A. 
 301 
 
289 DISCHARGE OF CONTRACT. PartV. 
 
 (2) By the fact that there has been a total or sub- 
 stantial failure on the part of X to do that which he 
 was bound to do under the contract — a state of things 
 which we may describe as virtual failure of considera- 
 tion. 
 *289 (3) By the untruth of some one statement or 
 the breach of some one term which the parties 
 considered to be vital to the contract. 
 
 Breach of Concurrent Condition. 
 
 Concurrent Concurrent conditions seem, in point of fact, to be 
 conditions conditions precedent; for the simultaneous perform- 
 conditions ance of his promise by each party must needs be 
 precedent, inapossible except in contemplation of law. But what 
 Benjamin on we mean by the phrase is, that there must be a con- 
 Sales, p. 480. cui-i-ent readiness and willingness to perform the two 
 promises, and that if one is not able or willing to do 
 his part, the other is discharged. 
 
 This form of condition is more particularly applica- 
 ble to contracts of sale, where payment and deliveiy 
 are assumed in the absence of express stipulation to be 
 intended to be contemporaneous. 
 7 T. R. 135. In Morton v. Lamh the plaintiff agreed to buy a 
 certain quantity of corn of the defendant at a certain 
 price, and the defendant promised to deliver the corn 
 within one month. The plaintiff alleged that he had 
 always been ready and willing to receive the corn, but 
 that it had not been delivered within the month. The 
 Court held that readiness to receive was not a sufiS- 
 cient performance of his obligation by the plaintiff; 
 that payment of the price was intended to be concilr- 
 rent with delivery of the corn. As the plaintiff did 
 not allege that during the time in which delivery 
 might have been made he had been ready to pay the 
 price, there was nothing, as he had shaped his case, to 
 show that he had not himself broken the contract and 
 discharged the defendant by non-readiness to pay. 
 302 
 
Chap. III. § 3. BY BREACH. 290 
 
 And so the law is laid down by Batlet, J., in 
 Bloxam v. Sanders: "Where goods are sold, and 4 B. & C. 941. 
 nothing is said as to the time of the delivery or the 
 time of payment, and everything the seller has to do 
 with them is complete, the property vests in the buyer, 
 so as to subject him to the risk of any accident 
 which may happen to the goods, and ths seller *290 
 is liable to deli/oer them whenever they a/re de- 
 mcmded upon payment of the price; bat the buyer 
 has no right to have possession of the goods till he 
 yOAjs the price." 
 
 Breach Tyy Yirtual Failure of Consideration. 
 
 It is laid down by high authority that " where mu- "Williams* 
 tual promises or covenants go to the whole considera- flg"^'^^™' 
 tion on both sides, they are mutual conditions and Boone v. 
 performance must be averred." 9t?^'^ ^<?^ 
 
 By this we must understand that where A's promise People v. 
 is the entire consideration for X's promise, then, in the orIi"' '^ ^^ 
 absence of any clear indication that X is to perform 
 his promise first, or that X, as the consideration for 
 his promise^ relied solely upon his right of action 
 against A, A will not be able to sue X unless he can 
 aver that he has performed or is ready to perform his 
 promise; and in the event of it being no longer possi- 
 ble for him to perform it within the terms of the 
 contract, X will be discharged. 
 
 It seems tolerably obvious that a total failure by A 
 in performing that which was the entire consideration 
 for X's promise, and which should have been antece- 
 dent to X's performance of his promise, will exonerate 
 X; but it will be well to note some of the less obvious 
 applications of the rule, and to mark its effect in cases 
 where the performance of a promise has been illusory 
 and consideration for the promise of the other party 
 has consequently failed. 
 803 
 
291 DISCHARGE OF CONTRACT. Part V. 
 
 In cases of In every executory contract of sale the buyer, if he 
 coXacf of ^^^ contracted for an article of a particular quality, is 
 sale. entitled to reject the article tendered if it do not cor- 
 
 respond in quality with the terms of the contract. 
 This, however, is a matter of express condition falling 
 under the next and not the present head of con- 
 *291 ditional promises. But in the absence of express 
 stipulations of this nature there are certain terms 
 implied in every contract of sale which protect the 
 buyer who has not been able to inspect the goods from 
 the imposition upon him of an article different to that 
 wliich he contracted to buy, or practically worthless 
 and unmarketable. 
 Jones V. Just, " In every contract to supply goods of a specified 
 
 h.^' ?T^" ^' description which the buyer has no opportunity to 
 197. [How- . -^ •' , . , ^-^ ■' , 
 
 ard V. Hoey, inspect, the goods must not only in tact answer the 
 
 350 1^'^ specified description, but must also be saleable or mer- 
 chantable under that description." 
 Where goods Thus the buyer is not bound to accept goods which 
 
 do not ^Q ^^f correspond to the descrivtion of the article 
 
 answer to ^ f- ./ 
 
 description, sold, even though they do correspond to the sample by 
 
 which they were bought. 
 
 10 Exch. 191. In Nichols v. Godts the plaintiff agreed to sell to 
 the defendant a certain quantity of foreign refined 
 rape oil, warranted only equal to samples; and the 
 action was brought for the refusal by the defendant to 
 accept oil which corresponded to tlie samples, but 
 which turned out not to be foreign refined rape oil. 
 
 And see It was held that he was entitled to be discharged from 
 
 Azemar v. ^^ contract, inasmuch as the nature of the article de- 
 
 Uasolla, L. R. ' 
 
 2 C. P. 4i;i & livered was different from that which he had agreed 
 
 «^'- to buy. 
 
 6 Taunt. 108. On the same principle, in Laing v. Fidgeon a con- 
 tract to supply saddles was held to be discharged, and 
 
 or are not the purchaser exonerated from receiving the goods, 
 
 marketable. ^^ ^jjg ground that they were not of a merchantable 
 quality. 
 
 301 
 
Chap. III. § 2. BY BREACH. 292 
 
 In the case of au executed contract of sale, in which In cases of 
 
 the property in the article sold has passed iincondi-^*^*f g°j^ 
 
 tionally to the buyer, there does not seem to be express 
 
 authority to the effect that terms, thus imported into See Benja- 
 
 every contract of sale in which the buyer cannot |^'^j.^?^g?g^^ 
 
 inspect the goods, give a right to return the article Sec. 888 and 
 , , , ' note a.] 
 
 bought. •* 
 
 But it would seem that if the article the property in 
 
 which has passed to the buyer prove to be 
 
 worthless and unmarketable, or different in *292 
 
 character from that which he agreed to buy, he 
 
 can exercise rights closely analogous with the right of 
 
 return, and such as we have described as flowing from 
 
 the discharge of contract by breach. 
 
 (1) He can defend an action successfully for the 
 whole amount of the price. 
 
 (2) He can, if he has paid the price, recover it back, 
 as money received to his use, on the principle explained 
 above, that where a man has done all or any part of 
 his share of a contract which is afterwards broken by 
 the default of the other party, he may recover as upou 
 a distinct contract arising upon the accptance by the 
 other of money, goods or services offered by him. 
 
 In .Poulton V. Lattimore, the plaintiff sued the de- 9 b. & C 259. 
 
 fendant for the price of seed; the seed had been soldC^®^ •^f®^''' 
 11 1 • 1 , 1, ger V. Thor- 
 
 as new growing seed, but when sown it proved wholly bum, 34 M". 
 
 unproductive. The defendant refused to pay anything ^" °°*J 
 for the seed, and his defense was successful to the 
 whole amount of the price. 
 
 In Young v. Cole the defendant employed the plain- 3 Bing, it. 0. 
 tiff as a stockbroker, and delivered to him some Gau-''^^*- 
 temala bonds to sell. The plaintiff sold them and paid 
 the price to the defendant. The bonds turned out to 
 be worthless because unstamped, and were returned to 
 the plaintiff, who took them back, repaid to the pur- 
 chaser their price, and sued the defendant for the 
 305—20 
 
293 DISCHARGE OF CONTRACT. PartV. 
 
 amount whicli he had paid, as money received by the 
 defendant for his use. 
 
 The Court held that he was entitled to recover inas- 
 much as the purchaser of the bonds was entitled to 
 return them and demand their price back from the 
 broker, and the plaintiff had thus been compelled to 
 make the payment on behalf of the defendant. " It 
 is not a question of warranty," said Tindal, 0. J., 
 " but whether the defendant has not delivered some- 
 thing which, though resembling the article contracted 
 to ie sold, is of no value." 
 
 It follows from what has been said that the 
 *293 buyer under the circumstances described may 
 Joslingv. always maintain an actiop for damages sus- 
 
 c'b N 8 tained by the supply to him of an unmarketable arti- 
 447. cle, or of something different in character to that which 
 
 Gr'egsoa L. -^^ agreed to buy. There needs no express term in the 
 R. 4 Ex. 49. contract to enable him to do this. 
 
 It is somewhat unfortunate that the phrase " implied 
 warranty " should have been used to describe terms of 
 this nature. A non-compliance with such terms is, in 
 fact, a breach of the entire contract, a substantial fail- 
 ure of consideration. If A agrees to buy beef of X, 
 it seems hardly reasonable to say that X impliedly war- 
 rants that he will not supply mutton, or that he will 
 not supply an article unfit for human food. 
 Per Lord The use of the term " warranty " in this sense has 
 
 B Chanter V ^^®^ emphatically condemned by eminent judges, but 
 Hopkins, 4 it still exists, and tends to obscure the subject of the 
 Per Martin performance and breach of contract. 
 B., Azemar 
 
 R.2C.P.677! The rule further applies to the case of promises 
 
 In cases of which we have described as capable of more or less 
 
 formance^^'' complete performance, and which may be broken in 
 
 ^?'9^ „ ., part without such breach affecting the existence of the 
 wholly fails. ^ , , ° 
 
 contract. 
 
 Where the performance of a promise is divisible so 
 306 
 
Chap III. § 2. BY BREACH. 294 
 
 that a partial breach will not discharge the other con- 
 tracting party, a total failure of performance will 
 nevertheless operate as a discharge. 
 
 It is possible therefore that a premise which is inde- 
 pendent, so that a partial breach does not affect the 
 contract, may, if wholly broken, change its character 
 and become a condition. Thus in Ritchie v. Atkinson, 10 East, 295. 
 cited above, it was admitted that though the failure to 
 deliver a complete cargo did not exonerate the char- 
 terer, yet that if no cargo had been delivered he would Per Grose, J., 
 have been discharged. ^* P- ^''^• 
 
 And so with a promise which the parties regard as a 
 subsidiary term in the contract in so far as its 
 exact performance is not a condition upon which *294: 
 the rights of the promisor depend : if it be bro- Jackson v. 
 
 ken in such a way as to frustrate the objects of the It°\°'^ t 
 contract, it operates as a condition and the breach of surance Co., 
 it as a discharge. p • f^^ ^- ^' 
 
 Thus in Mc Andrew v. Chappie, cited above, the L. R. l 0. P. 
 promise to use " all convenient speed " was held not ®*^" 
 to be a condition precedent to the rights of the ship 
 owner. It was laid down that delay or deviation in 
 sending out the ship did not exonerate the charterer 
 from providing a cargo at the port of loading. But 
 if it were " a delay or deviation which, as it has been Per Willes, 
 said, goes to the whole root of the matter, deprives the^- !'q'^®p ^' 
 charterer of the whole benefit of the contract," such 48. 
 delay or deviation would effect a discharge. 
 
 Conditions Precedent. 
 
 In the cases with which we have been dealing, one 
 of the parties to a contract has been excused from per- 
 formance of his promise by reason of the entire failure 
 of the consideration which was to have been given for 
 it. "We now come to Conditions Precedent in the nar- 
 rower and more frequent use of the word, as meaning 
 SOT 
 
295 
 
 DISCHAEGE OF CONTRACT. 
 
 Part V. 
 
 Condition 
 Precedent 
 defined. 
 
 a single term in the contract, but a term possessing a 
 particular character. 
 
 "VVe will define a Condition Precedent, in this sense, 
 as a Statement or Promise, the untruth or non-per- 
 formance of which discharges the contract. 
 
 The difficulty which has always arisen, and must 
 needs continue to arise with regard to Conditions Pre- 
 cedent, consists in discovering whether or no the par- 
 ties to a contract regarded a particular term as essential. 
 If they did, the term is a Condition: its failure dis- 
 charges the contract. If they did not, the term is a 
 Warrranty: its failure can only give rise to an action 
 for such damages as have been sustained by the failure 
 of that particular term. 
 
 "Warranty and condition are alike parts, and only 
 parts, of a contract consisting in various terms. 
 *295 "We have tried to define Condition, we will ven- 
 ture further and try and define "Warranty. 
 Warranty de- "Warranty is a more or less unqualified promise of 
 indemnity against a failure in the performance of a 
 term in the contract. 
 
 It is right to say that the word warranty is used in 
 the most confusing manner, and in a great variety ot 
 senses,! but it is submitted that the definition which 
 
 fined. 
 
 • It -would be a work of some research to enumerate the varioua 
 senses in which the word wwrranty is used. The following are 
 some of the commoner uses of the term: 
 
 (1) Warranty is used as equivalent to a condition precedent in 
 the sense of a descriptive statement on the truth of which the 
 
 3 B. & S. 75. rights of one of the parties depend. Belin v. Burness. 
 
 (2) It is used as equivalent to a condition precedent in the sense 
 of a promise with the eifect above described. Behn v. Burness. 
 
 (3) It is used as meaning a condition the breach of which has 
 been acquiesced in, and which therefore forms a cause of action 
 but does not create a discharge. Behn v. Burness. 
 
 (4) It is used as an independent subsidiary promise, collateral 
 4M.&W.404. to the main object of the contract. Chanter v. Hopkins. This, it 
 
 is submitted, is its legitimate meaning. 
 
 (5) In relation to the contract of sale, warranty is used for an 
 
 SOS 
 
Chap. III. § 3. BY BREACH. 296 
 
 just been given assigns to the term its primary mean- 
 ing. "A warranty is an express or implied statement Per Lord 
 of something which the party undertakes shall g kf Chan.- 
 
 be part of the contract; and though part of the *296 ter v. Hop- 
 contract, collateral to the express object of it." ■^. 404 
 
 The breach of a term which amounts to a warranty 
 therefore will give a right of action, though it will 
 not take away existing liabilities; it is a mere promise 
 to indemnify. 
 
 We have called a warranty " a more or less unqual- 
 ified promise;" and we will illustrate the meaning of 
 this phrase from the contract between a Eailway Com- 
 pany and its passengers. It is sometimes said that a 
 Railway Company as a common carrier warrants the 
 safety of a passenger's luggage, but does not warrant 
 his punctual arrival at his destination in accordance 
 with its time tables. In truth it warrants the one just 
 as much as it warrants the other. In each case it makes 
 a promise subsidiary to the entire contract, but in the 
 
 express promise that an article shall answer a particular standard 
 
 of quality; and this promise is a condition until the sale is exe-gtreetv.Blay, 
 
 cuted, a warranty after it is executed. 2 B. & Ad. 
 
 (6) Implied warranty is a term used very often in such a sense ^^°' 
 as to amount to a repetition by implication of the express under- 
 taking of one of the contracting parties. We have mentioned Ante, p. 891. 
 the implied warranty in an executory contract of sale that goods 
 shall answer to their specific description and be of a merchant- Jones v. Just, 
 ablequality ; in other words, that there shall be a substantial per- L. B. 3 Q. B. 
 formance of a contract. ""■ 
 
 Implied warranty of title appears to be a somewhat vexed ■ 
 question: but the better opinion seems to be that on the sale of Eicholz v. 
 an article a man is supposed to undertake that he has a right to Bannister, 17 
 sell it; in other words, '' that he sells a chattel and not a lawsuit." P' ^' ■^" ^* 
 
 But the strangest applications of the implied warranty are the 
 warranty of authority ^hXcii an agent is supposed to give to a Collen v. 
 person contracting with him as agent, of which more hereafter; Wright, 7 E. 
 and the warranty of possibility which a man is said to give, if he * B. |01 ! 8 
 omits to introduce into his promise conditions which guard him pj.fp ^ 
 from being bound by it in the event of its becoming impossible -yyatta" L^E 
 of performance. 5 P 577 " 
 
 309 ■ ■ ' 
 
297 DISCHARGE OF CONTRACT. TartV. 
 
 Richards v. case of the luggage its promise is qualified only bj the 
 
 BrShton & excepted risks incident to the contract of a common 
 
 B. C. Railway carrier, in the case of the time table its promise 
 
 339 ■ ■ amounts to no more than an undertaking to use rea- 
 
 LeBlancliev. sonable diligence to insure punctuality. A promise is 
 
 RaUway^o "^* more or less of a warranty because a greater or 
 
 L. R. 1 C. P. less degree of diligence is exacted or undertaken in 
 D 311 
 
 the performance of it. 
 
 That the promises are warranties, and not condi- 
 tions is apparent from the fact that neither loss of lug- 
 gage nor unpunctuality would entitle the passenger to 
 rescind the contract and recover back his fare. 
 Difficulties The question whether a particular term in a contract 
 of distin. jg.^ Condition Precedent or a "Warranty is one which, 
 
 gUlSUlDg _ ■' , _ ' 
 
 condition as it turns upon the construction of each individual 
 j!^f^^' contract, need not detain us longer here. 
 
 " The rule has been established," said Tindal, 0. J., 
 3 Bing. N. C.in Stavers v. Curling, " by a long series of decisions 
 "°* in modern times, that the question whether covenants 
 
 are to be held dependent or independent of each other, 
 is to be determined by the intention and meaning of 
 the parties as it appears on the instrument, and by the 
 application of common sense to each particular 
 *297 case; to which intention when once discovered 
 all technical forms of expression must give way." 
 And Blaokbuen, J., puts the matter in the same 
 L. B. 1 Q. B. light in the recent case of Bettini v. Gye: 
 D. 187. "Parties may think some matter, apparently of very 
 
 little importance, essential; and if they sufBciently 
 express an intention to make the literal fuliillment of 
 such a thing a condition precedent, it will be one; or 
 they may think that the performance of some matter, 
 apparently of some importance and prima facie a con- 
 dition precedent is not really vital, and may be com- 
 pensated for in damages, and if they sufficiently ex- 
 pressed such an intention, it will not be a condition 
 precedent." 
 310 
 
Chap. III. § 3. BY BREACH. 298 
 
 This being the rule as to the ascertainment of a con- 
 dition precedent, it will be enough to note that a con- 
 dition precedent may assume the form either of a 
 Btatement or of a promise. In speaking of Misrepre- Ante, p. 133. 
 sentation, we pointed out the mode in which state- 
 ments forming the basis of a contract or regarded as 
 essential to it were incorporated into the body of the 
 contract, and were placed upon a level with promises 
 the breach of which would confer a right of action, 
 and in certain cases effect a discharge. 
 
 But it must be borne in mind that a condition pre- Acquies- 
 cedent may change its character in the course of the ^^g^pj^'^j 
 performance of a contract; and that a breach which oonditiop 
 would have effected a discharge if treated as such at ^ warranty, 
 once by the promisee, ceases to be such if he goes on 
 with the contract and takes a benefit under it. 
 
 This aspect of a condition precedent is pointed out 
 by Williams, J., in Behn v. JBurness, where he speaks 3 B. & 8. 756. 
 of the right of the promisee, in the case of a broken 
 condition, to repudiate the contract, " provided it has 
 not already been partially executed in his favor; " and 
 goes on to say that if after breach the promisee 
 continues to accept performance, the condition *298 
 loses its effect as such, and becomes a warranty 
 in the sense that it can only be used as a means of 
 recovering damages. 
 
 An illustration of such a change in the effect of a 
 condition is afforded by the case of P^Lst v. Dowie. 33 L. J. Q. B. 
 The defendant chartered the plaintiff's vessel for a ■'■''^^' ^^^• 
 voyage to Sydney, he promised to pay £1,550 in full 
 for this use of the vessel on condition of her taking a 
 cargo of not less than 1,000 tons weight and measure- 
 ment. The charterer had the use of the vessel as 
 agreed upon; but it appeared that she was not capable 
 of holding so large a cargo as had been made a condi- 
 tion of the contract. To an action brought for non- 
 311 
 
299 DISCHARGE OF CONTRACT. Part V. 
 
 payment of the freight the defendant pleaded a breach 
 of this condition. The term in the contract which has 
 been described was held to have amounted, in its in- 
 ception, to a condition. " It is not easy to see," said 
 Blackbiten, J., " what is meant by these latter words 
 unless they import a condition in some sense; and if 
 f when the matter was still executory, the charterer had 
 
 refused to put any goods on board, on the ground that 
 the vessel was not of the capacity for which he had 
 stipulated, I will not say that he might not have been 
 justified in repudiating the contract altogether; and 
 in that case the condition would have been a condition 
 precedent in the full sense." 
 
 He then quotes with approval the dicta of Williams, 
 J., in Behn v. Burness, and goes on to say, '' No doubt 
 that principle is adopted from the judgment of Lord 
 9Exch. 709. Wbnsleydale, in Graves v. Legg, and this distinction 
 ee p. aS5. ^ji^ explain many of the cases in which, although there 
 appears to have been a condition precedent not per- 
 formed, a party having received part of the consider- 
 ation has been driven to his cross-action. Now is not 
 this a case in which a substantial part of tlie consid- 
 eration has been received ? And to say that the failure 
 of a single ton (which, would be enough to support 
 the plea) is to prevent the defendant from being 
 *299 compelled to pay anything at all, would be de- 
 ciding contrary to the exception put in the case 
 of Behn V. Burness." 
 
 but not If the But although the acceptance of a part performance 
 
 a sublaantw subsequent to a breach of a condition precedent alters, 
 
 character, as a general rule, the nature of such a condition and 
 
 reduces it to the level of a subsidiary promise, there 
 
 may be circumstances under which the condition 
 
 retains its original character. 
 
 If such a performance as has been accepted be not 
 "a substantial part of the consideration" the condi- 
 312 
 
Chap. III. § 3. BY BREACH. 300 
 
 tion does not lose its force. In Ellen v. Topp action 6 Excli. 424 
 was brought by a master against the father of an ap- 
 prentice upon an apprenticeship deed to which the 
 father was a party, for a discontinuance of service by 
 the apprentice. The apprentice had served for three 
 years out of a terna of five. The defendant pleaded 
 that the plaintiff, having agreed to teach the appren- 
 tice three trades, had abandoned one of them. It was 
 argued that as the plaintiff had given so much of the 
 consideration as a three years' instruction of the ap- 
 prentice, the condition that he should practice the 
 three trades which he had originally promised to teach, 
 had ceased to be a condition precedent and that the 
 breach of it did not discharge the apprentice. The 
 Court acknowledged the rule that " the construction 
 of an instrument may be varied by matter ex post 
 facto,' and that which is a condition precedent when 
 the deed is executed may cease to be so by the subse- 
 quent conduct of the covenantee in accepting less." 
 But it was held that the failure to fulfill the condition, 
 although some performance had since been accepted, 
 was a failure to fulfill a substantial part of the consid- 
 eration, that the covenant to teach was, in effect, a con- 
 tinuing condition precedent to the covenant to serve, Ellenv. 
 and that, in consequence, the rule under discussion did ^^Pi6Exch. 
 not apply. 
 
 § 3. Eemedies foe BEErflror Oonteact. *300 
 
 Having endeavored to ascertain the rules which gov- Remedies 
 ern the discharge of contract by breach, it remains ioiox\iKaa)x. 
 consider the remedies which are open to the person 
 injured by the breach. 
 
 If the contract be discharged by the breach, the 
 person injured acquires or may acquire, as we have 
 seen, three distinct rights : (1) a right to be exonerated 
 from further performance; (2) a right, if he has done 
 anytliing under the contract to sue upon a quantum 
 313 
 
301 DISCHARGE OF CONTRACT. Part V. 
 
 meruit, a cause of action distinct from that arising 
 ont of the original contract, and based upon a new 
 contract originating in the conduct of the parties; (3) 
 a right of action upon the contract, or term of the 
 contract broken. 
 
 But we are now no longer specially concerned with 
 that breach of contract which amounts to a discharge; 
 we may therefore consider generally what are the rem- 
 edies open to a person who is injured by the breacli of 
 Damages. a contract made with him. They are of two kinds: 
 he may seek to obtain damages iov the loss he has sus- 
 Speciflc per- tained; or he may seek to obtain specific performance 
 formanoe. ^j- ^j^g contract which the other party has refused or 
 neglected to perform. 
 
 But there is this difference between the two reme- 
 dies: every breach of contract entitles the injured 
 party to damages, though they be but nominal; but 
 it is only in the case of certain contracts and under 
 certain circumstances that specific performance can be 
 obtained. 
 
 "We do not propose to treat of these remedies other- 
 wise than in the most general way, for the matter is 
 one which barely comes within the scope of this work; 
 but it may be well to state briefly some elementary 
 rules which govern the two remedies in question. 
 
 *30l Damages. 
 
 When a contract is broken and action is brought 
 upon it — the damages being unliquidated, that is to 
 say unascertained in the terms of the contract — how 
 are we to arrive at the amount which the plaintiff, if 
 successful, is entitled to recover? 
 
 Per Parke, (1) "The rule of Common Law is, that where a 
 ^''m?man?lP^^*y sustains a loss by reason of a breach of contract, 
 Ex.855. [See he is, so far as money can do it, to be placed in the 
 
 314: 
 
Chap. III. § 3. BY BREACH. 303 
 
 same situation, with respect to damages, as if the con- Pinkston v. 
 tract had been performed." f^'f- ^ ^^^ 
 
 Thus where no loss accrues from the breach of con- Damages 
 tract, the plaintiff is nevertheless entitled to a verdict, sen"loss^s^ 
 but for nominal damages only, and " nominal damages, tained ; 
 in fact, mean a sum of money that may be spoken of, ^^^. Maule, 
 but that has no existence in point of quantity." And mont v. 
 so in action for the non-payment of a debt, where there o.'"b*494''' ^ 
 is no promise to pay interest upon the debt, nothing [Plumleigh 
 more than the sum due can be recovered; for the pos- Qiijj^_^44J 
 sible loss arising to tlie creditor from being kept out 
 of his money is not allowed to enter into the consid- 
 eration of the jury in assessing damages, unless it was 
 expressly stated at the time of the loan to be within 
 the contemplation of the parties, (a) 
 
 (2) The rule laid down by Pakke, B., in Robinson so far as it 
 V. Harman, must be taken subject to considerable ^^pl°t^™' 
 limitations in practice. The breach of a contract may of the parties, 
 result in losses which neither party contemplated, or 
 could contemplate at the time that the contract was 
 entered into, and the Courts have striven to lay down 
 rules by which the limit of damages may be ascer- 
 tained. 
 
 So in Hadley v. Baxendale it was decided *302 9 Exch. 354. 
 that " where two parties have made a contract more^^New 
 
 which one of them has broken, the damages which the York Shot 
 the other party ought to receive in respect of such423j ' ' 
 breach of contract should be such as may fairly and 
 reasonably be considered either arising naturally, L e. 
 according to the usual course of things, from such 
 breach of the contract itself, or such as may reasonably 
 be supposed to have been in contemplation of both 
 
 (a) [In this country the statutes of the States cover all the 
 questions of interest.] 
 315 
 
302 DISCHARGE OF CONTRACT. PartV. 
 
 parties, at the time they made the contract, as the 
 probable result of the breach of it. {a) 
 Exceptional And where special loss is in contemplation of the 
 bef matter of P^-rtiss from the breach of the contract, snch loss as 
 special would not, in the ordinary course of things, follow 
 
 upon the breach, it is not enough that the loss should 
 Per Blaclc- be in contemplation of the parties in order that it may 
 HoriierlVlid-^® recovered as damages, there must be "evidence of 
 landRailway an actual contract to bear the exceptional loss arising 
 
 from breach of contract." 
 L. R. 8 C. P. In Home v. Midland Railway Company, the 
 plaintiff being under a contract to deliver shoes in 
 London at an unusually high price by a particular day, 
 delivered them to the defendant to be carried, with no- 
 tice of the contract only as to the date of delivery. 
 The shoes were delayed in carriage, were consequently 
 rejected by the intending purchasers, and the plaintifl 
 sought to recover, besides the ordinary loss for delay, 
 the difference between the price at which the shoes 
 were actually sold and that at which they would have 
 been sold if they had been punctually carried. It was 
 held that these damages were not recoverable, in the 
 absence of any evidence that the Company undertook 
 
 (a) [There is a difference of opinion in tlie American courts 
 upon the proper measure of damages in cases of breach of the 
 contract of warranty. The Supreme Court of Alabama, in the 
 recent case of Herring v. Skoggs, 3 Southern L. Journal, 291, 
 which was a case where a safe warranted burglar proof had been 
 broken into and valuables stolen, holding that the measure of 
 damages was the difference between the value of the safe, as it 
 was, and what it would have been worth if as warranted, and 
 that no recovery could be had for the loss of the articles taken 
 from it. The cases of Parsinger v. Thorium, 34 N! T. 634, and 
 Flick V. Wellerton, 30 "Wis. 390, hold that when seed was sold aa 
 being of a certain kind and quality, and was not so, the value of 
 the crop which would have been raised, less the expense of pro- 
 duction, was the proper measure of damages, and not merely the 
 difference between good and worthless seed.] 
 316 
 
. Chap. III. § 3. BY BREACH. 303 
 
 the increased responsibility arising from the unusual 
 price. 
 
 (3) Damages in an action for breach of contract are Damages for 
 by way of compensation and not of punishment. go^i°^Q°^ot 
 Hence a plaintiff can never recover more than such vindictive, 
 pecuniary loss as be has sustained, subject to the above 
 
 rules. To this general rule, however, tlae breach 
 of promise of marriage is an exception, for in *303 Hamlin v. 
 such cases the feelings of the person injured SrfRaUwa'^' 
 
 are taken into account, apart from such specific pecu- Co., i H. & 
 niary loss as can be shown to have arisen. Goodail y^^^ 
 
 Sherman, 1 
 
 (4) The parties to a contract not unfrequently assess Head, 209.} 
 
 the damages at which they rate a breach of the con- ^^ p^j.™g°' 
 
 tract by one or both of them, and introduce their 
 
 assessment into the terms. of the contract. Under 
 
 these circumstances arises the distinction between 
 
 penalty and liquidated damages, which we have 
 
 already dealt with in considering the construction of See p. 243. 
 
 contracts. 
 
 (5) It follows from the general rule laid down by In Robinson 
 Baron Paeee, that a difScuity in assessing damages ^^ s ™^"' ^ 
 can in no way disentitle a plaintiff from having an 
 
 attempt made to assess them. 
 
 A manufacturer was in the habit of sending speci- Difficulty of 
 
 mens of his goods for exhibition to agricultural shows, ^^st^i"^"* * 
 
 and he made a profit by the practice. He entrusted by jury. 
 
 some such goods to a railway company, who promised 
 
 the plaintiff, under circumstances which should have 
 
 brought his object to their notice, to deliver the goods 
 
 at a certain town on a fixed day. The goods were not Simpson v. 
 
 delivered at the time fixed, and consequently were late ^'^^ ^^' ^' 
 
 for a show at which they would have been exhibited, l Q. B. D.374! 
 
 It was held that though the ascertainment of damages y johns^o ™^ 
 
 was difficult and speculative, its difficulty was no reason Sup. Ct. 111. 
 f ^ . . J * n Oct. 1, 1879.1 
 
 tor not giving any damages at all. 
 
 317 
 
304 DISCHARGE OF CONTRACT. PartV. 
 
 And further, the plaintiff is entitled to recover for 
 prospective loss arising from a refusal by the defend- 
 ant to perform a contract by which the plaintiff would 
 have profited. Thus where a contract was made for 
 the supply of coal by the defendants to the plaintiff 
 by monthly installments, and breach occurred and 
 action was brought before the last installment fell due, 
 it was held that the damages must be calculated to be 
 the difference between the contract price and the mar- 
 ket price at the date when each installment should 
 have been delivered, and that the loss arising 
 Roper V. *304: from the non-delivery of the last installment 
 R s'o"? l6^ ™^®* ^^ calculated upon that basis, although 
 
 the time for its delivery had not arrived. 
 
 Sfecifio Performance. 
 
 Jurisdiction The jurisdiction, once exclusively possessed by the 
 as to^s^°e(^flo ^ourt of Chancery, to compel performance of a prom- 
 perform- ise, supplemented the remedy offered by the Common 
 ^^'^^' Law Courts, which was often inadequate or inapplica- 
 
 ble to the loss sustained. 
 
 A promise to do a thing can be enforced by a decree 
 
 for specific performance, a promise to forbear by an 
 
 injunction. 
 
 How limited. The exercise of this jurisdiction by the Court of 
 
 Chancery was limited by several rules, some of which 
 
 have been already noticed. Defects in the formation 
 
 Kekewich v. of a contract afforded an answer to a claim for specific 
 
 D^M^A^^^ performance, and in some cases Equity was more 
 
 176. guarded than the Common Law in granting its rem- 
 
 Und^^iV^"^ edy to suitors. A gratuitous promise though under 
 
 298. ' [Black seal cannot be enforced in Equity, nor can an infant 
 
 Har°& (J. obtain specific performance of a contract which cannot 
 
 100.] be enforced against him. 
 
 But the substantial limitations on the employment 
 of the remedy were these; 
 
 The Courts will not decree specific performance — 
 318 
 
Chap. III. § 4. BY BREACH. 305 
 
 1. Where the Common Law remedy of damages is 
 adequate to the loss sustained. 
 
 2. "Where the matter of the contract is such that the 
 Courts cannot supervise its execution. 
 
 (1) The first of these rules is illustrated by the dif- Specific per- 
 ferent attitude which the Court has assumed in this on'j^^^ere 
 matter towards contracts fol* the sale of land and con- damage aa 
 tracts for the sale of goods. reme^t^^ ° 
 
 The objects with which a man purchases a particular 
 piece of land are different to those with which he pur- 
 chases goods. He may be determined, in making the 
 contract, by the merits of the site or its neighborhood, 
 and these ca:nnot be represented by a money 
 compensation; whereas goods of tlie kind and *305 
 quality that he wants are generally to be pur- 
 chased. Hence specific performance of a contract for 
 the sale of goods is only decreed in the case of specific Leake on 
 chattels the value of which, either from their beauty, fi°2'7"^and 
 the interest attaching to them, or some other cause, cases there 
 cannot be represented by damages, {a) ^° ^ ^ 
 
 (2) And the distinction drawn between land and And where 
 goods illustrates the second rule also. insure per-^ 
 
 An agreement for the purchase of land can be per- formance. 
 
 formed by the doing of a specific act, the execution of §^f P^"^ ^°'^ 
 
 ■' ° ^ ^ J. 1 1 1 Selborne, 
 
 a deed or conveyance. In a contract tor the saJe anawolver- 
 
 delivery of goods performance may extend over some K^^'JJ^'ai'co. 
 
 time and involve the fulfillment of various terms, and v. L. & N. W. 
 
 "The Court acts only where it can perform the very^.^R^ie^q.'' 
 
 thing in the terms specifically agreed upon." at p. 439. 
 
 But the second rule is more distinctly illustrated by birds' 2 Dr*' 
 
 the refusal of the Courts to grant specific performance & War. 80. 
 
 of contracts involving personal services; though it 
 
 (a) [Some of the American Courts seem disposed to be more 
 liberal in granting specific performance of contracts relating to 
 personalty. See Barr v. Lapaley, 1 Wheat. 151 ; Mechanics' Bank 
 of Alexandria v. Seton, 1 Pet. 299; Clwrk v. Flint, 23 Pick. 321.] 
 319 
 
306 
 
 DISCHARttE OF CONTRACT. 
 
 Part V. 
 
 1 D. M. & Q. 
 604. [See 
 Kivofinoli v. 
 Oorsetti, 4 
 Paige, 261] 
 
 will enforce by injunction a promise not to act in a 
 particular way. 
 
 Thus in Lumley v. Wagner, the defendant agreed 
 with the plaintiff to sing at his theatre upon certain 
 terms, and during a certain period to sing nowhere 
 else. Subsequently she entered into an engagement 
 with another person to sing at another theatre, and 
 refused to perform her contract with the plaintiff. 
 
 The Court declined to enforce so much of the con- 
 tract as related to the promise to sing at the plaintiff's 
 theatre, but it rest^-ained the defendant by injunction 
 from singing elsewhere. 
 
 *306 § 4. DiSOHAEGE OF KiGHT OF AcTIOIT AeISING 
 FEOM BeEAOH of CoNTEACT. 
 
 Discharge of The right arising from a breach of contract can only 
 
 right of 
 action, 
 
 be discharged in one of three ways: 
 
 (a) By the consent of the parties. 
 
 (5) By the judgment of a Court of competent juris- 
 diction. 
 
 (c) By lapse of time. 
 
 by Release, 
 
 {a) Discharge hy consent of the parties. 
 
 This may take place either by Kelease or by Accord 
 and Satisfaction; and the distinction between these 
 two modes of discharge brings us back to the ele- 
 mentary rule of contract, that a promise made without 
 Consideration must, in order to be binding, be made 
 under seal. A Release is a waiver, by the person en- 
 titled, of a right of action accruing to him from a 
 breach of a promise' made to him. 
 
 In order that such a waiver should bind the person 
 making it, it is necessary that it should be made 
 tinder seal; otherwise it would be nothing more than 
 a promise, given without consideration, to forbear 
 from the exercise of a right. 
 
 To this rule bills of exchange and promissory notes 
 320 
 
Chap. III. § 4. BY BREACH. 307 
 
 form an exception. "We have already .seen that these Ante, p. 249. 
 
 instruments admit of a parol waiver before they fall 
 
 due. It appears to be correct to say that the right of Byles on 
 
 action arising upon a bill or note can be discharged by ^^ ^'gg 
 
 express, though gratuitous, renunciation. 
 
 Accord and Satisfaction is an agreement, which need by Accord 
 
 not be by deed, the effect of which is to dis- yon. 
 
 charge the right of action possessed by one of *307 
 
 the parties to the agreement. But in order to 
 
 have this effect it is not merely necessary that there 
 
 should be consideration for the promise of the party 
 
 entitled to sue, but that the consideration should be Bayley v. 
 
 executed in his favor. Otherwise the agreement is an b-d'^.^n. 0. 
 
 accord without a satisfaction. The promisor must f^' P- 920. 
 
 have obtained what he bargained for in lieu of his Bank v. De 
 
 right of action, and he must have obtained something 25^"7'„^>? •, 
 
 ^ , „ 1 , Wend. 343.1 
 
 more than a mere Iresh arrangement as to the pay- McManus v. 
 
 ment or discharge of the existing liability. S^'"'^' I'- ^ ^ 
 
 The satisfaction may consist in the acquisition of 
 a new right against the debtor, as the receipt from him 
 of a negotiable instrument in lieu of payment; or of 
 new rights against the debtor and third parties, as in 
 the case of a composition with creditors; or of some- 
 thing different in kind to that which the debtor was 
 bound by the original contract to perform; but it 
 must have been taken by the creditor as satisfaction See Sm.L. 0. 
 for his claim in order to operate as a valid discharge. cumberV 
 
 Wane, and 
 (5) Discharge ly the judgmsnt of a court of compe- cases ti^ere 
 
 tent jurisdiction. cock v. kaw- 
 
 The judgment of a Court of competent jurisdiction 561.]' 
 in the plaintiff's favor discharges the right of action 
 arising from breach of contract. The right is thereby See eh. v. s. 1. 
 merged in the more solemn form of obligation which Jv[cNu^ty^3 
 we have described as a Contract of Kecord. Gilm. 855.] 
 
 The result of legal proceedings taken upon a broken 
 contract may thus be summarized: 
 321—21 
 
308 DISCHARGE OF CONTRACT. Part V. 
 
 Effect of The bringing of an action has not of itself any effect 
 
 acticm^^ in discharging the right to bring the action. Another 
 
 action may be brought for the same cause in another 
 
 Court; and though proceedings in such an action 
 
 would be stayed, if they were merely vexatious, upon 
 
 Judicature application to the summary jurisdiction of the Courts, 
 
 61^ s' 4' ^^ y®* ^^ action for the same cause be brought in 
 
 *308 an English and foreign Court, the fact that the 
 
 TNewell V. defendant is being sued in the latter would not 
 
 Pick. 470.1 ^^ ^^^ ^^y ^^^P ^^ affect his position in the former. 
 
 of judgment, When the action is pursued to judgment, a judgment 
 
 adverse to the plaintiff discharges the obligation by 
 
 by way of estoppel. The plaintiff cannot bring another action 
 
 t ^Hopkins T ^°'" ^^^ same cause so long as the judgment stands, 
 ice.ewiieat. The judgment may be reversed by the Court, in which 
 ■-' case it may be entered in his favor, or else the parties 
 
 may be remitted to their original positions by a rule 
 being obtained for a new trial of the case. 
 
 But it is important to bear in mind that an adverse 
 [Morton v. judgment, in order to discharge the obligation by 
 AUen^m^/ estopping the plaintiff from reasserting liis claim, 
 must have proceeded upon the merits of the case. 
 
 If a man fail because he has sued in a wrong char- 
 acter, as executor instead of administrator; or at a 
 Pajmer v. wrong time, as in the case of action brought before a 
 ^•^^Pggj^-^- condition of the contract had been fulfilled, such as 
 roayis V. the expiration of a period of credit in the sale of 
 Gea 296.1 goods, he will not be prejudiced, by a judgment pro- 
 ceeding on these grounds, from succeeding in a subse- 
 quent action, 
 by way of If the plaintiff get judgment in his favor, the right 
 merger; ^f action is discharged and a new obligation arises, a 
 p. 37. form of the so-called Contract of Eecord. It remains 
 
 to say that the obligation arising from judgment may 
 be discharged by payment of the judgment debt, under 
 4 & 5 Anne, c. 16, § 12, or by satisfaction obtained by 
 822 
 
Chap. III. § 4 BY BREACH. 310 
 
 the creditor from the property of his debtor by the of execution, 
 process of execution. 
 
 (o) Lapse of Time. 
 
 Except by express statutory provision, lapse of time 
 
 does not affect the rights of parties to contracts. The Per Lord Sel. 
 
 riglits arising from contract are of a permanent and H'l''"?; ^'*"^- 
 • 1 i. 1 1 1 1 6lly Railway 
 
 maestructable character, unless either from the nature (!o. v. L.&N. 
 
 of the contract, or from its terms, it be limited in point ^'^^i,' ^ 
 of duration. 567. 
 
 But though the rights arising from contract 
 are of this permanent character, the remedies *309 
 arising from their violation are, by various stat- 
 utory provisions, withdrawn after a certain lapse of 
 time. The remedies are barred, though the rights are 
 not extinguished, (a) 
 
 These are the only matters which hinder the *310 
 Statutes of Limitation from affecting the plain- 
 tiff's remedy. Neither ignorance that a right of action 
 existed, nor, so far as Common Law goes, the conceal- Imperial Gas 
 ment of the cause of action by fraud, will prevent the G°'^c'°°fo°° 
 plaintiff from losing his remedy by lapse of time: nor, Exch. 39. 
 again, will the operation of the Statute be affected by Long^so^ ^' 
 a disability arising after the period of limitation has Iowa, 383.] 
 begun to run. 
 
 But in cases where there has been a fraudulent con- rvVelbom v. 
 
 cealmentof the existence of a cause of action, Equity /^^''^TfZ; }' 
 11 n 1 . , „ (^eo. 267.J 
 
 dates the commencement of the statutory period from siair v. 
 
 the discovery of the fraud. S'"™^®?;. ^ 
 
 •' Hare, 5o9. 
 
 [Campbell v. 
 (a) [The time in which actions of various kinds are barred de- yinino. 33 
 
 pends entirely on the statutes of the different States, and the dis- 111. 535.] 
 abilities which prevent the statute from commencing to run vary 
 very much, so that the student must examine this question either 
 in the statutes or in some work on that special subject; but as a 
 general thing the statute will not begin to run while the defend- 
 ant is absent from the State or the plaintiff is unable to sue by 
 reason of personal disability, as in cases of lunacy or minority.] 
 323 
 
311 DISCHARGE OF CONTRACT. PartV. 
 
 Revival of It is possible that Statutes of Limitation may be so 
 
 right of framed as not merely to bar tbe remedy, but to extin- 
 action. •' . 1 J i ii 
 
 gnish the right: such is the case with regard to realty 
 
 under 3 and 4 Will. IV. c. 27, but as regards contract 
 
 the remedy barred by the Statutes of Limitation may 
 
 be revived in certain ways. 
 
 In case of Where a specialty contract results in a money debt, 
 
 specialty. ^j^g right of action may be revived for the statutory 
 [Ames V. Le ° •{ i i i ,. , 
 
 Rue, 2 Mc- period of limitation, (1) by an acknowledgment oi the 
 
 Lean, 216.] ^^^^ ^^ writing, signed by the party liable, or his agent; 
 
 or (2) by part payment, or part satisfaction on account 
 
 of any principal or interest 'due on such a specialty 
 
 3 & 4 Will. debt. Such a payment, if made by the agent of the 
 
 IV. c. 42, 8. 6. party liable, will have the effect of reviving the claim. 
 
 Of simple Where a simple contract has resulted in a money 
 
 fKeenerv <iebt, the right of action may also be revived by sub- 
 
 brall, 19 ill. sequent acknowledgment or promise. 
 
 T, '^ . *311 The sort of acknowledgment or promise which 
 By promise. ° ^ 
 
 has been held to be requisite m order that a 
 
 simple contract debt may be revived for another pe- 
 riod of six years, is thus described by Mellish, L. J. : 
 In re River "There must be one of three things to take the case 
 l'^r"6 Ch°'' °^* °^ *^^^ Statute (of Limitation). Either there must 
 828. [Porter be an acknowledgment of the debt from which a prom- 
 Greenl' 41 1 ^^^ ^^ P^^ ^® implied ; or, secondly, there must be an un- 
 conditional promise to pay the debt; or, thirdly, there 
 must be a conditional promise to pay the debt, and 
 evidence that the condition has been performed." 
 
 This being the principle, its application in every 
 
 case must turn on questions of construction of the 
 
 words of the alleged promisor. And as was remarked 
 
 PerCleasby, in the most recent case upon the subject, "When the 
 
 V Lincu'^v'^L ^.^^stion is, what effect is to be given to particular 
 R. 3 Ex. D. words, little assistance can be derived from the effect 
 
 V Forsyth 69 gi^-en to Other words in applying a principle which is 
 lin37.] ' admitted." 
 
 The debt, however, admits of revival in another 
 324 
 
Chap. III. § 4 BY BREACH. 311 
 
 mode than by express acknowledgment or promise. A 
 part payment, or payment on account of the principal, By payment, 
 or a payment of interest upon the debt will take the 
 contract out of the Statute of Limitation. But the 
 payment must be made with reference to the original Waters y. 
 debt, and in such a manner as to amount to an q°^P -g^^'gg^ 
 acknowledgment of it 
 325 
 
312 DISCHARGE OF CONTRACT. PartV. 
 
 «312 OHAPTEE IV. 
 
 rMPOSSrEILITT OF FEEFOKMANCE. 
 
 Impossibility of performance arising subsequently 
 to the formation of the contract will, in certain cases, 
 operate as a discharge. But before proceeding to con- 
 sider and classify these cases, it may be well to say 
 something as to Impossibility in general in its relation 
 to contracts. 
 
 Obvious physical impossibility, or legal impossibil- 
 
 _ ity which is apparent upon the face of the promise. 
 
 Unreality of -^ . , ,, /^ u v i J 
 
 considera- avoids the contract, because, as we have seen,i the prora- 
 tion, ise is an unreal consideration for any promise given 
 in respect of it. 
 
 Impossibility which arises from the non-existence 
 
 of the subject matter of the contract avoids it, as we 
 
 Strickland v. '^^^^ seen,^ on the ground of mistake; but there are 
 
 Turner, 7 two cases of this sort which, if reconcilable at all, are 
 
 reconcilable only by a very fine distinction. 
 
 The distinction, if worth anything, seems to come 
 to this: If a man makes a promise to do some act, 
 and the possibility of his doing it is dependent on the 
 existence of some thing or state of circumstances, he 
 must make his promise conditionally or he will be 
 bound in any event. But if two parties agree to pur- 
 chase or otherwise deal with a thing which turns out 
 to be non-existent, then, in the absense of any expres- 
 sions to show that the promise of either was uncondi- 
 tional, they will be taken, if the thing be non-existent, 
 to have contracted under mistake. 
 The facts of the two cases are these. 
 
 ' Bee page 74. ' See page 121. 
 
 326 
 
Chap. IV. IMPOSSIBILITY OF PERFORMANCE. 313 
 
 In Hills V. Sughrue, the defendant agreed *313l5M. &W. 
 with the plaintiff by charter-party to take his ^^^' 
 
 (the defendant's) ship to the island of Ichaboe and 
 there load a complete cargo of guano and return with 
 it to England, being paid a high rate of freight. There 
 was so little guano at Ichaboe that the performance of 
 the defendant's promise to load a complete cargo was 
 impossible. Tlie plaintift" sued him for damages for 
 failure to bring home a cargo, and was held to be en- 
 titled to recover; the impossibility of performance 
 being no answer to an absolute promise such as the 
 defendant had made. 
 
 On the other hand, in Clifford v. Watts, the plain- L. R. B 0. P. 
 tifi and defendant were landlord and tenant, and the 
 plaintiff sued upon a covenant in the lease in which 
 the defendant undertook to dig from the premises not 
 less than 1,000 tons of potter's clay annually, paying 
 a royalty of 2s. Qd. per ton. The defendant pleaded 
 that there never had been so much as 1,000 tons of 
 clay under the land. The court held that the plea fur- 
 nished a good answer to the plain tiff 's claim. " Here," 
 said Beett, J., "both parties might well have supposed 
 that there was clay under the land. They agree on the 
 assv/mption that it is there/ and the covenant is ap- 
 plioable only if there he clay." 
 
 It is possible that the cases might be distinguish- 
 able on the ground suggested above, but it is notice- 
 able that the Judges in the Court of Common Pleas, 
 in distinguishing Hill v. Sughrue from Clifford 15 M. &W. 
 y.Watts, curiously misapprehended the points of the^P-^_ g^^'® 
 earlier case; 1 and this makes the fine distinction which 
 we have tried to draw somewhat unsatisfactory. 
 
 ' It is clear from the language of Willes, J., at p. 586, and of 
 Bkett, J., at p. 589, that they thought the action in Hills v. Su- L. R. 5 0. P. 
 gh'ue was brought by the shipowner against the charterer for not 
 furnishing a cargo, whereas it was brought by the charterer 
 against the owner for not loading a cargo which the owner, con- 
 327 
 
314 
 
 DISCHARGE OF CONTRACT. 
 
 Party. 
 
 Subsequent 
 impossi- 
 bility no 
 excuse. 
 
 Aleyn, 26. 
 fSee contra, 
 Bayley v. 
 Lawrence, 1 
 Bay, 499.] 
 
 *314: We now come to deal with Impossibility 
 arising subsequent to the P^ormation of the 
 Contract, and we may lay it down as a general rule 
 that whether or no such impossibility originates in the 
 default of the promisor, he will not thereby be excused 
 from performance. 
 
 "We have already dealt with what are termed " con- 
 ditions subsequent," or " excepted risks," and what 
 was then said may serve to explain tlie rule now laid 
 down. If the promisor make the performance of his 
 promise conditional upon its continued possibility, the 
 promisee takes the risk: in the event of performance 
 becoming impossible, the promisee must bear the loss. 
 If the promisor makes his promise unconditionally, 
 he takes the risk of being held liable even though per- 
 formance should become impossible by circumstances 
 beyond liis control. 
 
 An old case, Paradine v. Jane, illustrates the law 
 upon this subject briefly and perspicuously: 
 
 The plaintiff sued for rent due upon a lease. The 
 defendant pleaded " that a certain German prince, by 
 name Prince Kupert, an alien born, enemy to the king 
 and his kingdom, had invaded the realm with an hos- 
 tile army of men; and with the same force did enter 
 upon the defendant's possession, and him expelled, 
 and held out of possession .... whereby he could not 
 take the profits." The plea then was in substance that 
 the rent was not due, because the lessee had been de- 
 
 trary to the ordinary practice in charter-parties, undertook to do 
 (see dicta of Pakkb, B., 15 M. & W. 258-9). There is a great dif- 
 ference between a man promising to go and bring home a thing 
 which proves to be non-existent, and a man promising that, if 
 another will let out his ship on certain terms, he will enable him 
 to earn freight by loading a cargo which, when the ship is sent, 
 proves to bo non-existent. The writer cannot but think that the 
 Court of Common Pleas unintentionally decided contrary to 
 Hill V. Sughrue. 
 ' 328 
 
Chap. IV. IMPOSSIBILITY OF PERFORMANCE. 315 
 
 prived by events beyond his control of the profits from 
 which the rent should have come. 
 
 But the court held that this was no excuse; " and 
 this difference was taken, that where the law creates a 
 duty or charge and the party is disabled to perform it 
 without any default in him, and hath no rem- 
 edy over, there the lavj will excuse him. As in *315 
 the case of Waste, if a house be destroyed by i 
 
 tempest, or by enemies, the lessee is excused .... But 
 when a party iy his own contract creates a duty or 
 charge upon himself, he is bound to make it good, if 
 he may, notwithstanding any accident or inevitable ne- 
 cessity, because he might have provided against it hy 
 his contract. And therefore if the lessee covenant to 
 repair a house, though it be burnt by lightning, or [Philips v. 
 thrown down by enemies, yet he onght to repair it." ji^^oqui 
 
 This being the general rule of law, we must now 
 note a group of exceptions to it. And these must be 
 distinguished from cases in which the Act of God is 
 said to excuse from non-performance of a contract; 
 for this use of the term " Act of God " has been con- Per Curiam 
 demned by high authority. De^rel'"' 
 
 There are, as we have seen, certain contracts into P'g°y. L. R. 
 which the Act of God is introduced as an express, or, i^\ ' * ^' 
 by custom, an implied condition subsequent absolving 
 the promisor. But there are forms of impossibility 
 which are said to excuse from performance because 
 " they are not within the contract; " that is to say, 
 that neither party can reasonably be supposed to haveL. R. 4 Q. B. 
 contemplated their occurrence, so that the promisor ^°^- 
 neither excepts them specifically, nor promises uncon- 
 ditionally in respect of them. 
 
 We will deal with them seriatim. 
 
 (1) Legal impossilility a/rising from a change in Except 
 the law of our own country exonerates the promisor, ^e'chlnge of 
 
 In Baily v. De Crespigny, the plaintiff was lessee 
 329 
 
316 DISCHARGE OF CONTRACT. Part V. 
 
 L. R. 4 Q. B. to the defendant for a term of 89 years of a plot of 
 land; the defendant retained the adjoining land, and 
 covenanted that neither he nor his assigns would, 
 during the term, erect any but ornamental buildings 
 on a certain paddock fronting the demised premises. 
 A Railway Company, acting under parliamentary 
 powers, took the paddock compulsorily, and built a 
 station upon it. The plaintiff sued the defend- 
 *316 upon the covenant: it was held that he was ex- 
 cused from the observance of his covenant by 
 an impossibility arising from the action of the Legis- 
 lature. " The word ' assigns ' is a term of well-known 
 signification, comprehending all those who take either 
 immediately or remotely from or under the assignor, 
 Spencer's whether by conveyance, devise, descent or act of law. 
 Ee^D'l5^°' '^^® defendant when he contracted used the general 
 word ' assigns,' knowing that it had a definite mean- 
 ing; and he was able to foresee and guard against the 
 liabilities which might arise from his contract so in- 
 terpreted. The Legislature, by compelling him to 
 part with his land to a railway company, whom he 
 could not bind by any stipulation, as he could an as- 
 signee chosen by himself, has created a new kind of 
 assign, such as was not in the contemplation of the 
 parties when the contract was entered into. To hold the 
 defendant responsible for the acts of such an assignee 
 is to make an entirely new contract for the parties." 
 
 Destruction (2) Where the conti/nued existence of a specific thing 
 matter '^'^ «'« essential to the performance of the contract, its de- 
 struction, from no default of either party, operates as 
 a discharge. 
 
 3 B. & S. 836. The leading case upon this subject is Taylor v. Cald- 
 well. There the defendant agreed to let the plaintiff 
 have the use of a Music Hall for the purpose of giv- 
 ing concerts upon certain days: before the days of 
 performance arrived the Music Hall was destroyed by 
 330 
 
Chap. IV. IMPOSSIBILITY OP PERFORMANCE. 317 
 
 fire, and the plaintiff sued the defendant for losses 
 arising from the consequent breach of contract. 
 
 The court held that, in tlie absence of any express 
 stipulation on the matter, the parties must betaken 
 "to have contemplated the continuing existence" of at p. 833. 
 the Music Hall " as the foundation of what was to be 
 done; " and that therefore, " in the absence of any ex- 
 press or implied stipulation that the thing shall exist, 
 the contract is not to he construed as a positive 
 contract, but as subject to an implied condi- *317 
 tion that the parties shall be excused in case, 
 before breach, performance becomes impossible from 
 the perishing of the thing without default of the 
 contractor." 
 
 It will be observed that in this case the Court intro- 
 duces an " implied condition " into the contract, that 
 the subject matter of it shall continue to exist; where- 
 as in the later case quoted above, express note is taken 
 of the fact that the impossibility is " not within the 
 contract," and has not been made the subject of any 
 condition ; and this, it is submitted, is a more satisfac- 
 tory interpretation of the rule than to introduce a terra 
 into the contract which was never present to the mind 
 of either party to it. 
 
 (3) A contract which has for its object the render- incapacity 
 img of personal services is discharged by the death or ^^Jj.^^°^^ 
 incapacitating illness of the jpromisor. 
 
 In Robinson v. Davison, an action was brought for L. R. 6 Exdi. 
 damage sustained by a breach of contract on the part "''• 
 of an eminent pianoforte player, who having promised 
 to perform at a concert, was prevented from doing so 
 by dangerous illness. 
 
 The law governing the case was thus laid down by 
 Beimwell, B. : " This is a contract to perform a ser- 
 vice which no deputy could perform, and which, in 
 case of death, could not be peformed by the executors 
 331 
 
317 DISCHARGE OF CONTRACT. PartV. 
 
 of the deceased ; and I am of opinion that, by virtue 
 of the terms of the original bargain, incapacity of body 
 or mind in the performer, without default on his or her 
 part, is an excuse for non-performance. Of course the 
 parties might expressly contract that incapacity should 
 not excuse, and thus preclude the condition ot health 
 from being annexed to their agreement. Here they have 
 not done so; and as they have been silent on that point 
 the contract must, in my judgment, be taken to have 
 been conditional and not absolute. 
 332 
 
Chap. V. BY OPERATION OF LAW. 319 
 
 ^HAPTEE V. «318 
 
 DISCHAEGE 01' OONTEAOT BY OPEEATION OF LAW. 
 
 Theee are rules of law which, operating upon cer- 
 tain sets of circumstances will bring about the dis- 
 charge of a contract, and these we will briefly consider. 
 
 Merger. 
 
 The acceptance of a higher security in place of a Merger, 
 lower, that is to say, a security which in the eye of 
 the law is inferior in operative power, vpso facto, and 
 apart from the intention of the parties, merges or 
 . extinguishes the lower. 
 
 We have already seen an instance of this in the case See p. 307. 
 of judgment recovered, which extinguishes by merger 
 the right of action arising from breach of contract. 
 
 And, in like manner, if two parties to a simple eon- 
 tract embody its contents in a deed which they both 
 execute, the simple contract is thereby discharged. 
 
 The rules governing this process may be thus sum- 
 marized: 
 
 (a) The two securities must be different in their legal 
 operation, the one of a higher efficacy than the other. Higgen's 
 A second security taken in addition to one similar in^^gMg^^' 
 character will not effect its validity, unless there be 
 discharge by substituted agreement. 
 
 iV) The subiect matter of the two securities must be Holmes v. 
 
 •A \.- ^ • Bell, 3 M. & 
 
 identical. (j_ ^i^_ 
 
 (e) The parties must be the same. 
 
 Alteration of a Written Instrument. *319 
 
 Rules as to 
 If a deed or contract in writing be altered by ad- alteration, 
 
 833 
 
319 DISCHARGE OF CONTRACT. Part V. 
 
 dition or erasure, it is discharged, subject to the fol- 
 lowing rules: 
 Pattinson v. {a) The alteration must be made by a party to the 
 ^^"^'^'y^^-^- contract, or by a stranger while in his possession and 
 for his benefit [and with his knowledge or consent] (a) 
 Wilkinson v. Alteration by accident or mistake occurring under 
 i°?i°^oQ'^'^'snch circumstance as to negative the idea of inten- 
 tion will not invalidate the document. 
 
 (5) The alteration must be made without the consent 
 of the other party, else it would operate as a new 
 agreement. 
 
 (c) The alteration must be made in a material part. 
 
 What amounts to a material alteration must needs 
 
 depend upon the character of the instrument. But 
 
 the general principle seems to be this, that a man " is 
 
 Per Curiam discharged from his liability, if the altered instrument, 
 
 w^*h'^^^F^' supposing it to be genuine, would operate differently 
 
 & B. 89. ' to the original instrument, whether the alteration be 
 
 or be not to his prejudice." 
 or loss. The loss of a written instrument only affects the 
 
 rights of the parties in so far as it occasions a diffi- 
 culty of proof; but an exception to this rule exists in 
 the case of bills of exchange and promissory notes. 
 Hansard v. If the holder of the instrument lose it, he loses his ■ 
 RoVinson 7 rights under it, unless he offer to the party primarily 
 
 Conflans ' liable upon it an indemnity against possible claims. 
 
 Quarry Co. v. 
 
 Parlter, L. R. Bankruptcy. 
 
 Bankruptcy effects a statutory release from debts 
 
 and liabilities provable under the bankruptcy, when 
 
 the bankrupt has obtained from the Court an order of 
 
 discharge. It is sufficient to call attention to this 
 
 mode of discharge, without entering into a discussion 
 
 as to the nature and effects of Bankruptcy, or the pro- 
 
 83 & 83 Vict, "visions of the Bankruptcy Act of 1869. 
 
 C. 71. 
 
 {a) [Nichols v. JoTmson, 10 Conn. 193; Rees v. OverbaugTi, 6 Cow. 
 
 746; Lewis v. Payne, 8 Cow. 71; Medlin v. Plait Co., 8 Mo. 235; 
 Dams V. Carlisle, 6 Ala. 607.] 
 
 334: 
 
APPENDIX A. *32i 
 
 CONTRACT AND QUASI CONTRACT. 
 
 It is necessary to toiicli briefly upon certain kinds 
 of legal obligation which, for want of a better name, 
 we call Quasi Contract, and which have been invested 
 with the form of a fictitious or implied agreement. In 
 dealing with Form and Consideration we mentioned 
 that it appears as though both in English and Eoman 
 law we found the rudiments of Contract to originate 
 in the same sources: 
 
 (1) A Formal Promise, the Stipulation in Eoman, 
 the Deed in English law, seems to be the only mode 
 in which parties can bind themselves where the sub- 
 ject matter of agreement is wholly future or executory. 
 
 (2) An informal acquisition of benefit by one party 
 at the expense of another, creating a liability to make 
 a return, seems to be at the root of the contract Ee in 
 Eoman law, and the contract arising upon executed 
 consideration in English law. 
 
 It is not improbable that the relation which we call 
 
 ' The History of Formal Contract seems still obscure, but, so 
 far as the Stipulatio is concerned, Mr. Hunter in his "Exposi- 
 tion of Roman Law" has proved almost conclusively that it does 
 not originate in the Mancipatio ; in other words that Convey- pp. 364-368. 
 ance is not the parent of every iiind of contract. In fact the ar- 
 guments of Mr. Hunter go far to show that the Formal binding 
 promise originated in Treaty rather than Sale, in those interna- 
 tional relations of families described by Sir Henry Maine as ex- AncientLaw, 
 isting when the family was the unit of society: in those cove- 126. 
 nants affirmed by oath, of which the Book of Genesis offers fre- 
 quent and familiar examples. 
 335 
 
322 APPENDIX A. 
 
 Leake on quasi contract, or "contract implied in law," and the 
 Contract, p. genuine contract arising upon consideration 
 
 *322 executed, sprang alike from this notion of the 
 readjustment of proprietary rights. It may 
 well be that the idea of Agreement expressed in pro- 
 posal and acceptance was not applied at first to that 
 which we now call contract arising upon consideration 
 executed, and that such genuine contracts were only 
 by degrees disentangled from quasi contract. A pas- 
 sage in Gains points to the blending of the two con- 
 ceptions. After illustrating the nature of the contract 
 He, by the instance of Mutuum or loan for consump- 
 tion, he goes on to say, " is qui non debitum accepit 
 Gaius,3.s.91. a5 eo qui per errorem solvit, re ohligatur."^ It is 
 true that he immediately' points out the difference in 
 character betwen the two obligations; but it is signifi- 
 cant that they were regarded as so nearly allied. And 
 the application in English law of the action of Debt 
 indicates a similar connection, in early law, of the two 
 sources of liability. 
 
 But it is the change of remedy in English law from 
 Debt to Assumpsit, more than this possible commu- 
 nity of origin with certain forms of true contract, 
 which has invested the " contract implied in law" with 
 so much of the outward aspect of Agreement. 
 
 Debt was the remedy for cases of breach of contract 
 upon consideration executed, where such a breach re- 
 See antliori- suited in a liquidated or ascertained money claim: and 
 ties collected jg^j-g,, ^]^jg action came to be applied to any breach of 
 in Pollock ' 1 . . . ., ^ , . . , T^ 
 
 on Contract, Contract resulting m a similar claim. And Debt was 
 
 pp. 125, 6. g^igQ |.|^g remedy in cases where statute, common law, 
 Comyns, or custom laid a duty upon one to pay an ascertained 
 
 Digest, tit. g^^jn to another. 
 DetL 
 
 The action of Assumpsit was primarily an action to 
 
 ' By the time of Justinian this legal relation had been defi- 
 nitely assigned to the province of Quasi Contract Institutes ill. 
 27, 6. 
 
 336 
 
CONTRACT AND QUASI CONTRACT. 323 
 
 recover an unliquidated sum, or such damages as the 
 breach of a promise had occasioned to the promisee, 
 and it was in the first instance inapplicable to legal 
 habilities arising otherwise than upon a contract 
 springing from mutual promises. 
 
 But there were certain inconveniences attach- 
 ing to the action of Debt. It admitted of the *323 
 employment by the defendant of a mode of de- 
 fense termed " "Wager of law." This determined the Blackstone^ 
 result of the action, not upon the merits, but by a pro- qI",™"^ "*" 
 cess of compurgation; in which the defendant came 
 into Court and declared upon oath that he did not owe 
 the debt, and eleven respectable neighbors also declared 
 upon oath that they believed him to speak the truth. 
 Again, the technical rules of pleading made it impos- 
 sible to Include in the same suit an action of debt and 
 an action of assumpsit, an action for liquidated and 
 one for unliquidated damages, inasmuch as the one 
 was based upon contract real or feigned, the other upon 
 a form of wrong, the non-feazance of an undertaking. 
 
 And so the history of pleading in relation to con- 
 tract is in great part the history of tlie encroachment 
 of the action of Assumpsit upon the field of the action 
 oiDebt. 
 
 It was for some time doubtful whether assumpsit 
 would lie where the action was brought upon a breach 
 of contract resulting in a liquidated claim; for a debt 
 rather than for damages. But it was decided in Blade's 4 Co. Eep-fla* 
 case that an action of assumpsit would lie though the 
 contract resulted in a liquidated claim. 
 
 The next step was tliis: where the breach of a con- 
 tract resulted in a liquidated claim, the pleadings in 
 tlie action of assumpsit were reduced to a short state- 
 ment of a debt originating in a request by the defend- 
 ant, and a promise by him to pay. This was still 
 almost a novelty in the reign of Anne. Henceforth See expres. 
 the action of assumpsit possessed great practical con- ^'°j^ " ^^"'^ 
 337—22 ■ 
 
324: APPENDIX A. 
 
 in Hayes v. venience. It enabled claims arising from contract to 
 
 2^^'^^933 ^® variously stated in the same suit, in the form of a 
 
 special agreement which had been broken, and in the 
 
 form of a debt resulting from an agreement and con- 
 
 secpently importing a promise to pay it. 
 
 Such a mode of pleading was called an indebitatus 
 count, or count in indebitatus assumpsit/ the remedy 
 upon a special contract which resulted in a 
 *324r liquidated claim was now capable of being re- 
 duced to the shape of an action for debt with 
 the addition of a promise to pay it. In this form it 
 came to be applied to those kinds of legal liability 
 Moses V. which had given rise to the action of Debt, though 
 S^Burr^ 1008 ^^^*^^^ ^^ *^® element of agreement, and thence to all 
 cases where A was liable to make good to X a sum 
 gained at X's expense. 
 
 The legal liability thus clothed in the form of con- 
 tract, cannot be omitted from the treatment of oar 
 subject if only for the sake of distinguishing feigned 
 from true Proposal and Acceptance. For the con- 
 venience of the remedy certain legal liabilities have 
 been made to figure as though they sprang from con- 
 tract, and have approjjriated the form of Agreement. 
 It is enough to say, as regards the later history of the 
 16 & 16 Vict, subject, that the Common Law Procedure Act of 1852 
 "• '8' practically abolished the distinction between Assump- 
 
 sit and Debt, by making it no longer needful that a 
 B. 3. plaintiff should specify the form in which his action 
 
 8. 41. is brought, by allowing the joinder of various forms 
 
 of action in the same suit, and by providing for the 
 omission of the feigned promise from the statement 
 8. 49. of the cause of action. The form of pleading, in such 
 
 cases as resolved themselves into a simple money 
 claim, was reduced to a short statement of a debt due 
 for money paid or received; and now the Judicature 
 Act requires "that every pleading shall contain a 
 Order 19, 4 Statement of the material facts upon which the party 
 338 
 
CONTRACT AND QUASI CONTRACT. 325 
 
 pleading relies;" and thus merely formal pleadings 
 are abolished. 
 
 Nevertheless, although the form no longer exists, 
 the legal relations of the parties remain unchanged, 
 and the obligation to which the action of Assumpsit 
 conveyed a false air of agreement continues to furnish 
 a cause of action, though that cause of action is now 
 to be stated as it really exists. 
 
 It is rather in deference to its historical connection 
 with contract, than to actual propriety of arrangement, 
 that we briefly notice the kinds of legal relation which 
 ouce, in the pleader's hands, wore the semblance of 
 proposal and acceptance. 
 
 The liability of which we speak may arise *325 
 from the judgment of a court of competent 
 jurisdiction, or from the acts of the parties. 
 
 As to the former, it is enough to say that the judg- Judgment 
 ment of a court of competent jurisdiction, ordering a 
 sum of money to be paid by one of two parties to an- 
 other, is not merely enforceable by the process of the 
 court, but can be sued upon as creating a debt between Williams v. 
 the parties, whether or no the court be a Court of i^w^H 
 Eecord. 
 
 The acts of the parties may bring about this obliga- 
 tion either (1) from the admission by one of a claim 
 due to the other upon an account stated, or (2) from 
 the payment by one of a sum which the other ought 
 to have paid, or (3) from the acquisition by one of 
 money which should belong to the other. 
 
 (1) An account stated is an admission by one party Account 
 who is in account with another that there is a balance ^'^'f^- 
 
 due from him. The admission that a balance is due VeitcS, 3 M. 
 imports a promise to pay upon request, which may *W. 106. 
 be sued upon as though it created a liability ex con- Lo?an, 5 M. 
 tractu. "^^.241. 
 
 (2) It is a rule of English law that no man " can per Wines, 
 make himself the creditor of another by paying t^^at J^'^^i^J^J^- 
 
 339 ■ •* 
 
326 APPENDIX A. 
 
 Mail Steam other's debt against his will or without his con- 
 Packet Co., 6e„t_„(^) 
 
 3 0. P. 43. But if A requests or allows X to assume such a 
 by'lTorThe Position that X may be compelled by law to discharge 
 use of X. A's legal liabilities, the law imports a request and 
 promise made by A to X, a request to make the pay- 
 ment, and a promise to repay. 
 
 The payment by one of several co-debtors of the 
 entirety of the debt will entitle him to recover from 
 each of the others his proportionate share. In such a 
 case a request to pay and a promise to repay were 
 feigned in order to bring plaintiff within the remedy 
 Kemp V. of assumpsit, and he could recover his payment from 
 m"&°W 433 ^^® co-debtors as money paid to their use. 
 
 *326 And in like manner a lodger, who has paid 
 the rent of his landlord under a threatened dis- 
 Exall V. tress of his goods, may recover the amount which he 
 8T RSOS ^^® ^\Jl& been compelled to pay. 
 
 But legal liability incurred by X on behalf of A 
 without any concurrence or privity on the part of A, 
 will not entitle X to recover for money which under 
 such circumstances he may pay to A's use. The lia- 
 bility must have been in some manner cast upon X 
 by A. Otherwise the mere fact that X has paid under 
 compulsion of law what A Tnight have leen compelled 
 to pay, will give to X no right of action against A. 
 X may have been acting for his own benefit and not 
 in consequence of any request or act of A. 
 
 For instance, X was entitled under a bill of sale to 
 seize A's goods; he did so, but left them on A's prem- 
 ises till rent fell due to A's landlord. The landlord 
 distrained the goods. X paid the rent and then sued 
 A for tlie amount paid as having been paid to his use. 
 It was held that the facts gave X no right of action. 
 "Having seized the goods under the bill of sale, they 
 
 (a) [Except in case of payment of bill of exchange, supra. See 
 note a, pase 197.] 
 340 
 
CONTRACT AND QUASI CONTRACT. 327 
 
 were his absolute property. He had a right to take 
 them away; indeed it was his duty to take them away. 
 He probably left theni on the premises for his own 
 purposes, .... at all eyents they were not left there England v. 
 at the request or for the benefit of the defendant." r Yc p'539 
 
 (3) There are a number of cases in which A may be Money- 
 called upon to repay to X money which has come into IS°J?'^^^ ^y 
 his possession under circumstances which disentitle of A. 
 him to retain it. 
 
 This class of cases, though at one time in the hands 
 of Lord Mansfield it threatened to expand into the 
 vagueness of " moral obligation," is practically reduci- Moses v. 
 ble to two groups of circumstances now pretty clearly g^Bu^/^foio 
 defined. 
 
 The first of these are cases of money obtained by 
 wrong, of which payments under contracts induced by 
 fraud, or duress, have afforded us some illustra- 
 tions; the second are cases of money paid under *327 Marriott v. 
 such mistake of fact as creates a belief that a 2 Sm^'L'o 
 
 legal liability rests on the payer to make the pay- 356, and 
 
 . , notes thereto, 
 
 ment.^ 
 
 It would not fall within the limits of our subject to 
 
 deal with cases of this nature. 
 
 ■ To these is sometimes added the liability arising to repay 
 money paid upon a consideration which has wholly failed, but 
 this it would seem is based upon genuine contract, the breach of 
 which with its consequences was thus shortly stated in an inde- 
 bitatus count. 
 341 
 
328 APPENDIX B. 
 
 *328 APPENDIX B. 
 
 AGENCY. 
 
 Agency is a It is hardly possible to avoid dealing witli the sub- 
 TOntoact J®°* °^ Agency in a work professing to treat of the 
 general principles of the law of Contract, because the 
 relations of Principal and Agent are involved in many 
 of the cases used by way of illustration, and recur in 
 almost every part of the subject. And yet Agency is, 
 sti'ictly speaking, a special contract, the details of 
 which, like those of Bailment, Partnership, or Sale, 
 are outside of the scope of this work. 
 Not a Status. The relation of Principal and Agent is introduced 
 by writers of great authority into the subject of Par- 
 ties to Contracts, but we avoid this course and for the 
 following reason: 
 
 In dealing with parties to contracts it seems right 
 to limit that branch of the subject to the Capacity of 
 Parties as affected by Status, and not to introduce 
 limitations or modifications of contracting power, 
 which, as in the case of Agency, spring from contract. 
 For Agency is not a Status. The essential feature 
 of a status is that the rights and liabilities affecting 
 the class which constitutes each particular status are 
 Buch as no member of the class can vary by contract^ 
 
 ' It is believed that this suggested characteristic of Status is 
 its true differentia from other legal relations. At any rate it can- 
 not be amiss to offer a suggestion which may help the student 
 out of the difBculties which Austin's discussion of the subject 
 of status tends to increase rather than to diminish. 
 342 
 
AGENCY. 329 
 
 while lie remains a member of the class. An infant, 
 for instance, can by no possibility contract him- 
 self out of the Infant's Relief Act, nor can a *329 
 soldier contract himself ont of the Mutiny Act. 
 A corporation can by no artifice bind itself by a con- 
 tract ultra vires, nor can a British subject make a 
 valid promise to sell his vote at an election, to abstain 
 from marriage, or to do any other act which is 
 expressly unlawful or held to be contrary to publio 
 policy. 
 
 An agent, on the other hand, may by the terms of 
 his contract vary indefinitely his rights and liabilities 
 in respect of his principal and of the parties whom he 
 brings into relations with his principal. Except in 
 the case of some statutory regulations aiiecting agents 
 of a certain class, the rules of law which affect Agency 
 are either special rules which admit of variation by 
 contract, or general rules as to the consequences which 
 follow upon conduct or expressions of a certain sort. 
 
 For instance, it is a general rule of law that an agent 
 standing between a foreign dealer and an English prin- 
 cipal is personally liable to his English principal, but Mahony v. 
 he may contract himself out of this rule and free g ggg '' pg^ 
 himself from liability by express terms. McKenzie v. 
 
 Similarly it is a general rule of law that if an agent jieT 138.] 
 contracts as a principal, or contracts for a principal 
 whose name he does not disclose, the party with whom 
 he contracts has an option to proceed against the agent 
 or principal when he has discovered the true position 
 of aifairs : in like manner the principal has a right to 
 intervene, and may if he choose take the benefit of the 
 agent's contract. But here it is the conduct of the 
 agent which has made him liable at the option of the 
 third party and which leaves him liable at the option 
 of his principal. In all this there is nothing of Status. 
 The relations of principal and agent, of agent and 
 third party, of principal and third party, all spring 
 343 
 
330 
 
 APPENDIX B. 
 
 Form of 
 appoint, 
 meut. 
 When 
 required. 
 rGordon v. 
 Bulkley, 14 
 8. & R. 331.] 
 
 [Shaw V. 
 Nadd, 
 8 Pick. 9.] 
 
 from contract, and may be modified by contract unless 
 the conduct of one of the parties has been such as to 
 furnish inference of intention which may not be re- 
 butted. 
 *330 Agency then being a special sort of contract, 
 we only touch upon its main characteristics in 
 deference to the frequency with which it occurs in the 
 general law of the subject. We may group what has 
 to be said on the matter under the following heads: 
 
 (1) The mode of appointing an agent and the extent 
 of authority conferred by different modes of appoint- 
 ment. 
 
 (2) The restriction and revocation of authority once 
 given. 
 
 (3) The rights and liabilities which may arise as 
 between agent, principal and third parties. 
 
 An agent need not possess the capacity to contract 
 in order to make a binding contract between his 
 principal and a third party; but if he do not possess 
 such capacity, he can acquire no personal rights or 
 liabilities under the contract. 
 
 In order that an agent may make a binding contract 
 under seal, it is necessary that he should receive his 
 authority under seal. Such a formal authority is 
 called a power of attorney. 
 
 In order that an agent may make a binding contract 
 relating to leases and interests in land within the mean- 
 ing of 29 Car. II. c. 3, ss. 1, 3, it is necessary that the 
 agent should receive an authority in writing. 
 
 For all other purposes the form in which an agent 
 receives his authority is immaterial: writing, words 
 or conduct are all modes in which an authority may 
 be conferred. 
 
 Nor is it necessary that the principal should have 
 authorized the making of the contract before it was 
 344 
 
AGENCY. 331 
 
 entered into by the agent. He may assume its rights 
 
 and liabilities by a subsequent ratiiication. 
 
 But in order that ratification may have this effect Eatiflcation. 
 
 the agent must have acted as agent, and on behalf of Wilson v. 
 
 the prinoipal who ratifies, so that there must be ajy^'^'^'gag 
 
 principal in the contemplation of the agent, and the [Roby v. 
 
 . . i : i? 1 • (Jossitt, 
 
 agent must assume to act for him. 78 111. 638.] 
 
 An extension is given to this power of rati- *331 Exceptions 
 fication in certain cases. rule!'^^'^''^ 
 
 In a contract of marine insurance, persons " who are 
 not named or ascertained at the time the policy is 
 effected are allowed to come in and take the benefit of Per Erie, C. 
 the insurance. But then they must be persons who y'swann'^1? 
 were contemplated at the time the policy was made." C. B. N. 8. 
 
 Again, in cases of representation by administrators 
 of an intestate or trustees of a bankrupt, an act done 
 by an agent on behalf of the estate may be ratified by 
 the administrators or trustees when appointed, though 
 they were unascertained persons at the time the act Foster v. 
 was done. I w!'m''- 
 
 Apart from the few cases in which Form or writing 
 is necessary to give an authority, and apart from the 
 rules relating to ratification, the mode in which the 
 relation between principal and agent is created calls 
 for no remark. It is more important to consider the 
 nature of the agent's authority and the extent to which 
 it may be modified by the fashion of its creation or by 
 express restrictions. 
 
 An authority may be special, or it may be general. Special 
 A special agent is given a prescribed and definite au- ^S^^cy. 
 thority for the purposes of a particular transaction. 
 He can only bind his principal to the extent of the 
 powers assigned to them. 
 
 Thus where a person, not being a dealer in horses, 
 authorized his servant to sell a horse, it was held that 
 he was not bound by a warranty of the horse given by 
 345 
 
332 
 
 APPENDIX B. 
 
 Brady v. 
 Todd, 9 0. B. 
 N. S. 593. 
 
 General 
 agency. 
 
 How it may 
 arise : 
 
 From the 
 giving dis- 
 cretionary 
 powers. 
 
 his servant to the purchaser: inasmuch as the servant 
 had received no express authority to give a warranty, 
 and was not habitually employed by his master to sell 
 horses so as to confer upon him the powers of a 
 general agent, {a) 
 
 A general agent has the full powers which the na- 
 ture of his employment might reasonably be supposed 
 to confer, and these cannot be limited by restrictions, 
 imposed by his principal, but not communicated to 
 
 the party dealing with him. 
 *332 For a general agent represents his principal 
 throughout the* various transactions incident to 
 a particular sort of business which the agent is em- 
 ployed to carry on: while a special agent is agent, as 
 it were, incidentally, and represents his principal for 
 the occasion only. 
 
 A general agent may derive his authority from the 
 fact that business of a certain sort is entrusted to him 
 which involves the exercise of a discretion, or from 
 the fact that he stands in some snch relation to his 
 principal as of itself implies an authority to act in 
 certain matters, or from the fact, that the principal has 
 habitually sanctioned acts of a particular character 
 done by the agent on his behalf. 
 
 The first of these forms of general agency, that 
 which arises by entrusting to a man the conduct of 
 
 (a) [There are a number of cases which hold a doctrine con- 
 trary to that laid down in the text. See Alexander v. Oibsm, 2 
 Campbell, 555 ; Bradford v. Bush, 10 Ala. 386 ; Woodford v Me- 
 Olenahan, 4 Gilm. (111)85; Hunters. Jameson, 6 Ired. L. (N. Car.) 
 253; Franklin Y. Bzell, 1 Sneed, (Tenn.) 497; Nelson v. Cowing, 6 
 Hill, (N. Y.) 836, and Schuclihardt v. Allen, 1 Wall. (U. S.) 359. 
 Some of these cases turn upon the point that the presumption is 
 in favor of the right to malie the warranty, but others are in di- 
 rect conflict with the case cited in the text. Upon the question 
 of presumption see Gibson v. Colt, 7 Johns. (N. Y.) 890, and Smith 
 V. Traeey, 86 N. Y. 79, which hold that there is no presumption 
 of authority to warrant, unless it is where it is the usage of the 
 trade to warrant.] 
 346 
 
AGENCY. 333 
 
 business which involves the exercise of discretion, is 
 best illustrated by noting some of the commonest forms 
 of professional or commercial agency. 
 
 («) An auctioneer is an agent to sell goods at a Auctioneer, 
 public auction. He is primarily an agent for the 
 seller, but, upon the goods being knocked down, lie 
 becomes also the agent of the buyer; and he is so for 
 the purpose of the signatures of both parties within 
 'the meaning of the 4th and 17th sections of the Stat- 
 ute of Frauds. He has not merely an authority to 
 sell, but actual possession of the goods, and a lien upon 
 them for his charges. He may sue the purchaser in 
 his own name, and even where he contracts avowedly 
 as agent, and for a known principal, he may introduce Woolfe v. 
 terms into the contract which he makes with the buyer, g q^B% 3^ 
 so as to render himself personally liable. 
 
 {b) A factor is an agent employed to sell goods which Factor, 
 are consigned to him by or on behalf of his principal: 
 "he usually sells in his own name without disclos-ing 
 that of his principal: the latter, therefore, with full 
 knowledge of these circumstances, trusts him with the Per Abbott, 
 actual possession of the goods and gives him authority ^'Qpjj.ig'™^ 
 to sue in his own name." B.&Ald.l43. 
 
 The power of the factor to deal with the Hickox, 7 
 
 goods is not limited by the general discretion *333 ^°S- Ark. 
 as to sale; he has a lien upon the goods for his 
 commission, and has a discretionary power to insure 
 them. 
 
 (c) A commission agent is one who buys or sells Commission 
 goods for a foreign principal. He deals directly and ^^^"^ ' 
 personally with both his employers, and establishes no 
 contractual relation between them. " There is no more 
 privity between the person supplying goods to the 
 commission agent and the foreign correspondent than 
 there is between the brickmaker who supplies brick to 
 a person building a house and the owner of that house. 
 The property in the bricks passes from the brickmaker 
 347 
 
334 APPENDIX B. 
 
 to the builder, and, when they are built into the wall, 
 
 to tlie owner of that wall: and just so does tlie prop- 
 
 Per Black, erty in the goods pass from the country producer to 
 
 ?"'?' '^ri'^'^' the commission merchant, and then, when the goods 
 
 ingston, L.R. are shipped from the commission merchant, to his 
 
 5 H. L. 408. . „ 
 
 consignee." 
 
 The commission agent in fact promises to find goods 
 for his employer, on the best terms he can, on pay- 
 ment to him of a commission. 
 
 Broker. (d) A broker diifers essentially from the kinds of 
 
 agents we have described. A factor may, a commis- 
 sion agent must, contract in his own name; each has 
 certain rights over the goods which are the subject of 
 sale. But a broker is merely the means of establish- 
 
 Mollettv. ing privity of contract between two parties; he has 
 
 L°R°7'h' L °° dealings with the goods or their price and no right 
 
 803. to sue in his own name. 
 
 Agency from The relations of the parties may confer upon one a 
 
 ptafeT °^ general authority to act on behalf of the other. 
 
 Partnership. Thus a partner, acting within the ordinary limits 
 
 Hawken V. ^f ^]^g partnership business, has authority to contract 
 Bourne, 8 M. '^ ,. , n 
 
 6 W. 703. on behalf of the firm, that is to say the partners 
 
 Er3^6KJ«i"tly 
 
 Y. 344.] Thus also a man by marrying a woman, or cohabit- 
 
 Cohabita, ating with her as his wife, gives her an implied 
 
 2 Smith, L. *334 authority to bind him by contract for such 
 
 Manby v'° things as are suited to the position which she 
 
 Scott. is allowed by him to occupy. 
 
 Agency from Again, a course of conduct may create an agency 
 conduct. of a general kind: if a man allow a servant constantly 
 servant. to purchase goods upon credit the master will be held 
 1 Shower, 95. liable though the servant purchase things for his own 
 
 use. But these must be of the same class as those 
 
 ordinarily purchased for the master. 
 Husband And so if a man entrust his wife with the manage- 
 
 and wxfe. ment of a trade, or permit another habitually to trans- 
 348 
 
AGENCY. 335 
 
 act business for him of a certain soi't, he -will be bound [Fisher v. 
 by acts done in pursuance of a continuous authority 9 Po?t^?'A^i 
 presumed from such a course of conduct. 310.] 
 
 (2.) 
 
 A special agent has, as we have seen, such authority Restriction 
 as is expressly conferred upon him, and no more. A°^ agency, 
 general agent has the authority incident to the scope 
 of liis business; he has such a power of binding his 
 principal to third parties as a reasonable man, having 
 regard to the character of the business, would natur- 
 ally presume that he possessed." 
 
 And from this description of the nature of an agent's 
 authority it follows that the principal cannot, by in- 
 structions addressed to the agent, restrict his authority 
 in reference to third parties. If he place a man in 
 such a position as invests him with an apparent See judg- 
 authority to do certain acts, and then instructs him yyi"*g°j 
 privately not to do them, he will nevertheless be bound Maddiclc v. 
 if tlie agent dipobey his instructions in contractingy ^ j^ g 
 with a third party who is ignorant of them. 387^ [Fisher 
 
 Revocation of the agent's authority by the principal gporter.sio.'] 
 operates to determine the agency as betwecTi agent and Revocation 
 principal so soon as the revocation is communicated to° '''S™''^" 
 tlie agent; as between the principal and third parties Story on 
 so soon as the revocation is made known to them. ^ I^q^^^' 
 But this last rule is apparently subject to an exception joiiy v. Rees, 
 in the case of the implied authority springing 628^' '^^ ■'^' ^* 
 
 from the relation of liusband and wife, which *335 
 may be revoked without notice to those with 
 whom the wile deals. 
 
 The death of the principal, the marriage of the Blades v. 
 principal, if a woman, or tlie bankruptcy of the prin- q'' jg^^ ^' * 
 cipal, would, in all cases it should seem, operate as an Charnley v. 
 absolute revocation of the agency, not only as between g j;"gt^26fa\' 
 
 principal and agent, but as between principal and third Minett v. 
 ^ . ^ J X- r Forester, 4 
 
 parties. Taunt. 541. 
 
 349 
 
336 APPENDIX B 
 
 Delegation An agent may not as a rule depute another person 
 of authority. ^^ ^^ ^j^^^ ^j^j^^jj j^g j^^g undertaken to do. 
 
 The reason of this rule, and its limitations, are thus 
 L.R.8 CI1.D. stated by Thesiger, L. J., in De Bussche v. Alt. "As 
 a general rule, no doubt, the maxim delegatus non 
 potest delegare applies so as to prevent an agent from 
 establishing the relationship of principal and agent 
 between his own principal and a third person; but 
 this action when analyzed merely imports that an 
 agent cannot, without authority from his principal, 
 devolve upon another obligation to the principal which 
 he has himself undertaken personally to fulfill; and 
 that inasmuch as confidence in the particular person 
 employed is at the root of the contract of agency, such 
 authority cannot be implied as an ordinary incident to 
 the contract." The Lord Justice then goes on to point 
 out that there are occasions when such an authority 
 must needs be implied, occasions springing from the 
 conduct of the parties, the usage of a trade, the nature 
 of a business, or an unforeseen emergency, " and that 
 when such implied authority exists and is duly exer- 
 cised, privity of contract arises between the principal 
 and the substitute, and the latter becomes as respon- 
 sible to the former for the due discharge of the duties 
 which his employment casts on him, as if he had been 
 appointed agent by the principal himself." 
 
 (3.) 
 
 The contract of agency as between agent and prin- 
 cipal imports a liability on the part of the principal 
 to indemnity the agent for acts done lawfully 
 1 Smith.L.C, *336 in pursuance of his authority. It also imports 
 ^°'^® *° a promise on the part of the agent to act with 
 
 Bernard. due diligence in the matter of the agency and within 
 
 Adamson v. the limits of his authority. As regards the right aris- 
 
 Jarvis 4 ./ o o 
 
 Bing. 06. ing from contracts made by the agent on behalf of his 
 
AGENCY. 336 
 
 principal witli third parties, we will state only the 
 most common and established rules. 
 
 (a) Where the contract is under seal, no one is 
 regarded as a party to the contract who is not named 
 as a party in the deed. 
 
 (5) Where the contract is in writing no one con- 
 tracting as a party can be heard to say that he is not 
 one, but other parties may be shown to exist. So 
 where an agent contracts personally in the matter of Higgins v. 
 his agency, it is open to the party with whom he has If w" gai''^" 
 contracted to fix him with the contract, or to show that Tj.ygmaii v. 
 
 he merely represented his principal and to sue the I^oder, il 
 
 . . /, ,^ ^ ^ Ad.&E.687. 
 
 prmcipal. {a) 
 
 (c) Where the agent contracts as agent for a prin- 
 cipal whom he does not name he binds himself per- 
 sonally, or his principal when disclosed, at the option 
 of the party with whom he contracts. 
 
 But this general rule must be taken to be subject to 
 the usage of the trade in which the agent is employed 
 and the character of the agency, for the contract may 
 be of such a nature that though the agent does not 
 disclose his principal's name, he excludes himself from 
 liability upon the contract. Such is the case of a bro- 
 ker acting for buyer and seller, who delivers to the seller 
 a note in terms " sold for you to my principal " and Southwell v. 
 signs it as Iroher. In such a case it has been held that ?°S'^i*'^'p 
 the broker is by the terms of the contract excluded D. 374 
 from liability to the seller, though he would have been ^ujton 
 liable had the terms run " bought of you for my L. K. 5 Q. B. 
 principal." 
 
 id) If the agent contracts as principal, that is to 
 say, if there be not merely a non-disclosure of the 
 name of the principal, but a non-disclosure of the 
 existence of the principal, the agent is a fortiori 
 liable at the option of the party with whom he con- 
 tracts. 
 
 (a) [See note V,) page 49.] 
 351 
 
337 APPENDIX B. 
 
 Rights of *337 In this case and in the case above mentioned 
 
 existence ^of° the rights ot the parties appear to be these. 
 
 principal is The agent is liable at the option of the third party 
 
 ■with wliom he has contracted, and his principal is not 
 
 bound to intervene if the third party choose to hold 
 
 the agent liable when he is aware of the circumstances 
 
 of the case. 
 
 The principal is entitled to intervene and, as against 
 
 3 Smith, L. his agent, take the benefit of the contract. 
 
 C D 379 
 
 notes to ' '^^'^ third party, upon the disclosure of the princi- 
 
 Tbompson v. pal, may elect whether he will adopt agent or prin- 
 cipal as the party with whom he has contracted. He 
 is thenceforth bound by such election 
 
 But in each of these last cases the rights of the par- 
 ties are limited by circumstances which may make it 
 inequitable that the principal or the third party should 
 deal with one another as though each had been dis- 
 closed to the other from the first. 
 
 If the principal choose to enforce the contract, he 
 must do so subject to the right of the third party to 
 
 PerWilles, be put in the same position as if he had been dealing 
 
 NonvooTl^4 '•'^^^^^ ^^^® ^'^^^ principal." Any rights which the third 
 C.B.N.S.574. party would liave had against the agent in respect of 
 DrakeTM *^^ Contract he has against the principal. And in like 
 & W. 98. manner the third party in enforcing the contract 
 Sto'kes^°L^R ^S^"'®* ^^'^ principal when discovered must do so sub- 
 7Q. B.'c(KJ. ' ject to the state of accounts between the agent and 
 
 principal. 
 Wliere idea {e) It is possible for an agent to enter into a contract 
 excludedf ^" wliich lie so represents himself as principal that the 
 
 the idea of agency is altogether excluded. Thus, where 
 Humble V. an agent in making a charter party described himself 
 13"q.'b'. 310. tisercin as owner of the ship, it was held that the 
 
 pi'iucipal could not sue upon the contract. 
 Where no (/") If a man contract as agent for an existing prin- 
 
 grven."'^ ^^'P^^' ^i^^i°g no authority to do so, he cannot be sued 
 
 upon the contract so made, or dealt with as though he 
 352 
 
AGENCY. 338 
 
 were the principal, because there is in point of fact no 
 relation of principal and agent, but only a false 
 representation by one party to another that he *338 Lewis v. 
 is acting as an agent and can bring about a i8'o'°B°503 
 
 contract between that other person and the supposed [Hancock v. 
 principal. sa'iii.m] 
 
 Bnt.in order to find a remedy ex oontractv, for the 
 person to whom such a representation has been made, 
 a warranty of authority, or promise that he was an 
 agent, is feigned to have been given by the one party 
 .to the other. Such a promise or warranty need never 
 have been, and in the nature of things probably never 
 was present to the minds of parties to the contract; 
 nevertheless it appears to have been thought to be a 
 reasonable implication from the conduct of the parties 
 by the Court of Exchequer Chamber, in Collen v. 8E. &B.647. 
 Wright, the leading case upon the subject. Tlie nov- 
 elty as well as the unreality of the conception formed 
 the ground of a luminous dissenting judgment by At p. 658. 
 CocKBUEN, C. J. The point has been already alluded 
 to in the discussion of the nature of Warranty, and in gee ante, 
 particular of implied warranties, {a) P- ^^^' ''°*®- 
 
 {g) If a man contract as agent for a non-existent Where no 
 principal he is personally liable on the contract; heP^J^j^'P 
 cannot be relieved from liability by any subsequent 
 ratification, for the reason, assigned above, that such 
 persons only can ratify as were ascertained or contem- 
 plated when the contract was made. A purchased 
 goods on behalf of a company not in existence at the 
 time. The company was incorporated, it collapsed, and 
 A was sued on the contract. He was held personally 
 hable. "Eoth upon principle and authority," said 
 WiLLES, J., " it seems to me tliat the company never 
 could be liable upon this contract, and construing this 
 
 (a) [See Ballou v. Talhot, 16 Mass. 461 ; Harper v. Little, 3 Greenl. 
 14; MeHenry v. Duffleld, 7 Blackf. 41 ; Hancock v. Tunker, 83 111. 
 208, which hold that an action on the case is the proper remedy.] 
 353—23 
 
338 APPENDIX B. 
 
 Kelner v. document tit res magis valeat qua/m, pereat, we must 
 acx*p'l84 "S'Ssume that the parties contemplated that the persons 
 signing it would be personally liable." 
 354 
 
INDEX. 
 
 EErEKBNCBS ARE TO ORIGINAL PAGES. 
 
 A. 
 
 ACCEPTANCE, *pagb. 
 
 of proposal of contract 10, 13 
 
 must be absolute and unconditional 14 
 
 its eflfect in concluding contract 17,19 
 
 communication of it, requisite to constitute agreement, 
 
 2, 15, 25 
 
 may be made by conduct 23 
 
 rules as to communication in contracts made by corre- 
 spondence 18, 31 
 
 motive of acceptance immaterial 26 
 
 ACCORD AND SATISFACTION, 
 
 a form of discharge of right of action 806 
 
 accord without satisfaction may affect measures of dam- 
 ages 251 
 
 ■what constitutes accord and satisfaction 306 
 
 ACCOUNT STATED, 
 
 creates an obligation qiiasi ex contractu. 325 
 
 ACQUIESCENCE, 
 
 how far equivalent to acceptance. - 15,23 
 
 in fraud, affirms contract 154 
 
 in breach of condition turns it into a warranty 136, 297 
 
 ACT OF GOD, 
 
 a form of condition subsequent. 254 
 
 an excepted risk in charter-party and carrier's contract. 255 
 definition of. 356 
 
 ACT OF PARLIAMENT. See Statute. 
 
 ACTION, 
 
 of assumpsit - 33, 332 
 
 of covenant 33 
 
 of debt 33, 323 
 
 (355) 
 
356 INDEX. 
 
 ACTION — Continued. *page. 
 of detinue 33 
 
 of deceit - 129, 145, 153 
 
 eflfect on contractual rights of bringing action 307 
 
 right of action, as a form of obligation.. 7 
 
 arises upon every breach of contract 266 
 
 how discharged 306 
 
 ADEQUACY, 
 
 of consideration not regarded in courts of law 63 
 
 of consideration, how regarded in equity 65, 158, 161 
 
 ADMISSION, 
 
 of written contract, how made 238 
 
 ADVERTISEMENT, 
 
 proposal made by 25 
 
 acceptance of by act, a consideration executed on request 84 
 
 AGENCY, 
 
 contract of, no real exception to rule that only the parties 
 
 have rights and liabilities under a contract 196 
 
 to sign contract under 39 Car. II. c. 3, s. 4 49, 51 
 
 to make payment or acknowledgment of debt barred by 
 
 lapse of time 310, 811 
 
 does not create a status. 338 
 
 personal cagacity to contract not needed in agent 380 
 
 mode of giving authority 330 
 
 ratification, rules as to 331 
 
 special and general agency 881 
 
 kinds of professional agency 333, 388 
 
 agency from relation of parties. 333, 334 
 
 agency from course of conduct ..'. 384 
 
 agent's authority, how far capable of restriction 334 
 
 agent's authority, how far revocable 335 
 
 rules as to delegation of authority 197, 335 
 
 rights and liabilities of agent and principal inter se, 335, 336 
 
 agent when personally liable 336 
 
 rules as to undisclosed principal 386, 337 
 
 warranty of authority 337 
 
 AGENT, 
 
 to sign contract under 39 Car. II. c. 3, s. 4 49, 51 
 
 AGREEMENT, 
 
 the origin of contract 1 
 
 its analysis 3, 8 
 
 its definition 3 
 
 a source of obligation 7 
 
 assignment of contract by 305,307 
 
 discharge of contract by 247 
 
 waiver or agreement to cancel a contract 247, 348 
 
INDEX. 357 
 
 AGREEMENT — Continued. 
 
 Discharge of contract by — Continued. *pagb. 
 
 substituted contract discharging a previous one 350 
 
 provisions for discharge 253, 256, 257 
 
 forms needed for discharge by agreement 357 sqq. 
 
 ALIEN, 
 
 his capacity to contract 97 
 
 alien enemy, contract with such illegal 173 
 
 ALTERATION OF INSTRUMENT, 
 
 circumstances under which it effects discharge 319 
 
 AMBIGUITY, 
 
 latent and patent -. 237 
 
 ARBITRATION, 
 
 agreements to refer to 177 
 
 ARTIFICIALITY OF (CONSTRUCTION, 
 
 as limiting powers of corporate bodies to contract-. Ill, 113 
 
 ASSIGNMENT, 
 
 a form of operation of contract. 193, 194 
 
 of liabilities can only take place by new agreement 305 
 
 or on transfer of interests in land 305, 330 
 
 of rights at common law can only take place by new 
 
 agreement or by custom of merchants 206, 307 
 
 in equity subject to rules as to notice and title. 208 sqq. 
 of rights of covenants on transfer of interests in land, 
 
 318, 219, 320 
 
 of contracts of woman on her marriage 321 
 
 of contracts of deceased to his representatives 322 
 
 of contracts of bankrupt to his representatives 223 
 
 ASSIGNS, 
 
 meaning of the term 316 
 
 ASSUMPSIT, 
 
 g, form of trespass on the case 33, 33 
 
 history of its encroachment on sphere of action of debt. 333 
 history of its application to rights qtiasi ex contractu 834 
 
 ATTESTATION, 
 
 if necessary to the validity of a deed, witness' evidence 
 is needed to prove the deed 338 
 
 AUCTIONEER, 
 
 his liabil ities on advertisement 27, 28 
 
 his signature as agent for both parties 53, 333 
 
 his rights and duties as a general 'agent 333 
 
 AUTHORITY. See Agency. 
 
 warranty of - 337 
 
 general and special - 331 
 
358 INDEX 
 
 B. 
 
 BAILMENT, •page. 
 
 may give rise to action of detinue ... 33 
 
 nature of consideration for I'O 
 
 BANKRUPTCr, 
 
 bankrupt's promise after discharge to pay debt in full.. 90 
 
 its eflfect in assigning contract 333 
 
 its effect in discliarging contract -- 319 
 
 BARRISTER, 
 
 his professional status 97 
 
 BILL OF EXCHANGE, 
 
 burden of proving consideration, for it does not lie on 
 
 tlie holder 63 
 
 may be discharged by waiver 77, 349, 306 
 
 is negotiable by custom 313 
 
 how drawn, accepted and indorsed 313 
 
 characteristics of 814, 315 
 
 BILL OF LADING, 
 
 consideration for its indorsement 69 
 
 is negotiable within certain limits 313, 317 
 
 its assignment confers proprietary rights by custom 316 
 
 BOND, 
 
 nature of. 43, 44 
 
 an illustration of conditions subsequent 354 
 
 BREACH OF CONTRACT. See Condition; Warranty; 
 Independent Promise. 
 
 as a form of discharge - 366 
 
 rights conferred by it 370, 300 
 
 modes in which it may take place. 370 
 
 renunciation of contract before performance 271, 373 
 
 must be treated as a discharge by the other party .. 373 
 
 renunciation in the course of performance 376 
 
 impossibility arising from act of party before perform- 
 ance 373 
 
 impossibility arising from act of party during perform- 
 ance 376 
 
 failure in performance; when a discharge 277 sqq. 
 
 BROKER, 
 
 agent for both parties to sign contract under 39 Car. II. 
 
 0.3,3.4 53 
 
 nature of broker's rights and liabilities as agent ... 338, 336 
 
 C. 
 CARRIER, 
 
 extent of his promise as to safely of goods 255, 396 
 
INDEX. 359 
 
 CHAMPERTY, *PAaB. 
 is unlawful consideration for a promise 178 
 
 CHARTER-PARTY, 
 
 construction of 134, 238, 281, 294, 398 
 
 excepted risks in 254,255 
 
 CHOSE IN ACTION, 
 
 cannot be assigned at Common Law 206 
 
 but may be in Equity 208 
 
 CIVIL DEATH, 
 
 meaning of term 108 
 
 COGNOVIT ACTIONEM, 
 
 to confess right of action and empower to sign judg- 
 ment 37 
 
 attestation necessary to its validity 228 
 
 COHABITATION, 
 
 gives to woman an implied authority to contract for 
 
 necessaries 388, 334 
 
 illicit, is null as a consideration 178, 179 
 
 COLLATERAL PROMISE. See Wabbantt. 
 
 COMMISSION AGENT, 
 
 deals personally with his principals 333 
 
 COMPOSITION WITH CREDITORS, 
 
 consideration for the promise of each creditor... 78, 79, 307 
 fraudulent preference - 173, 191 
 
 COMPROMISE OF SUIT, 
 
 when a good consideration for a promise 67, 68, 69 
 
 CONCEALMENT, 
 
 how different from non-disclosure 145 
 
 CONDITION. See Bebach of Costeaot. 
 a statement of promise vital to the contract, 
 
 133, 134, 135, 294, 295 
 
 used sometimes as convertible with Wabbanty 134, 135 
 
 condition precedent expressly providing for discharge, 
 
 258, 254 
 condition subsequent, a form of discharge by agreement, 
 
 254, 255 
 kinds of condition, subsequent, concurrent, precedent.. 286 
 
 conditions precedent which are only suspensory 287 
 
 conditions concurrent.. 289 
 
 condition broken by virtual failure of consideration ... 290 
 condition precedent distinguished from warranty, 
 
 294, 296, 297 
 
 CONSIDERATION, 
 
 an element in the formation of contract 10 
 
 essential where contract is not under seal, 
 
 12, 34, 36, 62, 248, 249, 306 
 
360 INDEX. 
 
 CONSIDERA.TION — CoraimaetZ. *paqb. 
 
 executed arid executory considerations 13 
 
 its origin as the basis of simple contract 31, 34, 35 
 
 must appear in writing required by 29 Car. II. c. 3, s. 4. 50 
 
 tliougli not in case of guarantee 50,54 
 
 definition of. 61 
 
 is universally necessary 62 
 
 negotiable instrument no exception except as to burden of 
 
 proof 63 
 
 need not be adequate 63, 64, 65 
 
 but must be real 65, 155, 156 
 
 promise or executory consideration. 66, 83 
 
 forbearance a consideration 66-70 
 
 bailment a consideration 70 
 
 motive no real consideration 71 
 
 distinction between good and valuable consideration 73 
 
 discharge of moral duty no consideration 73 
 
 French law and Indian Contract Act 74 
 
 promise to do an obvious impossibility is no considera- 
 
 ation 74, 75 
 
 nor is apromlse too vague to be enforced 75 
 
 discharge of existing obligation or legal duty no consid- 
 eration 76, 77, 78, 155, 156 
 
 promise to perform a contract with a third party 81 
 
 composition with creditors, consideration for it 80, 81 
 
 executed consideration, forms of it 83, 84 
 
 past consideration is null 85 
 
 consideration " moved by previous request" 85-87 
 
 revived promise for which consideration has been given, 
 
 90, 9], 93 
 voluntary dischargeof another's legal obligation.. 93, 94, 95 
 considerationprobablynecessary toa valid waiver.. 347, 348 
 
 except in case of bills of exchange 77, 249, 306 
 
 absence of consideration may be given In evidence to 
 
 show inval idity of a written contract 230 
 
 failure of consideration a form of discharge 290, 393 
 
 CONSTRUCTION, 
 
 rules as to construction of documents 235, 341 
 
 CONTRACT IN WRITING, 
 
 when writing is required 46,47,48 
 
 See Statute. 
 
 the writing is only emdence of the contract 48, 237, 938 
 
 how proved 228,239 
 
 admissibility of evidence to show that it depends for its 
 
 operation upon a condition 231, 333 
 
 of evidence that the writing is not the whole agreement, 233 
 
INDEX. 361 
 
 CONTRACT IN WRlTmGt — Continued. *page. 
 
 of evidence as to terms 233-338 
 
 rectification of in Equity 289, 340 
 
 how it may be cUscliarged by agreement 358, 259 
 
 CONTRACT OF RECORD. See Judgment. 
 
 a form of obligation 7, 8 
 
 its forms and characteristics 37,88 
 
 is not a true contract 38, 39 
 
 CONTRACT UNDER SEAL, 
 
 proposal jinder seal irrevocable 12, 16, 17 
 
 mode of execution.. 39 
 
 characteristics 40, 41 
 
 consideration not necessary at Common Lav? 43 
 
 how its absence is regarded in Equity 43, 158, 161 
 
 what contracts must be made under seal 44, 45 
 
 how effected by illegality of consideration 186, 187, 188 
 
 cannot be negotiable -.. 315 
 
 the instrument is the contract, and not evidence of it 227 
 
 how it is proved 338 
 
 can only be discharged by instrument under seal. 257 
 
 agent being a party to it contracts personally 836 
 
 CONVEYANCE, 
 
 in what respects different from contract 3 
 
 executed contract of sale is a conveyance 58 
 
 conveyance not the origin of all contracts 30, 321 
 
 CONVICT, 
 
 his incapacity to contract 97 
 
 COPYHOLDER, 
 
 liable, though an infant, to pay fine 100 
 
 CORPORATIONS, 
 
 their contracts must be under seal 44 
 
 hence cannot usually make negotiable instruments 111 
 
 exceptions to general rule 45 
 
 necessary limits to their power to contract ■ 111 
 
 express limits 112, 113 
 
 CORRESPONDENCE, 
 
 contracts made by •.. 19, 20, 31 
 
 COVENANT, 
 
 action of 31 
 
 assignmentof covenant affecting leasehold interest.. 318, 319 
 assignment of covenant affecting freehold interest.. 219, 330 
 
 COVERTURE. See Marria&b. 
 
 CUSTOM. See Usage. 
 
 Custom of merchants, as to negotiable instruments 313 
 
 Custom of merchants, as to bills of lading 216, 217 
 
 Custom of City of London as to contract of married woman 108 
 
362 INDEX. 
 
 D. 
 
 DAMAGES, *PAGE. 
 
 rules relating to 300,801 
 
 liquidated and unliquidated damages 2437J 
 
 penalty and liquidated damages _ 343, 244 
 
 interest by way of damages 301 
 
 DEATH, 
 
 its effect in assigning contract of deceased 222, 223 
 
 civil death, in what it consists , 108 
 
 DEBT, 
 
 action of 33, 33 
 
 why supplanted by action of Assumpsit 823, 324 
 
 assignment of 206, 207 
 
 DECEIT, 
 
 action of 129 
 
 what amounts to cause of action 145 
 
 DEED. See Contbact Under Seal. 
 
 DELIVERY, 
 
 of deed. 39 
 
 of negotiable instrument transferable by delivery 313 
 
 of goods, a form of tender, or performance.. 264 
 
 DETINUE, 
 
 action of, whether in contract or tort 31 
 
 DISCHARGE. See Aqrebmbnt; Bbbach; Impossibility; 
 Opeeation op Law; Performance. 
 
 DIVISIBLE PERFORMANCE, 
 
 partial failure, where performance is divisible, not a dis- 
 charge 281 
 
 DIVORCE, 
 
 its efi'ect on a woman's capacity to contract 109 
 
 DRUNKEN PERSON, 
 
 contract made with one drunken is voidable at his op- , 
 tion 114 
 
 DURESS, 
 
 its characteristics 155,156 
 
 no duress>of goods 156 
 
 DUTY, 
 
 as distinct from obligation 6 
 
 questionable if it is imposed by contract 198 
 
 E 
 EQUITY, 
 
 refuses specific performance of gratuitous promise not 
 
 under seal 43 
 
 how it regards absence of consideration 43 
 
INDEX. 363 
 
 EQ,XJITY — Continued. *page. 
 
 diflFered from Common Law in Its treatment of bonds .. 44 
 
 breadth of meaning wliich it attaclies to fraud 156 
 
 rules witliin whicli it permits assignment of righits, 
 
 208, 209, 210 
 enforces covenants restricting enjoyment of freehold. 220, 231 
 
 its rules as to admissibility of evidence 239, 240 
 
 its rules as to rectification of instruments 239, 240 
 
 its rules as to specific performance 304, 305 
 
 ESCROW, 
 
 a deed delivered under condition 40 
 
 evidence as to deed being an escrow 227, 231 
 
 ESTOPPEL, 
 
 as to statements made in a deed 40, 41 
 
 effect of judgment by way of estoppel 308 
 
 ESTATE, 
 
 specialty creditor's remedies against estate of debtor ... 41 
 
 administration of, in Chancery. 43 
 
 represented by executor or trustee in bankruptcy... 222-224 
 EVIDENCE, 
 
 parol, inadmissible to connect documents, under 29 Car. 
 
 IL c. 3,s. 4.. 49,229 
 
 or to supplement its terms 50 
 
 rules relating to evidence 225 
 
 extrinsic evidence admissible to prove document 227, 229 
 
 to prove or disprove agreement 227, 280 
 
 secondary evidence of contents of document when ad- 
 
 missible _ I 280 
 
 of condition suspending operation of contract 231 
 
 of supplementary terms 238 
 
 of collateral terms 234 
 
 explanatory of latent ambiguity 285 
 
 of usage. 237 
 
 evidence admissible in equity for purpose of resisting 
 specific performance or obtaining rectification or avoid- 
 ance 239, 240 
 
 EXECUTION. 
 
 of a deed 39 
 
 upon judgment 308 
 
 EXECUTOR, 
 
 his duties and liabilities 52, 222 
 
 effect on them of, 29 Car. IL c. 3, s. 4 53 
 
 EXECUTORY CONTRACT, 
 
 how formed - 13 
 
 how it became actionable though not made under seal. 38, 33 
 consists in mutual promises 66 
 
364 INDEX. 
 
 EXECUTORY CONTRA-CT — Continued. *pagb. 
 
 can be discharged by waiver of mutual rights 347, 348 
 
 EXPECTANT HEIR, 
 
 protected by doctrine of undue influence 161 
 
 FACTOR, 
 
 a general agent 333 
 
 his rights and liabilities - 332,883 
 
 FAILURE OF CONSIDERATION, 
 
 differs from absence of consideration 330 
 
 a form of discharge 390 
 
 money paid for consideration which has failed is recov- 
 erable 327 
 
 FORBEARANCE, 
 
 to sue or exercise a right is consideration for a promise, 
 
 67, 68, 69 
 
 FOREIGN STATE, 
 
 its ministers exempt from jurisdiction 97 
 
 its bonds negotiable 313 
 
 FORM, 
 
 its importance in early history of a legal system 29, 30 
 
 contracts valid by reason of their form 36, 37, 39 
 
 in case of Statute of Frauds, s. 4, is merely evidentiary, 48, 49 
 
 FRAUD, 
 
 suggested by absence of consideration for contract un- 
 der seal 43 
 
 relates to formation of contract. 115 
 
 gives rise to action ex delicto - 129 
 
 may exist without dishonest motive 130, 150 
 
 may exist without certainty of falsehood 131, 149, 150 
 
 definition of 146 
 
 representation an essential element 145, 146 
 
 character of representation. 147, 148, 149 
 
 must be intended to deceive party complaining 151 
 
 and must deceive him 153 
 
 its effect on rights ex contractu 158, 154, 155 
 
 how different from undue influence 157 
 
 distinct from illegality as a vitiating element in contract, 174 
 
 agreement to commit fraud is illegal 173 
 
 burden of proof lies on him who asserts fraud. 314 
 
 meaning of phrase "fraud in law " 149 
 
 FRAUDULENT PREFERENCE, 
 
 promise in consideration of, illegal at Common Law... 173 
 money so paid recoverable if paid under pressure 191 
 
INDEX. 365 
 
 FRU0TU8 INDUSTRIALES, *pagb. 
 not an interest in land under 29 Car. II. c. 3, s. 4 55. 
 
 G. 
 GIFT, 
 
 requires assent of donee 2 
 
 ■when suggestive ef undue influence 158 
 
 GOODS. See Sale. 
 
 GOODS, WARES AND MERCHANDISE, 
 
 wliat are, under 29 Car. II. c. 3, s. 17 65, 59, 60' 
 
 GRATUITOUS PROMISE, 
 
 void, unless made under seal 42, 44, 62. 
 
 GUARANTEE, 
 
 ■within meaning of 29 Car. II. c. 3, s. 4 52, 53, 54 
 
 exception to rule as to consideration appearing in writ- 
 ing 51 
 
 not in its inception a contract uberrimae fidei 143 
 
 but becomes so when made ^ 143. 
 
 H. 
 
 HEIR, 
 
 expectant heir how protected by doctrine of undue in- 
 fluence 160, 161 
 
 HUSBAND AND WIFE. See Marriage. 
 
 I. 
 IGNORANCE OF LAW, 
 
 its effect in case of mistake. 121, 133 
 
 its effect in case of fraud 148 
 
 ILLEGALITY, 
 
 as an element in the formation of contract 163 
 
 arising from statute. 164, 165 
 
 objects of statutory prohibition 165- 
 
 arising from rules of Common Law 173 
 
 distinct from fraud as vitiating formation of contract 173 
 
 arising from rules relating to public policy 174 
 
 contracts injurious to public service 175, 176 
 
 affecting course of j ustice 176, 177 
 
 encouraging litigation 177, 178 
 
 contrary to good morals 178. 
 
 affecting marriage 179 
 
 in restraint of trade I84 
 
 its effect on contract 180-193 
 
 ■when parties are not inpari delicto 190, 191 
 
 when there is a locus poenitentiae 191, 192. 
 
366 INDEX. 
 
 IMMORALITY, *page. 
 
 effect upon contract of immoral object 178, 179, 185 
 
 IMPLIED PROMISE, 
 
 of sea-worthiness in contract of marine insurance. 236 
 
 of indemnity in contract of employment or agency, 84, 87, 335 
 
 of quality in executory sale of goods 291, 292, 293 
 
 of possibility 295re 
 
 of authority 295re., 838 
 
 IMPOSSIBILITY, 
 
 of fact or law on face of the contract 74, 312 
 
 antecedent, unknown to the parties, a form of mistake, 
 
 121, 312, 313 
 
 created by act of one party, a form of breach 270, 313 
 
 created before performance is due 273 
 
 created in the course of performance 276 
 
 subsequent arising from act of neither party, sometimes 
 a form of discharge 314-317 
 
 IMPRISONMENT, 
 
 a form of duress - 155 
 
 INADEQUACY OF CONSIDERATION, 
 
 how regarded in equity _ 65, 158 
 
 INDEBITATUS COUNTS. 
 
 their history - 323,324 
 
 their object 267, 323, 324 
 
 when applicable to special contract 268, 269, 276 
 
 INDEMNITY, 
 
 as distinct from guarantee under 29 Car. II. c. 3, s. 3.. 52, 53 
 
 INDENTURE, 
 
 as distinct from deed poll 40 
 
 INDEPENDENT PROMISES, 
 
 what are independent promises 277 
 
 absolute promises 278 
 
 promises divisible in respect of performance 281 
 
 subsidiary promises 284 
 
 warranty a subsidiary promise 296 
 
 INDORSEE, 
 
 rights of 213 
 
 where bonajidea,ni for value 214 
 
 INDORSEMENT, 
 
 special 213 
 
 in blank 213 
 
 of bill of lading 216, 217 
 
 INFANTS, 
 
 their contracts voidable at Common Law 98 
 
 Ratification at Commom Law — 
 
 of two kinds, implied and express 99 
 
INDEX. 367 
 
 INFANTS — Goniinued. 
 
 Katiflcation at Common Law — Continued. *pagb. 
 
 implied in case of infant, sliareholder or partner. . 99, 100 
 
 liability for necessaries 104, 105 
 
 for wrong 105 
 
 for breacli of contract resulting in a wrong 105 
 
 cannot obtain specific performance 104, 304 
 
 INSANITY. See Lunatics. 
 INSURANCE, 
 
 Fire insurance — 
 
 liow affected by innnocent misrepresentation 140 
 
 Life insurance — 
 
 is not a contract uherrimaefidei.. -- 141 
 
 is a form of wager 167 
 
 how different from Are and marine insurance 173 
 
 policy of, assignable - 211 
 
 Marine insurance — 
 
 is required to be in writing in the form of a policy. 47 
 how affected by innocent misrepresentation, 129, 138, 140 
 
 not affected by expression of opinion 144 
 
 is a form of wager. 166 
 
 made binding by insurable interest.. 167 
 
 how different from life insurance 172 
 
 policy of, assignable 211 
 
 contains implied warranty of sea-worthiness... 236, 237 
 INTENTION, 
 
 distinctness of necessary to agreement 2 
 
 communication of 3 
 
 when important in cases of contract for unlawful purpose, 
 
 183-186, 191 
 of the parties to be gathered from construction of whole 
 
 of contract 342 
 
 when ascertained, all technicalities of expression give 
 
 way to it 137,296,397 
 
 INTEREST, 
 
 insurable interest, when requisite 167 
 
 interest on debt, when it may be given by way of damages, 301 
 
 J. 
 JUDGMENT, 
 
 a form of contract of record 7 
 
 its nature and characteristics 37 
 
 consideration for, may be inquired into by Court of 
 
 Bankruptcy 103 
 
 a discharge of right of action - --- 307 
 
 its operation by way of merger 307 
 
368 ■ INDEX. 
 
 JVOaUlE^NT— Continued,. *page. 
 
 its operation by way of estoppel 308 
 
 how discharged 308 
 
 creates a debt which might have been sued on in as- 
 sumpsit - -- - 338 
 
 JUDICATURE ACT. See Statute. 
 
 \ L. 
 
 LAND, 
 
 what is an interest in land within the meaning of 29 Car. 
 
 II. C.8, s. 4 54,55 
 
 contract for sale of interest in land is uberrimae fidei, 141, 142 
 assignment of obligation on transfer of interest in. 218, 220 
 distinction between contracts for sale of land and goods 
 as regards specific performance 304,805 
 
 LEASE, 
 
 assignment of, its effect on covenau ts 218, 219 
 
 LEX FORI, 
 
 determines procedure 56 
 
 LEX LOCI, 
 
 determines validity of contract 56 
 
 LICENSE, 
 
 license to break contract, a bad plea 247 
 
 LIEN, 
 
 of auctioneer 382 
 
 of factor 333 
 
 LIMITATION OF ACTIONS, 
 
 in case of contract under seal 41 
 
 writing required for acknowledgment of barred debt, 47, 310 
 
 barred debt a consideration for promise to repay 90 
 
 disability to sue, how far a bar to operation of statutes.. 309 
 modes of reviving barred debt 310, 311 
 
 LIQUIDATED DAMAGES, 
 
 as distinguished from penalty, 243, 244, 245, 303 
 
 LOSS OP WRITTEN INSTRUMENT, 
 
 only affects rights in case of bill of exchange and prom- 
 issory note 319 
 
 LUNATICS, 
 
 their contracts voidable while executory 118 
 
 not so, when executed in part 114 
 
 where lunatic so found by commission, presumption is 
 against the validity of his contract 114 
 
 M. 
 MAINTENANCE, 
 
 its effect on the lawfulness of contract 177, 178 
 
INDEX. 369 
 
 MARRIAGE, *PAaEi. 
 
 a form of agreement diflfering from contract 3 
 
 promise in consideration of 54 
 
 mutual promises to nlarry. _. 66 
 
 married woman as a rule incapable of binding herself by- 
 contract _ 106 
 
 common law exceptions.. 107 
 
 equitable doctrine of separate estate _. 110 
 
 agreements affecting freedom of choice in marriage 179 
 
 agreements providing for separation of husband and 
 
 wife 179 
 
 effect of marriage on contract made by wife dum sola... 221 
 
 implied authority given to wife by marriage 108,333 
 
 can be agent for her husband 108, 334 
 
 MASTER AND SERVANT, 
 
 law of, how far an exception to general rules of con- 
 tract 198,199 
 
 MERCHANTS, CUSTOM OF, 
 
 as to consideration for written contract.. 35 
 
 as creating negotiability .- 213, 315, 216 
 
 MERGER, 
 
 of lesser security in a greater 37, 41 
 
 a discharge of contract... 318 
 
 a discharge of right of action arising from contract. 306, 307 
 MISREPRESENTATION, 
 
 relates to formation of contract 115 
 
 how distinguished from fraud 129 
 
 when it affects contract 139,132,133 
 
 affects contracts of marine and fire insurance 140 
 
 affects contracts for purchase of interest in land 141 
 
 affects contracts for purchase of shares 143 
 
 does not affect life insurance.. 141 
 
 or suretyship 143 
 
 MISTAKE, 
 
 relates to formation of contract 115 
 
 of intention as distinct from mistake of expression 116 
 
 astonatureof transaction 117 
 
 as to person with whom contract is made 118, 119 
 
 as to subject matter of contract, does not generally affect 
 
 contract 120 
 
 as to existence of thing contracted for 131, 313 
 
 as to existence of a right 123 
 
 as to identity of subject of contract 123 
 
 as to quality of subject of contract 123 
 
 its effect upon contract 127, 128 
 
 24 
 
370 INDEX. 
 
 MONEY PAID, *PAGB. 
 under mistake, recoverable 137 
 
 for an illegal object, when recoverable 185, 191, 193 
 
 for the use of another, when a cause of action 335, 336 
 
 MONEY RECEIVED, 
 
 to the use of another, when a cause of action. 336 
 
 MORAL OBLIGATION, 
 
 once thought to be consideration for a promise 73, 73, 91 
 
 settled not to be so 73, 93 
 
 MOTIVE, 
 
 is no real consideration for a promise 71, 73, 73, 74 
 
 its effect where the object of contract is illegal 183 
 
 MUTUAL PROMISES, 
 
 are consideration for one another 66 
 
 performance of one does discharge the contract 361 
 
 N. 
 NECESSARIES, 
 
 for an infant. 104 
 
 province of judge and jury in deciding what are necessa. 
 ries 105 
 
 for a married woman 108 
 
 NEGLIGENCE, 
 
 affects rights of party setting up mistake.,.,. 117, 118, 340 
 NEGOTIABLE INSTRUMENT. See Bill of Exchange. 
 
 bill of exchange and promissory note may be conferred . 
 on married woman 107 
 
 cannot be made under seal 113,315 
 
 cannot be made by corporation unless part of the busi- 
 ness of a trading corporation 45,113 
 
 as security for payment due on illegal or void contract, 
 
 188, 189 
 
 how distinct from assignable contract 313 
 
 negotiability by custom and statute 313-317 
 
 effect of giving a negotiable instrument as payment 363 
 
 NOTICE, 
 
 required an assignment of contract . 308, 309 
 
 NUDUM PACTUM, 
 
 meaning of term in English law 63 
 
 O. 
 OBLIGATION, 
 
 its definition 4, 5 
 
 distinguished from duty 6 
 
 sources of 7 
 
 limits of, when arising from agreement 195 sqq. 
 
INDEX. 371 
 
 OFFICE, *PAGH. 
 
 sale of 176 
 
 OPERATION OF LAW, 
 
 discharge of contract by 318,319 
 
 P. 
 
 PAR DELICTUM, 
 
 when it does not exist in cases of illegal contract.. 190, 191 
 
 PARENT, 
 
 how far hound to support of child 73 
 
 PART PERFORMANCE, 
 
 when it takes contract out of operation of Statute of 
 Frauds 57 
 
 PARTIES. See Assignment. 
 
 in contracts within 29 Car. II. c. 3, ss. 4, 17, their names 
 
 must appear in writing 49 
 
 only parties to a contract are liable under it 195, 197, 198 
 
 who entitled at Common Law 199, 300 
 
 who entitled in Equity 200, 301 
 
 third parties, when allowed to sue 303 
 
 substitution of new for former parties rescinds a contract 
 by creation of a new one 253 
 
 PARTNER, 
 
 infant partner, his rights in Law and Equity. 100 
 
 change of partners, its effect on contracts made with 
 
 partnership 353 
 
 as creating a general agency 333 
 
 PATENT AMBIGUITY, 
 
 may not be corrected by parol evidence 337 
 
 PAYMENT, 
 
 of a smaller sum no good discharge of a greater 77 
 
 a form of discharge by performance 363 
 
 negotiable instrument as payment 363 
 
 PENALTY, 
 
 rules of Law and Equity as to 343 
 
 penalty and liquidated damages 243, 344, 303 
 
 PENSION, »► 
 
 assignment of - 176 
 
 PERFORMANCE. See Payment ; Tendeb. 
 
 postponement of, at request of one party, is not a dis- 
 charge of contract by agreement 350, 351 
 
 discharge of one party by performance distinguished 
 from discharge of contract by performance 261 
 
 PERSONAL CONTRACT, 
 
 does not pass to representatives of deceased or bankrupt 
 
 333, 334 
 
372 INDEX. 
 
 PHYSICIAN, •page. 
 his professional status 98 
 
 PRINCIPAL AND AGENT. See Agency. 
 
 PROMISE, 
 
 under seal. See Contract Under Seal. 
 
 essential to contract — 4 
 
 part executed, when a cause of action 33 
 
 implied. See Implied Promise and "Warranty. 
 
 PROMISSORY NOTE, 
 
 consideration for it presumed until the contrary is shown 63 
 
 negotiable by statute - 313 
 
 rights of payee and indorsee 313 
 
 PROPOSAL, 
 
 must refer to legal relations 14 
 
 must be definite - 14 
 
 when binding 16 
 
 how far revocable 17, 18, 19 
 
 how it may lapse 33, 33 
 
 may be communicated by conduct 33,34 
 
 maybe made to persons unascertained 35, 36, 37, 38 
 
 PROPOSAL AND ACCEPTANCE, 
 
 a necessary element in agreement and contract ' 10 
 
 must take form of question and answer 11 
 
 forms which it may assume 13, 13 
 
 PUBLIC POLICY, 
 
 contracts in breach of it illegal .- 163, 174 
 
 possible origin of rules respecting 174 
 
 limits of its operation 175 
 
 kinds of contract affected by it. 175, 180 
 
 QUASI CONTRACT, 
 
 a source of obligation 7 
 
 kinds of quasi contract assimilated to true contract in 
 pleading 334,335 
 
 QUANTUM MERUIT, 
 
 when it may be sued upon 269,376 
 
 R. 
 RAILWAY COMPANY, 
 
 nature of its ofier to carry 26 
 
 how far liable on its time table 36, 296 
 
 and for passenger's luggage 296 
 
INDEX. 373 
 
 RATIFICATION, 
 
 Of infant's contract — *pagb. 
 
 a promise based on past consideration 90 
 
 by suifering judgment 101 
 
 of act of agent... 330, 338 
 
 agent must have acted as such.. 330, 331 
 
 and for a contemplated principal 321, 338 
 
 REAL ESTATE, 
 
 covenants restricting its enjoyment, wlien assignable 
 
 220, 221 
 
 RECOGNIZANCE, 
 
 a form of contract of record.. 38 
 
 RECTIFICATION, 
 
 of instrument in case of mutual mistake 289, 240 
 
 RELEASE, 
 
 a mode of discliarge of right of action 306 
 
 RENUNCIATION OF CONTRACT, 
 
 before performance 271 
 
 during performance 274, 275 
 
 REPRESENTATION, 
 
 inoperative unless a term of contract 128, 133, 138 
 
 or unless it occurs i n contract uierrimae fidei 128, 138 
 
 reasons for limiting effect of 138 
 
 differs from expression of opinion 144 
 
 differs from mere commendation 144 
 
 differs from promise 147,148 
 
 of fact essential to fraud... 145, 147 
 
 of law, its effect if fraudulent 148 
 
 is fraudulent if known to be false 130, 150 
 
 or made in reckless disregard of truth 131, 149 
 
 to be fraudulent must be intended to be acted upon by 
 party complaining 151 
 
 REQUEST, 
 
 when it implies a promise 86, 87, 88, 89 
 
 RESCISSION. See Agreement as a Form op Discharse. 
 
 RESTRAINT OF TRADE. See Public Polict. 
 
 consideration required through contract under seal. 42, 180 
 rules respecting 180 
 
 REVERSION, 
 
 sale of, how regarded in Equity 60 
 
 REVOCATION, 
 
 of propbsal, when possible 17-22 
 
 of acceptance, impossible in English law - 20 
 
 not so by Indian Contract Act - 22 
 
374 INDEX 
 
 S. 
 SALE, *PAGB. 
 
 of goods, if executed operates as a conveyance 58 
 
 executed and executory 58, 59, 385, 291, 293 
 
 contracts of sale, how different from contract for 
 
 work and labor 59, 60 
 
 how affected by mistake as to party contracted with 
 
 119, 155 
 vendor not bound to inform purchaser of defects — 
 
 126, 146, 147 
 not voidable in case of fraud if third parties have 
 
 acquired rights 155 
 
 specific performance of, not granted in Equity 304 
 
 of land, agreement for sale of land a contract uberrimae 
 
 fldei - 141, 142 
 
 specific performance of agreement to sell 305, 306 
 
 SATISFACTION, 
 
 payment of a smaller sum for a larger, no discharge... 77 
 
 reasons for this rule 77, 78 
 
 what satisfaction amounts to a discharge of right of action 307 
 SEAL, 
 
 of corporation, why necessary to its contracts 45 
 
 SEAWORTHINESS, 
 
 implied warranty of, in contract of marine insurance 
 
 236, 237 
 SEPARATE ESTATE, 
 
 of married woman in equity 110, 111 
 
 SEPARATION, 
 
 agreement between husband and wife, with a ■^iew to 
 
 their separation, when Valid 179 
 
 SHARES, 
 
 transfer of, form required 44, 47, 211 
 
 in railway company, not an interest in land under 29 
 
 Car. IL c. 3, s. 4 55 
 
 infant shareholder 100 
 
 contract of purchase, is one vberrimae fidei 142, 143 
 
 SHIP, 
 
 transfer of 44 
 
 SIGNATURE, 
 
 doubtful if requisite to contract under seal 89 
 
 of party or his agent under Statute of Frauds, ss. 4, 17, 
 
 51, 333 
 SIMPLE CONTRACT, OR PAROL CONTRACT, 
 
 universally requires consideration 36,46,62 
 
 when writing required 47, 48 
 
 See Statbtb of Frauds. 
 
INDEX. 375 
 
 SOLICITOR AND CLIENT, *pagb. 
 
 a relation wliioh may suggest undue influence 159 
 
 SPECIALTY. See Contract Undkk Seal. 
 SPECIFIC PERFORMANCE, 
 
 of gratuitous promise under seal, not granted 43 
 
 of part performed contract under 29 Car. II. c. 3, not in 
 
 writing.. 57 
 
 not granted in case of infant's contract 104 
 
 not granted in case of fraud.. 154 
 
 sometimes withheld in case of mistake 128, 239 
 
 general rules relating to it _ 304^ 
 
 of contract for sale of goods 305 
 
 of contract for sale of land 306 
 
 STATUTE, 
 
 bills of exchange — 
 
 as to pleading 324 
 
 frauds, statute of, 29 Car II. c. 3 — 
 
 affects simple contracts..^ 47 
 
 rules as to form required by s. 4 48, 49, 50, 51 
 
 kinds of contract specified in s. 4 52-55 
 
 position of parties where s. 4 not complied with. 56, 57 
 
 form required by s. 17 58 
 
 nature of contract specified in s. 17 58, 59 
 
 eflect of non-compliance with s. 17 60 
 
 connection of documents how to be shown under s. 4 
 
 49, 227 
 contracts under ss. 4 and 17, how discharged by 
 
 agreement 259, 260 
 
 as to pleading 267, 269, 270, 324 
 
 STIPULATIO, 
 
 analogous in its operation to contract under seal 30 
 
 views as to its origin 833 
 
 STOPPAGE IN TRANSITU, 
 
 vendor's rights 69, 316 
 
 T. 
 
 TENDER, 
 
 a form of performance 364 
 
 of goods 264 
 
 of money 264, 265 
 
 TIME, 
 
 of the essence of the contract at Common Law 243 
 
 rules of Equity as to 248 
 
 TITLE, 
 
 of assignee of contract ----- 210 
 
 See Pakties. 
 
376 INDEX. 
 
 TRUST, *PAGE. 
 how distinct from contract - 8 
 
 no exception to rule, that contract only binds parties to it 
 
 196, 197 
 
 U. 
 
 ULTRA VIRES, 
 
 contracts ultra vires relate to capacity of parties 113, 181, 183 
 
 UNCERTAINTY, 
 
 in proposal or acceptance prevents the formation of 
 
 contract -.. - - 14, 15 
 
 of consideration avoids promise. 75 
 
 UNDUE INFULENCE, 
 
 presents reality of consent - 116 
 
 how distinct from fraud 156 
 
 cases in which it may be presumed. 157-161 
 
 rule as to rescission of contracts affected by it 161 
 
 USAGE, 
 
 evidence of when admissible 237, 238 
 
 USURY LAWS, 
 
 promise after their repeal, to repay money lent at usury. 91 
 their place supplied by doctrine of undue influence 160 
 
 W. 
 
 WAGER, 
 
 definition of 166, 167 
 
 history of legislation respecting 167-172 
 
 in relation to contracts of insurance 167, 171 
 
 agreements to pay differences 171 
 
 money advanced for gambling not recoverable 184 
 
 money advanced to pay lost bets recoverable 186 
 
 WAIVER, 
 
 of rights under bill of exchange or promissory note. 77, 249 
 of statutory exemption from performance of contract.. 90 
 of continuing interest in permanent property by infant 99, 100 
 
 as a form of discharge 247 
 
 of executed as distinct from executory contract 247 
 
 probably requires consideration for its validity 248 
 
 except -in case of bills of exchange 77, 249 
 
 WARRANTY, 
 
 of quality not implied in sale of a chattel 85, 124, 125 
 
 extent of implied warranty 124 
 
 warranty as distinct from condition 185, 296 
 
 warranty ex post facto arises on acquiescence in breach 
 
 of condition 136,297,298 
 
 is a subsidiary or collateral promise 285. 295, 296 
 
INDEX. 377 
 
 WARRANTY — Continued. ♦pagb. 
 
 effect of in execute contract of sale .. 285 
 
 effect of in executory contract of sale 285 
 
 various uses of term 295n 
 
 how distinguishable from condition 296 
 
 of authority 337,338 
 
 WRONG, 
 
 a source of obligation 7 
 
 included under " miscarriage " in 29 Car. II. c. 3, s. 4.. 54 
 infant not liable for ■wrong arising out of contract .. 105 
 
 but for wrong independent of contract 106 
 
 fraud as a wrong to be distingushed from fraud as a viti^ 
 ating element in contract 174 
 
Date Due 
 
 NOV 12 75| 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Library Bureai 
 
 iCat. No. 1137 
 
 
KP 801 A86 
 
 Author Vol. 
 
 Anson, Sir William Reynell 
 
 Title Copy 
 
 Principles of the law of 
 contract 
 
 m 
 
 12 
 
 A I /" Borrower's Name