li','. •)■.>, ii -■■"■>■ ii;iii>ili!;i i',;jr;i»[li;;i(!i UC-NRLF B 4 Sia 353 ^-^. { f,'^-''U' ir^A^ "/y-i h-^ \ RICHARDSON'S COMMERCIAL LAW A TEXT-BOOK FOR SCHOOLS, COLLEGES AND PRIVATE REFERENCE W. p. RICHARDSON, LL.D. Decn of the Brooklyn Laiv School rOPTRlGHT, 1900 COPYRIGHT, 1907 SADLER-ROWE COMPANT BALTIMORE THE H. M. ROWE COMPANY Educational Publishers fcDUCATION DEffo "If one shatt enter upon the study of the tatu under the impres- sion that the extent of his advancement must necessarily bear some relation to the number of hours consumed in reading, and the num- ber of pages devoured, and shall, in consequence of that mistaken impression, hurrx over ground n barrels of sugar. The transportation company, through mistake, delivered it to C, wiiu refused to give it up. A friend of C's agreed with B to pay the latter $25 if he would abandon his law suit against C. Is this promise enforceable?'*' CHAPTER V. LEGALITY OF SUBJECT-MATTER. 159. Meaning. — This is the last element in the formation of contracts which remains to be considered. It is the legality of the thing to be done or omitted. Instead of naming the contracts parties are permitted to make, we shall name those which the law forbids and which, if made, the Courts will not enforce. These Illegal contracts may be divided into three classes, viz. : ""1. Gaming and wagering contracts. ^•^2. Contracts made on Sunday. *'^3. Contracts against public policy. Gaming and Wagering Contracts: 163. 1. Gaming. — A contract between two or more persons by which they agree to play by certain rules at cards, dice or other contrivance, and that one shall be the loser and the other the winner, i. e., billiards, lottery, backgammon^ cock-fighting and betting thereon, etc. 164. 2. Wager. — A contract by which two or more parties agree that a cer- tain sum of money or other thing shall be paid or delivered to one of them on the happening or not happening of an uncertain event. If the contract between the parties is a bona fide contract to buy and sell, the law will sustain it, but where it appears there is no'real contract of sale, and that the whole transaction is to be settled by the payment of "differences," the contract will be set aside. *®^At common law gaming and wagering contracts were valid, but statutes have been enacted in all the States declaring such contracts to be unlawful. Wagering contracts remained in force in England up to 1845, when Parliament passed an act making them void. '•®A general summary of the statutes in the United States is as follows: r 1671 That any security given for mone^'^ lost by betting is void. LEGALITY OF SUBJECT-MATTER. 23 1682^ That money lost at a gaming table may be recovered as a common debt.^ "^3. That no money or other thing won by betting can be sued for. i704_ That wagers on elections are prohibited, and money deposited thereon is forfeited. 171. Contracts Made on Sunday. — The common law does not prohibit the making of contracts on Sunday; therefore contracts made on this day are valid unless they are expressly forbidden by statute. ^"The statutes usually declare that contracts to do work on Sunday which is not necessary are void, but a con- tract made on Sunday to do work on a week day is valid. All contracts for the sale of goods, wares and merchandise on Sunday are unenforceable. ^^'When a contract has been performed on Sunday it is as valid as if made on a week day. A sold B 100 boxes oranges. The following day B endeavored to have the sale set aside and recover his money because the contract was performed on Sunday. He cannot succeed. 174. Contracts Against Public Policy. — If the subject-matter of a contract relates to the performance of an act which will be detrimental and injurious to the citizens of a community and the public in general the contract is void. And th.s is true even though it can be shown that neither party will lose or suffer from its fulfillment. The question in this class of contracts is not whether the parties to the contract are injured, but whether or not the public rights are preju- diced. ^''^The following are some of the most important classes of contracts which are void, because against public policy: *^®1. Agreements tending to injure public service or good government. ^''2. Agreements which are contrary to good morals. ^'*3. Agreements which affect the freedom of marriage, ^'^4. Agreements on restraint of trade. ""5. Agreements which tend to pervert the course of justice. 181. Agreements Tending to Injure Public Service or Good Government. — An agreement by a candidate to share the emoluments* of a public office in consideration of aid in securing his election is void. Lobbying contracts are void. They are agreements to render service in securing legislative action through personal influence with public servants and through other objectionable and sometimes corrupt means. A promised B, a congressman, $500 in considera- tion that the latter procure for the former the contract to furnish army supplies to the government. B, according to the agreement, procured the coveted con- tract, but he cannot enforce payment by A, because the contract is void as against public policy. ♦Emoluments. — ^That which is received as a compensation for services, as salaries, fees, etc 24 LEGALITY OF SUBJECT-MATTER. 182. Agreements which Are Contrary to Good Morals. — Where the under- taking on either side is to do or permit to be done something decidedly immoral, as prostitution, making indecent books or pictures and the like, the law will not aid either party in enforcing performance. The immorality must be of a marked character, for the law does not observe a fastidious* delicacy. In general, only those contracts are held void for immorality which the precedents have settled to be immoral, a question not always open to discussion. If the contract in such eases has been executed the Courts will not rescind it, and, if executory, will not enforce it. A, the author of an obscene manuscript, contracted with B, a pub- lisher, for its publication. Relying on B's promise, A made extensive preparations for the sale of the book. B subsequently refused to carry out his part of the contract, which resulted in a heavy loss to A. The law will not aid A in seeking redress. The Courts, in such cases, will leave the parties where they find them. 183. Agreements which Affect the Freedom of Marriage. — The policy of the law is to encourage marriage and to discourage any interference with freedom of choice. Hence agreements never to marry, or not to marry within a given time, which is unreasonable, or not to marry any other than a given person, are void. A wager, in which one man bets another that he would not marry within a certain time, was held to be void, as giving to one of the parties a pecuniary interest in his celibacy. "*A promise to pay or do anything in consideration of the promisee's bring- ing about a marriage is void. Such agreements are called marriage brokerage contracts, and are well illustrated by a recent New York case decided in 189 1, the facts of which were that a Mrs. Guion, a widow, who, in her search for a husband, sought the advice and aid of a Mr. Wellman, who was owner and publisher of a matrimonial journal called "The New York Cupid" and the proprietor of a mat- rimonial bureau in New York city.- ^*^Mrs. Guion became a patron of Mr. Wellman's establishment in 1886, and paid the usual registration fee of $5. She was introduced to thirty or forty gentlemen, but found none whom she was willing to accept as a husband, and in 1887, for the purpose of stimulating Mr. Wellman's efforts in her behalf, she paid him $50, whereupon there was executed the following agreement: "June 2, 1887. "Due Mrs. Guion from Mr. Wellman $50, August 15, if at that time she is willing to give up all acquaintance with gentlemen who are introduced in any manner by Mr. Wellman." In August, 1887, Mrs. Guion, not finding a congenial companion among any of the men to whom she had been introduced, and claiming to be willing to give ♦Fastidious. — Delicate to a fault. LEGALITY OF SUBJECT-MATTER. 26 up all acquaintance with them, demanded from Mr. Wellman the return of the money paid. It was held that she was entitled to its return. Courts will aid a party who has patronized such a business by relieving him or her from all con- tracts made, and will grant a restitution of any money paid or property trans- ferred. i86. Agreements in Restraint of Trade. — It is against the policy of the law that a man should deprive himself of exercising his skill and the means of making a living. Therefore, contracts which restrain a person from engaging in his trade or profession for an unlimited time, or require him to abstain from its exercise, are void. But contracts which restrict the exercise of a trade or profession to a cer- tain locality are valid. The restraint may be unlimited as to time, but must be\) limited as to space. That is, a person may agree never to engage in the same business in San Francisco or in the State of California, because he can go else- where, but if he should agree never to carry on business anywhere, then the agree- ment is void. The restraint in all cases must be reasonable, and what is reason- able depends upon the nature of the business to which the contract relates. ^*^A few practical cases will make clearer the principle. A contract restrain- ing one of the parties from running a steamer on any of the waters of the State of California was sustained. A contract not to carry on a publishing business within the State of Michigan was upheld as not being an unlawful restraint of trade. An agreement made by a manufacturer of matches not to sell in any of the United States except two was held to be valid. i88. Agreements which Tend to Pervert the Course of Justice. — That is, contracts the object of which is to stifle prosecutions or to compound felonies are held to be void upon the ground that public interest demands the punishment of such offenders, and that a man who knows crimes have been committed should not be allowed to make it a source of personal profit, and that the State relies upon such persons to institute prosecutions. A contract to pay an attorney a contingent fee to procure the settlement of a criminal charge is invalid. A father whose son had been guilty of embezzlement gave a mortgage for the amount embezzled in consideration that the mortgagee would not prosecute his son. Is the mortgage valid? No, because the consideration upon which it is based is the doing of an act which is against public policy. CASES. (Give reasons for answers.) 26. A gave his note to B for ?1000 for money lost at cards. B sues A. Can he recover?"* 27. A paid B $125 for money lost at a game of cards. Can A recover the money from B?"* 28. A makes a bet with B for $1000 that the Boston Baseball Club will win the pennant. A loses, and B sues to recover the $1000. Should he succeed?'** 26 FRAUDULENT CONTRACTS. 29. A contracts with B on Suiuhiy for tlie hitter's services jus bookkeeper, to begin work on tlie following Monday. Is the contract valid?"- 30. A contructetl with li for tlie sale of the former's house and lot to the latter. A refused to sign the deed, because tlie contract was made on Sunday. Is this a good defense?'" 31. A horse whicli .\ bouglit of H on Sunday proved to be very unsafe. A returned the liorse and sued B for a return of the money. Can he succeed?'" 32. A promises B SoOU in consideration that B procure the passage through the city counc- of a certain bill. B was successful in his efforts and sues A on his promise. Can he recover?'" 33. A offered B $5000 if the latter would marry the former's daughter. B accepted the offer and after marriage sued A to recover. Can he succeed?"*^ 34. In order that she might have the privilege of patronizing a "matrimonial bureau" A paid B, the proprietor, $25 as a registration fee. Subsequently she sued the proprietor to recover the amount she had paid him. Will the court grant a restitution?'"^ 35. A, a physician practicing in Washington, sold to B, by written agreement, " his good will of practice for the sum of $1000, said A agreeing to quit the practice in said city in favor of B." In one year A resumed his practice, and B sued for damages. Can he recover?"** 36. A, the proprietor of a dyeing and scouring estabHshment, leased the same to B for a terra of twenty years, and for a valuable consideration sold the custom and good will thereof, together witli the right to use the same name and style as theretofore: also agreed that he would not at any time thereafter conduct in the city of Denver the trade of dyer and scourer. A subse- quently resumed the business, and B sued to recover damages for breach of contract. Can he succeed?'*' 37. A, who had forged B's signature to a check, promised the latter $100 if he would not expose him. Relying upon said promise, B kept quiet. Is the promise enforceable?'** CHAPTER VI. FRAUDULENT CONTRACTS. 189. Definition. — "Fraud is a false representation of fact, made with knowl- edge of its falsehood, or in reckless disregard whether 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." We shall consider these characteristics in detail : ^*"1. There must have been a material false representation, and it is material if the contract would not have been made but for the fraud practiced. Inten- tional misrepresentation is always fraudulent. But there may be intentional concealment which is not fraudulent. The question, then, is, what kind of knowl- edge a contracting party may lawfully keep to himself. The Supreme Court of the United States lays down the following rule: "If you have any peculiar or FRA UDULENT CONTRACTS. 27 extraordinary information which the other party, exercising ordinary know ,edge and dihgence, cannot be presumed to have, you are bound to disclose it, and the concealment of it will be fraud." While the law requires a full disclosure of all material facts necessary to enable each party to make up his mind, the rule here has a reasonable construction, ^^^The law will not relieve* against the common inequalities of knowledge, judgment, skill and experience. It allows one party to obtain the advantage when there is no unfairness. In regard to the quality and value of articles contracted for, the rule is that if a defect, fault or imperfec- tion be open and obvious by an inspection, there can be no ground to complain of fraud. But when the defect cannot be easily perceived, the party knowing it is l)ound to make a disclosure. ^^^2, The representation must be made with knowledge of its falsehood. It is clear that a person who makes a statement, although untrue, is not guilty of fraud, unless he knows it is false. Thus, where a telegraph company, by mistake in the transmission, caused B to ship to England a large quantity of barley which w^as not required, and which resulted in a heavy loss, it was held that the representa- tion not being false to the knowledge of the company, gave no right of action to B. ^^^3. The representation must relate to a fact, and not a mere matter of opinion. A mere expression of opinion, which turns out to be unfounded, will not invalidate a contract. A representation by the seller that property is worth a given sum is a mere expression of opinion, but a false statement as to the cost of an article is a material fact and fraudulent. "^4. The representation must be made with the intention that it should be acted upon by the injured party. It is not necessary that the statement be made directly to the injured party. Thus, false statements made by a man to a com- mercial agency concerning his financial solvency, or that of his firm, entitles the person who relied upon them to all the remedies of a defrauded party. "^5. The other party must have relied on the representation and have thereby been deceived. A bought a cannon of B. The cannon had a defect, which made it worthless, and B had endeavored to conceal the defect by inserting a metal plug. A had never inspected the cannon. When he used it the cannon burst. It was held that B had not committed fraud, because the attempted fraud had no operation on A's mind. ^^^The Court said: "If the plug, which it was said was put in to conceal the defect, had never been there his position would have been the same, for as he did not examine the gun or form any opinion as to whether it was sound, its condition did not affect him." Although this decision has been severely criticised by high ♦Relieve. — To free from or set oflf by contrast. 28 FRAUDULENT CONTRACTS. iiutliority. it is still the doctrine on the subject of fruiicl. Deceit which does not affect the conduct of a party can hardly create liabilities. 197. Effect and Remedies. — A contract procured by means of fraud is not void, but voidable at the option of the party upon whom the fraud was practiced. The defrauded party has the following remedies: "*1. He may affirm the contract and sue for damages, or "*2. He may avoid the contract. -''"If the person defrauded elects to avoid the contract, he must return, or offer to return, what he received under it. But if the thing received has perished, or is of no value, or for any good reason cannot be returned, then the defrauded party may avoid the contract without an ofifer to return. -"4f, after discovery of the fraud, the party does not rescind* the contract within a reasonable time, his right to rescind will be lost. Certain bonds of A held by B for safe keeping were sold by B and the proceeds used by him. With knowledge of the fact, A accepted and retained a promissory note of B's and others sent him by B for the amount of the value of the bonds sold, and A collected the interest on said note for two years. A subsequently sued B to recover the value of the said bonds upon the ground that B fraudulently contracted the debt, but it was held that the acceptance of the notes under all the circumstances connected with it created a new contract between the parties, and operated as an affirmance and ratification of the fraud practiced by B. 202. Both Parties Guilty of Fraud. — If both parties have been guilty of fraud, neither can obtain relief on the contract. But where both parties are not equally guilty, one having acted under circumstances of oppression, imposition, hardship, or undue influence, so that his guilt may be far less than his associate, then public policy may require that relief should be granted. Thus, where a debtor, in order to induce a creditor to sign a deed, by which the creditor accepts part of the debt due to him in satisfaction of the whole, pays him, without the knowledge of the other creditors, a larger amount than that paid to the rest of the creditors, he may recover back such extra allowance. CASES. (Give reasons for answers.) 38. A falsely represented to B that shares in certain silver mines were a profitable invest- ment, and in reply to inquiries falsely asserted that he had invested a large amount in the shares and working capital of the said mines, whereupon B, at the solicitations of A, but not until he (B) had carefully investigated the mines, etc., and elying solely upon his own investigation purchased a large number of shares, which proved to be in fact valueless. B brought action to recover of A *Rescind. — To annul, i. e., to make void or of no effect. CLASSES OF CONTRACTS. 29 $2000 which he had paid him on the ground of A's false and fraudulent representations. Can he recover?'"' 39. A, being part owner of a vessel, was authorized to appoint her master. B made application for the appointment. A agreed to appoint him in consideration that he would take one-fourth interest in the vessel at her cost price. A fraudulently represented the cost price of the vessel. Is A liable to B for the fraud ?''^ 40. A brought an action to recover damages alleged to have been sustained by means of false and fraudulent representations made to him by B, through which he was induced to pur- chase a half interest in the business of manufacturing artificial marble. The facts were that B represented he was doing a fine business and making money; that he had a contract with St. Vincent Church for $4000, one-half of which was profit; also a large contract at the Capitol at Washington, and a large contract for work with the B. & O. R. R. That the business was a complete failure, and the representations made and through which A was induced to purchase were utterly false. Can he succeed?"" CHAPTER VII. CLASSES OF CONTRACTS. 203. Classes. — Contracts are divided into three classes, viz.: 1. Contracts of Record; 2. Contracts under Seal; 3. Simple Contracts. 204. Contracts of Record. — They are so called because when made are mat- ters of record in court. They are judgments,* recognizances* and supersedeases.* 205. Contracts Under Seal.— A sealed contract is technically called a spe- cialty, deed, bond or writing obligatory. Every contract may be under seal if the parties so elect, but some contracts require a seal, i. e., deeds, bonds, etc. ^"^The law relating to these contracts abounds with technical and arbitrary distinctions, which serve no other purpose than to confuse the mind. According to Blackstone, seals were first introduced because men could not write. Not being able to write, each person had his own particular seal, which he used in place of his signature. Therefore, when writing became general, the reason for using seals ceased; but the custom, nevertheless, continued. Another reason, to show that the original purpose and use of a seal has been entirely lost sight of in modern times, is that we not only never affix a seal without a signature, but where a per- son cannot write his name, we write it for him, and he ratifies* it. For what pur- *Recognizance. — In civil cases it is an obligation of record entered into before some court of record that the party will pay the debt, interest and costs recovered by the plaintiff under certain contingencies. *Judgment. — Decision of a court. ♦Supersedeas. — A writ directed to an officer that he stay the proceedings at law, or that sus- pends the powers of an officer in certain cases. ♦Ratify. — To approve and sanction something done by an agent. ao CONTRACTS THAT MUST BE WRITTEN. pose, then, are seals contimied in use? The pretense is that they add solemnity* to the instrument. In Maryland a scrawl after the name is all that is necessary to constitute a seal. It is upon this theoretical solemnity of a seal that the dis- Unction between sealed and unsealed \\Titings is founded. Some of the distinctions are: *^n. The seal is said to estop the party, that is, to preclude him from proving anything to the contrary, when by using the same words he could not be estopped. 2082 The presence of a seal is said to import or imply a consideration, when the same words without a seal would have no such effect; hence a gratuitous promise under seal is enforceable, but if not under seal is void. '"^S, A contract under seal being of a higher nature, there cannot be a simple contract and a contract under seal between the same parties on the sam e subject, because the simple contract will be merged* into the one under seal. ^"4. Right of action on sim ple contracts is lost if not exercised w ithi n thr ee years, while on sealed instruments it is not barred until aft er the lap s e of twelv e years. ^"5. A surety upon a contract under seal is not releas ed by giving time to the principal unless the agreement for extension be under seal; whereas a mere verbal agreement for extension will release a surety upon a c ontract not under seal. ~ 212. Simple Contracts. — All contracts not under seal, nor of record, whethei they be written or verbal, are simple or parol* contracts. CHAPTER VIII. CONTRACTS THAT MUST BE WRITTEN. 213. To Prevent Fraud and Perjuries. — In the reign of Charles II., 1676, Parliament passed an act the object of which was to prevent the perpetration of frauds and perjuries with facility. It has since been substantially re-enacted by the legislatures of most of the States. In some States, however, it has never been re-enacted by the legislature, but simply recognized and adopted by the courts as being a part of the common law. In those States in which the statute was re- ♦Solemnity. — Awe or reverence inspired by circumstances; a solemn or formal observance. *Merged. — Swallowed up, or lost. ♦Parol. — A term used to distinguish contracts which are made verbally or in writing not under seal. CONTRACTS THAT MUST BE WRITTEN. 31 enacted the legislatures, in doing so, made some minor changes, but, as a whole, it remains about the same as the original statute. It is generally called "Statute of Frauds." It provides that certain classes of contracts must be evidenced by- some memorandum signed by the party to be charged. Witnesses to the agree- ment will not supply the want of the memorandum. It declares those contracts to be: ^"1. To charge* any executor* or administrator* upon any special promise to pay damages out of his own estate. ^^^2. To charge any person upon any special promise to answer for the debt, default or miscarriage of another person. ^^^3. To charge any person upon any agreement made upon consideration of marriage. ^*^4. For the sale of lands, tenements* or hereditaments,* or any interest in or concerning them. ^^^5. Agreements not to be performed within one year from the making thereof. ^^•^6. For the sale of any goods, wares and merchandise for the price of $50 unless: (1) The buyer shall accept and actually receive a part of the goods; or, (2) The buyer pays a part of the price; or, (3) The buyer gives something as an earnest to bind the bargain. 220. What Constitutes a Sufl&cient Writing. — The writing is required, not for the existence or validity, but for the evidence of the contract. No formality is required; a mere note or memorandum is sufficient. The memorandum may consist of telegrams or various papers or letters, but they must be connected, con- sistent and complete. A contract required to be in writing cannot be partly in writing and partly oral. 221. To Charge any Executor or Administrator Upon Any Special Promise to Answer Damages Out of His Own Estate, — The expression, "answer damages," means to pay the debts of the deceased. An executor or administrator is not liable for the debts of the decedent, the person deceased; that is, he does not have to pay the debts out of his own pocket; his liabilities are limited by the assets of *Charge. — To make liable. *Executor. — One appointed in or by the will of another to execute the will. *Adininistrator. — A person appointed by competent authority to settle the estate of one who left no will. *Tenement. — Any species of permanent property that may be held so as to create a tenancy, as houses, lands and rents. *Hereditament. — Any species of property that may be inherited. 32 CONTRACTS THAT MUST BE WRITTEN. the decedent. If, in order to save the credit of the deceased, or for any other reason he promises to answer damages out of his own estate, that promise must be in writing, together with the consideration for it. "-But a promise by an execu- tor to pay an heir a sum of money if he will not contest the will is not within the statute, and, therefore, need not be in writing. 223. Any Promise to Answer for the Debt, Default or Miscarriage of Another Person, — This means a guaranty — to be responsible for a debt for which another person continues to be liable. ^^^There must be three parties — the creditor, the principal debtor, and his surety or guarantor. There must be a liability, actual or prospective, of a third party for whom the guarantor undertakes to answer, ff the guarantor, instead of making his liability secondary, makes himself prima- rily liable, the promise is not within the statute, and need not be in writing, because there is no guaranty. "^The liability may be prospective at the time the promise is made, as a promise by A to B that if C employs B he (A) will go surety for payment of ser- vices rendered. "If two come to a shop, and one buys, and the other, to gain him credit, promises the seller, 'If he does not pay you I will,' this is a collateral* undertaking or guaranty, and is void without it is in writing under the Statute of Frauds, But if he says, 'Let him have the goods; I wall be your paymaster,' or 'I will see you are paid,' this is an undertaking for himself, and he shall be under- stood to be the buyer and the other to act as but his servant," 226. Guaranty Made Concurrently and Subsequently. — One important dis- tinction is to be noted between a guaranty made concurrently with the principal transaction and one made subsequently as to the consideraticu for the guaranty. A and B go to a merchant, and, on the strength of A's guaranty, the merchant sells B goods amounting to SIOOO. A is liable on his guaranty; the consideration for the same is the credit given. -^But suppose the merchant had sold the goods to B, and subsequently requested A to guarantee payment; although A complied with the request, and gave a written guaranty, he would not be liable, because there is no consideration. "®It must be remembered that the guaranty to pay a subsisting debt, like all other contracts, must have a consideration, even though the promise be in writing. ^"The debt, default or miscarriage spoken of in the statute will include liabili- ties arising out of wrong as well as out of contract. A rode a horse of B's without his leave and killed it. C verbally promised to pay B a certain sum in considera- tion of his forbearing to sue A. This promise is void, because not in writing. ""Had the promise been reduced to writing it would have been valid, the consid- ♦Collateral. — Surety given in addition to the principal promise. CONTRACTS THAT MUST BE WRITTEN. 33 eration being A's forbearing to sue, which, we have already learned, was a suffi- cient consideration to support an agreement. 231. Agreements Made in Consideration of Marriage. — This does not mean the promise to marry, but a promise to pay money or settle property on one of the contracting parties when the marriage actually takes place. A father verbally promised, in consideration of his daughter's marriage, to give her, as a wedding present, a house and lot. After marriage he refused to carry out his promise. The law will not compel him to convey the property to his daughter, because the contract was not written. 232. Contracts for the Sale of Lands, Tenements or Hereditaments or Any Interest in or Concerning Them. — This whole subject is one which belongs to the law of real property rather than to the law of contracts. It will, therefore, suffice our purpose to state briefly that all agreements for the sale or purchase of real property must, in order to enforce them, be in writing. The statute also requires that leases of real property for three years or more must be written, but in some States when the statute was re-enacted the time for which oral leases were valid was reduced to one year. 233. Agreements Not to Be Performed Within One Year from the Making Thereof. — While the rule as stated is very clear and easily understood, yet by innumerable judicial decisions the construction placed upon it has become extremely artificial. In construing this rule the Courts have held the following verbal contracts to be valid: 2^*1. If the contract is fully performed by one of the parties within the year it will take it out of the statute, and need not be in writing. A, being a tenant of B's under a ten years' lease, promised verbally to pay an additional $20 a year during the remainder of the term in consideration that B expend $200 in alterations. A was held liable upon his promise, the alterations having been made within one year. ^^^2. If the contract can b}^ any possibility be performed within one year, although the parties may have intended that its operation should extend through a much longer period, the statute will not apply; hence the contract need not be in writing. A contract to pay a lawyer for conducting a law suit which might be terminated within a year is not within the statute, although the litigation may continue for two years. ^^^3. The statute does not apply if the death of one party within the year would leave the contract completely performed and its purpose achieved. ^^^An agreement to support a child until a certain age, at which the child would not arrive for several years, was held not to be within the statute, because it depended upon the child's life, and if the child should die within one year, would be fully performed. -^^Agreements for service where the term is for more than one year 34 CONTRACTS THAT MUST BE WRITTEN. or is to begin at a future time, are within the statute, and must be in writing. Thus an agreement to employ a boy five years and pay his father certain sums at stated periods during that time is within the statute; hence to enforce the agreement it must be reduced to writing. Although bj^ the death of the boy the services would cease and the contract determined,* it would certainly not be completely performed. -^''Agreements not to carry on a certain business at a particular place need not be in writing, because, being only a personal engagement, and imposing no duties upon his legal representatives, it would be fully performed if the party died within the year. 240. For the Sale of Any Goods, "Wares or Merchandise for the Price of Fifty Dollars and Upwards. — But if any one of the following circumstances occurs at the time of the sale it need not be in writing: 1. Acceptance and receipt of part of the goods. 2. Payment of part of the price. 3. Giving something as an earnest to bind the bargain. In some States the price is $30 and upwards; in others $50. 241. Accept and Receive Part of the Goods means that the buyer must appro- priate to himself a part or the whole of the goods in such a way as to destroy any further claim to them by the seller. It does not mean that in all cases the buyer is actually to handle the things bought. Where the articles are heavy and bulky it is not necessary that they be manually delivered. It is only required in such cases that the purchaser should have complete and absolute control and authority over the thing purchased. If the buyer receives and takes with him a sample, it is sufficient to satisfy the statute. But it must be understood by both parties that the sample was a part of the goods purchased. 242. Payment of Part of the Price means that there should be an actual pay- ment of a portion of the purchase price. 243. Giving Something in Earnest.— The effect of an earnest is to bind the goods sold. Upon payment of the whole price the buyer is entitled to them. But if he does not within the time agreed pay for and take the goods the vendor may resell the same, also retain the earnest money. 244. What Are Goods, Wares and Merchandise? — In some cases what are goods, wares and iiiercliandise under this clause is a question of much difficulty, and the decisions of the Courts are not in harmony. -*^A contract for work and labor is not within the s+atute, but where one agrees to manufacture an article for another it is often a nice question to deter- mine whether the contract is for work, labor and materials, or for goods, wares and merchandise. •Determined. — Urought to a conclusio'*. CONTRACTS THAT MUST BE WRITTEN. 35 ^^"The weight of authority is that where worl<; and labor is to be bestowed by the seller upon the thing sold before delivery the contract is for work and labor, therefore not within the statute, and need not be written. ^^^A sold wheat in the stack to B, which was to be threshed by A, the seller before delivery. The contract, being partly for labor, is not within the statute But if the buyer is to perform the labor, then it is within the statute. Thus, ii B, the buyer, was to thresh the wheat, the contract must be written. ^**Shares of stocks, bonds and promissory notes are goods within the mean ing of this statute. An auction sale is also within the statute. The auctionee is the agent of both parties to sign the memorandum. CASES. (Give reasons for answers.) 41. A delivers a vessel at B's dock-yard for repairs. The bill for the work is $125. A wants the boat, but B refuses to let him have it until his claim is paid. C verbally promises to become responsible for the payment, whereupon B delivers the boat to A. B sues C on his promise. Can he recover ?^^^ 42. A and B go into a store. A directs the merchant to let B have goods to the amount of $100. A verbally promises to pay for them. Is his promise enforceable ?^^^ 43. A bought of B a carriage for $150. When the carriage was delivered A refused to accept it, because it was not the one he had bought. B proved beyond a doubt that it was the one A had purchased, and sued him to recover. Should he succeed?^" 44. A made an oral agreement with B that the latter should receive employment in the former's store for two years. Is the contract enforceable?^^' 45. A made an oral agreement with B that he would sell to the latter 100 tons of coal at $5 per ton, provided the order for same was received within fifteen months. At the end of thirteen months B put in his order. Is A obliged to deliver the coal?^^^ 46. A contracted with B for the sale of his farm to the latter. B paid $100 to bind the l)argain. When the time came for signing the deed A refused, and B sued to compel a convey- ance. Should he succeed ?^^^ 47. A sold goods to B. Subsequently A, learning of B's bad credit, requested C to go B's surety. Whereupon C gave a written guarantee. A having failed to collect of B, sues C. Can he recover ?^^'' ^-' 48. A hired a horse and buggy of B,,and, by his reckless driving, the carriage was upset and damaged to the extent of $50. C gave a written guarantee to B to answer for damages sustained if he would not prosecute A. Is C's promise enforceable?"' 49. A made an oral agreement with B not to carry on basiness in Wasliington for twenty- five years. Is the agreement binding?^'" 50. A sold to B 1000 shocks of corn, which were to be hu.siach man his due according to reason. *Dcfens<\ — That whicli protects; a denial of the truth or validfty of tlie plaintitil's claina. BILLS AND NOTES. 6.1 ANALYSIS OF DRAFTS AND NOTES. 1. Negotiable distinguished from non-negotiable. f 1. Assignment. 2. Value of assignment 3. Title. 4. Consideration. 2. Definition /I. Of bill of exchange. \ 2. Of promissory note. 3. Parties 1. Of draft 2. Of note 3. Immediate. 4. Remote. 5. Holder. r 1. Drawer. ' 2. Drawee. [ 3. Payee, / 1. Maker. \ 2. Payee. 4. Requisites of negotiability 5. Effect of additional stipulations 1 . Must be p.ayable absolutely. 2. The bill must contain certain direction and the note a certain promise to pay. 3. Negotiable words. 4. Certainty as to amount. 5. For payment of motiey only. 6. Must be unsealed. 7. Must be delivered. f !. Appointing holder to confess judgment \ 2. Waiving exemptions, etc. I. 3. Payment of collection and attorney's fees f 1. 6. Form of 7. Maturity . S. Acceptance Date of making. Time of payment Payee. Amount. Consideration. Signature. Drawee. Days of grace. Sunday and legal holidays. Written, Verbal. Written promise to accept. Who may accept. When it may be made General. ' ' 1. 2. QualifiafJ 3. 1. At sight. 2. At thirty days' sight. 3. At thirty days after sigh 4. On demaad. 15. Aa to amount. As to time. As to number ol aeceptorf Imposing a condition. Effect of. 48 PARTIES TO COMMERCIAL PAPER. CHAPTER XV. PARTIES TO COMMERCIAL PAPER. 313. Definition. — A Rill of Exchanji;c (commonly called "draft," and here- after to be known as such) is an unconditional order in writing for the payment of a sum of money, absolute and at all events. ^"A note is an unconditional written promise signed by the maker for the payment of a sum of money absolutely and at all events, either to the bearer or to a person therein designated, or his order. The most important distinction be- tween a note and a draft is, that in the former there is a promise by one party to another to pay, and, in the latter, there is a request by one party of another to pay the amount stated in the paper. 315. Parties. — There must, in point of form, be three parties to a draft and check, and two to a note. We submit a form of each to illustrate. DRAFT. 316. Form. The parties to a draft are: 1. Drawer. — The party who gives the order. 2. Drawee. — The party on whom the order is given. 3. Payee. — The party in whose favor the order is givep PARTIES TO COMMERCIAL PAPER. 49 In the form No. 316 the drawer is H. G. Grant, the drawee is Bowman & Co., and the payee is Johnson, Lippincott & Co.; that is, H. G. Grant requests Bowman & Co. to pay the amount named to Johnson, Lippincott & Co. After the drawee has accepted a draft he is no longer called the drawee, but acceptor. CHECK. 317. Form. iyuruM^^^,^f-- A check has the same parties as a draft, i. e., drawer, drawee and payee. The drawer of a check is often spoken of as a maker, which is not correct. Maker applies only to the signers of Promissory Notes. In the above form the drawer is X. W. Zaner, the drawee is the Merchants' National Bank, and the payee is Davis & Comer. NOTE. 318. Form. The parties to a note are: 1. Maker. — The party who makes the promise. 2. Payee. — The person in whose favor the promise is made. In the form No. 318 the maker is H. H. Etter, and the payee is John Wana- maker. The contract and liabilities of the different parties in a draft, check and note are fully discussed in a succeeding chapter. so PARTIES TO COMMERCIAL PAPER. 319. Immediate Parties. — Those parties between whom there is privity nj contract, 1. e., drawer and acceptor, drawer and payee, maker and payee and endorser and immediate endorsee. Privity of contract means a connection or bond of union between parties as to some particular transaction. 320. Remote Parties. — Those parties between whom there is no privity of contract, i. e., maker and endorsee, paj^ee and acceptor. It is important that these two classes be remembered, because between the immediate parties the rights of a bona fide holder never apply, whereas in case of remote parties the rights of a bona fide holder do apply. 321. Holder. — "Holder" means the person who is in actual or constructive possession of the paper and entitled at law to enforce payment thereof by the maker, acceptor or endorser. ^^-An endorser of non-negotiable paper is not lia- ble for payment, because his liability attaches to negotiable paper only. Holder includes payee, endorsee or bearer. 323. Form. RECEIPT. 324. Receipt. — A receipt is a written acknowledgment of the payment of money or delivery of chattels. It is executed by the person to whom the delivery or payment is made. The receipt must be delivered to the debtor, for a memor- andum or payment made by the creditor in his own books is no receipt. 325. Effect of. — The mere acknowledgment of payment made is not treated in law as binding or conclusive. So far as a simple acknowledgment of payment or delivery is concerned it is prima facie* evidence only, and is, in general; open to explanation. This is an exception to the general rule that parol evidence cannot be admitted to contradict or vary a written instrument. Thus, a party may always show in explanation of a receipt that it was obtained by fraud, or given under a mistake, or that, in point of fact, no money was actually paid as stated in it. *Prima Facie. — At first view or appearance. Prima facie evidence is such evidence which is sufficient to estabhsh the fact unless rebutted. REQUISITES OF NEGOTIABILITY. 61 CHAPTER XVI. REQUISITES OF NEGOTIABILITY. 326. Essential Requisites. — There are certain essential things which every negotiable instrument must contain, and the absence of any one of them will destroy its negotiable characteristics. ^-^They are six in number, as follows: 1. Must be payable absolutely and without contingencies. 2. The bill must contain a certain direction, and the note a certain promise to pay. 3. Negotiable words. 4. Certainty as to amount. 5. For payment of money only, 6. Must be delivered. ^^*We shall consider these requisites in the following order. The student will have little or no difficulty in remembering them, as they are given in the order in which they arise in the usual form of drafts and notes. 329. Must Be Payable Absolutely and Without Contingencies. — An instru- ment made payable on the happening of an uncertain event or contingency is not negotiable, and the happening of the event does not cure the defect. ^^"But if the contingency is one which is sure to happen, that is, the time made certain, though no one can tell when, it does not destroy its negotiability. "Pay C, or order, $100 ten days after the death of D," is negotiable, because the death of D is sure to take place, although the precise time is not known. "Pay C, or order when I marry D," is not negotiable, because it is not certain that the event will ever happen, 331. Certainty as to Amount. — The sum paj-able must be certain and defi- nite, or capable of being made certain. '^^The sum is certain, although it is to be paid: 1. With interest; or, 2. By stated instalments; or, 3. By stated instalments, with a provision that upon default in payment of any instalments or of interest the whole shall become due; or, 4. With exchange, whether at a fixed rate or at the current rate; or, 5. With costs of collection or an attorney's fee in case payment shall not be made at maturity. ^^^As to clauses which contain a stipulation that the maker 62 REQUISITES OF NEGOTIABILITY. shall pay costs and attorney's fees, there has been much conflict in the decisions. The rule adopted is the one sustained by the weight of authority. The courts which have sustained this rule have taken the view that so long as the amount payable is certain up to maturity and dishonor, it is not essential that aficr that time when it has become non-negotiable for other reasons the certainty as to the amount should continue. The following are not negotiable, because they arc at variance with the rule: 1. Pay C, or order, $100 and all other sums which may be due him. 2. Pay C, or order, the proceeds of shipment of goods, value $2000, con- signed by me to you. The following are negotiable: 1. A promise to pay $40 per acre for the X lot of land becomes valid when the number of acres is endorsed thereon. 2. A promise to pay $100, with interest, on or before January 1, 1899. 334. For Payment of Money Only. — The in strument must require the pay- ment of money. This means gold, silver, treasury notes or national bank bills; the latter, although not legal tender, have been legalized as national currency. The following are not negotiable: 1. A promise to pay C, or order, $100 in cotton, or in work and labor. 2. A promise to pay in currency of a foreign country. 3. Pay C, or order, the accrued rent, though the rent is payable in money. 4. Pay C, or order, $100 in United States bonds. ^^Notes or bills payable out of a particular fund are not negotiable bills or notes, because payment is contingent cgi the adequacy of the fund. The words "out of" are usually relied upon to show such a contingency. The following are not negotiable: 1. Pay C, or order, $100 out of the money in your hands belonging to the D Co. 2. Pay C, or order, $100 out of the money arising from the sale of my land. ''®An absolute order to pay, coupled with a direction to the drawee to reim- burse himself out of a particular fund, or show to what account it is charged, is negotiable, because the fund is not the source of payment. The following are negotiable: 1. Pay C, or order, $100, and take the same out of our share of the grain when sold. 2. Pay C, or order, $100 on account of money advanced by me for the Roe Company. 337. The Bill Must Contain a Certain Direction and the Note a Certain Promise to Pay. — A bill is not asking a favor. ^^^The direction to the drawee must be imperative. "Please let bearer have $100, and you \\'ill much oblige REQUISITES OF NEGOTIABILITY. 53 me," was held to be inyalid. A promissory note may be in any form of words from which a promise may be implied. There must, however, be something more than mere acknowledgment of indebtedness. The following are not notes, but mere evidence of indebtedness; 1. Due C $100, value received. 2. I. 0. U. SIOO. 3. I owe you SIOO, to be paid September 1, 1895. 4. Due C, or order, on demand, $100. 339. Negotiable Words.— These words are "order" or "bearer." ^^ "They are not essentially requisite to validity of bill or note, but are necessary to make them negotiable. ^"If the bill or note be payable to A, or order, it is payable to him or to the person to whom he orders it to be paid. He may transfer his rights, and even better rights than he possessed, to a third party by endorsement and delivery: ^^^If made payable to A, or bearer, he may transfer the right and title to the paper by mere delivery in the same manner as he would transfer the right or title to a book or other personal property the possession of which is prima facie evidence of ownership. ^^^There is a difference in the expression "Pay to the order of A" and "Pay to bearer, A." The former is the same as if it read, "A, or order," while the latter is not equivalent to "A, or bearer;" hence, if the word bearer precedes the payee's name the paper is not negotiable. 344. Must Be Delivered. — Delivery is essential to the valid ity of bills and notes. There must be a transfer of the possession of the instrument. B, who is indebted to C, makes a note for the amount, payable to C. B dies, and the note is afterwards found among his papers. C has no right to this note, and if given to him, cannot enforce payment. 345. Escrow. — Commercial paper may be given as escrow; by this we mean that the paper may be delivered to a third person to hold until the payee does some act or performs some condition, and which is not to take effect until the condition is performed, and its negotiation contrary to the condition may be restrained by injunction. ^^"As between immediate parties, if the condition has not been fulfilled no recovery can be had. If put in the hands of an agent to be delivered on condition, it may be recalled any time before delivery. C, the holder of a note, endorses it to D; C transmits it by post to his own agent. The agent informs D that he has received the note endorsed especially to him (D) , but does not deliver it to him. C can revoke the transaction and cancel his endorsement to D. ^*^When negotiable instruments have bee n delivered conditionally or as escrow they differ from choses in action or non-negotiable paper i n this, that if delivered contrary to instructions to a bona fide holder all parties are bound to such holder. C, the holder of a bill, endorses it especially to D in order that he may get it discounted for him. D, in a breach of trust, negotiates the bill to E. 64 ADDITIONAL STIPULATIONS. If E takes the bill bona fide he acquires a good title, and can sue all the parties thereto. If he does not so take it, he cannot sue C; and if he sues the acceptor the latter may set up as a defense that the bill is C's. Deliver}' is presumed from possession of the paper by payee or holder, and that delivery was made at vim.e of date of instrument. Such presumption may, however, be rebutted. CHAPTER XVII. ADDITIONAL STIPULATIONS. 348. Additional Stipulations Not Affecting Negotiability. — Having treated of the essential requisites of negotiable paper, there yet remains to be considered a practice which has become quite common in the United States within the last quarter of a century of embodying in notes provisions which: 1. Authorizes the sale of collateral securities in case the instrument be not paid at maturity; or, 2. Authorizes a confession of judgment if the instrument be not paid at maturity; or, 3. Waives the benefit of any law intended for the advantage or protection of the obligor (one obligated); or, 4. Gives the holder an election to require something to be done in lieu of payment of money. ^^^The "Negotiable Instruments Law" provides that an instrument otherwise negotiable, containing any of the above provisions, is to be regarded as nego- tiable. ^^"Before the adoption of this act it was usually held by the courts that these additional stipulations destroyed the negotiability of the paper, because they have a tendency to encumber the paper, which, in order that it may circu- late with freedom among business men and supply the want for which it was created, should be free from conditions and contingencies and contain only the bare promise for the payment of a certain sum of money absolutely and at all events. In former years the practice of inserting these provisions was very limited, but in recent years it has become a common custom, and it is to meet this practice that the former rulings of the Courts were changed. ADDITIONAL STIPULATIONS. 55 ^^*We herewith submit a number of forms to ilkistrato how such notes are usually drawn. They may be worded in many different ways. Note Waiving Exemptions. ■^^■^f^?^. 352. Waiving Exemptions. — The security which the law gives to every creditor is that if the debtor does not pay his creditor the latter may, by obtain- ing a judgment, have the property of the debtor sold and the proceeds of sale applied on the debt. ^^^But in all the States the legislatures thereof have made provisions whereby a certain amount of property of the debtor is exempt from attachment and cannot be sold to pay his debts. The value of property exempt varies in the different States from $100 to $2500. ^^"^ While the law gives to ever>' debtor this protection, yet he may waive or give up this right and allow his creditor to take every dollar's worth of his property. The above form illustrates the wording of a note whereby the maker or debtor gives up the right which the law gives him of keeping a part of his property. 355. Judgment Note. — A note wherein the maker gives the holder a power of attorney, authorizing him to appear in court and obtain a judgment against the maker for the amount, is called a judgment note. This is a very severe form of contract, and should, if possible, be avoided under all circumstances. The fol- lowing form is one quite generally used in Pennsylvania. It illustrates not only a judgment note, but also homestead exemption and payment of collection fees. Judgment notes are not permitted in the State of New York. 56 ADDITIONAL STIPULATIONS. NoTK Appointing Holder to Confess Judgment, Waiving Exemptions and Payment of Collection Fees. ->"H♦-■♦-^- SlOOO, Philadelphia^ Sept, /, IQ -»► ■ t Three 77ionths after date I promise to pay t to the order of Fair man A . Sadler &f Co. t Without Defalcation, wi7/i interest; and further do hereby autfiorize and empower any attorney of any Court of Record in Pennsylvania, or elsewhere, to appear for and con- fess judgment for the above sum, with or without declaration, urith costs of suit, release of errors, unthout stay of execution, and with five per cent added for collection fees, and also waive the right of inquisition on my real estate that may be levied upon to collect this note, and do liereby voluntarily condemn the same and authorize the Prothonotary to enter upon tlie Fi. Fa. said voluntary condemnation; and furtlier agree that said estate may be sold on a Fi. Fa., and liereby waive and release all relief from any and all appraisement, stay, or exemption laws of any State, now in force, or hereafter to be passed; and also waive the benefit of the present and any future bankrupt law that may be passed by the United States. Samuel P, Blair. -♦♦♦♦♦ ♦-♦-• 356. Collateral Notes. — Collateral means security given in addition to a principal promise; therefore a collateral note is one which contains a security for the payment of money in addition to the principal security. The principal security is the bare promise of the maker to pay the sum named; the collateral security is any stocks, bonds, warehouse receipts or other tangible property given to the holder of the note. ^"The maker of the note gives the holder the power to sell the collateral in case the note is not paid at maturity. ^^^The sto,cks, bonds or other securities given with the note are not the property of the party who loaned the money, and must not, under any circumstances, be used by him except in default of payment. They are only pledged to make the loan secure, and when the money is repaid they must be returned to the borrower. The nominal value of the collateral usually exceeds the amount of the loan, because at a forced sale the collateral might not bring a sum equal to the amount loaned. ADDITIONAL STIPULATIONS. 57 ^''^As this method has become a very common practice of obtaining loans, we will more fully illustrate by supposing Mr. Brown wanted to obtain a loan from the American National Bank for $10,000. Not wishing to ask anyone to endorse his paper, as he would then feel under obligation to return the favor, he offers the bank 250 shares of stock of $100 each in the Consolidated Gas Co., Kansas City, which they can hold as security. The bank, being thus protected, makes the loan upon these terms. Mr. Brown will deliver to the bank with his note the stock endorsed in blank. If the note be paid at maturity the stock will be returned to Mr. Brown. If not paid, the stock will be sold and the proceeds of the sale will be applied in settlement of the note. If the proceeds from the sale of the stock be in excess of the loan, such excess will be returned to Mr. Brown. But if the proceeds be not sufficient to settle the loan the borrower will be liable for the deficiency. We herewith submit two forms of a collateral note: Collateral Note. • ♦♦♦♦»»♦♦♦♦♦♦♦♦♦♦♦♦♦ ♦♦>-♦--♦- ♦ ♦ ♦ ♦ ♦-»--♦- ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦» $7000. Philadelphia^ Pa.^ Sept. I^ IQ . -^ Sixty days after date I promise to pay to the order of 4 Second National Bank of Philadelphia^ Pa., \ Seven Thousand^y^^^^^^^^^^^^^^s^^^^^^^^^^^^^^^^^^^y^^^^^^Dollars^ \ Value R,eceived, -ojUhout Defalcation, and I further deliver to the said payee One Hundred and Twenty- five Shares {$IOO par) Capital Stock of Pullma7i Car Co., Chicago, III., as collatei'al security for the payment of the said note on the day it becomes due, -f luhich collateral I hereby atithori'ze and empower the holder of the promissory T note {provided the same be not paid at maturity) to sell or transfer at public or 4. private sale without further reference or notice; to apply the proceeds iti payment I" T thereof together ivith interest and charges thereon; thereafter should any deficiency remain, I further pro?nise and agree to pay the same to the holder thereof 071 demand. Charles Lee Mann. 58 FOR}r OF DRAFT AXD XOTE. CoLLATKHAr, NoTK. $ 23,000'^'^ CHiCACio, III., Sept. 6, 19 t^OllT' tnOflt/lS after dale J promise to pay to the order o. Union Trust Company, m their oii'tce in Chirago, Twe?ity-five thousa?idr^.^.^s^.^.^s^.^.^.^.^^y.y^y^-.^.^^^.^.^.^.^^^o\-\-rKyK^, for value Received, u-ith interest at the rate of per cent per annum, after muturity until paid. Ira Willis X have transferred and delivered to said Union Trust Company, as Collateral Security, for the payment of this and of any otherliabilities of the undersigned to said payee, due or to become due , or that may hereafter he contracted . the following property, value of which is Twenty-sBvefi thousund five hundred ^.^^^^nouars. viz: Three hundred seventy- five shares^ Chicago^ Milwau- kee &* St. Paul Railroad Stock. Certificates: No. 3114 for 100 shares y No. 3I15 for200 shares and No. 3476 for 175 shares And the undersigned hereby give the said payee and assigns authority to sell the said property, or any partthereuf, orany substitutes therefor, and all additions thereto, on the maturity of the above note, or any time thereafter, or before, in the event of the said security depreciating in value, at any public or private sale, without advertising the same, or demanding payment or giving notice, with the right to said payee and assigns themseh-es to be the purchasers, u-hen sale is made at any brokers' board or public sale. And after deducting all costs and expenses, to apply the residue to the payment of any, either en- cdl liabilities as aforesaid, as said payee or assigns shall elect returning the overplus to the undersigned; and in case the proceeds of the sale of said property shall not cover the principal, interest and expenses, the undersigned engages to pay the deficiency forthwith after such sale, u-ith legal interest. Ira Willis CHAPTER XVITT. FORM OF DRAFT AND NOTE. 360. Formality Not Required. — No particular form of words is essential to constitute a bill or note. All that is necessary is that such instruments contain the essential requisites as previously explained. sei^Ye give a detailed analysis of the following forms which are in general use, in order that the student may see the composition or make-up of a draft and note from the beginning of the date to the completion of the same by the signing of the signature: FORM OF DRAFT AND NOTE. 59 Form 1. — Foreign Bill of Exchange.* — (Drawn at Sight.) Form 2. — Inland Bill of Exchange. — (Drawn at Thirty Days' Sight.) £^-'l^P^^'^>^ Of -''&inding as against the acceptor and all subsecjuent parties and all prior parties (drawer and endorsers) who assent thereto. But prior parties who do not assent to the qualified acceptance are discharged from further liability. ^'-Suppose E. P. Ewers owes L. H. Young S500, and gives him the following draft on J. A. Lyons, who accepts it as illustrated below: QuALii'iED Acceptance. 7^^ ^i^z^-z-c-^^-z-^^^ /^^.f-'^^^ic^ O'-T^t^^C^i '(^^(£: 1-i>c^-oLia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentuckj' Louisiana ... - Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana 6 5 5 4 6 6 6 3 5 6 5 10 10 10 5 5 5 6 3 6 6 6 6 10 8 20 5 10 5 6 20 20 10 6 20 20 20 5 15 10 20 10 20 10 10 7 20 10 Nebraska Nevada New Hampshire New Jersey . . . New Mexico . . . New York . . . . North Carolina North Dakota . . Ohio Oklahoma .... Oregon Pennsylvania . . Rhode Island . . South Carolina South Dakota . Tennessee Texas Utah Vermont Virginia Washington . . . West Virginia . Wisconsin Wyoming 5 4 6 6 6 6 3 6 15 5 6 6 6 6 6 6 4 4 14 5 6 10 6 5 5 5 20 20 7 20 10 20 15 5 10 20 20 20 20 10 10 5 8 10 6 10 20 5 94 CERTU'IED CHECKS, CERTIFICATES OF DEPOSIT, ETC. ^''^The statute begins to run on drafts and notes the first day after ma turity. To illustrate, suppose Xgives his note to B, dated September 1, 1905, payable in one year. The note is due September 1, 190G. On September 1, 190G, the limitation begins to run, and if B does not bring his action to recover within three years from that time, i. e., September 1, 1909, his right to recover will be lost. "^'"The maker of a note is not discharged from liability if the holder does not demand payment at maturity, but, as previously stated, an endorser is, because his liability is only conditional. If an endorser waives protest and notice, then his liability will continue to run for the same length of time as the maker's. CASES. (Give reasons for answers.) 7G. A gives B his check on First National Bank. B presents the check to the bank and requests the bank to certify it, which the bank does. On the following day the bank fails. B seeks to hold A liable. Can he succeed?^" 77. A wishes to borrow $1000 of the First National Bank. The bank declines to give him the money on his own paper. A thereupon draws a draft on B, who accepts for A's accom- modation. A does not have the draft discounted, but at maturity brings suit against H, the acceptor, to recover the amount of the draft. Can lie succeed?^" 78. A gives his note to B in order that B might borrow money on it. B tliscounts the note at a bank. At maturity the bank brings an action against A for the sum secured on its face. Can the bank succeed?"^ 79. In the above case, to whom can A, the maker, look for reimbursement, should he be required to pay?^" 80. C lost a note, which was made payable to his order and which had not been endorsed before it was lost. Can C recover of the maker without giving him a bond of indemnity ?*«* 81. B's note, which was held by C, was destroyed In- fire. C sues B to recover on the note, but refuses to give B a bond of indemnity. Can he succeed?^*** 82. B executed a note payable to C, or order. C endorsed the note in blank to D. D, through no fault of his, lost it. At maturity, D gives B a lx)nd of indemity antl rocovcre on the note. A bona fide holder of the note sues B, who sets up as his defense that the note having Ijeen paid, he is no longer liable. Is this a good defense?^'" 83. C, the holder of B's note, neglects to demand payment until one year after the maturity of the note. Is the maker still liable?"^ 84. A note dated January 1, 1905, payable in one year, is not presented for payment until February 1, 1908. Payment being refused, the holder notifies the eudori^ers. Are the endorsers and maker liable?**' QUESTIONS FOR REVIEW. 1. Define negotiable paper. 2, What is meant by non-negotiable paper? .3. How is non- negotiable paper assigned? 4. What are the rights of the assignee of non-negotiable paper? 5. \Miat is t^e rule as to passing title to negotiable paper when the transferrer has no title him- CERTIFIED CHECKS, CERTIFICATES OF DEPOSIT, ETC. 95 self? 6. Define a Bill of Exchange. 7. What is a promissory note? 8. How many parties to a draft? 9. How many parties to a check? 10. Who are the parties to a note? 11. What are the essential requisites of negotiability? 12. What is meant by giving commercial paper as escrow? 13. What effect have additional stipulations on the negotiability of commercial paper? r4. Are notes which contain additional stipulations good contracts as between the imniediatt parties? 15. What is meant by remote parties? 16. May an endorsee have a better title than m endorser? 17. What is a judgment note? 18. Define collateral note. 19. Is the date of the note essential to its negotiability? 20. Who is the payee of commercial paper? 21. How must the amount be stated? 22. What do the expressions "value received" and "value received and charge to my account" mean? 23. Who is the drawee of a draft? 24. What is meant by days of grace? 25. How does the drawee fasten his liability on a draft? 26. Is a verbal acceptance binding? 27. May the acceptance be made on a separate paper? 28. When may the acceptance be made? 29. What is a general acceptance? 30. Define qualified accep- tance. 31. What is the effect of a qualified acceptance on the liability of the drawer? 32. Is the drawer still liable after a general acceptance by the drawee? 33. What is an endorse- ment? 34. How many kinds of endorsements? 35. What is a blank endorsement? 36. How may paper be transferred when endorsed in blank? 37. What is a full endorsement? 38. May the holder change a ])lank endorsement to one in full? 39. What is a qualified endorsement? 40. Define conditional endorsement. 41. What is the effect of a restrictive endorsement? 42. If a party puts his name on the back of a note, when will he be considered a surety? 43. When maker? 44. When guarantor? 45. State the drawee's liability as to the drawer. 46. What is the drawee's liabihty as to the holder? 47. What is the acceptor's liability? 48. What does the acceptor conclusively admit and warrant to a bona fide holder? 49. Define drawer's liability. 50. What is an endorsee's liability? 51. What does an endorser conclusively admit and warrant to a bona fide holder? 52. State the liability of an endorser without recourse. 53. What steps must be taken by the holder in order to make absolute the liability of a drawer or endorser? 54. When must a draft be presented to the drawee? 55. What is meant by demand for payment? 56. What is meant by protesting commercial paper? 57. What does protest comprise? 58. Who may give the notice of dishonor? 59. To whom should notice of dishonor be given? 60. When must the notice of dishonor be given? 61. What must the notice contain? 62. Why are notes, checks, drafts, etc., protested when the law does not require it? 63. What is meant by a waiver of notice and protest? 64. What constitutes a bona fide holder? 65. What are the defenses that may be set up against a bona fide holder and defeat his rights to recover? 66. What is a check? 67. State the differences between ? check and a draft? 68. What is a certified check'' 69. What are the effects of certification? 70. Define Certificate of Deposit. 71. What is meant by accommodation paper? 72. Can the owner of lost paper recover from the parties priniarii\- liable? 73. Can title to commercial paper De made through forged signatures? 74. What is meant by Statute of Limitations? 96 AGENCY. ANALYTICAL OUTLINE OF AGENCY. Agency defined. Agency a form of employment. Who are principals. Who are agents. Capacity of parties / 1. WTio may be nrincipals. \2. Wi ■ ■ /ho may be agents. f 1. Conduct. IIow agents may be appointed -j 2. Verbally. (. .3. Written instrument Powers of agents. Classes ; *• fl. W'i \2. Un ithout seal. Jnder seal. General.- Special. - —Authority of. -Autliority of. 1. To third persons. 1. On contracts. 2. For torts. 9. Principal's. 1. Liability 10. Agent's 2. To agent [ 3. Broker's rights. Rights against agent. Rights against third persons 1 Duties and liabilities to his principal {I: Compensation. Advances. General agent Special agent. Negligence. Willful acts. Fraud. Criminal acts. General liability. Defenses of agent against principals. Good faith. Follow instructions. Skill and diligence. Depositing money in principal's name. Mixing property. Keeping accounts. 1. On contracts 2. Liability to third persons. When an agent is not known to be such. Not known for whom he acts E.xceeds his authority. By form, of contract. Agrees to become so. f 1- ill. Termination •; 4. 2. For torts. Revocation of the principal. Renunciation by the agent. By lapse of time. Cnmnletion or extinction of subj'^rt matter. Insanity of principal or agent. Death of principal or agent. Bankruptcy of principal. AGENCY. 97 CHAPTER XXVIII. AGENCY. 496. Agency Defined. — Agency is a legal relationship founded on a contract, express or implied, by means of which one party gives authority to another to carry on business for him. He who, being competent to do an act for his own benefit, or on his own account, employs another person to do it, is called the Principal, and he who is thus employed is called the Agent. The relation thus created is called an Agency. The law of agency, probably, enters into every business enterprise in the world. It is almost impossible to conceive the idea of a single person carrying on his business without some assistance. If assistants be employed to represent the principal there is then the relation of principal and agent. 497. Agency a Form of Employment. — Many of our writers on agency seem loth to recognize that agency is a form of employment. Yet in dealing with the principal's liability for the agent's torts they invariably introduce large selections from the law of master and servant. It is true that "employment" is a broader term than "agency," but in dealing with this aspect of the subject we use the term "employment" to mean employment for the purpose of bringing the em- ployer into legal relations with a third party. The business of a corporation is entirely conducted by agents. Even the huckster and cobbler have their agents. The rules and principles of agency are not numerous nor in themselves complex, but difficulties often arise in their application which makes the subject quite technical and complicated. 498. Who Are Principals. — A principal is one who gives authority to another to do some act for him, or who adopts the unauthorized acts of another. A employs B as his solicitor. A is a principal and B an agent. 499. Who Are Agents. — An agent is one duly authorized to act on behalf of another, or one whose unauthorized acts have been duly ratified. From this definition it will be observed that whenever one person employs another to represent him, or ratifies the unauthorized act of another, the person so employed, or v/hose unauthorized acts arc ratified, is an agent. If A, unknown to B, should buy a carload of watermelons for B, and the latter receive and pay for the same, A would be an agent, because B adopted A's unauthorized act. tt AGENCY. CAPACITY OF PARTIES. 500. Who May Be Principals. — Everyone of full age and of sound mind may be a principal, unless laboring under some legal disability. A principal must be able to contract. 501. IiJants. — Infants are generally incapable of appointing an agent. It has, however, been decided that an infant 'may appoint another to do an act '.vhich will be beneficial to him, but not to do an act which will be to his prejudice. 502. Idiots and Lunatics. — They are wholly incapable of appointing an agent, because they have no contractual capacity. 503. Who May Be Agents. — Any person, except a lunatic, idiot or child of very tender years, may be appointed an agent. An infant may act as an agent, because his act is not his own, but that of his principal. Therefore, if the princi- pal have capacity to contract the agent need not have, because the acts per- formed by the agent are not in his name or on his account, but in the name or on account of his principal, who has contractual capacity. 504. How Agents May Be Appointed. — An agent may be appointed bj^ con- duct, verbally or by written instrument, sealed or unsealed. The relation be- tween principal and agenf originates in a contract; therefore, no one can be made the principal of another without his consent. Neither can a person become the agent of another without that other's consent, expressed or implied. ^"^A person may, however, ratify the unauthorized acts of another, thus creating the relation of principal and agent. The ratification must, to be valid, be with full knowledge by the principal of all the material facts in the case. A sent B money with which to purchase a lot on Charles street. B, believing a better investment could be made by purchasing a lot on Bolton street, so invested the money, and wrote A that "the property was purchased and payment made." A was sued for the balance of the purchase money, but refused payment, because he had not authorized the purchase of the lot on Bolton street, and that although he had ratified the purchase as represented to him, he was not bound by such ratification, because the agent did not purchase the property he was instructed to buy, and in making his report he concealed the fact that he had violated his instructions, and led him to believe the property on Charles street was purchased, so that the ratification was not made with full knowledge of all the material facts. A's defense is good. He need not pay the purchase money. Had the agent informed B that he had bought property on Bolton street, and the principal consented to such purchase, the principal would be bound, because of his ratifica- tion of the agent's acts, although they were unauthorized. The agent is liable to the jiH-inoipnl for damages and a return of the money for violating his inntructione. 506. Appointment Under Seal. — It is never necessary that the authority AGENCY. 99 given to the agent should be reduced to writing, signed and sealed by the prin- cipal, except where the thing to be done by the agent requires a sealed instru- ment. For instance, if A appoint B as his agent to sell and convey certain real estate belonging to A, then B, as he has a deed, which is a sealed instrument, to execute, must receive his authority under A's hand and seal. An appointment thus made is called "power of attorney;" that is, A gives B a power of attorney, which may be general in its nature, i. e., to do and perform every act requisite and necessary to be done in the principal's business, or limited, i. e., to do s^'me special or particular thing. Power of Attorney. 507. General Form. — For any specific act: KNOW ALL MEN BY THESE PRESENTS, thai I, J, H, Easterda)) of the City of Toledo, Ohio, do hereby appoint J. U. Dennis, of the City of Chicago, Ills., to be my agent and attorney for me and in my name, to {here insert the act or acts to be done by the attorney). As 'witness my hand and seal this first day of September, in the year nineteen hundred and five Test: C, L, M err t ken, J, H, Easterday, [seal] Power of Attorney. 508. Mercantile Agent. — To manage personal business: KNOW ALL MEN BY THESE PRESENTS, that I, Willis Myers, of Boston, Mass., do hereby constitute, nominate and appoint Philip Maguire, of Boston, to be my true, sufficient and laiuful attorney, for me in my name, place and stead, to ask, demand and sue for, recoill be located in the City of Seattle and the State of Washington. 4. WE DO FURTHER CERTIFY, That the aggregate of the Capital Stock of the said corvoraticn is T')i?enty Thousand Dollars {$20,000), and that the said Capital is di^3.nd 'zuill not at any time assign this agreement, or the property thus let or any portion thereof, le for B's misconduct?"' 4. A agreed to build a warehouse for B and to have it completed within one year. The per- formance of this contract was guaranteed by C. It was found that A could not complete the building within a year, and it was agreed with 1^ that the latter was to extend the time for com- pletion one month, and that A should forfeit $500 for extension of time thus granted him. A absolutely failed to complete the building in the time thus agreed upon. Is the guarantor liable?"^ 5. The Fidelity Trust Co. guaranteed the faithful performance of B as paying teller of the First National Bank for one year. Two months after B entered upon his duties as teller he embezzled $3000. The bank having discovered the embezzlement, made an agreement with B that if he made good the amount they would not prosecute him and would still allow him to retain his present position. At the end of the j^ear the company renewed his bond for his personal integrity and honesty, not having any knowledge of B's misdoings. In the second year B again embezzled $12,000 of the bank's money. The bank sued the Fidelity Trust Co. to make good the money B had appropriated for himself. Is the company liable on its bond?"^ GENERAL REVIEW QUESTIONS. 1. Defir.e guaranty. 2. Who is a guarantor? 3. What is the difference between the liability of a guarantor and a surety? 4. May a contract of guaranty be oral? 5. What is meant by subrogation? 6. When is a surety entitled to contribution? 7. What is a continuing guaranty? 8. Define guaranty of payment. 9. What is a guaranty of collection? 10. What is the difference between the liability of a guaranty of payment and of collection? 11. When will the considera- tion that supports the contract between the creditor and debtor be sufficient to support the con- tract of guaranty? 12. How may a surety be discharged? 13. When will an extension of time release a surety or guarantor? 14. What is the difference between a surety, guarantor and endorser? CHAPTER XLVII. FIXTURES. 735. Definition. — A fixture is a chattel that is annexed to real property in such a way as to become a part of it. Whether what is annexed is to be consid- ered permanent and intended to become a part of the realty depends upon the intentions of the annexer, which intention is to be inferred from his rel ation to the land, from the mode of annexati on and from the appropriation of the chattel to permanent use on or with the land. 736. The Right to Remove Fixtures. — How to determine what are fixtures, and the right to remove them, is the only question for consideration in a work of 166 FIXTURES. this nature. The tiuestion us to the exercising of the riglit of removal arises be- tween landlord and tenant, vendor and vendee, mortgagor and mortgagee. Per- manent ownership implies permanent improvements; therefore, chattels annexed to land by the owner are presumed to be permanent and a part of the realty. Temporary possession implies temporary improvements; therefore, improve- ments made by a tenant are presumed to be only temporary. A tenant, therefore will be permitted to remove improvements which he has made to the property, while a vendor will not be. But the tenant cannot remove the improvements if it will result in injury to the property, neither is he entitled to compensation from the landlord for the improvements he has made. 737. Degree of Annexation. — The old cases invariably hold that it is neces- sary that there should be some physical annexation of the chattel that it may become a part of the realty, but later cases hold that there need not be actual annexation; that a constructive annexation is sufficient to show that it was con- sidered to be permanent and a fixture. Keys to a house or fences on land are illustrations of constructive annexation. Physical annexation it only evidence to show that there was an intention to make it permanent. 738. If the Chattel Be Permanently Annexed, and Its Removal Would Injure the Property, It Cannot Be Taken Away. — The following cases show that articles may be fixtures and still not be permanently annexed to the realty. Gas and water pipes running under the floors and walls of a house are non-removable fixtures, but gas and water pipes fastened to the walls by means of hooks, and passing through holes in the floor, are removable when erected by the tenant. Chandeliers, burners and gas fixtures attached to the pipes by means of screws, etc., are generally removable. Such articles are considered as necessary furniture like carpets and pictures, but in the sale of a house, as it stands ready for occu- pancy, the gas fixtures will be included unless reserved. Stoves and furnaces put up in the usual way are removable by the party erecting them, but when built in the brickwork or chimneys they are fixtures, and not removable. In the sale of a saw-mill chains used in drawing up logs, which could be hooked and unhooked at pleasure, were held to be a part of the mill, being essential to its use as such. An organ built in the recess of a church, left for that purpose and nailed to the floor, the removal of which would destroy the architectural design, is a fixture and passes with the sale of the building. A church bell in a temporary framework alongside of a church, that would be used until the edifice would be ready for the reception of the bell, is a fixture, and not subject to execution as personal property. Rails lying along the line of an intended fence are considered as a part of the realty. Boards in a barn, and used as a permanent flooring, and iron posts placed on the land for the purpose of building fences, cannot be seized as personal property. Poles used for the cultivation of hops are a part of the FIXTURES. 167 realty, although lying piled upon the ground. Rail, spikes, ties, etc., brought on the property and designed to be attached to the soil are fixtures. Engine, boilers, burrs and mill iron brought to the mill are fixtures although not actually attached to the land, and cannot be seized upon execution. The signboard of a hotel, formerly hanging outside, and afterwards removed and fastened to the wall of a room by spikes, is a permanent fixture. 739. Machinery. — The question is often asked, "What machinery may be removed from the premises when property is sold or mortgaged?" It is not necessary that the machinery be actually annexed to the freehold. It may be made a part of the realty by appropriation. Troughs, duplicate pumps, slate- dressing machines, all visible on the property at the time of the sale, pass with the purchase, and cannot be removed by a vendor. Process kettles resting on a foundation under the floor, gasoline pots on brick foundations, which are neces- sary for the business for which the building was erected, are parts of it. Ponder- ous machines, kept in position by their own weight, are fixtures, and not remov- able. Casks, hogsheads and tubs, not fastened, are fixtures, if they are too large to pass out of any opening in the building. Loose tools about the premises are not considered fixtures. 740. Landlord and Tenant — Trade Fixtures.— The general rule is that all trade fixtures are removable. By trade fixtures we mean fixtures that are put upon the property for the purpose of carrying on trade. A tenant being a tempo- rary occupant, his erections are presumed to be made, not for the benefit of the real property, but for the better enjoyment of his possession. If the tenant give up possession of the property in as good condition as when he took possession the landlord has no reason for complaint. The foil wing strongly illustrate the extent to which the doctrine of the removal of fixtu es has been carried : 741. Fixtures as Between Vendor and Vendee, •Mortgagor and Mortgagee. — When real property is sold or mortgaged the fixtures oass to the vendee or mort- gagee, although the articles were annexed and used for the purpose of trade, man- ufacture, domestic use or ornament. The purchaser or mortgagee is clearly entitled to everything which has been annexed for the purpose of increasing its value or adapting it to the purpose for which it is used, and within this principle it has been held that bathtubs and pipes in a dwelling and counters in a store, etc., are fixtures, and not removable. Mirrors set in the walls, so as to become a part of them, are permanent fixtures. These rules as to the removal of fixtures may be changed or annulled by an agreement between the parties, but where no agree- ment is entered into concerning them the rules as laid down prevail. ''^^A wooden dwelling-house, two stories high, with a cellar of stone and a brick chimney, erected by the tenant for the purpose of carrj'ing on his business as a dairyman, may be removed by the tenant as a trade fixture. Likewise, a 168 FIXTURES. carpenter shop resting on blocks, and erected by a tenant, is a trade fixture, and so is a bowling alley. An icehouse on sills set in the ground, and a water tank with a sink, put up by the tenant of a hotel, may be taken away. Platform scales, counters, shelves and partitions are removable as trade fixtures. ^"But if the mode of annexation be such as to indicate permanent improvement, or if the removal will cause permanent injury to the freehold, then the articles cannot be taken away. Thus, a conservatory added to a house by a tenant, being of a permanent character, the removal of which would greatly injure the property, cannot be taken away, nor can a summer-house, which has been occupied as a dwelling, nor glass put in windows. 744. When Tenant Must Remove Fixtures. — The tenant, as a rule, must remove his fixtures before the expiration of his lease. If he a bandon posses- sion he cannot re-enter the premises and take away his chattels, because if he leave without removing them it is presumed that he has given them to the landlord. 745. Remedies for the Protection or Recovery of Fixtures. — An injunction will be granted to restrain a tenant, vendor or mortgagor who is in possession from severing fixtures. Replevin also lies to recover fixtures wrongfully removed. CASES. (Give reasons for answers.) 1 . A rented a hall for dwelling purposes, and put in several partitions dividing it into rooms. At the expiration of the lease what are A's rights as to removing the partitions?"* 2. In Case No. 1, if the right of removal be denied A, can he recover from the landlord the expense of putting in the partitions?"' 3. A sold a farm to B, and before giving up possession claimed the right of removing a wind pump which he had erected only the day before the sale. Who has a right to the pump?^" 4. A rented a building of B and put in gas fixtures and ran steam pipes along the walls fastened by hooks for the purpose of heating the rooms. A number of holes were bored in the floor and walls to insert the pipes. Has A a right to take away the improvements when he vacates ?'«' '« 5. A rented a storeroom and put in counters, shelves, offices, etc., for the purpose of carrying on a business as a dry goods merchant. The counters and offices were nailed to the floor and the shelving securely fastened to the walls. Has the tenant a right to remove the fixtures when he vacates the property?'" 6. In Case No. 5, what effect does the degree of annexation have upon the tenant's right to remove the fixtures?'" 7. A, who conducted a retail clothing business in a store which he owned in fee, sold it to B. B claimed the fixtures that were in the building which had been used by A. A denied this fight, and claimed the fixtures as his, as he expected to open another store. To whom do the fixtures belong?'". '*» BAILMENTS. 169 8. A put valuable stained glass windows in a house wliicli lie liad rented from li for a term of years. At the expiration of the lease what are the tenant's rights as to removing the stained glass window panes ?'^^ GENERAL REVIEW QUESTIONS. 1. What is a fixture? 2. To what degree must a chattel be annexed in order to constitute it a fixture? 3. What is meant by a constructive annexation? 4. What are trade fixtures? 5. What is the rule as to the right of a tenant to remove trade fixtures? 6. What right has a vendor to remove fixtures? 7. Why is a tenant allowed greater privileges to remove improve- ments he has made than a vendor? 8. When must a tenant exercise his right to remove fixtures? CHAPTER XLVIII. BAILMENTS. 746. Definition. — Bailment embraces all cases in which the owner of personal property places it in the hands of another for some special purpose. These special purposes include borrowing, lending, letting, hiring of things and services. The person who gives up the possession of the property is called the bailor, and the person receiving the property is called the bailee. Merely the possession, and not the ownership of the property is transferred. The subject is divided into five specific classes; 1. Deposit; 2. Mandate; 3. Loan for use; 4. Pledge; 5. For hire. 747. Deposit. — Whenever a person receives property from another, and agrees to care for it, and then returns it to the owner without receiving compen- sation for the care bestowed upon the property, it is called a deposit. B stored a part of his household goods in C's house. C, not making any charge for this ser- vice, creates a bailment by deposit. Holding the property for the sole benefit of the bailor gives the bailee the right to terminate the bailment whenever he desires. If the bailor fail to take possession of the chattels when so directed the bailee may remove them from his premises regardless of the result to the prop- erty. Thus, in the above illustration, if B refuse to remove his household goods stored in C's house when so ordered C may place the goods in the street, and if they be stolen or destroyed he will not in any way be liable. This kind of bail- ment, being for the benefit of the bailor, the holder of his property need exercise only slight care, and is liable for only gross negligence. If C had agreed to store B's household goods, and instead of doing so, had let them remain in his yard 170 BAILMENTS. unsheltered, he would be liuble to H fur dumagCRi to the goods, because it was gross negligence on his part. The bailee has no right to use the property, except when it is necessary for its preservation, and when returned it must be with all its increase, viz., animals with their young. 748. Mandate. — In mandate or commission the bailee agrees to bestow some labor or service, without compensation, upon the property received. The prin- cipal and really the only distinction between a deposit and a mandate is that in the former keeping the property is the j)rincipal feature, while in the latter per- forming some service upon the property bailed is the essential requisite. In both bailments the service of the bailee is gratis, and the bailee is liable only for gross negligence. A, learning that B was going to the city, gave him $200 to pay his note due at a bank. While on his way B was robbed of A's money, also $150 of his own. B was cautious and careful of the money entrusted to him. He is not liable to A for the loss, because he exercised as much care over A's money as he did his own, and, therefore, was not grossly negligent. ^^^While a bailee in this class of bailments is not liable to the bailor for non- feasance, yet he is liable for malfeasance. A agreed to paint B's buggy free of charge. Subsequently he refused to do so. This does not make him liable for breach of the agreement. But had A used the buggy and broken it he would be liable for the damages. 750. Liability for Non-Performance. — But it is quite generally held that if the bailee enter upon a discharge of his trusts he will be bound to execute it or pay damages. Notwithstanding that the services are gratuitous, yet the delivery of the thing bailed is a sufficient consideration to require the bailee to perform his agreement when once he undertakes it. Thus, if A had partially painted B's buggy, and then refused to finish it, he would be liable to B; or if A agree to deliver an important letter or message for B, which B gives him, and he neglects to do so because it would put him to some inconvenience, he will be liable to B for the damages he may sustain. 751. Loan for Use. — A loan for use is the delivery of property by one person to another to be used by him for his own personal benefit. This class includes all gratuitous loans. It being for the sole benefit of the bailee, he is required to exercise the highest degree of diligence, and is liable for the slightest negligence. F, wishing to make a display of jewelry at an exposition, and not having a suffi- cient supply of his own, borrowed several valuable diamonds of G. The jewelry was placed in a burglar-proof safe, made especially for the purpose. Robbers blew open the safe and carried off the jewelry. F need not incur the loss, because it was not due to any neglect or want of proper care or diligence on his part. 752. How to Be Used. — The thing borrowed must be used for the purpose for which it was loaned. This rule is most rigidly enforced. If the thing be used in BAILMENTS. 171 any other way, or for any other purpose than that for which it was obtained, the bailee must make good the loss. A borrowed B's horse and buggy to drive to a certain place. He tied the horse in the usual way to a hitching post. The horse became frightened, broke loose and ran away. The carriage was demolished and the horse injured. A need not make good the loss. The owner is the loser. But had A driven to some other place, though he might have used the same degree of care and diligence, he would have been liable, because he disregarded the pur- pose for which he borrowed the horse and JDUggy. The borrower has a right to the use of the property for the time for which it was borrowed, even though the lender make a request for its return before the expiration of that time. For instance, M borrowed D's wagon for ten days. In a couple of days after it was loaned D wanted to use it and asked M to return the wagon. M may keep the wagon for the full time of the bailment. 753. Pledge. — It is a pledge when one party gives personal property to another to hold as securitj^ for the payment of some debt or performance of some act. The person transferring possession is called pledgor; the person receiv- ing it, pledgee. This is what may be termed a collateral security. Anything that is personal property may be pledged. 754. Duty of Pledgee. — The pledge being for the benefit of both parties, the pledgee is required to use only ordinary care. The pledgee is not entitled to use the property if its use will lessen its value. Thus, if an overcoat be pledged to secure the payment of a debt, the pledgee would have no right to wear it. But if a horse be pledged it should be used sufficiently to keep it in health. 755. Right to Sell. — The pledgee has a right to retain possession of the prop- erty pledged until the debt be paid, but he cannot hold the property to cover debts other than those for which the pledge was made. If the debt be not paid when due the pledgee may either sue on the debt or sell the property. The prop- erty is not forfeited to the pledgee. He must notify the pledgor to redeem the property by paying the debt, or otherwise it will be sold. If, after giving a reasonable time, the debt be not paid, the holder may sell the property at public auction. He should be sure that it is an open and fair sale. Or, if he prefer, he may file a bill in equity asking for a foreclosure, leaving the sale in the hands of the court. Therefore, after default by the pledgor, the pledgee may either sue on the debt, sell the property at public auction, or have it sold by the court through its officers. When notes are pledged they cannot ordinarily be sold. The pledgee must wait until maturity of paper, and then collect on the note in the usual way. ^^^B gave C his note at thirty days for $500, and a pair of horses and buggy to hold as security. The note not being paid at maturity, C, without giving any notice to B, sold the horses and buggy for $300, while they were worth at least Subsequently, B tendered $500 in settlement of the note, at which time 172 BAILMENTS. he was infonncil t luit tlie horses and buggy hail hccn sohl. C must make good to B the value of the property, for he had not given the required notice. Had C notified B that he would sell them if the note were not paid within a certain time, and had accordingly made the sale, he would not have been liable to make good the value of the jiledge. for it was in conformity with the recjuirements of the bailment. 757. Pawnbrokers. — The business of a pawnbroker comes under this head, which is regulated entirely by statute. One of the main provisions which is uni- versal is that the pawnbroker must make a report to the police department every day at noon of all the property that was pledged with him the previous twenty- four hours. They must not only describe the property, but give a full description of the person who pledges the property. This is done to assist the officers in locating stolen goods. 758. Bailment for Hire. — Bailment for hire includes all transactions where pro])erty, labor, services or care of property is hired of another for a conside ration. ThTs is the most important branch of bailments, as it is the one commonly repre- sented in business affairs. It is divided into the following classes: 1. Hire of things; 2. Hire of services; 3. Hire of custody; 4. Hire of carriage. 759. Hire of Things. — Hire of things is the hiring by one person of the per- sonal property or chattels of another for a compensation. The hiring of a horse and buggy of a liveryman represents this class. If the hirer use the property for any purpose other than that for which it was hired he will be liable for any loss or damage. ""^A hired a pair of horses and buggy of a liveryman to drive to a certain city. He, instead, hitched the horses to a heavy wagon, loaded with grain, and drove them to the same city that he intended to drive them in the carriage. Not being used to heav}'^ hauling, one of the horses injured himself and became forever afterwards absolutely worthless. The hirer must make good the loss. Had the horses given out while driving them in the carriage, or sprained themselves in some way, the hirer would not have been Uable. ^"^ The thing hired must be returned to the letter in as good conditio n as when received, excepting ordinary wear and unavoidable accidents. If a buggy spring or axle should break the loss falls on the owner or letter. In case of animals, if a horse should be taken sick the hirer should employ a veterinary doctor, and his expense would have to be borne by the letter, for there is an implied promise in all these cases that the thing hired is capable of doing that for which it was hired. 762. Hire of Services. — When one delivers property to another to have some work done upon it for a compensation it represents a hire of service. Leaving a suit of clothes with a tailor to have cleaned and pressed is an illustration of this class. This differs from mandate in that the bailee's service in a mandate is gratis, while in a hire for service his services must be paid for. COMMON CARRIER. 173 763. Workman's or Bailee's Duties. — The workman may employ others to do the work for him, provided it was not his own personal skill and service that was contracted for. B employs a noted artist to paint a picture on valuable material furnished by himself. The artist has the work done by one of his stu- dents. B need not accept the painting, and can compel the artist to pay him for the materials furnished. 764. Skill Required. — The workman must possess the necessary skill to per- form that which he undertakes, and if he does not he will be liable for damages. A, whose occupation is that of a blacksmith, represented himself to be a piano tuner, whereupon B let him tune his piano. B could not replace a number of the pieces which he removed, and otherwise damaged the piano. B is not only civilly liable to make good A's loss, but also criminally liable for obtaining money under false pretenses. The workman may retain possession of the property until his services are paid for. 765. Hire of Custody. — A hire of custody embraces cases where one person engages another to keep his goods. The principaf element is the custod}^ of the goods. The bailee has no work or labor to bestow upon them. The bailee is required to use only ordinary care, as it is for the benefit of both parties. A stores his household goods in B's warehouse, and for this privilege pays $4 a month. The warehouse and contents are destroyed by fire. A must bear the loss unless he can show that the fire was caused by B's carelessness. Going through the building with a lighted cigar would be carelessness, which would make the warehouseman liable in case of fire. Should the warehouseman deliver the goods to anyone other than the right party he will have to make good the loss. 766. Recapitulation. — It is very essential that the student bear in mind the degree of care that is required of the bailee in the different bailments. In a De- posit and Mandate the bailor receives all the benefit; therefore, the bailee need exercise only slight care, and is liable only for gross negligence. In Loan for Use the bailee receives all the benefit; therefore, he must exercise the greatest care, and is liable for the slightest neglect. In Pledge and Bailment for Hire both parties are benefited; therefore, the bailee is required to exercise ordinary care, and is liable for ordinary negligence. CHAPTER XLIX. COMMON CARRIER. 767. Definition. — Where one holds himself out to carry the goods of all persons indifferently he will be considered a common carrier, and will incur the liability of that character. Of this description are railroads, ships, express 174 COMMON CARRIER. companies, ferrymen, wagoners and teamsters transporting goods as a public- employment. 768. General Duties and Liabilities. — A common carrier must convey the goods of any person ofTering to pa y his hire, unless his carriage already be full or the risk sought to be imposed upon him be extraordinary, or be such as he is unable or unaccustomed to assume. A railroad company is liable for refusing to receive goods without a valid excuse. A common carrier stands in the same posi- tion as an insurer of property, and is liable for every loss or damage to it while in his custody, no matter by what cause, unless it were by "Acts of God," such as storms and floods, or the public enemy. Public enemies means persons who owe allegiance to a country that is at war with ours, and not highway robbers and burglars. Even his entire faultlessness does not excuse him. Thus, he is liable for accidental fire or robbery. His liability continues until delivery, which must be wdthin a reasonable time after the goods reach their destination. Delivery must be to the right person, and if not so delivered the common carrier is liable, even though the consignee's address was erroneously given. If the consignee refuse to take the goods, the carrier immediately notifies the consignor to that effect, and asks for instructions as to w^hat disposal to make of them. 769. Liability Limited by Notice. — It is now well settled that a common car- rier may limit his liability by express agreement as insurer of the property intrusted to him. But when the notices are given by advertisements in the newspapers, by the posting up of placards or printing them on the back of a bill of lading, they are generally regarded as insufficient. It is generally held, however, that the shipper, by accepting a bill of lading, makes the conditions printed on its face a part of the contract, and is bound thereby. 770. Cannot Limit Liability for Negligence. — The courts construe these con- tracts as only exonerating the carrier from liability from loss or damage not caused by his own fault, for if he be guilty of misconduct or gross negligence, he is chargeable with the loss occasioned thereby, and the contract will not permit him to escape his responsibility. Therefore, a common carrier cannot by any means exonerate himself from liability for loss caused by negligence of his own or of his servants. 771. Duty to State Value of Goods. — The bailor is not bound to state the value of goods unless inquiry be made; then it must be given. Railroad com- panies usually limit their liability for the loss of trunks and parcels to SIOO. And a provision that a carrier will not be liable beyond a certain amount, unless the true value be disclosed, is enforceable. If there be any fraud or unfair conceal- ment whereby his risk is increased or his vigilance lessened it will exempt the carrier from responsibility. 772. Connecting Carriers. — Where goods arc dplivered to a carrier and COMMON CARRIER. 175 raarked for a destination beyond his own line, without any direction as to their delivery, he is bound only to deliver them at the end of his line. Neither is he bound to receive and carry the goods beyond his line; but if he do agree to do so, the other carriers are his agents, and he is alike responsible for loss or damage on their lines as well as his own. 773. Carriers of Passengers. — Common carriers of passengers are not per- mitted to discriminate against a particular person, class or race. They must carry all persons who offer their tickets for passage, unless they be afflicted with some contagious disease, or otherwise be in a condition unfit for transportation. The carriers of passengers are not held to as strict an accountability as carriers of merchandise. They are, however, liable for any injury to passengers caused by their own or their servants' neglect. Common carriers have, however, a right to adopt rules and regulations for the carriage of passengers, and should they violate them it is at their own risk. Railroad companies, having invited the public to take passage on their cars, owe protection to passengers from insults and indig- nities on the part of others. The conductor of a passenger train violates the train dispatcher's orders, which causes a collision. Notwithstanding the act of the conductor was willfull on his part, the railroad company is liable for any damage or loss of life. CASES. (Give reasons for answers.) 1. A and B were farmers. A allowed B to store his farming implements in his barn, which, with all its contents, was burned. The fire was caused by A's throwing a lighted match on the barn floor, which immediately ignited. What remedies, if any, has B?'" 2. A doctor who gratuitously rendered surgical aid to parties who had been injurec' in a wreck was sued for malpractice. What is his liability?'"* 3. A left a pair of shoes mth B to have repaired. They were stolen from B's shop. Who must bear the loss?"^- "' 4. A hired a dress suit of B. A was caught in the rain and the suit ruined. Who must bear the loss?'*' 5. B shipped her piano to Denver, Col., over the B. & O. R. R. It went through the hands of three different transportation companies. When delivered the piano was much injured, due to rough handling. Who is liable for the damages?'*'- "^ 6. A hired B's buggy to drive to a certain city. While driving at a rapid pace he ran into a rut and broke the axle. Who is responsible?'""- '"" 7. D borrowed $175 of B, and gave his diamond ring as security. What procedure must B take to make good his claim out of the pledge?'^* 8. A gives his watch to B to keep for two weeks. B makes no charge for this service. B put A's watch in the bureau drawer, where he kept other valuable jewelry of his own. The watch was stolen. Who must bear the loss?'*' 9. A sold his household goods to B, and represented that the storage on them was paid. 1 70 COMMON CARRIER. The storage, in fact, was not paid, and the warehouseman refused to let B have the goods until he paid the storage. What are B's rights and liabilities?'" 10. A merchant lost a large shipment of perishable fruit because of the failure of the railroad company to furnish him with cars by which he might ship the fruit to another city where there was a demand for it. The railroad company claimed that it was impossible to secure more cars. The merchant sued the company for liis loss. Can he succeed?"" 11. A hired B's horse to lie used in plowing a field. The horse died from unknown causes. Is A lialile to B for the value of the horse?"" 12. In case No 11, had A used the horse to drive to a certain city, would his responsibility be the same?"' GENERAL REVIEW QUESTIONS. 1. Define Bailment. 2. Bailments are divided into how many classes? 3. What is meant by a Deposit? 4. Define Bailment by Mandate. 5. What is the liability of the bailee in Deposit and Mandate? 6. If the bailee enter upon a performance of the bailment, is he required to finish it or pay damages? 7. What is a transaction called when property is delivered by one person to another, to be used by him for his own personal benefit? 8. In such a case, what is the liability of the bailee? 9. How must the thing borrowed be used by the bailee? 10. What is meant by a Pledge? 11. What may be pledged? 12. What is the duty of the pledgee? 13. May he use the property? 14. What are the three remedies which the pledgee has for realizing on the pledge? 1.5. What is meant by Bailment for Hire? 16. Define Hire of Things. 17. What is the hability of the bailee in this class of transactions? 18. What is meant by Hire of Services? 19. What is the duty of the workman or l)ailee? 20. What remedy has the workman to enforce payment for his services? 21. What is Hire of Custody? 22. Who are Common Carriers? 23. What are the General duties and liabilities of a Common Carrier of merchandise? 24. Can Common Car- riers by agreement limit their liability for damages caused by their own negligence? 25. Is a Common Carrier obliged to deliver goods beyond his own line of transportation? 26. Is a Com- mon Carrier liable for damages to the goods caused by another company to whom the goods were delivered for transportation? APPENDIX-STATE LAWS. CORRECTED JANUARY, 1912. Statutory Provisions. Rights and liabilities arising out of commercial transactions are, in the absence of statute, regulated by common law; but statute law has, in modern times, greatly modified many of the common law rights and liabilities. While the general provisions of the statutes are similar iamany of the states, in others they differ widely. Therefore, the purpose of this Appendix is to set forth in a brief and concise form the substance of the stat- utes. These special provisions, taken from the statute books of the various states, may be classified under the following defined terms: Statute of Limitations. By the rule of the common law, one who had legal grounds of com- plaint against another might suit his own convenience as to when he would call upon the latter to answer. But this rule proved to be productive of very great inconvenience and, not infre- quently, of great injustice. The states have, therefore, regulated by statute the time within which an action or suit at law may be instituted. The periods of limitation must be computed from the time the right to sue accrues. The length of the periods varies according to the nature of the action or claim. For example : in New York an action on contract must be begun within six years; an action to recover damages for a personal injury resulting from negligence, within three years; libel, slander, assault, etc., two years; and still other actions must be commenced within one year. If the action is not begun within the period prescribed by law, the claim is said to be "outlawed." A statute defining the time within which an action must be commenced is known as a "statute of limitation." Stay of Execution. After a j udgment is rendered against a defendant, who is then known as a judgment debtor, the judgment creditor may proceed to have the property of the judgment debtor sold to satisfy the judgment. In some states this procedure may be begun at once; in others, by giving a suitable bond, the debtor may secure a delay or postponement of the sale of his property. This is known as a "stay of execution." Exemptions. While the enforcement of the creditor's judgment is by sale of the property of the judgment debtor, yet the law wisely provides that the debtor may retain a portion of his property free from execution. This right is known as "exemption." The common law allowed the debtor only the necessary weai'ing apparel. It was once held in an old English case that, if the defendant had two gowns, the sheriff might sell one of them. But in modern times a considerable amount of property, both real and personal, is exempted from execution (sale by the sheriff) by the statutes of the several states. If the debtor is without property, the creditor may attach money due the defendant in the hands of a third party, i.e. , attaching the salary of defendant. This process is called ' ' garnish- ment." In case of attaching salary, only a certain portion, or the excess over a certain amount can be garnisheed. This is regulated entirely by statute. Negotiable Instruments Law. (See Par. 298, p. 44.) This is a statute making the law applicable to negotiable paper uniform in all states in which it has been adopted. Up to Janu- ary 1, 1907, a majority of states have adopted it. The act in no way controls the law relating to non-negotiable paper. It sets at rest many controverted questions. It declares that addi- tional stipulations relating to attorney and collection fees, exemptions, etc., shall not destroy the negotiable qualities of a commercial instrument otherwise negotiable. Further, that an antecedent debt shall be a sufficient consideration to constitute one a holder in due (regular) course; that a material alteration will not discharge the maker or acceptor, but that, as to a holder in due course, he shall be liable according to the original tenor of the instrument; that nondelivery by the maker or acceptor of a completed negotiable instrument is not a good defense, as against a holder in due course; that an oral acceptance is invalid; that a seal shall not affect the negotiability of the instrument, and that the obligor no longer pays an instru- ment conditionally indorsed at his peril. These are a few of the more important questions that are settled by the act. Statute of Frauds. This is an old English statute requiring certain contracts to be evi- denced by some written memorandum. Its essential provisions have been adopted in most of the states The part of the statute relating to the sale of goods, wares or merchandise has received greater modification than any of the other provisions. The English statute provided 177 17S APPENDIX. that if llip sale amounted to ten pounds sterling or more, the contract could not be enforced unless there was a part delivery and acceptance, or part payment or something given in earn- est to bind the bargain, or unless some note or memorandum were made and signed by the party to be charged. The ten pounds sterling represents about $48.86 in legal tender of the United States. The majority of the states have set the amount at $50; others, at any value, and in some few states, this part of the statute has never been enforced. Interest. This term represents money paid for the use of money. The rate is fixed' either by law or by contract. The legal rate will prevail in the absence of express stipulation. Some states allow by contract a rate of interest in excess of that established by law; other states do not. When the rate of interest agreed upon is in excess of the legal or contract rate, it is said to be usurious, and the effect of a usurious rate upon the contract varies in the different states, as shown under this head in the laws of the states. Rights of Married Women. Under this head we shall give the statutory regulations as to the rights of married women. At common law a married woman had no contractual capacity. She could not bind herself by contract in any form, even for necessaries, except when living apart from her husband. Her personal property was vested in her husband, and he could dis- pose of it as if he had acquired it. This arose from the principle that they were considered as one person in law. These common law disabilities arising out of coverture have been greatly modified by statute. Chattel Mortgages. A chattel mortgage is a conditional sale of a chattel as security of a debt or the performance of some other obligation. Independently of statutes, a delivery is necessary to the validity of a chattel mortgage, as against creditors. The registration stat- utes simply provide a substitute for change of possession. Between the parties a change of possession is unnecessary. If there is a change of possession, registration is not required. The rights of parties interested in the mortgaged property are regulated almost wholly by statute, and are quite uniform in all states. LAWS OF ALABAMA. Statute of Limitations. Stated or Liquidated Accou7it — 6 years; open account, 3 years from date of last item or from time when, by contract or usage, the account is due. Commer- cial Paper — G years; if under seal, 10 years. Judgments — Court of record, 20 j'ears; justice of peace, 6 years. Execution. Judgments in court of record, no staj'; in jiistice of peace court, stay of 30 days if amount is less than $20 and CO days if more than $20 by giving bond to plaintiff in double the amount of the judgment. Exemptions. Personal Property — SIOOO, unless waived in writing. Homestead — Land with the improvements not exceeding $2000 in value ; may be waived by separate written instru- ment. M'awes — Of residents, $25 per month; of deceased employee, $100 in favor of widow or minor child. Statute of Frauds. Not in force as to the sale of goods, wares and merchandise. Other essential features have been adopted. InteiiEst. Legal rate by statute 8 per cent; by contract 8 per cent. Usury works for- feiture of the interest. Negotiable Instruments Law. Adopted 1909. Rights of Married Women. Same as if a femme sole, except that she cannot convey or mortgage her realty or waive homestead rights without husband joins in. She cannot become surety for her husband. Married women over 18 are relieved of disabilities of minority. Dower Rights — If no descendants and not insolvent, life estate in one-half; if insolvent, life estate in one-third; if she has separate, value of same is to be deducted from dower. Distrib- utive Share of Husband's Personalty — If no children she takes all; if but one child, one-half. Her share may be affected or wholly barred by her statutory separate estate. Chattel Mortgages. Void against creditors and purchasers \yithout notice. Must be recorded in office of judge of probate in county where mortgagor resides and in county where property is at date of mortgage. If removed before mortgage is satisfied, must be again recorded in county to which property is removed. LAWS OF ARIZONA. Statute OF Limitations. Accounts — 3 years. Commercial Paper — 4 years. Judgments — 4 years. Executions. No stay is granted. APPENDIX. ]79 Exemptions. Personal Property — S500. Homestead — To the value of $2500. Must be recorded. Wages. — Earnings for 30 days next preceding levy. Statute of Frauds. All contracts for the sale of goods, wares and merchandise must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract not exceeding 12 per cent. Negotiable Instruments Law. Adopted 1901. Rights op Married Women. Same as a femme sole after age of 18. Dower — If children widow gets life estate in one-third. If no children widow gets one-half absolutely. If no children and no surviving father or mother widow gets all. Community property goes to sur- vivor unless there are children, when one-half goes to survivor. Distributive Share of Husband's Personality — If there be children widow gets one-third. If no children widow gets all. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded with county recorder where property is situated and where mortgagor resides, if resident. If property is removed to another county must be recorded within one month. LAWS OF ARKANSAS. Statute OF Limitations. Accoimts — 3 years. Commercial Paper — 5 years. Judgments — 10 years. Execution. In all courts a stay is granted for 6 months. Exemptions. Personal Property — Head of family, $.500; to others, S200. Homestead — In country, 160 acres; in town, one-fourth acre; in each case not to exceed $2,500 in value. Wages — For 60 days, provided same added to personality is not more than exemption allowed. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $30 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 10 per cent. Usury works a forfeiture of contract-principal and interest. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Same as femme sole. Dower Rights — If children, life inter- est in one-third realty, and one-third personalty absolute. If no children fee of one-half of realty, not ancestral, as against all except creditors and one-third as against them. Also one-half of personalty absolute as against all except creditors and one-third as against them. If ancestral one-half for life except as to creditors and one-third as to ihem. Distributive Share of Husband's Personalty — If personal estate does not exceed $300 widow and childi-en get all. Chattel Mortgages. Void as to subsequent parties without notice. Must be filed and recorded in the office of the recorder where the mortgagor resides. LAWS OF CALIFORNIA. Statute of Limitations. Accounts — 3 years. Commercial Paper — 4 years; 2 years if executed out of the state. Judgments — In courts of record, 5 years; in justice of peace*courts, 2 years. Execution. 30 days. Exemptions. Personal Property — Specified articles. Homestead — Head of family, $.5000; others, $1000. Declaration must be recorded. Can be abandoned only by declaration which must be recorded. Wages — 30 days if necessary for the support of resident family. Wages of seamen, $300. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $200 and over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 7 per cent; by contract, no limit. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. May become sole trader by judgment of superior court and is limited in her investments to $500. She has absolute control of her separate property. Doiver Rights — Dower has been abolished, the following statutory provision being substituted therefor: One cliild surviving, widow gets one-half of realty and personalty; more than one child surviving, widow gets one-third of realty and personalty; if no children, father, mother, brother or sister, or children or grandchildren of brother or sister, widow takes all. Chattel Mortgages. Void as against subsequent parties without notice. IMust be recorded where mortgagor resides and also where the propert j' is located ; if property be removed it must be recorded within 30 days. ISO AFFENDIX. LAWS OF COLORADO. Statute OF Limitations. Accounts — 6 years. Commercial Paper — Oy^ars. Judgments — In court of record, 20 years; in courts not of record, 6 years. ExEci'TioN. In courts of record, stay for a reasonable time if levy be on personal property; in justice of peace courts, no stay. Exemptions. Personal Property—Specified articles. Homestead — To the amount of $2000; must be recorded. Wages — GO per cent of wages due. Statute of Frax'ds. Contract for the sale of goods, wares and merchandise for $50 and over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 8 per cent; bj- contract, no limit. Negotiable Lnstruments Law. Adopted in 1897. Rights of Mahrikd Women. May become a sole trader. Can convey property without consent of husband, but cannot bequeath more than one-half of it. Dower Rights — Dower has been abolished, the following statutory provision being substituted therefor: If there be children, the widow gets one-half of realty and personaltj'. If no children, widow gets all. Chattel ]\Iortgage.s. Void as to subsequent parties without notice. Must be recorded with the count}' clerk where property is located. LAWS OF CONNECTICUT. Statute of Limitations. Accounts — 6 years. Commercial Paper — 6 years; if non-nego- tiable, 17 year. Judgiyients — No limit. Execution. No stay. Exemptions. Personal Property — Specified articles. Homestead — To the value of SIOOO; must be recorded. Wages — $2.5. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, no limit up to 15 per cent. Negotiable Instruments Law. Adopted in 1897. Rights of Married Wo.men. Same as a femme sole. Dower Rights — Life estate in one- third realty. Distributive Share of Husband's Personalty. — If issue, widow gets one-third ; if no issue or legal representative of issue, widow gets one-half for all up to $2000 if married since 1877. Chattel Mortgages. Valid as to specified articles if recorded with town clerk where property is located. LAWS OF DELAWARE. Statute OF Limitations. Accounts — Sj-ears. Commercial Paper — 6 years. Judgments — 20 years. Executions. Courts of record, stay of G months is grunted; justice of peace cowr^s, 9 months. ExE.MPTiONS. Personal Property — Specified articles. Homestead — None. Wages — 50 per cent, if resident. Married women and infants all. Statite OF P'rauds. No provision as to the sale of goods, wares and merchandise. Other essential features have been adopted. Interest. Legal rate by statute, G per cent ; by contract , (i per cent. Usury makes void the contract. ^Vny one may sue for a sum equal to the amount loaned. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Can own property the same as a femme sole and contract in respect to same but cannot convey without husband's consent so as to defeat his curtesy. (Rights in her property.) Dower — If there be a child, widow gets one-third for life, of the realty left by her busband. If no child or issue of child, one-half for life. If no child or kindred, widow gets life estate in all. Distributive Share of Husband's Personalty — If there be children she gets one-tliird absolutely ; if no children but brothers and sisters, one-half, and if no kindred, widow gets all. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded within 10 daj'S vn%h the reeordor where property in flitiiflt*>d. lA^n is good for 6 y»fi«i. Then renewable rverv 3 vears. APPENDIX. lis I LAWS OF FLORIDA. Statute of Limitations. Accounts — 4 years. Commercial Paper — 5 years; under seal, 20 years. Judgynents — 20 years. Execution. A stay may be granted in the discretion of the court. Exemptions. Personal Property — $1000 to head of family residing in the state. Home- stead — leO acres in the country or one-half acre in the city. Wages — All wages are exempt. Statute of Frauds All contracts for the sale of goods, wares and merchandise must be in writing. Other es.sential features have been adopted. Interest. Legal rate by statute, 8 per cent; by contract, 10 per cent. Usury works a forfeiture of all interest. Negotiable Instruments Law. Adopted in 1897. Rights of Married Women. She has full trading rights by license granted by circuit court judge. Dower Rights — Life estate in one-third realty. Distributive Share of Husband's Personalty — If no children or only one child, widow gets one-half : if more than one child, widow gets one-third. Chattel Mortgages. Invalid if not recorded. Must be recorded in the office of the clerk of circuit court where the property is located. LAWS OF GEORGIA. Statute OF Limitations. Accounts — 4 years. Commercial Paper — 6 years. Judgments — 7 years. Executions. Courts of record, stay of 60 days is granted; jasizce of peace courts, if judg- ment be under $30, 40 days; over $30, 60 days. Exemptions. Personal Property — Specified articles. Homestead — Realty or personalty or both to the value of $1600; agricultural land, 50 acres and 5 acres additional for each child under 16 years, with improvements not to exceed $200, and in city not to exceed $500. Wages — • All laborers' wages. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 and over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 7 per cent; by contract, 8 per cent. C/swr?/ works a for- feiture of excess interest. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Can contract same as a femme sole except that she cannot become surety for another or bind herself to pay her husband's debts. Dower — Life interest in one-third realty. If no lineal descendants, wife is sole heir. Distributive Share of Husband's Personalty — If there be children, widow gets a child's part, unless there are more than 5 when she gets one-fifth. If no lineal descendants, she gets all. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded with clerk of superior court in county where mortgagor resides and also where property is located. If on property outside of state and property is afterwards brought into state, must be recorded within 6 months. LAWS OF IDAHO. Statute of Limitations. Accounts — 4 years. Commercial Paper — 5 years. Judgments — 6 years. Executions. No provision for a stay of execution. Exemptions. Personal Property — Specified articles. Homestead — Head of family, $5000; any other person, $1000. Wages — For 30 days if necessary for the support of family. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for .$200 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 7 per cent ; by contract, 12 per cent. Usury works a for- feiture of 10 per cent of the principal. Negotiable Instruments Law. Adopted in 1903. Rights of Married Women. Dower has 6een abolished. Same as femme sole with her separate property. Chattel Mortgages. Void as against subsequent parties without notice. Must be filed for record with recorder of county where property is located. If goods are removed into another county it must be filed '"n said county mthin 10 da.vf;. 182 APPENDIX. LAWS OF ILLINOIS. Statute of Limitations. Accounts — 5 years. Commercial Paper — 10 years. Judgments — Courts of record, 20 years; justice of peace, 10 years. Executions. No provision for a stay of execution. E.XEMPTioNs. Personal Propcrty—Ucud of family, $400; others SIOO. Homestead — To the value of $1000. Wages — $15 per week to heads of families. Statx^te of Frauds. Not in force as to the sale of goods, wares and merchandise. Other essential features have been adopted. Interest. Legal rate by statute, 5 per cent; by contract, 7 per cent, (/surf/ works a for- feiture of entire interest. NEt;oTiAHi.E Ln'stri'ments Law. In force only as to paper executed after July 1, 1907. Rights of Married Women. Can engage in business the same as a femme sole, except that she cannot enter into partnership without husband's consent, unless he has deserted her, is insane or in the penitentiary. Expenses of family charged upon proi)erty of bf)th. Dower — Life interest in one-third realty. If no children, one-half absolutely. If no kindred, all abso- lutelj'. Distribrilive Share of Husbayid's Personalty — If children, she gets one-third absolutely If no children, she gets all absolutely. Chattel AIortgages. Invalid as to third parties unless possession is given to mortgagee or instrument provides that mortgagor shall retain possession, and it is acknowledged and recorded with recorder of the county where mortgagor resides at time mortgage is executed, or if mortgagor is a nonresidentit must be recorded in county where property is situated. Is good until debt is paid if less than 3 years. IVIay be extended for a period of 1 j'ear after debt is due by filing affidavit within 30 days prior to maturity of debt, stating mortgagee's interest in property and the balance due upon the debt. LAWS OF INDIANA. Statute of Limitations Accounts — 6 years from date of each item. Commercial Paper — 10 years. J udgments — 20 years, but no lien after 10 j'ears. E.xecutions. Courts of record — Not more than $6, 30 days; under $12, 60 daj's; under $20, 90 days; under $40, 120 days; under $100, 150 days, more than $100, LSO days. Justice of the peace courts — Not over $6, 30 days; under $12, 60 days; under $20, 90 days; under $40, 120 days; under $75, 150 daj-s; over $75, 180 days. Exemptions. Personal Property (Realty) — Every resident householder is entitled to $600 of either or both as he may elect. Married women entitled to same if she is a resident whether household or not. Wages — Of householder not exceeding $25 at one time. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 8 per cent. Usury works a for- feiture of interest above legal rate of 6 per cent. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Disabilities have been removed, except that she cannot become surety for any body and cannot convey or mortgage her real property without husband joining in conveyance. Dower has been abolished, the following stautory provision being substituted therefor: Widow gets one-third in fee of all realt}% free from claims of creditors, unless it exceeds $10,000, when she gets one-fourth, and if it exceeds $20,000 she gets one-fifth. If one child only, widow gets one-half realty. Distril>utive Share of Husl)and's Personalty — If one child, she gets one-half. If more than one child, she gets one-third unless she be his second wife. This right cannot be defeated by husband's will. Chattel AIortgages. Invalid as to third parties unless recorded in the office of the recorder of the county where mortgagor resides within 10 days. If nonresident, it must be recorded in county where property is situated. LAWS OF INDIAN TERRITORY. See Laws of Oklahoma, APPENDIX. 183 LAWS OF IOWA. Statute OF Limitations. Accounts — 5 years. Commercial Paper — 10 years. Jtulyinoilf! — In courts of record, 20 years; in courts not of record, 10 years. Execution. If judgment be for not more than $100, three months' stay is granted; if for more than $100, six months' stay. Exemptions. Personal Property — Specified articles. Homestead — In city, one-half acre; if in country, 40 acres. Wages — Earnings for 90 days next preceding the levy. Statute of Frauds. All contracts for the sale of goods, wares and merchandise must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 8 per cent. Usury works a for- feiture of interest and costs of suit. Negotiable Instruments Law. Adopted in 1902. Rights of Married Women. Same as a femme sole. Dower Rights — Life estate in one- third realty. Distributive Share of Husband's Personalty — If there be no issue, widow gets one- half. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded with the county recorder where the mortgagor resides. LAWS OF KANSAS. Statute of Limitations. Accounts — 3 years. Commercial Paper— 5 years. Juxlgments — May be kept alive indefinitely by issuing execution every 5 years. Execution. In courts of record, no stay. In justice of peace courts, a stay is granted as fol- lows; If amount be $20 or under, 30 days; over $20 and not over $50, 60 days; over $50 and not over $100, 90 days; over $100, 120 days. Exemptions. Personal Property — Specified articles. Household furniture and wearing apparel not to exceed $500. Homestead — 1 acre in city or town; in country, 160 acres farming lands together with all improvements thereon. Wages — For 3 months. Statute of Frauds. Not in force as to sales of goods, wares, and merchandise when contract is to be performed within a year. Interest. Legal rate by statute, 6 per cent; by contract, 10 per cent. Usury works a for- feiture of double amount of excess interest. Negotiable Instruments Law. Adopted in 1905. Rights of Married Women. Same as a femme sole. Dower Rights — Dower has been abolished, but wife is entitled to one-half realty of her husband. Distributive Share oj Husband's Personalty — ^Widow is entitled to one-half. Chattel Mortgages. Void as to subsequent parties without notice. Must be filed with the register of deeds in county where the property is located . LAWS OF KENTUCKY. Statute of Limitations. Accounts — 5 years. Commercial Paper — 5 years. Judgments — 15 years. Execution. A stay of 3 months is granted in all courts. Exemptions. Personal Property — Specified articles. Homestead — To the value of $1000. Wages— %oQ. Statute op Frauds. Not in force. Interest. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a for- feiture of excess interest. Negotiable Instruments Law. Adopted in 1904. Rights of Married Women. She has full trading rights, except that she cannot sell or mortgage her real estate unless her husband joins. Doiver Rights — Life estate in one-third realty. Distributive Share of Husband's Personalty — Widow is entitled to one-half. Chattel Mortgages. Void as against subsequent parties without notice. Must be recorded in the coun'y of the mortgagor's residence. LAWS OF LOUISIANA. Statute of Limitations. Accounts — 3 years. Commercial Paper — 5 years. Judgments — 10 years unless revived before expiration of said period, when they are good for 10 years more. May be revived as often as person wishes. 184 APPENDIX. Executions. Xo provision for stay. Exemptions. Personal Property — Specified articles. Homestead — 160 acres, not to e.xceed $2000 in value. Head of family only. Written waiver only. Wages — All laborers' wages and officers' salaries. St.\tute of P'rauds. Sales of goods, wares and merchandise for more than $500 must be in writing; antl must be proved by one credible witness and other corroborative circumstances. Qther essential features have been adopted, except that a verbal sale of land is good as against vendor as well as against vendee who confesses it when interrogated on oath, provided actual delivery has been maile. Interest. Legal rat€ by statute, 5 per cent; by contract, 8 per cent. Usury works a for- feiture of whole interest. Negotiable Instruments Law. Adopted in 1904. Rights of Married Women. Has the right to become a public merchant and as such has free power to contract in respect to her trade. Cannot convey or incumber her separate property without consent of husband in writing. Dower — The following provision regulates her property rights. .\11 property is conununity property unless otherwise expressly stipulated. Upon hus- band's death intestate leaving no ascendants or descendants, his snare goes to widow for life. If issue, she is entitled to use during widowhood only: if no lawful descendants, nor ascendants, nor collateral relations she is entitled to husband's share to exclusion of any natural child, duly acknowledged. Chattel Mortgages. Unknown in this state. LAWS OF MAINE. Statute op Limitations. Accounts — 6 years. Commercial Paper — 6 years, unless wit- nessed, when it is 20 years. Jmlgments — 20 years. Executions. No provision for stay of execution unless taken by default against nonresi- dent defendant, in which case a stay for 1 year may be had unless plaintiff gives bond in double amount. Exemptions. Personal Property — Specified articles. Homestead — $500 to any householder if properly recorded. Lasts during life of wddow and infancy of children. Wages— One month's wages not exceeding $20 except for necessaries. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $300 or more must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, no limit except in certain specified cases. Usury — No penalty except in specified case when excess interest is forfeited. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Same as a femme sole. Dower has been abolished, the follow- ing statutory provision being substituted therefor: If there be children widow gets one-third of both real and personal property. If there be no children, widow gets one-half of both real and personal property: if there be no kindred, widow gets all of both real and personal property. Ch.vttel Mortgages. Void as to subsequent parties unless recorded. Must be recorded with tlie town clerk in county where mortgagor resides, unless nonresident when it must be filed and recorded in county where property is situated. LAWS OF MARYLAND. Statute of Limitations. Accomits — 3 years. Commercial Paper — 3 years, unless under seal, when it is 12 years. Judgments — 12 years. Executions. All judgments may be superseded for 6 months by confessing judgment and giving security within 2 months after rendition of judgment. Exemptions. Personal Property — Residents entitled to $100 and certain specified articles, except on judgments for breach of promise to marry or seduction. Homestead — No provision. Wages — $100; applies to both resident and nonresidents and attachment only binds wages due when laid. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a for- feiture of excess interest. Negotiable Instruments Law. Adopted 1898. Rights of Married Women. May contract same as a femme sole. Cannot dispose of prop- erty so as to defeat husband's interest without husband joining in deed. Disability of infancy APPENDIX. 185 does not apply (o inanietl females over IS years. Dower — Life interest in one-third realty. If no heirs she gets all absolutely. Distributive Share of Husband's Personalty—She gets one-third absolutely. If children, she gets an additional allowance of $150. If no children, allowance is $75 only. Chattel Mortgages. Invalid if not recorded with clerk of circuit court within 20 days. Priority in order of recording. LAWS OF MASSACHUSETTS. Statute of Limitations. Accounts — 6 years. Commercial Paper — 6 years. If attested, action may be brought by original payee or his executor or administrator within 20 years. Judg- ments — 20 years. Executions. No provision for stay. Exemptions. Personal Property — Specified articles. Applies to both married and single persons. Homestead — To a householder with family, if used as a residence, to the value of $800. Must be recorded and continues for the benefit of widow and infant children. Wages — Of labor- ers to the extent of $20 unless for necessaries when it is $10. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, no limit if in writing. Usury — No penalty. Negotiable Instruments Law. Adopted 1898. Rights of Married Women. May engage in any business if she files married woman's cer- tificate with town clerk. Cannot contract with husband. Cannot convey so as to defeat hus- band's curtesy unless he joins in conveyance. Dower — Life interest in one-third realty. If there be no children, $5000 and one-half remaining realty. If no kindred she gets all. Distributive Share of Husband's Personalty — If there be issue she gets one-third. If no issue, she gets $5000 and one-half of remaining personalty. If no kindred she gets all. Also certain allowance as necessaries. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded within 15 days with town clerk where mortgagor resides and transacts business. If nonresident, it must be recorded where property is situated. If a record in two different places is required and the mortgage is recorded in one within 15 days, it may be recorded in the other within 10 days after first record. LAWS OF MICHIGAN. Statute of Limitations. Accounts- — 6 years. Commercial Paper — 6 years; under seal, 10 years. Judgments — Courts of record, 10 years; justice of peace, 6 years. Executions. Courts of record, no stay is granted; justice of peace courts, a stay is granted as follows: If judgment be for $50 and under, 4 months; over $50, 6 months. Exemptions. Personal Property — $250 in any trade, profession, occupation or business, and certain specified articles. Homestead — 40 acres in country, or 1 lot in city or town; in each case not to exceed $1500 in value. Wages — Householder, 80 per cent of wages, but not exceeding $30 nor less than $8; others, 40 per cent, but not exceeding $15 nor less than $4. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 5 per cent; by contract, 7 per cent. Usury works a for- feiture of all interest. Negotiable Instruments Law. Adopted in 1905. Rights of Married Women. Same as a femme sole, except that she cannot become surety for her husband or enter into partnership with him. Dower — Life estate in one-third realty. She may avail herself of the following statutory provision in lieu of dower: If no descendants, she gets one-half absolutely. If no descendants, father, mother, brother or sister or children of brother or sister, she gets all. Distributive Share of Husband's Personalty — Certain allowance and one- third of surplus if children; if only one child, one-half; if no child and value of persinalty does not exceed $3000 she gets all; if it exceeds $3000 she gets one-half of surplus. If no children, father, mother, brother or sister or issue of brother or sister, she gets all. Chattel Mortgages. Void unless filed with city or township clerk where mortgagor resides. If nonresident must be filed where property is located LAWS OF MINNESOTA. Statute of Limitations. Accounts — 6 years. Commercial Paper — 6 years. Judgmenia — 10 years. 186 APPENDIX. Executions. Courts of record, G months' stay is granted. Justice of peace courts — If judg ment be for $10, 1 month; $1U to %2i>, 2 months; $25 to $50, 3 months; over $50, 6 months. In each of tlie courts security must bo given witliin 10 days after rendering judgment. Exemptions. Personal Property — Specified articles. Also printing presses together with stock in trade not exceeding $2400. Also hfe insurance to wife or child not exceeding $10,000. Homestead — 80 acres in country, one-half acre in town or one-third acre in city. Wages — P'or 30 days not exceeding $25. Statute OF Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Intere.st. Legal rate by statute, 6 per cent; by contract, 1(J per cent. Usury works a for- feiture of principal and interest. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Can engage in business same as a femme sole. Apparently she cannot convey realty without husband joins in deed. Cannot convey to husband. Cannot mortgage or convey her homestead without husband joining. She is jointly liable for necessaries. Dower — If there be children, she gets one-third absolutely; if no children, she gets all. Distribu- tive Share of Husband's Personalty — Allowance not exceeding $500 and additional allowance for maintenance during settlement of estate. If there be children, she gets one-third of the residue; if no children she gets all. Chattel Mortgages. Void as to subsequent parties without notice. Must be filed with town clerk wliere mortgagor resides. If nonresident, where property is situated. Must be two attesting witnesses. Good for 6 years. LAWS OF MISSISSIPPI. Statute of Limit.^tions. Accounts — 3 years. Commercial Paper — 6 years. Judgments — 7 years. Executions. Courts of record, no stay is granted ; justice of peace, a stay is granted as follows ; $50 and under, 30 days; over $50, 60 days, by giving bond within 5 days after judgment. Exemptions. Personal Property — Specified articles. Homestead — $3000, in iio case exceed- ing 160 acres in the country. Wages — $50 to head of family. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contracb, 10 per cent. Usury works a for- feiture of interest. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Same as a femme sole. Dower — Has been abolished, the fol- lowing statutory provision being substituted therefor: If there be descendants, widow gets a child's share of realty and personalty absolutely. If no descendants, she gets all the realty and personalty absolutely. Chattel Mortgages. Void unless recorded with the chancery clerk in county where prop- erty is located. If removed to another county with consent of mortgagee he must record mort- gage in that county within 12 months. LAWS OF MISSOURI. St.\tute OF Limitations. Accounts — 5 years. Commercial Paper — 10 years. Judgments — 10 years. Executions. No provision for stay. Exemptions. Personal Property — Specified articles. Homestead — In country, 160 acres not exceeding in value the sum of $1500. In towns of less than 10,000, 5 acres, not exceeding $1500 in value. In cities of 10,000 to 40,000, 30 square rods, not exceeding 1 per cent in value. In cities of 40,000 and upwards, 18 square rods, not exceeding $3000 in value. Wages — 90 per cent, not exceeding together with other personal property $300. St.\tute of Frauds. Contracts for tlie sale of goods, wares and merchandise for $30 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 8 per cent. Usury works a for- feiture of excess above 6 per cent. Negotiable Instruments Law. Adopted in 1905; amended in 1909. Rights of Married Women. Same as a femme sole. Dower — Life interest in one-third realty. If no descendants she gets absolutely all realty which came to the husband in right of the marriage, not subject to the husband's debts; one-half absolutely of all realty belonging to 1ms- APPENDIX 18V band at time of his death, subject to payment of liis debts. Slie may elect to take either her dower or the statutory provision when no descendants. Distributive Share of Husband's Person- alty — If descendants, she gets a child's share absohitely. If no descendants, she shares as in realty. (See above, under Dower.) Chattel Mortgages. Invalid urdess filed or recorded with the recorder in county where mortgagor lives. If nonresident in county where property is located. LAWS OF MONTANA. Statute of Limitations. Accounts — 5 years. Commercial Paper — 8 years. Jvdgmevts — Courts of record, 10 years; justice of peace, 5 years. Executions. No provision for stay of execution. Exemptions. Personal Property — Specified articles. Homestead — 160 acres in country, oi- one-fourth acre in town; in each case not to exceed $2500 in value. Wages — For 30 chiys tt) head of family unless for necessaries when only one-half is exempt. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $200 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 8 per cent; by contract, no limit. Negotiable Instruments Law. Adopted in 1903. Rights of Married Women. May become a sole trader by judgment of the district court of the county in which she has resided for 6 months. Dower — Life estate in one-third realty. If no descendants she may elect to take either dower or the following statutory provision, one-half absolutely after payment of husband's debts. Distributive Share of Husband's Personalty — If one child or issue of such, she gets equal share. If more than one child, she gets one-third. If no descendants, one-half. If no descendants, father, mother, brother or sister, she gets all. Chattel Mortgages. Void unless recorded with county clerk where mortgagor resides. If nonresident it must be recorded where property is located. Is good until maturity of debt and 60 days thereafter with provision for renewal. LAWS OF NEBRASKA. Statute op Limitations. Accounts — 4 years. Commercial Paper — 5 years. Judgments — May be kept alive indefinitely by issuing execution every 5 years. Execution. In courts of record a stay of execution is granted as follows: If amount be $50 or less, 3 months; $50 to $100, 6 months; in all other cases, 9 months. In justice of peace courts, if amount be $10 or under, 60 days; over $10 to $50, 90 days; $50 to $100, 6 months; $100 to $200, 9 months. Exemptions. Personal Property — Specified articles. Homestead — House and 160 acres in the country, or house and 2 lots in the city; in each case value must not exceed $2000. Statute of Frauds. Contract for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 7 per cent; by contract, 10 per cent. Usury works for- feiture of all interest. Negotiable Instruments Law. Has not been adopted. Rights of Married Women. Same asafemmesole. DowerRights — Life estate in one-third realty. Distributive Share of Husband's Personalty — All articles of household furniture, ornaments and wearing apparel of the deceased, and all property and articles that were exempt at the time of his death and other personal property to be selected by her not to exceed $200. She then takes a child's share of the remainder. If there be no issue or kindred, widow takes all. Chattel Mortgages. Void as to subsequent parties without notice. Must be filed with county clerk where mortgagor resides, unless he resides out of the state, in which case it must be filed where property is located. LAWS OF NEVADA. Statute of Limitations. Accounts — 4 years. Commercial Paper — 6 years. Jxulgments — 6 years. Execution. No stay. Exemptions. Personal Property — Specified articles. Homestead — Land and improvements not exceeding $5000in value. Wages — $50 earned during 30 days next preceding issvieof process. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or under must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 7 per cent; by contract, no limit. I»lEGOTiABLE INSTRUMENTS Law. Has not been adopted. 188 APPENDIX. Rights of Married Women. She may become a sole trader, provided she gets an order of the court and records the same. Dower Rights — Dower has been aoolished, the following statu- tory provision being substituted therefor: The widow is entitled to one-half of the community property (that is, property acquired by the spouses during marriage); she then sliares of the real and personal property as follows: If there be one child or issue of one child, one-half; if more than one cliild or the issue of one or more children, one-third; if no child or issue of children, one-half. Chattel Mortgages. Void against creditors and purchasers without notice. Must be recorded with recorder where property is located and where mortgagor resides. LAWS OF NEW HAMPSHIRE. Statute OF Limitations. Accounts — 6 years. Commercial Paper — 6 years. Jtidgments — 20 years. l>XEcuTiON. The granting of a stay of execution is in the discretion of the court. Exemptions. Personal Property — Specified articles. Homestead — Land to the value of $500. Wages~$20. Statute of Frauds. Contract for the sale of goods, wares and merchandise for $33 or under must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a for- feiture of three times the excess of legal interest. Negotiable Instruments Law. Adopted 1910. Rights of Married Women. Same as a femme sole, except that she cannot become surety for her husband. Dower Rights — She is entitled to so much of any real estate as will produce a yearly income equal to one-tiiird of the yearly income thereof at the death of her husband. Dis- tributive Share of Husband's Personalty — If issue survives, widow gets one-third; if no issue sur- vives, she gets one-half. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded with town clerk where mortgagor resides. LAWS OF NEW JERSEY. Statute of Limitations. Accounts — (3 years. Commercial Paper — 6 years. Judgments — 20 years. Execution. In circuit or supreme court, no stay; in district and justice of peace courts, a stay of execution is granted as follows: If amount is from $5 to $15, 1 month; $15 to $60, 3 months; more than $G0, 6 months. Exemptions. Personal Property — $200 and wearing apparel. Homestead — To the value of $1000; must be advertised and recorded. Wages — All. Statute of Frauds. Contract for sale of goods, wares, or merchandise of $30 and upwards must be in writing. Other essential features adopted. Interest. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a forfeiture of all interest and costs. Negoti.a.ble Instruments Law. Adopted in 1902. Rights of Married Women. She may become a sole trader, but cannot become an accom- modation indorser, guarantor or surety. Dower Rights — Life estate in one-third realty. Distribu- tive Share of Husband's Personalty — If there be children, widow gets one-third; if no children, one- half. If no children or descendants, widow takes all. Chattel Mortgages. Void as to creditors, purchasers and mortgagees without notice. Must be recorded with the county clerk, where the property is located. LAWS OF NEW MEXICO. Statute of Limitations. Accounts — 4 years. Commercial Paper — 6 years. Judgments — 7 years. Execution. No stay. Exemptions. Personal Property — Specified articles, and if not owner of homestead, $500 additional. Homestead — To the value of $1000. Wages — 3 months. Statute of Frauds. All contracts for the sale of goods, wares and merchandise must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 6 per cent; by contract, 12 per cent. Usury works a for- feiture of double the amount of excess interest. A fine is also imposed. r<^EGOTiABLE INSTRUMENTS Law. Adopted 1907. Rights of Married Women. She has full trading rights, except when dealing with real estate* then her husband must join in the transaction. Dower Rights — By statute the widow gets APPENDIX. 189 one-lialf of community property. She gets one-iourth of the remainder of the community property and husband's separate estate. If no issue she gets ail. Chattel Mortgages. Void unless filed and recorded with the recorder where property is located. LAWS OF NEW YORK. Statute of Limitations. Accounts — 6 years. Commercial Paper— 6 years; if under seal, 20 years. Judgments — Courts of record, 20 years; inferior courts, 6 years, but if transcripted, 20 years. Executions. No provision for stay of execution. Exemptions. Personal Property — Specified articles, and $250 additional to head of family. No exemption for purchase price. Homestead — $1000 provided that the deed or notice is properly recorded. Wages — -For 60 days, provided they are necessary for support of family. $12 per week only exempt where judgment is for necessaries or domestic's wages or employee's salary. Statute op Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features adopted. Interest. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a for- feiture of both debt and interest. In case of banlUO, .'iO days; $500 to $1,500, 60 days; over §1500, 90 days; in other courts of record, if under $300, 2 months; $300 to $1000, 5 months; over $1000, 4 months. KxE.MPTiONS. Personal Property — Specified articles. Homestead — To the value of $2000. IVa^es— $100. if necessary for the support of family. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $.50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, G per cent; by contract, 12 per cent. Usury works a for- feiture of excess interest; also forfeiture of twice the amount of interest paid. Negotiable Instruments Law. Adopted in 1899. Rights of Married Women. Same as a femme sole; but she cannot become a partner of her husband. Dower Rights — Dower has been abolished, the following statutory provision being sub- stituted therefor: Wife takes her share of community property, and if there be no testamentary disposition of same and no legitimate issue of his, her or their bodies, she takes all the community property. If there be one child or lawful issue of one child, widow takes one-half of all other realty. If more than one child or issue of same, one-third. If no issue at all, one-half. If no issue, father, mother, brother or sister, widow gets all. Distributive Share of Husband's Person- alty — If issue, one-half. If no issue, all. Chattel Mortgages. Void as to subsequent parties without notice. Must be recorded and filed with the county auditor where the property is located. LAWS OF WEST VIRGINIA. Statute of Limitations. Accounts — 5 years. Commercial Paper — 10 years. Judg- ments — May be kept alive indefinitely by issuing execution. Execution. No stay in courts of record: in justice of peace, a stay is granted as follows: If amount be $50, 2 months; .$50 to $100, 4 months; over $100, 6 months. Exemptions. Personal Property — $200 including wages. Homestead — To the value of $1000. Statute of Frauds. Not in force. Intere.st. Legal rate by statute, 6 per cent; by contract, 6 per cent. Usury works a for- feiture of excess interest. Negotiable In.struments Law. Adopted in 1908. Rights of Married Women. Same as a femme sole. Doiver — Life interest in one-third realty. If there be no heirs, widow gets all the realty. Distributive Share of Husband's Person- alty — If tliere be children, she gets one-third; if no children, she gets all. Ch,\ttel Mortgages. Void as to third parties unless recorded with the coimty clerk where the property is located. LAWS OF WISCONSIN. Statute of Limitations. Accounts — 6 years. Commercial Paper — lOyears. Judgments — Courts of record, 20 years; courts not of record, 6 years. Execution. Courts of record, stay on appeal by giying sureties; in jtistice of the peace courts, a stay is granted as follows: If amount be$10, 1 month; if above $10and not exceeding $30, 2 months; above $30 and not exceeding S50, 3 months; above $.50, 4 months. Exemptions. Personal Property — Specified articles. Homestead — In city or village, one- fourth acre and dwelling house thereon and its appurtenances; in country, 40 acres used for agri- cultural purpo.ses. Wages — For 3 months prior to execution, not to exceed average of $60 per montli. Statttte of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over raust be in writing. Other essential feat/ures have been adopted. APPENDIX. 195 Interest. Legal rate by statute, 6 per cent; by contract, 10 per cent. Usury works a for- feiture of all interest; treble amount of interest paid may be recovered. Negotiable Instruments Law. Adopted in 1899. Rights of Married Women. Same as a femme sole. Dower — Life interest in one-third realty. If no lawful issue she gets all absolutely. Distributive Share of Husband's Personally — If issue, she gets a child's share. If no issue, she gets all. Chattel Mortgages. Void as to third parties unless filed with the town clerk where mort- gagor resides; if nonresident, where property is located. LAWS OF WYOMING. Statute of Limitations. Accounts — 8 years. Commercial Paper — 5 years. Judgments — 5 years. Execution. In court of record, 6 months stay is granted; in justice of peace, 6 months. Exemptions. Personal Property — Specified articles. Homestead — To the value of $1500. Wages — Not exceeding $100. Statute of Frauds. Contracts for the sale of goods, wares and merchandise for $50 or over must be in writing. Other essential features have been adopted. Interest. Legal rate by statute, 8 per cent; by contract, 12 per cent. Usury works a for- feiture of interest. Negotiable Instruments Law. Adopted in 1905. Rights of Married Women. Same as a femme sole. Dower Rights — Dower has been abolished, the following statutory provision being substituted therefor: If there be descendants, widow gets one-half absolutely of both realty and personalty. If no descendants and estate does not exceed $10,000 she gets all. If more than $10,000 she gets three-fourths. Chattel Mortgages. Void as to third parties unless filed with the county clerk v^here property is located. Commercial and Industrial Bookkeeping By H. M. Roue, Ph.D. Business Bookkeeping and Practice By W. H. Sadler and H. M. Roue, Ph.D. These are the famous Budget Systems of bookkeeping that have completely changed the methods of teaching this important branch in all classes of schools. Theory and '■Practice combined. The transactions and the required business papers come to the student's attention together. Correct business practice, customs and methods a distincti've feature. A Series of Supplementary Exercises and Drills that are Invaluable cModern systems of accounting exemplified. Pedagogical treatment sound, con'hincing and interesting. Each book and accompanying budgets supply five complete sets from which courses ranging from four months to two years may be selected. FULL DESCRIPTIONS IN CATALOGUE. BOOKLETS AND CIRCULARS International Business Practice By H. M. Rowe, Ph.D. Supplies a complete course in business and office practice. The transactions originate between students, acting as individual proprietors, partners, or officers of corporations. A bank, wholesale, commission and other offices are required. We supply all necessary blanks and stationery. CORRESPONDENCE SOLICITED '-pi Tj \/r T> r^ EDUCATIONAL PUBLISHERS 1 ne O. iVl., JtVOWe \^0. Baltimore Maryland UNIVERSITY OF CALIFORNIA LIBRARY BERKELEY Return to desk from which borrowed. This book is DUE on the last date stamped below. uD 21-100m-9,'47(A5702sl6)476 Ks •'^^'•'='' UNIVERSITY OF CALIFORNIA LIBRARY ^•■iiiiiiii il': iiiiiii I