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THE

LAWS

OF

Crabe anb Commerce,

DESIGNED AS

A BOOK OF REFEREIVCE

IN

MERCANTILE TRANSACTIONS.

Potius ignoratio juris litigiosa est, quam scientia. Cic. de Leg.

It is incumbent upon every man to be acquainted with those laws, at least, with which he is immediately concerned.

Blackstone's Commentaries,

By JOUK IVILLIAJMS, Esq.

LONDO N: PRINTED FOR SHERWOOD, NEELY, AND JONES,

PATERNOSTER-ROW ;

AND THOMSON AND WRIGHTSON, BIRIII VGHAM ; BTIODIF, DOTVDIN'C, AND I.T;s- FORD, SALISBURY ; MEYLER AND SON, BATH ; REF.S AND CURTIS, PLYMOUTH, W. ROBINSON, LIVE«P0OL ; MOTLEY, MILLER, AND HARRISON, PORTSMOUTH ; MONDAY AND SLATTER, OXFORD ; CONSTABLE A^D CO, , EDINBL'RCH ; BRASS AND REID, GLASGOW; AND CUMMINGS, DUBLIN.

1812.

T

UiclMrd Taylor and Co. Printers, Shoe Lam, Lo?idon.

TO

ALEXANDER BARING, Esq. M.P. THIS WORK

IS,

BY PERMISSION,

inscribed:

as a testimony of esteem

for his extensive commercial knowledge

AND

ACKNOWLEDGED PRIVATE WORTH,

BY

HIS MUCH OBLIGED

AND

MOST OBEDIENT SERVANT,

THE AUTHOR.

INTRODUCTION

J- HE importance of Commerce is a point so gene- rally understood and acknowledged, that it would be superfluous to attempt any new proof or illus- tration of its necessity or advantages. It tends, says an elegant historian, to wear off those preju- dices which maintain distinction and animosity between nations. It softens and polishes the man- ners of men. It unites them by one of the strongest of all ties, the desire of supplying their mutual wants. It disposes them to peace, by establishing in every state an order of citizens bound by their interest to be the guardians of public trancuillity.

From a view of the beneficial effects which com- merce is capable of producing on the happiness and comfort of mankind, it is a natural inference, that the means by which it may be most success- fully cultivated, as also those established rules and principles which regulate nations in their com- mercial dealings with each other, must be the ob- ject

VI INTRODUCTION.

ject of the most solicitous inquiry of every one whose interests and pursuits are of a mercantile na-r ture. But experience proves the contrary. So far from a knowledge of the principles of political oeco- nomy, and their practical application to commerce and finance, of those laws and customs which uni- versal consent, or the more obligatory authority of compacts or treaties, has established for the commer- cial intercourse of independent states, being thought necessary, there are few men engaged in commerce who have any notion of the privileges, regulations^ and restrictions of the municipal laws of their native soil with regard to commercial affairs. The reason is obvious. The statutory enactments and judicial decisions concerning the regulation of commerce , have become so numerous, and are oftentimes so fluctuating, as to preclude all, except such as de- vote themselves to the attainment of legal know- ledge for professional purposes, from an acquaintance with their provisions. It must also be admitted, that those to whom, from their destination in life, this knowledge is accessible, appear not to have been very solicitous to remove this obstacle. From the few publications which, until of late years, have appeared on commercial branches of the law, it would seem that professional men had formed the same opinion of their clients' capabilities of understand- ing the mysteries of law, as Erasmus did of the ca- pacity of those who happened not to be born to a splendid fortune and liberal education, with regard

to

INTRODUCTION. Ml

to the truths of religion — "Non expedit omnem ve- ri.tatem," says that great divine in one of his letters to Melancthon, " prodere vulgo." Within the last twenty or thirty years, however, several valuable treatises on commercial law have been published; but as these are numerous, and chieBv calculated for professional readers, little advantage or assistance can be derived from them to the mercantile part of the community.

To obviate this defect, then, is the design of the present publication. Its object is to afford a com- pendium of commercial law applicable to subjects of frequent recurrence, and digested in a form to which reference can readily be made in the hurry of busi- ness. With what skill the design has been executed, the compiler does not take upon himself to deter- mine. In treating of so great a variety of subjects, if he has failed, his consolation is, that his endea- vours were well meant. On a review of his work, he readily acknowledges that he is not satisfied with its execution. When he first sat down to his task, he expected to have constructed a much more goodly fabric than he finds he has done. His dis- appointment, however, has forcibly convinced him, that "the distance is always very great between actual performance and speculative probability." To those who are disposed to be captious, he repKes in the words of Columella,

" Nihil perfectura, aut a singular! consummatum industria."

VIU INTRODUCTION.

The Compiler avails himself, here, of the oppor- tunity of acknowledging his obligations to the ex- cellent works on Commercial Law by the following gentlemen, viz. James Allen Park, Charles Abbot, William Cooke, Francis Whitmarsh, William Wat- son, Walter William Fell, William Paley, William Selwyn, Joseph Chitty, and George Ross, esquires.

5, Hare Court, Temple. July I, 1812.

THE

LAWS

OF

TRADE AND COMMERCE.

PART I.

AX HISTORICAL SKETCH OF THE RISE AND PROGRESS OF COMMERCE.

Notwithstanding Xenophon expresses a doubt whe- ther commerce be of any advantage to a state (E'lSe xai «/*- TTOfia otpeXsi Ti itoXiv, &c.), and that Plato (De Leg. lib. 4.) totally excludes it from his imaginary commonwealth ; yet whoever looks into the history of the world will find, that in all ages its utility and advantages have been fully ap- pretiated by mankind. It is an observation justified by experience, that as soon as the commercial spirit begins to acquire vigour, and to gain the ascendant in any society, "^e discover a new genius in its policy, its alliances, its wars, and its negotiations. No nation that cultivated foreign commerce ever failed to make a distinguished figure on the theatre of the world. It was by its opulence and extensive commerce that Carthage counterbalanced the fortune and the grandeur of the Romans ; and in proportion as com- merce made its way into the various states of Europe, they turned their attention to those objects and adopted those manners which distinguish polished nations, and which lead to political consequence and eminence amongst the neighbouring powers'.

' Robertson's View of Society, p. 95-

2 Of the Rise and Progress of Commerce.

Among tlie anciciils, <he llhodians, the Egyptians, the Pheiiit iuiis, and (he Carthaginians, Avcre the nations which cultivated commerce the most successfully, and obtained by its resources riches and renown.

The llhodians claim the first place in this inquiry ; for althoitgh (here is undoubted testimony, that nations of much greater antiquity than the people of Rhodes ' cul- tivated cojauierce, and carried it on to a considerable ex- tent, yet there does not appear to be the smallest ground for entertaining an opinion that any of these naval powers had cstal^lished amongst themselves, much more communicated to mankind in general, ajiy code or system of marine law. Rhodes obtained the sovereignty of the sea about 916 years before the Christian era. The situation and fertility of this island were peculiarly favourable for the purposes of navi- gation, being situated in the Mediterranean seas, a few leagues from the continent of Lesser Asia ; and its wealth and fertility have always been celebrated by the poets and historians of antiquity. From these circumstances, joined to the activity and industry of its people, it long main- tained that superiority which it had acquired ; its inhabi- tants were rich, its alliance was courted ; though, upon principles of policy, it generally observed a strict neutrality. But as wealth naturally produces luxury, which gradually enervates the powers of the state, theRhodians, after main- taining their political importance from the time already ihentioned till the termination almost of the Roman repub- lic, visibly began to decline in wealth and power*.

Tlie Egyptians, soon after the establishment of their mo-

' *■ r,usrbius, in liis account of the maritimp states, mentions three ante- rior to the llhodians} namely, the Cretans, the Lytlians, and the Thra- clans; tlie fir-t of whom llouri'ihpd aiioiit five hniidred year-. l)efore the Rhodians, the next two hundred, and the laft about eighty years. EusebJ Ghronicon, lib. '2. ' Park's Insurances, p. 5.

„ — - narchy.

Of the Rise and Progress of Commerce. 5

narchy, are said to bavc opened a trade between the Arabian Gulf and the Red Sea and the western coast of the great Indian continent. The commodities which tliey imported from the East were carried by land from the Arabian Gulf tp the banks of the Nile, and conveyed down that river to the Mediterranean. But if the Egyptians, in early times, applied themselves to commerce, their attention to it was of short duration. The fertile soil and mild climate of Egypt produced the necessaries and comforts of life in such pro- fusion, as rendered the inhabitants so independent of other countries^ that it became an established maxim among that people, whose ideas and institutions differed in almost every point from those of other nations, to renounce all intercourse with foreigners. In consequence of this, they never went out of their own country ; they held all seafaring persons in detestation, as impious and profane; and, fortifying their own harbours, they denied strangers admittance into them. It was in the decline of their power, and when their vene- ration for ancient maxims had greatly abated, that tliey again opened their ports, and resumed their communica- tion with foreigners'.

The character and situation of the Phenicians were as favourable to the spirit of commerce and discovery as those of the Egyptians were adverse to it. They had no di- stinguishing peculiarity in their manners and institutions ; they were not addicted to any singular and unsocial form of superstition ; they could mingle with other nations without scruple and reluctance. The territory which they possessed was neither large nor fertile. Commerce was the only source from wjiich they could derive opulence and power. Ac- cordingly the trade carried on by the Phenicians of Sidon and Tyre was more extensive and enterprising than that of any state in the ancient world. The genius of the Pheni'

' Robertson's History of America, vol. i.

.: u 2 cians;

4 Of the Rise and Progress of Commerce,

cians, as well as (be object of their policy, and the spirit of their laws, was cntinly commercial, 'J'hey were a people of merchants, who aimed at the empire of the sea," and actually possessed it. Their ships not only frequented all the ports of the Mediterranean, but they were the first Mho ventured beyond the ancient boundaries of navigation', and, passing the straits of Gades, visited the coasts of Spain and Africa. In many of the places to which they resorted they planted colonies, and communicated to the rude inhabitants some knowledge of their arts and improve- ments. While they extended their discoveries to the north and the west, they did not neglect to penetrate into the more opulent and fertile regions of the souih and east. Haviug rendered themselves masters of several commodioui harbours towards the bottom of the Arabian Gulf, they, after the example of the Egyptians, established a regular intercourse with Arabia and the continent of India on the one liand, and with the eastern coast of Africa on the other. From these countries they imported many valuable commodities unknown to the re:it of the world, and during a long period engrossed that lucrative branch of commerer without a rival*.

The vast wealth which the Phcnicians acquired by mo- nopolizing the trade carried on in the Ked Sea incited their neighbours the Jews, under the prosperous reigns of Da- vid and Solomon, to aim at being admitted to some share of it. This they obtained, partly by their conquest of Idu-

' We are informed on the testimony of Herodotus, that a Pheniciaa fleet, fitted out hy Nerho kinj; of Kjjypt, took its departure, about six hun- dred y<ars before the « hris-tirin era, from a port in the Red Sea, doubled the sonthcrn promontory 'cf Africa, and, after a voyasje of three years, returned by the straits of (:;:des to the mouth of the Nile. Lib. iv. c. 42. The account of this extraordinary navigation. Dr. Hobcrtson justly ob« srrves, is of suspicious authority. It is recordc<l by the (ireek and Roman writers rather as a stran-^e amiisini? tale, which they did not comprehend, «• did not believe, than as a real transaction which enlarged their know- !edj;e and inlluenced their opinions.

' Robertson's History of America, vol. L

znes.

Of the Rise and Progress of Commerce. 5

-inea, which' stretches along the Red Sea, and partly by their alliance with Ilinini king of Tyre. Solomon fitted out fleets, whicli, under the protection of Phenician pi- lots, sailed from the Red Sea to Tarshish and Ophir. These, it is probable, were partly in India and Africa, which their conductors were accustomed to frequent ; and froin them the JeNvish ships returned with such va- luable cargoes as suddenly diflused wealth and splendour through the kingdom of Isia< 1 '. But the singular insti- tutions of the Jews, the observance of which wj'S enjoined by their divine legislator with an intention of preserving^ them a sejmrate jeople uninfected by idolatry, formed a national character, incapable of that open and liberal in- t-ercour.se with strangers which commerce requires. Ac- cordingly this unsocial genius of the people, together with the disasters which befel the kingdom of Israel, prevcjited the commercial spirit, which their mona* chs laboured to in- tfoduce and to cherish, from spreading among them*.

But though the instructions and example of the Plieni- cians were unable to mould the manners and temper of the Jews, in opposition to the tendency of their laws, they transmitted the commercial spirit with facility, and in full vigour, to their own descendants the Caithaginians. The commonwealth of Carthage applied to trade and to naval afi'airs with no hss ardour, ingenuity, and success, than its parent state. Carthage early rivalled and soon surpassed Tyre in opulence and power, but seems not to have aimed at obtaining any share in the commerce with India, The Phenicians had engrossed this, and had such a command of the Bed Sea as secured to them the exclusive possession pf that lucrative branch of trade. The commercial acti-

f Witness the immense rirhei which David is recorded, in 1 Chronicle*, chap- xxii. xxix. to have prepared forth'.- house of tii* LsrU. » Robertson's History of America, vol. I.

Tity

6 Of the Rise and Progress of Commerce.

vity of the Carthaginians was exerted in another tlircction. Without contending for t!ie trade of the East with their mother countrj-, they extended their navigation chiefly to- wards the west and north. Following the course wliich the Phenicians had opened, they passed the straits of Gades, and, pushing their discoveries far beyond those of the parent state, visited not only all the coasts of Spain, but those of Gaul, and penetrated at last into Britain. At the same time that they acquired knowledge of the new countries in this part of the globe, they gradually carried their researches towards the south. They made consider- able progress, by land, into the interior provinces of Africa, traded with some of them, and subjected others to tlieir •mpire. They sailed along the western coast of that great continent, almost to the tropic of Cancer, and planted se-, veral colonies, in order to civilize the natives and accustom them to commerce. They discovered the Fortunate Islands^ now known by the name of the Canaries, the utmost boundary of ancient navigation in the western ocean'.

Under the Grecian and Roman republics, history alsp discovers the traces of a commerce cultivated. In several of the states of Greece, particularly in Corinth and Athens, commerce very much flourished. Athens indeed was par- ticularly famous for commercial knowledge ; its trade was extensive, having a port to receive the merchandizes of Asia, and another, those of Italy ; its manufactures were in high repute, and emulation was excited by the public rewards and honours which were bestowed upon tliose who attained to excellence in any of the useful arts. The many hn\ s which this people have left to posterity, with regard to imports and exports, and the contract of bargain and sale; the many privileges granted to the mercantile part of the state ; the appointment of magistrates who had the cognizance of con-

» Robertson's History of Amerka, vol. 1.

troversiej.

Of the Rise and Progress of Commerce', 7

(roversios that happened between merchants and mafiners ; the attention which Ihey paid to their market, and th« many officers coiiGerned in that department, give us ar very favourable idea of their judgment in the (riie principles of commerce. But notwithstanding these excellent hiws and institutions, and the advantages arising from a numerdas body of seamen which they had in their pay, from the pro- duce of their mines, and from their influence over the other cities of Greece, the Athenians did not carry onso expen- sive a trade as might naturally be expected. They, as Well as the other maritime states of Greece, hardly carried on any commerce beyond the limits of the Mediterrai\ean Sea. Their chief intercourse was with the colonies of their conn" trymen planted in the Lesser Asia, in Italy, and Sicily. They sometimes visited the ports of iigj'^pt, of the southern provinces of Gaul, and of Thrace ; or, passing through the Hellespont, tbey traded witii the countries around the Eaxine Sea. The commerce of the Romans was still more inconsiderable than that of the Greeks. They regarded commerce no further than as it was instrumental towards conquest. When Roman valour and discipline had sub- dued all the maritime states known in tiie ancient world; when Carthage, Greece, and Egypt had submitted to their power, the Romans did not imbibe the spirit of the cons- quered nations. The trade of Greece, Egypt, and the other conquered countries, contiimed to be carried on in its usual channels, after they were reduced into the form of Roman provinces. As Rome was the capital of the world, and the seat of government, all the wealth and valuable productions of its provinces flowed naturally thither. The Romans, satisfied with this, seem to have suflered com- merce to have remained almost entirely in the hands of the respective conquered countries. The extent, however, of the Roman power, which reached over the greatest part of

the

8 Of the Rise and Progress of Commerce.

the known world, the vigilant inspection of the Roman magistrates, and the spirit of the Roman government, no less intelligent than active, gave such additional security io commerce as animated it with new vigour. The union among nations was never so entire, nor the intercourse so perfect, as within the bounds of this vast empire. Com- merce, nnder the Roman dominion, was not obstructed by the jealousy of rival states, interrupted by frequent hostilities, or limited by partial restrictions. One superintending power moved and regulated the industry of mankind, and enjoyed the fruits of their joint efforts'.

But though the policy of the Greeks and Romans encoU" raged commerce, yet they did not possess a commercial spirit of enterprise. The Romans, in their manners, their constitu- tion, and their laws, treated commerce as a dishonourable employment, and prohibited the exercise thereof to persons of birth, or rank, or fortune. Among that people of sol- diers, to have applied to trade would have been a degrada-* tion of a Roman citizen. No cn)ployment was deemed ho- nourable but the plough and the sword ; every species of commercial pursuits was held in such slight estimation, that traders and mechanics were incapable of succeeding to any public honours. They abandoned the mechanical arts, commerce, and navigation, to slaves, to freedmen, to provincials, and to citizens of the lowest class. Even after the subversion of liberty, when the severity and haughtiness of ancient manners began to abate, commerce did not rise into high estimation among the Romans. In several of the ancient stales of Greece, foreign trade was prohibited altogether , and in several others the employ- ments of artificers and manufacturers were considered as

' Beawps's I. ex Merc- Taylor's Flemenls of the Civil I, aw, 507. rotter's Grecian .^lltiq■ vol. i. p. 80 et seq. Montesquieu's Esprit dcsLois, lir. xxi. c. 7. Kobgrtson's History of America, p. 16.

hurtful

Of the Rise and Progress of Commerce. 9

hurtful to the strength and agility of the human frame. Both at Athens and at Rome, if the citizens deigned to en- gage in traffic, it was carried on through tlie medium of slaves, who exercised it for the benefit of their masters. But this awkward shift of avoiding the odium of being en* gaged in trade was no less prejudicial to the interests of the respective communities, than their impolitic restraints upon the freedom of commefce : the wealth, power, and pro- tection of the rich made it almost impossible for a poor free- man to tind a market for his work, when it came in(o com- petition with that of the slaves'.

But to whatever degree of advancement commerce had at- tained in the countries under review, it visibly declined when the Roman empire was overrun by the Barbarians. Du- ring the lirst ages after the destruclion of the mighty fabric of the Western empire, while ihe barbarous times of feudal anarchy paralysed the energies and enterprise of man, and the names of stranger and enemy were ^\ ords of the same import, little attention Avas paid to the cultivation of com- merce : the prohibitions and restrictions with which it was loaded savoured less of cunm^.ercial policy, than of hatred against foreigners aad contempt for the Jiiercantile pro- fession^. But by degrees the calamities and desolation

brouiiht

♦ Taylor's Elements of the Ci\il I-aw, 502. Potter's Grecian Antiq pas- jim. Smith's Wealth of Nations.

" During the ignorant times of feudal polity, merchants, like all thi» other inhabitants of burghs, were considered as little better than eman- cipated slaves, V. hose persons were despised and their grains envied. And it is recorded, that it was determined at the council of Melfi, under pope Urban the second, A. D. 1090, that trade being inconsistent with Chris- tianity, it was impossible to exercise traffic of any kind. Decret. i. 88. II.

Foreign commerce is also held in tlie utmost contempt among the modern Chinese, who scarcely deign to afford it the decent protection of the laws. '* Your lieggarly commerce !'' was the language in wliich the m.andarins of Pekin used to talk to M. Dc Lange, the Russian envoy, concerning it, (Smith's Wealtii of Nations, iii. p. 30. ) With respect, liowever, to home ma- nufactures and the nieehanic arts they follow a different j)lan. On all manu- factuyers and artisans w to excel in their respective occupations, they con- fer

10 Of the Rise and Progress of Commetee.

brought upon (he western provinces of the Roman cmpir« by its barbarous conquerors were forgotten, and in some measure repaired. The rude tribes which settled there ac- quiring insensibly some idea of regular government and some nlish for the comforts of civil life, Europe began to awake fiom its torpid and inactive state. The first sym- ptoms of revival were discerned in Italy'. The northern tribes, which took possession of this country, made pro- gress in improvement with greater rapidity than the people settled in the other parts of Europe. Foreign commerce revived, navigation Avas attended to and improved. Con- stantinople became the ciiicf mart to Avhich the Italians re- sorted. There they not only met with a favourable recep- tion, but obtained such mercantile privileges Jis enabled them to carry on trade with great advantage. They were supplied both with the precious commodities of the East, and with many curious manufactures, the product of an- cient art and ingenuity which still subsisted among the Greeks. The commercial spirit of Italy became active and

fpr the honour of mandarin, a noble of the ninth class. Mortimer's Ele« ments of Commerce, p. hb.

The same contempt for mercantile pursuits prevailed amon^ many na- tions of the ancient world. The Thebatls had a law, that no person should he capable of any ofiice in the state who had not discontinued trade for the space of ten years. Ariftot. 111. Polit. .'j. The Romans, as we have al- ready seen, went still furtlier ; they absolutely forbad all merchandizing (qufTstus omnis indecorus patribus visus est. Livy, xxi. 6.'1. ) to the nobili- ty; all gain w!is held scandalous in a senator. Cie. Orat. contra Verr. Herodotus records, tUat the Egyptians, tlie Scythians, tlie Persians, and almost all the barbarous nations, considered all- persons who applied them- selves to commerce as the meanest and lowest sort of subjects, and that their offspring was always thought to hi' mean and base.

But by tlie laws of Athelstane, it was enacted, for the encouragement of eommcrce and navigation, that the merchant who had performed three long voyages should be invested with the title of nobility. Hume's History of England.

' The re-establishmcnt of commerce is to be attributed to the Venetians. These people, who in the sixth century had, to avoid the ravages of the Barbarians who had destroyed the [loman empire, taken shelter in a few marshy islands which lay near the coast of Haly, in the eighth century became a well established republic, possessing great conmiercial power. Anderson's History of Commerce, vol. i. p. 19.

enterprising^.

Of the Rise and Progress of Comrncrce, i I

enterprising. Venice, Genoa, Pisa, arose from inconsider-, cible towns to be populous and ^\ealtily cities. TJieir naval power increased ; their vessels frequented not only the ports, ill the Mediterranean, but, venturing sometimes beyond the Jjlraits, visited the maritime towns of Spain, France, the Low Countries, and England ; and, by distributing theiic commodities over Europe, began to communicate to its various nations some taste for tlie valuable productions of the East, as well as some ideas of manufactures and arts, which were then unknown beyond the precincts of Italy*.

Various other causes, however, concurred to revive thfr spirit of commerce, and to renew, in some degree, that in- tercourse^ between nations which during the period o^ Gothic ignorance and barbarism had nearly ceased. The Italians, by their intercourse with Constantinople and othev

' Marten's Law. of Nations. Smith's Wealth of Nations. Robertson'* View of Society. Robertson's History of America.

'^ It may not perhaps be misi)l<iced to speak here of the rise and progress of the intercourse between the difft-rent nations of Europe- There does not appear then to have been any very "general intercourse between the nations of this quarter of the oflobe, till the Romans, in endeavouring to make them-, selves masters of the world, had brouj;ht tlie gjreatest part of the ]luropean' states under their dominion. From that time there necessarily subsisted a sort of connexion between them, and this connexion was strengthened i)^ the famous decree of Caraealla, by the adoption of the Roman laws, the in-' fluence of the Cliristian relio:ion, which introduced itself insensibly into h11 the subdued states, and the navigation to the East and West Indie's. After' tiie destruction of the empire of the West, the hierarchal system naturally led the several Christian states to consider themselves, in ecclesiastical mat- ters, as unequal members of one a;n'at society. Besides that, theimmoderat& ascendancy that the bishjp of Rome had the address to obtain as spiritual chief of the church, and his making the emperor to be considered as its tem- poral chief, brought such an accession of authority to the latter, that most of (he nations of J^urope showed, for some ages, so great a deference for thfe emperor, that in many respects Europe seemed to form but one society, con- sisting of unequal members, and subject to one sovereign. This order of things remained until the different powers, perceiving that their rigiits were violated, shook oft" the yoke of the pope, or diminished his power, and re- duced all the prerogatives that the emperor enjoyed over ot'ier crowned heads to the mere point of precedence. Since this epoch, until the usurpa- tion of Buonaparte, there has subsisted no unequal connexion between the powers of Europe, either in spiritual or temporal affairs. JNlarten's Law of. Nations, p. '26.

cities

12 Of the Rise and Progress of Commerce,

cities of the Greek empire, had preserved in their own conn-' try considerable relish for the precious commodities and curious manufactures of the East. They coraraunicated some knowledge of t'nese to the countries contiguous to Italy « But this commerce being extremely liniled, the intercourse which it occasioned between different nations was not con- •iderable. The crusades for the recovery of the Holy Land from the Saracens, in the eleventh and following centuries, by leading multitudes from eveiy corn; r of Europe into Asia, opened a more extensive communication between the East and A^''est ; and though the object of these expedition! was conquest aiid not commerce, yet their commercial ef- fects were both beneficial and p. rmanenl. These wild en- thusiastic expeditions were extremely favourable to the com- mercial pursuits of the Italian stat s. The vast armies which marched from all parts of Europe towards Asia on these enterprises gave encoaragement to the shipping of Venice, Genoa, and Pisa, sometimes in transporting them thither, and always in supplying them Avitli provisions and military stores. Besides the immeme sums which these states received on this account, they obtained commercial privileges and establishments of great consequence in the settlements which the crusaders made in Palestine and in other provinces of Asia. There are charters yet extant, containing grants to the Ycaetians, Pisans, and Genoese, of the most extensive immunities. All the commodities which they itnported or exported are thereby exempted from every imposition ; the property of entire suburbs in some of the maritime towns, and of large streets in others, is vested in them ; and all questions arising among persons settled within their precincts, or who traded under iheir protection, are appointed to be tried by their own laws and by judges of their own appointment. When the crusaders seized Constantinople, the Venetians did not neglect to se- cure

Of tlie Rise and Progress of Commerce. 13

«ure to themselves the chief advantages redounding from that event. They made themselves masters of part of the ancient Peloponnesus in Greece, together with some of the most fertile islands in the Archipelago. Many ofthe valua- ble branches of the commerce ^vhich formerly centred in Constantinople were transferred to Venice, Genoa, or Pisa. Thus from these sources prodigious wealth flowed into these cities. This was accompanied with a proportional increase of power; and by the end of the Holy War, Venice, in particular, became a great maritime state possessing ex- tensive and ample territories '.

But Italy was not the only country in which the crusades contributed to revive and diffuse such a spirit as prepared Europe for future discoveries. By their expeditions into Asia, the other European nations became acquainted with, remote regions, which formerly they knew only by name, or by the reports of ignorant and credulous pilgrims. They had an opportunity of observing the manners, the arts, and the accommodations of people more polished than them- •elves. This intercourse between the East and West sub- sisted about two centuries. The adventurers who returned from Asia communicated to their countrymen the ideas "which they had acquired, and the habits of life which they had contracted, by visiting more refined nations. The Europeans began to be sensible of wants with which they were formerly unacquainted : new desires were excited ; and such a taste for the commodities and arts of other coun- tries gradually spread among them, that they not only en- couraged the resort of foreigners to their harbours, but be- gan to perceive the advantage and necessity of applying to commerce themselves*.

' Robertson's View of SocieJy. Smith's Wealth of Nations. Robert- son's History of America.

* Smith's Wealth of Nations, Robertson's History of America.

Another

14 Of the Rise and Progress of Commerce.^

Another great cause of the revival of commerce was t,h« invention of the mariner's compass, which, by renderings navigation more secure as well as more adventurous, facili- tated (he communication between reraofe nations, and brought Ihcm nearer to each other'. . Daring the twelfth and thirteenth centuries the commerce of Europe was entirely in the hands of the Italians. They established a regular commerce with the East in the ports of Egypt, and drew from tliencc all the rich pro- ducts of the Indies. Companies or societies of Lombard merchants, the name by which the Kalian traders were commonly known in those ages, settled in every diflerent kingdom. They were taJvcn under th« iuimcdiale protec- tion of the several governments. They enjoyed extensive privilcg<'s and immunities. The oix^ralion of the ancient and barbarous laws concerning strangers was suspended with respect to them . They became the carriers, the ma- nufacturers, and the bankers of all Europe^.

While the Italians in the south of Europe were culti- vating trade with such industry and success, the commer- cial spirit awakened in the north towards the middle of thtt thirt<H'nth century. As tlie nations round the lialtic were at that time extremely barbarous, and infested that sea with their piracies, the cities of Lubec and Hamburgh, soon after they began to open some trade with these people, found it necessary to enter into a league of mutual de&nce. Th-cy derived such advantages from this union, that other towns acceded to their confederacy ; and in a short time eighty of the most considerable cities, scattered through those extensive countries which stretch from the bottom of the Baltic to Cologne on the Khine, joiiu^d in the famous Hau-

' Robertson's View of Society, p. 91. IIuet,Traitg du Commerce des Ariciens, c. 10.

■^ Robertsyni View pf Society, p, 92 . . . •

seati$.

Of the Rise and Progress of Commerce. lb

scaiic league; which became so formidable, that its alliance was courted, and its enmity was dreaded, by the greatest monarchs. The members of this powerful association formed the first systematic plan of commerce known in the middle ages, and conducted it by common laws enacted in their general assemblies. They supplied the rest of Europe with naval stores, and pitched on di/lerent towns, the most emi- nent of which was Bruges in Flanders, wliere they esta- blished staples in which their commerce was regularly car- ried on. Thither the Lombards brought the productions of India, together with the manufactures of Italy, and ex- changed them for the more bulky eommodities of the North. The Hanseatic merchajits disposed of the cargoes which they received from the Lombards, in the ports of the Baltic, or carried them up the great rivers into the interior parts of Germany'.

This regular intercourse opened between the nations in the north and south of Europe made them sensible of their mutual wants, and created such new and increasing demands ibr commodities of every kind, that it excited among the inhabitants of the Netherlands a more vigorous spirit in carrying on the two great manufactures of wool and ilax, which seem to have been considerable in that coun- try as early as the age of Charlemagne. As Bruges became the centre of communication between the Lombard and Hanseatic merchants, the Flemings traded with both in that city to such extent as well as advantage, as spread among them a general habit of industry, which long rendered Flanders imd the adjacent provinces the most opulent, th« most populous, and the best cultivated countries in Europe^.

Struck with the flourishing state of these provinces, of which he discerned the true cause, Edward the Third of Eng^land endeavoured to excite a spirit of industry among

' Ibid. ' Ibid. '

his

16 Of the Rise and Progress of Commerce.

his own subjects, who, blind ' to the advantages of their situation, and ignorant of the source from which opulence was destined (o flow into their country, were so little alten* tive tt) their commercial interests, as hardly to at(enipt those manufactures the materials of whicli they furnished to fo- reigners. By alluring Flemish artisans to settle in his do- minions, as well as by many wise laws for the encourage- ment and regulation of trade, Edward gave a beginning to the woollen manufactures of England, and first turned the active and enterprising genius of his people toward arts which have raised the English to (he highest rank amongst commercial nations. But notwitiistanding the endeavours of Edward, and the many wis« establishments proposed and encouraged by him, it was not till the reign of Eliza- beth that the English began to discover their true interests^ and the arts by which they were to obtain that pre-eminence and rank which they now hold among commercial nationfir. The causes of this slow progress of commerce are obvious. During the Saxon heptarchy, England, split into many petty kingdoms, which were perpetually at variance with each other ; exposed to the fierce incursions of the Danes and other northern pirates ; and sunk in barbarism and igno- rance, was in no condition to cultivate commerce, or to pursue any system of useful and salutary policy. To this succeeded the Norman conquest, and all the consequence* of a feudal government, military in its nature, hostile to commerce, and the arts and refinements of a liberal and

' In England the progress of cominprce was extremely slow: It was one of the last nations in Europe that availed itself of those commiVcial advan- tages which were natural or peculiar to it. The first commercial treaty of England on record is that with lla£;»iii king of Norway, A.D. 1217. ^Anders, vol. i. p. 108.) But the English did not venture to trade in their own ships to the Baltic until the heginnin<;of the fourteenth century. (Ibid, p. 151.) It was after the middle of the fifteenth before they sent any •hip into the Mediterranean. (Ibid. p. 177.) Nor was it long before this

ETiod that their vessels began to visit the ports of Spain and Portugal, obertson's Hist, of Charles V. Notes and Illustrations, 30.

civilized

Of the Rise and Progress of Commerce. 17

civilized people. Scarce had the nation recovered from the shock occasioned by this revolution, and acquired some stability by incorporating witli their conquerors, but it was engaged with no less ardour than imprudence, in support of the pretensions of its monarch to the crown of France, and long wasted its vigour and genius in wild endeavours to conquer that kingdom. After this followed the destructive wars between the liouses of York and Lancaster, which long deluged the kingdom with blood ; and to which a period was at last happily put by an union of their several titles to the crown in the person of Henry the Eighth'. Under this monarch commercial affairs began to flourish ; but it was not until about the middle of the reign of queea Elizabeth * that tliey began to assume a degree of form and regularity, and to tind shplter and protection from the raa- nag-ers of public affairs K

Besides the causes already mentioned, wliich concurretl to revive the spirit of commerce and promote the inter- course of nations, (viz. the establisliment of the Venetians, ^he Genoese, and the Pisans, the crusades, and the inven- tion of the mariner's compass,) other causes conduced to open men's eyes to the solid importance of commerce, and to give motion and vigour to all the active powers of the human mind. The discovery of America and the naviga- tion to the East Indies followed, and totally changed the face of things.

TJie discovery of America, Mhich gave a new world to European curiosity, by opening an inexhaustible market to all the commodities of Europe, gave occasion to

' Robertson's View of Society, p. 94 ; and Notes and Illustrations, p. SO, - Sir William Jones calls this tl;e commercial reien. Jones's Law of Bailments, p. 103. And Lord Kenyon, in the case of Rex v. Waddington, 1 Last's Rep, said that '• under the acts passed by a Cecilit was that com- merce had been raised up in this country to its present gigantic size."' ■» Hume's Hist, of England. Park's Insurance, preface, p. 25. • _'

c. new

18 Of the Rise and Progress of Commerce.

new divisions of labour aTid improvements of art, whicli ii\ the narrow circle of the ancient commerce could never have taken place for want of a market to take off the greater part of their proeluce. The productive powers of labour were improved, and its produce increa.'-ed in all the different countries of Europe, and, together with it, the real wealth and revenue of the inhabilants. The commodities were almost all new to America, and many of those of America were new to Europe. A new set of exchanges, therefore, began to take place which had never been thought of before, and which natiually would have proved as advantageous to the new as it certainly did to the old continent, had not the savage injustice of Europeans rendered an event which ought to have been beneficial to all, ruinous and destructive to several of those unfortunate countries '.

By the discovery of a passage to the East Indies by the Cape of Grood Hope, which happened much dbout the same time, a still more extensive range was perhaps opened to foreign commerce than even that of America, notwith- ftanding the greater distance. There were but two nations in America in any respect superior to savages, and these were destroyed idmost as soon as discovered. The rest Mere mere savages. But the empires of China, Indostan, Japan, as well as several others in the East Indies, without having richer mines of gold and silver, were in every other respect much richer, better cultivated, and more advanced in all arts and manufactures, than either Mexico or Peru, even though we should credit, what plainly deserves no credit, the exaggerated accounts of the Spanish writers concerning the ancient st;ite of those empires. But rich and civili/ed nations can always exchange to a much greater value with one another than with savages and barbarians. Besides j

» Smith's Wealth of Nations, ii. p. ITT.

Of the Rise and Progress of Commerce. 19

the trade to tlie East Indies, by opening a market to the commodities of Europe, or, what comes nearly to the same thing, to tl>e gold and silver which is purchased w ith those commodities, must necessarily tend to increase the annual production of European commodities, and consequently the real wealth and revenue of Europe. That it has derived much less advantage from its commerce with the East In- dies than from that of America, Dr. Smith observes, is pro- bably owing to the restraints that it every where labours under from the privileges of exclusive companies'.

After the two important events in the history of com- merce, viz. the discovery of America and of the passag« to the East Indies, communities began to be animated by a commercial spirit of enterprise, and most of the poT^^rsof Europe began to think seriously of maritime corameroe, and to coiisider it as one of the most effective means of aug- menting their riclies and power. Some of them succeeded in acquiring possessions out of Europe. Others took care to encourage commerce, at least, in their home possessions, and to procure for their subjects, by the means of laws and treaties, solid advantages, which were no less solid for the siatc at the time, gince their chief tendency was to leave a balance in its favour *.

' Ibiii. pp. 178, 180.

' Martf n's Law of Nations, p. ii>0.

c f ?iKI

20 PART II.

OF THE MEDIUM OF COMMERCE.

In the first stage of society, barter or permutation was tli« method of carrying on commerce between nations : some people having a superfluity of those goods which otliers wanted, both parties would naturally be inclined to ex- change their superfluities with each other, as by that means they could procure what they wanted, by parting with that which tliey did not want. This method of traffic con- tinued even to the seventeenth century. The English, French, and Dutch traders first carried their merchandize to Archangel, and there trucked it with the Russians for the products of that vast empire '. But as men and their wants multiplied, this sort of commerce, in its original form, could not be carried on at a distance, or pven among neighbours, it not always happening that one nation could spare what another wanted. Many different commodities, it is probable, were successivelj' both thought of and em- ployed for this purpose. In the rude ages of society, cattle are said to have been the common instrument of commerce ; and though tbey must have been a most inconvenient one, yet in old times we find that things were frequently valued according to the number of cattle which had been given in exchange for them. The armour of Diomede, says Ho- mer, cost only nine oxen ; but that of Glaucus cost a hun-

• The revenues of the ancient Saxon kings of England are said to hare been paid not in money, but in kind ; that is, in victuals and provisions of all sorts. W illiam the Norman introduced the custom of paying them in money. This money, however, was for a long time rectived at the exche- quer t)y weight, and not by talr. Aad so late as the fourteenth century, twenty thousand sacks of wool were sent to Antwerp, to pay the expenses of .the English army in the Netherlands. SUiith's Wealth ef Nations, i. p. 40.

dred.

Of the Medium of Commerce. SI

dred. It is also mentioned by Pausanias and Aristotle, as a custom which still subsisted in their times among the Barbarians : and we learn from other authors that it was the practice of the ancient Germans, Britons, and Lusita- nians. To this day, among the Tartars, as also among all nations of shepherds, who are generally ignorant of the use of money, cattle are the common instruments of commerce and the measure of value. Salt is said to be the common instrument of commerce and exchanges in Abyssinia 3 a species of shells in some parts of the coast of India ; dried cod at Newfoundland ; tobacco in Virginia ; sugar in some of our West India colonies ; hides and dressed leather in some other countries ; and in some towns in Scotland, even at this day, nails are used instead of money. Among the savages of North America, the only standard of exchanges is the skin of a beaver'.

A common medium, which might be equally adapted to every one's wants, by being made by mutual agreement the common measure of exchange, which should be at the same time portable, and divisible into parts equal to the value of the goods bought or sold, was long the object of the most earnest investigation. Metals, therefore, were adopted. In all countries, men seem at last to have been determined by irresistible reasons to give the preference for this employment to rrietals above every other ^mmodity. Their homogeneous quality in all countries adapted them, in a peculiar manner, for facilitating the purposes of com- merce, and consequently as a standard of tJie comparative value of commodities. They cannot only be kept with as little loss as any other commodity, scarce any thing being less perishable than they are, but they can likewise, with- out any loss, be divided into any number of parts, as by

' Home's Sketches, vol. i. p. 61. Smitli's Wealth tf Nations, i. p. S6. Taylor's Elemetite of the Civil Law, p. 499.

fusioB

22 Of the Medium of Commerce.

fusion those parts can be easily UHiled again ; a quality Tvhich no other equally durable commodities possess, and which, more than any other quality, renders them fit to be instrument* of commerce and circulation. The man who ■wanted to buy salt, for example, and had nothing but cat- tle to give in exchange for it, must have been obliged to buy salt to the value of a ^vhole ox, or a ^vhole sheep^ at a time. He could seldom buy less than this, because what he was to give for it could sehloni be divided without loss ; and if he had a mind to buy more, he; must, for the sam« reasons, have been obliged to buy double or triple the quan- tity ; the value, to wit, of two or three oxen, or of two or three sheep. If on the contrary, instead of sheep and oxen, he had metals to give in exchange for it, he could easily proportion the quantity of the metal to the precise quantity of tiie commodity for >vhich he had immediate oc- casion '.

Different metals have been made use of by different na- tions for this purpose. Iron Avas the common instrument of commerce among the ancient Spartans; copper among the ancient Romans, until five years before the first Punic war, when they first began to coin silver ; and gold and silvei among all commercial nations. In England, silver coins were in use in the time of the Saxons, but there was littl* gold coined till the time of Edward the Third, nor any copper till that of James the First ^

In the invention of money there are two periods, that wherein it was Aveighed, when it consisted either of small bars of iron, brass, or silver, or large plates of the same metals, and that wherein it was coined. The denomina- tions of money and the several terms of exchange, both in the Greek and Roman languages, evidently refer us to this

' Ibid, ut ante.

» Smith's Wealth of Nations, i. p. 38, 61,

ancient

Of the Medium of'Coyninerce. 23

Sincietit practice '. Originally (he circulating medium consisted of rude bars of metal Avithout any stamp or coinage. Thus, we are tuld by Pliny, (Hist^ Nat. lib. xxxiii. c. 3.) upon the authority of Timaeus, an ancient historian, that till the tiUie of Servius TuUius the Romans had no coined money, but made use of unstamped bars of copper to purchase whatever they bad occasion for. These rude bars, therefore, performed at this time tho functions of money ^. But, in time, more nicety came to be introduced into the conrmcrce of metals ; instead of btung given loosely by bulk;, every portion was weighed in scales, or assayed in the crucible. Even weight and the tedious and difficult operation of assaying were at length discovered to be an imperfect standard; To pre- vent, then, fraud and imposition, and to facilitate ex- changes, pieces of these metals, with a public stamp vouching both the purity and quaiititj'^, were introduced ; and such pieces were termed coins i This was a notable improvement, says Lord Kaimsj in commerce; and, like other improvements, was probably at first thought the ut- most stretch of human invention. It was not foreseeu, continues that perspicacious writer, that tliese metals wear by much handling, so that in time the public slamp is re- duced to be a voucher of the purity only, not of (he quan- tity. Hence proceeded manifold inconveniences, and much embarrassment in commerce ; which no doubt, together \vith the scarcity of (he precious me(uls, facilitated the in- troduction of paper money, which is free fiom that embar- tassment'.

It may not be improper (o state here the adva iiages arising trom the introduction of pa})er money as a circulating medium. A well regulated paper money, Dr. Smith ob-

' Tavlor's Llemrnts, p. 18S.

' U.id.

3 ilome's Sketches, voK i. p, al.

serves

2i Of the Medium of Commerce.

ficrvcs in his Woaldi of Nations, will supply a scarcity of the precious metals, not ojily without any inconveniency, but in some cases with some advantages.

The substitution of paper in the room of <^old and silver money replaces a very expensive instrument of commerce ivith one much less costly, and sometimes equally con- venient. Circulation comes to be carried on by anew wbee!, ivhi'.h it costs less botli to erect and to maintain than the old one. But in wliat manner this operation is performed, and in what way it tends to increase either the gross or the neat revenue of the society, is not altogether so obvious, and may therefore require some further explication.

There are several different sorts of paper money ; btft the circulating notes of banks and bankers are the species which is best known, and which seems best adapted for this purpose.

A particular banker lends among his customers his own promissory notes, to the extent, wc shall suppose, of a hun- dred thousand pounds. As those notes serve all the pur- poses of money, his debtors pay him the same interest as if he had lent them so much money. The interest is the source of his gain. Though some of those notes arc con- tinually coming b.ick upon him for payment, part of them continue to circulate for months and years together. Though lie has generally in circulation, therefore, notes to the ex*' tent of one hundred thousand pounds, twenty thousand pounds in gold and silver may, frequently, be a sufficient provision for answering occasional demands. By this operation, therefore, twenty thousand pounds in gold and silver peribrni all the operations which a hundred thousand could otherwise have performed. The same exchanges may be made, the same quantity of consumable goods may be circulated and distributed to their proper consumers, by means of his promissory notes to the value of a hundred

thousand

Of the Medium of Cormnei-ce, Q3

thousand pounds, as hy an equal value of gold and silver money. Eighty thousand pounds of gold and silver, therefore, can, in this manner, be spared from the circula- tion of the country ; and if diflerent operations of the same kind should, at the same time, be carried on by many different banks and bankers, the whole circulation may thus be conducted with a fifth part only of the gold and silver which would otherwise have been requisite.

Let us suppose, for example, that the wliole circulating money of some particular country amounted, at a particular time, to one million sterling, that sum being then sufficient for circulating the whole annual produce of their land and Mtbour. Let us suppose too, that some time thereafter, dif- ferent banks and bankers issued promissory notes, payable to the bearer, to the extent of one million, reserving in their diflerent cofiers two hundred thousand pounds for answer- ing occasional demands. There would reraaui, therefore, in circulation, eight hundred thousand pounds in gold and silver, and a million of bank notes, or eighteen hundred thousand pounds of paper and money together, ^ut the annual produce of the land and labour of the country had before required only one million to circulate and distribute. it to their proper consumers, and that annual produce can- not be immediately augmented by those operations of banking. One million, therefore, will be sufficient to cir- culate it after them. The goods to be bought and sold being precisely the same as before, the same quantity of money will be sufficient for buying and selling them. The channel of circulation, continues Dr. Smith, if I may be allowed sucli an expression, will remain precisely the same as before. One million we have supposed sufficient to fill <hat channel. Whatever, therefore, is poured into it beyond this sura, cannot run in it, but must overflow. One million eight li\indred thousand poundvs are poured

into

26 Of the Aledium of Commei'c'e,

into it. Eif!;^bt hiindrecl tliousand jiounds must tlicrefdrt dveiflo^v, that sum he'\\\*r over and above what can be em*' ployed in the circulation of the country. But though this sum cannot be employed at hoine^ it is too valuable \o be allowed to lie idle. It Mill, therefore, be; sent abroad, in ftrder to seek that profitable employment which it cannot jBnd at home. But the paper cannot go abroad ; l^ccause at a distance frOm the banks that issue it, and from the country in which payment a^ it can he exacted by law, it ■wiU not be receivetl in common payments. Gold and silver, therefore, to the amount of eight hundred thousand pounds will be sent abroad, and the channel of home cir- culation will remain filled Avith a million of paper, instead t)f a million of those metals which filled it before.

FrOm these premises it is evident then, that when papef is substituted in the room of gold and silver money, the quantity of the materials, tools, and maintenance, which the whole circulatirig capital can supply, may be increased by the whole value of gdld and silver which used \o be em- ployed ill purchasing them. The whcjle value of the great tvheel of circulation and distribution is added td the goods •which are circulated and distributed by means of it. The operation in some measure. Dr. Smith observes, resembles that of the undertaker of some great work, who, in conse- quence of some improvement in mechanics, takes down Jiis old machinery, and adds the difTen nee between its pricSft and that of the new to his circulating capital, to the fund from which he furnishes materials and wages for his works- men.

Wheuj therefore, by the substitution of paper money, the gold and silver necessary for circulation is reduced to^ perhaps, a fifth part of the former quantity, if the value of the grejiter part of the other four-fifths be added to the funds which are destined for the maintenanee of industry, it must ........ make

Of the Medhtm of Commerce. St

make a Very considerable addition to tlic quantity of that industry, and consequently to the value of the annual pro- duce of land and labout.

An operation of this kind, continues Dr. Smith, has within these five-and-twenty or thirty years been performed in Scotland, by the erection of new banking companies in almost every considerable town, and even in some country villages. The effects of it have been precisely those above described.

Particular attention, howeVer, must be paid, that the circulation be not overstocked with paper money. The whole paper money of every kijid which can easily circulate in any country never can exceed the value of the gold and silver of which it supplies the place, or which (the com- merce being supposed the same) would circulate there if there was no paper money. Should the circulating paper at any time exceed that value, as the excess could neither be sent abroad nor be employed in the circulation of the country, it must be immediately returned upon the banks to be exchanged for gold and silver. There would imme- diately be a run upon the banks to the whole extent of this superfluous paper, and, if tbey showed any difficulty or backwardness in payment, to a much greater extent ; the alarm which this would occasion, necessarily increasing tfie run. -^ i/vTi^^dt^ </^^^/^ ^ J<^-

' ' J ^ y

'/

1*8 PART III.

OF COMMERCIAL POLITICS •' .

OoMMERCE being one of the most efficacious means of augmenting tbe ease, the riches, and even the power of a nation, it is of the first importance to examine the causes of its advanciement and decline. For this purpose we shall consider it in three points of view: I. The most advantage- ous way in which the capital of a country may be employ- fd: 2. What cfTccfs money has upon commerce; and 3. The causes of the advancement and decline of commerce.

SECTION I.

OF THE EMPLOYMENT OF CAPITAL IN^ C05IMERCE,

A capital, says Dr. Smith, may be employed in four dif- ferent ways, each of which is essentially necessary either to the existence or extension of the other three : first, it may be employed in procuring the rude produce annually re- quired for the use and consumption of the society ; second- ly, in manufacturing and preparing that rude produce for immediate use and consumption ; thirdly, in transporting either the rude or manufactured produce from tlie ])Iaces ■nlicre they abound to those where they are wanted; or lastly, in dividhig particular portions of either into such small parcels as suit the occasional demands of those who ivant them. In the first way arc employed the capitals of

* To avoid a. repetition of reference, we shall acknowledge once for all, that the whole cf this part is taken from the works of Dr. Adam Smith and Lord Kaim?, whose solid reasonings and conclusive deductions have received th • confirmation of truth and experience.

all

Of Commereial Poiitics. ^

all those who undertake the improvement or cultivation of lands, mines, or libhcries; in the second, those of all mas- lers manufacturers; in the third, those of all wholesale merchants; and in the fourth, those of all retailers. It is dilEcult to conceive, continues that patriotic writer, that a capital should be employed in any way which may not be classed under some one or other of these four.

Equal capitals, however, employed in each of these four (lifferent ways will inunediately put info motion very difl'er- ent quantities of productive labour, and augment too in very different proportions the value of the aimual produce of the land and labour to which they belong. In countries which have not a suflicient capital to employ at the same time in the improvement and cultivation of all their lands, in the manufacture and preparation of their whole rude produce for immediate use and consumption, and in the transporta- tion of the surplus part either of the rude or manufactured produce to those distant markets where it can be exchanged for something for which there is a demand at home ; of all the ways in which a capital can be employed that of agri- culture is of far the most advantage to the society. After agriculture, the capital employed in manufactures puts into motion the greatest quantity of productive labour, and adds the greatest vahie to the annual produce. That which is employed in the trade of exportation, has the least eiiect of any of the tliree.

The capital that is acquiretl to any country by commerce and manufactures, is all a very precarious and uncertain possession, till some part of it has been secured and realized in the cultivation and improvement of its lands. A mer- chant, it has been said very properly, is not necessarily the citizen of any particular country. It is in a great measure indifferent to him from what place he carries on his trade ; and a very trifling disgust will make him remove his capi- tal,

so Of Commerciq^l Politics*

tal, and together with it all the industry which it supports, from one country to another. No part of it can belong to any particular country, till it has been spread as it were over the face of that country, either in buildings, or in the lasting improvement of lands. No vestige now remains of tlic great wealth said to have been possessed by the greater part of the Hans towns, except in the obscure histories of the thirteenth and fourteenth centuries. It is even uncer- tain Avhere some of them are situated, or to what towns in Europe the Latin names given to some of them belong. But though the misfortunes of Italy in the end of the tifteenth and beginning of the sixteenth centuries greatly diminished the commerce and manufactures of the cities of Lombardy and Tuscany, those countries still continue to be among the most populous and best cultivated in Europe. The civil wars of Flanders, and the Spanish government which suC' ceeded them, chased away the great commerce of Antwerp, Ghent, and Bruges. But Flanders continued to be one of the richest, best cultivated, and most populous provinces of Europe. Neither have the pillage and devastation of the French revolutionists robbed it of its agricultural riches. The ordinary revobitions of war and government easily dry up the sources of that wealth which arises from commerce only. That which arises from the more solid improvements of agriculture is much more durable, and cannot be de^ stroycd but by those more violent convulsions occasioned by the deprediitions of hostile and barbarous nations co!i- timied for a century or two together; such as those that liappened for some time belbre and after tlic fall of the Roman empire in tlic western provinces of Europe.

But as the extension and advancement of commerce are the objects of our inquiries, we shall contine ourselves to the elucidation of the employment of the capital of the wholcijalc merchant, referring only incidentallyj or when

the

Of Commercial Politics . SI

the nature of tlic subject requires, to its operation upon jigriculture and manufactures.

^ Every individual, continues the author of the Wealth of Nations, is continually exerting himself to find out the most advantagrous employment for whatever capital he can com* mand. The consideration of his own private profit is the sole motive which determines the owner of any capital to employ it cither in agriculture, in manufactures, or in some particular branch of the wholesale or retail Irade. The different quantities of productive labour which it may put into motion, and the diflerent values which it may add to the annual produce of the laud and labour of the society, ac^ cording as it is employed in one or other of those different ways, never enter into his thoughts. In countries, there- fore, where agriculture is the most profitable of all employ •» mcnts, and forming and improving the most direct roads to a splendid fortune, the capitals of individuals will naturally be employed in the manner most advantngeous to the whole society. The employment of capital in this method, be-» sides that it Ls the must advantageous to the society, is the most congenial to the disposition of man ; for as the culti-? vation of tiic ground was the original destination of man, so in every stage of his existence he seems to retain a pre- dilection for this primitive employment. J^esides, where profits are equal, or nearly equal, most men will choose to employ their fortunes rather hi the improvement and culti- vation of land, than eith(;r in manufactures or in foreign trade ; to have them more under their view and command, than commit them, not only to the winds and the waves, but to the nK)rc uncertain elements of human folly and in--- justice, by giving great credits in distant countries to men ^vith whose character and situation they can seldom be tljoroughly acquainted.

TUtf

32 Of Commercial Politics.

The profits of agriculture, however, seem to have nq superiority over those of other employments in any part of Europe. Projectors, indeed, U\ every corner of it, liave Tvitiiin these itvi years, continues Dr. Smitli, amused the public with most magni'iccnt accounts of the pro/its to be jnade by the cultivation and improvement of land. With- out entering- into any particular discussion of their calcnk' tions, a very simple oljscrvation may satisfy us that tlic rc-^ suit of them must be false. We see every day the most splendid fortunes that have been acquired in the course of a single life by trade and maimfaclurcs, frequently fron^ very small capitals, sometimes from no capital. A single instance of such a fortune acquired by agriculture in the same time, and from such a c;ip;tal, has not perhaps oc- curred in Europe during the course of a century.

As the same capital will in any country, according to; the different modes and proportions in which it is cmploj^edj^ add a greater or smaller value io the annual produce of the land and labour ; so the difference too is very great accord- ino- to the ditierent sorts of trade in which any part of it is employed.

All wholesale trade, all buying in order to sell again by wholesale, says Dr. Smitli, may be reduced to three dif- ferent sorts. The home trade, the foreign trade of con- sumption, and the carrying trade. The home trade is em- ployed in purchasing in one part of the same country, and selling in another, the produce of the industry of that <:ountry. It comprehends both the inland and the coasting; trade. The foreign trade of consuniption is employed in purchasing foreign goods for home consumption. The carrying trade is employed in transacting the commerce of fprei"-n countries, or in carrying the surplus produce of one

to another.

Of

Of Commercial Politics, 3$

Of these, continues Dr. Smith, the capital employed in the home trade of any country will generally give encourage- ment and support to a greater quantity of productive laboiir in that country, and increase the value of its annual pro- duce more than an equal capital employed in the home trade of consumption : and the capital employed in this latter trade has in both these respects a still greater advan- tage over an equal capital employed in the carrying trade. The riches, and, so far as power depends upon riches, the power of every country must always be in proportion to the value of the ammal produce, the fund from which all taxes must ultimately be paid. But the great object of the political economy of every country, is to increase the riches and power of that country. It ought, therefore, to give no preference nor superior encouragement to the foreign trade of consimiption above the home trade, nor to the carrying trade above either of the other two. It ought neither to force nor to allure into either of those two channels, a greater share of the capital of the country than what would natu- rally flow into them of their own accord.

The extent of the home trade, and of the capital which can be employed in it, is necessarily limited by the value of the surplus produce of all those distant places within the country which have occasion to exchange their respective productions with one another; that of the foreign trade of consumption, by the value of the surplus produce of the whole country and of what can be purchased with it ; that of the carrying trade, by the value of the surplus produce of all the different countries of the world. Its pos- sible extent, therefore, is in a manner infinite in compariaoa of that of the other two, and is capai)le of absorbing th# greatest capitals.

» SECTION

oi Of Commercial Politics* "^

SECTION II.

OF THE EFFECTS OF MONEY UPON COMMERCfl.

Before >ve enter upon the inquiry bow commerce iS' efl'ected by the quantity of circuhitini^ coin, it seems ne- cessary to premise a few observations concerning the opera- tion of the value of a conimodily on the demand. We may say, generally, that the value of a commodity depends chiefly, though notsolel}', on the demand. Quantity be- yond the demand renders even necessaries of no value ; of which water is an instance. It may be held accordingly as a general rnle, that the value of goods in commerce de- pends on a demand beyond what their quantity can satisfy ; and rises in proi)ortion to the excess of the demand above the quantity. Even water becomes valuable in countries where the demand exceeds the quantity : in arid regions springs of water arc highly valued • and in old times were frequently the occasion of broils and bloodshed. Com- paring next different commodities with respect to value, that commodity of which the excess of the demand above the quantity is greater, will be of the greater value. Were utility or intrinsic value only to be considered, a pound of iron would be worth ten pounds of gold ; but as the excess of the demand for gold above its quantity is much greater than that of iron, the latter is of less value in the market. A pound of opium or of Jesuit's bark is, for its salutary effects, more valuable than gold ; and y^i, for the reason given, a pound of gold will purchase many pounds of these drugs. Thus, in general, the excess of the demand above the quantity is the standard that chiefly Axes the mcrcau- tilc value of commodities.

But as our chief view is to examine how far industry and commerce are aflected by the quantity of circulating coin,

we

Of Commercial Politics. 55

Vie premise, in that view, the following plain propositions : Supposing-, first, the quantity of money in circulation and the quantity of goods in the market to continue the same, the price will rise and fall with the demand. For when more goods are demanded than the market affords, those who offer the highest price will be preferred ; as on the other hand, when the goods brought to market exceed the de- mand, the venders have no resource but to entice purchasers by a low price. The price offish, flesh, butter, and cheese, is much liigher than formerly ; for, thchc being now the daily food of the lowest people, the demand for them is greatly increased. But though tlie increase of demand may in the beginning sometimes raise the price of goods, it never fails to lower it in the long run. It encourages production, and thereby increases tire competition of the producers, who, in order to undersell one another, liavc re- course to new divisions of labour and new improvements of art, which might never otherwise have been thought of.

Supposing now a fluctuation in the quantity of goods only, the price falls as the quantity increases, and rises as the quantity decreases. The farmer whose quantity of corn is doubled by a favourable season, must sell at half the usual price; because the purchaser, who sees a superfluity, will pay no more for it. The contrary happens upon a scanty crop ; those who want corn must starve, or give the mar- ket price, however high. The manufactures of wool, flax, and metals, are much cheaper than formerly ; for though the demand has increased, yet by skill and industry the quantities producetl have increased in a greater proportion.

It is easy to combine the quantity and demand, supposing a fluctuation in both. Where the quantity exceeds the usual demand, more people will be tempted to purchase by the low price ; and where the demand rises considerably above the quantity, the price >Yill rise in proportion. In mathe-

D 2 matical

36 Of Comjnercial Politics.

matical language these propositions may be thus cxprfssed, that the price is directly as the demand, and inversely a» the quantity.

A variation in the quantity of circuhitinfic coin is the most intricate circumstance : because it never happens without making a variation in the demand for goods, and frequently in the quantity. 1 take the liberty, hoi\'ever, continues Lord Kaims, to suppose that there is no variation but in the quantity of circulating coin ; for though that cannot hap- pen in reality, yet the result of the supposition will throw light upon what really happens : the subject is involved^ and I wish to make it plain. I put a simple case, that the half of our current coin is at once s^ept away by some ex» traordinary accident. This at first will embarrass our ex- ternal conmierce, as the vender will insist for the usual price ; which now cannot be afforded. But the error of such demand will soon be discovered ; and the price of com- modities, after some fluctuation, Avill settle at the one half of what it was formerly. Ai the same time, there is here no downfall in the value of commodities, which cannot hap* pen while the quantity and demand continue unvaried. The purchasing for a sixpence what formerly cost a shilling., makes no alteration in the value of the thing purchased ; because a sixpence is equal in value to what a shilling was formerly. In a v/ord, when money is scarce, it must bear a high value : it must in particular go far in the purcha^ ©f goods ; which we express by saying that goods are cheap. Put the. next case, that by some accident our specie is instantly doubled. Upon supposition that the quantity and demand continue unvaried, the result must be, not in- stantaneous indeed, to double the price of commodities. Upon the former supposition, a shilling has in effect sunk down to a sixpence. And here again it ought to be ob- aeryedj that though the price is augmented, there is no real

alteration-

Of Commercial Politics, 37

alteration in the value of commodities. A bullock, says the same author, that some years ago could have been pur- chased for ten pounds, will at present yield fifteen. The vulgar ignorantly think that the value of horned cattle has risen in that proportion. The advanced price may, in some degree, be occasioned by a greater consumption ; but it is chiefly occasioned by a greater quantity of money in cir- culation*.

Combining all the circumstances, the result is, that if the quantity of goods and of money continue the same, the price will be in proportion to the demand : if the demand and quantity of goods continue the same, the price will be in proportion to the quantity of money. And if the demand and quantity of money continue the same, the price will fall as the quantity increases, and rise as the quan- tity diminishes.

OThe effects of money on the prices of labour are deservinfj of the closest attention. It may be held as a general rule, that the increase of money raises the price of every com- modity ; partly fiom the greater quantity of money, and partly from the additional demand for supplying those artificial wants which money generates. High wages will undoubtedly promote at first the spirit of industry, and double the' quantity of labour : but the utmost exertion of labour is limited within certain bounds; and consequently a perpetual influx of gold and silver will not for ever be at- tended with a proportionable quantity of work : the price of labour will rise in proportion to the quantity of money ; but the produce will not rise in the same proportion ; and

* This import.nnt maxim has received the incontestable sanction of Dr. Smith, who in his TV'ealth of Nations observes, That degradation in the value of silver, which is the effect of the fertility of the mines, and which. operates equally or very nearly equally through the greater part of the commercial world, is a matter of very Ifttle consequence t!i any particular country. The consequent rise of all mojiey prices, though it does not make those who receive them really richer, does not make them really poorer. A service of plate becomes really cheaper, and every thing else rejjuClrjs precisely of the same real value 9s befpr.e.

foi

3S Of Commercial FoUtics'.

for that reason our maniifacturos v, ill be dearer than formerly. Hence a di-.mal scene. The high price at lio)ne of our ma- nnfactures ^vill exclude us from foreign markets ; for, if the merchant cannot draw theje for his goods what he paid at home, with some profit, he must abandon foreign commerce altogether. And what is even still more dismal, we shall be deprived even of our own markets ; for, in spite of the utmost diligence, foreign commodities cheaper than our own will be poured in upon us*.

But however certain it may appear, that an augmenta- tion in the quantity of money must raise the price of labour and of manufactures, yet there is a fact that seems to con- tradict this proposition, which is, that in no country are la- bour and manufactures so cheap as in the two peninsulas on the right and left of the Ganges, though in no other coun- try is there such plenty of monej'. To account for this singular fact, political writers say, that money is there amassed by the nabobs, and withdrawn from circulation. This is not satisfactory : the chief exportation from these peninsulas are (heir manufactures, the price of which comes first to the merchant and manufacturer ; and how can that happen witliout raising the price of labour ? Rice, it is true, is the food of the labouring poor ; and an acre of rice yields

* There serm? (o be, says Mr. Hume in his Essay on Money, a happy r<»rriirr»'nrc in hiimnii aflnirs, \vliirli rlucks (he 2;ro\vth of trade and richo?, and hinders thcni from hcini; foiilined entirely to one people; as might na- tiirallvat first he dreaded from (he advantages of an established commerce. XVhere one nation lias pot the start of another in trade, it is very difficult f<ir the latter to rep;ain the ground it has lost; because of the supeiior in- riustryaiid skill of tlie former, and the greater stocks of which its merchants are possessed, and which enable tliem to trade for so much smaller profits. But tlv'se advantap;es are compeii?ated in some measure l)y the low price of labour in every nation which has not an extensive commerce, and docs iiot v^r- iTnicl) aijound in gold and silver. Manufactures, therefore, gra- dually .shift their places, leavinj;- those countries and provinces which they have already enriched, and flying to others, whither (hey are allured by the cheapness of provi.-ions and labour; till they have enriched these also, and are a°;ain banishcil by the sai-ne causes. And in general we may observe, that the di arness of every tiling from plenty fif money, is a disadvantage which attends an establi.-ihcd coiiinur( c, and sets bounds to it in every coun- try, by enabling the poorer states to undersell the richer in all foreign jrarketi.

twOj

Of Commercial Politics, SP

two, sortietimes three, crops in the year, each of them more plentiful than any common crop of corn : but the cheap- ness of necessaries, though it has a considerable influence ifi keeping down the price of labour, cannot have an eflcct so extraordinary as to keep it constantly down, in opposi- tion to an overflowing current of money. The populous- jiess of these two countries is a circumstance that has been totally overlooked. Every traveller is amazed how such swarms of people can find bread, however fertile the soil may be. hei us examine that circumstance. One thing is evident, that were the people fully employed, there would not be a demand for the tenth part of their manufactures. Here then is a country where hand labour is a drug for want of employment. The people at the same time, sober and in- dustrious, are glad to be employed at any rate ; and whatever pittance is gained by labour makes always some addition to- wards their support. Hence it is that, in these peninsulas, su- perfluity of hands overbalancing both the quantity of money and the demand for their manufactures, serves to keep the price much lower than it is any where in Europe. Through the greater part of Europe, too, tlie expense of laiul carriage increases very much both the real and nominal price of most manufactures. It costs more labour, and therefore more money, to bring first the materials, and afterwards the com- plete manufacture to market. In China and Indostan the extent and variety of inland navigations save the greater part of this labour, and consequently of this money, and thereby reduce still lower both the real and the nominal price of the greater part of their manufactures.

^Vhat is now said discovers an error in the proposition above laid down. It holds undoubtedly in Europe, and in every country av here there is work for all the people, that an augmentatioti in the circulating coin raises the price of labour and manufactures; but such augmentation has no

sensible

40 Of Commercial Politics,

sensible effect in a country where there is a superfluifj of hands, who are always disposed to work when they find em- ployment.

From these premises it will be evident, that unless there be a superfluity of hands, manufactures can never flourish in a country abounding with mines of gold and silver. This in effect is the case with Spain : a constant influx of those metals, raising the price of labour and of manufao^ tures, has deprived the Spaniards of foreign markets and also of their own : they are reduced to purchase from stran- gers even the necessaries of life.

To illustrate this observation, which indeed is of great importance, we will enter more minutely into the condition of Spain. The rough materials of silk, wool, and iron, aie produced there more perfect than in a"y other country ; and yet flourishing manufactures of tliese would be ruinous to it in its present state. Let us only suppose that Spair^ itself could furnish all the commodities that are demanded in its American territories ; what ^vould be the consequence? The gold and silver produced by that trade would centre and circulate in Spain : money would become a drug : la-? bour and manufactures would rise to a high price; and every necessary of life, not excepting manufactures of silk, wool, and iron, would be smuggled into Spain, the Iwgh price there being sufficient to overbalance every risk : Spain vould be left without industrj^, and without people. Spain was actually in the flourishing state here supposed, when America was discovered ; its gold and silver mines inflamed the disease, and consequently were the greatest misfortune that ever befell <hat once potent kingdom. The exportation of our silver coin to the East Indies, so loudly exclaimed against by shallow i)oliticians, is to us, on the contrary, a most substantial bencflt ; it keeps up the value of silver, and consequently lessens tlic value of labour and goods ; Avhich

enables

Of Commercial Politics. 41

enables us to maintain our place in foreign markets. Were tliere no drain for our silver, its quantity in our continent •jvould sink its value so much as to render the Americau mines unprofitable. Notwithstanding the great flow of money to the East Indies, many mints in the West Indies are given up, because they afford not tlie expense of work- ing ; and were the value of silver in Europe brought much lower, the whole silver mines in the West Indies Avould be necessarily abandoned. Thus our East India commerce, which is thought ruinous by many, because it is a drain to much of our silver, is for that very reason profitable to all. The Spaniards profit by importing it into Europe ; and other nations profit by receiving it for their manufaC' tures, the value paid for which they afterwards export to India. Besides, there is scarce any commodity which brings a better price there ; or which, in proportion to the quan- tity of labour and commodities which it costs in Europe, will purchase or command a greater quantity of labour and commodities in India, It is more advantageous too to carry silver thither than gold ; because in China, and the greater part of the other markets of India, tlie proportion between fine silver and fine gold is but as ten, or at most as twelve, to one ; whereas in Eu^op^ it is as fourteen or firteen to one. In China, and the greater part of the other markets of In-» dia, ten or at most twelve ounces of silver will purchase an ounce of gold : in Europe it requires fourteen or fifteen ounces. In the cargoes, therefore, of the greater part of the European ships wliich sail to ludia, silver has gcne-^ xaliy been one of the most valuable articles. It is the most valuable article in the Acapulco ships which sail to Mai nilla. The silver of the new continent seems in this man-; ner to be one of the principal commodities by which tho commerce between the two extremities of the old one is car- ried on ; ^nd it is by means of it, in a great measure, that

thosft

42 Of Coynmercial Politics.

those cli»itant parts of tho world are connected with one an- other. J>y this aunnal exportation of silver to the East Indies, plate probably is somewhat dearer in Europe than it otherwise would liave been ; but this disadvantage is counterbalanced by the larger quantity both of labour and commodities which coined silver purchases. The former of these two efFects is a very small loss ; the latter a vpry great advantage,

SECTION III.

OF THE RESTRAINTS AXD ENCOURAGEMENTS OF TUJ) COMMERCIAL SVSTEII.

From the two popular though erroneous notions, that TTcallh consisted in gold and silv<jr, ii nd that those metals could be broiiglit into a country whicli had no mines only by the balance of trade, or by exporting to a greater value than it imported ; it necessarily became the great object of politi- cal economy to diminish as much as possible the importa- tion of foreign goods for home consumption, and to increase as much as possible the exportation of the produce of do- mestic industry. Its two great engines for enriching the country, therefore, Averc restraints upon importation, and encouragements to exportation.

. Accordingly as these restraints and encouragements tend cither to increase or diminish the value of the annual pro- duce of tlie country, they must evidently tend either to in- crease or diminish its real wealth and industry. We shall examine what are likely to be the efFects of each of theja vpon the annual produce of its industry.

1. Of Export at ion.

It was a maxim universally adopt(;d among nations igno- rant of the nature of coauucrcc, that to tax exportation,

Of

Of Commercial Politics, 43

or to proliibit it'altogellicr, was the best means for Iiaving plenty at home. They did not consider that in tliis pro- hibition they acted directly contrary to their intention ; and that the more that is exported of any commodity, the more wilit)e raised at home, of which they themselves will al- ways have the first offer. But the policy of tlic mercantile system gives ample encouragement to exportation. Yet with regard to some particular commodities it seems to follow an opposite plan. It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets.

The exportation of the materials of manufacture is some- times discouraged by absolute prohibitions, and sometimes by high duties.

Our woollen manufacturers have been more successful than any other class of workmen in persuading the legisr lature that the prosperity of the nation depended upon the success and extension of their particular business. They have not only obtained a monopoly against the consinners, by an absolute prohibition of importing woollen cloths from any foreign country, but they have likewise obtained an^ other monopoly against the sheep farmers and growers of wool, by a similar prohibition of the exportation of liv€ sheep and avooI. In order to justify tlicir demand of such extraordinary restrictions and proliibitioris, they contidcntly asserted that English wool was of a peculiar quality, su- perior to that of any other country ; that the Mool of other countries could not, without some mixture of it, be wrought up into any tolerable manufacture; that fine cloth could not be made witliout it ; that England, therefore, 4f the exportation of it could be totally prevented, could mono- polize to herself almost the whole wooilcn trade of the

world ;

(|4 Of Commercial Politics,

\vorld ; and thus, havin;^ no rivals, could sell at what price she pleased, and in a short time acquire the most incredi* ble degree of wealth by the most advantageous balance of trade. This doctrine, continues Dr. Smith, like most other doctrines Avhich are confidently asserted by any considerable number of people, was and still continues to be most im* plicitly believed by a raucli greater number. It is, how* ever, so perfectly false that English wool is in any respect necessary for the making of line cloth, that it is altogether unfit for it. Fine cloth is made altogether of Spanish wool. jEnglish wool cannot be even so mixt with Spanish wool as to enter into the composition without spoiling and de- grading, in some degree, the fabric of the cloth.

The ellect of these regulations, adds the same author, has been to depress the price of English wool, not only be- low what it Avould naturally be in the present times, but very much below what it actually was in the time of Edward III. The price of Scots wool, when in consequence of the Union it became subject to the same regulations, is said to have fallen about one half. It is observed by the very accurate and intelligent author of the Memoirs of Wool, the reverend Mr. John Smith, that the price of the best English wool in England is generally below what wool of a very inferior quality sells for in the market of Amsterdam. To depress the price of this commodity below what may properly be called its natural and proper price, Avas the avowed purpose of those regulations ; and there seems to be no doubt of their having produced the effect that was expected from Ihcm.

In consequence of excluding this commodity from an open and free market, it is likely that its qualify is in some measure degraded. The degradation in the quality of English wool, if not below what it was in former times, yet below what it naturally would have been in the present

state

Of Comfiiercial Politics. 45

nhite of improvement and cultLvdtion, must have been, it may perhaps be supposed, very nearly in proportion to the degradation of price. As the quality depends upon the breed, upon the pasture, and upon the management and cleanliness of the sheep, during the whole progress of the growth of the fleece, the attention to these circum- stances, it may naturally enough be imagined, can never be greater than in proportion to the recompense which the price of the fleece is likely to make for tlie labour and ex- pense which that attention requires. It happens, however, that the goodness of the fleece depends in a great measure «pon the health, growth, iuid bulk of the animal ; the same attention which is necessary for the improvement of the carcase is, in some respects, sufficient for that of the fleece.

This degradation in the price of wool may also have somewhat diminished the demand for, and consequently the production of, sheep. For whatever regulations tend to sink the price eitlier of wool or of rav/ hides below what k naturally would be, must, in an improved and cultivated country, have some tendency to raise the price of butcher's meat. The price both of the gre<it and small cattle, which are fed upon improved and cultivated land, must be suffi- cient to pay the rent which the landlord, and the profit which the farmer, has reason to expect from improved and cuhivated land. If it is not, they will soon cease to feed them. Whatever part of this price, therefore, is not paid by the wool and the hide must be paid by "the carcase. Tbe less there is paid for the one, the more must be paid for the other. In what manner tliis price is to be divided upon the different parts of tlie bea&t is indiflerent to the landlords and farmers, provided it is all paid to tliem. In an improved and cultivated country, therefore, their inter- ests as landlords and farmers cannot be much affected by

such

46 ' Of Commercial Politics,

such regulations, thougli their interests as consumers may, by the rise in the price of provisions.

From these considerations it is evident that an absolute prohibition of the exportation of wool is' detrimental. The imposition of a considerable tax upon that exportation is justifiable.

A moderate duty would produce a very considerable re- venue to the goverimicnt. It would hurt the interest of the growers somewhat less tlian the prohibition, because it would not probably lower the price of wool quite so much. It would aflbrd a sufficient advantage to the manufacturer* because, though he might not buy his wool altogether so cheap as under the prohibition, he would still buy it at least five or ten shillings cheaper than any foreign manu- facturer could buy it, besides saving the freight and in- surance, which the other would be obliged to pay. It is scarce possible to devise a tax which could produce any considerable revenue to the sovereign, and at the same time occasion so little iaconveniency to any body.

There is one reason that should influence our legislature io permit the exportation of wool, even supposing the fore- going arguments to be inconclusive. Tiie proliibition, not- withstanding all the penalties which guard it, does not pre- vent tlie exportation of wool. It is exported, it is well tnown, in great quantities. The great difference between the price in the home and that in tjie foreign market pre- sents such a temptation to smuggling, that all the rigour of the law cannot prevent it. This illegal exportation is ad- vantageous to nol)ody but the smuggler. ^^ hy not then make a virtue of necessity, by permitting exportation under a duty? One other measure would restore the English woollen manufacture to its pristine splendour ; which is, io apply the sum arising from the tax as a premium for ex- porting woollen goods.

But

Of Commercial Politics, if.

But thougli the exportation of our wool upon a moJei-atc duty -would be more beneliciul to the country than the ab- solute prohibition which it now labours under ; yet, when the price rises above a certain sum, it is as proper to pro- hibit its exportation as tliat of any other commodity, for ex- ample corn. The prohibition in this case would have the double efi'ect of securing plenty to ourselves, and of di- stressing our rivals at critical times w hen the commodity is scarce.

The exportation of fuller's earth, or fuller's clay, sup- posed to be necessary for preparing and cleansing the wool- len manufactures, has been subjected to nearly tlie same. penalties as the exportation of wool. Even tobacco-pij>e clay, though acknowledged to be different from fuller's clay, yet on account of their resemblance, and because fuller's clay might sometimes be exported as tobacco-pipe chy, has been laid junder the same prohibitions and pe- nalties.

By the ISth and lith Car. IJ. r. 7, the exportation of raw hides has been prohibited. The horns of cattle are also subject to the same restraint.

Restraints, either by prohibitions or by taxes, extend io the exportation of goods which are partially but not com- pletely manufactured. Woollen yarn and worsted are prohibited to be exported under the same penalties as wool. Watch-cases, clock-cnses, and dial-plates for watches and clocks, have been prohibited lo be exported.

By some old statutes of Edward III. Henry VIII. and Edward VI. the exportation of all metals was prohibited. Lead and tin were alone excepted ; probably on account of the great abundance of those metals ; in tJie exportation of which a considerable part of the trade of the kingdom in those days consisted. For the encouragement of the mining trade, the 5th of AVilliam and Mary,, c. 17, exempted

from

4.S Of Commercial Politics.

from this proliibiiion iron, copper, and mundic m«tsl made from British ore. The exportation of all sorts of copper bars, fon^if^n as well as British, was afterwards per- mitted by file m\ and 10th of William III. c. '26. Tbe exportation of nnmaniifacturod brass, of what is called gnn-mp(al, bell-metal, and shrofl-nictal, still continues to* be prohibited. Brass manufactures of all sorts may be ex* ported duty free.

It is not always true policy to discourage the exportatiort of our own rude materials, as is evident from the restraints imposed upon wool. Liberty of exportation gives encou- ragement to produce them in greater plenty at home ; which consequently lowers the price to our manufacturers. Upo« that principle the free and open exportation of corn (of which we shall presently speak) has been permitted, andj in Britain, even encouraged with a bounty. But where exportation of a rude material will not increase its quantity, the prohibition is good policy. For example, the export- ing^ of rags for paper may be prohibited ; because liberty of exporting will not occasion one yard more of linen cloth to be consumcKl.

Lyons, adds Lord Kaims, is the city of Europe where the greatest quantity of silk stuffs is made : it is at the same time the greatest staple of raw silk ; the silk of Italy, of Spain, of the Levant, and of the South of France, being tliere collected. The exportation of raw silk is prohibited in France, with a view to lessen its price at home, and to obstruct the silk manufacture among foreigners. The first is a gross error ; the prohibition of exportation producing scarcity, not plenty : and witli respect to tJic other view, it seems to have been overlooked, that the commerce of the silks of Ital}'^, of Spain, and of the Levant, is not confined to France, but is open to all trading nations. Thi^ prohi- bition is indeed so injudicious, continues the same author,

that

Of Commercial Politics. 49

t!iat. without any benefit to France it lias done irreparable mischief to the city of Lyons : ^vhile the commerce of raw silk, both buying and selling-, was monopolized by the merchants of that city, they had it in their power to regulate the price ; but to com^xl foreigners to go to the fountain-head, not only raises the price by concurrence of purchasers, but deprives Lyons of a lucrative monopoly. The same blun- der is repeated with respect to raw silk, spun and dyed. In Lyons, silk is prepared for the loom with more art than any where else ; and to secure the silk manufacture, the expor- tation of spun silk is prohibited ; which mijst rouse fo- reigners to bestow their utmost attention upon improving the spinning and dressing of silk.

The exportation of the materials of manufacture, where it is not altogether prohibited, is in many cases subjected to considerable duties.

Duties on exportationj continues the same writer, are in great favour from a notion that they are paid by foreigners. This holds sometimes ; as in the monopoly Britain formerly enjoyed of exporting coals to Holland. The duty paid on this exportation was agreeable to sound policy : it raised a considerable revenue to the public, and enabled us to cope with the Dutch in every manufacture that employed coal, such as dyeing, distilling, works of glass and of iron. But in every case where tlie foreign market can be suj)plied by others, it fails. And tiierefore in the above-mentioned case, the English monopoly of exporting coals to Holland would have been ruined by the coal ihines in the Austrian Ne- therlands, had not the exportation thereof been barred by an exorbitant duty. The Diitch many years ago ofiered to confine themselves to those inexhaustible mines, on condi- tion of being relieved from the duty. But the proposal was rejected. The duty on French wines exported from France, continues the same author, is equal to a bounty to the wines

30 Of Commercial Politics.

of ncii;]ibouring countries. At the same time llie dutj is uiiskilfwUy impoisedj being tlie same upon all "winesexpoi ted, without regard to iiuvour or htiength ; wliich bars the com- merce of s:nail wines, tliough much more plentiful. A mo- derate duty ou exportation, such as sma'l wines can bear, would add a greater sum to the revenue, and alho be more beneficial (o commerce. To improve liie commerce of wine in I'Vance, the exportation ought to be free, or at most charged with a moderate duty ad valorem. In Spain an excessive duty is laid upon the plant barrilewhen exported, from a persuasion that it will not grow in any other coun- try. It is not considered, that this t:!x by lessening the de- mand is a discouragemtnt to its ctiUure. A motlerate duty would raise more money to the public, would employ more hands, and Avould make that plant a permanent article of commerce. lorme;ly in Britain the exportation of manu- factured copper was prohibited. That blunder in commer- cial politics was corrected by a statute in the reign of ting William, permitting such copper to be exported, on pay- ing a duty of four shillings the hundred weight. The ex- porta^tion ought to have been declared free ; which was done by a statute of queen Anne. But as people are apt to overdo in the rage of improvement, this statute, con- tiiiucs the same author, permits even unwrought co})per, a raw material, to be exported. This probably was to favour copper mines : but did it not also favour foreign copper manufactures? By the 8th Geo. I. c. 15., the exportation of all goods the produce or manufacture of Great Britain, upon which any duty luul been imposed by former statutes, was rendered duty free. The following goods, however, were excepted : alum, had, lead-ore, tin, tanned leather, copperas, coals, wool, cards, wlate woollen cloth, lapis ca- laminaris, skins of ail sorts, glue, coney hair or wool, hares' wool, hair of all sorts, horses, and litharge of lead. This

statute.

Of Commercial Politics. 51

statute, for the encouragement of such of our own manu- factures as employ any of tlie articles specified, leaves them subject to all the old duties which had ever been imposed upon them, the old subsidy and one per cent, outwards.

By the same statute, a great number of foreign drugs for dyers' use are exempted from all duties upon importation. Eacli of them, however, is afterwards subjected (o a cer- tain duty, not indeed a very heavy one, upon exportation. Our dyers, it seems, while they thought it for their interest to encourage the importation of these drugs, by an exemp- tion from all duties, thought it likewise for their own in- terest to throw some small discouragement upon their ex- portation. The avidity, however, which suggested this notable piece of mercantile ingenuity, most probably dis- appointed itself of its object. It necessarily taught the im- porters to be more careful than they otherwise might have been, that their importation should not exceed what was necessary for the supply of the home market. The home market was at all times likely to be more scantily supplied ; the commodities were at all times likely to be somewhat dearer there than they would have been, had the exporta- tion been rendered as free as the importation.

Bytlie above-mentioned statute, gum Senega or gum Ara- bic, being among the enumerated dyeing drugs, might be imported duty free. They were subjected, indeed, to a small poundage duty amounting only to three-pence in the hundred weight upon their re-exportation. France enjoyed at that time an exclusive trade to the country most pro- ductive of those drugs, that which lies in the neighbour- hood of the Senegal; and the British market could not easily be supplied by the immediate importation of them from the place of growth. By the 25tU Geo. II. therefore, gum Seuega was allowed to be imported (contrary to the

E 2 general

d2 Of Coihmerdal Politics.

gciioral disroiiitions of Ihc act ot navigjition) from any part of Euroj^e. ^slLe law, however, did not mean to encou- rage this species of trade, bO contrary to tlie general prin- ciples of the mercantile policy of England, it impobed a duly of ten shillings the hundred weight upon sucii im- poilation, and no pait of this duty ^\as to be afterwards drawn back upon its cxporlation. Tlie succes-sful war >Uiich began in ]75j gave Great Britain the same exclu- sive (n'de to those countries which France had enjoyed be- fore. Our manufacturers, as soon as the peace was made, endeavoured to avail themselves of this advantage, and to establish a monopoly hi tiieir ovtn favour, both against the growers and against tlie importers of this commodity. By the 5th Geo. 111. c. 37, therefore, the exportation of gum Senega from his majesty's dominions in Africa was confined to Great Britain, and was subjected to the same restrictions, regulations, forfeitures,, and penalties, as tliat of the enu- merated cominodilics of the British colonies in America and the West Indies. Its importation a\ as subjected to a small duty of six-pence the hundred weight, but its re-ex- portation was subjected to the enormous duty of one pound ter» shillings the hundred weight. It was the intention of our nianufitcturers that the wl.oie produce of those countries slioaid be imported into (ireat Britain, and, in order that they themselves might be enabled to buy it at their ov, n price, that no part of it should be exported again, but at such an expense as would sufficiently discourage that ex- portation. Their avidity, however, upon this as well as upon many other occasions, disappointed itself of its object. Tile enormous duty presented such a temptation to smug- gling, that great quantities of this commodity were clan- destinely exporti?d, probably to all the manufacturing coun- tries of Europe, but particularly to Holland, not only from

Great

Of Commercial' Politics. 55

Great Britain but fro n Africa. Upon this account, by tlie I4th Geo. III. c. 10; this duty upon exportation was rcclncrd to five sliilliiig's tlie hundred weight.

In the book of rates, according to wliicli the old subsidy was levied, beaver skins were estimated at six sliilling-s and eig:ht-peace a pi^'ce, and the difl'ercnt subsidies and imposts, wliich before the year 1722 had been laid upon their im- portation, amounted to one fifth part of the rate, or to six- teen-pence upon each skin ; ali of whicli, except half tlie old subsidy, was drawii back upon exportation. This duty upon the importation of so important a material of manu- facture had been thou5i;ht too high, and in the year 1722 the rate was reduced to two shinings and six-pence ; which reduced the duty upon importation to six-pence, and of this only one half was to be drawn back upon exporfation. Tlie same successful war put the country most prodsictive of beaver under the dominion of Great Britain ; and beaver skins being among the enumerated commodities, their ex- portation from America was consequently confined to the market of Great Britain. Our manufacturers soon be- thouglit themselves of the advantage tliey might make of this circumstance, and in the year 176i the duty upon importation of beaver skins was reduced to one penny ; but the duty upon exportation was raised to seven-pence per skin, without any drawl)ack of t!ie duty upon importation. By the same law, a duty of eighteen-pence the poiiiid was imposed upon the exportation of beaver wool or wombs, without making any alteration upon the importation of that commodity, which when imported by British merchants, and in British shipping, amounted at that time to between four-pence and five-pence the piece.

With regard to the exportation of corn, Dr. Smith ob- serves that if ever it is prohibited, it ought to be prohibited when at a very high price. The liberal system of a free

exportation

54 Of Commercial Politics.

exportation and a free importation, continues the same aii- tlior, Mould be highly beneficial, if it were adopted hy all nations. But, to the incalculable injury of mankind, very few countries have adopted this liberal system. The free- dom of the corn trade is almost every "where restrained, and in many countries is confined by such absurd regulations, as frequently aggravate the unavoidable misfortune of a dearth into the dreadful calamity of a famine.

When Suliy entered on the administration of the French finances, the corn in France was at an exorbitant price, oc- casioned by the neglect of husbandry during the civil war. That sagacious minister discovered the secret of re-establish- ing agriculture, and of reducing the price of corn ; wliicli is, to allow a free exportation. So rapid was the success of that bold and politic measure, that in a few years France became the granary of Europe ; and wliat may at present appear wonderful, we find in the English records, in the year 1G21, bitter complaints of the French underselling them in their own marliets. Colbert, who fortunately for us had imbibed the common error, renewed the ancient prohibition of exporting corn, hoping to have it cheap at home for his manufacturers. But he was in a gross mis- take; for that prohibition has been the cause of many fa- mines in France since that time. The corn trade in France lay long under great discouragements ; and tiie French ministry continued long blind to the interest of their coun- try. At last edicts were issued, authorizing the commerce of corn to be absolutely free, whether sold within the king- dom or exported. The generality, however, continued blind. In the year 1768, the badness of tho harvest hav- ing occasioned a famine, the distresses of the people were excessive, and their complaints universal. Overlooking al- together the bad harvest, they from amazing partiality at- tributed their misery to the new law. It was in vain in- culcated,

Of Commercial Politics. 55

culeated, that fretxloin in the corn trade encourages agri- culture : the popuhir opinion \vas adopted even by most of the Parliaments : so difficult it is to eradicate established prejudice. In Turkey about thirty years ago, continues Lord Kaiuis, a grand vizier pcruiilted corn to be exported more freely than had been done luimcrly, a bushel of" wheat being sold at that time under scventeoa-'jence. Every nation flocked to Turkey for corn ; and in particular no fewer than three hundred P'rench vessels, from twenty to two hundred tons, entered Smyrna bay in one day. The Janissaries and populace took the alarm, fearing that all the corn would be exported, and that a famine would ensue. In Constantinople they grew mutinous, and could not be ap- peased tiU the vizier was strangled, and his body thrown out to them. His successor, who resolved not to .split upon the same rock, prohibited exportation absolutely. In that country refit is paid in proportion to the product of the land ; and the farmers, who saw no demand, neglected tillage. In less than three years the bushel of wheat rose to six shillings, and the distresses of the people became in- tolerable. To this day, the fate of the good vizier is la- mented. Formerly in Spain there was pUnty of corn for twenty millions of inhabitants, with a surplus for the great city of Rome ; but for many years back, on account of the absolute prohibition against exporting corn, there has not been sufficient for seven millions, its present inhabitants.

In great states, says Dr. Smith, the unlimited freedom of exportation of corn is much less dangerous than in small ones ; for, the growth being much greater, the supply can be seldom much affected by any quantity of corn that is likely to be exported. In a Swiss canton, or in some of the little states of Italy, it may perhaps sometimes be neces- sary to restrain the exportation of corn. In such great coun- tries as France ai\d England it scarce ever can. Besides,

to

5G Of Commercial Politics.

to binder llic farmer from sending his goods at all times to the best market, is evidently to sacrifice the ordinary laws of justice to an idea of public utility, to a sort of rea- sons of state; an act of legislative authority -which ought to be exercised only, and can be pardoned only, in cases of the most urgent necessity.

Unless more corn is either usually grown, or usually im- ported into the country, observes the same author, than •what is usually consumed in it, the supply of the home mar- ket can never be very plentiful. For unless the surplus can, in all ordinary cases, be exported, the growers will be care- ful never to grow more, and the inipoi'ters never to import more, than what tlie bare consumption of the home market requires. That market will very seldom be overstocked; but it will generally be understocked, the people whose business it is to supply it being generally afraid lest their goods sliould be left upon their hands. The prohibition of exportation limits the improvement and cultivation of the country to what the supply of its own inhabitants requires. The freedom of exportation enables it to extend cultivation for the supply of foreign nations. By the discouragement of importation, the supply of the market, even in times of great scarcity, is confined to the home growth.

Trie exportation of British manufactures to our American colonies ought to meet with such encouragement as to pre- vent them from rivalling us : it would be a gross blunder to encourage their manufactures, by imposing a duty on what we exported to them. We ought rather to give a bounty on exportation ; which, by underselling them in their own markets, would quash every attempt at rivalship.

I close this branch, continues Lord Kaims, with a com- mercial lesson, to which every other consideration ought to yield. The trade of a nation depends for the most part on very delicate circumstances, and requires to be carefully

nursed.

Of Commercial Politics. 57

nursod. Forci<>"ners, in particular, ons^ht \o be flatlercd and encouraged, (hat they may prefer us before olhers. Nor ought we ever to rely entirely on our natural advan- tages ; for it is not easy to foresee wliat may occur to coun- terbalance tlieni.- As tlus reflection is no less obvious than weighty, facts will be more effectual than argument for making a deep impression. The Swiss some years ago im- ported all their wines from the king of Sardinia's dominions. The king laid a high duty on tliese wincS; knowing tlic Swiss had not ready access to any other wine country. lie did not foresee that this higli duty was equal to a premium for cultivating the viiie at home. They succeeded ; and now are provided with wine of their own growth. The city of Lyons, by making silver-thread in perfection, had maintained a monopoly of that article against foreigners as well as natives. But a high duty on the exporting of it, in order to monopolize also the manufacture of silver-lace,; has, by exciting foreigners to improve their own silver- tiiread and silver-lace, deprived them of both monopolies, by the very means employed for {Securing bot'i. Spanish oil exported to America would be a great article of commerce, were it not barred by a heavy duty on exportation equal almost to a prohibition : and the Spanish Americans, for want of oil, are reduced to use fat and butter. The prohi- bition of planting vines in Mexico, and the excessive duty on the importation of Spanisli wines into that country, in- troducixl a spirit drawn from the sugar-cane.

Beside heavy duties, commerce with foreigners has been distressed by many unwary regulations. .The herring fislicry, which is now an immense article of commerce, was wigrossed originally by the Scots. Bixi grasping at all ad- vantages, the royal boroughs of Scotland, in the reign of .James the Second, prohibited their fishermen to sell her- rings at sea to foreigners ; ordering, that the herrings should.

be

58 Of Commercial Politics.

be first landed, in order that they themselves might be first served. Such Avas the policy of Ihose times. But behold the consequence : the Netherianders, and people of the Hans towns, being prohibited from purchasing as formerly, be- came fishers themselvrs, and cut tlie Scots out of that prO' fitable branch of trade. The tar copipany of Sweden, taking for granted tluit the English could not otherwise be supplied, refused to let them have any pitch or tar, even for ready money, unless permitted to be imported into Eng- land in Swedish bottoms ; and consequently in such quan- tities only as the company should be pleased to furnish. This hardship moved the parliament to give a bounty for pitch and tar made in our own colonies ; which has ren- dered us independent of Sweden. The Dutch, excited by the profitable trade of Portugal with the East Indies, at-, templed a north-east passage to China ; and that proving abortive, they set on foot a trade with Lisbon for East India commodities. Portugal was at that time subject to the king of Spain ; and the Dutch, though at war with Spain, did not doubt of their being well received in Portugal, with wliich k'mgdom they had no cause to quarrel. But the king of Spain, overlooking not only the law of nations, but even his own interest as king of Portugal, confiscated at shorthand the Dutch ships and their cargoes in the har- bour of Lisbon. That unjust and impolitic treatment pro- voked the Dutch to attempt an East India trade, which probably they would not otherwise have thought of ; and they were so successful as to supplant the Portuguese iu every quarter. And thus the king of Spain, by a gross er- ror in politics, exalted his enemies to be a powerful mari- time state. Hud he encouraged the Dutch to trade with Lisbon, other nations must have resorted to the same mar- ket. Portugal thereby would have been raised to such a height of maritime power, as to be afraid of no rival. The

Dutch

Of Commercial Politics. 59

Dutch wo:]kl not have thought of coping* wi(h them, nor VFOukl any other nation.

Wc proceed to the encouragements to exportation, which are by means of bounties and drawbacks.

Bounties are given for the encouragement of an infant manufacture, or of such sorts of industry of other kinds as are supposed to deserve particular favour, or of tliose branches of trade only which c;uinot be carried on widiout them. But every branch of trade in which tlic mercliaut can sell his goods for a pri^•e which repkices to him, with the ordinary profits of stock, the whole capital employed in preparing and sending them to marKet, can be carried on without a bounty. Those trades only require bounties in which the merchant is obliged to sell his goods for a price which does not replace to him his capital, together with the ordinary profit ; or in which lie is obliged to sell tliem for less than it really costs him to send tliera to market.

Bounties upon the exportation of any home-made com- modity are kable, first, to that general objection wjiicli may be made to all the different expedients of the mercan- tile system ; the objection of forcing some part of the' in- dustry of the country into a cliannel less advantageous tiian that in whicli it would run of its o^n accord ; and, se- condly, to the particular objection of forcing if, not only iiito a cliannel that is less advantageous, but info one that is actually disadvantageous ; the trade which cannot be carried on but by means of a bounty being necessarily a losing trade.

But if any particular manuflictnre is necessary for fhe defence of the society, and if such manufacture cannot o! her wise be supported at home, a bounty for its encou- ragement may be adviseable. The bounties upon the ex- portation o!*Bntish-madc sail-cloth, and Brifisii-raade gun- powder,

60 Of Commercial Pglitics>-

powder^ may perliaps both be vindicated upon this prin-» ciple.

To encourage the production of any commodity', a boun- ty on production, one \vouId imagine, would have a more direct operation tlian one upon exportation. It Avould, be- sides, impose only one tax upon tlie people ; that which tliey must contribute in order to pay the bounty. Instead of raising-, it Avouid tend to lower tiie price of the commo- dity in the home market ; and thereby, instead of imposin* a second tax upon the pi?ople, it might, at least in part, re- pay, them for what they had contributed to the first. Bounties upon production, however, have been very rarely granted. The prejudices established by the commercial system have taught us to believe that natural wealth arises more immediately from exportation than from production. It has, accordingly, been more favoured, as the more imme- diate means of bringing money into the country. Bounties upon production, it has been said, too, have been found by experience more liable to frauds than those upon expor- tation. How far this is true, continues Dr. Smith, 1 know not. That bounties upon exportation have been abused to many fraudulent purposes is very well known. But it is not the interest of merchants and manufacturers, the great inventors of all these expedients, that the home market should be overstocked with their goods, an event that a bounty upon production might sometimes occasion. A bounty upon exportation, by enabling them to send abroad their surplus part, and to keep up the price of what re- mains in the home market, effectually prevents this. Of all the expedients of the mercantile system, accordingly, it is the one of which they are the fondest. I have known the different undertakers, adds the same author, of some particular works agree privately among themselves to give a bounty out of their own pockets upon the exportation of

a cerlaiii

Of Commercial Folit'ics. CI

a certain proportion of the goods which they dealt in. This expedient succeeded so well that it more than doubled the price of their goods in the home market, notwithstanding a very considerable increase in the produce.

Wliat is called a bounty is sometimes no more than a drawback, and consequently is not liable to the same ob- jections as that which is properly a bounty. The bounty, for example, upon refined sugar exported, may be considered as a drawback of the duties upon the brown and muscova- do sugars, fiom which it is made ; the bounty upon wrought silk exported, a drawback upon raw and thrown silk imported; the bounty upon gunpowder expoit^'d , a drawback upon brimstone and salt-petre imported. In the language of the customs, those allowances only are called drawbacks which are given upon goods exported in the same form in which they are imported. When that form has been so altered by manufacture of any kind as to come under a new denomination, they are called bounties.

As to the bounty on corn, Dr. Smitli observes, (hat sy- stem of laws which is connected with the establishment of the bounty seems to deserve no part of the praise which has been bestowed upon it. The improvement and prosperity of Great Britain, which hiis been so often ascribed to those laws, may very easily be accounted for by other causes. That security \^hicli the laws in Great Britain give to every man, that he shall enjoy the fruits of his labour, is alone sufficient to make any country flourish, notwithstanding these and twenty other absurd regulatiofis of commerce ; and this security was perfected by the Revolution, much about the same time that the bounty was established. The natural effort of every individual to better his own condi- tion, when suflered to exert itself with freedom and secu- rity, is so powerful a principle, tliat it is alone and with* cut any assistance not only capable of carrying on the so-

cictv

62 Of Commercial Politics.

VAQiy to wealth and prosperity, but of surmounting^ a liun- drod impel tincnt obstructions Avitli uhich the folly of hu- man hiws too often encumbers its operations ; though the cllect of these obstructions is ahvaysmorc or less either to en- croach upon i(s freedom, or to diminish its sccurif}'. In Cateat Britain industry is perfectly secure; .and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.

The average price of corn, it has been said, has fallen considerably since the establishment of the bounty. . The average price of corn began to fail somewliat towards' the eiid of the seventeenth centiUy, and has continued to do so during the course of the sixty-four first years of the last century. But this event, says Dr. Smith, supposing it to be real, as I believe it to be, must have happened in spite of the bounty, and catmot possibly have happened in con- sequence of it. It has happened in France, as well as in England, though in France tliere was not only no bounty, but till 1764 the exportation of corn was subjected to a ge- neral prohibition. This gradual fall in the average price of grain, it is probable, therefore, is ultimately owing neitlier to the one regulation nor to the other, but to the gradual and insensible rise in the real value of silver which has taken place in the general market of Europe during the course, of the present century. It seems to be altogether impossible that the bounty could ever contribute to lower the price of grain.

In years of plenty tlie bounty, hy occasioning an ex- traordinary exportation, necessarily keeps up the price of corn in the home market above what it would naturally fall to. To do so was the avowed purpose of the institution. In years of scarcity, though the bounty is freqiiendy sus- pended, yet the great exportation v/liich it occasions in j^ears of jplcnty must frequently hinder more or less the

plenty

Of Commercial Politics. 63

plenty of one year from relieving the scarcity of another. Both in years of plenty and in years of scarcity, therefore, the bounty necessarily tends to raise the money price of corn somewhat higher than it otlierwise would be in the home market.

Tliat in the actual state of tillage the bounty must neces- sarily have this tendency will not, I apprehend, contiimes Dr. Smith, be disputed by any reasonisble person. But it h.\^ been thought by many people, that it tends to encou- rage tillage, and that in two different ways ; first, by opefting a more extensive foreign markc*t io the corn of the farmer, it tends, they imagine,' to increase the demand for, and consequently the pmduction of, the commodity; aiid secondly, by securing to him a better price than he could otherwise expect in the actual state of tillage, it tends, they , suppose, to encourage tillage. This double encouragemcfit must, they imagine, in a long period of years, occasion such an increase in the production of corn, as may lower its price in the home market much more than the bounty can raise it, in the actual state in which tillage may, at the end of that period, happen to be.

I answer, adds the same excellent author, that whatever extension of the foreign market can be occasioned by the bounty must, in every particular year, be altogether at the expense of the home market ; as every bushel of corn which is exported by means of the bounty, and which would not have been exported without the bounty, would liave re- mained in the liome market to increase the consumption, and to lower the price of that conunodity. The corn bounty, it is to be observed, as well as every other bounty upon exportation, imposes two diflerent taxes upon the people ; first, the fax which they are obliged to contribute in order to pay the bounty ; and secondly, the tax which arises from the advanced price of the commodity in the

home

t'/i Of Commercial Politics,

home market, and which, as the whole body of llie people arc the purchasers of the corn, must in this particular com- modity be paid by the whole body of the people. In this particular commodity', therefore, this second tax is by much the heavier of the two. Let us suppose that, taking one year with another, tlie bounty of five sjiiliings upon the cxporlation of the quarter of wheat raises the price of that commodity in the home market only six-pence the bushel, or four shillings the quarter, higher than it otherw ise would have been in the actual state of the crop.. Even upon this very moderate supposition, the great body of the people, over and above contributing the tax which pays the bounty of -live sliiliings upon every quarter of wheat ex^^orted, must pay ,a,nothcr of four shillings upon eveiy quarter which they themselves consume. But according to the very well informed author of the tracts upon the corn trade, the ave- rage proportion of the corn exported to ti!at consumed at home is not more than that of one to thirty-one. For every five shillings, therefore, which they contribute to the pay- ment of the first tax, they must contribute six pounds four shillings to the payment of the second. So very heavy a tax-upon the first necessary of life, continues Dr. Smith, must either reduce the subsistence of the labotaing poor, or it must occasion some augmentation in their pecuniary wages proportionable to that in- the pecuniary price of their subsistence. So far as it operates in the one way, it must reduce tiie ability of the labouring poor ^to educ;:te and bring up their children, and must so far tend to restrain the population of the countrj'. So far as it operates in the other, it must reduce the ability of the employers of the poor to employ so great a number as th(y oti^erwise might do, and must so far tend to restrain the industry of the country. The extraordinary exportation of corn, therefore, occaiiioikd by the bounty, not only in every paiticular

year,

Of Commercial Poiltics. 65

year, diminishes the home just as much as it extends the fo- reign market and consumption, but, by restraining the po- pulation and industry of the country, its final tendency is to stunt and restrain the gradual extension of the home market; and thereby, in the long-run, rather to diminish than to augment the whole market and consumption of corn.

This enhancement of the money price of corn, ho^vever, it has been thought, by rendering that commodity more profitable to the farmer, must necessarily encourage its pro- duction.

I answer, adds Dr. Smith, that this might be the case if the cilcct of the bounty was to raise the real price of corn, or to enable the farmer with an equal quantity of it to maintain a greater number of labourers in the same man- ner, whether liberal, moderate, or scanty, than other la- bourers are commonly maintained in his neighbourhood. But neither the bounty, it is evident, nor any other human institution, can have. any such elfect. It is not the real but the nominal price of corn wliicli can in any consider- able degree be affected by the bounty. And though the tax which that institution imposes upon the whole body of tlie people may be very burthensome to those who pay it, it is of very little advantage to those who receive it.

The sooner bounties cease, and the lower they are, so luuch the better. And therefore the J 3th of the present king, c. 43, which takes off the old bounty of five shil- lings upon the exportation of wheat as soon as the price rises to forty-four shillings the quarter, instead of forty- eight, the price at which it ceased before, is founded on good policy.

By tlie same statute, the high duties upon importation for home consumption are taken off as soon as the price of middling- wheat rises to forty -eight shillings the quarter,

F thus

66 Of Commercial Politics.

thus opening the liomr-mrrrket to foreign supplies at prices considrrablj lower than before.

We come now to tlie second mode of encouragement to exportation, which is termed a draAvback.

Drawbacks are given nptm two different occasions. When the home manufacturi s are subject to any excise or duty, cither the whole or a jjart of it is frequently drawn back upon their exportation; and when foreign goods liable to a dii/y are impoited in order to !>e exported again, either the wliol<> or a part of this duty is sometimes given back U])on such exportation.

Of the encouragensents given by the mercantile s^'stem to espoitation, ^Ahat are called drawf)acks seem to be the most reasonable. To allow the merchant to draw back npon exportation cither the whole or a part of whatever excise or inland de.ty is imposed npon domestic industry, can never occasion tlie exportation of a greater quantity of goods than what would have been exported had no duty been imposed. Such enc(juragemen(s do not tend to turn toAvards any particular employment a greater share of the capital of the country than what would go to that emploj'- ment of its own accord, but only to hinder the duty from driving away any part of that share to otlier employments. They tend not to overturn that balance which naturally establishes itself among the various employments of the so- ciety, but to hinder it from being overturned by the duty. They tend not to destroy, but to preserve, what it is in most cases advantageous to preserve, tiie natural division and distribution of labour in the society.

The same thing may be said of the drawbacks upon the re-exportation of foreign goods imported, which in Great Britain generally anioimt to by much the largest part of the duty npon importation. By the second of the rules annex- ed to the act of parliament, which imposed what is now

called

Of Commercial Politics. 67

called the old subsidy, every merchant, whether English or alien, was allowed to draw back half that duty upon ex- portation ; the English merchant, provided the exportation took place within twelve months ; the alien, provided it took place within nine montlis. Wines, currants, and wrought silks were the only goods which did not fall within this rule, having other and more advantageous allowances. The duties imposed by this act of parliament were at that time the only duties upon the importation of foreign goods. The term upon wliich this and all other drawbacks could be claimed was afterwards (by 7th Geo. I. c. 21, s. 10) ex- tended to throe years.

The duties which have been imposed since the old sub- sidy are, the greater part of them, wholly drawn back up- on exportation. This general rule, however, is liable to a great number of exceptions.

Upon the exportation of some foreign goods, of which it was expected that the importation would greatly exceed what was necessary for the home consumption, the whole duties are drawn back, without retaining even half the old subsidy.

The revenue of the customs, continues Dr. Smith, in- stead of suffering, profits from such drawbacks, by that part of the duty w 'licli is retained. Jf tlie whole duties had been retained, the foreign goods upon which they are retained could seldom have been exported, nor consequent- ly imported, for want of a market. The duties, therefore, of which a part is retained, would never have been paid.

These reasons seem sufficiently to justify drawbacks, and would justify them, though the wliole duties, whether upon the produce of domestic industry or upon foreign goods, were always drawn back upon exportation. The revenue of excise would in this case, indeed, suffer a little, and that of the customs a ^ood deal more ; but the nataral bitlanc©

F 2 of

68 Of Commercial Politics.

industry, the natural division and distribution of labour^ wliicli is always more or loss disturbed by such duties, would be more nearly re-established by such a regulation.

These reasons, however, will justity drawbacks only upon exporting- goods to those countries which are altoge- ther foreign and indepaident, not to those in which our * merchants and manufacturers enjoy a monopoly. A draw- back, for exum[)!e, upon the exportation of European goods to our American colonies will not always occasion a greater exportation than what would have taken placL^ without it. Yiy means of the monopoly which our mer- chants and manufacturers enjoy there, the same quantity might frequently, perhaps, be sent thither, though the Avhole duties were retained. The drawback, therefore, may frequently be pure loss to the reveime of excise and cus> toms, without altering the state of the trade, or rendering it in any respect more extensive. In allowing the same drawbacks upon the re-exportation of the greater part of European and East India goods to the colonies, as upon their re-exportiition to any independent country, the iji- terest of the mother country Avas sacrificed to it, even ac- cording to the mercantile ideas of that interest. It was for the interest of the merchants to pay as little as possible fur the goods which they sent to the colonics, and consequently to get back as much as possible of the duties which they advanced upon their importation into Great Britain. They might thereby be enabled to sell in the colonies cither the same quantity of goods with a greater profit, or a greater quantity with the same profit ; and, consequently, to gain something in the one way or the other. It was likewise for (he interest of the colonies to get all such goods as cheap and in as great abundance as possible. But this might not always be for the interest of the mother country. She might frequently suffer both in her revenue, by giving back

a great

Of Commercial Politics. 69"

a great pait of the duties which Iiacl been paid upon the importation of such goods ; and in her manufactiues, by being undersold in the colony market, in consL^quence of the easy terms upon which foreign manufactures could be carried thither by means of those drawbacks. The pro- gress of the linen manufacture of Great Britain, it is com- monly said, lias been a good deal retarded by the draw- backs upon the re-exportation of German linen to the Ame- rican colonies.

2. Of Importation,

By restraining either by high duties, or by absolute pro- hibitions, the importation of sucli goods from foreign coun- tries as can be produced at home, ihc monopoly of the home market is more or less secured \o the domestic indus- try employed in producing tliem. Thus, the prohibition of importing either live cattle or salt provisions from foreign countries, secures to the graziers of Great Britain the mono- poly of the home market for butchers' meat. The higli duties upon the importafion of corn, which in times of mo- derate plenty amount to a prohibition, give a like advan- tage to the growers of that commodity. The proliibition of the importation of foreign woollens is equally favourable to the woollen manufactures. The silk manufacture, though altogether employed upon foreign materials, lias lately ob- tained the same advantage. The linen manufacture, con- tinues Dr. Smith, has not yet obtained it, but is making rapid strides towards it. JVIany other sorts of manufactures have in the same manner obtained in Great Britain, either altogether or very nearly, a monopoly against their coun- trymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely or under certain circumstances, greatly exceeds what can easily he

suspected

70 Of Commercial Politics.

suspected by those who are not acquainted with the laws of the customs.

That tliis monopoly of the home market frequently gives great encouragement to that particular species of industry wliich enjoys it, and frequently turns towards tliat employ- ment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be donbted. But though a particular manufactilre may by such regulations be sometimes acquired sooner than it would have been otherwise, and after a certain time may be made at home as cheap or cheaper than in a foreign coimtry, it will by no means follow that the same total, either of its industr; or of its revenue, can ever be augmented by such regulation, or the most advantageous direction given to it. The industry of the society can augment ordy in proportion as its capital augments, and its capital can augment only in proportion to Avhat can be gradually saved out of its re- venue. But the immediate effect of every such regulation is to diminish its revenue; and what diminishes its revenue is not certainly very likely to augment its capital faster than it would have augmented of its own accord, had both ca- pital and industry been left to find out their natural em- ploy m.ents ' .

This

' Monopolies hinder the capital of a ronntry, whatever may nf any par- ticular time l)e the extent of that capital, from maintaining; so prcat a quan - tity of protluctive labour as it would otherwise maintain, ami from alTord- ingsogre.ita revenue to the industrious "inhabitants as it Avould otherwise afford. But as cF.pi'.al would be inrreased only by savings from revenue, the monopoly, by hintlering it from affording so great a revenue a<- it would otherwise afford, Ticcessarily hinders it from inrreasing so fast as it would otherw ise increase, and consequently from maintaining a still greater quan- tity of prodiutive labour^ and affording a still greater revenue to the in- dustrious inhabitants of that country. One great original source of reve- nue, therefore, the wages of labour, the monopoly must necessarily have rendered at all times less abundant than it oth<rwise would have b(?en.

By raising tlie rate of mercantile profit, the monopoly discourages the improvement of land. The profit of the improvement depends upon the difference between what the land actually produces, and what, by the aj)- plication of a certain capital, it can be made to produce. If tliLi difference

afforib

Of Coinmercial Politics. 71

This monopoly of the hoir.e market is a favourite part of the mercantile systtMii. It vuiist, ht)wever, be adinittal, that if the free im.portation of f )reiun manufactures were permitted, several of the home mnnufaclures would proba- bly suffer, and some of them perhaps go to rain altogether, and a considerable part of the sfock and industry at present employed iw them would be forced to find out some other employment. 13lut the freest importation of the vucie pro- duce of tliesoil coidd liave no such effect upon the agricul- ture of the counliy. And tliercfore the free impcntation of foreign lean catde, salt provisions, and corn, can have lit- tle effect upon the iio.ne productions. The su)all number of Irish cattle imported since their importation Mas per- mitted, toget'.ier with the good price at which lean cattle continue to sell, seem to demonstrate that even the brecdhig countries of Great Britain are never likely to be much af-

nffords .1 n:ronfer profit llinn wlial can be drawn from an oqunl capital in any mercantile emplnyn>eiit, the iiriprovenu-nt of land will draw capital from all mercantile employments. If She profit is Icsk, mercantile employ- ments will draw capital from the improv(^ment of land. Wliaf ever there- fore rais'-s the rate of mercantile profit, cither lessens the superiority or in- creases the inferiority of the profit of improvement ; and in the one case Jiinders capital from goinj? to improvement, and in the other draws capital from if. B'li by discouraj^in^ improvement, the monopoly necessarily re- tards the natural increase of another <;reat original source of revenue, the rent of land. By raisiiiij the rale of profit, too, the monopoly necessarily keeps up the market rate of interest higher than it otherwise ■would be. ]5ut the ])rice of land in proportion to the rent which it aftords, the num- ber of years purchase which is commonly paid for it, necessarily falis ag the rate of interest rises, and rises as the rate of interest falls. The mono- poly, therefore, hurts the interest of the landlord two dilferent ways ; by retarding the natural increase, first, of his rent, and secondly, of the price w hich he could get for his land in proportion to the rent wiiich it affords.

The monopoly, indeed, raises the rate of mercantile profit, and thereby augments somev.hat the gain of our merchants. But as it obstructs the na- tural increase of capital, it tends rather to diminish than to increase the sum total of the revenue which the inhabitar.ts of the country derive from the profits of stock ; a small profit ujjon a great cajjital generally alTordino- a greater revenue than a gr^-at profit upon a small one. The monopoly raises the profit, bat it hinders the sum of profit from rising so high as it otherwise would do.

AH the original sources of revenue, the wages of labour, the rent of land, and the profits of stock, the monopoly renders much less abundant than they otherwise would be. To promote the little interest of one order of men, it hurts the interest of all other orders of men in that country, and of all men in all other countvie?.

fected

75 Of Commercial Politics.

fectcd by tlie free importation of Iris]i cattle. Tlie frees? importation of foreign cattle, besides, can have no other eflect than to hinder the breeding countries of Great Britain from taking advantage of the increasing population and improyement of the rest of the kingdom, from raisin* their price to an exorbitant height, and from laying a real Ujx upon all the more cultivated parts of the country.

The quantity of foreign corn imported, even in times of the greatest scarcity, may also satisfy our farmers that they can have nothing to fear from the freest importation. The average quantity imported one year with another, con- tinues Dr. Smith, amounts only, according to the very well informed author of the tracts upon the corn trade, to twenty- tliree thousand seven hundred and twenty-eight quarters of all sorts of grain, and does not exceed the five hundredth and seventy-first part of the annual consumption. But as the bounty upon corn occasions a greater exportation in years of plenty, so it must of consequence occasion a greatef importation in years of scarcity, than in the actual state of tillage would otherwise take place, ^y means of it the plenty of one year does not compensate the scarcity of an- other ; and as the average quantity exported is necessarily augmented by it, so must likewise, in the actual state of tillage, the average quantity imported. If there were no bounty, as less corn would be exported, so it is probable that, one year with another, less would be imported than at present.

To prohibit by a perpetual law the importation of foreign cofn and cattle, is in reality to enact, that the popuiatiojti and industry of the country shall at no time exceed what the rude produce of its own soil can maintain '.

There

* No nation derives gr<'atcr benefit from a free and iinrrstrainod cora- mcrce than a landed nation. It can never be tlie interest of land^-d nations, observes Dr. Smith, to discourage or distress the industry of mercantile

Of Commercial Politics. 73

There seem, however, to be two cases, adds the same author, in Aviiich it will generally be advantageous to laj- some burden upon foreign for the encouragement of domestic industry.

The tirst is, when some particular sort of industry is necessary for the defence of the country. The detencc of Great Britain, for example, depends very much upon the number of its sailors and sbippisig. The act of navigation, therefore, very properly endeavours to give tlie sailors and shipping of Great Britain the monopoly of the trade of their own country, in son.re cases by absolute prohibitions, and in others by heavy burdens upon the shipping of foreign countries.

The act of navigation, continues Dr. Smith, is not

favourable

states, by imposing high duties upon their trade, or upon the commoditifs ■«'!iich they furnish. Such duties, by rendering those commoditirj dearer, could serve only to sink the real value of the sur|)lus produce of their own land, with -which, or, what romes to the same tbiiig, with the price of which, those commodities are purciiased. Such duties could serve only to discourage the increase of that se.rplus produce, and consequently the !«•.- provcment and cultivafion of their own land. The most effectual expedient, on the contrary, for raising the value of the snr])lus produce, for encouran^in'- its increase, and consequently the improvement and cultivation of their land, would he to allow the most perfect freedom to the trade of all such mercantile nations.

This perfect freedom of trade would even be the most effectual expedient for supplying them, in due time, with all the artificers, manufacturers and merchants, whom they wanted at home, and for filling up in the propcrest and most advantageous manner that very important void which they felt there.

The continual increase of the surplus pfoduce of their land would, in due time, ci'eate a greater capital than what conld be employed with the ordinary rate of profit in the imjirovement and cultivation of land; and the surplus part of it would naturally turn itself to the employment of artificers and manufacturers at home. lUit those artificers and manufac- turers, finding at home both the materials of their work, and tlie fund of their subsistence, might immediately, even with much less art and skill, be able to work as cheap as the little artificers and manufacturers of such mercantile states, w ho had both to brinj^ from a greater distance. K\en though, from want of art and skill, they might not ifor some time be able to work as cheap ; yet, finding a market at home, they might be able to sell their work there as cheap as that of the artificers jtnd manufacturers of s»icli mercantile states which could not be brought to that marke{ but from so great a distance; and as theii'art and skill improved, they ^vould sooa be able to sell it cheaper. The artificers and manufacturers of such mer- cantile state;, therefore, would immediately be rivalled in the market of

those

74 Of Commercial Politics.

favourable to foreign commerce, or to the growtlt of that opulence which can arise from it. The interest of a nation in its commercial relatioris to foreig-n nations is, like that of a merchant with regard to tlie different peojile with whom he deals, to buy as cheap and to sell as dear as possible. But it will be most lii^ely to buy cl;enp, when by the most perfect freedom of trade it encourages all nations to bring to it the goods which it has occasion to purchase; and, for the same reason, it will be most likely to sell dear, when its markets are thus tilled with tlie greatest numljer of buyers. Tlie act of navigation, it is true, lays no burden upon foreigji sliips that come to export the produce of British industry. Even the ancient aliens duty, which used to be paid upon all goods exported as well as imi^orted, has, by several subsequent acts, been taken off from the

those landed nations, and soon after undersold and jostled out of it alto- gether. The cheapness of the manufactures of those landed nations, in consequence of tiie g;ra(liial iinpr()vem?nLs of art and skill, would, in due time, extend fhfir snle beyond tlie home market, and carry them to many foreign markets, from which they would in the same manner gradually jostle out many of the manvfactufTs of eu'Ii mercantile nations.

This continual increase both of the rude and manufactured produce of those landed nations woii'id in due time create a s;reaier capital than could, with the ordinary rate o" profit, be employed either in ai':riculture or in manufactures. The surplus of ttiis capital would ndturally turn itself to foreign trade, and be employed in exporting, to foreign countries, such parts of the rude and manufactured prod'ice of its own country as exceeded the demnnd of the home market. In the exportation of the produce of their own country, the merchants of a landert nation would have an advan- tage of the same kind over those of mercantile nations, which its artificers and mantifactHrers had over the artificers and manufacturers of such nations ; the advantage of finding at home that cargo, and those stores and provisions, w hich the others were obligrd to seek at a distance. W ith in- ferior art and skill in navigatinn, therefore, they would be able to sell that cargo as cheap in foreign markets as the merchants of such mercantile na- tions; and with equal art and skill they would be able to sell it cheaper. They would soon, therefore, rival those mercantile nations in this branch of foreign commerce, and in <Iue time would jostle them out of it altogether.

According to this liberal and generous system, therefore, the most advan- tageous m;-thod in which a landed nation can raise up artificers, manufac- turers and merchants of its own, is to grant the most perfect freedom of trade to the artificers, manufacturers and merchants of all other nations. It thereby raises the value of the surplus produce of its own land, of which the continual increase gradually establishes a fund, which in due time necessarily raises up all the artificers, mafiufacturers and merchants whom it lias occasion for.

greater

Of Commercml PcUlics. 75

greater part of tiie articles of exportation. But if foreigners, either by prohibitior.s or high duties, are hindered from coming to seH, tJ;ey cannot always afford to come to buy ; because, coming wit Iiout a cargo, they must iose the freight from their own country to Great Britain. By diminishing the number of sel'ers, therefore, we necessarily diminish tliat of buyers, and are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there was a more perfect freedom of trade. As defence, however, is of much more impoit;incc Ihnn opulence, the act of naviga- tion is, perhaps, the wisest of all the commercial regulations of England.

Tile second case in wliich it will <renerallv be advantasre- ons to lay some burden upon foreii n for the enconragemejit of domestic industry, is, when same tax is imposed at home upon the produce of the latter. In tliis case, it seems rea- sonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the home-market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country, than wiiat would naturally go to it. It would only hinder any part of \vhat would naturally go to it from being turned away, by the tax, into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it. In Great Britaiu, when any such tax is laid upon the produce of domestic industry, it is usual at the same time, in order to stop the clamorous complaints of our merchants and manufacturers, that they will be undersold at home, to lay a much heavier duty upon the importation of all foreign goods of the same kind.

As there are two cases in Avhich it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, so (here are two others

in

76 Of Commercial Politics.

in which it may sometimes be a matter of deliberation ; irt the one, liow far it is proper to continue the free importation of certain foreign goods; and in the other, how far, or in wliat manner, it may be proper to restore that free impor- tation after it lias been for some time interrupted.

The case in which it may be sometimes a matier of de- liberation how far it is proper to continue the free importa- tion of certain foreign goods, is, when some foreign nations restrain by high duties or prohibitions the importation of some of our manufactures into their country. Revenge in this case naturally dictates retaliation, and that we should impose the like duties and prohibitions upon the importa- tion of some or all of their manufactures into ours.

The case in wliich it may sometimes be a matter of deliberation, how far, or in what manner, it is proper to restore the free importation of foreign goods, after it has been for some time interrupted, is, when particular manu- factures, by means of high duties or prohibitions upon all foreign goods which can come into competition with them, have been so far extended as to employ a great multitude of hands. Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve anjj circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home-market, as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence.

To lay extraordinary restraints upon the importation of goods of almost all kinds, froni those particular countries with which the balance of trade is supposed to be disadvan- tageous, is, continues Dr. Smith, the second expedient by which the commercial system proposes to increase the quan- tity of gold and silver. Thus in Great Britain Silesia lawns

may

Of Commercial Politics. 77

may be imported for liome consumption upon payiiig cer- tain duties. But French cambrics and lawns are prohibited to be imported, except into the port of London, there to be warehoused for exportation. Higlicr duties are imposed upon the wines of France than upon those of Poitugal, or indeed of any other country, ll^y what is called the impost of 1692, a duty of five-and-twenty per cent, of the rate or value was laid upon all French goods ; while the goods of other nations were, the greater part of them, subjected to lighter duties, seldom exceeding five per cent. The wine, brandy, salt, and vinegar of France were indeed excepted ; these commodities being subjected to other heavy duties, either by other laws, or by particular clauses of the same law. In 1696, a second duty of twenty-five per cent., the first not having been thought a sufficient discouragement, was imposed upon all French goods except brandy ; toge- ther Avith a new duty of five-and-twenty pounds upon the tun of French wine, and another of fifteen pounds upon the tun of French vinegar. French goods have never been omitted in any of those general subsidies or duties of five per cent, which liave been imposed upon all or the greater part of the goods enumerated in the book of rates. If we count the one third and two third subsidies as making a complete subsidy between them, there have been five of these general subsidies ; so that before the commencement of the Ame- rican Avar seventy-five per cent, may be considered as the lowest duty to which the greater part of the goods of the growth, produce, or manufacture of France were liable. But upon the greater part of goods those duties are equiva- lent to a prohibition. The French in their turn treated our goods and manufactures just as hardly. Those mutual restraints put an end to almost all fair commerce between the two nations, and smugglers were the principal im- porters, either of British goods into IVancc, or of French

ffoods

T8 Of Commercial Politics.

^oods into Great Britain. These princij)los, ^vliich took tlicir rise from national prejudice and animosity, are more unreasonable than those A\hich took their oriii^in from pri- vate interest and a spirit of monopoly. They are so, even upon the principles of the commercial system.

First, though it were certain that in the case of a free trade between France and Enjjland, for example, the ba- lance would be in favour of France, it would by no means folloAv that such a trade would he disadvantageous to Enir- land, or that the general balance of its whole trade would thereby be turned more against it. If the wines of France are better and cheaper than those of Portugal, or its linens than those of Germany, it would be more advantageous for Great Britain to jmrchase both the wine and the foreign linen which it had occasion for of France, than of Porlugal and Germany. Thougii the value of the annual importa- tions from France would thereby be greatly augmented, the value of the whole annual importations would be dimuiish- ed, in proportion as the French goods of the same quality were clicajjer than those of the other two countries. This would be the case, even upon the supposition that the whole French goods imported were to 'be consumed in Great Britain.

But, secondly, a great part of them might bo re-exported to other countries, where, being sold with profit, they might bring back a return equal in v;due perhaps to the prime cost of tlie whole French goods imported. What has frequently been said of the East India trade might pos- sibly be true of tlie French: that though the greater part of East India goods were bought witli gold and silver, the re-exportation of part of them to other countries brought back more gold and silver to that which carried on the trade, than the prime cost of the whole amounted to. One of the most important branches of the Dutch trade, at present,

(when

Of Commercial Politics, /»

(when Dr. Smith lirst published his invaluable work the Wealth of Nations.) consists in the carriage of Frencli goods to other European countries. Some part even of the French wine drunk in Great Britain is clandestinely im- ported from Holland apd ZeiJand. If there was either a free trade between France and England, or if French goods could be imported upon paying only the same duties as those of other European nations, to be drawn back upon exportation, England might have some share of a trade which is found so advantageous to Holland.

Thirdly and lastly, there is no certain criterion by which we can determine on which side what is called the balance of trade between any two countries lies, or which of them ex- ports to the greatest value. National prejudice and animo- sity, prompted always by the pviv;ite interest of particular traders, are the priiicijiles which generally direct our judge- ment upon all questions concerning it. There are two cri- terions, however, which have freqiiently been appealed to upon such occjisioiis. The custom-house books, it is now generally acknowledged, are a very uncertain criterion, on account of the inaccuracy of the valuation at which tlie greater part of goods are rated in them. The course of exchange is perhaps almost equally so.

Though by the discouragement of importation the mer- cantile system proposes to enrich every country, yet with regard to some particular commodities it seems to follow an opposhe plan : to encourage importation. It encourages the importation of the materials of manufacture, in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities. I do not observe, adds Dr. Smith, at least in our statute book, any encouragement given to the injportation of the instruments of trade. When manufactures have advanced to a certain

pitch

so Of Commercial Politics.

pitch of <i:roatnrss, tlic fabrication of <lie instruments of <iade bccoau's itself (lie object of a great iiiinibcr of very impoilaiit mantifacturcs. To give any pariiciilar cncou- ragoinent to the importation of such inslnimcnts \yould in- terfere too much witli (be interest of those manufactures. Such importation, therefore, instead of being encouraged, has frequently been proliibitcid. TIius the importation of wool-cards, except from Ireland, or when brought in as wreck or prize goods, was proliibited by the iJd Edw. IV^., which prohibition Avas renewed by the '39i\\ of ElizabetJi, und has been continued and rendered perpetual by subse- , quent laws.

The importation of tlie materials of mtmufaeturc hasi sometimes been encouraged by an exemption from the du- ties to Avhicli other goods arc subject, antl sometimes by bounties.

The importation of sheep's wool from several different countries, of cotton wool from all countries, of undressed ilax, of the greater part of dyeing drugs, of the greater part of undressed hides from Ireland or the British colonies, of seal skins from (lie British (Treenl:md t^shcry, of pig and bar iron from the British colonies, as Avell as of several other materials of manufacture, has been encouraged by an ex- emption from all duties, if properly entered at the custom- house. Th'? private interests of our merchants and manu- facturers may have extorted frosn the legislature these ex- emptions, as well as the greater part of our other com- mercial regulations. They are, hoMever, perfectly ju«t and reasonable; and if, consistently with the necessities of the state, they could be extended to all tiie o'Au'x materials of manufacture, i^ia public would certtiiniy be a g-aiucr.

'i'he encouragement given lo the importation of tlwe fiiaterials of manufacture by bounties, has been principally cwitined to such as wcve imported from our Ameiiciin plan- tations.

Of Commercial Politics, 81

tations. The same coramodities, however, upon which we gave bounties when imported from x\merica, were subject to considerable duties when imported from smy other country. Tlie interest of our American colonies was regarded as the same with that of the mother country. Their weaUh was considered as our wealth : whatever money was sent out to them, it was said, came all back to us by the balance of trade, and we could never become a farthing the poorer by any expense which we could lay out upon them ; they were our own in every respect, and it was an expense laid out in the improvement of our owu property, and fur the profitable employment of our own people. It is unnecessary, I apprehend, adds Dr. Smith, at present to say any thing further to expose the folly of a system which fatal experience has now sufficiently exposed. Had our American colonies really been a part of Great Britain, tliose bounties might have been considered as boun- ties upon production, and would still have been liable to all the objections to which such bounties are liable, but to no other.

The mercantile system has not been more favourable to the revenue of the sovereign, so far at least as that revenue depends upon the duties of customs, than it has been to the revenue of the great body of the people, or to the annual produce of the land and labour of the country.

Inconsequence of that system, the importation of several sorts of goods has been prohibited altogether. This prohi- bition has in some cases entirely prevented, and in others has very much diminished, the importation of those cora- modities, by rediicing the importers to the necessity of smuggling. It has entirely prevented the importation of foreign woollens, and it has very much diminished that of foreign silks and velvets. In both cases it has entirely

^ annihilated.

82 Of Commercial Politics*

annihilated the revenue of the customs which might have been levied upon such importation.

The high duties Avhicli Iiave been imposed upon the importation of many diiFcrent sorts of foreign goods, in order to discourage their consumption in Great Britain, have in many cases served only to encourage smuggling, and in all cases have reduced the revenue of tlie customs below v.hat more moderate duties would have afforded. The sayitig of Dr. Swilt, that in the arithmetic of the customs two and two, instead of making four, make some- times only one. holds perfectly true with regard to such lieavy duties, which never could have been imposed had iriot the mercantile system taught us, in many cases, to employ taxation as an instiument not of revenue but of monopoly'.

High duties on importation are immoral as well as im- politic : i( is unjustifiable in the legislature, first to tempt, and then to punish for yielding to the temptation.

By removing all prohibitions, and by subjecting all foreign manufactures to such moderate taxes as it was found from experience aflbrded upon each article \\\e greatest revenue to the public, our own workmen mxight still have a considerable advantage in the home market, and many articles, some of \\hich at present afford no revenue to government, and others a very inconsiderable one, might afford a very great one.

High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging

' V.'hen the value of i\\c rtimmodity, obsTvos ?ilr. Justice Blackstone, beai-s little or no proportion to tho quantity of the duty imposed, smu£:;£!,lii;^ becomes a very lucralivr eiii|)lo\nifnt ; and its natural and most reasonable punishment, viz. confiscation of tlie commodity, is in such cases quite inef- fectual : the intrinsic value of the £;oods, which is all that the smuj!;gler has paid, and therefore all that he ran lose, beinp very inconsiderable wijcn compared with his prospect of advaiitagein evading the duty.

smuggling.

Of Commercial Volitks. 83

svntiggUng, frequently afford a smaller revenue to govern- ment than -svluit might be drawn from more moderate taxes.

Wlien the diminution of the revenue is the effect of the diminution of consumption, there can be but one remedy, and that is the lowering of the tax.

When the diminution of the revenue is the effect of tlie encouragement given to smuggling, it may perliaps be remedied in two w.^ys ; either by diminishing the tempta- tion to smuggle, or by increasing the difficulty of smug- gling. The temptation to smuggle can be diminished only by the lowering of the tax; and the difficulty of smuggling can be increased only by establishing that system of admi- nistration which is most proper for preventing it. . If every duty was occasionally either heightened or lowered according as it was most likely, either the one way or the other, to afford the greatest revenue to the state ; taxation being always employed as an instrument of revenue, and never of monopoly ; it seems not improbable that a revenue, at least equal to the present neat revenue of the customs, might be draAvn from duties upon the im- portation of only a few sorts of goods of the most general use and consumption ; and that the duties of customs might thus be brought to the same degree of simplicity, certainty and precision, as those of excise. What the revenue at present loses, by drawbacks upon the re-exporta- tion of foreign goods which are afterwards relanded and consumed at home, Avould under this system be saved alto- gether. If to this saving, which would be very consider- able, were added the abolitioii of ail bounties upon the exportation of home produce in all cases in which those bounties were not in reality dravv backs of some duties of excise which had before been advanced, it cannot well be doubted but that the neat revenue of the customs might, after

G 2 an

$4 Of Commercial Politics.

an alieration of this kind, be fully equal to what it had ever been before.

If by such a change of system the public revenue suffered no loss, the trade and manufactures of the country would certainly gain a very considerable advantage. The trade in the commodities not taxed, by far the greatest number^ would be perfectly free, and might be carried on to and from all parts of the world with every possible advantage. Among those commodities W()uld be comprehended all the necessaries of life, and all the materials of manufacture. So far as the free importation of the necessaries of life reduced their average money price in the home market, it would reduce the money price of labolir, but without reducing in any respect its real recompense. The value of money is in proportion to the quantity of the necessaries of life w hich it will purchase. That of the necessaries of life is altogether independent of the quantity of money which can be had for them. The reduction in the money price of labour would necessarily be attended with a pro- portionable one in that of all home manufactures, which would thereby gain some advantage in all foreign markets. The price of some manufactures would be reduced in a still greater proportion by the free importation of the raw ma- terials. If raw silk could be imported trom China and Indostanduty free, the silk manufacturers in England could greatly undersell those of France and Italy. There would be no occasion to prohibit the importation of foreign silks and velvets. The cheapness of their goods would secure to our own workmen, not only the possession of the home market, but'a very great command of the foreign market. Even the; trade in the connnodities taxed would be carried on with much more advantage than at present. If those commodities were delivered out of the public warehouse for foreign exportation, being in this case exempted from .

all

Of Commercial Politics. 85

all taxes, the trade ia them would be perfectly free. The carrying trade in all sorls of goods would under this system enjoy every possible advantage. If those commodities were delivered out for home consumption, the importer not being obliged to advance the tax till he had an opportunity of selling his goods, either to some dealer or to some con- sumer, he could always afford to sell them cheaper than if he had been obliged to advance it at the moment of importa- tion. Under the same taxes the foreign trade of consump- tion, even in the taxed commodities, might in this manner be carried on with much more advantage than it can at present.

PART

86

PART IV.

OF LAW IX GENERAL.

XROM tlie lime that men began to form themselves into na- tions, there must necesssarily have existed two sorts of rights and obligations for each nation. 1. The rights and obli- gations bctv/een the soveieigri and liis people, founded on fundamental laws peculiar to each stale; and 2. Thos(^ rights and obligations which exist between nations, and by which they are regulated in their commerce with one an- other. The first is called Municipal Law ; the second, In- ternational or Universal Law.

OF INTERNATIONAL LAW.

International law, or the Law of Nations, is a system of rules deducible by natural reason, and established by uni- versal consent among the civilized, inhabitants of the world, in order to decide all disputes, to regulate all ceremonies and civilities, and to uisure the observance of justice and good faith, in that intercourse which must frequently occur between two or more independent states and the individuals belonging to each. And as none of these states will allow a superiority in the other, therefore neither can dictate or prescribe the rules of this law to the rest ' : but such rules

' It is not competent for one nation to add to the law of nations by its own arbitrary ordinances, without the concurrence of other nations. Per Lord Mansfield. Recognised by Lord Kenyon, 8 T. R. 437. The arbitrary ordinancess of one state ought not to conclude the rights of otiier parties : courts of justice ought to proceed on the acknowledged law of nations, and on the existing treaties between the dilferent states; not to deliver occa- sional and shifting opinions to serve the present purposes (if particular national interest. Per Sir William Scott, 1 Rob. Adnii Rep. 349.

must

Of Internatienal Law. 87

must necessarily result from tliose principles of natural jus- tice in which all (he learned of every nation agree ; or they depend upoji mutual compacts or treaties between the respective communities ; in the construction of which there is also no judge to resort to but the law of nature and rea- son, being the only one in which all the contracting parties aire equally conversant, and to which tliey ave equally sub- ject'.

International law divides itself into the natural or uni- versal, and the positive or arbitrary law.

The natural law, which Cicero says is " conscnsio omnium gentium," consists, as we have just seen, of those gteat common principles wliicli nature has made intrinsi- cally binding upon all mankind alike, under whatever rela- tion they act*. But as the simple law of nature was in- sufficient betwceu nations, when they came to frequerit and carry on counnercc with one another, their common inter- est obliged them to esta})lish conventions either express or tacit, or to regulate their intercourse with one another by simple custom'. These rights and obligations, which nations liave thought proper to eslabli^sh among themselves, form the positive or arbitrary law.

This general positive or arbitrary law, wliich has been established among the nations of Europe either by treaty, convention, or by custom, is subdivided by jurists into three divisions. First, the universal or voluntary law, or tliose rules wliich common consent, either tacit or express, has established among all civilized nations, and which are founded upon natural law, or deducible from its principles. Secondly, the customary law of nations, or those maxims and customs which long us.ige has established among nations. This law, aS it is founded upon

' 4 Elackstonr's Commrntaries, 66. " hist. lib. i. tit. 2. s. 1.

the

88 Of International Law.

the tacit consent of the nations that observe it witli respect to each other, is binding only upon those nations that liave adopted it. Thirdly, the conventional law of nations, or those express treaties which from time to time have been concluded between particular countries '.

In arbitrary states international law, wherever it contra- dicts or is not provided for by the municipal law of the country, is enforced by the royal power ; but since in En- gland no royal power can introduce a new law, or suspend the execution of the old, therefore the law of nations (wherever any question arises which is properly the object of its jurisdiction) is here adopted in its full force by the common law, and is held to be a part of the law of the land. And those acts of parliament which have from time to time been made to enforce this universal law, or to fa- cilitate the execution of its decisions, are not to be consi- dered as introductive of any new rule, but merely as de- claratory of the old fundamental constitutions of the king- dom ; without which it must cease to be a part of the civi- lized world. Thus in mercantile questions, such as bills of exchange and the like ; in all marine causes relating to freight, average, demurrage, insurances, bottomry, and others of a similar nature; the law merchant, which is a branch of the law of nations, is regularly and constantly adhered to. So too in all disputes relating to prizes, tp shipwrecks, and hostages, there is no other rule of decision than this great universal law, collected from history and ttsage, and such writers of all nations and languages as a if generally approved and allowed of*.

' Vattcl's Law of Nations, Prelim, s. 2'1, 25.

^ A Blackstorie's Commentaries, 67. 1 Ibid. 75,573. 3 Burr. 1481.

SECTION

Of the Inte7- national Laws of Commerce during Peace, 89 SECTION I.

now COMMERCE IS AFFECTED BY INTERNATIONAL LAW IN TIME OF PEACE.

J. Of the Right and Freedom of Commerce.

Men being by nature obliged lo assist each other reci-. procally, and contribute as much as is in their power to one another's happiness, there exists a sort of general obliga- tion, derived from the very contract on -which society is formed, for them to carry on commerce with each other.

In Europe commerce is so far free, that no nation retuses positively and entirely to permit the subjects of another nation, when even tliere is no treaty existing between them, to trade with its possessions in or out of Europe, or to esta- blish themselves in its territory for that piirpose '.

But as this general obligation to m_utual commerce de- pends only on an imperfect right, it does not go to hinder a nation to limit or even prohibit ^ lier own C(mi!nerce, or that of her deperuleucirs, witli foreign states, ciihcr abso- lutely or conditionally \ For it is a nation's right iis well as duty to deteiiniuc wiiat is useful and salutary to its in- terests, and to affix what condition it pleases to a right it freely grants, and admit or reject any overlures of commer- cial intercourse with Ibicigners, without the least imputation of injustice**.

The mere general liberly of trade, tlicrefore, being found-

' Marten's Law of Nations, 148, 150-

' From this right tTiat every nation has to impose liniitatinns, restriclior?, pr even pruhitfilioiis, on her own commerce, arises ti'.e ri£,ht oi' tlie esta- blishment (>f ciibtniiis and ot'ier diitir=, as also of enforcing her revenue laws, and of sequfsteriua; or aaTiullins; the coniraets of fi)reij;ners tradins; to Ir r terrijories in eonienipt of such liMiitations and prohibilioiis. Marten, IJO. Vide Weymel! r. Keed, 5Y. Ro9y.

3 Manen, J 48. Vattci's Law of Nations, b. i. c. 8. s- 90, 90, 9-1 ; and b. ii. c. 2. s. 24. Puff. Jtis Nat. et Gent. lib. iv. s. 10.

<■ Vattel't Law of .Nations, b. i. c. 8. s. 88—95 ; antl b. ii. c. 2. s- 25.

ed

so Of the International Laws

ed odIj on imperfect rights depending on the will and jiidgemciit of anotlier, commercial powers have been obliged to have recourse (o treaties for their nuilual benefit. These treaties are the measure and rule of the right of commerce, and generally turn on three points' : 1. On commerce in times ofpeace : 2. On the measures to be pursued with re- spect to commerce and commercial subjects in case of a rupture between the parties: 3. On the commerce of the contracting party that may happen to remain neuter, while the other contracting party is at war with a third power ^.

Such treaties of commerce are allowable among nations, provided they do not affect the perfect rights of others, or alter the jus gentium Avith respect to the rest of the world, and may be perpetual, temporary, or dependent on certain events'.

When once a nation has entered into engagements by treaty, it is no longer at liberty to do, in favour of a third party, and contrary to the tenor of the treaty, what it might have granted agree<ibly to the duties of humanity, or to the general obligation of reciprocal commerce. Therefore, when a nation has engaged to another that it will sell only to them certain goods or provisions, as for instance corn, it can no longer carry such provisions to another market. The case is the same in a contract to purchase certain goods only of that nation ■^.

And if a nation finds its safety and advantage by enter-, ing into an engagement of trading Avith a particular nation, such treaty is valid. As if a state which stands in need of salt can procure a supply of it from another nation, by en- gaging to sell its corn and cattle only to this other nation,

• Vattel's Lav,- of Nations, b. i. c. S. s, 93. Puff. lib. iv. $• 10. ' Marten's Law of Nations, 134.

3 Vattel's Law ofNationi, b. ii. c. 2. i. 27, 29.

* Ibia. s. 30.

unquestionably

of Commerce during Peace. f)l

unquestionably such a treaty is lawful. But these kind of engagements are not to be entered into without very good reasons'.

A nation may lay a restriction on its commerce in favour of another, engage not to trafiic in a certain kind of goods, forbear trading with such and such a country, &c. And in departing from such engagements it acts against the per- fect rights of the nations with which it has contracted ; and therefore they have a riglit of bringing it to reason. The na-- tural liberty of trade is not liiat by treaties of this nature; for this liberty consists only in every nation being unmolested in the right of trading with those who consent to trailic Avith it ; every one remaining free to close with or decline a par- ticular commerce, as it shall judge most advantageous-.

We have seen what are the laws wliich nations dei'ive from nature Avith regard to commerce, and by Avhat means they may procure others by treaties : it remains to inquire whether they can found any on prescription.

Though a nation may certainly renounce t!ie property or rights it possesses, in undertaking actior.s v.hicli prove such renunciation; and in thus losing its riglits, it may authorize another to acquire them' ; yet the abstaining from the use of a right, or keeping silence while another makes use of it, can never have the force of consent, except we are obliged to speak of, or make use of, such right. For, as long as there is no engagement, simple presumption, founded on our silence or inaction, cannot deprive us, in spite of our- selves, of our rights for the time to come. Therefore, when two nations have traded togctiier, Avithout interruption, for a long series of years, this long use does not gi\'e a right to ciiher of them ; and one is not obliged on t!)is account to

' Vatfel, S.31. i" Ibid. s. 32.

3 Grot, de J. B. ac P. lib. ii. c. 4. Pull'. Jus Nat. et Gent, lib- iv- r. 12.

suffer

93 Of the International Laws

suffer tlie otiier to come and sell its merchandizes, or to buy others, if there are no treaties or agreements which require sucli permission : both preserve the double right of prohi- biting the entrance of foreign merchandize, and of selling theirs wherever people are willing to buy it. If the English have from time immemorial been accustomed to fetch their wines from Portugal, they are not on that account obliged to continue the trade, and have not lost the liberty of pur- chasing their wines elsewhere. If, in the same manner, they have for a long time sold their cloth in that kingdom, they have nevertheless a right to transfer that trade to any country ; and, reciprocally, the Portuguese are not obliged by this long custom either to sell their wines to the English, or to purchase their cloths '.

What has just been said may be applied to the rights of commerce acquired by treaties. If a nation has by this method procured the liberty of selling certain merchandizes to another, it does not lose its right, though a great number of years are suffered to be passed over without its being used ; because this is a ri;^ht which it is at liberty to use, or not, whenever it pleases*.

Certain circumstances, however, may render a different decision necessary, because they imply a change in the na- ture of the right in question. For example, if it appears evident, that the nation granting this right granted it only with a view of procuring a species of merchandize of which it was then in want ; and the nation which obtained the right of selling neglects to furnish tlie merchandizes agreed for ; if a third nation agrees to bring them regularlv, on condition of having an exclusive privilege, it may certain- ly grant that exclusive piivilege^

' Marten's Law of Nations, 65, 148. Vattel's Law of Nations, b. i. c. 8. I. 95.

» Ibid. s. 96. 3 Ibid. -

of Commerce durhig Peace, 03

We now come to inquire whether a nation may appro- priate a trade to itself.

If a nation alone produces certain things, another may lawfully procure itself by treaty the advantage of being the only buyer ; and then may sell them again over the whole world, provided the monopoly does not clash with the ge- neral rules of humanity. Should the nation enjoying the monopoly set an exorbitant price on its goods, this would be an offence against the law of nature, as by such an in- fraction it deprives other nations of a necessary or agreeable product which nature designed for all men. Yet no wrong is done, because, strictly speaking, and according to ex- ternal right, the owner of a commodity may either keep, or set what price he pleases on it. Thus the Dutch, by a treaty with the king of Ceylon, engrossed the cinnamon trade into their own hands ; yet whilst they kept their pro- fits within just limits, no nation had cause to complain'.

But did the question relate to commodities necessary to life, and the monopolizer was for raising them to an exces- sive price, other nations would be authorized by a regard to their own safety, and the advantage of human society, to join in bringing an avaricious oppressor to reasonable terras. The right to necessaries is very different from that of things adapted for conveniency and delight, which, if they are too highly raised, one can safely go without. But it would be absurd, that the subsistence and being of nations should depend on the caprice and avidity of one*. It is, however, only in cases of absolute necessity, that one nation can oblige another to sell to it a part of its super- fluity ^

2. Of the Right of Passage for Merchandize. It may be received as a general principle, that during

' Vattd, b. ii. c.2. s. 33. « Ibid.

' Marten's Law of Nations, 1^38.

peace,

^4 Of the InternaLional Laws

peace, every sta<c is boand to perini( a passage of her iielgli- bours' merchandizes over her land and navigable rivers,- providcd, no inconvenience or detriment arises to her from such freedom of passage '4 For such a prohibition would he contrary to the commercial liberty generally introduced into Europe^, Besides, in the primitive communion of the eartii, men had, without distinction, a right to the use of every tiling necessary for the accomplishment of their na- tural obligations* And as nothing could deprive them of this right, tlio introduction of domain and property could not take place without leaving to every man the necessary use of things ^ Vattel illustrates this position by the fol- lowing example. The count of Lupfen having improperly stopped some merchandize in Alsace, complaints were ear- ned to the emperor Sigismund, who was then at the coun- cil of Constance ; upon which that prince assembled the electors, princes, and deputies of towns, to examine the aflair. The opinion of the bourgrave of Nuremburg de- serves to be mentioned. God, said he, has created heaven for himself and his saints, and has given the earth to man, in order to make it of use to the poor and tlie rich. The roads are for their use, and God has not subjected them to any taxes. He condemned the count of Lupfen to restore the merchandize, and to pay costs and damages, because he could not justify his seizure by any particular lav/. The emperor approved this opinion, and passed sentence accord- ingly ■^.

And it is from this right that all nations -have a passage for their merchandize over the territories of other states, that fishermen have the liberty of drying their nets on the banks

' Vattcl's Law of Natinn?, b. ii. c. 10. s. 130, 133, 13 J. Puff. lib. iii- c. 3. s 5. Grot. Ju5. B. ac P. !ih. ii. c. 2. s. 13. * Marten's Law of Nations, 168.

3 Vattel"s Law of >,atu>ns, b. iJ. c. 10. s. IIT.

4 J bid. s. 132,

of

of CoTYimerce during Peace. 95

of ihe sea, and that a vessel in distress has a right to enter, even by force, into a foreigii port. But it must be ob- served, says Vattel, that ii'sucli vessel be infected \vith the plague, it may be kept at a distance by violent means \

But as this liberty of free and unrestrained commerce is founded either on treaties, or, in demi-sovereign states, on law ; in every case where it is founded only upon custom, that custom does not hinder a nation from making whatever regulations and restrictions it pleases, or from exercising over such parts of its territory all the rights of sovereign dominion ^.

The permission of passage over the main seas depends on the question how fur nations liavc a right to appropriate to themselves the property and empire of any particular seas. This right of appropriation rests on the acknowledgement and submission of their neighbours, or on an ancient exercise of executive jurisdiction, founded presumptively on an admission of prior settlement on its shores, or of subsequent cession.

Entire property is insisted on but by few nations. The question of jurisdiction has been the subject of the most earnest contention between nations. It may, however, be considered, that though the sole dominion may exist in theory, yet neither right of discovery, donation of (he Pope, nor prescription, will exclude other nations from a free pos-* session'. No nation can appropriate to itself dominion over the neighbouring seas further than is necessary for its safety, or for rendering itself respected : it would be a vain and ridiculous pretension to claim a riglit which it was na ways able to cause to be respected '*. After the vain pre-

' Vattcl, b. ii. c. 10. s. 123, 129 ; and b. i. c. 23. s. 288 ; and see Puff. Jus Nat. ct Gent. lib. iii. c. 3. s. 8.

' .Marten's Law of Nations, 1G8.

3 Vattel, b, i. c. 23. s. 281. Grot. Mare Liberum, Lugd. Bat. 1609. Seld. Mare Clausum, lib. i. c. IT.

« Vattc!, b. i. c. 23. s. 289,

tension*

96 Of the International Laws

tensions and contestations of the Portuguese to the sove- reignty of the Guinea and Indian seas during the sixteenth and seventeenth centuries, all the powers* of Europe now ac- lino\\ ledge the ocean and the Indian Sea to be exempt from all property and dominion, and to be the common posses- sion of all lialions '.

A nation may, however, renounce by treaty the liberty of navigating any particular sea. Thus the Iiouse of Au- stria renounced in favour of Enijland and Holland the right of sending vessels from the Netherlands to the East Indies. We may see in Grot, de Jure B. ac P. lib. ii. c. 3. s. 15. many examples of such treaties among the ancients : and in Bouchaud, p. 202, among the moderns*.

But no nation can acquire an exclusive right of naviga- tion by prescription and long use. For, as we have already seen that the abstaining from the use of a right, or keep- ing silence while another makes use of it, can never have the force of consent, except we are obliged to speak or make use of such right ; consequently the immemorial possession of a navigation or fishery in certain seas will give not an ex- clusive right to the nation possessing it ; unless there ap- pears an evident intention of the party claiming the com- mon right to navigation and fishery in those seas to renounce such their common right*.

The intention of a renunciation to a common right of navi- gation and fishery may, however, be inferred fiom a neglect of use attended with tlie nature of a consent, or a tacit pact ; and thus become a title in favour of one nation against another. Thu?,when a nation in the possession of the navigation and fishery in certain latitudes pretends an exclusive right, and forbids any other interfering in it ; if these obey that pro- hibition with sufficient marks of acquiescence, they tacitly

' Vattel, b. i. r. ?3. s. ?84. Marten, »66. * Vattd, b. i. c. 23. a. 284.

» Ibid. s. 285.

renounce

of Commerce during Peace. 97

renouhee their right in favour of the other, and establish a right which the oilier may afterwards lawfully maintain against them, especially when it is confirmed by long use'.

But notwithstanding the ocean and the four great seas that compose it are acknowledged to be the common pos- session of all nations *, there are out of Europe some in- considerable parts of the ocean claimed as the property and dominion of particular European nations ^ And in general it is heldj that the sea surrounding the coast, as well those parts of it that are land-locked, such as roads, bays, gulfs, &c., as those which are situated within cannon shot of the shore, (that is, witliin the distance of three leagues,) are so entirely the property, and subject to the dominion, of the master of the coast, that, first, he has the exclusive right to all the property of it, whether ordinary or accidental, as far as relates to things unclaimed by any other lawful proprietor. Secondly, he can forbid or restrain the naviga- tion of foreigners in his roads, and their enfry into his ports. Yet in time of peace this liberty is permitted to merchant ships, and even to ships of war to a certain num- ber. Thirdly, he has a right to impose duties, tonnage, &c. fees of entry, of clearance, &c. and he can institute tolls for the benefit olhis navigation. Fourthly, he may require the maritime honours that custom allows to those who have do- minion over any part of the seas. In short, those paits of the sea which surround the coast of every state are so com- pletely susceptil)le of propertv, that they are comprehend- ed in its territory, and no one can navigate them in spite of the proprietar3'' nation •♦.

The riiihts exercised on the sea near the coast are also

- Vattcl, b.i.c. 23. s. 28(t, '^ Puff. Dc Jure Nat. et Gent. lib. iv. c. 5.

5 Moser, Nordauiprica, vol. iii.

* Marten, 168, Vattel, b. i. c 22. s. 274 ; c. 23. s, 287, 288, 291. •

H exercised

98 Of the International Laws

exercised in those straits which are not wider than the rarigc of two common shots. It is for this reason that the king of Denmark, by possessing the pn)perty and dominion of the navigable part of the Sound, cluims there not only the maritime honours due to him as sovereign, but tolls for the libcrly of passing, and for defraying tlie expense he is at in maintaining light-houses, sea-marks, and other things necessary for the safety of mariners. But it must be re- marked, that in siich straits (as for example the Straits of Magellan) over which empire cannot extend, and stil! less a right of property, the freedom of navigation is a remain- der of the primitive liberty enjoyed in common by mankind '.

^^'hat has been said of straits which are too extensive for the claim of empire and the right of property, may be understood of such bays as are too extensive for a like claim ; as Hudson's Bay ^.

After the discussion of the question of the right of dominion and property in respect to the sea, it remains to mention what parts of the sea are acknowledged as free or subject.

The three straits betweea Dcinnark and Sweden are under the dominion, and are considered as the property, of the king of Denmark : who also claims a right of ex- cluding foreigners from fishing and even navigating the seas adjacent to Iceland and Greenland, to the space of four miles from Iceland, and fifteen miles from Greenland. But the right of fishing has been disputed by many nations, particularly by the United Provinces.

2. The Straits of Sicily are under the dominion of the kiftg of Sicily.

3. The Gulf of Bothnia is under the dominion of the king of Sweden,

' Miirten, 17K Vatte!, b. i. c. 23. s. '291, 292. -' Ibid. s. -^91.

4. The

of CoTfimerce during Peace. 99

4. The Turkish Emperor claims the dominion over the Black Sea, the Egean Sea, tlie Bosphorus of Thrace, the Propontis, and the Hellespont. Over the Black Sea he exercises his right of proprietor and sovereign in such a manner as not to permit even the entry or navigation of it to any nation whatever, unless he has granted it by treaty.

5. Great Britain.

The extent of the maritime dominion of England seems to consist of two parts, the profitable and the Jionorary- The profitable regards our own coasts only, to a certain distance from the shore, in the sight whereof foreigners were not usually suffered to fish. The honorary is that of respect to the British fl;<g, which we claim from all nations, and still support.

The boundaries we have established for this purpose are the British Channel on the south, extending io the shores of France, and to those of Spain as far as Cape Finisterre ; ^rom thence, by an imaginary line west, twenty-three de- grees of longitude from London to the latitude of sixty degrees north, which last is called the Western Ocean of Britain ; from thence, by another imaginary line in that parallel of latitude, to the middle point of the land Van Staten on the coast of Norway, which is tiie northern boundary ; and from that point it extends along the shores of Norway, Denmark, Germany, and t!ie Netherlands, to the British Channel again ; which last boundary compre- hends what is called the Eastern Ocean of Britain. These are the original limits acquired at the time of king Alfred's beating the Danes out of these seas ; and from thenceforth the kings of Englarid took on themselves the more peculiar guard and sovereignty of the seas, piotccling the traders of all nations from the insults of pirates ; and to answer the expense of keeping fleets at these seas, and for protection, all nations who sailed into these seas paid a tribute in pro-

H 2 portion

100 Of the International Laivs

portion to tlie burden of their ships ; but this tribute Is now confined to the ceremony of lowering the flag '.

6. The claim of the Republic of Venice to (he dominion over the Adriatic Sea, and of Genoa over the Ligustic Sea, was always disputed by other nations ; and as these pretended empires are respected only while the nation that lays claim to them is able to support them by force, they consequently fall with its power *.

7. After many disputes with respect to the dominion of the Bidtic, and particularly with respect to the honours of the flag, some of the states situated on its shores have agreed to yield those honours in certain districts, and to omit them reciprocally in others '.

8. The following seas arc acknowledged free : i]\!i Spanish Sea, the Aquitain Sea, the North Sea, the White Sea, the Mediterranean Sea, and the Straits of Gibraltar ■*.

One of the conscqjiences arising from the claim of dominion and property in particular parts of the sea, is the right of receiving and paying maritime honours, or the obligation for vessels to salute one another. Even on those parts of the sea which are acknowledged to be free or neutral, the obligation of salute seems to be required from merchantmen. The usual method of salute bsrd hy mer- chant vessels is by lowering or hauling down theforctop- sail. Merchant ships, even when they are armed, are obliged to salute all vessels of war, fortresses and portj;, ais ivell with their caimon, as with their merchant /lags and their sails ^

The right of claiming toll*, or passjge duties, for goods carried across tlie territory, either tjy land or wa^er, from one foreign country to another, has been so iirmly esta-

• Godolphin Ad^n. Juvi'^. Srldcii's Maro riaiisum. e Marten's Law of V;itii»ti,s 101, 172. VriUpl. I., i. c. 'J3. f. ?8D. ^ Martens Law of >:;itioi;t, Ho. * ibid. Ui-1.

-■• Ibid, rii, 117.

blished

i)J Commerce during Peace. 101

blished by custom or treuty, lliat it is now no longer dis- putal. Its origin may be traced to the remotest antiquity '. Both Grotius* and PufTendorf ' give it the sanction of their authority.

These tolls or passnge duties, •which in some countries are called transit duties, are levied for the maintenance of the roads and navigation, and are justly imposed upon all those mIio receive advantage from their use. The most important transit duty in the world is that levied by the king of Denmark upon all merchant ships that pass through tlic Sound ^. •

But when the transit duty is excessive, and bears no pro- portion io the expense of preserving these public passages ; or when it is levied fqr the preservation or construction of roads, or the convenience of navigation, where the master of the soil or the shore is at no expense for the same, such imposts are contrary to the law of nations '.

It is necessary to mention the right to shipwrecks, the un- happy fiuils of barbarism, and which almost every where disappeared with it. This pretended strandright, which is consonant neither to reason nor humanity, has been re- strained from time to time, particularly since the thirteenth century, by privileges, laws, and a number of treaties ; so that, at present, it may be considered as generally abolished^. The humane expostulation of Constantine the Great on this subject deserves to be recorded. That prince, finding that by the Iniperial law the revciuie of wrecks was given to the royal treasury or Jisc us, restrained it by an edict ''j and

' Plin. Hist. Nat. xii. 14.

^ De.hitr I}. :vc P. lib. ii. c. 2. s. li.

^ l)e .lure N:u. ft Gent. lii). iii. c. S. =. 7.

< Vauel, b. i. c. <>. s. lOS. 3 smith's Wealth of Nations, 3?,0.

* Vatt«M, b i.e. 9. s. 104.

** Scliuback, Diss, de Jure Littoris, Got'. 1750. Commtniarius de Jure Litoris, vol. i.

• Cfd. 11.5. 1.

ordered

lOf Of the International Laws

ordered tliem to remain to the owners, adding, *• Quod enim jns ballet in aliena calamitate, ut de re tarn luctuosa corrpendium sedctur."

But though the rigour of the law of wrecks has been softened in favour of the distressed proprietors, and that justice and humanity have forbid adding sorrow to sorrow ; yet the master of the shore has a right to a compensation for the expenses he may incur in preserving property %vrecl;ed on his coasts^ and assisting vessels in danger, and even to detain a part of the property by way of indemnifi- cation. This right (jus colligendi naufragium) is every where exercised, now-a-days, before restitution is made, even to those who appear in the appointed time. The time allowed for claiming ship-property is generally a year, counting from the day on which the proprietor is informed of the accident ; and if no proprietor appears, the effects saved from the wreck belong either to the first possessor, or to the sovereign of the shore if the law gives him a right tq them '.

SECTION II.

HOW COMMERCE IS AFFECTED BY INTERNATIONAL LAW IN TIME OF WAR.

As between Belligerent and Belligerent.

We have already said that, generally speaking, the com- merce of Europe is so far free, that no nation refuses posi- tively and entirely to permit the subjects of another nation, when even there is no treaty existing between them, to trade with its possessions in or out of Europe, or to esta- blish thciv.selves in its territory for that purpose. But a state of war forms an exception. A declaration of hostility naturally carries with it an interdiction of all commercial

» Marten, 170. Vattel, b, i. c. £3. s. S93.

intercourse j

of Commerce during PVar. iOS

intercourse; it leaves the belligerent countries in a state J hat is inconsistent with commerce. In the state of Marfare, all treaties, civil contracts, and rights of pro^iertj, are put an end to; and therefore trading, which supposes the ex- istence of civil contracts and relations, is necessarily con- tradictory to a state of war.

From the moment a sovereign is in a state of war, he has a right, strictly speaking, to act as an enemy, not only with respect to the persons and property found in the ter- ritory of the enemy, but also wit ii respect to the enemy's subjects and their property which may happen to be si- tuated in his own territory at the breaking out of the war '. He has a right, then, to seize on their ships found in his ports, and on all their otiier property ; to arrett their per- sons, and to declare null and void all the debts which the state may have contracted with them^.

However, nations, for their mutual benefit, have been induced to temper the rigour of this right. 1. In a great numlier of treaties, nations have stipulated, in case of a rupture between them, to give each others subjects residing in their territory at the breaking out of the war, or coming to it not knowing of the declaration of war, a specified time for the removal of themselves and their property. And if they are detained by sickness or any other impedi- ment, a further time is to be given them. 2. Sometimes it is agreed to let the subjects of an enemy remain during the whole course of the war, or so long as they live peaceably and quietly, o. Besides these precautions taken between nation and nation, many states have provided, by parti- cular laws and privileges, for the protection of the persons ajul properly of enemies' subjects. 4. Generally speaking.

' Marten's Law of Nations, SS?.

^ Grot. lib. iii. c. 9. s. 4. Puff. lib. vjii. c. 6. s. 19, 2C, "Wolf Jus Gent. s. 1181, 1198.

a nation

104 Of the hiternational Laws

a nation docs not venture lo touch tbe capitals whicli the subjects of the enemy may have in its funds, or that it may otherwise OAve to such subjects '.

Where there are neither treaties nor laws touching these points, nations continue still to seize on all the property be- longins;: to its enemy's subjects which is carried into its ter- ritories after the declaration of -war*.

Every sovereign engaged in war may prohibit all com- merce whatever with the enemy : first, in his own territory and maritime dominion ; secondly, in the places, provinces, &c. taken from the enemy ; thirdly, in such places as he is able to keep blocked up so as to prevent every foreigner from entering. In all these cases he may attacli penalties to the transgression of his prohibitions ; and these penalties may extend to the confiscation of goods and vessel, or to the corporal punisiiraent of those who assist in the carrying on of such prohibited commerce'.

This principle of restraining the subjects of one bellige- rent nation from all commercial intercourse with the sub- jects of the other, is not peculiar to the law of any country ; it is laid down by Bynkershoek, with whom almost all the elementary writers on the law of nations concur, as an uni- versal principle of law. " Ex natura belli commercia inter hoistes cessare non dubitandum. Quamvis nulla spe- cialis sit commerciorum prohibitip, ipso tamen jure belli commercia esse vetita, ips^ae ijidictiones beliorum satis de- clarant, 8ic.* " To this authority Boerius, in his deci^ions, lends his sanction. In opposition to some distinctions and qualifications which had been suggested by particular lawyers, he maintains, '* Ego tamen contrarium credo,

' Marten's Law of Nations, 28,?. Vattcl, b. iii. c. 4. s. 63. Emerignon, vdI. i. p. 567.

» Marten's Law of Nations, 283. ^ Ibid. i\L2.

♦ Quest. Jur. Pub. lib. i. c. 3.

quod

of Commerce durhig IVar. 105

quod non licet tarn I'lcitas quani iilicitas liostibi.'s de- ferre, tempore guenae ;" and he declares Ihis io be the ge- neral opinion of jurists.

It is illegal for a subject in time of Avar, Avithout the king's license, to bring gootls even in a neutral ship from an enemy's port, Avhich after the commencement of hostili- ties had been purchased by Ids ai;cri( resident in (he ene- my's country, although it may not iippcar lliat they were purchased of an enemy ' .

So in a conjoint Avar, tliLit is, Avhere <avo n;itic)iis are in al- liance against a common enemy, no subject of one bi-liige- rent can trade with the enemy, without being liable to for- feit his property engaged in such trade, in the prize courts of his ally *.

In a conjoint Avar, Avhen an ally in tiie Avar is permitted to trade Avith the enemy in " innoi;entai tides," such permis- sion Avill not extend to nival and mditary stores. But the infection of such contrabaiiJ co'iimodities Avill not cause the condemnation of the innocent puts of the cargo, if, by order of the confederated government, all other goods are directed to be restored K

In the course of the judgement in this case Sir William Scott said, I am of opinion, that where such articles oc- cur, though tlie word co7itrahcmd m;!y be kept out of sight, the court is bound to consider thv-m as nf the nature of cori' traband, in such a sense as renders it impossible that tliey should be included under the description of innocent arti- cles. When allied nations are pursuing a eoir.nioti cause against a common enemy, it Diust be t tken as an implied, if not an express contract, that one state s!iall not do any thing to defeat the general obj'ct. If ono' state admits its

' Potts V. Bell, in Error, 8 T. R. 5-J8.

2 The Nayade, 4 R.il). Adra. Rfp. 25\.

3 Tlie Jveptmius, 6 Ibul. 103.

subjects

]06 Of the International Laws

subjects to carry on an uninterrupted trade with the enemy, the consequence may be, that it will supply that aid and comfort to the enemy which may be very injurious to the prosecution of the common cause, and to the interests of its ally. It should seem, that it is not enough, therefore, that one has allowed this prnctice to its own subjects ; it should appear to bo, at least it is desirable that it could be shoAvn, thit either the practice is of such a nature as can in no manner isitcrfere with the common operations, or that it has the allowance of the confederate state.

This is the general principle, continues the same en- lightened judge, that I fed myself bound to apply to the whole class. And in no instance can the penalty of confis- cation be applied with more propriety than in this case, in which the parties exporting these articles to the enemy are British subjects domiciled in Sweden. It has been decided both in this court and in the Court of Appeal, that though a British subject, resident abroad, may engage in trade ge- nerally with the enemy, he cannot carry on such a trade in articles of a contraband nature. The duties of allegiance travel with him, so as to restrain him from supplying ar- ticles of that kind to the enemy.

Trading with an enemy on an adventure originating be- fore the war, and before the parties could have any know- ledge of that event, but not stopped on notice of hostdities having been commenced, will not subject the cargo to con- demnation, if the place of their ulterior destination had liccome a British settlement before the arrival of the ship. For if the intent was to trade Avith an enem}'^ (which can- not be ascribed to the party at the commencement of the voyage, when hostilities had not been deckired), but at the time of carrying the design into effect the person has not become an enemy ; the intention here wants the corpus clelicti. On the contrary, where a country is known to be

hostile,

of Commerce during JVar, 107

hostile, the commencement of a voyage towards tliat conn- iry may be deemed a sufficient act of illi^gality ; but "vvhere the voyage is imdertaken without that ivnowledge, the sub- sequent event of hostility will have no such effect '.

But if the place of destination had remained hostile, the party, after knowledge of hostilities, must exonerate him- self from the intention of trading with an enemy before he can have restitution of his property from the captors *.

Goods for which orders had been given b(.'fore the com- mencement of Jiostilities >viU be restored to the owners, if it appears that there was no possibility of countermanding the order. For though the demand against the merchant would be suspended during liostilitics, it miglit be ditficult to relieve the Britisli merchant from the demand when his foreign correspondent was rehabilitated and restored to his rigiit of action by the return of peace ^.

If British subjects, who had been settled in trade in fo- reign states in time of amity, make arrangements for their removal, but are prevented from doing so by the detention of the hostile state, they will be entitled to restitution of their property from the captors ^.

The situation, says Dr. Robinson, of British subjects wishing to remove from the country of the enemy in the event of a war, but prevented by the sudden interruption of hostilities ftom taking measures for that purpose suffi- ciently early to enable them to obtain restitution, forms not unfrequently a case of considerable hardship in the Prize Court. In such cases it would be advisable for persons so situated, on their actual removal, to make application to government for a special pass, rather than to hazard valu- able property to the effect of a mere previous intention to

' The Abby, 5 Rob. Adm. Rep. 251. " IbiJ.

s The Jiiffrow Cntharina, 5 Ibid. HI. i The Ocean, b Ibid. 9L

remove.

103 Of the International Laws

remove, dubious as that iijtention may frequently appear under the circumstances that prevent it from beinj^ carried into execution ' .

It is a decided point, that even an inactive and dormant partner cannot receive restitution in a transaction in which lie could not lawfully be engaged as a sole trader. There- fore, if a Britisii merchant is jointly interested with a mer- chant in America in a shipment from America to a coun- try in a state of hostility with Great Britain, his share of the cargo will be condemned, as the property of a British merchant engaged in commerce with the enemy. But the ihare of the cargo belonging to the neutral partner is held to be inviolable *.

It remains to inquire how a natural-born subject may di- vest himself of his national character by residence in a hos- tile territory.

In Europe and the western parts of the world, by the law of nations, traders take their national character from the gvineial character of the country in which they are re- sident, unless they trade under some recognised authority of their own country : they are considered subject to the same obligations, bound by the same duties, and amenable to the same coinm.on authority of tribunals as the natives of the state in which they reside. Therefore a British sub- ject, by settling in trade in an enemy's colony, exposes his property taken on a voyage from such colony to Europe to confiscation ; unless sonu; overt act or solid fact affords evi-r deijce of the party's intention to withdraw Irom such hos- tile territory ^

In the Eist, however, fiom the oldest times an immisci- ble character having been kept up, foreigners are not ad- mitted into the general body and mass of the society ; they

' Rob. Adm. Rep. note (a.) ^ The Franklin, 6 Rob. Adm. Rep. 127. 3 Tlie rresideiit, 3 Rob. Adm. Rep. 277.

do

of Cummerce during War. 109

do not acquiie any national character under the general so- vereignty of the country ; neither are they known in the'.i' own peculiar national character ; but are coasidered to take their national character from that association or factory un- der whose shelter aiul protection they live and carry on their commerce. And therefore the property of a foreign mer- chant, who lives under a British administration in JiuUm, and has the benefit of its protection for his person and com- merce, is liable to confiscation, if taken in trade with an enemy ' .

But the character which is gained by residence ceases by residence: it is an adventitious character, which no longer adheres to the person from the moment that he pnts him- self in motion, bona fide, to quit the country, sine animo revertendi. Therefore a ship captured on its voyage from Batavia to Hamburgh, and belonging to a native American who had settled in England as a Britisli merchant, l:ut Avas actually preparing to return to his own countrj', was do creed to be restored ; for, the moment a person is on his way to his own couiitry, his native character is stj-ongly and substantially revived *.

So in tlie case of the Snelle Zejdder ' ; Mr. Curtissos, wIjo was a British-born subject, had been resident in Surinam and St. Eustatius, and had left those settlements wiili an intention of returning to this country, to take up his final residence; but he had got no further than Holland, (w!)i- ther he had gone for the purpose of settling some accounts,) the moiiier country of those settlements, when the war broke out. It was deterniined by the Lords of Appeal, that he was in itinere, that he had put himself in motion, and was in pursuit of his native British character : and as such he was held to be entitled to the restitution of his property.

» Thelndian Chief, 3 Rob. Adm. Rep. 22.

''The Indian Chief, 5 Ibid. 12. ' Lords, April 25, MBX

.But

1 10 Of the International Laws

liut wlictlicr the claimants had lakcn measures io with- draw, and had actually engaged in the operation of re* juoving, may be relieved by the circumstances of the set- tlements having been in British possession at the time of commencing their residence, taken in conjunction with the presumption raised by the stipulation of a treaty, that per- sons so settled would remove in three years, on the resti- tution of the settlement '.

Though restitution will be decreed when a neutral or natural born subject has gone into an enemy's country for tlie purpose of Avithdrawing his property, and invested the same in a shipment to his own country ; yet it is otherwise if such investment is made with a view to mercantile spe- culations V, ith other countries*.

If a house of trade in a neutral country sends a partner into a belligerent country, with an intention of not mixing in any other trade than the business of that house ; if the purpose be of such a natiue as may probably, or does ac- tually, detain the person for a great length of time in the hostile territory, such a circumstance will impress a national character upon him ^.

A merchant of Embdcn, having also a share in a house in 'London, is not precluded by that circumstance from aveiTing an entire interest in his house at Embden, in a shipment from the enemy's country consigued to the house in London-*.

In the case of the Phoenix ^j Sir \A'illiam Scott said, Certainly nothing can be more decided and fixed, as the principle of this court, and of the Supreme Court, than that the possession of the soil does impress upon the owner the character of the country, as far as the produce of the soil-is concerned, in its transportation to any other country.

> The Diani, 5 Rob. Adm. Hep 60.

5 The Drpe Obrondcrs. 4 Ibid. 232. 3 The ITaimonv, 2 Ibid. 322.

4 The Herman, 4 Ibid. 258. s 5 Ibid. 20.

whatever

o/" Commerce during Wai . 1 1 1

whatever the local residence of the owner may be. On this principle, the property of the claimants taken in a voy- age from Surinam to MolLuul, and described to be the pro- duce of their estates in Surinam, was condemned as legal prize to the captors, though such claimants were properly domiciled in neutral territories : for it is an esiablishetl principle of the Prize Courts, that sucli property is to be considered under the national character of the pan-nt state.

A natural born subject of this country admiltcd citizen of the United States of America, either before or after the declaration of American independence, may be considered as a subject of the United States so as to entitle him to trade to ihe East Indies under the treaty of commerce coniirme^^ by the statute 37 Geo. III. c. f}7. '

Property sent from a hostile territory cannot change its character in transitu, although the owners become British by capitulation before the capture^.

A contract entered into between a British sul)ject and the government of the belligerent country, being illegal in the hands of such British subject, is illegal also in the hands of persons employed to execute it for him ^ The circum- stances of tlie case were, that a contract was entered into between Mr. Robinson, a British subject, resident at Cu- racoa, which had fallen under the British government when the contract was carried into execution, and the S'pa- niih government of the Caraccas, giving a monopoly of llie tobacco produced in those settlements for three years ; and that Mr. Robinson had entered into a sub-contract with IMessrs. Sontag and Co. of Hamburg to execute this contract. It was contended on the part of the captors, that the contract, being illegal in t,he hands of JMr. Robui- son, must be held to be illegal in the bands of Messrs.

* Marryat v. Vv'ilson, in Error, 1 Bos. and Pul. 4S0.

* Tiie i)arirkf'baar Africaan, 1 Rob. Adm. Rep. 107.

* TIi»; Anna Catharina. 1 Ibid. 107.

Sontasr

112 Of the Intrrnal'mial Laws

Sontiig and Co. wlu) wt rt> employed to execute it under a contract with hiin ; and (hat the interest of Robinson was not even divested, since it appeared that his house at Cnrucoa was to have one-third of the profits. It was further coatendiii that the cir^o was to be considered as going to become the properij of tiie Spanish government on arrival, and therelbrc to Ijc deemed Spanisli property : that the nature of the coiihact with t'le Spanish government, giving a nion<)}H)iy of the tobacco of tliose settlements for three years, would also have the effect of impressing on the pro- perly passing under the contract, and the persons carrying it into execution, the SpaniJi character.

On the nature of this contract, said Sir W. Scott, two questions arise : first, How is the property to be legally considered ? If the cargo is to be taken as being actually become Spanish property, there will be an end of the ca,se, under the rule which renders goods going to a belligerent, to become his property imuiedialely on arrival, subject to confiscdtion. This is a rule universally applied by this court, and confirmed by tl)e authority of the Supreme Court. A distinction lias indeed been admitted in favoui' of contracts made before a war, and without any considera- tion of war ; but if the conlriict being made before the war, and without any prospect t'nereto, is carried into execution by a shipment after tiie breaking out of lio-jtilities, the ground on which that l\ivoiirable distinction is made no longer exists. The original contract in this case was ori- ginally inoflL^nsive, both parties being enemies. But on the principle before adverted to, if a party becomes a neu- tral after the contmct, and before the execution of it, and ■shipment takes place afterwanls, that- also wiil compose a case not falling within the reach oi' the relaxation. By the cession of Curacoa, Mr. Robinson became not merely a neutral, but a subject of this country ; and :hcn his con-*

tract

rj" Commerce during War. 113

tract becoming illegal, ouglit (o have terminated ; for, by the change in his civil relations, his legal capacity to exc- c«te such a contract was totally extinguished. He, how>- ever, is not the person for v/lioni the present cargo is claim- ed. The goods Avcre not shipped by him, though lie was in Europe at Hamburgh, at the time, for the purpose of carrying the contract into execution. The sliipmcnt was made by Mr. Sontag, aiid other merchants of Hamburgh, to whom a part of his contract had been transferred by Ro- binson. It has been argned, that th.e contract bccomiiig illegal in the hands of Robinson, the illegality would t.avel over with it, and attach on those persons carrying it into execution. I am not disposed to hold that f/ luould aflect them, as a contract made or executed in breach of alh' glance. The immediate shippers arc neutral persons, Messrs. Sontag and Co. of Hamburgh, acting under the contract, as it was devolved on them, to supply the goods, and re- ceive the return cargof^s, in the same manner as Robinson was to have done. No duties of allegiance bound them to abstain from a direct commerce with the enemy of this country ; and it cannot be inferred that any violation of duties of that species, on his part, could at all be trans- ferred to them, who are neu'ral merchants, standing indif- ferent to both parties. But taking them to be such, how does the character of the goods stand in this transaction ? Was it not, in the first place, a cargo going to become the property of the Spanish government immediately on arri- val? Was not the Spanish gavernment entitled to posses- sion? It was only on the .violation of the contract on the part of the Spanish government that these goods were to take the chance of the market. The shippers coiisider^cd tJ 1 em selves a,f bound to deliver them for the use of tlie Spa- nish government, under the a^refMuent ; as entitli'd to the benefit, and subject to the obligatioim of that contract.

I Were

114 Of the International Laws

W ( re there any immediate acts to be clime after tlic arrival of the vessel? Is there any act of owiiersliip -wliich tlic claimant was at liberiy to (!xcrci«ie, so as \o prevent tlie delivery? If not, the g'ooils must be considered as having substantially become, in itiiiere, the property of the enemy. Uiit there is a second question — \\ hetlier such a con- tract docs not fix on Robinson the character of a Spanish merchant, aud, by conl'erring that chanicter on him, con- fer it also on tliose -who adopted the contract under liim ? What is the ellect of the contract ? It is to give a privileged monopoly of the tobacco trade of those settlements for three years ; and that privilege guarded by other privileges of a higher nature. Tliese goods Mere to te imported, and other goods exported, duty free. They Avere to he sold to the Spanish government, and for the use of the Spanish settlement. This gives at least the full benefit of the Spa- nish character. It may possibly go further, since there is no reason to suppose that a Spanish merchant, merely as a subject of Spain, Moidd have]>een admitted to such privi- leges in (he ordinary course of Ills private trade. Can such a communication of peculiar indulgence, "vvldch elevates Mr. Robinson above the private Spanish merchant, be consi- dered, then, aslcss thana communication to these individuals of the entire benefit of a Sjxmisli character, as far as this transaction is concerned ? In such a state, what is tliere want- ing to constitute tlie absolute Spanish character ? — Nothing, but actual bodily domicil. The parties can hardly be said t'veu to want ihut, because they have a stationed resident agent in the Spanish settlement, for the very purpose of conducting this permanent commercial undertaking. It is not, indeed, lield in general cases,_that a neutral merchant, trading in the ordinary manner to the country of a belli- gerent, does contract the character of a person domiciled there, by the mere residence of a stationed agent ; because,

iu

of Commerce during Ifar. 115

in general cases, the eflcct of such a residence is counter- arlcd by the nature of the trade, and tiie neutral character of the merchant liiinself. But it may be very differenf, Avhere tlie principal is not trading on the ordinary footing of a foreign merchant, but as a privileged trader of the enemy. There tlic nature «f his trade does not protect hira. On the contrary, the trade itself is the privileged trade of the enemy, putting him on the same footing as their own sub- jects, and even above it. This circumstance operates, if I may so express it, in sucli a case, to fill up the totality of all tliat is required to consititute aSpani^]l character. This is the state in which Mr. Hobinson Vtould have stood under the contract.

Then how docs it aficct Mr. Sontna;, who is enoaa'cd ia carrying it into execution ? The legal consequence will be, to clothe him who accepts the contract, with the same character, so far as this transaction extends. It is by nothing peculiar in his own character, that Mr. Robinson would be liable to be considered as a Spanish merchant, but merely by the acceptance of this contract, and by acting upon it. If other persons take their share, and take those benefits, they take their share also in the legal effects. They accepted his privileges ; they adopted bis resident agent : it would be monstrous to say, that the effect of the original contract is, to give the Spanish cha- racter to the contracting person, but that he may dole it out to an hundred other persons, who, in their respective portions, are to have the entire benefit, but are not to be liable to the effect of any such imputations. The conse- quence would be, that such a c()n(raf:t v.ould be protected in the only mode in which it could be carried into efit^ct; for a contract of sucli extent must be distributed ; and if every subordinate person is protected, th"n here is a con»- tJractwhich concludes the original undertaker of the whole,

1 2 but

1 IG Of the International Laws

but in no degree affecls one of those persons wlio carry that whole into cxccudon.

On tliese grounds, I ara of opinion that these goods arc liable to be considered as the property of the Spanish go- vernment ; and further, that these parties are Hable to be considered as persons clothed, in this traJisaction, witli the character of Spanish merchants.

But in the case of the Vrow Anna Catharina', -where neutral merchants cLtinied, under a sub-contract with Voute and Co, of Amsterdam, considerable parcels of Batavian produce purchased of tlie Dutch East India Company j, to be brought to Amsterdam, and tliere sold by the East India Company, restitution of the property captured on a voyage to Holland was ordered.

Sir William Scott in giving judgement said. Several cir- cumstances approximate this to a Dutch tiansaction ; for, unquestionably, there is a great deal ot" Dutch agency and even of Dutch interest throughout : Out is ii so essentially Dutch, that a foreign ciiaracter cannot be predicated of it ? What are the circumstances to which such an efiect can be attributed .' Certainly not the mere purchasing of goods at Batavia out of the Company's stores ; for that we have •seen done in a variety of cases, without necessarily affecting the character of the foreign purchaser. That this is done by a contract with the Company in Europe, will not in- validate. That the contract engages, that the purchased articles shall come to Europe in Dutch vessels, will not invalidate. But this case turns upon two questions of law. The general fact out of which these questions arise, is a contract of sale from the Dutch Asiatic Company of a quantity of goods laying at Batavia to certain persons in Holland, who have contracted to undersell to certain other persons resident in foreign countries, who are the claimants

• 5 Rob. Adm. Rep. 161.

and

of Commerce during JFar. 117

and ;tsscitocl proprietors. To entitle tliem io receive resti- tution, it must a ppear that they are proprietors ; and secoudiy, that they arc qualified proprietors ; that is, that tlicy are persons who are not disabled, by any circumstances belong- ing to tliis transaction, from receiving restitution of tbeir property in this comt. These are the two questions. In order to determine upon tliem, the nature of the ori»^inal contract, between the Dutcli Asiatic Company and the first purcliasers, must be first considered. Tluit coiidact appears to have been entered into on tlie Sitli of March, i802, betAveen Voute and Co, acting for themselves and divers other merchants of the commercial cities of Holland. Tliese parties are considered as actual proprietors, and are so described throughout. Under this contract " they are to provide ships, and to send them io JBatavia. They are tiiere to receive the goods, and to pay the price— one-third in Europe, one-third on delivery at Batavia, aiid the re- maini?\g tliird on the return (o Holland, where (he goods were to be deposited in the waieliouses of the Company, and sold by the Company under the usual conditions of their sales." The tirst question that has been raised, is, Whetlicr these persons are to be considered as proprietors ? But on what ground is it asserted that they are iiot ? Is it to be objected, that they had not paid the whole purchase money ? T'lat is an objection whicii every day's habits of considering such subjects will not support ; two-thirds had actually been paid, and the remaining tliird was to he. received, according to the contract, on the arrival of the goods in Europe : that is a sullicient legal payment. It is next contended that there was no delivery ! How does that stand in point of fact ? The goods had actually, been delivered to t'aeir agents, and were comingybr tJudr account and risk. It is true that they are, by iha contrict, to be delivered to the Asiatic Coinpanj- ; but iipon w hat autho- rity ?

J 18 Of the International Laws

lity ? By the contract of tlie partj that it shall he so. In what ca})acify are (lie Company to act in llieir sales ? In the opacity of agents. It is not a delivery to the Com- pany, that the Cornpany may do ^vhat they please with the goods. They are bound to sell them upon the terms prescribed, and to pay over (he proccetls. Does this de- prive the owner of the dominion over his goods, so as to destroy his right of property ? If I, having goods, hand them over to another to sell, the circumstance of the man's Iiaving been the original proprietor of the goods would make no difference. He had conveyed his right of pro- perty, and it would be no derogatioii of those rights, tha^ b}' the terms of the purchase lie Avas to have the manage- ment of the sale. There would be no foundation for the assertion tliat the goods were not completely delivered, merely because they reverted to their former proprietor in a new character. His possession, as agent, is my posses- sion. In the present case, it is hardly necessary to observe, that at the time of the capture the goods were in the pos- session of the purchasers ; they had not yd reverted. The obligation to revert, founded on a mere voluntary compact, Avould not defeat tlie immediate possession, if personal possession could be, held sufficient to support the right of property : but it is by uo means necessary. S\ippose tlie case of the East Jndia Company holding a delegated an(l confided possession of goods in this country, for the purpose of bringing tliem to their regular sales ; could it be said of such goods, that the contract under which they have been acquired by the proprietor, sul^jcct to this condition, was a contract for tlie profits only, and not for the goods them- selves ? Is it necessary tliat there should be a manuc^l possession by the hands of the purchaser himself? Is there not a legal delivery, an implied delivery, a presumed deli- ycry throug'i the' hands of the agent ? This is the ordinary

mode

of Commerce during JVar, 119

mode of effccling the traditio ; and v.liether it is given to the same person accepting the ollice of agent, or to a third person accepting it, still it does not interfere with the cmptio and venditio. In these first pnrchasers, then, tliere was a clear right of property ; and if they, not being restricted from conveying it by contract, transfer it to otliers capable of receiving it, it will equally be property in them : for what more stands in the way oi their riglils of property ? If Voute had all the rights of property, and the want of payment, and the want of delivery, is no objection against him, nei- ther will it be an objection against them, if he has transferred to them all those rights, having a legal faculty ?,o to do.

Contracts of purchase ejected on the part of the belligerent, but loft executory as to payment, and con- tingent on a delivery at an ulterior port, at the risk of a neutral merchant, are not allowed in time of war : and goods sailing under such a contract, and taken in transitu, have been considered the absolute property of the enemy '. Hostilities, besides incurring a confiscation, occasion a siispensiim of all legal remedies, a total inability to sustain any contract by an appeal to the tribunals of the one coun- try, on the part of the subjects of the other ; for during warfare all comjauriicalioii is fundamentally inconsistent with the relation at that time existiiio: between the belligc- rent nations. In the law of almost every country, the cha- racter of alien enemy carries with it a disability to sue, or to sustain, in the langu:ige of the civilians, a persona standi in judicio. The peculiar law of our own country applies this principle Avith great rigour. No man can sue therein who is a su!)ject of the enemy, unless under particular cir- cumstances that pro hjtc vice discharge him from the cha- racter of an enemy ; such as his coming under a flog of truce, a cartel, a jmss, or some other act of public auiho-

' The Atl.ir,, 3 Rob, Adm. Rep. 30<0.

rity

120 Of the Inter }iatio?ml Laws

Tity that puts him in (l;e king's peace pro hac vice : bat otherwise he is totally exlex' !

^s between Belligerents and Neutrals.

AH writers admit that neutrals have a right to trade wiHi either belligerent nation in the way they consider most advantageous. The right which a nation enjoys, in time of peace, of selling and carrying all sorts of merchandize to every nation which chooses to trade witli it, it enjoys also in time of war, provided that it remains neuter. It follows, then, that a neutral nation may permit its subjects to carry all sorts of merchandize, including arms and am- jnunition, to the powers at war, or to that of them wit'i which this commerce mny be carried on to the greatest advantage. So long as the state, that is the sovereign power, in a neutral nation, does not interfere, by prohibit- ing commerce with either or all the powers at war, so long, it should seem, the nation dpes not transgress the laws of neutralitj^ However, a power at war liaving a right to hinder its enemy from reinforcing itself by the reception of warlike stores, necessity may authorize it to prevent mer- chandize of this kind from being conveyed to the enemy by a neutral power *.

It is generally acknowledged, that a neutral power ought not to transport to either of the belligerent powers merchan- dizes unequivocally intended for warlike purposes. But as necessity is the only reason which can authorize a restriction of the trade and navigation of neutral nations, goods which liavc no relation to war must be carefully distinguished from those which are peculiarly subservient to it. Arms, military and naval stores, ship-timljer, pitch and tar^, cables, hetnp, provisions, &c. (but cordilla hemp being unfit for

« Hoop, I Rob, Adm. Rep. 200.

' Marten's Law of JNations, oJiS. Vaitel's Law of Nations, b. iii. r. 7 s. 111. Puff. lib. iw. c. 6, Grot. lib. ii. c, 9. ? 1 Rob. Adui. Rep, 241.

naval

of Commerce dur vg JVar. 121

naval purposes is held not to be contraband ',) are pro- liibilcd as contraband.

Provisions, however, are not generally deemed contra - band, but may become so under particular circumstances arising- out of the particular situation of (he war, or (he con- dition of the parties engaged in it. Grotius speaks of them as articles promiscui usus, and specifies some circumstances under which they may become contraband . Tliose circum- stances are of a very particular nature, snch as the relief of places in distress ; and the general character is to be consi- dered as innocent, and free (or all purposes of traffic, unless under such particular situations and circumstances.

Among the causes of exemption which tend to prevent provisions from being treated as contraband, one is, tjjat they arc of the growth of the country which exports them. Another circumstance to which some indulgence, b}'- tlie practice of nations, is shown, is wlien ihc articles are in tlieir native and unmanufactured state. Thus iron is treated with indulgence, thougli anchors and other instruments fabricated out oi it are directly cont.aband. Ilcmp is more favourably considered than cordage ; and wheat is not con- sidered as so noxious a couTinodity as any of the final pre- parations of it for human use.

But the most important distinction is, whether the articles were intended for the ordinary use of life, or even for mer- cantile ships' use , or whether they were going witli a highly probable destination to milifary use ? Of the matter of fact, on which the distinction is to be applied, the nature and quality of the port to which the articles were going is not an irrational test : if the port is a general commercial port, it shall be understood that the articles were jroino- for civil use, although occasionally a frigate or ships of war may be constructed in that port. Oil the contrary, if the grciit predominant character of a port be that of a port of

' 4 Rob. 91.

naval

122 Of the International Laws

naval niililarj- equipment, it shall be intended tlic articles were goin^ for military use, although merchant ships resort to the same place, and allhcuglj it is possible that the articles miglit have been applied to civil consumption ; for, it being impossible to ascertaiu the final application of an article ancipitis usus, it is not an injurious rule Avhich de- duces both Avays the (inal use from the immediate destination ; and the presumption of a hostile use, founded on its desti- Tiation to a military port, is very much inflamed, if, at the time when tlic articles "were going, a considerable armament was notoriously preparing, to which a supply of tiiosc articles would be eminently ^iseful '.

The list of those merchandizes, commonly called conira- band, is expressed in treaties of commerce. And since the latter end of the seventeenth century the maritime power* began to issue declarations at the beginning of a war, to advertise the neutral powers that tliey shall look upon such and such mercliandizes as contraband, and to forewarn them of the penalties they intend to inflict on tliose who shall be found conveying them to the enemy. These' declarations are rather advertisements than laws, nor can their effects be by any means extended <o those neutral powers with v/hich the powers that issue them have treaties of commerce, in which this matter is settled ^.

A nation tliat authorizes contraband commerce is looked upon as having violated its obligations of nentralify ; and the belligerent power against which such jMKver operates, confiscates the contraband merchandize, and sometimes the vessel too. Jt seems to have been the rule formerly to con- fiscate both, when the proprietor of the vessel had knowingly and voluntarily loaded his vessel with contraband merchan- dize, v^hetiier in whole or in part'. Bynkershoek and

» The Jonjjc Msrsran tiia, 1 Rob. A:lin. Rep. 192. ^ '" Marten's Law of Nation?, ,S;J2. '^^ Ibid. 3 33. Vatters Law of Nations, b. iii. c. 7. ?. n.3.

Ifein^ccius

g/ Commerce during War. 123

Heineccius both agree that the penalty ought to attach equally oa the ship, as well as on the cargo. Publicabam quoque naves arnicas si scientihiis dominis contrabanda ad hostes dcferreiit ; et nisi pacta inipediant omnino publican- die sunt quia earuin doniini operantur rei illicitae'. On (he same principle Heineccius, Quemadmoduni ejusmodi pacta ad exceptioncm pertinent ; ita facile patet regulan; istis non toliij adeoque ceiti juris esse, ob nierccs illicitas naves etiuni in commissuni cadere ^. The policy of modern times has, however, introduced a relaxation on this point; and the general rule now is, tliat the vessel does not Jbe? conic confiscated for that act, b\\i oi\\y incurs the forfeiture of freight and expenses. But this rule is liable to excepr lions: Where a ship belongs to the owner of the cargo, or where the ship is gqing on such service under a false destination or fahe papers, or where the contraband goods are taken on board with the actual or presumed knowledge of the owner; (he circumstances of aggravation haye been held to c0nslitute excepted cases out oi the modern rule, and (o continue them under t\\Q aijcient one '.

Whether an enemy's ellects found on board of a neutral fchip are subject io confiscation or not by (he rights of war, js a matter of variance among the writers on the laws of na- (ions. Grotius-^ and Vattel' are of opinion that they are confiscable, iii\i i^Jarten is of a contrary opinion. It was f(K"merly a nile. almost generally adopted by (he na- tions of Europe, to return (p (he proprietors the neutral ^oods taken o\\ board of an enemy's vessel, and (o con- Jisca(e the goods of an enemy found on board of a neutral

' Bynk. Qunpst.Jur. Piil).

^ l)c Nav. ol) W'ot. Merc. Vetit. Coinmiss. r. 2. s. 6.

3'Jlic Hiii},nT.dc ,!acol). 1 iloh. Adin. licp.SO. The Frr.nlilin, S Il.iri. 217. The Johanna Tlmlen, 0 ibid. ''2. The AUihmta, ♦] ll/ul. 459. Tue JSeu- U.iIKct, 3 Ibid. '293.

^ Lib. iii. c. G. i. 6. 5 B. iii. c. T.s. 115.

vessel*

I2i Of the Inter national Laws

vcf-scl. Tiui llu- (1i>pu<cs arising from the observance of this rule, and (he veiy great inconvenience it brought on the commerce of neutral nation?, gave rise to an entirely new principle. According to this principle, regard is had to the property of the vessel, and not of tiie goods ; so that a mnitral vessel saves tlie goods of an enemy, and Jicu- tral goods found on board of an enemy are confiscated '.

This principle has been adopted in almost all the treaties of commerce made since the middle of the seventeenth century, and t;as been observed even by the greatest of powers having no treaties with each other. Yet in some treaties of commerce the ancient principle has been ad- hered to, and, in others, a diflerent rule has been esta- blislied ^

If the voyage ar^d commerce arc not of a hostile description, nor otherwise expressly or impliedly forbidden by the law or policy of this country, it is no breach of neutrality for a neutral sliip to carry enemy's property from its own to the ertemy's country ; though the neutral' thereby subjects his ship to be detained and carried into a British port for the purpose of search '.

TiiC carrying of hostile dispatches by a neutral vessel is a criminal act, and will subject the ves-sel to condemnation, if they are fraudulently concealed and suppressed from the knowledge of the captor. And in case of a cargo being on board, anvd a direct participation in such concealment can be proved or presumed on the part of the coiistituted agents of the cargo, it will also be liable to conliscation -K

But dispatches fi-om an ambassador of the enemy's state, resident in a neutral country for the. purpose of preserving the relations of amity between that state and his own go-

« IVIp.rtcn's Law of Nations ?,3G. » Ibifl. S3T.

3 B;irk-r v, Blake, 9 least's Rep. 283. * Tiie Atalarita, 6 ll»b. Adm. Rep. 440.

vernment.

of Commerce during IVar, 125

vernment, found on board of a neutral vessel, will not work a condemnation ' .

A neutral ship engaged as a transport in the military service of the enemy is liable to confiscation. And the number of persons so conveyed is iniraaf erial ^.

Where a capture is made of a cargo the property of an enemy carried in a neutral ship, the neutral ship-ouncr ob- tains against tlic captor those rights which he had agaii'st the enemy. At the same time, this principle is not^o uni- versal as not to be liable to some exceptions ; as, for in- stance, in the known case of contraband goods. If an Ciie- my puts on board a neutral vessel a cargo belonging to him- self, which is a contraband cargo, and ihat cargo is taken, it is couderauable to the captor: but the Court of Admirally will not consider itself bound to enforce the payment of freight against the captors, altliough at the same time the neutral ship-owner might have juit reason to demand it from the enemy '.

"Qy the general law of nations, it is not competent io neu- trals, in time of war, to assume, on particular indulgences, or on temporary relaxations arising from the state of war, a trade with the colony of t'le enemy whicli was not per- mitted in time of peace. The applicatiu;'. of this general rule, however, lias from time to time been qualified by some regulations.

Soon a&er the commencement of the late war^, the first set of instruments that issued were framed, not on the ex- ception of the American war, but onthe antecedeitt prac- tice ; and directed cruizers " to bring in for lawful adjudi- cation all vessels loaucn with goofis, tUe produce of aiiy co- lony of France, or carrj ing provibious or suppliers fur the

' Tho Caroline, 6 Rob. Adni. Rep. 461. '^ The, Orozemhn, 6 Ibid. 420. 3 The £aiaiiuol, 1 Ibid. 2'jt). 4 Nov. 6tti, IT3j.

use

196 Of the Inter?ialiondl LaiOs

use of any such colony." The rrla-xatioiis \\\\\ liavr sinct* been adopted have originated chiefly in tlie eliaiigc tliat has taken place in the trade of that i)art of the worhl since the establishment of an irulepcndent governniiiit on the conti- nent of America. In consequenre of that event, America?! vessels had been permitted to trade; in some articles, anil on certain conditions, m ith the colonies both of this country and of France. 8'nch a permission had become a part of the general commercial arrangements, as the ordinary state of their trade in time of peace. The commerce of America was therefore abridged by the foregoing instructions, and debarred of the right gcjierally ascrilx'd \o neutral trade in time of Avar, that it may be continued, with particular ex- ceptions, on i\\c basis of its ordinary establishment. In consequence of representations made by tJie American go- Yernment to this effect, new instructions to our cruizers were issued 8th January 1794, apparently designed to exempt American ships trading between their own country and the colonies of France. The directions were, " to bring in all Tessels loaden with goods, the produce of the French West India islands, and coming directly from any port of the said islands to any port in Europe."

In consequence of this relaxation of the general principle in favour of American vessels, a similar liberty of resorting to the colonial marl<et for the su]i])ly of their own consump- tion was conceded to the neutral states of Europe; To this eflect, a third set of public insi ructions issued 25th Jan. 1798, which recite, as i]\c special cause of ftntlier alteration, '' the, present stale of \\\c commerce of this country, as well as that of neutral states," and direct cruizers " to bring in all vessels coming with cargo( s, the prmluce of any island or settlement of Franc<', Spain, or Holland, and coming directly from any port of the said islands or settle- ments to any port of Europe, not being a port ofthis king- dom.

of Commerce during IVdr, 1S7

dom, nor a port of Hk; country to which such ships, being neutral ships, belonged'."

The port of the country of tlie vessel is lierc only men- tioned. The Court of Aihnirahy has, however, allowed the benefit of the same rule to cases of a neutral vessel of our country going from an enemy's colony to the port of the owner of the cargo, being also a neutral port *.

IBy this relaxation, neutral vessels were allowed to cairy on a direct commerce between the colony of the enemy and their own country.

On the illegality of the trade between the colony and the parent state of that colony a solemn decision was pronounced in the Court of Admiralty, in tiie case of the Immanuel ^ In that case, the judge entered much at length into the na- ture of colonial establishments, and adverted to the prohi- bition intimated in the first instructions of 1793, as the rule, to be applied in ail cas<^s, which did not fall within the reach of any relaxation. In that instance, a cargo taken in at Bourdeaux, to be carried to St. Domingo, as asserted, on the actual account and risk of neutral merchants, was condemned on the question of lav/. And in the case of the Rose, Young, from Ifolkmd to Guadaloupe, which hap- pened on the same day, a trade between the country of one belligerent and the colony of an allied enemy were held to stand upon the same footing *.

^y a variety of decisions, then, the illegality of voyages from the colonies of the enemy to neutral ports in Europe, not being the ports of the pi=oprietors of the ship or cargo, nor a port of this kingdom, is fully established ^

But upon the breaking out of war it is the riglit of neu- trals to carry on their accustomed trade, to the utmost extent

■ •! Rob. Adm. Rep. Apnrnd. 1. ' Ibid. 3- n.

J ? Rob. Acini. Rep. Ib6 « Ibid. 3, 5 ibid, passim.

of

]28 Of ilie Inl'ernational Laws

of AViiicli <liat accustomed trade is capable, -with an ex- ception of the particular cases of a trade to blockaded places, or in contraband articles. Therefore, if a trade is universally allowed to the colonies of (lie enemy durin<^ peace, with the exception of a moiiop.oly in certain articicB, it is not illegal for neutrals to trade thither in time of war.

Formerly, neutral vessels engaged in the coasting trade of the enemy were subject to condemnation. But in later times, which have admitted many relaxations in favour of the navigation of neutral slates, the penalty on vessels so employed has been reduced to a forfeiture of the freight ',

^y tiie law of England, the purchase of vessels in the enemy's country is permitted to neutrals, provided a bill of sale properly autiieiiticated is produced^. But it is to be observed, that the purchase of such vessds in time of war is liable to great suspicion ; and that suspicion is increased when the asserted neutral purcliaser a])pears to be person- ally residing in the enemy's country at the time of the sale '\

An enemy's vessel ostensibly transferred to a neutral mer- chant, and coiitinuing in theenemj's trade, is liiihle to con- demnation. For it is a known and established rule with re- spect to a V( ssel, that if she is navigating under t\\?i pass of a, foreign country, she is considered a& bearing the na- tional character of the nation under whose pass she sails : she makes a part of its navig.^tion, and is i:i every respect liable to be considered as a vessel of that country. In like manner, and upon similar principles, if a vessel p-urchased in the enemy's country is, by constant and habitual occu- patio:i, continually employed in the trade of that country, commencing with the war, continuing during the war, aial evidently on account of the war, on what ground, Sir Wil-

' The Johanna Tlioh<n, 6 Rab. Mm. Rop. 72 ; 1 Ibid. SOG.

* The WLlvaart, 1 Ibid. I'.t'. ^ TL;- l^t nioji, 1 Ibid. 101.

liam

of Commerce during JFar. 129

be asserted, that the vessel is not to be deemed a ship of the country from which she is so navigating, in tlie same man- ner as if evidently belonging- to the inhabitants of it ' ?

A lien on the freight, and a title of property in a parcel of goods pledged for the payment of the purchase money of the ship, will not entitle a neutral to claim a ship and cargo ostensibly hostile. The captors are supposed to lay their hands on the gross tangible property, on which there may be many just claims outstanding, between other par- ties, which can have no operation as to them. If such a rule did not exist, it would be quite impossible for captors to know upon what grounds they Avere proceeding to make any seizure. The fairest and most credible documents, de- claring the property to belong to the enetny, would only serve to mislead them, if such documents were liable to be over-ruled by liens which could not in any manner come to their knowledge *.

Of Licenses. Although it is an e^tablis!:ed principle of international law, that all commercial intercourse is interdicted between belligerent nations, the o{>erations of war being inconsistent with the relations of commerce ; yet since the world has grown more commercial, a practice has crept in of admitting particular relaxations, which, if sanctioned by the special license of their respective governments, are legal ^ In the passage before cited from Bynkershoek, he proceeds to ob- serve, that the interests of trade, and the necessity of ob- taining certain commodities, have sometimes so far over- powered the rule of prohibition of commercial intercourse between hostile states, that diflerent species of traflic have been permitted " prout e re sua, subditorumque suorum esse censent princij>es."

' The Vi^U.intia, 1 Rob. Adm. Rep. 1. » The M?irianna, 6 Ibid. 24. 9 The Hoop, 1 Ihid. 196. 1 Vcs.317.

K These

130 Of the Inlernailonal Laws

These relaxations, termed " licenses," are deiinetl by Sir William Scott, in the case of the Cosmopolite', to be an high act of sovereignty ; an act immediately proceeding from the sovereign authority of the state, -whicli is alone competent to decide on all the considerations of commer- cial and political expediency, by which an exception from the ordinary consequences of war must be controlled. In their construction, they must not be carried further than the intention of the great antlujrity which grants them may be supposed to extend. 1 do not say, adds the same learned and eloquent judge, that they are to be construed with pe- dantic accuracy, or tliat every small deviation should be held to destroy the eflect of them : an exctss in the quantity of the goods permitted might not be considered as noxious to any extent ; a variation in the quality or substance of the goods might be more significant, because a liberty of im- porting one specj^s of goods, under a license granted to import another, might lead to very dangerous abuses. And therefore where a license had been obtained for permission to import the following enumerated articles — barilla, wool, liquorice, orchilla wooil, and dyeing wood, — a quantity of wines and some hides being also imported. — this part of the cargo, not being provided for in the enumeration, was held to be subject to condemnation*.

Another material circumstance in all licenses is the limi- tation of time in which they are to be carried into effect ; for as it is in the view of govermnent, in granting these li- censes, to combine all commercial and political considera- tions, a communication with tl'e enemy might be very pro- per at one time, and at another very unfit and highly mis- chievous. It therefore seems, that a license granted in 1799 would not be good for an importation in 1801 '.

' 4 Rob. Adin. Rep. I J. '^ Ibid. 3 ibid.

And

of CofnmefCe during War. 131

And if it be provided in such license that the party act- ing under it sliall give bond for the due exportation of the goods to the places proposed, and they are exported with- out such bond being given, such exportation is illegal. Neither will it be sufficient, wliere a license has been grant- ed to export and deliver goods to an enemy's country for a limited time, if the goods are shipped before the expiration of the time, the ship not sailing till afterwards'.

So where a license was obtained for importing to an ene- hiy's port certain enumerated articles,— other articles not inserted in the enumeration, sent on the part of a British subject, Are liable to condemnation, notwithstanding, after the privileged part of the cargo had been delivered at such enemy's port, the non-enumerated articles had an ulterior • destination to a neutral port *.

If a license is granted to two pensons, their agents ot bearers of their bills of lading, their interest is not trans- ferable to others not originally concerned with them iii the transaction ; and therefore neither the grantors nor grantees of such license are entitled to restitution of property captured under such circumstances^.

A license to export goods to certain places within the in- fluence of the enemy interdicted to British commerce, grant- ed to H. N. on behalf of himself and other British mer- chants, is sufficient to protect the adventure under the li- cense, if it appears that H. N. was the agent employed by the British merchants really interested in it to get the license^ though he had no property in the goods himself '^.

If a license is obtained, giving a neutral wider scope thaii the exceptions and conditions in the orders of council ^ive.

' Vandyck v. Whitmore, 1 East's Rep. 475.

» The Vrieiidschap, 4 Rob-. Adm. Rep. 96.

3 The Jonge Johannes, 4 Ibid. 263.

* Rawlin«on v. Janson, 12 East's Rep. 223,

K 2 and

J 32 Of the International Laws

and not referring thereto, he may avail himself of the pri- vileges conferred by the license, and is not confined by the restrictions contained in those orders '.

But possession of a general license to trade with the ene- my is not prima facie evidence that the holder is entitled to hold and use it : if he seeks to coyer his own interests under it, he must connect himself with it by other evidence than the mere possession ; as by showing from whom and when he received it, and thereby connecting his own par- ticular adventure with such general license : otherwise, in the absence of all proof of such connexion, there is a na- tural suspici<Mi, a pre|)onderattce of probability, that the li- cense had been used before to cover an antecedent voyage*.

Under a license to A. to import goods, the prc^rty of A., as specified in his bills of lading, if tlie goods be con- «igned to others with particular bills of lading, a general biU of lading signed to A., without proof of some special interest in A. in the goods, will not entitle the consignment to the benefit of the license. But it would have been other- wise if A. had had a special property in the goods *.

If the proprietary interest remains in subjects of a state in hostility with this country, tlie obtaining of a license for the importation of goods will be of no avail, but the pro- perty will be subject to condemnation ■*.

Neither will a license granted to a British merchant io>- import, extend to shipments which he personally superin- tends in an enemy *^s country, as a merchant of that coun- try ; but he will be deemed an exporter of goods in the latter character, rather than an importer in his former ca- pacity; notwithstanding he had no estabUshcd domicil or

• Spitfa V. Woodman, 2 Taunt. 416.

" Barlow v. M'Intosh, \2 East's Rep. 3L1. ' Ferze v. Waters, 2 Taunt. '24S.

• The Aurora, 4 Rob. Adin. Rep. 31*.

5xed

•of Commerce during War. \^^

■fixed counting'-house in such hostile stale. It apjicars, how- ever, from Sir William Scott's judg:emerit in this case, that iiad the shipper of the goods gone into the enemy's country for the purpose of collecting debts, or for occasional pur- poses not originally connected with this transaction, and not with a view i^ mwkxwg fitture mercantile arrangements, shipments made only for the piwpose of collecting his debts wonld not be subject to confiscation '.

In the case of the JufFrow Catharina^ «nder a license to import certain raw materials, restitution of a parcel of lace not included in the enumerated articles, but which had been shipped under tin order given previous to the com- mencement of hostilities, in letura for a cargo sent out from this country, was ordered.

A license granted during the pendency of negotiation cannot be construed to extend to the contingency of a new war, which arises out of the inefficacy and inexecution of that treaty. And therefore a ship captured under suck circumstances will be liable to condemnation *.

Where a license has been granted to trade with an ene- my, the courts of justice will permit every thing to be done, though not expressed, which is necessary in order to effectuate the inteirtion of the king in granting the license, from the principle of law, " ut res magis valeat, quam pereat." Thus, in an action on a policy of insurance, where a certain trading with an alien eneray, for specie and goods to be brought from the enemy's country, in his ships, into our c^ilonial ports, was licensed by the king's authority ; it was held, that an insurance on an ene- my's ship, as well as on the goods and specie put on board for the benefit of the British subjects, was incidentally Ic-

« TliP Joii£;e Klassina, 5 Rob. Adm. Rep, «9T. « 5 Ibid. 111.

J The Planters Wenscb, 'y Ibid. 'i'i.

galized;

154 Of the International Laws

galized ; and that it was competent for the British agent of both parties, in whose name an insurance was effected, to sue upon the policy in time of war : for although the king's license cannot, in point of law, have the effect of removing the personal disability of an alien enemy, in respect of suit, so as to cnabif' him to sue in his own name ; it purges the trust, in respect to him, of all those injurious qualities, in regard to the public interest, which constitute the public ground of objection to the alien himself'.

So it has been held, that a native Spaniard domiciled here in time of war between this country and Spain, having been licensed in general terms by the king to ship goods '\x\ a neutral vessel from hence to certain ports in Spain, such commerce is legalized for all purposes of its due and effecf tual prosecution, either for the benefit of the party himself or of his correspondents, though residing in the enemy's country ; for, in lespect of such licensed trading, the sub^ jects of Spain concerned in it are to be regarded as British subjects *.

The legal result of the license granted in this case is, said Lord Ellenborough, that not only the plaintiff, the person licensed, may sue in respect of such licensed commerce in our courts of law, but that the commerce itself is to be re- garded as legalized for all purposes of its due and effectual prosecution. To hold otherwise, would be to maintain a proposition repugnant to national good faith and the honour of the crown. The crown may exempt any persons and any branch of commerce, in its discretion, from the dis- abilities and forfeitures arising out of a state of war : and its license for such purpose ought to receive the most liberal construction. To say that the plaintiff might export the goods specified in the license from Great Britain to an enc-

• Kensington v. Inglis, in Error, 8 East's Hep. 273. s Usparicha v. Noble, 13 Last's Rep. 332.

my's

Of Commerce, during Wdr, 135

my's country, for the benefit of himself or otliers, (and the license contains no rcslriclion in this particular,) and yet 16 hold that, uhere he lias so done, he could not insure, or, havin<r insured, could not recover his loss, either on ac- count of his original character of a native Spaniard, or on account of the places to Avhich or of the persons to whom the goods were destined, would be to convert the license it- self into an instrument of deception and fraud. The crown, in licensitii^ the end, impliedly licenses all the ordinary le- gitimate means of attaining that end. For adequate pur- poses of state policy and public advantage, the crown, it may be presumed, has been induced in this instance to li- cense a description of trading with an enemy's country, which would otherwise be unquestionably illegal. What- ever commerce of this sort the crown has thought proper to permit, (which, in respect of its prerogatives of peace and war, the crown is by its sole authority competent to prohi- bit or permit,) must be regarded by all the subjects of this realm, and by the courts of law when any question relative to it comes before them, as legal, with all the consequences of its being legal ; one of which consequences is a right to contract w ith other subjects of the country for the indemni- ty and protection of such property in the course of its con- veyance to its licensed place of destination, though an ene^ my's country, and for the purpose (as it probably will be in most cases) of being there delivered to an alien enemy, as consignee or purchaser. In the present case the license was obtauied for tlie purjjose of protecting the subject matter in^ sured in the course of its conveyance by sea from EnglaJid to certain ports in Spain, to be there delivered to the pur- chasers thereof, who are the persons in whom the interest is averred in the first and second counts of this declaration : and the action is well brought, upon the principles above stated, in the name of the plaintifi", for their benefit. For

the

156 Of Ihe hUernaiional Laivs

tbe pupposp of tliis licensed act of trading (but to that ex- tent only) the person licensed is, to be regarded as virtually an adopted subject of (lie crown of Greot Britain ; his trading, as far as (he di.sal»ilities arising out of a state of war arc concerned, is British trading ; and of course any argu- ment to be drawn from a virtual participation in, and sup- posed privity to, the acts of his own native country, then at war widi the crown of Great Britain, is excluded or super- se<led, in point of efled, by an express privity to, and imme- diate participation in, the adverse acts of the British go- vernment. As far as the plaintiff and the Spanish pur- chasers of this cargo are concerned, they are actually privy to the objects of the British government, and acting in fur- therance (hereof, and in direct opposition to the laws and policy of their own country. And it will not be contended to be illegal to insure a <rade carried on in contravention of the laws of a state at war ^yith us, and in furtherance of tJie policy of our own country and of its trade ; and which this trade in question, sanctioned as it is by his majesty's license, must be deenu^d to have been.

Tiiose ports of St. Domingo which are under the do- minion of Christophc and the negroes engaged in hostility with France are neutral pods, and no license is necessary to legalize a trade with them '.

Of the Right of Visitation and Search.

The right of visiting and searching merchant ships upon the high seas, whatever be the ships, the cargoes, or the destinations, is an established right of belligerent powers, founded on the law of nations, and acknowledged and re- ferred to in the treaties of the st;ites of Europe. Jt is ad- mitted by all speculative writers on the hnv of nations,

' Johnson V. Greaws, 2 Taunt. 344.

Bynkershock

of Commerce during War. 137

Bynkershoek expressly admits it in these words : " V clim qnimadvertas eatenus utitjuc licitiim esse amicani navera sistcre, ui non ex fallaci forte aplustri, sed ex ipsis instru- mentis in navi repcrtis constet, navem amicain esse'.'' And Vattel * acknowledges the penalty attending the con- travention of this right by neutral ships to be confiscation. Even in cases where it is possible that this right may be wrongfully exercised by cruizers, resistance is not the legal remedy, as there is a regular and effectual remedy, pro- vided by all the maritime codes of Europe, in the respon- sibility which cruizers lie under to make compensation, for any injurious exercise of this right, in costs and damages ^.

Rescue by the crew of a neutral ship is considered as a resistance, and will subject the ship and cargo to condem- nation **. But resistance by an enemy master will not afiect the cargo, being the property of a neutral merchant ^.

The evidences by which a ship is required to prove her neutrality are — 1 . the passport ; 2. the sea letter or sea brief; 3. the bill of sale, if the ship appears to be built in an enemy's country ; 4. tiie muster roll ; 5. the charter- party ; 6. the bill of lading ; 7. the* invoices ; 8. the log- book or ship's journal ; 9. the bill of health.

The absence, however, of these papers or documents will not subject the ship to contiscation.

Of Recapture.

Capture from an enemy in time of war is a fundamental principle of international law ^\ There apjjears, however, to be no settled and uniform rule estal)lished in practice among nations, as to the precise period at which property

' Lib. i. c. 14. '2 Lib. iii. c. 7. f. 114.

3 1 Rob. Aflin. Rrp. 343. ■• The Dispafcli, 3 Ibitl. 278.

5 TheCatliarina Elizabeth, 5 Ibid. 232.

* Bynk. Q. .F. P. lib. i c. 6. Hale'» Tnaliso, part ii. c. 28. in Hargravc'i Law Tract!; 246.

158 Of the International Laws

is divested by capture, li seems to be generally agreed by writers on the laws of nations, that it is not every taking, and subsequent possession under that taking, which will constitute a capture in the legal sense of the word, or make it become the property of the captor ; but there must be a firm possession. In this they all agree; but what shall be such a possession, as to vest the absolute property in the captor, is so much a matter of doubt, that it is diffi- cult to find two writers of the same opinion. Grotius is of opinion, that the capture shall be deemed complete when the prize has been carried infra praesidia, as within the har- bour or ports of the enemy, or where his whole fleet is sta- tioned'. Emerignon savs, that the right of the original proprietor ceases after the prize has been conducted into the middle of a fieet, or into a free port ^ Vattel deems a capture which has been twenty-four hours in the pos- session of the enemy, legal K To this opinion Marten lends his sanction •♦. Bynkershoek, however, seems to think that the spes recuperandi is the ground on which the question is to be decided ^ He mentions the opinions of some writers, who think that it is necessary for the ship to have arrived in the enemy's port before the property can be said to be changed. Roccus seems to lean to the idea, that it is necessary to bring the ship within the confines of the captor, -and to keep it there a night in safe custody \

But by the marine law of England, there is no change of property, in case of capture, so as to bar the owner in fa- vour of a vendee or recaptor, till there has been a sentence of condemnation. The very learned Judge of the Court of Admiralty, in the cases of the Flad Oyen ", and the Hen- rick and Maria* , has said. As to the time Avhen property

1 Grot. lib. iii. c. 6. s. 3. ' Vol. i. p. 494.

Vattel, b. iii. s. 196. « p. '299.

5 Q.J. P. lib. i. C.4. • Not. 66.

" 1 RolT. Adm. Rep. 134. ^ • 4 Ibid. 55.

IS

of Commerce during War. 139

fe to be deemed converted by capture, the ancient law of Europe' held, that bringing infra pra^sidia was absolutely necessary to fortify the possession of the captor, and divest the original proprietor of his claim. Some nations have in-^ deed, by later regulations, substituted a possession of twenty- four hours as a itatc of sufficient security ; but it is an alte- ration which doca not appear to be founded on any national principle, ami has never been admitted into the practice of the Eno-Ush Frize Courts. In later times, an additional for- niuUty has been required, that of a sentence of condemna- tion) in a competent court, decreeing the capture to have been riglitly made jure belli; it not being thougl)t fit, in ci-^ vilized society, that property of this sort should be converted without the sentence of a competent court i^ronouncing it to have been seized as the property of an enemy, and to be now become jure belli the property of the captor. The pu r- poses of justice require, that such exercises of war shoiil 1 be placed under public inspection ; and therefore the mere deductio infra prasidia has not been deemed sufficient. I apprehend, that by the general practice of the law of na- tions, a sentence of condemnation is at present deemed ge- nerally necessary, and that a neutral purchaser in Europe during war looks to the legal sentence of condemnation as one of the title deeds of a ship, if he buys a jnize vessel. Agreeably to this principle, judgement was given in that court,, decreeing restitution. of a ship retaken by a priva- teer, th<?ugh she ha<l been fourteen weeks in the enemy's possession. Another case also, upon the same principle, was decided against the vendee ;ifter a long possession, two sales, and several voyages.

Among the subjects of England, no capture by the ene- jny can be so total a loss as to leave no possibility of recovery.

' Consol. del Mar. c. 287. Bynk. Q. J. P. lib. iv. ct v.

By

140 Of the Intermtional Laws

By the statutes 13 Geo. II. c. 4., 29 Geo. 11. c. 34. s. 24., 33 Geo. III. c. GQ. s. 12., and 43 Geo. III. c. 160. s. 39., if an English ship, either a man of Avar or a privateer, re- take any ship or vessel belonging to any of his majesty's subjects, and wliich had boon captured by the enemy, the owner is entitled to restitution, upon paying for salvage the sums mentioned in the statutes, unless the ship so retaken shall appear to have been set foith by his majesty's enemies as a ship of war ; in which case she shall be condemned as lawful prize to the caj)(ors.

On recapture of the property of allies, the law of Eng- land restores on 5-alvage, till it appears that they act to- wards British property on a less liberal principle : in such a caise it adopts their rule, and treats them according to their own measure of justice '.

A sentence of condemnation pronounced by a consul or minister of a belligerent power, in the country of a neutral power to wJiich the prize had been taken, is con^ trary to the law of nations, and void ; and therefore the property never having been divested out of the original owner, ships have been restored as well upon recapture from the purchaser^ as upon arrest in a port of this coun- try'. But a condemnation of a ship carried into a neutral port, is, while remaining there, valid, though made in the country of the captors •♦. And a prize carried into the port? of an ally of the captor may be legally condemned either there by a consul belonging to the nation of the captors % or iivtlie country of the captors''.

It may be proper to mention here, that by the late prize acts", if a ship be retaken before she has been carried into

• -< The Santa Cruz, 1 Rob. Adm. Rep. 49.

•The Ilad Oven, 1 Ibid. ISj. 3 The Kierll^hrft, .'I Ibid, 96.

< The lienriek ci ^faria, 4 Ibid. 43. * The Betsy, 2 Ibid. 210. n.

* 1 he Christopher, 2 Ibid. 'im. ^5.3 Geo. III. c. t)G. s. 44. 43 Geo. HI. c. IgO. s. 41.

an

©/* Commerce during War, 141

an enemy's port, it sliall be lawful for hey, w ith consent of the recaptors, to prosecute her voyage, and it shall not be necessary for the recaptors to proceed to an adjudication for six months, or till her return io the port from which she sailed ; and it shall be lawful for the master^ owners, &c. with the consent of the recaptors, to unliver and dis- pose of the cargo before adjudication ; and in case the vessel shall not return directly to the port from which she sailed, or the recaptors shall have had no oppor(unity of proceed- ing to adjudication within tlie six months, on account of the absence of the said vessel, the Court of Admiialfy shall, at the instance of the said recaptors, decree restitutioat to the former owners, paying salvage npon such evidence as to the said court, under all the circumstances of the case, •hall appear reasonable, the expense of such proceeding not to exceed the sum of fourteen pounds.

To prevent the chance of recapturing the sliii>s which may be captured of his majesty's subjects, it is declared illegal, by the statutes 22 Geo. 111. c. 2j. and 33 Geo. III. c. 66., for the captains or owners of any British ships who may be captured, to ransom themselves from the enemy ; and the contract to ransom is not only declared absolutely void, but the parties entering into it are punished by fine. And by a still later act (43 Geo- III. c. 160.) the above provisions are continued ; and by the 3ai\ section, if any captain of a privateer shall agree to ransom any ship or cargo taken as prize, and shall in pursuance of such agree- ment set the prize at liberty, instead of bringing the same iflto the ports of his majesty's dominions, unless in a case of extreme necessity to be allowed by the Court of Admi- ralty, he shall forfeit his letter of marque, and shall sufler such penalties of fine and imprisonment as the said court shall adjudge.

Of

142 Of the International Laws

Of Reprisals.

Reprisals areiwed between nation and nation to do justice to themselves, when they cannot otherwise obtain it'. One' of the species of reprisals the most frequctitly employed^ is the seizure of tJie properly and persons of the subjects belona^ing to the state from which an injury lias been re-» ccived *. Effects seized are preserved while there are-Jthy hopes of obtaining satisfaction or justice. As soon as this hope is lost, tliey arc confiscated, and then the reprisals are accomplished. If the t^^o nations upon this qudrrel cora^ to an open rupture, satisfaction is considered as refusedj iVcin the moment of the declaration of wiir, or the tirst hos* tilitlcs, and then also the effects seized may be confiscated ^t

A state can make reprisals for injuries committed against itself or agaias^t its subjects ; but not in favour of a third person *.

By right, tlieie are many persons exempted from repri* sals ; and those whose persons are so privileged have also protection for their goods, some-by the law of nations, some by the civil law, others by the common law ; among whom, ambassadors, by the law of nations, their retinue and goods> arc exempt, coming from him who awarded reprised

Travellers through a country, whose stay is but short, and a merchant of another place than that against which reprisals are granted, although the factor of his goodg was of that place, are not subject to reprisals'''.

When ships are d'-iven into port by storm or stress of weather, they have an exem.ption from the law of re- prisals, according to the jus commune, though by the lavr

' VaHel, b. ii. s. 342. "^ Bynkeishock, Qiisest. Jur. W'h. lib. i. c. 24.

3 Vattel, b. ii. s. S42,

* Marten's Law of Nations, 22G. Grot. lib. iii. c. 2. Yattel, b, ii. s. 3-J8.

* licawcs's Lex Merc. 235. " Ibid.

of

of Commerce during War. 145

of England it is otherwise, unless expressly provided for in the writ of commission : but if such ships fly from their own country to avoid confiscation, or for some other fault, and are driven in by stress of weather, they may in such case become subject to be prize ; though it is unlawful to make seizure in any ports for reprisals, but in that prince's who awarded them, or in his against whom the same i^ issued ' .

Of Embargo.

An embargo is an arrest laid on ships or merchandize by public authority, or a proliibition of state commonly issued to prevent foreign ships from putting to sea in time of war, and sometimes also to exclude them from entering our ports"'. This term has also a more extensive signification ; for sliips are frequently detained to serve a prince in an expedition, and for this end have their loading taken out, without any regard to the colours they bear, or the princes to whose subjects they belong. The legality of such a measure has been doubted by some^ ; but it is entirely conformable to the law of nations, for a prince in distress to make use of whatever vessels he finds in his ports, that may contribute to the success of his enterprise. Embargoes laid on ship- ping in the ports of Great Britain, by royal proclamation, in time of war, are strictly legal, and will be equally bind- ing, as an act of parliament ; because such a proclamation is founded on a prior law, namely, that the king may pro- hibit any of his subjects from leaving the realm. But in times of peace the power of the king of Great Britain to lay such restraints is doubtful ; and therefore when such a proclamation issued in the year 1766, against the words of the statute then in force, although absolutely necessary for

» Beawes's Lex Merc. 235. • Ibid. 260.

3 Grotius de Jive B. ac P. lib. ii. c. 2. s. lO. Marten's Law of Nations, 326.

the

144 Of the International Laws

the prevention of a dearth in the countr}', it vras thought prudcnl to procure an act ' of the legislature <o indemnify those who advised or who acted under that proclamation'.

Of Blockade.

Thouijh the commerce of ^jeutral nations ouglit to be unrestrained as far as the laws of war will admit, yet there is a particular case where the rights of war extend still fur- ther. All commerce is entirely prohibited with a besieged town. If I lay siciie to a place, or only form the blockade, I have a right to hinder any one from entering, and to treat as an enemy whoever attempts to enter the place, or carry any thing to the besieged, without my leave : for he op- poses my enterprise ; may contribule to the miscarriage of it; and thus cause mc to fall info all the evils of an un- successful war ' .

But a declaration of bloclvade is not to be extended by those em ploj^ed to carry it into execution. Therefore a ge- neral notice of a blockade of the coast of Holland, untrue in fact, will not be good by limitation or construction for Amsterdam, the only Dutch port which was then under blockade ■*.

With respect to the extent of a blockade, Sir William Scott in the case of the Stcrt observed, that where no actual blockade can be applied, a legal blockade cannot exist. In the very notion of a complete blockade it is included, that the besieging force can apply its power to every point of the blockaded state. If it cannot, it is no l)lockade of that quarter where its power cannot be brought to bear '.

' 7 r.po. UI. r. T.

"^ I ]51ack<tones Corament.iries, 270. Park's Insurance, 104.

3 yattcl, b. iii. c. 7. s. 117.

*Xiie lieiiritkand Maria, 1 Rob, Adin. Rtp. 148. „- s 4 ibid. 65^

PART

145

Part y.

HOW THE COMMERCE OF GREAT BRITAIN IS AFFECTED BY ITS OWN MUNICIPAL REGULATIONS.

Having treated of tlie manner in -which the commerce of a country may be affected by the law of fiations, we pro- ceed to inquire how the commerce of Great Britain is affected by its own municipal regulations.

CHAPTER I.

OF THE LIBERTY OF TRADE.

Bt/ natural-born Subjects.

In England freedom of trade is not only allowed by com- mon law, but is asserted and established by various statutory provisions. By the stat. 15 Edw. III. c. 3. it is enacted, that the seas shall be open to all merchants to pass with their mercliandize where they please. But though every possible encouragement was given to the extension of fo- reign commerce, yei^ in early times, several regulations were made, restrictive of the common law right of the liberty of exercising trade.

By the stat. 31 Edw. III. c. 6. every man was required to confine himself to one mystery or trade. And by the 5 Eliz. c. 4. it is enacted, that no one shall exercise any art> mystery, or manual occupation, within the realm of Eng- land or Wales, without having previously served as an apprentice thereiji for seven years ; nor set any person on work, in such mystery, art, or occupation, except he shall

L Lave

146 Of the Liberhj of Trade.

liave been apprentice, as is aforesaid ; on jKiin of forfeiting for every default forty sliillings for every month.

Tliis statute, however, being in restraint of the eommon law, the resolutions of tlie courts have rather confined than extended tiie restriction. It has therefore been held, tliat if a person has without interruption worked at, or in any maiuicr followed, a trade for seven years, either as master, servant, or inmate, at home or beyond sea, he is not subject to the penalties of this statute, although he has never loeen an apprentice or bound to the trade. In like manner, if the wife of a tradesman is employed in his business for seven years, and he dies, she may use the trade alter his death '. So, by a particular custom in any town or village, a widow may con- tinue her husband's business ^. A service as an apprentice for six years, and one year as a journeyman', or as a clerk and poller for fifteen years *, has been held suGicient to entitle the party to the benefit of this statute. So, it is sufficient if the pavtj' has followed a trade for seven years abroad^ ; and the term of seven years may be made out by months and weeks ?tt different times ^ : but a service of five years abroad will not be a sufKcient compliance wiih tlie statute, although the law of that country does not require a longer period^.

It has also been decided, that if a person uses a trade mciely for the use of his family, and not with a view to gain a profit, he is not within the statute ^ So, if a person advances a sum of money in a trade, and becomes a partner, but does not interfere in the executive part of the business, he is not liable to the penalties of^the statute*^.. And if a man who has not served an apprenticeship himself, exports or sells goods which have been manufactured by journcy-

' 1 Barnardiston, 367. ' Bar. Abr. Master and Servant, D. 2,

3 3 Keb. 400. * Peake's N. P. C. 148.

5 1 Salk. 67. ^1 Saund. 309. n. 6.

7 10Mod.70. »8Co.l29. lllbid.51.a. Cro.Car.499. Hob.211

» Kaynard v. Chase, 2 Wils. 40. 1 Bur. 2. S. C.

men

Of the Llhertij of Trade, M7

men who Iiave regularly served and been employed by hini, he is not within the act, if he has not intevfered ia the manual occupation of the trade '. Neither is a person who carries on particular branches of a general business by such. as have served an apprenticeship to those pas ticulir branches of the business in which they arc employed, subject to the penalties of tlie statute, if lie merely exercises such parti- cular trade incidentally as a branch of his general business; for the statute applies only to those wIk) substantively set up and exercise a frade without having served an appren- ticeship. And therefore a master coach-maker may law- fully employ journeymen blacksmiths to make the iron- work for coaches, as may a master carpenter journeymen sawyers, although the one may not have served an appren- ticeship to the trade of a blacksmitli, nor the olher to that of a sawyer ^.

Neither is a person who carries on a trade as trustee only for children, and wlio does not assist in the several opera- tions, or take any part in the conduct of the business, liable to the penalty of the statute, for carrying on a trade without having served an apprenticeship K

Neither does the statute restrain a man from exercising several trades at the same time, if he has served an appren- ticeship to each ■*. It has also been decided that this statute does not extend to a person w Iio works as a jouraiey- man, though he has not served an apprenticeship, but that his master is liable to the penalty K

Neither are employments which do not require skill and experience within the statute ; and consequently a hemp-

• 1 Sannd. S!9. n. 1.

^ Coward v. Mabeily, 2 Camp. N. P. C. 127. Spencer v. Mann, 5 Esp.

N. P. c, no.

3 Meazcan v. Poarsall, 6 Esp. N. P. C 1. < Carth. 16.S. I Bl. Rep. 's^i.S. 2 Wils. 1(58. ^ Beach V. Turner, 4 tiur. ^419. S Mod. Sl.'J.

I. 2 <lresscr,

1 18 Of the Llbertijf of Trade.

dresspi', Iiusbandinan, and the like, are not required to serve an appreiiticeslii]) '.

It lias been said, tliiit for trading in a country village apprenticeships are not sequired by the statute*; but the b'jtter opinion, 'Mr. 8erj. Williams observes in his note to the case of Rex v. Kildi. rbv ', seems to J3e, that the statute does incliide vilin^^es.

To the prohi'jiiticns also of the statute, some exceptions have hccn introdnccd in favour of pnrlif ular trades and persons. By 6 and 7 W. III. c. 17. an apprentice convict- ing two ofRniders guilty of coining shall be entitled to his freedom, and may exercise his tra(!c as if he liad served out Ills tirFfe. By 15 (^ar. II. c. Jo. ]ienij)-\vorkrrsof all kirids, n<t-niakei's, and makers of tajiestry liangings, may exercise their tr.uJrs witliout having served an apprenticei>l)ip. By 17 Geo. III. c. 33. dyers in Middlesex, Essex, Surry, and Kent, may employ journeymen who have not served ap- prenticeships. As may hatters by the 5.5th section of the same statute, and Avoolcombers by 35 Geo. III. c. 121. By 21 Geo. III. st. 2. c. 6. all ollicers, mariners, and soldiers, may, if they have not deserted tlii'ir wives and cliiidren, exercise such trades as they are sufficient to, in any town or place. By 2(5 Geo. III. c. 107. every person having served in t];e militia, -when drawn out into actual service may, if a married man, exorcise any trade in any town or i-lace. .And by .00 Geo. III. c. 41. hawkers and pedlars dnly licensed are authori.sed to trade.

No trades are held to be within the statute but such as are enumerated in its provisions, or wereus^d and exercised at the time of makistg it '*.

Tlic trades witliin the statute are: Bakers, barber.'^, brewers, drapers, fcltmongers, fruiterers, ironmongers, knife-

' Cro. Car. 409. ? 1 Til- Com. 128.

a'l Sauiui. oil^ ♦ Viz. .JaHiuiry I2th, 156-2-

luift-

Of the Liberty of Trade. 149

liaft-makers, point-makers, soap-roakers, 5-purrierR^ lanners, tailors, tilers, upliolstcreis ', cable-makers, hornere, anercers, inillers, milliners, pin-makers, pippiii-monijers, salesmen, salters, scriveners, silk-weavers, surg-eons, tallo-sv-c:haodleis, ' taggers of points, ^veuvers of silk, ^^ool-comhers*, cotnb- - makers, cooks, cook-shops, shoe-makers ', avrow-head- makers, bawyt rs, c:!ppers, clothiers, cloth -workers, ciirritrs, cullers, djers, f.<rriers, fietehers, fullers, g-lovers, hat-makeis, hosiers, pewtercrs,sa{llers,shercuien, smiths, tuckers, turiiei s-^.

The tiadis not -within the statute are : Braziers, butchers, ' collar- makers, feilaiong-ers, mantua-niakers, rope-makers, seamstresses *, coster-mongers, gardeners, hemp-dressers ^, husbandmen, mcrcliants, merchant tailors", coach-makers ^.

Bi/ Merchant's Strangers.

The law of EngUnid, as a commercial country, observes , JMr. Justice Blackstone, pays a yi;iy particular regard to the interests of foreign merchants. Mjigna Chartti, >\hic:h is confirmed b\' two subsequent statutes'^, fornis the f{;unda- tion of the indulgences which alien merchants enjoy in tiiis realm. By this statute it is provided, that all merchants (unless publicly prohibited before hatid ) sh'dl have safe conduct to depart from, to come into, to tarry in, and to go through Enghiud, for the excrci>x' oi' merchandize, without any unreasonable imposts, except in time of war: and if a war break out between us and tlu ir country, they shull be attached (if in England) wit'iout harm of body or goods, till the king or his chief justiciary bo informed ho'.v our merchants are tre^ited in the lind with which we are at war : and, if ours be secure in that land, they shall be secure in ours.

' Com. Diir. title Trailp, D. 5. » Viii. Abr. fit. Trade, A.

3 Bac. Aiir. title .Master aiiil .'•prvant, 1). J, '• .") I liz. r. 4.

* XU). AhV. tii. Tnide, A. " Com, Dinr. tit. Ira'l. , i). f>.

7 Bac. Abr. tit. .;M;ist. r and Sorv.int, 1). i. * "^ Camp. Iv i'. C. 391.

9 I Ld. ill. c.';9. a Lil. ill. St. I.

Thin

150 Of the Liberty of Trade.

This protection of aliens in the exercise of commerce is .fuither secured by the statute ofthe Staple, 27 Ed. III. st. 2. c. 2. as well as by numerous other statutes. By this statute it is ordained, that all nurcliant strangers, not of enmity, may safely come and dv^ell in the realm, where they will, and thence return with their ships, wares, &c. and freely buy and sell within the reahn, p'lying the customs and subsidies due Ihcreon. And by stat. 9 Ed. III. c. 1.' wiiocver gives disturbance shall be subject to double damafjTCs.

. And by stat. 27 Ed. III. st. 2. c. 17. in case of war, all merchant strangers shall have convenient time, by pro- clamation, to sell their goods and depart; and if they ar« prevented by sickness or any otiicr accident, they shall have a further extension ofthe time.

But tjiough aliens are allowed the free exercise of trade in Great Britain, yet by the slat. 12 Car. II. c. 18. s. 2. no alien, unless naturalized, or made denizen, shall exercise the trade of a merchant or factor in the English plantations iii Asia, Africa, or America, on pain of forfeiting all his goods, &c.

And to prevent frauds in colouring strangers' goods, wares, or merchandizes passing inwards or outwards, it is enacted by the 10th section ofthe 13th and I4th a^ the same king, that the children of aliens under 21 years of age shall not be traders, and that no goods or merchandize shall bo entered in their names.

So by stat. 6 Hen. IV. c. 4. merchants strangers shall not carry, or cause to be carried, oiitof tlic realm any merchant dizes brought within the realm by sncli alien merchants.

The statute of 1 Hie. HI. c. 9. which prohii)ited an alien artificer from exercising any trade in England, unless as servant to a subject, or to make any cloth, or to sell wares by

' Confirm?!) !>y 2 Ric. II. c. i. and 11 Rie. II. c. 7.

retail,

Of the Liherhj of Trade. 151

retail, is held lo be virtually repealed by the 5 Eli?;, c. 'I.' As is also the 1 Ric. 111. c. 9. and U Hen. VIII. c. 2. which prohibited a stranger arlificer ^rom taking any servant or apprentice, and employing above two journeymen, not subjects; togctlier wiihtheSlIlcn.VIII. c. lb. Avhich prohi- bited such alien from keeping in his house at the same time above two servants. The 32 Hen. Vlll. c. 16. s. \o. remains yet unrepealed. But this law, contrary to good policy and the spirit of commerce, is construed very strictly in favour of aliens *. For if an alien occupy a dwelling-house of the yearly value of 10/. for forty days, he gains a settlement under the statute 13th and 14th Car. II. c. 12.^ And Mr. Justice Blackstone in his Commentaries, page 372, says, that an alien may hire a house for his habitatioii ; for this indulgence is necessary for the advancement of trade.

Besides these restrictions, aliens are sul)ject to certain higher duties at the custom-house than subjects are "♦. To which extra duties, by tlie course of the Exchequer, tlie son of an alien, thor.gh born within the realm, is liable for the first generation K But by 24 Geo. III. st. 2. c. 16. aliens are exonerated from the extra impositions, except from those which have been granted to the cKy of London.

The description of persons with whom an alien trader may deal, has also been the object of legislative inlerference.

By 9 Ed. III. St. ] . c. 1 . 25 Ed. III. st. 4. c. 2. 2 Ric. 11. st. 1. c. 1. and 11 Ric. II. c. 7. all merchants, strangers or <lenizens, may within this realm buy of and sell to what persons they please, as \\c\\ foreigners as denizens, except the enemies of the king, all manner of merchandizes, without disturbance, on pain that the person causing such disturbance

1 1 Bl. Com. 3T2. * Co, Lit. 2. h. n. 7.

3 Thp Kin^ v. ]',fis(bournc, 4 East's Rep. 103. * 1 Bl. Com. ST?.

» Blake v. John aiul JaiUL's Vaiider Ber^h, Hard. 335.

bhall

152 Of the Liberty of Trade.

shall forfeit double damages to such merchant stranger as he may disturb.

But by 16 Ric. II. c. 1. and 5 Hen. IV. c. .9. no mer- chant alien or stranger shall sell any manner of merchandize to any other merchant alien or stranger, except victuals, on pain of tbrfeiting the same.

The period within which the commercial transactions of merchants strangers may be negotiated has been variouhly prescribed by the provisions of the statutes of 5 Hen. \Y . c. 9. 6 Hen. IV. c. 4. 8 Hen. VI. c. 24. But by the statute 9 Hen. VI. c. 2. it was enacted, that in all transactions be- tween English subjects and alien merchants, payment must be made by such aliens within six mouths for the merchan- dizes sold.

The manner and the description of goods in which aHen merchants shall invest their capitals for the purposes of commerce have been also prescrifjed. By 4 Hen. I V^ c. 15. enforced by 7 Ei\. VI. c. 6. as well as by several otlier statutes, all merchant strangers shall employ the money re- ceived for their merchandizes upon the couimoditics of this realm, on pain of forfeiting the money arising from the sale of the same, ^y 4 Ed. IV. c. 8. enforced by 7 Jac. L c. 14. no stranger shall by himselt^ or by any other persoti, buy horns unwrought in London, or within twenty-four miles thereof, or within the fairs of Sturbridge and Ely, un- less it be the surplusof such horns as the natives of England cannot employ in their manufactures. By 1 Ric. HI. c. 9. to prevent the grievances arising from tlie monopoly Mhich the merchants of Italy practised ^\itil those goods which they brought into this realm, it is provided, that all Italian merchants sliall sell their merchandizes in gross, and employ their money in the commodities of this realm. It is also further provided, that they shall sell their wares within eight months after their arrival in this realm. And by the

eiglilh

Of ike Lilerty of Trade. 153

«iglith section of the same act, it is enacted, that al! such merchants of Italy shall not buy or sell any W(;ol or woollen cloth within this realm, nor make any woollen cloth, nor deliver wool to that end.

The permission granted by I RIc. III. c. 9. to aliens, to import books into this realm, is repeal d by the 25t]i Hen. VIII. c. 15. And by the second sec! ion of that sta- tute, every person wlio shall bny to sell again any such books imported ready bound in bo;jrds, leather, or parch- ment, shall for every su('h book forfeit six ^hi!lings and eight-pence. But by the third section permission is granted to buy the same in gross.

By the statute 11 Edw. III. c.2. no merchant shall im- port cloths not made within the king's dominions, on paia of forfeiture of the same.

j\or by statute 3 Edw. W. c.4. are any foreign woollen caps, woollen cloths, cards of wool, laces, corses, ribbands, fringes of silk and thread, laces of thread, silk twined and em- broidered, laces of gold, of silk and gold, saddles, stirrups, harness to saddles, spurs, bosses of bridles, and irons, grid- irons, locks, hamm.crs, pincers, girdles of iron, latten, steel, tin, or alkmine, fire-tongs, dripping-pans, points, purses, gloves, girdles, harness for girdles, hats, brushes, dice, tennis balls, chess-men, playing cards, any wrought or tawed leather, tawed furs, buskins, shoes, galochcs, corks, knives, dag- gers, v/ood-knives, sheers for tailors, scissors, razors, sheaths, pins, pattens, pack-needles, forcers, caskets, rings of cop- per or latten gilt, chafing dishes, hanging candl, sticks, chafing bells, sacring bells, cnriain rings, ladles, scunimers, coiyiterfeit basons, ewers, painted ware, or white wiie thread, to be sold within this realm, (unless wrought in Ireland,) on pain of forfeit ing the same.

So by 1 Bic. III. c. 12. no merchant stranger shall import to be sold, any girdles, harness tbrgirdks, points.

Lather*

151; Of the Liter ty of Trade.

leather, laces, purses, pouches, pins, gloves, spurs, sheers, shoe-bucVies, bells, (except hawks' bei'^s.) curtain rings, knives, hangers, tailors' cheers, scissors, andirons, cobbards, tongs, fire-forks, gridirons, stocklocks,, keys, hinges, gar- nets, painted glasses, rainted papers, painted forcers, paint- ed images, painted cloths, beaten gold or silver for painters, saddles, saddle-trees, horse-harness, boots, bits, stirrups, bucldes, chains, latten nails with iron shanks, turnets, stand- ing candlesticks, hanging candlesticks, holj-water-stops, chaflug dishes, hanging layers, tin or leaden spoons, latten or iron wire, iron candlesticks, grates, horn for lanthorns ; on pain of forfeiting tlie same.

So by the statute 19 Hen. VII. c. 21. none shall import silk wrought by itself, or with stuff, in ribbands, laces, gir- dles, corses, calls, or points.

Nor, by the statutes 25 Hen. VIII. c. 9. and 33 Hen. VIII- c. 4. any thing made of tin or pewter.

Nor, by 5 Eliz. c. 7. rappiers, daggers, knives, hilts, pummels, lockets, chapes, handles, scabbards, sheaths for knives.

By the statute 38 Edw. III. st. 1 . c. 2. aliens, as well as natives, are prohibited from exporting gold and silver in plate or in money.

And by the ISth and 14th Car. II. c. 13. all persons are prohibited to import any foreign bone-lace, cut work, em- broidery, fringe, band-strings, buttons, or needle-work, made of thread or silk, on pain of forfeiting the same and the sum of 100/. for every offence ; and if sold or offered for sale, to be forfeited in like maimer, together with the sum of 50/. But the prohibition relating to foreign lace made of thread in the Spanish Low Countries was removed by the statute 5 Ann. c. 17.

By the 33d Geo. III. c. 4. s. G. no alien shall import any weapons, arms, gun-powder, or ammunition, other

than

Of the Restraint of TraSe, 153

thcin as racrchandize subject to the laws now in force respect- ing the importaliou of arms or ammunition as merchandize, on pain of having the same seized.

By the 37th tlen. VIII. c. 14. s. 4. any stranger, or his factor, conveying or carrying leather from one port (o an- other before the transporting of isuch leather, sliall cause it to be entered and packed in the port from whence he in- tends to carry the same, taking a certificate expressing the number or quantity of such leather, making mention also in the same certificate whether the customs have been paid or not, on pain of forfeiting the leatlier or its value.

By 9 Ed w. III. st. I. c. 1. aliens sliall carry no wine out of the rcahn.

Nor, by stat. 33 Hen. VIII. c. 9. s. 9. bows or arrows.

By the tenth section of 1 Ric. III. no persons not born •witliin the king's o!;eisancc, nor made denizens, shall make any cloth within this realm. And by the llth section of the same statute, all artificers and handicraftsmen not bora under the king^s obeisance sliall not sell or barter their "Wares or merchandizes by retail, but ia gross, on pain cf forfeiture of the same.

Cii AFTER ir.

OF THE RESTRAINT OF TRADE.

1. Bt/ Prerogative.

Bv the laws of England, the king is considered as the arbiter of commerce. His prerogative extends to tlie esta- blishment of public marts, or places of buying and selling, such as markets and fairs, with the tolls thereunto belong- ii:g ; to the regulation of weights and measures ; and to ihc coinage and denomination of the currency '. He may

* 1 Blackslone's Commcntari,""?, 27!, 1'j.

constitute

15G Of the Restrahil of Trade.

constitute fraternities or companies for the management of foreign or domestic trade. Bnt he cannot by bis charter make a total restraint of trade, or grant exclusive privi- leges, for such a patent uould be void'. Neither can he charge a new impost upon any merchant*; nor levy new customs'; nor enlarge the ancient customs ^j for the right of levying these customs belongs to parliament alone.

Neither can he confine the importation of goods to a par- ticular port ^ But he may, by his grant, require, that all ships which come to such a haven unload in such a ■ place, for the security of the customs ^. As also that ships load in a pu!jlic place, and not elsewhere '.

We have already seen, that tlie king may by his license authorize to trade Avith an enemy's country. iJut he can- not license the importation of enemy's property, the produce of a foreign country, into this realm in neutral vessels, contrary to the navig;ition laws^.

The king, with the advice of his piivy council, may prohibit any particular goods '^ By statute 1 Jac. c 23. he may by proclamiition restrain llie transportation of any grain, generally, or from any particular pt)ils ; and by - statute 12 Car. II. c. 4. s. 12. and 29 Geo. 11. c. JG. the transportation of sali-petre, gunpowder, or any sort of arms or amnignition.

The king may by proclamation lay an embargo npon nil shippiiig in time of war, if for the public good, but not tor the private advantage of an individiial trader or company "'.

liut these constitutions or edicts of the sovereign, Avhich M'e call proclamations, are no furtlier binding upo?i the subject than when they do not contradict the old laws, or lend to

' f) Carp. Dig. 50, 36i. ■ ' 2 Inst. 58.

■T y Imt. 60. ♦ a Inst. ()0.

5 1 Hoi. Abr. 5. * II;ird. 35

7 I'.oi.a. » 12 I'ast's Itcp. 296.

» Lord J liil>;'s Tracts. '« I :-hV«.. 3>.

establish

Of the Restraint of Trade. 1 57

cstablisli new ones ; they only enforce such laws as are already in being, in such manner as the king shall judge necessary '.

Where a place for trade is discovered by any per- sons, the king may |,rant to them Uie sole trade there, as in the case of the Greenland Company *.

Another of the prerogatives of the king for the regulation of trade, is the right of granting letters of marque and re- prisal ; words used as synonymous, and signifying, tlie lat- ter a taking in return, the former the passing of the frontiers in ordtT to such t;iking. These letters may be obtained, in order to seize the bodies or goods of the subjects of the ©(lending state, until sali.sfsrction be made, wherever they happen' to be found : a custom which, as the elegant com- mentator observes, seems dictated by nature herself. But here the necessity is obvious of calling in the sovereign power, to determine when reprisals may be made ; else every private sufferer would be a judge in his oAvn cause. In pursuance of this principle, it is with us declared by the statute 4: Hen, V. c. 7- that if any subjects of the realm are oppressed in time of truce by any foreigners, the king will grant marque in due form to all that feel themselves grieved. Bat during war, the Lord High Admiral, or tlie Commis- sioners of the Admiralty, are, by various st;»tutes, empowered tcj grant commissions to merchants and others to tit out pri- vateers Or armed ships, upon giving security to the /Vdmi- ralty to make compensation for any violation of treaties be- tween those powers with whom the nation is at peace : and by 21 Geo. HI. c. 47. such armed ships shall not be em- ployed in smuggling. The prizes captured are to be di- vided according to the contract entered into between the owners and the captain and crew of the privateer ^.

When a private person sues for letters of marque and

' 1 BI. Com. 271. 12 Co, 75. ' 1 Rrl. 5.

» J HI. Com. 259; and Mr, Christian's note.

reprisal

J58 Of the Restrahii of Trade.

reprisal tor an injury he lias sustained during the time of truce, before he can olMain Iheni, tlie following requisitions must appear, says Mr. Beawes in his Lex Mercatoria, page 2 J 4. 1. The oath of the party injured, or oiher sulllcient proof, touching the pretended injury, and the loss or da- mage thereby sustained. 2. A proof of the due prosecu- tion for obtaining satisfaction in a legal way. S. A proof of the delay, or tlie denial of justice. 4. A coijiphiint io Ills o^vn prince or state. 5. A requisition of justice by him, or them, made to tlie supreme head or state, where justice in the ordinary course was denied. 6. Persistence still in the denial of justice.

By 43 Geo. IH. c. IGO. s. ll. every person applying to obtain a commission or letter of marque shall make such application in writing, and therein set Ib'.th a particular, true, and exact description of the ship or vessel for which such commission or letter of matque is requested, specifying i\\e name and burthen of such ship or vessel, what sort of built she is, and t!ic number and nature of the guns on board the same, to wiiat place belonging, and the name or names of the owner or owners of such ship or vessel, and the nuralx'r of men intended to be put on board the same.

Letters of marque may be revoked by the king's express revocation', or by the Admiralty^ . They may be forfeited for ofienccs against the revenue laws, ^ for acts of cruelty on tlic part of the captors towards their prisoners •*. And although there is a clause in the letters patent that no treaty of peace shall prejudice them, yet lliey may be repealed in Ctianccry after a ])cace K

By By-Law or Custovi.

General restraints of trade are bad ; particular restraints, either as to time or place, are good, if for a suliicient con-

» Molloy, vol. i. v. 58. ^ 48 Geo. III. r. 160. s. 11. 3 ibid. s. 13. 4 TUc JiiaiiumiiC;, 5 Hob. Adm. Rep. 9. 5 'fiie King v. Care^v, i Vern. 54.

sideration .

Of the Restraint of Trade. 159

sideiation ' . For a custom which makes a total restrahit of trade, as a custom that a man shall not use a trade in such a city, is void, unless it be founded upon some considera- tion. But a cust( ii which restrains trade sub modo, may- be good ; and theretbre the custom o^ foreign loug/it, and foreign sold, whereby a man not free of a city, &c. Avillbe re-strained from buying or soiling goods to other foreigners within such city &c. is good ^.

When the general consent of persons engaged in a trade, has established certain rules for the conduct of that trade, it is not compcteiit for any number of individuals to pro- mulgate a contrary regulation. And though they may agree among themselves to adopt new rules, they cannot thereby deprive one wlio has not assented to their compact, of the benefit of the old rules, as against themselves ; even in a trade recently established '.

In the case of Stone v. RawUnson-*, Willes C. J. said, " The Courts have always in mercantile affairs endeavoured to adapt the rules of law to the course and method of trade and commerce, in order to promote it ; and when new cases have arisen on the mercantile law, they consult traders and merchants as to their usage '."

Although it is a general rule of law, that a woikman is entitled to bo paid for his labour where the work is destroyed, without any default of his own, before it is completed or delivered to his employer ^, yet the law, in this respect, may be controlled by the usage of a particular trade ; for custom, as far as it extends, controls the general law "'.

By Contract. Stipulations in general restraint of trade are unlawful and

» f-ondon v. Ft-ll, Vv'iUes's Rep. 384. "^ G Com. Dig. 366.

3 Fennings and others v. Lord Grenvillc. 1 Taunt. 241.

4 Willes's Rep. 561.

* For the particular instances when a by-l.iw or custom is ^ood or not for the restraint of trade, see ti Com. Dig. S6G. 1 Ibid. 152, 155. and I Bac. Abr.3.S8.

• Menetone v. Athames,3 Bur. 1592. ' GilleU v. Mawman, 1 Taunt. 137.

void ;

\()0 Of the Restraint of Trade.

voi',1 ; and oven a promise or obligation which restrains the total use of a trade in a particular place is void, unless it appc.irs (o have been made upon good consideration. But if I he robtraint be qualified, so as only a preclude the party from trading in a particular, or vv^ithin a certain distance, as for i.-.slance ten milos, if a consideration v/as given, the con- tract will not be impeached either in law or equity, although the breacii of the stipulation tends apparently to the detri- ment of the party in whose favour it was made '.

By Mo7iopoly.

All monopolies are contrary to JNIagna Charta. By statute ^S Edw. 11 f. all merchants may deal freely in all manner of nierchandize, notwithstanding any charter to the contrary. And therefore every grant of the king, which tends to a monopoly, v,\\\ be void by the common law*.

80 by statute 21 Jac. II. c. 3. all monopolies, and all eommissioiis, graiits, licenses, letters patent, &c. to any person, body politic, &c. for the sole buying, selling, making, working, using of any thing, &c. shall be void.

But by a proviso in the same statute, letters patent, &c. heretofore made for twenty-one years or hereafter to be made for fourteen years, for the sole working or making of any new inventions or manufactures, are excepted, pro- vided tluy be not contrary to law, or mischievous to th« state, or generally inconvenient.

Grants to a city or corporation, or to any company &c. for the maintenajice or ordering of trade ; and letters patent concerning printing, saltpetre, gun-powder, great ordiiance, and shot, are also excepted.

By Statute,

An enumeration of the restraints that are imposed by

statute is to be Ibund under the preceding heads.

■ ' G Com. Dii;. 366. Co. Lit. £06. 1), n. 1. 2 Sau-.v^. laG. n. 1. ^ 1 liol. 4.

CHAPTER

Of the Charge upon Trade. IGl

CHAPTER III.

OF THE CHARGE UPON TRADE.

Bv 27 Geo. III. c. 13. called the Consolidation Act^ till tlie former statutes imposing- duties of custom and excise vere repealed with regard to the quantum of the duty, and- the duties ordered to be paid according to a new book of lutes annexed to that statute. Bullion, wool, and some few other commodities, mny be imported duty free. All the articles enumerated in the tables or book of rates pay upon importation or exportation the sum therein specified, ac- cording to their weight, number, or measure. And all other goods and merchandize, not being particularly enu- merated or described, and permitted to be exported and used in Great Britain, shall pay upon importation 27/. VQs. per cent, ad valorem, or for every 100/. of the value thereof, but subject to a drawback of 25/. per cent, upon exporta- tion. Very few commodities pay a duty upon exportation ; and where the duty is not specilied, and the exportation is not prohibited, all articles may be exported without pay- ment of duty, provided they are regularly entered and shipped ; but on failure thereof they are subject to a duty of bl. 105. ad valorem. And to prevent fraud in the re- presentation of the value, a very simple and equitable re- gulation is prescribed by the act, viz. the proprietor shall himself declare the value, and if this slioulil appear not to be a fair and true estimate, the goods may be seized by the proper officer ; and four of the commissioners of the cus- toms may direct that the owner shall be paid the price which he himself fixed upon them, with an advance often per cent, besides all the duty which he may have paid ; and they may then order the goods to be publicly sold, and if they raise any sum beyond what was paid to tlie owner

M and

.162 Of the Charge upon Trade.

and the subsequent expenses, o.ic hall of Ihc overplus shall be paid to the olBcer who made the seizure, and the other halt" to the public revenue'.

Similar provisions are made by 43 Geo. III. c. 68. by ivhich statute the then- existinii^ duties of customs and drawbacks, except the duties of pac ka^e, scavage, bail- lage, or porterage, payable to the city of London, or other corporations, shall cease, and those specified in the annexed schedule and tables shall be levied, and the drawbacks therein inserted be allowed in their stead.

By the common law, customs are due by the importation, where any act is done by way of merchandize ; as bulk broken, part of the goods sold, &c. But where goods are brouglit into a port not by way of merchandize; as if a ship enters a port by default of provisions, stress of weather^ &c., customs arc not due until the goods are landed ^

By 12 Car. II. s. 3. if any goods be shipped or put into a boat or vessel to the intent to be carried beyond sea, or to be brought from beyond sea' into any port, &c. by way of merchandize, and unshipped, &c. the customs due not being paid or tendered to the collector or his deputy, with consent of tlic comptroller or surveyor there, or one of them, nor agreed for at the custom-house, such goods shall be forfeited. And therefore, where bulk is broken, or that there is a manifest intent to do it, before the customs are paid, tendered, or agreed for, tiie goods are forfeited ■*. And that even though they are U\Vcu by way of reprisal ^.

If goods and merchandize are brought by a merchant to a port or haven, and there part thereof sold, but never put upon land, they must pay the customs ; and discharging out of the ship into another uj)on tiie sale, amounts in law

' Black<tonp's Commentaries, 316. n- « .Tuly 5th 1803.

J F'er Lord Hale, Haidr. .'i6'2. * Holton v. Raworth, Hardr. 360.

*Lcak V. HoweJ, C'ro. Elia. 534.

to

Of the Charge upon Trod^, 163

to a puttino- tUem upon the land, so that if the custom du- ties are not paid the goods will be forfeited '.

But goods wrecketl are not forfeited, though the customs are hot paid ^.

If a ship be within the limits of a port, it shall be deemed an importation '.

By 12 Car. II. s. 4. if the goods of a subject born be taken upon tiie sea by enemies or pirates, or lost by ship- ■wreck, and for which the duties had been paid or agreed for; on proof, &c. before the Treasury dr Chief Baron, recorded and allowed in the Exchequer, and certified to the oiHcers of the customs, he^ his executor or administrator, may ship in the same port so much other goods as those lost amounted to in custom^ without paying any duty.

It may perhaps not be inapplicable in this place, to speak briefly of the seizure of goods for which the duties have not been paid.

By 8 Geo. 1. c. 18. if any goods are put into any vessel to be carried beyond sea, or to be brought from be- yond sea, and unshipped to be landed, the duties not being paid nor agreed for at the custom-house, the same shall be forfeited, one moiety to the king, the other to the seizer, &c. And by subsequent statutes, foreign goods taken in at sea, by any coasting vessel, &c. shall be forfeited, with treble the value thereof.

If goods prohibited from being sold in this country by stat. II and 12 W. IJI. c. 10. are taken out of a ware- house, and put on board of a vessel as if f )r exportation, but in fact with a viev/ to be relandcd, they are liable to be seized, though no attempt has been made to retand them*^.

Any vessel not above fifty tons, having foreign spirits,

• 12 Co. 18.

' Leak v. IIowcl, Crcr. Eliz. 534. Sheppard v. GosnoH, Vaugh. 161.

' I/t-aptT V. Smilh, Bunb. 19.

" Vr'ilion V. Saunders, 1 lios. and Pul. 2G7.

M 2 Coxcept

164 Of Offences against Trade.

(except two gallons a head for the crew,) or tea or tobacco, on board, in any harbour, or hovering witliin two leagues of sliore, is Ibrfi^ited.

Contraband goods, unless Wwy arc landed or offered for sale, cannot be seized ; the mere bringing of the ship into port gives no right to seize '.

CHAPTER IV,

OF OFFENCES AGAINST TRADE.

Offences against public trade, according <o Mr. Justice Blackstone, are either felonious or not felonious. Of the first sort are,

1 . Owiing.

Ovvling, so called from its being usually carried on in the niglit, is the offence of transporting wool or sheep out of this kingdom, to the detriment of its staple manu- facture. This was forbidden at common law. But by 28 Geo. III. c. 58. all the former statutes respectuig the exportation of sheep and wool are repealed, and an infi- nite variety of regulations and restrictions upon this staple commodity are consolidated. The principal prohibitions are, that if any person shall send or receive any sheep on board a ship or vessel, to be carried out of the kingdom, the sheep and vessel are both forfeite-d, and the person so offending shall forfeit 31. for every sheep, and shall suffer solitary imprisonment for three months. But wether sheep, by a license from tlie collector of the customs, may be taken on board for the use of the ship's company. And every person who shall export out of the kingdom any wool, or woollen articles slightly made up, so as easily to be reduced to wool again, or anj^ fuller's earth, or tobacco-

• Smyth V. Reynolds, 2 Wils. 257.

pipe

Of Offences against Trade. 165

pipe clijy, and every carrier, shjp-owner, commander, ma- riner, or other person, Avho shall knowingly assist in ex- poitin,^;, or in attemptini^ to export, these articles, shall forfeit 5i. for every pound ^\eigllt, or the sum of 50Z. in the whole, at the election of the prosecutor, and shall also suf- fer solitary imprisonment for three months. But wool may be carried coastwise upon being- duly entered, and secmity being given, according to the directions of the statute, io tlie officer of the port from whence the same shall be con- veyed. And the owners of sheep which are shorn within live miles of the sea, or within ten miles in Kent and Sussex, cannot remove the wool without giving notice to the oiEcer of the nearest port, as directed by the statute.

2. Snmggling.

Smuggling, or the offence of importing goods without paying the duties imposed thereon by the laws of the cus- toms and excise, is an offence generally connected and car- ried on hand in hand with the former. This is restrained by a great variety of statutes, which inflict pecuniary pe- nalties and seizure of the goods for clandestine smuggling ; and affix the guilt of felony, with transportation for seven years, upon the more open, darin" , and avowed practices ; but the last of (hem, 19 Geo. ]I. c. S4. is for the purpose instar omnium: for it makes all forcible acts of smuiralinff, carried on in defiance of the laws, or even in disguise to evade ihem, felony without benefit of clergy : enacting, that if three or more persons shall assemble, with fire arms or oth.er offensive weapons, to assist in the illegal exportation or importation of goods, or in rescuing the same after seizure, or in rescuing offenders in custody for sucli oflcnces; or shall pass with such goods in disguise ; or shall wound, shoot at, or assault any Oiiicers of the rever^ue when in the exectition of their duty ; such persons shall be felons without the be- nefit

106 Of Offences against Trade.

ne/it of clergy. As to that branch of the statute which re, quired any person charged upon oath as a smuggler, under pain of death, to surrender himself upon proclamation, Sir William Blackstone says, it seems to have expired ; as the subsequent statutes, which continue the original act to the present time, do in terms continue only so mueli of tho said act as relates to the punishment of the offenders, and not to the extraordinary method of apprehending or causing them to surrender. But Professor Christian, in his note on the above passage, observes, that the I9th Geo. III. c. G9. s. 23. has expressly declared, that the method of appre- hending i\\e offenders described in the 19th Gfo. II. c. S4. and of canvng them to surrender, is continued by all tho statutes which have conthiued the i9th Geo. II. c. 34. ; and that it is also recited at length in the 21ih Geo. III. st. 2. c. 47. and is there directed to be enK)rccd for procuring the apprehension of the capital felons described by that star tute, who arc persons who shall maliciously shoot into any ship or boat, or at any custom-house officer, or his assistant, in the execution of his duty, either on shore or within four Icitgues of it.

3. Fraudulent Bankruptcy. Another oflence against trade is fraudulent bankruptcy, of which we shall treat hereafter. These, continues J\lr, Justice Blackstone, are the only felouious offences against trade ; tlie residue being mere misdemeanois : as,

4. Usury. Usury is an unlawful contract upon the loan of money, to receive the sanxe again with exorbitant increase.

Whatever were the prejudices of early tunes against the taking of interest, they appear to have worn off in the reign pf Henry the Eighth ; a rational commerce having taught

the

Of Offences against Trade. 1G7

the nation, that an c>tatc in money, as \\d\ as an cstat*' in land, houses, and t';c like, migl it be let out to hire, with- out the breach of one moral or religious duty. And indeed, when the source ot this prejudice is examined, it will be found to have originated in a political and not a moral pre- cept ; for though the Jews were prohibited from taking usii- ry, that is, interest, from their brctiuen, they were in ex- press words permiUed to take it from a stranger.

In the reign of Henry the Eighth, 10/. percent, was al- lowed as the legal rate of interest ; but this statute was re- pealed by the 5th and 6th EdAv. VI. c. 20., by wJiicli all interest was prohibited, the money lent and the interest were declared to be forfeited, and tiie ofienJer to be subject to fme and imprisonment. And thus the law stood till the sta- tute 13th Eliz. c. 8., which revived the 37th Henry VIII. c. 9., and ordained that all brokers should be guilty of a premunire, who transacted any contracts for more.; and that the securities themselves should be void. The statute 21 Jac. I. c. 17. reduced tlie rate of interest to eight per cent. ; and it having been lowered in 1650, during the Usurpation, to six per cent., the same reduction was re- enacted after the Restoration, by statute 12 Car. H. c. 13. ; and lastly, the statute 12 Ann. st. 2. c. 16. has reduced it to 5/. per cent., which is now the extremity of legal inter- est that can be taken.

By this statute 12 Ann. c. 16. no person shall take, di- rectly or indirectly, for loan of any money, or any thing, above the value of 5/. for the forbearance of TOO/, for a year, and so proportionably for a greater or less sum ; and all bonds, contracts, and assurances made for payment of any principal sum to be lent on usury, above the rate of 5/. per cent, shall be utterly void. And whoever shall take, accept, or receive, i)y way of corrupt bargain, loan, &c. a greater interest, sliall forfeit treble the money bor- rowed :

1G8 Of Offences against Trade.

rowed ; one half of the penalty to the prosecutor, the other to the kinfr. And if any scrivener or broker takes mdre than tiv^e shillings per cent, procuratioti money, or more than twclvepence for making a bond, he shall forfeit 20/. M ith costs, and suffer imprisonment for half a year.

These restrictions, however, do not apply to contracts made in foreign countries ; for on such contracts the Court will direct the payment of interest according to the law of the country in which such contract was made'. Thus Irish, American, Turkish, and Indian interest have been al- lowed in our courts to the amount of even twelve per cent. ; for the moderation or exorbitance of interest depends upon local circumstances ; and the refusal to enforce such con- tracts would put a stop to all foreign trade.

The following determinations will further explain the ge- neral principles that govern the cases on this subject.

It is not necessary that money should be actually ad- vanced to constitute the offence of usury ; but any contri- vance or pretence whatever to gain more than legal interest, where it is the intent of the parties to contract for a loan, will be usury : as where a person applies to a trades- man to lend him money, who, instead of cash, fur- nishes him with goods, to be paid for at a future day, but at such an exorbitant price as to secure to himself more than legal interest upon the amount of their intrinsic value; this is an usurious contract. The question of usury, or whether a contract is a colour and pretence for an usurious loan, or is a fair and honest transaction, must under all its circumstances be determined by a jury, subject to the cor- rection of the court by a new trial*.

» Eking V. East India Company, 1 P. W.r.s. 396. Ibid. 2 Bro. Pari. Ca. 7'2.

' Flover v. Edwards, Cowp. 112; Lower. Waller, Doug. 70S. Tate v. Welliiig"s,3 T. R. 531.

It

Of Offences against Trade. 169

It is remarkable, that one species of indirect usury is guarded against by the statute 37 Hen. VIII. c. 9. ; and tliis part of the statute seems to be still in force. I3y this it is enacted, that no person shall sell his merchandize to any other, and within three months after buy the same, or any part tliereof, for a less price, knowing it to be the same, on pain of forfeiting double the value ; half to the informer, and half to the king ; and also to be punished by tiiic and imprisonment.

It is now clearly settled, that bankers and other persons discounting bills may not only take five per cent, for interest, but also a reasonable sum besides, for their trouble and risk in remitting cash, and for other incidental expenses '. But if a banker deducts the discount of 5/. per cent, upon a bill and, instead of paying the remainder in cash, gives a draft for it, even at a short date, this has been held to be usury ; for he not only gains five per cent., but also the further be- nefit of the money till that draft is paid^. But whether more than bl.^ex cexii.hcintentionaihj iaken for the loin and forbearance of money, is a question of fact to be decided by a jury. It ought not to be considered usury, if it is done at the request and for the convenience of the party, who might have had cash instead of such bills, and m here it is not a device and contrivance to get beyond the fair allow- ance of interest and expense of commission '.

If a person discounts a bill for the drawer upon the terms that he shall receive bl. per cent, discount, and an addi- tional sum for guarantying the payment of the bill by the acceptor, he having no doubt of the acceptor's solvency, this is an usurious contract ■*.

On a contract for a loan reserving bl. per cent, interest.

> Vyrinch V. Fenn, 2 T. R. 52. - Parr v. Eliason, 1 Ea?ts Rep. 9'.

3 Ilammettv. Yea, Bart. 1 Bos. and Pul. 114. * Lee V, Cass, 1 Taunt. 511.

if

170 * Of Offences against Trade.

if a premium be taken at the time of tlic loan, the crime of

usurj,' is complete as soon as any interest is paid '.

If a contnicl is entered into to pay more than legal interest, though all securities are immediately void, yet the penalty is not incurred till more than legal interest is actually paid ^. For to subject tlie party to the pcnalt}' under the statute 12 Ann. st. 2, c. 16. there must be both an usurious con- tract at the time of the loan, and an usurious taking in pur- suance of it of money, or money's worth '.

But in order to avoid a security, it must be shown that the agreement was in its origin illegal and usurious : it will not be usury if more than legal interest is afterwards paid, if not originally agreed for ■*.

An agreeiiioit to replace stock and pay the amount of the dividends, tliough more than 51. per cent., is not usu- rious 5.

Where the principle is secured at all events, except from the insolvency of the borrower, and more than 51. per cent, may be gained by the terms of the contract, as by tlic profits of some concern, the contract is usurious'''.

But it is an established rule, that no contract is within the statute of usury, although more than five per cent, is to be paid upon the money advanced, if the principal is actually put in hazard, and may be totally lost to the lender'.

And if the original contract be not usurious, nothing done afterwards can make it so; a counterbond to save one liarmless against a bond made upon a corrupt agreement, will not be void by the statutes. But if the original agree-

> Wado V. Wilson, 1 East's Rep. 195. ^ I'ishr . V. licaslev, Dmis- 2T3.

3 Per AsJihurst J. in Scott v. Brest, 2 T. R. 211.

4 3 Anstr. 9iO. s jate v. Wellings, 3 T. R. SSI.

6 Morse V. Wilson, 4 T. R. 353.

7 Ibid. Sharpley v. Hanel, Cre. Jac. 208,

ment

Of Offences against Trade. 171

raent be corrupt between nil (he parties, and so ^vithin the statute, no colour will exempt it from the danger of tlie statutes against usury'.

After usurious securities given for a loan have been de- sfroyed by mutual consent, a promise by ihe borrower to repay the principal and legal interest is founded on a sufii- cient consideration, and is binding ^.

A contract for 6/. per cent, m.'wlc before the statute, is not within the meaning of it ; and therefore it is still lawful to receive such interest, in respect of any such contract. The receipt of higher interest than is allowed by the statule, by virtue of an agreement subsequent to tlie first contract, docs not avoid an assurance fairly made'. Neither is a bond made to secure a just debt, payable with lawful in- terest, avoided by a subsequent usurious contract, but the obligee is thereby subject to the penalty, by the latter clause pf the statute IS Car. IL c. 13.*

4. Cheating.

Cheating, as it was understood at common law, may in general be described to be deceitful practices, in defrauding another of his known right, by means of soiuc artful con- trivance, of a nature to affect the public interest, and so subtle and concealed that the common prudence and caution of mankind is not sufficient to elude the eflect of it. But there being many species of fraud which could not, in strictness of law, be comprehended within this definition, the statute 33 Hen. Vlil. c. 1. (uacis, tliat if any person shall falsely and deceitfully obtain any money or goods, by colour and means o( a.uy false priuy tokeii, or counterfeit letter made in another raaii's name, &c. for obtaining money

' 1 Brownl. 73. 2 And. 42'^. A SIicp. Abr. 173.

' Hnrncsv. KrdScv, y Taunt. 18 t.

3 3 Anstr. OlO. ' •» IVrrall v. Sbaon, 1 Saund. SOh

or

172 Of Offences against Trade.

or ^oods from such person, he shall suffer punishmenl by im- prisonment, setting upon the pillory, or any corijoral pains short of death that the court in its discretion may think proper. But this statute not affecting those frauds to guard against which the common prudence of mankind was thonght insufficient, the 20 Geo. II. c. 24. introdiues a new ofibnce, and enacts, that all persons who knowingly and designedly hij false pretences, or by sending thicateuing letters in order to extort money or goods, shall obtain from any person money, goods, wares, or merchandizes, with intent to cheat or defraud any person of the same, shall be put in the pillory, or publicly whipped, or fined and ini-? prisoned, or transported.

A false assertion or afhrmation, without an artful device or contrivance, will not amount to a false pretence ; and therefore it has been determined that it is not a false pretence within the statute to purchase goods, and to give a bill for them, drawn upon a banker with whom the drawer lias no effects'.

But where the defendant had made a bet upon a race to be run upon a future day, by which false representation he obtained a sum of money from the prosecutor to let him have a share of the wager ; this was held to be a false pretence within the slatute*.

So where a man pays a number of workmen, and receives from a clerk what is due to them, if he represents that more is due to them than actually is, he may be indicted for ob- taining the difference under a false pretence^

Changing corn by a miller, and returning bad corn in the stead, is punishable by indictment, being an offence against the public-*. Qui selling beer short of the measure is not indictable as a cheats Nor selling gum of one de-

> Rrx V. Lara, 6 T. R. 365. ' Rex v. Young, 3 T. R. 828.

3 Wiichdl's case, 2 Last's. P. C. c. 18. s. 8. < 1 Sess. Ca. 217.

J 1 Wils.301. 1 Bl. R. 274.

nomination

Of Offences against Trade. 173

nominafion far that of another '. Nor selliiio; wrought gold, as and for gold of the true standard ; the offender not being a goldbmilh *.

As there are frauds which may be relieved civilly, and not punished criminally, so tliere are other frauds which in a special case may not be helped civilly, and yai shall be punished criminally. Thus, if a minor, pretending to be of age, defrauds many persons by taking credit for a considerable quantity of goods ; the persons injured cannot recover the value -of their goods, but may indict and pu- nisli him for a common cheat ^.

The distinction laid down as proper to be attended to in all cases of this kind, is this : — That in such impositions and deceits, where common prudence may guard persons against their suffering from them, the offence is not indict- able : but the party is left to his civil remedy for redress of the injury done him : but where false weights and measures are used, or folse tokens produced, or sucli methods taken (o cheat and deceive as peoj)le cannot by any ordinary care or prudence be guarded against, there it is an offence indictable •*.

6. Forestalling, Ingrossing, and Regrolinrr.

Forestalling, ingrossing, and regrating, are ofle/ices ge- nerally classed together as of the same nature and equally hurtf ,1 to the public.

The offence of fo estalling the market is an offence ajjainst puhlic trade. This is described by 5 and 6 Edw. VI. c. 1(3. to be the "buying or contracting for any cattle, mer- chaudia', or victual coming in the way to the market ; or dissuading persons from buying their goods or provisions there ; or persuading them to enhance the price when tliere •

• Saver, 205. •» Rex v. Boyer, Cown. 323 3 Barl. 100. "

* Per J ustice "VVilmot, in Rex ▼. Whcatly, 2 Bur. 1129.

any

?7i . Of Offences against Tradi,

w\y of \^hic]i ])rac(ices makes Ihc market dearer loflsc faJr trader. And in' kex v. Wadditiiiton ' it was decided, that the roHoYuiig' acts innoiiiit to the sanse ofFence, 1. Spread- ing rumours with intent <o enh.inee t!ie price of any article. g. Endeavouring to cnljance the price of hops by persuad- ing- dealers, &c. not to take their goods to market, and to ;ibstaiii from selling tiiem for a long lime. 3. Jngrossing large quantities of hops, by buying witli intent to resell the san^ for an unreasonable profi?, and thereby to erdiance the price. 4. Getting into one's hands large quantities of hops by contracting wiih various persons for the purchase, with intent to prevent the same being brought to market, and to resell at an unreasonable profit, and thereby greatly to enhance the price. 5. Uiilawfully ingrossing, by buy- ing large quantities, with like mlent. b. Jngrossing hops then growing, by foreliaiid bargains, with like intent.

To forestall any commodity which is become a common victual and necessary of life, or is used as an ingredient in the making or preservation of any victual, though not for- merly used and considered as such, is an oifence at common laW ^

Rcgraling is described by the same statute to be the buy- jno- of corn, or other dead victual, in any market, and selliu"- it affiin in the same market, or within four miles of the place. For this also enhances the price of the provisions, as every successive seller must have a successive profit.

Ingro<-si:\g is also descril)ed to be the getting into one's possession, or buying up, large quantities of corn or other dead victuals, with intent to sell them again. And so the tot'.d iri<»-ros»iiig of any other commodity, uith intent to sell it at a:i nnreasonable price, is an oifence indictable and lineable at tlie common law.

Several statutes have been made from ^irac to time a^gainst

M East's riep, 14S. 'Ibid.

these-

Of Offences against Trade, 175

these ofieiices in general, especially with respect to particular species of ijoods according to their several cir- cumstances; almost all of which from 5 and 6 Kdw. VI. are repealed by 12 Geo. III. c. 71. But these offences still continue punishable upon indictment at the common law by fine and imprisonment.

And at the common law, all endeavours whatsoever to enhance the common price of any merchandize, and all kinds of practices which have an apparent (en.dcncy thereto, whether by spreading false rumours, or by buying things in a market before the accustomed hour, or by buying and selling again the same thing in the same market, or by any other such like devices, are highly criminal, and punish- able by fine and imprisonment ' .

Hy the common law, a mercliant bringing victuals into the realm may sell the same in gross : but no person can lawfully buy within the realm any merchandize in gross, and sell the same in gross again, without being liable to be indicted for the same ^.

The bare ingrossing of a whole commodity, with an in- tent fo sell it at an unreasonable price, is an ollence indict- able at common law, whether any part thereof be sold br the ingrosser or not ^

7. Monopoly.

Of the remedy and forfeiture provided by the stntufe 2i Jac. I. c. 3. against monopolies, we have already treated at page 160.

8. Combinations among Victuallers or Artificers.

Combinations among victuallers or artificers, to raise the price of provisions or any commodities, or the rate of la- bour, arc severely punished by many particular statutes ;

• 1 Hawk.c. so. »3 Inst. 1S6.

» 1 Hawk. c. 80, s. 3.

and

176 Of Offences against Trade.

and in general, by slatule 2 and 3 Edw. VI. c. 16. with the forfeiture c(f 10/. or twenty days imprisonment, Avith an allowance of only bread and water for the first oflbnce ; 20/. or the pillory, f ;r the second ; and 4t?/. for the third, or else the pillory, lo.ss of one car, antl perpetual infamy.

Journeymen who, in con.sequence oi a combination, re-- fuse to work till their wages are raised, may be indicted for a conspiracy. And by 39 and 40 Geo. III. c. lOG. any two justices of the peace may, upon conviction, punish all journeymen coiispiiiuii^ to raise their wages, by imprison- ment In the county gaol for three months, or by imprison- ment and hard labour in the house of correction for two rjonlhs.

But though it is criminal for two or more to combine to raise their wages, yet one journeyman or servant may re- fuse to work, unless he is paid tlie wages he demands. For one person alone cannot be guilty of a conspiracy '.

9. OJ" the Liber ty of exercising Trades^ Of the penalty for exercising a trade in any town without httving previously served as an apprentice for seven years, we have already spoken at page 145.

10. Seducing Artificers and Mamifacturers^ and exporting prohibited Tools, i^'c.

To prevent the destruction of o\ir home manufactures, by transporting and seducing our artists to settle abroad, it is provided by statute 5 Geo. 1. c. §7. that such as so en- tice or seduce them shall be fined 100/. and be imprisoned three months ; and for the second offence shall be fined at discretion, and be imprisoned a year : and the artificers so fl-oiuff into forcii^n countries, and not returuing withirt six months after w arning given them by the British ambassador

' Rex V. KinEers'.ey and Moore, 1 Stra. 193.

where

Of Offences against Trade* 111

where tbey reside, shall be deemed aliens, forfeit all their land and goods, be incapable of any gift or legacy, and be out of (lie king's protection. Yiy statute 23 Geo. 11. c. 13. the seducers incur, for the first offence, a forfeiture of 500/. for each artificer contracted with to be sent abroad, and imprisonment for twelve months ; and for the second, 1000/. and are liable to two years imprisonment. And by the same statute, connected with the 14th Geo. III. c. 71. if any person exports any tools or utensils used in the silk, linen, cotton, or woollen manufactures, (except by 15 Geo. III. c. .5. s. 9. stock cards not exceeding 45. a pair, and spinners' cards not exceeding l5. Qd. per pair, intended to be exported to North America,) he forfeits the same and 200/., and the captain of the ship (having know- ledge thereof) 100/. And if any captain of a king's ship, or officer of the customs, knowingly suffers such exporta- tion, he forfeits 100/. and his employment ; and is for ever made incapable of bearing any public office : and every person collecting such tools or utensils, in order to export the same, shall, on conviction at the assizes, forfeit such tools, and also 200/.

By the statute 21 Geo. III. c. 3. if any person shall put on board any ship, not bound to any place in Great Bri- tain or Ireland, or shall have in his custo ly, witii intent to export, any engine, tool, or implement, used in the iinen, cotton, woollen, or silk manufacluies, he shall forfeit the same, and also the sum of 200/. and shall be imprisoned twelve calendar months, or till tiie forfeiture is paid. And every captain and custom-house officer, who shall know- ingly receive the same, or take an entry of it, shall forfeit 200/. Provided tiiat nothing herein shall extend to the preventing of woollen cards or stock cards from being ex- ported to America.

By the 22d Geo. III. c. 60. if any person sliall eidiCQ

N or

178 Of Mercantile Contracts for the

or encourage any artificer employed in printing cullicoes, fottons, muslins, or lincjis, to leave the kingdom, he shall forfeit 500/. and be imprisoned one year. And persons who export, or attempt to export, any engines or implements used in that manufacture, shall forfeit 500/. Captains of ships and custom-house oflicers conniving at these oilences lorfeit 100/. and become incapable of holding any office un- der the crown.

And by the 25th Geo. III. c. 67. any person who entices or encourages an artiticer in the iron or steel manufactures to leave the kingdom, shall forfeit 500/. and be imprisoned for one year. And captains and custom-house officers con- niving at the offence are subject to the same penalty, and become incapable of exercising any public employment.

CHAPTER V.

OF MERCANTILE CONTRACTS FOR THE SALE AND PURCHASE OF GOODS.

Of the General Nature of a Contract.

A CONTRACT, according to Mr. Justice Blackstone, may be defined an agreement (aggregatio mentinm, the union of two or more minds in a thing done or to be done ',) or mu- tual assent, upon sufficient consideration to do or not to do a particular thing *.

Tliis contract or agreement may be either express or im- plied. Express contracts are where the terms of the agree- ment are openly uttered and avowed at the time of the making, as to deliver an ox, or ten load of timber, or to pay a stated price for certain goods. Implied are such as reason and justice dictate, and which therefore the law prc-

• Plow. 5. a. 6. a. 1 Com. Di?;. -^00. Djer, 336. b.

* 2 Bliickstone's Conunciitarics, 44"<i.

sumes

Sale and Purchase of Goods. 179

suraes that every man undertakes to perform. As if I em- ploy a man to do any business for me, or perform any work ; the law implies that I undei;took, or contracted, to pay him as much as his labour deserves. If I take up wares from a tradesman without any agreement of price, the law con- cludes that I contracted to pay their real value. And there is also one species of implied contracts, wiiich runs through and is annexed to all other contracts, conditions, and cove- nants, viz. that if I fail in my part of the agreement, 1 shall pay the other party such damages as he has sustained by such my neglect or refusal '.

A contract may also be executed, as if A agrees to change horses with B, and they do it immediately ; in ^Yhich case the possession artd right are transferred together. So when an assent subsequent is given to an act precedent, by such assent the agreement is executed *. An agreement executory is, when the thing agreed is to be done afterwards ; as if A and B agree to change horses next week ; here the right only vests, and their reciprocal property in each other's horse is not in possession but in action K

SECTION I.

OF THE PARTIES TO A CONTRACT.

Bv the law of England, every person sui juris, of full age and sane memory, may make a binding contract -^ ; and that though the party be a leper, removed by the King's writ a societate hominum, or deaf, dumb, or blind, if he have understanding and sound memory '.

But the capacity of femes-covert, persons insensible or under duress, idiots and lunatics, infants, persons attainted,

' 2 Blackstonc's Commenfaries, 443. ^ Plow. 8. b.

3 Ibid. 9. a. 2 Blackstone's Commeutaries, 443. ♦ Co. Lit, 42. b. s ibid,

N 2 and

180 Of Mercantile Contracts for the

and aliens, to contract is limilcd. In some cases the con- tracts entered into by such persons are absolutely void ; in olhers not ipso facto void, but may receive validity from the circumstances we shall immediately mention.

] . Of Contracts by Femes-Covert.

As, by the law of England, the legal existence of the wife is merged in that of the husband, all contracts made with her are, generally speaking, absolutely void '. But though a married woman cannot by her contracts create any responsi- bility on the part of her husband, yet if she acts for him, in any business or department, by his authority and with his assent, lie there'oy adopts her acts, and must be bound by any admission or acknowledgement made by her respecting that business, in m hich, by his authority, she acted for liim^.

So, if the goods for which the wife has contracted come to the use of the husband, or his family, with his knowledge ; as if they be used in his house ' ; or if the wife l3e generally allowed by the husband to buy for him ; or buy necessary- apparel for herself; in these cases the consent of the hus- band is presumed, and he will be liable for such contracts^; for during cohabitation the law will presume the assent of the husband to ail contracts made by tlie wife for neces- saries suitable to his degree and estate ; and the misconduct or even the adultery of the wife, during that period, will not destroy the presumption.

And if lie allows her to assume an appearance which he- is unable (o support, he will be liable for the consequences ^ for he sends her into the world with a credit corresponding to the rank in life in which, by his sanction, she aflbcts

' Perk. s. 154.

» Emnson v. Blonden, 1 Esp. N. II. P. 142. The Earl of Derby's case, 2 Leon. 42.

3 1 Ilol. Abr. 350. E. Manbv v. Scotf, I Sid. 120. ♦ Fitz. N. B, 120. G. 1 bid, 127.

io

Sale and Purchase of Goods. ]81

ifo be placed '. But if they are not coliabiting, then ]je is in general liable only for such necessaries as from his situatioQ in life it is his duty to supply her.

The law is the same if the husband deserts his wife, oe turns her away without any reasonable ground, or compels her by ill usage or severity to leave him; for he sends credit with her, and will be liable for all reasonable ne- cessaries furnished to her, although he advertises her, and cautions all persons not to trust her, or if he even gives particular notice to individuals not to give her credit *.

It seems tliat, in all cases, general prohibitions against the wife's credit will not exonerate the husband from lia- bility for her contracts'.

But if she elopes with an adulterer, or on account of adultery committed under his roof her husband turns her out of doors, the husband's assent to her contracts (even for necessaries) after her elopement or expulsion cannot be im- plied, thoi gh the vendor had no notice-*: and although the husband has been the aggressor, by living in adultery with another woman, and although he turned his wife out of doors when there was not any imputation upon her con- duct ; yet if she afterwards commit adulter}', he is not liable for necessaries which may have been furnished to her after that time ^. So, if a woman elopes from her husband, though she does not go away with an adulterer, or in an adulterous manner, the tradesman trusts her at his peril, and the husband is not bound. But if he absolut(^!y refuse to receive her again, from that time his liability may re-

' Waithman v. Wakefield, E?q. 1 Camp. N. P. C. J21.

"^ Boltons V. Pr<"niitp, 2 Stra. I'Ml, ar-d reported at length in 1 Selvv. N. P. 291, from the .'.S?. of Mr. Ford, ilod^^es v. Hodges, 1 Esp. N. P. C. 441. Karris v. Morris, 4 Ihid. 42. ilawljns v. A andyke, 3 Ibid. 251.

3 Rawlvns v. Vandvke, utstipra.

« Morris v. Martin', 1 Str. 617. Ham v. Tcovey, 1 Sehv. N. P. 290. JIainwarring v. ftmds, 1 Str. 706.

i (Jpvier V. Hancock, 6 T. R. 603.

vive :

182 Of Mercantile Contracts for the

vive': and even where she has eloped for an adulterous purpose, yet if the husband receives her again, the pre- sumption of law revives, and attaches upon the contracts made by her after tlie reconciliation ^.

But tliough a man is, in general, liable to the contracts of his wife, cither for necessaries for herself, or the support of his household ; yet if he prove an express dissent to such contiacts before they were entered into by his wife, no such presumption can arise, and consequently he is not liable on contracts made with her '. And such dissent, if expressed to a servant usually employed by the tradesman, is a sufficient dissent to the master ^. Or if a tradesman has notice of a separate maintenance being allowed to the wife, that, according to Holt C. J. shall be notice of dissent on the part of the husband, and he shall not be charged.

We have seen that a married woman may by her act ren- der her husband chargeable for necessaries furnished to her, for he is bound by common right to provide for and main- tain her^'; and if he refuses or neglects so to do, the law has; provided a remedy for her by complaint to the ordinary in the Ecclesiastical Court ^' : yet she cannot borrow money to lay out for necessaries, and thereby bind her husbands But though the person who lent the money cannot sue the husband on the loan, yet if he can show a proper ap- plication of it, as that it was really laid out for necessaries, lie will in equity be put in the place of him who found and provided such necessaries for the wife, and will bq thus enabled to come upon her husband ".

' Per Ld. R.-xym. in Cl'ild v. Hardyman,2 Str. S7.J ; and see Lungworthy V. Horkmorc, ILd. Raym. 414. Etherinj;ton v. Parrot, 1 Snlk. 118. « Harris v. ]\1 orris, 4 I'sp. N. P. C. 42.

3 i:therinf;ton v. l»arroi,2 Lri. Rajm. 1006. 1 Salk. IIS. S. C. Manby v. Scott. 1 ^id. Vil. 1 Leon. 5. S. C.

4 Ktherii:8;ton v. Parrot, 2 Ld. Raym. 1006.

5 Per ll><ic ,1. in !\!anl)y v. Scott, "^1 Mod. 128.

6 Lit. s. 18. 3 Atk. 547. 2 Ibid. 296. ' Earle v. Peale, 1 Salk. 386 . 8 Harris v. Lee, 1 P. Wms. 483.

It

Sale and Purchase of Goods. » 183

It was formerly held, that if a feme-covert lived apart from her husband, and had a separate maintenance, slie might contract and be sued as a feme-sole', provided such separate maintenance was a fixed and permanent allow- ance *. But by (he cases of Marshall v. Rutton* and Ewers V. Hnttoii \ the former authorities are overthrown, and it is finally settled, that a man and his wife cannot by agreement bet^vcen themselves change their legal capacities and cha- racters, and that a woman cannot be sued as a feme-sole while the relation of marriage subsists, and her husband is in this kingdom, or abroad with an intention of returning, notwithstanding she has a separate maintenance secured to her by deed. Payment however of the wife's debts may be enforced out of such separate fund in a court of equity 5.

If a man cohabits with a woman, to whom lie is not married, and permits her to assume his name, and she ap- pears to the world as his wife, and in that character con- tracts for necessaries, lie will be liable for her contracts, al- though the creditor is acquainted with her real situation^. So, if a man marries a woman, and holds her out to the world as his wife, he docs not discharge himself from his liability for necessaries supplied to her, by proving a pre- vious marriage between himself and another woman still alive ; unless he brings home a clear knowledge of the first marriage to tlie person who supplied the necessaries to the second wife'.

The husband's responsibility is not confined to the con- tracts of his wife made during the coverture ; it extends by retrospection, to such debts as she had contracted before

' Todd V. Stokes, 1 Ld. Rnvm. 444. Corbptt v. Poclnitz, 1 T. R. 5. » Gilchrist V. Brown, 4 Ibid. 766. 3 8 Ibid. 5-15.

* 3 Esp. N. P. G. -Zo3. 5 Mulme v. Tenant, I Bro. C. C. 16.

« Watson V. Threlkeld, 2 Esp. N. P. C. 6:i7. ' Robinson v. Nahoii, 1 Caiap. N. P. C. 215.

his

184 Of Mercantile Contracts for the

his marriage with her'. But '\i^ these debts (and if even a bond has been given for them -) are not recovered against the husband, during the lifetime of his wife, or that he has been appointed her executor, lie cannot be charged for them either at lav/ or in equity after her death ^

But the general rule, that a married woman is incapable of binding liersclf personally, by her contracts, admits of many exceptions. We have seen that, in general, all con- tracts made by her on the part of her husband, during her cohabitvition with him, created his liability on tlie presump- tion that she contracted as his agent. But there are cir- cumstances from which she will be considered so far eman- cipated from the incapacities incident to coverture, and to be sui juris, as to be capable of contracting not only for necessaries, but for every other thing ^\hich can be made the subject m.altcr of agreement, and consequently as being liable to be sued in courts of law, as if she were a feme- sole. The cases in which a married woman is regarded as being sui juris in regard to matters of property, and per- sonally liable on her own contracts, are, where the situa- tion of her husband incapacitates him from interfering with her concerns, or by local customs.

The cases, when, from the situation of her husband, the disabilities of tiie wife are suspended or removed, and she is enabled to contract as a feme-sole, .are wlien her husband has abjured the realm, or is banished •♦, or is transported for a term of years ^, or where he does not return after the expiration of th;; term of his exile ^.

So, if the husband is an alien, and has deserted this kingdom, leaving his wife behind, she is liable for debts contracted here after such desertion, though she had no

• Fitz. N. B. 120. J".

» Htard v. Stamfor!i,3 P. Wms. 409. Ca.Tcmp. Talbot, 173.

SFilz. 121.C. ^1 Co. Lif. 13.'?. 5 Sparrow v.Carruthcrs cited in 1 T.R.7.

* Carrol v. Blencow,4 Esp. N. P. Q. 27.

separate

Sale and Purchase of Goods. 185

scpaiate maintenance, and had never rcpresenti'd herself as a single woman '. So if the husband, beinsr an alien, re- sides abroad, and the wife trades and obtains credit in this country as a feme-sole, she will be p«'isoniilly liable on her contracts *. But there is a great difference between the cases of an Englishman residing abroad, leaving his wife in this country, and of a foreigner doing so. Th.ere is not any case in which the wife has been held liable for her contracts during the residence abroad of her husbinJ, Iw being an Englisliman ; the yr.h not having represented herself as a feme-sole ^ : for he may be presumed (o liave animus rever- tendi*. lint ihat presumption may be rebutted by circum- stances wliich show that he has qiiitted tlie country with- out any intention of returning; in which case liie wife would be liable on her contracts '.

The case when the wife is liable on her own contract by the local cu.>!oni of the realm, is where a f(;Bi'^-covert being the wife of a freeman, by tlie custon- of the city of London, trades by herself in a trade with which her hus- band does not iniermeddle; in such case she may sue and be sued on her contracts as a feme-sole ; and the husband shall be named only for conformity ; and if ju;lgement be given against them, execution sh;ul be against the feme only ^.

A feme-covert may also by the voluritary agreement of her husband have a separate interest in her husband's trade. Thus, wlicre a husbaud voluntarily, ar.d after marriage, allowed the wife for her separrstc u.-.e to make profit of all butter, eggs, pigs, poultry, and fruit, beyond

' Wnlford V. Dichftss De Pienne, 2 Esp. N. P. C. 55-1. Ibid. 5S7. 2 Eos. ami Pill. N . P. H^O.

^ Do Gailiou V. L'Aiglr, I Ibid. ,S5T. 3 Marsh v. Hutchinson, 2 Ibid. 220. 4 Farrer v. (Oiuitcss of Cranarit, 1 Ibid. SO.

* Marsh v. Hutchinson, ut supra, and Bofvgett r. Frier, citf d in 1 Sclw. ^' . P. .S02.

* L^n^ham v. Bewctt, C'lo. Car. 68.

%vha("

\

1 86 Of Mercantile Contracts for the

Mhat was used in the family ; it was decreed that such an aijreeinent was valid, and that the wife had the entire disposal of the profits arising- from the same '.

2. Of Contracts lij Idiots, Lunatics, Persons insensible, under Duress, or attainted.

J . The contracts of idio(s and lunatics may be avoided either during the continuance of their idiocy or lunacy l)y the king *, or after their restoration to their perfect mind hy themselves ^

2. Contracts made by persons labouring under the de- privation of the organs of sense, as if they are deaf, duml>, and blind, arc ipso facto void -*.

But contracts entered into during a state of intoxication must be fulfilled. The having been in drink is not any rea- son to relieve a man against any deed or agreement gained from him when in those circumstances ; for this were to encourage drunkenness : but it would be otherwise, if through the management or contrivance of him who gained the deed, &c. the party from whom such deed had been gained was drawn in to drink ^

3. If a man, by duress of imprisonment, or by threats, and fear of bodily harm, enter into a contract, it seems that it is voidable^ ; but contracts made under such con- straint will remain valid until avoided by the party in- jured.

4. Contracts for the sale and purcliase of goods by per- sons attainted are absolutely void ; for by the conviction all their personal property becomes forfeited to the crown.

' Slanr.ing; v. Stvl<^, .3 P. W^ms. 335.

<= Bract, lib. iii." 100. Fitz. N. B. 232. 4 Co. 126.

3 Bui. N. P. 168. * Perk. s.25.

5 Per Sir Joseph Jckyll, at the Rolls, Johnson v, Mcdlicott, May 29th, i7,S-l. 3 P. Wm?. 130 (A).

6 2 Inst. 4.S3. 3 Rol. Abr. 687.

3. Of

Sale and Purchase of Goods. IS7

3. Of- Contracts ly Infants.

In goneral,. all contracts entered into with an infant will not bind him, except for diet, lodging-, apparel, physic, and such other necessaries ; as also for his teaching and instruction '.

3ut though an infant is liable for necessaries, yet if he enters into a bond with a penalty for the payment there- of, he will not be liable*. However, if he should give a single bond for such necessaries ', or a bill of exchange or promissory note for their value •♦, he will be bound by it. But he will not be liable as acceptbr of a bill of exchange, altliough the ground of his acceptance should have been for necessaries furnished to him''. Neither is he liable for money lent to him to purchase necessaries, although the money was actually expended in the purchase of necessa- ries''. Nor upon an account stated, though all the items in the account are ruicessaries''. Nor for goods purchased id trade with^, or for work done for him in the course of his trade '^, although he gains his living by carrying on trade. Neither is instruction in a trade a sufficient consi- deration to bind an infant '°.

As to the question, what things shall be deemed necessa-

• Co. Lit. 172, Pickering; v. nuniiing, Palm. 528. "- Aviiffv. Archdale, Cro. Eliz. 920.

3 Hufsel V. Lep, I Lev. 86.

4 Ibid. Ayliffv. Archdale,ut supra. Earle v. Pcalc, 10 Mod. 6T.

5 Williamson v. Watts, 1 Camp. 562.

« Darby v. Boucher, 1 Salk. 279. Probart v. Knouth, 2 Esp. N. P. C. 472. n.

But under surh circumstances the lender would in equity be entitled to I'estovcr against the infant; courts of equity holding that in such cases the lender stands in tho))lacc of the person furnishing the necessaries. MrtrloW T. Pitfield, I P. Williams, 558.

7 Triieman v. Hurst, 1 T. Jl. 40.

8 Whiftingham v. irill,Cro. Jac. 491. Wh-vwall v. Champion. 2 Str. lOS.*?.

9 Di!k V. Keighley, 2 Esp. N. P. C. 481. " »" I Keb. 446.

ries.

1S8 Of Mercantile Contracts for the

vies, in order to chars^e an infant, it has been held liiat sncli things only as are suitable to his rerJ circumstances, and not with his appearance or station in life, are to be so con- sidered. And therefore where an infant, v ho was a lieute- nant in i\\Q army, had been furnished with clothes proper for a man of figure aiid fortune, they were not held to be necessaries '. So, where the defendant, who was one of the gentlemen of ihe chamber to the Earl of Essex, had been s'k plieil with clothes, part fustian suits, a:id part yelvet and satin suits laced with gold, the Court held tlmt the suits of velvet and satin were not necessary for an in- fant, although he was a gentleman ^. So w here the infant, an officer in the army, had orders d a livery for his servant, and cockades for some of the soldieis of his company, the cockades were held not to be netessary '.

In the case of Ford v. Fothergill, Lord Kenyon said, the question of necessaries was a relative fact to be governed by the fortune aiid circumstances of the i;if at.

Necessaries for an infant's wife are necessaries for him ; but if provided in order to the marriage, he is not charge- able, though slie uses them "*.

Money lent to an infant to procure his liberation from an arrest may come under the description of necessaries ; and may be recoverable in assumpsit, if it appears that he was in custody for a debt for necessaries, or in execution '.

But tliongli an infant is not liable on his contracts for things which are not necessaries, yet if after he comes of age he expressly promises to pay, the subsequent promise "will operate upon the preceding consideration ^ ; for he lias

' Foifl V. Fothrrrin, 1 F,.=p. N, P. C.^U.

» Mackaicl v. liarli-lor, Cro. i liz. 583. 3 Hands v. Slancy, 8 T. R.578.

* Ppri'rattC. J. in1\tr;;erv. Tri'.bv, I Sfr. 1G8. 5 Cl.irke V. Lesli?-, 5 lisp. N. P. C. i;8.

* Sni'thf^rJon v. Wnitlisrk, 2 Str. 689. Hilling v. Hastings, 1 Ld. Raym. 3S9. Borihrt ick v. C uratiiL-rs, 1 T. R. 648. Cocksboft v. Bennett, S lb. 766.

thereby

Sale and Purchase of Goods. 189

tbeieby ratified the contract ; it being a general rule of law, that a moral obligation is a good consideration for an ex- press promise '. And thougli no subsequent promise will revive a void security, yet a security given by an infant^ which is voidable on account of his infancy, may be re- vived by a promise after he comes of age *. But to bind an infant on such a subsequent promise, it must be made volun- tarily, and with full knowledge that he then stood discharged by law ; for if the promise were extorted under the terror of an arrest, or given from an ignorance of the protection which the law affordtd, it will not be binding'. And in ail cases of subsequent promise, if the original transaction was not perfectly f lir, equity will give relief, if the infant is immediately on his coming of age entrapped into a ratifica- tion of the bargain ■♦. By the case of Thrupp v. Fielder ^, it appears, that pnymeiit of money generally, on account of a bill vvliich had been given during infincy, will not have the eifect of confirmifig the contract; bat that to re~ vive such liability, the promise must have been express ou the party's coming of Aul age.

If the infant, on the attainment of his full age, promises to pay when he is able, the onus probandi of such ability lies on the j)l;n:itiff, who, in tiie absence of other prooi, may give evidence of ability, from the defendant's ostensi- ble appearance and circumstances in the world''.

The privilege of infancy is personal, and no one can take an advantage of it but the infant himself: it cannot (here- fore be extended to the otlier contracting party, however injurious the execution of tiie'contract inny be to him "'.

As an infant is not bound by his contract, if goods are

' Per Lord MaiipfieUl in Watson v. Turner, Bu!. N. P. 14T.

" Per Ashhurst.T. in Coiksbott v. hcnnett, 2 Y. R. 766.

3 Hariner v. Killing, 5 lisp. N. P.C. lUV. 4 Urooke v. Gail v,? Atk, 35.

5 :> £bp. N. ]\ C. 6.'8. ° Coic V. Saxh-y, S Ibid. 1.59.

' Sniith V. Boweii, 1 Jlod. 'Jo. Holt v. Ward Clareacieux, a Str. 937.

delivered

1 VO Of Mercaiitile Contracts j'or the

(lelivcrcd to him upon a contract, and with a knowledge of liis infancy, they are not recoverable from him in any form of action. But if an infant, -without any contract, wih'ully take away the goods of another, or upon contract under false pretences, trover lies against him for the tort ^ But a plaintiff cannot convert an action founded on a contract in- to a tort, so as to charge an infant defendant. Therefore, w here the plaintiif declared that at the defendant's request he had delivered a mare to him, to be moderately ridden, and that the defejidant, maliciously intending, &c. wrong- fully and injuriously rode the mare so that she was da- maged, &c. ; it was held, that the defendant might plead liis infancy in bar, the action being founded on a con- tract ^

While an infant lives with and is properly maintained by his parent, he cannot in any case be liable even for ne- cessaries '. .

But where a father <rivcs his son a reasonable allowance for his expenses, the son is solely liable ; the liability of the father in such a case does not exist even for necessaries 4.

4. Of Contracts hy Aliens.

We have seen th;it alien friends may by law trade in this country ; consequently, they may sue and be sued upon contracts relating to personal property the same as natural-born subjects. But \y\i\\ respect to alien enemies the case is very diiierent. in the law of almost every coun- try * the character of alien enemy carries whh it a dis- ability to sue, or to sustain, in the language of the civi- lians, an action upon a contract. The peculiar law of our

» i\Ianhv V. Scott, I Sid. 129. Johnson v. Pie, 1 Lev. 169. - Jrnnins;* v. Riindaii, 8 T. R. 9,'?.b. . 3 Bainbridge V. Pickerin5, 2 B! Rop. 1325. 4 CraiUz V.Gill, a tsp. N. P. C. 4': 1. * Per Sir V»'. Scoit, in tlie Case of the Hoop, 1 Rob. Adin, Rep. 200-

country

Sale and Purchase of Goods. J 91

country applies this principle \y'\i\\ great rigour. The same principle is received in our Courts of the law of nations ; they arc so far British Courts, that no maji can sue therein >vho is a subject of the enemy, unless under particular cir- cumstances that pro hac vice discharge him from the cha- racter of an enemy; such as his coming under a flag of truce, a cartel, a pass, or some other act of public autho- rity tiiat puts him in the king's peace pro hue vice. But otiierwise he is totally cxlex ! Even in the case of ran- soms' Avhich W(!re contracts, but contracts arising ex jure belli, and tolerated as such, the enemy was not permitted to sue in his own proper person for the payment of the ran- som bill ; the payment was enforced by an action brou"Iit by the imprisoned hostage iu the Courts of his own coun- try for the recovery of his freedom. A state in which con- tracts cannot be enforced cannot be a state of legal com- merce. If the parties who arc to contract have no right to compel the performance of tlie contract, nor even to appear in a court of justice for that purpose, can there be a stronger proof that the law imposes a legal disability to contract ? To such transactions it givc^ no sanction ; they have no le- gal existence ; and the whole of such commerce is attempt- ed without its protection and against its authoritj-. Byn- kcrshoek expresses himself with great force upon this argu- ment in his first book, chapter 7, where he lays down that the legality of commerce and the mutual courts of justice are inseparable : he sajs, that cases of commerce are un- distinguishable from cases of any other species in this re- spect. Si liosti semel pcrmitfas actiones exercere, difficile

' By the .S:'d Geo. III. c. 66. it is en.nrtrd, tiiat the ransom or any con- tract entered into by any of liis majr.'ty's suhjcrts for the rins^rii rtf any ship or iiierehandize captured hy an enemy is unlawful; and tli;it all coir- tracls and securities for that purpose are abf;;)liitely void; and tii:itev;rv person entering into ■such ;i contrjict shall forfeit 500/.

est

193 Of Mercantile Contracts for the

est (listin^uerc ox qua causfi oriautur ; ncc poUii animad- veitorc illani distiuctioncm iinquam nsu fuisse servatain.

But though all <radiiii^ between stibjrcts of states at "wat is illegal, as totally inconsistent with the relation at that time subsisting between t!ie two countries; yet by the di- spensing power vvliich is vested in the sovereign by most of the statcs-of Europe ' such an intercourse may be legalized, and by consequence the ability to sustain any contract by an appeal to the tribunals of one country on the part of the subjects of the other. This principle of the law of nations is recognised by the law of England. If a British subject obtains a license to trade, it will so far hgalize such trade, as to enable him to maintain an action in our Courts upon any contract arising out of it. Thus, the statute 43 Geo. III. c. 153. s. 15. having enabled the king, by order in council, to license the importation of certa^in goods, being British or neutral property, from the enemy's country, in neutral ships, a contract made by A. and B., British sub- jects, (the plaintiffs,) for the purchase of brandy from a house of trade in France, which was then at war with this country, to be shipped from thence in a neutral, on ac- count of A. and B. ; which contract was made in contem- plation of obtaining a license for that purpose, and Ivhich Wis accordingly obtained soon after the making of such contract, and before it was begun to be executed ; is a legal contract, ;uid may lawfully be guarantied in the first instance by C. and I)., other Biiiish subjects (the de- fendants) : ar-.d after such license obtaiaed, the guarantees are liable in dam^tges for tl.e nori-sbipment of the goods by the house in France on board a neutral vessel sent thither for that purpose ^.

> Lyiik. QuiPit. J. p. lib. i. c. 3. 2 Tiinson v. iMf rac, 9 East's Rep. 35.

• .. So

Sak and Purchase of Goods. 193

So ■where a trading with an alien enemy for specie and goods, to be brought from the enemy's country, in bis ihips, into our colonial ports, was licensed t)y the king's authority, it was held, that an insurance on the enemy's ship, as well as on the goods and specie put on board for the benefit of the British subjects, was incidentally legalized ; aiid that it was competent for the British agent of both par-? ties, in whose name the insurance was eifected, to sue upon the policy in time of war ; the trust not contravening any rule of law or of public policy, and there being no per- sonal disability in the plaintifion the record to sue '.

But though a trading between belligerent nations is le- galized by the king's license, yet it will not have the effect of removing the personal disability of an alien enemy re- siding in the hostile country, flagrante bello, to sue in a British court, of justice ; and as the right to sue on a con- tract of sale is a chose in action, no action can be main- tained on his behalf by his assignee or trustee^.

But if an alien enemy comes into this kingdom with a safe conduct, or by license, or under the king's protection, his disability to sue and be sued upon contracts relating to personal property is removed ' ; and it is not necessary to show an actual license in such case ; for, " if an alien ene- my comes here in time of war, and continues without dis- turbance, it shall be intended that he came with a li- cense •*."

With respect to the contracts made by prisoners of war in this country, it seems from the leaning of tiie opinions of the Judges iii the caseof Sparenburgh v. Bannatyne, that

' Kensington v. Inj^iis, 8 East's Rc]). 913.

' Brandon v. Nesbitf, 6 T. R. 23. Biistow v. Tovrers, Tbtd. .S5.

s W ells V. Williams, 1 Salk. 46. 1 Ld. Raym. 282. S. C. Usyaricha v, Noh'.e. 13 East's ftpp. 3.'«.

* 1 Lutw. 3-1, 35. S. C. reco2;nised by Mr. Justice Rooke in Maria v. Hail, 1 Taunt. 33, n. ; and by Mr. Justice Heath in Sparenburgh v. Banna- tyue, 1 Bj3. andPul. 171.

^ o prisoners

194 Of Mercantile Cmtracts for the

prisoners of war on their parole, by the license of the king, may make binding contracts. In that case, Lord Chief Justice Eyre said, " As to the grounds of policy, namely, that a benefit would result to the enemy from the plaintiff recovering ; it is a policy, perhaps doubtful, certainly re- mote, and which I do not hold to be satisfactory. I take the true ground upon which tl)e plea of alien enemy has been allowed is, that a man professing himself hostile to this country, and in a state of war with it, cannot be heard if he sue for tlie benefit and protection of our laws in the courts of this country. We do not allow even our own subjects to demand the benefit of the law in our courts, if they refuse to submit to the law and jurisdiction of our courts. Such is the case of an outlaw. Modern civiliza- tion has introduced great qualifications to soften the rigours of war, and allows a degree of intercourse with enemies, and particularly with prisoners of war, which can hardly be carried on without the assistance of our courts of justice. It is not therefore good policy to encourage these strict no- tions, which are insisted on contrary to morality and public convenience."

So from the above cases of Sparenburgh v. Bannatyne, and Maria v. Hall, it appears, that a prisoner of war, whe- ther an alien enemy or a neutral subject taken in the service of a hostile power, may sue for a remuneration for his per- sonal labour performed for a subject of this country. And this is sanctioned by the authority of Grot i us ' and Pufrendorf^

As to the law respecting contracts entered into by part- ners and agents, see those respective heads.

» De Jure B. ac P. lib. iii. c. 21. s. 2S. ' Lib. viii. c. 7. s. 14.

Sr.CTIO.V

Sale and Purchase of Goods, 195

SECTION II.

OF THE .SUBJECT MATTER OF A CONTRACT.

All tbings may legally be the subject matter of a contract if founded on a sufficient consideration, unless the execu- tion of such contract is contrary to public policy, or the principles of morality, or in contravention of the express statutes made for the regulation of particular trades.

Among contracts contrary to public policy, is that of buying and selling the current coin of the realm for more than its denomination. By statutes 5 and 6 Edw. VI. c. 19. it is enacted, that if any person or persons exchange any coined gold, coined silver, or money, giving, receiv- ing, or paying any more in value, benefit, profit, or ad- vantage for it, than the same is or shall be declared by the king's majesty's proclamation to be current within this his highness's realm and other his dominions, that then all the said coined gold, silver, and money so exchanged, and every part and parcel thereof, shall be forfeited, and the parties so offending shall suffer imprisonment by the space of one whole year, and make fine at the king's pleasure.

In the case of the King v. De Yonge, 14 East's Rep. 402. it was decided, that to purchase guineas at a higher rate than the current value, in bank of England notes, is not an offence within the meaning of this act.

But by Lord Stanhope's temporary act ' , to receive or pay for any gold coin current within tlie realm more than its true and lawful value, whether such value or advantage be paid or taken in lawful money, or in notes or bills of the bank of England, or in silver tokens, or any other means or contrivance whatsoever, is a misdemeanour.

» 51 Geo. III. c. 127.

o 2 It

196 Of Mercantile Contracts for the

It is also contrary to the policy of our law to ffive eflfect to any contract the object of which is to foicstall the mfir- ket, regratc, or ingross the article bouglit. And (herefuie, where goods are bought or contracted to be bought with such an intent, the contract is not only illegal and void, but no action is maintainable for the non-performance ot it '.

The agreement must not be contaminated with, or arise out of, an illegal transaction. And therefore no contract can be given effect to, which originates in an act contrary to the statute 7 Geo. II. c. 8. s. 5. (an act to prevent stock-jobbing,) which enacts, that all contracts to deliver, accept, or refuse any stock or share therein, of which stock or share therein the contracting parties are not actually pos- sessed or entitled to, shall be void, and the persons entering into such contract, and t!ie brokers negotiating the same, subject to a penahy of 500/.

On this statute it has been decided, that if A., who was employed as a broker for B. in stock-jobbing transactions, paid the differences for him ; but a dispute arising between them respecting the amount of A.'s demand, the matter was referred to C, who awarded oQOl. to be paid; on which A. drew on B. for 100/. part of the above, and in- dorsed the bill to C. after B. had accepted it : C. could not recover on tlic bill ^.

But though payment of the differences, or of a bill given for the differences, cannot be enforced ; yet if mon(?y is lent for that purpose, it may be recovered notwithstanding the statute 7 Geo. II. Thus, if two persons jointly engage in a stock-jobbing transaction, and incur losses, and employ a broker to pay the differences, and one of them pays the

» 1 Hawk. p. C. c. 80. Rex v. Waddington, 1 East's Rep. 142, 167. 2 Steers v. Lashley, 6 T. R. 61.

broker,

Sale arid Purchase of Goods, 197

broker, -with the privity and consent of the other, (he whole sum, he may recover a moiety from the other in an action for monc^y paid to his use '. Neither does the statute ex- tend to invalidate a bond given for reimbursing a com- pounder of diffi'rences, mIio had paid mom'y for himself and another jointly concerned with him, the sura he had paid on that other person's account^.

So no action can be supported on any contract made con- trary to the statute 6 Geo. I. c. IS. the twelfth section of which directs, tliat societies and partnerships (except the two cor- porations mentioned therein) sliall be restrained from under- writing any policy, or making any contract of assurance ; and if any person acting in such society or partnership shall pre- sume to underwrite any such policy, or make any contract of assurance, every such policy siiall be void, and the sum underwritten shall be forfeited .

And therefore a contract for a marine insurance in which the plaintiff did not alone stand the risk insured, but associated one or more in partnership with him, cannot be enforced K And although one partner in such illegal in- surances has paid the wliole of the h)ss, he will not be allowed to recover any part of the premiums from his co- partners ■♦.

A contract for the shipment of goods to the East Indies is void by the stat. 7 Geo. I. c. 21., which declares that all contracts and agreements whatsoever made by any of his majesty's subjects for the loan of any money by way of bottomry, " on any ship or ships in the service of foreign- ers and bound or designed to trade to the East Indies, and all contracts and agrecinents made by any of his majesty's

' Petriev. HannaY,3 T. R. 418. * Faikncy v. Reynous, t Bur.2069,

5 Sullivan V. Greaves, Sittings after E. T. 1789.

♦ iiooih V. iJodgsoi), 6 T. R. 403. Mitchell v. Cockburn, 2 Hen. Bl. 379.

subjects^

1S8 Of Mercantile Contracts for the

subjects, or any person or persons in trust for them, for tlic loading or supplying any such ship or ships with a cargo or lading of any sort of goods, merchandize, &c. shall be void'."

Neitlier can contracts made in violation of the revenue laws be made the subject of complaint in a court of jus- tice, llencc, Avhcre an agreement was made between two I)arties subjects of this country, for the sale and delivery of gooils in Guernsey, for the purpose of being smuggled into Enghlnd, it was held that the vendor could not maintain an action for Vae value of (he goods *. And in a subsequent case it was decided, that the circumstance of the vendor being an inhabitant of Guernsey would not vary the case, for he was still an inhabitant of this country ^.

So where the vendor was concerned in giving assistance to the vendee to smuggle goods, by packing them in the manner most suitable for and w ith intent to aid that pur-, pose, although the vendor was a foreigner resident abroad, and the sale and delivery of the goods were completed abroad, it was held, that the vendor could not resort to the laws of this country io give effect to his agreement +. But tlie rhere knowledge of (he vendor that the goods were pur- chased for the purpose of being smuggled is not sufficient to prevent his recovering in an action for the price of the goods, if the vendor was a foreigner resident abroad, and the sale and delivery were completed abroad \

Contracts in restraint of the general freedom of trade are also contrary to public policy. But an agreement not to use a trade in a particular place is legal ''. And therefore where a contract was entered into by a practising attorney,

> Li^htfoot V. Tenant, 1 Bos. and Pul. 551.

» Bigss '• Lawrence, :5 T. R. 454. 3 chigas v. Panalnma, 4 T. R.467. 4 Waymoll v. Head, 5 T. R. 509. s Holman v. Johnson, Cowp. 341. « MUchell V. Reynolds, 1 P. Wms. 181. Broad v. Jollyfc, Cro. Jac. 596,

that

Sale and Purchase of Goods, Vj^

that he would relinquish and make over to B. and G. i\io other aliorneys, his business as an attorney, as far as respected his practice in the profession within London, and one hundred and fifty miles from thence, and all his business as agent for any attorney, and that he would re- commend his clients and permit B. and G. to use his name in the business, has been held valid '.

No action can be supported on a contract contrary to the principles of morality ; for the law prohibits every thing contra bonos mores, and ex turpi causa non oritur actio ; or, in the elegant paraphrase of Lord Mansfield, justice must be drawn from pure fountains. And therefore the value of prints on obscene and immoral subjects is not recoverable ^. Neither can a contract for articles of dress % or for board and lodging^ , if furnished for the purpose of enabling the defendants to carry on the business of prosti- tution, be enforced. It is to be observed, however, that to relieve the defendant from tiie obligation of fulfilling the contract on kcr part, it must appear that the clothes were ' supplied, and the board and lodging furnished, in further- ance of the defendant's immoral way of life : a mere know- ledge of that fact will not produce such an effect 5; which distinction was also taken by Lord Chief Justice Eyre in Crisp V. Churchill, E. 34 Geo. IIL cited in Lloyd v. John- son, 1 Bos. and Pul. 340, in which latter case a prostitute was held liable for washing done for her.

It remains to speak of contracts entered into in contra- vention of statutes made expressly for the regulation of particular trades.

Much of the matter referable to this head having been

' Bunn V. Gay, 4 East's Rep. 190. ^ Fores v. Jolines, Esq, 4 Esp. N. P. C. 97. 3 Bowry v. Bennt-t, spinster, I Camp. N. P. C. 3^8. *Girardv v. Richardson, 1 Esp. N. P. C. 13. Howard v. Hodges, cited in 1 Sclw.N. P. 79.

» Per Lord Llleiiboroiigh in Bowry v. Bennct.

necessarily

200 Of Mercantile Contracts for the

necessarily treated of in other parts of this work, little re* mains to be enlarged upon here. It remains merely to observe, that whenever tl^e sale or manufacture of any article is prohibited by any statute, except in the manner prescribed, no action can be maintained upon any contract for the sale of such article, unless the requisites of the sta- tute have been complied with : and therefore if such article has been delivered to the vendee, it cannot be recovered from him in any form of action : it is a mere gift '.

But if a sale has been made in breacli of an act of par- liament, containing mere revenue regulations, which are pro- tected by a specific penalty, and there being no clause in the act making the contract of sale illegal, such sale is valid. And therefore an omission to take out a license for liberty to deal in exciseable goods will be no objection to an action for the recovery of the price agreed for on the sale of them *.

We shall close this division of our subject with a brief exposition of fraudulent contracts.

The agreement must be fair and honest, and not entered into for a fraudulent purpose ; for no action can be main- tained for the breach of a fraudulent contract. Thus, if all the creditors of an insolvent debtor consent to accept a com- position for their respective demands upon an assignment of his effects by a deed of trust, to which they are all par- ties, and one of them, before he executes, obtains from the insolvent a promissory note for the residue of his demand, by refusing to execute till such note be given ; the note is void in law, as a fraud on the rest of the creditors; and a sub- sequent promise to pay it is a promise without considera- tion, which will not maintain an action'.

The same principle was established in Jackson v. Lo-

i Law V. Hodgson, 1 1 East's Rep. 300. » Johnson v. Hudson, Ibid. 182. 3 Cockshott V. Bennet, 2 T. R. 763.

mas;

Sale and Purchase of Goods. 201

nias '; in Avliich case an insolvent had assigned over his ef- fects for the benefit of his creditors, and in tlie deed tliere was a proviso that the shares of those en ditors who did not execute it before a given day should be paid to tlie insol- vent ; it was held that an agreement made between the in- solvent and a creditor after that day, that the latter should sign the deed, and the former pay the remainder of the whole debt, was fraudulent and void.

So where A. having given B. a sum of money for goods in advancement of C, a secret agreement between B. and C, that C. should pay B. a further sum for the goods, was held to be void, on the ground that it was a fraud upon A.*

So where a trust deed was proposed to the creditors of an insolvent, a\ hereby they all engaged to accept payment of their debts by six instalments, the first four of which were guarantied by collateral security, the two last to remain upon the single security of the insolvent; but several of the creditors refusing to sign unless the plaintiiTsdid, the plain- tiffs stipulated privately with the insolvent, as the condition of their signature, that he should procure them collateral security for the two last instalments as well as the two prior ones ; and upon the faith of sucli private agreement the plaintiffs signed the trust deed, which the other creditors did also, but without a knowledge of the private agreement : such private agreement was held to be a fraud against the other creditors, and void, although the efiect of it was not to secure to the plaintiffs the payment of more money than the other creditors were to receive, but only further gecurity for the same sum ^

' 4 T. R. 166. " Jackson v. Diichaire, S Ibid. 551.

3 Leicester v. Rose, 4 East's Rep. 31 1 .

SECTION

202 Of Mercantile Contract% for the

SECTION III.

OF THE ASSENT TO OR ACCEPTANCE OF A CONTRACT.

la contracts or bargains for the sale and purchase of goods, where the contract or bargain is not to be presently executed by a simultaneous or consecutive payment or delivery to fix the contract, and transmute the property, the assent of the contracting parties is regulated by the sta- tute of frauds '. Before this statute, a bargain for the sale and purchase of goods at a future stipulated time, provided there was a quid pro quo, or that motive or consideration which our law requires to raise an actionable demand upon any contract, was unrestricted in distance of time, and not necessary to be accompanied and ascertained by those acts of payment, or delivery of part, or the whole, of the thing contracted for, which, in contracts or bargains to be pre- sently executed, were necessary to their obligation and com- pletion, and to the legal alteration of property in the sub- ject of the contracting parties *.

We sliall consider the nature of an assent to a contract in a threefold, point of view : — 1 . for the sale of goods in pos- session ; 2. for the sale of goods not in possession ; and 5. for the sale of goods on condition, or on sale and return.

1 . Tor the Sale of Goods not in Possession.

By the common law, upon all sales of goods the property was immediately vested in the vendee upon the making of the contract, although the actual possession was not obtained by him until tlie fulfilment of the stipulated terms. But by the statute of frauds^ it is enacted, " That no contract for the sale of any goods, wares, or merchandizes to the price of ten pounds and upwards, shall be good, except the buyer

' 29 Car. II. c. 3. *" Roberts on Frauds, 165.

3 29 Car. II. c. 3. s,. 17.

shall

Sale and Purchase of Goods. 203

shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the bargain, or in part of payment ; or that some note or memorandum, in writing, of the said bargain, be made and signed by the parties to be cliarged by sucli contract, or their agents thereunto lawfully authoyiscd." And by the fourth section of the same statute all executory contracts which are not performed within one year from the making, whether for the sale of goods (whatever may be the value), or the doing of any other act, must be in writing ; it being enacted, " That no action shall be brought whereby to clmrge any person upon any agreeinent that is not to be performed within the space of one year from the making thereof, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorised."

In the exposition of the seventeenth clause of this statute, it has been determined, that executory contracts, that is, "where the goods contracted for are to be delivered at a fu- ture time, are within the statute, as well as such as are to be completed immediately ; and consequently if tlie requi- sites of the statutes have not been complied with, viz. nei- ther earnest, delivery of a part of the goods, nor agreement in writing, such contracts are void ' .

The fourth clause of the statute is confined to those cases where it clearly appears from the tenor of the agreement to have been tlie understanding of the parties, tliat the con- tract was not to be completed within a year from the time of making it^ ; but it does not extend to such contracts as depend upon a contingency, and which by possibility, and

« Rondeau v. Wyaft, 2 Hen. Bl. 63, Alexander v. Comhor, 1 Ibid. 20. Cooper V. Elston, 1 T. R. 14. •^ 11 East, 14a.

in

204; Of Mercantile Contracts for the

in the contemplation of the parties, may be performed withia the 3 car, though the conlino^ency on which they depend does not, in fact, happen within that time ; for '* a contin- g-ency isnotwithin theintent of the statute, nor any casewhich depends upon a contingency. It docs not extend to cases where the thing only may be performed within the year '." So, if the subject of the contract is not in esse, and capa- ble of an immediate delivery at the time of contracting; as where the contract was for a chariot to be made *, or for corn to be threshed ', or fur a waggon to be made •* ; or for a barge to be built ' ; or for a crop of grass, which at the time of the bargain for the sale of it was unsevered ^ ; such contracts are not within the statute, and therefore will be valid, notwithstanding its requisites have not been complied with. And in these cases no property vests in the vendee until the thing contracted for acquire the character in which it is to be delivered, and that although the whole price has been paid in advance '. But as soon as the thing contracted for is complete and ready for delivery, the vendee is enti- tled, on tender of the price, to the goods, and the vendor, to the price, on tender of the goods ^.

But if it appears to have been the understanding of the parties contracting, that the contract was not to be com- pleted within a year, though it might and was in fact part performed within that time, it is within the statute, and if not in writing, &c. cannot be enforced*^.

The next consideration is what may be considered a sufficient acceptance within the statute.

' Per Dennison J. in Fenton v. Emblers, 3 Bur. 1281. * Towers V. Sir John Osborne, 1 Str. 606.

3 Clayton V. Andrews, 4 liur. 2001.

4 Duinnore'v. Tavlor, IVake's N- P. C. 41. SMucklowv. MansKs, I Taunt. 318.

« Crosby v. Wordsworth, 6 least's Hep. 60?.

7 Muckiow V. Mans;les I Taunt. 318. » 1 Sir. 506. Noy'sMax. c. 42,

» Boydell t. Drummond, 11 Last's Hop. 14'2.

Where

Sale and Purchase of Goods. ^Qj

Where the goods are ponderous and incapable of an actual delivery, it may be done by something that is tan- tamount : a symbolical delivery, as of the key of (he ware- house in which the goods are lodged, or other indicia of the property, will satisfy the slafute '.

So also a constructive delivery may arise from words, as where the vendee desires the vendor to keep the goods b;ir- gained for in his possession for an especial purpose, and the vendor accepts the order ; this is a sufficient delivery within the statute ^. . ,

A written order given by the seller of goods to the buyer, directing the person (viz. the wharfinger or warehouseman) in whoi»e custody the goods are, to deliver them to the ven- dee, is a sufficient delivery within the statute ^ : and that whether a transfer is made into the name of the purchaser in the v^harfinger or warehouseman's books or not^.

So it seeiuSj that if the goods bargained for remain in the hands of the vendor, tlie acceptance of warehouse-rent for them afier the period when they ouglit to have been taken away, according to the terms of the sale, amounts to a com- plete transfer of tliem to the purcliaser, and consequently a delivery within the statute ^

It has also been decided, that while the goods remain in the custody of the vendor, if the purchaser, with the know- ledge and approbation of (he vendor, exercises any act of ownership over them, as by a resale to a third person, it will amount to a delivery and acceptance within (he sta- tute ^

So if a purchaser write his name or initials on the goods

' Chaplin v. Ro2:ers, 1 East's Rpp. 192.

' Elmore V. Stone, 1 Taunt. 458.

3 Scrle V. Koeves, « Esp. N. P. C. 593,

♦ Harman v. Anderson, ^ Camp. N. P. C. 245. |

5 Hnrry v. lMano;les, I Ibid. 452.

6 Chaplin v. Rogers, I East's Rep. 192.

bargained

206 Of Mercantile Conlractsfor the

bargained for, or the same be done by his order' ; or if he accv pis and actually receives a sample Avliich is absolutely part of the commodity sold*; or if the goods be vveiglied for the purpose of delivery, though put into another vessel than that -which the vendee desired ^ ; such conduct Avill be a sufficient delivery and acceplance to satisfy the statute.

But to constitute an acceptance -vvithin the statute, such acceptance must have been made in affirmance, and with a view to the performance, of tlie contract ; and therefore, if, on examination, the goods, being found to be inferior iir quality to those ordered, are returned to the vendor, it will not amount to a sufficient acceptance by the vendee so as io render him liable for their value*.

As to what shall be deemed sufficient earnest to bind the bargain, Mr. Justice Blackstone says, " that if any part of the price is paid, if it is but a penny, or any portion of the goods delivered, the property is bound ^." From the word- ing of the statute, however, which speaks of a partial deli- very o£ the goods, or the giving of somelhing in earnest, or in part of payment, it does not aprx'ar absolutely that the. earnest must consist of money : the deposit of a ring, a glove, or any otlicr article, would, it should seem, equally satisfy the statute.

The third requisite enjoined by the statute, in order to render valid a contract for the sale of goods above the value of ten pounds, and for which immediate payment lias not been made, is, " that a sufficient note or memorandum in writing of the bargain must be signed by the party souglit to he charged by the contract, or by his agent thereunto lawfully authorized."

> Hocison V, Le Bret, 1 Camp. N. P. C. 233. Anderson v. Scott, Ibid. 235. ^ Hinde v. Whitehojic and Galan, T Eusfs Rep. 55S. Klinitzv. Surry, 5 j'.tp. N. P. C. 267. 3 1 "Bl. Rep. 600. •» Kent v. Huskinson, 3 Bos. and Pul. 233-

5 2 B). Com. 44".-

But

Sale and Purchase of Goods. 207

But tlioiigli the signature of tlie party to be charged, or of his agent, is required by the statute, and that otherwise the bargain will be void ; yet it has been held, that the sig- nature of the party seeking the benelit of such a contract is not necessary '.

The names, however, of botli the contracting parties must appear (tlie name of the purchaser as well as that of the seller) either on the face of the memorandum, or in some- thing which is tliereby referred to, or connected wilh it by legal reference. And therefore, where a note was made by the plaintill's clerk in a common memorandum book, spe- cifying the quantity of the commodity purchased, the price, and time of delivery, and in which note the commodity w a^ stated to be bought of the vendor, without saying by whom ; it was held, that the vendee was not entitled to the beueiit of his contract -.

As to what is a sufficient wriUng willi'n the intent of the statute, it seems, that the writing or printing (as the deli- very of an invoice or a printed bill of parcels) of the party's name, on any part of Oie memorandum of the contract, will be considered as a signature K So if an agreement is drawn up in the party's own hand-writing, beginning " I ^. B. agree," and a place is left at the bottom for a signature, but which is never signed, it may be considered as a note or me- morandum within the statute^. The initials of the party also are considered as a sufficient signature to satisfy the sta- tute 5.

A letter containing the terms of an agreement, or wliich upon the face of it refers (6 any other writing which docs, amounts to a suihcient memorandum, or note in writiiii!,-,

' E,;^(>rton V. Matthews, 6 East's Rep. 306. " Ch-rimpion v. PUiininer, 5 tsp. .\. P C. 2iC}. 2 Saimders;;ii v. .7ac!<swr, 2 Hoi. and Pul.^^ay. < Knisrlit V. Ccckford, ! .Esp. N. P. C. 190. 5 I'hilliniore v, Barry, 1 Camp. N. P. C. 513.

within

208 Of Mercantile Contracts for the

within (he meaning of the statute *. For, if a letter contains all the terms, and describes the consideration, and all the circumstances, so that by the contents of the letter it can be connected and identitied with the Agreejuent, that letter, which not only is not a signature, but is the last of all things that can be called signing the agreement, is a writing signed, which ascertaining the contents of the agreemeiit, amounts to a note or memorandum of it, and therefore satisfies the statute*.

So a subscription as a witness only, by a parly Mho is a principal in the agreement, . is a suiiicient signing within the statute, and will bind him'.

Also, if a person sufficiently autliorised as agent to sign an ajreenient, sign it t»s a witness, it is sufficient •*.

Sealing an agreement, without signing it, has been held to be a signing within the statute, if done in the presence of a witness ^

So from the cases of Harrison v. Harrison, 8 Ves. Jun. 185. and Addy v. Grix, Ibid. 501. it appears that signhig b}' a mark is a sufficient signature.

W^e come now to inquire m ho is an agent of the party to be charged for the purposes of this act.

With respect to the sales of goods by public auction, it has been held, that the auctioneer is an agent for the buyer as well as the seller, and tliat a memorandum made by him of the bargain will bind both parties ^. But in order io clothe the auctioneer with this character, the catalogue must contain a memorandum of the terms of the contract. And therefore, where an auctioneer, having previously distri-

' Moor V. Hart, ? Chan. T?pp. 147. IIod9:;son v. Hntrhin«on, 5 Yin. 5??. Coleman ". Ui»rott, 5 Vin. 527. Saunderson v. Jackson, i> i5os. and Pul. 2^8. « Per Lord 5 Idon in Co!e,s v. Trecothick, 9 Vf-s. Jun g'M. 3 Welford v. Beazelny, I Ves. 6. * Coles v. Trecothick, ut ante.

S Lemayne v- Staii't-y, .'i Lev. 1. * Simon V. IMetivier, 1 iii. Re).). 599, Emiaeraoti v. Hcelis, 2 Taunt. 33.

buted

Sale and Purchase of Goods . 209

buleJ printed catalogues of sale, at the time of the sale read from a w ritJeii paper the conditions on which the goods enu- luerated in the catilogiie were to be sold ; it Mas held, that the \Nriting of t!ie i)urchaser's name in such catalogue by. the auctioneer, against the lot purchased, would not binji> the purchaser, the two papers being neitlier externally an- nexed Jior containing aiiy internal reference to each otlier '.

So where a broker is authorised by one man to sell goods, and to buy such goods for another, an entry in his books ftf a sale of these goo:ls from one to the other, signed by hiiu, is a binding contract between the parties, without any bought and sold note being sent to them ; for the sending of such note is not for tiieir approbation, but only to inform them of the terras of the contract ^.

But a memoranduin of the sale of goods cannot be signed hy one of the contracting parties, as the authorised agent of the other : tiie agent must be a third person '.

As to the manner of appointing such agent, it has been repeatedly decided, that a parol appointment is sufficient "♦; and that the authority need not be given for a particular purpose : a general authority is sufficient.

And such authority may be countermanded at any time before a memorandum of the contract of sale is written and signed by the broker ; although he has previously entered into a verbal agreement to sell the goods K

A power to contract does not seem. to come within the scope of the general authority of a mercantile clerk or agent, unless specially authorised for that purpose.

We have seen, that at common law, upon all sales of goods, the property was immediately vested in the vendee

' Hind? V. Whiteliouse, T East's Rep. 558; and see Bojdell v. Drummond, 11 lhid.142. ' Hevman v. Ncale, 2 Camp. N. P C. 337. 3 Wright V. Dannah, Ibid. yO'2. « Chapman v. Partridjce, 5 Esp. N. P. C. 253. .« Farmer v. Robinson, 2 Cainp. a*J. P. C. 339.

F upon

2 10 Of Mercantile Conirnctsfor the

upon the making of the contract : where the requisitions of the contract have been complied uith, the effect is similar, the property is changed, and absolutely vests in the vendee from the time of the sale, and remains at his risk, although no actual change of possession should have taken place. And therefore, whatever damage may happen to the goods while in the vejidor's possession, the loss will fall upon the purchaser'.

But this is to be understood only where no act remains to be done on the part of the vendor ; for where any act of the seller, such as counting, weighing, filling up, &c. re- mains to be done for the purpose of ascertaining the exact quantity sold, the property in the goods does not vest ab- solutely in the vendee, before the counting, weighing, &c. which was to precede the delivery, and to ascertain the price ; but, till such act is done, remains at the risk of the vendor^.

Thus, where a sale note for the purchase of Miy tuns of Greenland oil was delivered by the seller's broker to the purchasers, to be paid for by their acceptance, payable at a future day ; and they afterwards received from the sellers an order from their wharfingers for the delivery of the fifty out of ninety tuns of their oil ; yet as the custom of the trade was for the casks to be searched by the sellers' cooper, and for a broker on behalf of both parties to ascertain the foot dirt and water in each, (for which allowance was to be made) and then the casks were to be filled up by the sellers' cooper at their expense ; all which was to precede the delivery to the buyer : it was held that the sale was not complete to pass the property, but that the sellers, on the insolvency and subsequent bankruptcy of the buyers, before such acts done and delivery made, might countermand it'.

> PhiUimore v, Barry, 1 Camp. N. P. C. 573.

'Hanson V. Meyer, 6 East's Rep. 614. RugJ v. Minett, 11 Ibid. 2U>. Zagury V. Furnell, 2 Camp. N. P. C. 240. 3 V^^allace v. Breeds, 13 East's Rep. 522.

But

Sale and Purchase of Goods. 211

But altliough some act remains to be done between the vendor and the persons who retain the custody of the goods, for the purpose of ascertaining either the quantity or the price; yet ifnosnchact remains to be done Ijctween the vendor and vendee to perfect the sale, the sale is complete. Therefore where A., having forty tuns of oil in a cistern, sold ten tuns to B. and received the price, and 13. sold the same to C. and took his acceptance for the same at four months, and gave liim a written order on A. for delivery, who wrote and sio-ned his acceptance upon the said order ; but no actual delivery was made of the ten tuns, which con- tinued mixed with the rest in A.'s cistern ; it was IvAd to be a complete sale and delivery in law of the ten tuns by B. to C. ; nothing remaining to be done on the part of the seller, though, as between him and A., it remained to be mea- sured off'.

2. For the Sale of Goods not in Possession.

Among mercantile men it is usual to contract for the sale of goods which they have reason to expect -^vill be consign- ed to them by their correspondents abroad. And in this case the contract is complete, though the execution of it is suspended.

Thus, if a contract is entered into for the sale of goods by a particular ship on arrival, it means on the arrival of the goods which the ship is expected to bring ; and if the ship arrives empty, without any default upon the pari of the vendor, he is not liable to the purchaser for the non- delivery of the goods ^.

So, if the vendor contract for the sale of all the gooJs which his agents abroad may send by certain vessels, yet lie will not be answerable to the vendee for more than has been actually shipped on his account. Thus, A. sold to

» Wliitehouse v. Frost, 12 East's Rep. fil4. » Boyd V. Siffkin, 2 Camp, N. P. C.-32T

p 2 B. all

212 Of Mercantile Contracts for the

B. all the hemp Hiat might be shipped on board certain vessels at Ria^a, not exceeding three Imndred tons, by C. the agent of the concern. C. shipped on board these ves- sels only sevcnt3'-one tons of hemp on account of A. ; but upwards of three hundred tons on account of other persons. Held, that the contract must be confined to such hemp as

C. should ship as agent to A. ; and that A. was not answer- able to B. for more than seventy-one tons'.

But in contracts of this kind, if the vendor absolutely engages that tlie goods agreed to be sold shall actually be shipped, and the shipment is prevented by the seizure and condemnation of them as enemy's property, he will be obliged to make good the contract *.

3. For the Sale of Goods on Condition^ or on Sale and Return.

If goods are sold for such a price as A. shall name, when A. shall have fixed the price, the contract is complete ; and if the vendor sells the goods between the time of the contract and the ascertainment of tlie price, an action on the case lies against him' . But if the contract becomes impossible by the act of God, or of the person who was to name the price, as by his death, refusal, or the like, the contract is absolutely void •*.

W licre goods are sold upon sale or return, no property in such goods vests in the conditional vendee, until the completion of the condidon of the resale. But though, whilst the goods remain unsold in the hands of such condi- tional vendee, no absolute property vests in him ; yet, un- der the statute 21 Jac. I. c. 19. s. 11. they will pass by as- signment under a commission of batikruptcy against him, as goods in his possession, order, and disposition ^

If goods be sold to a trader, with a proviso, that in case

' Hay ward v. Srougall, 2 Camp. N. P. C 56.

' Splidtv. Heath and others, Guildhall Sitt. March 7th, 1809, 2 Camp. N. P. C. 57.n.

3 Kit. 181. ♦ Co. Lit. 206. b.

5 Livesay v. Hood, 2 Camp. N. P. C. 83.

of

Sale afid Purchase of Goods. 123

of bankruptcy the vendor may retake them, such a condi- tion is void under the statute 21 Jac. J. c. 18. s. 11. if the goods remain under the control and disposition of the ])ankrupt ' ; for the statute enacts, " that if any persons shall become bankrupt, and at such time as they shall so become bankrupt, shall, by the consent and permission of the true owner and proprietors, have in their possession, order, and disposition, any goods or chattels Avheieof they shall be reputed owners, and take upon themselves the sale, alteration, or disposition as owners ; that in any such case the commissioners, or the greater part of them, shall have power to sell and dispose of the same, to and for the benefit of the creditors who shall seek relief by the commission, as fully as any other part of the estate of the bankrupt."

SECTION IV.

OF THE TIME WHEN A CONTRACT MAY BE MADE.

By the statute 29 Car. II. c. 7. s. 1. it is enacted, that no person or persons whatever shall publicly cry, show forth, or expose to sale, any wares, merchandizes, goods, o" chattels whatsoever, upon the Lord's day. But it has been held, that a sale of goods made on a Sunday, which is not made in the exercise of the ordinary calling of the vendor, or his agent, is neither void at common law nor by the statute. Thus, where it appeared that the plaintiff, who was a banker by trade, had sent his horse to one Hull, who kept a commission sial)le for the sale of horses by auction, for the purpose of being sold ; and that the defendant came on a Sunday to the stable, and, after having tried the horse, requested that he might carry it to show to a Major Mac- kensie, that he might try it. Hull told him that the price of the horse at the hammer was a hundred guineas, but if the defendant would bring him back 100/. it would suffice. That he must either bring 100/. or return the horse by two

' Holroyd v. Gwynne, 2 Taunt. 1.7S.

o'clock

214; Of Mercantile Contracts for the

o'clock at the furthest ; and that if the defendant did not re- turn it by two o'clock, the horse should be his own. The horse not being brought back till eight o'clock, Hull refused to receive it, and insisted tiiat the sale was complete at two o'clock. To bring this case within the act, said Sir James Mansfield, we must pronounce tliat either Drury or Hull worked within their ordinary callings on the Sunday. But the sale of horses by private contract was not Drury's ordi- nary calling, nor was it Hull's ; his calling was that of a horse-auctioneer, and he was not within his ordinary calling in selling this horse by private contract; and therefore, al- though it is to be lamented, the sale must be held good '<

SECTION V.

OF THE PLACE WHERE A CONTRACT MAY BE MADE.

As property may in some cases be transferred by sale, though the vendor has none at all in the goods, it is expedient that sufficient notoriety should attend such sale as to secure the purchaser of his purchase. The general rule of law is, tiiat all sales and contracts of any thing vendible, in fairs or mar- kets overt, (that is open.) shall not only be good between tlie parties, but also be binding on all those that have any right or property therein -. And for this purpose, tlie Mirrour ' informs us, tolls were established in markets, viz. to testify the making of contracts ; for every private con- tract was discountenanced by law : insomuch that our Saxon ancestors prohibited the sale of any thing above the value of twenty-pence, unless in open market ; and di- rected every bargain and sale to be contracted in the pre- sence of credible witnesses'*. Market overt in the coun- try is held only on special days, provided for particular towns by charter or prescription ; but in London every

' Drurj' v.Defontaine, 1 Taunf. 135. 2 2 Inst. 113. 3 Cap. 1,8.3,

* LL. lithds. 10,11. W ilk. 80.

day,

Sale and Purchase of Goods-. 215

Aay, except Sunday, is market-day '. The market-place, or spot of ground set apart by custom for the sale of par- ticular goods, is also in the country the only market-place; but in London every shop in which goods are exposed pub- licly to sale is market overt, for such things only as the owner professes to trade in ^ And therefore, if goods are stolen and sold openly in a scrivener's shop on the market- day, the property is not changed by the sale ; for a scri- vener's shop is not a market overt for plate; etsic de simili- bus'. Neither, had the sale been in the shop of a gold- smith, would it change the property, if it had been either behind a hanging, or in any secret manner, so that any that stood or passed by could not see it*. So, if the sale be not in the shop, but in the warehouse, or other place of the house, or where the windows of the shop are shut, the property will not be changed ^ Neither is property changed Avhich lias been sold to a bona fide purchaser, at a wharf where goods of the same sort are usually sold, if the sale lias been without the authority of the owner of the goods ^. And, even in market overt, if the goods be the property of the king, such sale (though regular in all other respects) will in no case bind him ; though it binds infants, femes coverts, idiots, and lunatics, and men beyond sea or in prison ". So likewise, if the buyer knows that the seller has no right ; or there be any fraud in the transaction ; or he knows the seller to be an infant, or ferae covert not usually trading for herself^ ; the owner's property is not bound thereby. Nor will this rule of market overt extend to cases where the treaty for the sale was begun out of mar- ket J for the sals must be originally and wholly made in the iair or market 'K Nor to sales not at the usual hours ; for though a sale made between sun-setting and sun-rising is

' See the case'; cited in 5 Co. 81, in notes. ^ 5 Co. 84.

3 Cro. Jac. ey. 4 5 Co. 84. 2 Rol. Abr. tit. Market Overt, 50.

5 Il)iJ. 6 Wilkinson v. King, -2 Camp. N. P. C. 333.

7 i> Inst. 7 J 3. « ibid. " 9 Ibid,

binding

216 Of Mercantile Contracts for the

binding between the parties, yet it will not divest the own- er's property in his goods'. Neither docs it extend to pa'.vns in market overt, for there can be no market overt lor pawning^. Also, by statute I Jac. I. c. 21. it is pro- vided, (hat the sale of any goods wrongfully taken to any pawnbroker in liondon, or within two miles thereof, shall not alter the properly : and therefore, if gooJs be stolen and pawned, the owner may maintain trover against the pawn- broker '. Nor <o sales to a man of his own goods, unless the property has been previously aileved by a former sale. And r.otwilhstandiitg any number of intervening sah s, if the origi- nal vendor, who sold without being entitled to the property, comes again into possession of the goods, the original owner may take them, when found in his hands who was guilty of die first breach of justice*. So, if the owner has used due diligence in prosecuting the thief to conviction, he shall have restitution of his goods, though they have been sold in market overt ^ But the owner of goods stolen, who has prosecuted the thief io conviction, cannot recover the value of his goods from any one who has purchased them bona fide in market overt, and scld them again before the con- viction, notwhhstanding the owner gave him notice of the robbery while they were in his possession ^. By which wise regulations, o!»serves Sir William Blackstone, the common law has secured the right of the proprietor in personal chattels from being divested, so far as was consistent with that other policy, that purchasers, bona fide, in a fair, open, and regu ar maimer, sl>ould not be afterwards j)ut io dilhculties by reason of the previous knavery of the seller'. But there is one species of personal chattels in which the

' 2 Inst. 713. " Harfop v. IIoarc,2 S«r. 1187. 1 Wils. 8. 3 Atk. 44.

3 Packer v. Gillies, ^2 Camp. N. P. C. "AM. n.

3 Hilt the statnie do s not i>rot<'ct ;!;()()(ls obtaincfl under fal;-p pretenrrs : and there fore, where goods so <;(>tainetl are pHwiieii, it seems that the paw- nee is rntiilod fo retain his lien aj^aiiist t!ie tnie ov^ ner, thoui'h he has prose- cuted the otl'eudcr to conviction. Parker v. Patrick, 5 T. ti. 175.

<2Inst.7l:i. 5 It.id. 21ilen. Vlll.r. 11.

" llorw ood V. >.mi.h, 2 T, R. 750. 7 2 Q\, Cora. 450.

property

Sale and Purchase of Goods. 217

property is not easily altered by sale, even in market ov( rt, without the express consent of the owner, and tliat is horses. For a purchaser gains no property in a horse that has beea stolen, unless it be boiiglit in a fair or market overt, accord- ing to the directions of the statutes 2 P. and M. c. 7. and 31 Eliz. c. 12. By these statutes it is enacted, that the horse shall be openly exposed, in the time of such fair or nia;kct, for one whole hour togetlier, between ten in the morning and sun-set, in an open part of the market to be set apait ■for that purpose ; and that all the parties to tlie bargain shall appear with the horse before the toll -gatherer, who must enter in a book the price, colour, and one mark at least of the horse^ with the names and dwelling-places of such parties properly attested. Nor shall such sale take away the property of the owner, if within six months af(( r the horse is stolen he puts in his claim before some magis- trate, where the horse shall be found; and, within forty days more, proves such his property by tlie oath of two wit- nesses, and tenders to the person in possession such price as he bona fide paid for him in market overt. And in case any one of the points before mentioned be i:ot observed, such sale is utterly void ; and the owner shall not lo.^e his property ; but, at any distance of time, may seize, or brin^ an action for his horse, wherever he happens to find him.

SECTION VI.

OF THE FULFILMENT OF THE CONTIIACT BY PAYMENT AND DELIVEUY.

]. ^s lo Delivery.

As much of the matter v.hiGh is properly referable to the tide Delivery of Cioods has unavoidably been discussed in the third section of this chapter, little is left to be enlarged upon in this place. The cases, however, stated in that part of the work are only such as arose upon or out of the

statute :

218 Of Mercantile Contracts for the

statute: it remains to state what constitutes a delivery, in law.

The making of goods to be delivered, or otherwise sepa- rating tlieni from a larger quantity, of which they formed a part, w ith a view to the delivery ' ; or the delivery of goods to a carrier to be forwarded to the vendee ^, and a fortiori, if delivered to a carrier named by the vendee ' ; or the de- livery of goods to a wharlinger •» ; have all been construed to be evidence of a delivery, and consequently to entitle the vendee to the price of the goods. So the shipment of goods, according to the order and on tlie account of the consignee, "will operate as a delivery K

But the mere act of packing goods sold in cloths which liave been furnished by the vendee is no delivery ^\

It has been held, that where several articles have been or- dered at tiie same time, at separate and distinct prices, but forming one entire contract, (he vendor cannot by a deli- very of some of the articles entitle himself to the price of thciu separately, as in the case of a separate contract for each article: unless the veiidee accepts any one article so

delivered ".

2. As to Payment.

Where no time of payment is specified in the contract of sale, the money is demandable immediately upon the delivery of the goods*'. But wiiere the term of credit is specified, as where acceptances are given by the vendee for the value of the goods, or where a period is fixed for the payment, without the vendee being required to give any negotiable security in the mean time, the contract being executory on the part of the vendee till the time of such ac- ceptances becoming due, or till the expiration of such pe-

» Keil\vav,77. pi. 25. * Duttoii v, Solomonson, 3 Bos. and Pul. 582-

" Dawes V. Peck, 8T. R.?,30.

« Cooke V. Liidiow, 2 Bos. and Pul. Hi).

5 Huxhara v. Smith, 2 Camp. N. P. C. 19. Brown v. Hodgson, Ibid. 36.

6 Goodal! V. Skclton, 2 Hen. Bl. .316.

' Champion v. Short. 1 Camp. N. P. C. 53. * 1 Salk. 113.

riod

Sale and Purchase of Goods. 219

riod of credit, the vendor cannot maintain an action for tbe value of his goods in the interim.

Thus, where goods were sold upon a contract tliat the vendee was to pay for them in three montlis hy a bill at two months, it was held, that the contract was for a credit of live months ; and therefore that assumpsit for goods sold and delivered could not be brought at the end of three months upon t!ie neglect of the vendee to give his bill at tv,o months : for when, by the terms of the sale, the vendee is to give his acceptance for the value of the goods at any given time, and omits or refuses so to do, the remedy is by a special action on the case for damages for the breach of contract in not giving or accepting such bill'.

Where goods had been sold at two months credit, to be paid for by a bill at twelve months, and more than four- teen montlis had expired between the delivery of the goods and the commencement of the action ; an action for goods sold and delivered is maintainable ^

But thougii, where credit has been given at the time of the sale of goods, no action lies till the expiration of the time given ; yet if the credit given was a voluntary act of the vendor, subsequent to and not making part of the ori- ginal contract, or that the purchase was not bona fide on the part of the vendee, it may at any time be revoked % unless in such case the vendor takes a bill or note payable at a future day ; and then, if the bill or note is a valid se- curity, he cannot commence an action for the original debt until the time the bill or note has to run -*.

In some branches of trade custom has fixed one universal

' Musspn V. Prire and another, 4 F.nsfs Rep. Ml. Anrl see IMillar v. J<haw, cited in tlie same case, and Uuttun v. Solomoiiscii, 3 Bos. and J'ul. 58^2.

^ Brooke v. W hite, 1 Bos. and Pul. N. R. S.SO.

3 l)e Symons v. Minclmicii, 1 Esp. N. P. C- 4^0.

< Stedinaa v. Gooi h, Itiid. 3.

standard

220 ' Of Mei- cant He Contracts for i ke

standard as to (be period of credit upon sales of goods ; and upon sales in the usual codrse of such trades, where no spe- ci/ic stipulation is made in the contract, this customary credit is as mucli a part of the contract as if expressly agTced uppn, tlic law implyinij^ that all persons deal ac- cording to tiie general usage, unless the contrary appears.

Where by the terms of the contract part of the money is paid in hand, and a security for the remainder is taken at a future day, but which security is given on a wrong stamp, the vendor cannot sue till the period of payment to be given by the security arrives '.

So V. here the vendor agrees to deliver certain goods at a certain price, witliin a limited time, he cannot demand payment till the whole of the goods are delivered ; for the contract is entire, and carmot be split, and therefore no ac- tion lies until the whole quantity is delivered, or until the time of delivering the whole has arrived *.

The permission of the vendor for the purchaser to carry away part of the goods \\ ithout payment is no waiver of the vendor's right to be paid for goods on delivery ; such per- mission is only a dispensation pro tanto, and the vendor is entitled at any time to stand on his right to be paid accord- ins: to the contract '.

As in all salts of goods the law implies a contract that those goods shall be paid for ; if payment of goods bought or sold be made by a check or draft upon a banker, and before payment thereof is obtained the banker fails, it is now clearly settled, that the original debtor is not discharged, unless the par(y who took the check, &c. has been guilty of negligence in presenting it for payment, or that it was expressly agreed at the time of giving it, tiiat it should be taken as payment, and that the party taking it should run

• Swears v. Wc!l#, 1 Esp. N. P. C 317.

•^ Waddiiiston v. OI".ver,2 {5o5. and Pi;l. N. F,. 61.

3 J'avne v. SiiaJbolt, 1 Camp. X. P. C. 427.

all

Sale and Purchase of Goods. . 221

all risks of ils being paid '. It lias also been determined, that if a creditor is offered cash in payment of his debt, or a clieck on a banker from an agent of his debtor, and he prefers the latter, that the debtor is not discharged if the check is dishonoured ; although the agent fails witii a ba- lance of his principal in his hands to a larger araount ^. But where goods were sold by A. to B. , for wliicli the latter was to pay by a bill at three months ; and B. gave A. a check on his bankers (who were also the bankers of xV.) re- quiring them to pay A. on demand by a bill at three montiis; and A. paid the check into the hands of the bank- ers and took no bill from them, but the araount was trans- ferred in the bankers' books from B.'s account to A.'s, with the knowledge of both, and the bankers failed before the check became due : held diat A. could not recover the value of the goods against B., for such transfer amounted to pay- ment'. In a case, however, under the same circumstances, where the amount had not been transferred in the banker's books from the account of the vendee of the goods to that of the vendor ; it was held, that in the event of theTailure of the banker, the vendee was still liable for the value of the goods ^.

Whether interest ought to l)e allowed upon a de- mand for goods sold and delivered, some contrariety of opinion has subsisted. The law respecting this matter may however be collected from what fell from Lord EUenborough in the case of De Haviland v. Bowerbank ^ His lordship laid it down as a general rule, " that in- terest ought to be allowed only in cases where there is a contract for the payment of money on a certain day, as on bills of exchange, promissory notes, &c. ; or where

' Ex parte Blackburn, 10 Ves. Jun. 20k Owenson v. Morse, 7 T. R. 65.

« Everett v. Collins, 2 Camp. N. P. C. 515.

3 Holton V. Richard, 6 T. R. 139.

t Brown v, Kewlcy, 2 Bos. and Pul. 518. « 1 Camp. N. P. C. 51.

(here

222 Of Mercantile Contracts for the

there has been an express promise to pay inierest ; or where, from the course of dealing between tlie parties, it may be inferred that tliis was (heir intention ; or where it can be proved that the money Jias been used, and interest has been actually made. In the case of Gor- don V. Swan ', his lordship observed, that what he said as to payment to be made on a certain day, must be understood to refer to written contracts only, such as bills of exchange, promissory notes, &c.

By the above-mentioned case of Gonlon and Swan, it appears that interest is not allowable on a demand ibr goods sold and delivered, unless a bill of exchange had been agreed to be given for the payment of the goods ; and then tlie vendor will be entitled to interest for the price of his goods from the lime the bill, if given, would have become due-; and that whether the vendee has or has not accepted the goods ^.

So where, from the usage of a particular trade, the in- tention of the parties that a book-debt shall bear interest can be collected, interest will be allowed-*.

SECTION VII.

OK THE AVOIDANCE OR ALTERATION OF A CONTRACT.

A CONTRACT of sale cannot be rescinded but by the mutual consent of the contracting parties, or by the origi- nal terms of the contract : it is not in the power of one alone to do it, unless both parties can be put in statu quo as before the contract '.

And if one of the contracting parties assents to the contract being rescinded, if the other party does any act

» 12 East's Rrp. 419.

' Marsli;ill v. Poolr, 13 East's Rep. 98. Porter v. Palsgrave, 2 Camp. K . P. C- 472.

3 Boyce v. Warburfon, 2 Carnp. N. P. C. 480.

< r;,ridowes V. Hopkins, l)oii^.:i7(>.

s Smith V. Field, 5 T. R. 402. Tow crs v. Barrett, 1 Ibid. 133. Hunt y. feilk, b Eaif? Rep. 449,

which

Sale and Purchase of Goods. 223

\viiich shows Lis anirmancc of the contract, the contract will be deemed comjilcte. Tims, where the vendee of goods, being apprehensive of his insolvency, sent word to tJie vendor to take back his goods, but the vendor instituted an attachment to attach the goods in the hands of a })ackcr as the property of the vendee, it was considered as an election by the vendor riot to rescind the contract ; and the vendee having since become a bankrupt, it was held that the vendor could not recover the goods fromthe packer in trovcF'.

But though the renunciation of the contract by the vendee will not have the effect of revesting the property in the vendor, if he lias done any act by which he shows that he considered the goods as the property of the vendee; yet it has been decided, that if goods are bought by an agent for the vendee, and delivered by him to the vendee's packer, in whose hands they are attached by t!ie vendee's creditors, the property revests in the vendor so as to avoid the attachment, if the vendee countermanded the purchase by letter to his agent, dated before such delivery, though not received till afterwards, and the vendor assented to take back the goods*.

So where the goods Avere sent by the vendee to a third person, and accepted by him to the use of the vendor be- fore the bankruptcy, although notice was not sent to the vendor,of sucha delivery to his use till after the bankruptcy, it was held a sufficient countermand and relinquishment by the vendee, so as to revest the property in the vendor *.

Upon a bargain for the sale of goods, if the vendee does not come and pay for them, and take them away in a reasonable time after request, the vendor may elect to con- sider the contract as rescinded, and resell the goods ■♦.

So where some act is to be done by each party under a

' Smith V. Field, 5 T. R, 402. » Salte v. Field, 5 II)id. 211.

3 Alkins V. Barwitk, 1 Str. 165. * Langfort v. Tyler, 1 Salk. 1 13.

special

224 Of Mercantile Contracts for the

special agreement, and the vendor by his neglect prevents the vendee from carrying the contract into execution, the vendee may rescind the contract, and recover back any mo- ney he has paid under it. The tacts of the case were shortly these : the defendant agreed, on the 6th of June 1791, to sell to the plaiiitifFall his cordwood tlien growing at 1 \s. 6d. per cord, ita'.ly cut, which was to be paid for by the plaintiiT in March 1793, and cut, corded, and cleared olFtlic premises by the defendant by Michaelmas following. It also appeared that the custom Avas for the seller to cut off the boughs and trunks, and cord the wood, and for the buyer to re-coal it ; after which it became his property. The defendant cut sL\ty cords, ten of Avhicli he corded, and the plaintiffs re- corded half a cord, and measured the rest. On the Sth of March 1792 the plaintiff paid the defendant twenty gui- neas ; but the defendant neglecting to cord the rest of the wood, the plaintiffs brought this action to recover back the twenty guineas, as having been paid on a contract that liiid failed : held that they were entitled to recover '.

A contract for the sale of goods may also be avoided by the statiiteof limitations, 21. J ac. I. c. 2G. or the time limited by act of parliament, beyond which no plaintiff can lay liis cause of action. The use of this statute was to pre- vent the setting up of stale claims, when perhaps all vouch- ers and documents relating to the transaction were either lost or destroyed ; or, as Sir William Blackstone says, for preserving^ the peace of the kingdom, and to prevent those innumerable perjuries which might ensue, if a man were allowed to bring an action for an injury committed at any distance of time.

By this statute of 21st Jac. I. c. IG. s. 3. it is enacted, >' that all actions of account and upon the case, other than such accounts as concern the trade of merchandize between

•Giles V. Edwards,? T. R. 181.

merchant

Sale and Purchase of Goods. 225

mcrcliaut and int^rcliaut, (hoir Factors ajid servants, shall be commenced anil sncd within the time and limitation here- at'ter expressed, viz. the said actions npon the case, and the said actions for accoujit, &c. witiiin six years next after the canse of snch actions or snils, and not after."

It has been a subject of much controversy, whether the exception relative to mcTchants' accounts extends to all ac- tions and accounts relatin;^ to merchants and merchandize, or to actions of account open and current only ; the words o(f the statute bein^-, "ull scti(ms of a<3count and upon the case, other than sncii actions as concern the trade of mer- chants ;" so that by the words " other than such actions," Ret l)cing actions of account, it has been insisted that all actions concerning merchants are cxceptal. But it is now settled, that accounts open and current only arc within the statute. Therefore, if an account be stated and settled bctvve(Mi merchant and mercliant, and a sum certain be agreed to l^e due to one of them ; if, in such case, he to whom the money is due does not bring his action within the limited time, he is barred by the statute '; but if it be only adjusted, and a folio whig account is added, in suck case the plaintiff shall not be barred by the statute, because it is arun'iing account ^. U is a pretty ditiicult construc- tion, said. Lord liardwicke in the case of Welford v. Lid- die ', how to apply the exception in the statute relating to merchants' accounts. It is not^ that the defendant may ttot plead ti'.e statute in all cases where the account is closed and concluded between the purties, and the dealing and transaction over. It was not the meaning to hinder that, but it was to prevent dividing the account between mer- chants where it was a running account, when perhaps part jnlght iiave been loiig hefure the time of the statute, and

« Wcl>l)er V. Tivill, 2 Sauiid. 124, and note 6.

3 rarrin^tou v.. Lee, -2 MoU. 311. ■> '2 Ves. 400,

q^ the

226 Of Mercantile Contracts for the

the account never settled, and perhaps there miglit hav^ been dealings and transactions uitldn the time of the sta- tute.

So if there be a mutual account of any sort between the plaintift" and defendant for any item for which credit ha3 been given Avithin six years, that is evidence of an acknoAV-' ledgement of there being such an open account between tJie parties, and a promise to pay the balance, as to take the case out of the statute '.

So where there is a mutual unsettled account, and reciprocal demands, • the statute of limitations does not attach *.

But Aviiere all the items are on one side, as in an account betv/ecu a tradesman and his customer, tlie last item which happens to be within six years shall not draw after it those ■which arc of a longer standing, but the statute will bar thof^e beyond six years ^.

To the plea of the statute of limitations the courts have shown such discountenance, that it has been held, that the statute does not extinguish the plaintitl's right of action, but suspends the remedy only, and that this suspension is CO pable of being removed by a subsequent promise on the part of the defendant witiiin the limited time. Jn Hyleing v. Hastings ^, Lord IJolt said, " Doubtless an ex- press promise will revive the debt, though it were ivfeniy years after." And not only an express promise, but any acknowledgement of the existence of tlie debt, however slight, will take it out of the statute, and the limitation will run from that time. Thus expressions to the following effect, " Prove your debt, and I will pay you '. I am rea- dy to account, but nothing is due ;" " I do not consider

» Catlins v. Skouldin;;, 6 T. R. ISP.

« Cranch v. Kirkman", Peakf's N. P. C. 120. Bui. N. P. 149-

3 Bui. N. P. 141. Catling V. Skouli;ing,6 T. R. 189.

♦ Ld. Rajm. 389. s i Salk. '29.

myself

Sale and Purchase of Goods. 227

^nyselF as owing Mr. B. a farthini^, it being more than six years since I coHtracted ;" "I have had the wheat 1 acknowLnlge, and have paid for some of it, and 261/. remains due ':" and ranch sUgliter aclniovvledgemjcnts thau these, will take a debt ont of tlic statute ^

The statute makes an exception for all persons who shall be under age, feme- coverts, non compos mentis, in prison, or abroad, when the cause of action accrues, and the limitations of thtj statute shall only comm.ence from the lime when their respective impeiliments or disabilities are removed, sec. 7. But if one only of a number of part- ners lives abroad, tiicy must bring ilieir action within six years after the cause of it accrued ^

A contract may also be avoided on the ground of fraud ; far either " suppressio veri" or " suggestio falsi " is a good leason to set aside any contiact *. . And therefore, where a party has bean guilty of any fraud in his dealings or ac-? counis, the courts of law and equity have determined, that he shall only protect himself by the statute of limitations from the time his fraud is discovered K

It does not seem improper to speak in this place of con- tracts for the sale of goods entered into by a debtor with intent to dciVand his creditors.

Ail contracts entered into for i\^Q sale or assignment of ^oods, where the vendor is sufleval to remain in the pos- session of them, are, by the statute 13 Eliz. c. 5, void as against creditors. The words of the statute are, " It is declared, ordained, and (-nucted, that all and every feoff- ment, giit, grant, alienittion, bargain, and conveyance of lands, tenements, heretiitarnrjnts, goods and chattels, or any of them, or of a/iy Ie;ise &c. that then was, or at any time

• 4 Ea>fs Rci). 599. » P. r Ld. Mansfield, Cowp, 548. 3 Perry v. Jack5on,4 T. R. 516.

* Broderic v. Brodtrit , 1 P. Vv tns. 210.

5 South Sea Company v. W yinoiidsells, Dong. 630.

Q_ 2 thereafter

2!yS Of Mercantile Contracts for the

thereafter should be had or made, to or for any intent 05 purpose before declared and expressed, should be from henceforth deemed and token (oiilj as against that person or persons, his or their heirs, successors, executors, admi- nistrators, and assigns, and every of them, whose actions, suits, debts, accounts, dama-^es, penalties, forfeitures, heri- ots, mortuaries, and reliefs, by such guileful covenaiits and iraudulent devices and practices aforesaid, were, or should or might be in any wise disturbed, hindered, delayed, or defrauded,) to be clearly and utterly void, frustrate, and of no effect ; any pretence, colour, feigned consideration, ex- pressing of use, or any other matter or thing to the con- trary notwithstanding."

In the construction of this statute it has been uniformly held, that all transfers or assignments of property by way of bill of sale will be fraudulent, and consequently void, as against creditors, unless absolute possession ' accompanies and follows the deed *; and the case Avill not be varied if the creditor has suffered his debtor to continue in possession of the goods, although he had condilioiied that the profits of the trade should be accounted for to trustees from the date of the assignment ^; or that he had reserved to him- self the liberty of taking possession of them within a sti- pulated time •♦; or that he had possessed himself of them, if he suffers the debtor to exercibC any act of ownership over them ^. So a bill of sale t<3 a particular creditor of all the'effects of a trader, in trust to satisfy his debt, and

• "When gooHs are eitlirr sold or morf2:a<rrd t!iey ought to be delivered specifically, or the key of the 'ivareliuuse whiTe they are, ftc. with the pos- session thereof. The delivery of th^- miiniinenls, bonks, and writings re- Tating to choses in artioii is taiitainoiuit to a speritic dcliTery. If a bond be assigned, the bond must be delivered, and notice must be ^iven to the. debtor; but in an assignment of book debts notie-^ alone is suHicirnt, be- cause there can be no delivery. Ityall v. Kollcs, 1 Ves. 34S. 1 Atk. 165. 1 Wils. 260.

- ^Twvnes Case, 3 Co. 8f)b. Cadogan v. Kennell, Cowp. 481. . 3 Bamford v. Baron, 2 T. fl. 594. ii. ■» Edwards v.HarbcD, Ibid. 587.

3 iPaget V, Perchard, I Lsp, N. P. C. 205.

pay

SM/e aiid Purchase of Gbods. 229

K^riy 6vcr the surplus (if any) to the trader, is of no effect as a convcjanccj though fol'ow(^d by an immediate change of property '.

But the not taking possession at the time of the convey- ance, though it is in .some measure indicative of fraud, is not conclusively so. For if a bill of sale be made, to take effect at some future time, or upon condition, or if it be made under the autliority of a court of equity, or by the sheriff under an execution for a just debt, and so ex- pressed therein, the sale will not be rendered void by the vendor's continuing in possession till the condition be per- formed ^.

So a bill of sale of goo;ls made for a valuable considera- tion, tliough unaccompanied witli possession, is valid as againiit creditors (as well as against the vendor himself), if given with their knowledge and assent K

Tlie discussion of this point seems to superinduce the mention of the cfkct of a judgemeut upon a contract pre- viously entered into for the sale of goods.

It is a general rule, that where a man has an absolute property in goods and chattels, he has also an absolute and indefeasible right of disposing of them as he may think proper. lo cases, however, where a judgement has been ob- tained for any debt or damages, all contracts entered into fox the sale or purchase of goods, though bona fide and for a valuable consideration, are by the statute 29 Car. II. c. 3. s. 16. null and void from the delivery of the writ to the sheriff; and the person obtaining such judgement has a lien upon the property of him against whom it is given, so as to bind his property, and defeat any intermediate disposition

• Newton V. Chantkr, 7 East's Rep. 137.

^ Edwards v, Karben,ut supra. Cadopan v Kennell, Cowp. 439. Jarman V. WoolIotoD, 3 T. R. 61S. Kidd v. RawUnEop, 2 JJos- and Pal. 59. ilaselin- ton V. Gill, 3 T. R. 620.

2 Steel V. Brown. I Tanat. 38J.

of

$50 Of Mercantile Conlrads for the

of it between the delivery of (he ^vrit and the execution of the judgement.

A bona fide sale of goods in niarket overt, to an innocent vendee, without notice of the execution, is not, however, subject (o the lien of a third person under a judgement'.

SEcnoN vni.

OF TUE V,ARRA\TV' OF GOO])S SOLD.

In contracts for llic sale of goods, it is constantly un- derstood, that the seller und-.Tlakcs that the commodKy he sells is his own ; and that if it proves otherwise, and the vendee sutlers by the insufiiciency of his (the vendor's) title, he may recover a satisfaction from the vendor ^. Also, if, upon the sale of any thing, t]ic vendor warrants it to be good, the law annexes a tacit contract to this warranty, that if it be not so he shall nialce compensation to the buyer '. And therefore, if the articles sold a]ipear on deli- very to be of a dinireient quality from that ordered by the vendee, or that he discovers some latent imperfection which was not visible to a man of ordinary circumspection at the time of purcliasiiig, he may, on the immediate discovery of their not answering the order, return them and rescind the contract *. But unless the vendor expressly warrants the article sold io be sound and good '; or that he knew it to be otherwise, and had used any art to disguise the de- fect'^', or that it turns out to be ditlercnt from what the ven- dor represented it to be, upon the faiili of v.hich represen- tation it was bought by the vendee ", the vcndet^ is without remedy ; for though it is a general rule of law, that the vcndpr is bound to disclose to the buyer all latent defects

' 2 Eq. Cas. Abi. 3&1. "• 1 Bl. Com. 168. 3 ibid,

< Fisher v. Samuda, 1 ('amp. ]S. P. C. I9J.

f' I Rol. Abr. p. 90. tit. Ac lion snr Qis.-, (P) 4.

*lbid. (P)3. 7 1biti.9i. (PjT.

known

Sale and Purchase of Goods. §31

krtown (() him ; yet the common law will not imply a war- ianty, the maxim being *' caveat emptor '."

The warranty must b3 upon the sale ; if it be made af- ter, it must be reduced into writing, olherAvise it will not be binding upon the vendor ^,

In all cases of express warrant}^, if the warranty prove false, or the goods are in any shape different from what the vendor represents them to be to the buyer, the vendor is answerable for their goodness. Thus, if cloth is warranted to be of such a length, when it is not ^; that a horse is sound, and he wants the sight of an eye +; or that wool is merchantable, which is full of moths '; in these cases ac-. tion lies to recover damages for this imposition.

But a general warranty will not extend to guard agaiiist" defects tliat are plainly and obviously the object of one's senses, or where the false representation of the vendor is known to the vendee ^'; as if a horse with a ' visiHe defect be warranted perfect, or the like, the vendee has no remedy '.

The inserting of the name of an artist in a catalogue as the painter of a particular picture, has been held not to be such a warranty as will subject the party selling to an action, if it appears that he was mistaken, and only re- presented what he himself believed, though such painting was not the work of the artist to whom it Vv'as attri- buted ^.

Neither does the law, upon a sale of goods by sample, with a warranty that the bulk of the commodity answered the sample, raise an implied warranty that the commodity should be mercliantable ; though a fair merchantable price were given ; and therefore, if there be a latent defect

' Noy's Max. c. 42, - Bl. Com. 166. Fitz. N. B. 98. K.

3 Finch. L. 1S9. 4 i Ro!. Abr. c. 96. Z. 1. 20. 5 ibid. 40,

« BuUcrficId V. BurrougJis, I Salk. '211. Dyer v. Har^rave, 10 Ves, Jun.50T.

' Kit. 174. b. ■ 8 Jeudwin.^ v. Slade, 1 Esp. I»j". P. C. 572.'

thea

^55 ' Of Mercantile Contracts for the

then existing in them, unknown to tlic seller, and withoaf fraud on his part, he is wA an?\\er;iblc, thom^li the goods- may turn out to'bc nnmt'rchantable '.

But a sale of goods by saniph' is such a wairanly, that if the bulk does not accord with the sample,, the purcliaser is not bound to accept or pay for the gooils, on any terms ; although no fraud was intended on the part of (he vendor,, and althoU'gli there may exist an u^isge in tlie particular trade for tlie vendor, on jmyment of the diiuncnce arising from the inleriorily of the sample to the bvilk, and wluch diiii^rence was estimated hy s\vorn brokers, k) ccwnpel the vendee to stand to the bargain -.

But if goods are delivered generally of the sort ordered according to tlie sample and paid tor, however bad their quality niay be, and although they arc wholly unfit for use, yet no action can be maintained to recover back the price; but tht^ vendee must sue upon the warranty that the bulk was equal to the sample '. And if a party purchases an article at a catain price, pursuant to a spe- cimen exhibited, and, on delivery, it is found to be of an inferior quality, in an action for lisc price, he cannot set up. the inferiority of it as a defence ; he should return it, and rescind the contract in toto ■',

As to the validity of warranties given by servants,, authorized to sell their masters' ]3roperty ; it h:is been held that such warranties will bind tlie master, as (he servant •will be presumed to be acling within the scope of his authority, and vested with sufBcic nt power to transact the business with which he is intrusted iii tlje Cjomnion and usual manner K

' Parkinson V. Lee,? East's Rep. 3M. 5 Hihbrrt V. Sh.o, 1 eami). .\. P. C. 11:5: 3 Fortune v. Lingh:im,2 ll)iil. -ilfi. 4Grimalrii v. W hite, 4 Viy. N. P. C. 95. ■'Ajcxaiider v. Gibson, /.i Vaniy. N. P. C 555.

CHAPTER

Conveyance of Goods. 233-

CHAPTER VI.

OF MERCANTILE CONTRACTS FOR TIfE CONVEYANCE OF GOODS PUflClIASED FROM THE VENDOIl TO THE VEN- DEE.

FIRST, BY LAND.

All persons carrying goods for hire (but not hack- ney-coachmen in London, except there is an express agreement, ami money paid for (he carriage of goods ',) are bound on tlie general custom of the rcahn, that is, by the common law, to receive and carry the goods of the subject for a reasonable hire or reward, to take due care of them in their paj^sage, to deliver them safely and in the same condition as Mhcu they were received; or, in default thereof, to make compensation to the owner for any loss or damage which happens while iha goods are in their custody *; except such loss or damage as arises from the act of God, rs storms, tempests, and the like ; or from the king's enemies ; cr from the default of the party sending them '.

Upon the groimd that a carrier is not liable for an ac* cident occasioned by the act of God (viz. inevitable ac- cident), it has been held, that if a bargeman in a tem- pest, for the safety of the lives of his passengers, throws overboard any trunks or packages, he is not liable*.

A carrier is also liable for any inevitable accident, happening through the intervention of any human means, provided such loss happens while the goods are in his custody.

Thus, where goods intrusted to a common carrier were consumed by an accidental lire comm.unicating to a booth.

> Up^hare v. Aidep, 1 Com. S5. ^ 1 ?elw. N. P. 413.

3 1 Inst. 89- Bui. N. P. TO". « 1 Rol. Rep. 79.

m

254: Of Mercantile Contracts for the

in mIhcIi the g'oocls lia'l bren deposited by the carrier in the courso of his jouniev, lie was held liable '.

So where common curriers froju A. to B; charg^ed and received for cartage of gotxh to the cor}si^i|;nee's house at B., from a ^varehouse there, where they usually loaded, but Avhich did not belong to them; they were held re- sporisible for a loss by an aoeidental tire while the sjoods were in tlse warel>ouse ; allhoug!) they allowed all the profits of the caruige to anotlyer person, and which circinnstance was knov.n to the consignee*.

These two crises differed in circumstances, but were both governed by the contracL, of undertaking to deliver; dt appearing in evidence, that the goods liad not reached the place of their final destination. Where, however, goods not having arrived at the place of final delivoy, are out of t])e custody of the carrier as such^ this con- ftfuction does not apply. On this disdnction it has been determined, thiit a comuKm carrier between A. andB.. employed to carry goods from A. to B., to be forwarded to a third place (by another carrier, according to the custom); was not, by putting them gratuitimsly in his warehouse at B.jMJicre tliey Wv'i-ic acciueaiaily destroye-tl hy fire before lie had an opportunity of for\t.'!rding thenj. vc^ponsible for the loss ^

Whether it is a duty incumbent upon carriers to deliver as well as carry good.<, may te collected from the case of Golden v. Manning, 3 Wils. 429. and 3 Bi. Bep. 916; the circumstances of which were : A box waadirecled to A . in B. street inLondon ; the direction was obliteraied ; but A.'s name and abode were in the printed directory ; his name only in the way-bill : the defendants made no inquiry of

' Fonrard v, Pittard, I T. R. 27.

" Hydi- V. the Trent and Mersey N.'ivi^atiori Coinijanj-, 5 Ihid. 399.

3 Garside v. the Propriet(»rs of the ireut and Meisey ^'avigati(>n, 4 T. R.

(he

Conveyance of Goods. 535

tlie plaintiff, nor of A., but suflbred the hox to vernal ri in their wardioiise (iil the ^oods were damaged, although tliey kept a constant porter to carry out parcels. The court ivcro of opiriioti that the defendants were liable, because it appeared that their general course of trade was to deliver goods at the liouses to which tliey were directed, that they received a premium, and kept a servant for that special purpose. Mr. Justice Gould expressed an opinion, that all carriers were bound to give notice of the arrival of goods to the persons to whom they were consigned, whether bound to deliver or not. Also in IJj'de v. tlie Trent and Mersey Navigation Company, 5 T. R. 396. Ashhurst, Duller, and Grose, Justices, were of opinion that a carrier was bound to deliver the goods to the person to whom they vv^ere elirected.

Before the time of Henry the Eighth, it appears to have been generally held, tliat a common carrier was chargeable, in case of a loss by robbery, only when lie had travelled by ways dangerous for rolibing, or driven by night, or at an inconvenient liour ; but in the commercial reign of Eliza- beth, it was resolved, upon the broad principles of policy and convenience, that if a common carrier is robbed of the goods delivered to him, he shall answer for the value of them ', for, having his hire, there is an implied understand- ing for the safe custody and delivery of the goods '.

If a common carrier who is offered his hire, and who has convenience, refuses to carry goods, he is liable to an ac- tion*. Bathe may refuse to admit goods into his ware- house at an unseasonable time, or before he is ready to take his journey ^

In order to charge the carrier, these circumstances are io be observed :

' 1 \tv-i. 89 a. 1 Rol. Abr. 33«. ' Jackson v. Rogers, 2 Show. 82T.

3 l-an*? V.Cotton, 1 Ld. Ravtii. 652.

1. The

^36 Of Mercantile Contracts for the

1. Tlie goods must be lost ^vllilc in possession of tlie car- tici' hiinselF, or in liis soL^ care. Therefore, where the plain- tiflV, the Ivisf In lia Company, sent their servant onboard the vessel, v. ho took ch;<r^e of Wxt gooJs in question, and thej A\eie lo.st, the defendant was held not to be liable ^

2. The carrier is liable only as far as he is paid, for he is cliargcable by reason of his reward,

A person delivered to a carrier's book-keeper two bags of money, sealed up, and containing- 400/. to be carried from London to Exeter, and (old hiinthey contained 200/.^ and took his receipt for the same, with a promise of delivery for ten shillings per cent, carriage and risk : the carrier Laving been robbed, Ids responsibility Mas held not io ex- tend above 200/.*

So where 100/. was delivered in a bag to the carrier^s book-keeper, by the plain! ift's servant, and paid for as a' common parcel ; when lost, tlie carrier was not held to be liable, it being ])roved that he hadj by public advertise- ment, limited his responsibilily as to a)iy money, plate, jewels, writings, or other valuable g©ods, unless they were entered as such and paid for accordingly '.

3. Under a special or qualified acceptance, the carrier is bound no furtlier than he undertakes.

Therefore, where the owner of a stage-coadi puts out an ad~ vcrtiscnieat, " that he will not beanswerable for money, platof jewels, watches, writings, goods, or any package whatever, (if lost or damaged,) above the value of 5/. unless insured and paid for at the time of the delivery ;" all goods received by him are under that special license; and therefore if they are lost, the proprietor of the stage coach is not answer- able, not even to the extent of the bl. or the su^n paid for

' East India Company v. Pulli-n, 1 Str. 690,

" Ts K-r V. JMorrlcc, Carth. 485.

3 GiL»bon v. i'aYuton, Bill. N. P. 71.

booking.

Conveyance of Goods. 2J7

booking'. But in order to dcfotid hiinsclf in an action, the carrier must prove tliut such notice was stuck up in a conspicuous pari oi' the ottice when the owner brought his goods, or that it was advertised in a newspaper which he vas accustomed to read ^. And Lord KUeuborough has strongly expressed his disapprobation of the great alterations which have been made in the common law obligation ; his lordship having dechircd, that in every case where a car- rier sets up a special engagement as his defence, he would require proof of actual notice to the owner of the article*.

4. A delivery to the cariier's servant is a delivery to himr $• Ifj and shall charge hira ; but they must be goads such ivs it is his custom to carry, and not out of his line of busiwess.

The action agauist a carrier for the non-delivery or lo^s of goods must be brought by the person in whom the legal fight of property in the goods in question is vested at tlie time ; for he is tiie person who has sustained the loss, if any, by the negligence of the carrier. Hence, where a tradoE- man orders goods to be sejit by a carrier, at the moment (he goods are delivered to the carrier it operates as a deli-r very to the purchaser, and the wliole property (subject only to the riglit of stoppage in transitu by the seller) vests in the purchaser ; he alone can maintain an action against the parrier for any loss or damage to the goods ■* : and this rule . holds as well where the carrier is not particularized as where he is *.

But if there is a special agreement by the parties, that t'he consignor is to pay ibr the carriage of the goods, the action is maintainable by the consigric^j ^\

With respect to the responsibility of the post-ofTicc, it^

••? Clay V. Willan, 1 II. P.l. «98. Izptt v. Mountain, 4 East's Rep, STlV

Sicliolson V. Wiilan, 5 Ibid. 507. •^ 4 Esp. N. P. C. 178. 3 4 East's Rep. .87. *

* Daw£s V. Peck, 8 T. R. 330. 5;j Bos. and Piil. 584.

' DavU and Jordan v. Jamti;, 3 Bur. 2680, Moore v. W ilson, 1 T. K.

659.

has

S38 Of Mercantile Contracts for the

lias been determined -that tlie postmaster-general is not an» S'^vcrable for the loss of a letter or packet containing exche- quer bills or money, occasioned by the receiver at the post- oilice '. Neither is tLc receiver liable to make good such a loss, unless he appears to have been guilty of personal mis- conduct *.

SECONDLY, BV WATER.

1. Of the Duty of the Owner and Master with respect to the Preparation for, and Commencement of the Voyage.

It is the first duly of the owner to provide a vessel fit for the purpose or employment for which he offers and holds it forth to the public ; that is, the vessel must be tight and staunch, and furnished with all tackle and apparel neces- sary for the intended voyage'. He must also supply her with an adequate number of persons of competent skill and ability to navigate her. Where by usage or the laws of the country a pilot is required, he must provide such a person"*; and he cannot limit his responsibility in these respects by any public notice K

The commencement of the master's duty, as to the man- ner of taking" goods on board, depends on the custom of the particular place. If he receive goods at the key or beach, or send his boat for them, his responsibility com- mences on his receiving of t|iem ^. Where goods are to be carried coastwise, and the usage of the wharf is to deliver them to t!ie mate of the ship, by which they are to be car- ried ; on delivery to him, the v/harfiriger's responsibility is at an end, and he is not liable, though the goods are lost from the \diarf before they are shipped • . The master must

' Lane v. Cotton, Carth. 487- 12 Wod. 482. 1 Ld. Raym. 646. Whitfield V. Lord Le Despenser, Cowp. 754. '" Cowp. 76.5.

3 Moilov, h. ii. c. 2. s. 10. « Ibid. s. T.

•5 Lyon V. Mells, 5 East's Rep. 49S. Ellis v. Turnor, 8 T. R: 5*?]. ^ Molloy, b. ii. C.2.S. 2. ' Corbaii v. Downe>5 Esp. N. P. C. 41.

not

Conveyance of Goods. 2S9

iioi take any contraband goodi ' nor colourable papers o^ board ^5 which may occasion the foifcifurc, capture, or de- tention of the ship. He must take care that the jroocls of wliich the cargo consists be so stowed that they may not be injured by each other, or by the motion or leekage of the ship : but if by usijge or agreement the stowage or arrange- ment of tlie goods is to be performed by persons hired by i\\c mercliant, he is then released from this obligation^. And as soon as any goods are put on board, the master must jjrovide a sufficient number of j:eraons to protect them''^.

After the necessary preparation for the commencement of the voyage, the master must forthwitli obtain the necessary clearances, and, as soon as tlie ^veather h favourable, pro- ceed upon his voyage 5. But he must not upon any ac- count set sail during tempestuous weat'itr^. And if there has been an underlakh^g or v/arranty to sail v/it'i convoy ,, he must conduct his vessel to the place of rendezvous, and put himself under the protection and control of the ships appointed for that purpose.

^. Of the Duty of tlie Owner and Master during the Course of the Voyage.

Having commenced his voyage, the master must proceed (o the place of destination without delay, and without stop- ping at any intermediate port, or deviating from the straight and shortest course, unless to repair his sliip, or to avoid. enemies or pirates. A ship, however, is allowed to deviate for a supply of water and provisions to the places ilsually re- sorted to in long voyages for that purpose". But neither in this case, nor if the ship be driven into a port through stress

• Moiloy, b. ii. c. 2. s. 7. ' Ibid. s. 9.

•^ Wellwood'.s Scii Laws, p. 29. * Morse v. Slue, I Ventr. 190,

_s 2 Magens, 102. e Moiloy, b. ii. c. 2. s. -i.

" Hoccus deAssec. not. 52.

of

^0 Of Mercantile Contracts for the

«f weather, caii the master wait there longer than iicccssi<y requires'.

If the vessel be rendered unfit to procceil on the voyage, <he master may freight another siiip to transport the cargo io the place of destination, or lie may sell it, according as the one or other wHl beof most advantage to the mcrcliant *. But if his own sliipcaube repaired, ajid tlie cargo is not of a jieriyhable nature, he is not bound to tranship or sell it. And if he has occasion for money for the repairs of his ship, or other expense necessary for him to prosecute and complete Ihe voyage, and cannot otherwise conveniently obtain it, he may either hypothecate -the Avhole cargo, or sell a part of it for this purposed

The master must also during the voyage take all possible care of the cargo ; and therefore if goods are spoiled by a leak occasioned in the vessel by rats, he Avill be responsible for the damage 4, unless he had cats on board his ship K

3. Of the Duty of the Oaner and Master on the Comph' tion of the Voyage.

When the si) ip has arrived at her place of destination, the master is without delay to dciiver tlie cargo to the mer- chant or his consignees, upon production of the bills of lad- ing and payment of the freight and other charges due in respect of it. But he cannot detain the goods on board the ship until these payments are made, if he is doubtful of the payment, he may send the goods to a wharf, and order the wharfinger not to part witli them until the merchant discharges his demand for the freiglit and other charges^.

Tire manner of delivering the goods, and consequently the period at which the responsibility of the master and

' Abboff's ^Merchant Shipping, p. 2!0. ' :Mo11ov, b. ii. c. 4. s. 5.

3 Tfee Giatitudine, 3 Rob. Adiii. Rep. 240. « Dale Y. Uall, I Wiis.'28l. s Roccu?, not. 58.

•Abbott's Merchant Shipping, 246.

owners

Conveyance of Goods. ■ Sil

owners will cease, Mr. Abbott obsorvesr, will depend tipoa the custom of particular places and tlie usage of parlicu- lar trades. The liability of a lioyman is not discliargcd by d* livery ol" the go;w;l.s at the wharf at wliicli he plies; but he is Ijound to deliver Ihem safe to the consignee according to the direction '. And if the owner of the goods reqniie the master of the vessel not to Lnid the goods on the wharf against wiilch (he vessel may be moored, which he pro- mises not to do, l^ut afterwards delivers them to the wharf- inger for the owner's use, under the idea oflhc whar/ingcr's lien thereon for tlse wliarfage fees, because the ve^s.'! \\as unloaded against the wharf, the master is liable to the own- er, unless lie can establish the wharfinger's rights-. But whcii goods are brouglit here from foreign couiitri( s, a de- livery at tlie usual wJiurf is such a delivery as wiil dlscliarge the master^.

By the custom of tht^ river Tliames the master of a vessel is bound to guard goods h)aded into a lighter sent for thera by the consignee until the loading is compleled, and can- not discharge himself from that obligation by declaring io the lighterman that he has not suliicient han.is en board to take care of them •*.

4. Of the Causes which excuse the Owner and Master.

We have already seen (page 232) that a carrier is in ge- neral excused for a iiOM-pern.rmaiice of tlie contract on his part, occasioned by any event falling within the racaning •of ihc expression '' the act of God." The same exemp- tion extends to the owners and masters of ships, who arc aFso indemnitied from perils of the sea. And therefore, v/here a ship was overpowered and plundered on the Idgh s<as by pirates, it was held tliat the ov/ners of the ship were

' W'ardcll v. Moiirillvan, 60,7. ^ SvnU v. Hav 4 T. R 2€D

3 Per Knllcr J.5 T. R. 3S7. "

* Cadey v. Wiutrinjhaiti, Teakc's N. P. C. liO.

B liOt

242 Of Mercanlile Corttracls for the

not answerable to the owners of llie goods for (heir valued But if, wliile a ship is in a port or river within the body of a county, (he crew are overpowered, and the goods stolen, the owners will be responsible tor the loss ^.

A loss happening to a cargo from liglitning is within the exception of damages arising from (he act of God. And by the statute 26 Geo. III. c. 8(). s. 2. the owner of any ship or vessel is itidcmnified from all responsibility for any loss or damage which may happen to any goods or merchandize on board his vessel by reason of any fire happening on board the same.

A loss or damage to be considered as happening from the act of God mast be immediate ; if remote, (he owner's responsibility is not removed. And thcreftjre, where asliip entering (he harbour of Hull struck ag;unst (he masts of another vessel which had sunk there, i\\c owner of the ves- sel was held liable for (he goods whicli had been spoiled by the water ; although i( aj^pearcd in evidence tha( the bank on which vessels used (o lie in safety at the entrance of (he harbour had been partly swept away by a great iiood a sliort time before the misfortune in question, and uponwidch, had it been in its former si(ua(ion, (he defendant's vessel would have remained in safety ^

So \v1iere, in a voyage from Hull to Gainsborough, a vessel was sunk iu the river Trent hy striking against the anchor of another vessel, whicli anchor lay under Ma(er and without a buoy, the owners were heUl responsible for (he damage done (o the goods on board •*.

So if a ship perish in consequence of s(riking against a

' Pickering V. Barclay, 2 Rol. Abr. 248. BuiU^n v. Wollifonl, Comb. 5G, ' Morse V. Slue, I Vf;ht. 190.

3 Sniitlv V. Shepherd, Summer York Assizes, 1705, reported in Abbott's Merchant Sliippiusf, 249.

* Proprietors of the Trent and IMersej Navigation, La5t. T. 1785, B.R.

rock

Conveyance of Goods. 243

reck or shallow, wliich is known to the master, the owner of the vessel will be liable for any loss or damage happen- ing to the gooils; luiless the ship was driven npon such roc!; or shallow by adverse wincis or tempest, or that the shallow was occasioned by a sudden and recent collection of sand in a place where ships could before sail in safety '.

5. Of the Limitation of the Responsibility of the Owner and Master,

By the statute 7 Geo. II. c. 15. s. 1. which was enacted for asceit'.inin!;- and settling how far owners of ships and vessels should be answerable for any gold, silver, diamonds, jewels, precious stones, or Other goods or mercliandi^es^ which shall be made away with by the mastfers or mariners, without the privity of the owners thereof, it is provided, that no owner of aiiy ship or vessel shall be responsible for any loss or damage occasioned by reason of any embezzlement, secreting, or making av. ay with by the master or mariners, or any of tiiein, of any gold, silver, diamonds, jewels, pre- cious stones, or other goods or merchandize, on board the same, without the privity of such owner, further than the value of the ship or vessel, with all her appurtenances, and the full amount of the freight due, or to grow due, for and daring the voyage? wherein such embezzlcmicnt, secreting, or making away \>i{\\ as aforesaid, or other malversation of the master or mariners, shall be committed.

But as this statute relieved the responsi!)ility of the owners only in the €;isc of a roblxTy com.mitt-ed by the master and mariners, and that they still remained liable for robberies committed by persons not bolongiug to the ship ; it was enacted by tlie statute 86 Geo. III. c. 86. s. 2., which contains the same provisions of the preceding act, that the

* Rocciis, not. 55.

J?i4 Of Mercantile Contracts for the

same limits .shall be fixed to the responsibility of the owners in the case of robbery, although the master or mariners sliall not be in anj' -wise concerned in or privy to stich rob- bery, cn^bezzlement, secreting, or making away w'vh. And by the third section of the same statute it is(Mi;ictcd, that no master or owner of any ship or vcsstl shr.U be responsible, for any loss or damage Avhich may happen to any gold, silver, diamonds, watches, jewels, or precious stones ship- j:ed on board any vessel, by reason of any rt)bbery, embez- zlement, making away v, ith, or secvcting thereof, unless the owner or shipper tliereof shall, at the time of siiipping tlie same, insert in his bill of lading, or olherwise declare in Avriting to the master or owner of such ship or vessel, the true nature, quality, and value of such gttlcl, silver, dia- monds, watches, jewels, or precious stones.

3. OF THE STOPPAGE OF GOODS IX TRANSITU.

^^ hen goods have been consigned upon credit, ai;d the consignee has become a bankrupt or insolvent before the de- livery of the goods, the law, in order lo prevent the less that would hap])cn to the consignor by the delivery of (hem, permi(s him, in many cases, to resume the possession, by countermanding the delivery, and, before or at tlui: arrival at the place of destination, to cause them to be delivered to himself, or to some other person for his use. This right Avhich the consignor has, upon the insolvency of the con- signee, and, if the full price has nut been paid, of resuming the possession of his goods during their transit to the place of destrnat'ori, is technically called stoppage in traiisiiu '.

This practice, which is founded on principles of natural justice and equity, was first sanctioned and estiiblished in the Court of Chancery -, and lias been subs -queiitly rc-

* Ahbott on Merchant Sbini)inp,.S51. 2Srlw. 1171. ■ 2 Vern, W:i. 1 Atk.-iJo. Amhl. 599.

co<rnised

Conveyance of Goods. 245

coo-riisod and acloptod by a variety of decisions in the courts of law. Aiht to entitle the consignor to lliis riglit an ac- tual possession oi' tl)','geo;ls is not necessary to be o')taincd ; a co;:s:ructive j;ossession wiil be sullicient, sucli as a claim, or ttie like, by his agent'.

The right of the vendor to stop goods in trr.nsitu in case of the insolvency of the vendee is, in the laiiguage of Lord Kenyon, a kind of equitable lien adopled by the law ibr the purpo.^es of substantial justice, and does not proceed on the groiind of lescinding the contract. Hence the circinn- stance of having paid in part for tiie goods will not defeat the vendor's right of stopping them in transitu ; for the vendor has a right to retake them, unless the lYdl price of th6 goods has been paid ; and the only operation of a partial ]-.aynien( is todiuiinisli the li(;n pro tunto^.

i]ut notwithstanding the consignor may, while the goods arc iH transitu, revest the p'^operty in the goods again in himself, which liad passed to another, by putting them in a course of conveyance; yet by the general law of England, wlien goods have been delivered into the actual or constructive possession of the buyer, they cannot be re- chjiraed by the vendor ; the p operty has com})let: iy passed from him, a,nd vested in the vendee, against whom the only reme.iy is an action (o recover the price ^

The law of England, however, (thougli, as b{ twcen ifs own fe\ibjects, the transfer of property is considered to be comj)lete by sale and delivery alone, even without p:)}- meut or security for the price,) will lend its aid to carry into eilect the more enlarged rule of equity, wFncIi exists in another counfry, upon a transaction taking place tlicre. Thus, wliere a ship was chartcicd by the consignee, and a delivery was made on board the same in Russia, and by a

' Prr lord Kcnv.)!! in Noittiey v. Field, 2 Esp. N. P. C. fiJ^J.

» Hodgson V. Loy, 7 T. K. 4-iO" 3 i liasfs Rtp. 5'i2. 3 Ibid. fJOG.

law

24G Of Mercantile Contracts for the

law of thnt counlrj the owner of goods, in ciisc of the baxik* ruptcy of the vendee, is entitled to sue out process to retake liis goods, and retain tliem till payment ; and the owners, hearing of the insolvency of the vendee, applied to the cap* lain on board whose sliip the goods had been delivered, to sign tlie bills of lading \o their order, ^hich he complied with: it was held tiiat this was a substanli:il compliance with such hnv, and that the captain on his arrival in Eng- land was bound to deliver the goods to the order of the ven- dors, and not to the assignees of the vendee who had be- come a bankrupt '.

We shall now proceed to inquire by wliom and under what circumstances this right may be exercised ; and for this purpose shall consider, 1st. Under what circumstances goods arc deemed to be in transitu. 2dly. When thctransi- tus sliall be considered as determined. Sdiy. By whom this right may be exercised. 4thl3'. By what acts the right of the consignor may be defeated during the transit.

First, then, under what circumstances goods are deem- ed to bo in transitu.

As under what circumstances the transitus shall be con- sidered as coiitinuiug, it is a general rule, that thetransitcs in goods contiiiUcs in all cases until there has been an actual delivery to the vendee. And therefore goods continue liable to the vendor's riglit of stoppage in transitu, not only while they remain in the possession of the carrier, whether by land or water, but also ia any place connected with the transmission and delivery of them to the ronsignee ^.

So if yoods consigned (o the vendee are delivered to a wharfinger, who receives tlicm on t'le part of tlie vemhe to be forwarded to Jiim accordingly; on the insolvency of the

y Tni;Vis and oCv.^rs v. Underwood, 1 Fnst's Rep. 515.

« St k' s V. Lfi Riviere, !,<iniion Sitt. after JMich. 17.91, cited in .S T. P.. 4G6. and in .S lias's Rep. .'{97. Hiir.terand another v. Beaie, London Si(t. after T. 1785, cited in 3 T. R. 4G6.

vendee,

Conveyance of Goods. 247

vendee, fliey ave subject lo be stopped by the consignor in the hands of the v/harfingaer ' : and the law is the sanve in case of delivery (o a packer^ ; even though the carrier, wharf- inger, or packer, should have been appointed by tiie vendee '.

Bo'fore ilw, case of luglis and Underwood, which we have aheady mentioueJ, a distinction was taken between goods imported in a general ship, and a ship chartered by the consignee for a particular voyage, as to the consignor's right to sfop in transitu ; it being supposed that the right of stopping in transitu did not apply to the case of goods shipped on bo.ud a vessel wholly chartered by the consignee. lly the case^ however, of Bohtlingk v. Inglis ■*, and which arose out of tlie same transiction, it was lield, that t!ie de- livery of the goo:ls on board a ship who'ly cliartered by the consignee does not, in case of the irisolvency of the ven- dee, preclude the right of the consignor to stop the goods "while in transitu on board such ship, before actual delivery, any more than if they had been delivered on board a gene- ral siiip for the same purpose.

To deprive the consignor of his riglit to stop in transitu, the ship, on board of which a cargo is consigned, must have completed her voyage before th'transitus cm be com- pletely at an eiid. And therefore, where aship which ought to have perfbrnied quarantuie came into port without dol- ing so, and the assignees of tlie consignee, who had re- ceived the bill of lading, but hid become Lankrtipi, went on board and took posessiou of the cargo as part ol the bankrupt's estate, but the ship b-ang aflerwards ordered out of port to perform quarantine, an agent of the cojisignor,

' Mills and another v. Ball, 2 Bos. and Pul. 457. « Jltuil :.Md odi'-rs v. Ward, citfd in 'i T. R. 407.

3 >inUh V. (io^s 1 Cauip N. P. C. i;8i. Lilis v. Hunt, S T. R. 469. Hodgson and otlicrs v. Loy, 7 T. R.4'10.

<3 i:a:t"s Rt-p. asi.

during

248 Of Mercantile Contracts for the

during tlie performance of quarantine, claimed tlic p:oods on behalf of bis principal ; it was luld that the rigl)t of the consignor to stop the goods in transitu existed when' t hi; claim was made on his behalf, because the voy-:ige was not at an end till the performance of quar;>iiti;ie '.

When gooc's coiisigned, but thf duties not being pat:!, are lodged in tije King's stores, the consignor may stop them in transitu,' if lie claims them before they are actually sold for the payment of the duties ; or, if sold, he is entitled to the proceeds^.

2. \Vhen the transitus shall be considered as determined.

"VVhrn the transitus shall be considered as com[;lete, and the delivery of such a nature as to divest the vendor's riglit of stopping in transitu, will appear from thefoilo^ung cases.

In a case of goods sent by a waggon, which, on their arrival in London at the inn where the waggon usually put up, were attached hy process of foreign attachment, at the suit of a creditor of tlie vendee, and which while remain- ing in that siluation at t!ie in it were claimed and marked by the assignee of the vendee, who had become a bank- rupt before t»ieir arrival in London ; it was held that (he vendor could not afterwards countermand the deli- very ; lor, from the impracticability of removing the goods on account of the attaciiment, on their arrival at the imi they had attained their ulterior destination, and were no longer in transitu ; and that the assignee, Avho was clothed with the rights of the bankrupt, had, by putting his mark upon them, done what was equivalent to taking actiial pos- session'.

Where a part of the goods sold by an entire contract has

' Hoist V. Pownal and Sponcer, 1 Ei\t. N. P. C. 2-iO. ' Northev and another v. Field, 2 Ibid. 613. 3 LUis V. Hunt, 3 T. R. -16i.

come

Conveyance of Goods. 219

co^nctothc actual possessionoftbe vendee, the vendor's right to counteimaiul is -wholly at an ciui, and caiirtol be exercised over tlie residue which may not have been delivered '.

Delivery of goods on board a ship wholly cliartered by (he consignee, will not, as we have seen, divest tlie con- signor's right to stop the goo;ls while in the h.anc's of tlie carrier**. But where a ship liad been liired by the consignee for a term of years, who during tliat time had Vaq entire disposition and control over such ship, having iitted, vic- tualled, and manned her, goods delivered on his account onboard, on a mercantile adventure, cannot be sto];pL-d in transitu ; the consignee beuig in such case the owner of tiie ship pro tempore, and t'le delivery of the goods on board thereof being equivalent to a delivery into the consignee's Avarehouse ^

From the cases of Mills v. Ball, and Hunt v. Ward, we have seen that where goods have been delivered to a packer, or wharfinger, to be forwarded to the consignee, and the packer or wliarfinger maybe considered merely as a middle man, the transit is not at an end by sucli dehvery. But when the consignee uses the warehouse of the wharfinger, packer, &c. as his own, and has the goods ser.t tliither as the place of their ulterior destination, the tr msitus Avill be considered lis at an end when the gooJs have arrived at such v.are- house ; and consequently the right of stoppage in transitu has ceased -*.

Where goods have so far arrived at the end of their jour- ney, that they wait for fresh orders from the purchaser to put them again in motion ; as wliere goods ordered for the

' Slubcy and another v. Hey ward and othf-rs, 2 IIpii. B1. 504. Ham- moRd and others v. Anderson, 1 Bos. and I'ul. N. 11. 69. ■^ Rohtlinjik v. \ns,\h, .'5 East's R.-p. 381.

3 I'Ovvler and anothi-rv. i\l' ra--;;art and others, cited in 7 T. R. 442. 1 East's Rep. 524. 3 I!)id. 386.

4 Scott aii.i others v. Pettit, 3 Bos. and Ful. 469. Lccd and another v Wri^iit, 3 Ibid. 320.

purpose

250 Of Mercantile Contracts for the

purpose oi being soiit abroad, liave come to the hands of an agent of the vdidee, in whose liaiuls they were to re- main until he received orders as to tiicir ulterior dt-stination; the right to stop in transitu is determined on the arrival of the goods at the hands of hudi agent. Thus,

AVhere A. and B., traders in Loudon, were in the course of ordering goods of the defendants, cotton manufacturers at Manchester, to be sent to M. and Co. at Hull, fur the purpose of afterwards being sent to the corres]}ondents of A. and B. at liamburgli ; it was hchl that, as between buyer and seller, tlie right of the defendants tostop wliile in trans- itu was at an end when the goods came to the possession of ]\I. and Co. at Hull ; for they were for this purpose tlie ap- pointed agents of the vendees, and received orders Irom them as to the ulterior d:s1ina<ion of the goods; and the gooJs, after their arrival at Hull, Mere to receive a new di- rection from the vendees '.

Lord, Ellcnborough in giving judgement in tiiis case said, (adverting to the case of Hunter and Beale before men- tiorjcd,) I c:xnnot but consider tlie transit as having been once complete ly at an end in the dir<ct course of the goods to the vendee, z. e. A\hen they arrived .at the innkeeper's, and were afterwards, under the immediate orders of the the vendee, thence actually launclied again in a course of conveyance from liim, in their way to Boston ; b 'ing in a new dij-cction prescribed and communicited by him- self. And if the transit be once at an end, the delivery is complete ; and the transitus for this purpose cannot com- mence de novo, merely because tlie goods are again sent upon their travels towards a new and ulterior destination.

The facts of the case of Hunter and Beale were shortly these : A bale of cloth was sent by Messrs. Steers and Co. of Waketield to the defendant, who was an innkeeper, di-

' Dixon and others v, Baldwen, 5 East's Rep. 175.

rected

Conveyance of Goods. 25 1

rccti'd to tlu* vendees, (Blancbard and Lewis,) to whom llic del'endant's book-keeper gave notice niat a bale of clotli had arrived fortlienn. Blarichard antl l^ewis <rave crdcrs to tlie dolentlant's book-keeper to send the bale doun to Galley Quay, in order (o ship it on board the Union, to be carried to Boston. The defendant accordingly sent (he bale to the quay ; but it arriving' too late to be shipped^ w;ts sent back, and continued in the defendant's custody lor the purpose of being sent by another ship, but before this could take place the vendees were declared bankrupts, li was held by Lord Mansfield, that the vendor's right of stop- page in transitu was not divested thereby ; and that to pro- duce this efi'ect there must be an absolute and actual pos- session by the vendee : a delivery to a third person to con- vey to him not being suflicient.

To defeat the right of the vendor to stop in transitu, it is not necessary that the goods should be delivered at thd vendee's place of abode ; it is sutHcient if they come inlo Ills possession, and that he has exercised any act of owner- ship over them (as by tasting and sampling them, and pJiy- ing warehouse rent), though at a place short of their original destination '.

So, if after goods arc sold, the}' remain in the warehouse of the vendor, and he receives warehouse rent for them, this amounts to such a delivery of the goods to the vendee, a9 to put on end to the vendor's right to stop in trtinsitu -.

And if the goods have been actually delivered to the con- signee, the consignor cannot reclaim them, though the bill of lading was for delivery to the cotsignor, and was unin- dorsed, and a bill of exchange drawn for the price has been dishonoured. Thus,

The consignor of goods abroad, upon a receipt of orders

' Wri2;ht V. Lawcs, 4 Esp. N. P. C. 82.

* llarrj aiid others v. Mangles and others, 1 Camp. N. P. C. 452.

from

2j2 Of Mercantile Contracts fur the

Iroiii a correspondent in Eiigliind, ships goods on account aiul at the risk of tiie consigner, and t;ikcs bills of laviins: fium tlie captain, nuikiiig; tlie g^oods deliverable to the con- signor's own order, and transmits one of such bills unin- liorsed with the invoice inclosed in a letter to tlie consignee, informing him that he had drawn U!:o;i iii;n for the amount, AAJiich he doubted not would n-cet du^i honour ai^i cLjsethe account; antl the consignor, hy way of priEcautio.'i. also sjnf another b il of la;iiiig indorsed to his own agent. Held, (hat upon the s'lipment on account and at the risk of the consignee, the property in the goods vested in him, subject only to be divestctl by the consignor's stopping them while in transitu ; aiul tliat u-pon the arrival of th.e goods, the con- signee liaving obtaimd possessioji of them from the captain by -the production of his unindorsed bill of lading, the property became absolute in thfi consignee, however wrong- fully parted Avith by the caj^tain without a competent au- thority hy the shi})per, and hov-ever answerable the captain miglit be to the shipper on that account '.

3. By whom the riglit of stoj.ping iii transitu may be exercised, and under what circumstances.

To entitle any one to exercise this right, lie must stand in the rcldion of vendor to tlie bankrupt; and therefore a mere surety for the price of the goods, is not sucli a vendor *quoad' the consignee as to exercise the right of stopping in transitu, even though lie may be entitled to a commission on the amount of the goods for which he liad been security *.

lint where a correspondent abroad, in ]:ur>uance of orders from a im-rchant in this country, j)urchases goods on his , own credit without naming the trader here, and ships to him at the original price, charging only his ccmimission, the forrcspondent abroad, in case of the insolvency of the

' Coxp V. Tfr.rdrp, 4 lasf's Rep. 21 1 .

» Siftk^n ai;d another V. Wray, 6 Easfs Rrp. 371.

consignee.

Conveyance of Goods. 253

consignee, is (o be considered as the vendor for the purpose of stopping the goods in transitu, for there was no privity bet\Aeen the original owiser of the goods and the bankrupt '. So also is a person 'vvho consigns goods to be sold on the joint account of himself and the consignee ^.

Where goods arc coiisigned iii pursuance of an agrre- niont b;>tween the consignor and tliird persons, to be applied in the execution of a certain trust, as to indenmiiy against acceptances, or the like ; oa the failure of the consignee in trust, the consignor cannot countermand the delivery, while the truit and object of tiic con^ignn^ent remain unsatisfied ^ Neither can the consignor repossess himself of goods du- ring their transit, Avnirh have bicn smtty order of the con- signee, on !iis account and at his risk, and to be paid f ( r at the expiration of a limited credit, or by bills at a given date, ti'.e consignee being willing to accept the bills and remaining solvent ■^.

IJut in case oftlie failure of the consignee, a payment by bids for the amount of the goods, and accepted^ before his bankruptcy, will not dsfeat the consignor's right of repossissing hinisdfof the goods during their transit, al- though at the time of sticli repossession the bills were not due ; for though such btils may be proved under the com- mission against the consignee, it will amount but to a j)ar- tial payment \

. So where the consignor has a right to stop goods in transi- tu, such riglit is not affected win re a past of tbe, price of the goods has i3e.-n paid by the consignee ; for part p jy- ment only diminishes the vendor's lien, pro tardo, on the goods (ktainci ^\

' IVize and .-inoth r v. Wray, 3 F.aFt's Rrp. 9'?.

" J\evvs':ii an('. niotlirv v. Thornioii and another, 5 Ibid. 17.

3 Haille V. Smiiii and anotiici , 1 Bos. and Pul.5fi3.

4 Walliy V. Montgmn ry, 3 iiast'.s \lcp 58'J. s I"' izp aad anoti.rr v. Wray, .'i liiid. 9^.

* llod^sou and others v. Lov, 1 T. II. 4i0.

Nor

254 Of Mercantile Contracts for the

Nor is the right of (he consignor to stop in transitu af- fected by any claim made u{.o;i (lir goods ia their transit by a crc(iiU)r of the consignee, as wlierc the goods had been attached by process of foreign aitaehTnerit at (he suit of such creditor; for t!ic vcjulor's right of intercepting the goods, being t!ie elder and prcil-rable lien, cajznot be superseded by the attachment '.

This right of stoppage in transitu can only be exercised 'where the relation of vendor and vendee subsists between the consignor aiid consignee ; it does not bi long io a person who has only a lien upon tJie goods without aiiy property in them. And therefore if a person, wlio by local custom has a lien tor his general balance, or is entided to retain (ha particular goods until bis demand for rendering them mer- chantable is paid, parts v/ith the goods in piirstiancc of the orders of his employer, he cannot countermand the deli- very ; for his lien and right to retain the goods only coiiti- nue wliile they are in his possession, and the moment he parts ^yit]l the pos-ession, in pursuance of the order and on the account of his employer, his lien ceases, and conse- quently' the rigi)t of slopping them in transitu ^.

Neither is tills right of the consignor defeated by an usao-e for carriers to retain goods as a security for the gene- ral, balance of account due to them by the consignee; but the consignee will be entitled to reclaim them out of tlieir hands, on payment of the price of the carriage of the par- ticular goods, and a tender of indemnification to them'.

Nor will a similar usage, when the carriage is to be paid by the consignor, antiiorize the carrier to detain goods Irom the consignee who has paid the price for them *.

With respect to the legality of the consignee's rc-deli-

» Smith V. Onss 1 Cnrnp. N. P. C. 282. « Sweet v. Pym, 1 Ea't's Rep. 4. 3 0])])fii;ieiin V. Husse), .'? Bos. auil I'ul. 4'i. * iiulU-r V. Woolcot, 2 Bos. and I'ul. N. II. 61.

very

Convei/ance of Goods. 255

very of the goo;ls consigned, in case of bankruptcy, to the consignor, the cases on this point seem at variance. In or- der to divest the property of goods in transitu out of the consignee, tlie act of repossession must be adverse on the part of tiio consignor against the consignee; an amicable agreement Jjetween them will not have that effect in case of the failure of the latter. In the case of Siffken and W'ray ', where a consignee after an act of bankruptcy delivered up the bills of lading to his agent upon his undertaking to ap- ply the proceeds of the goods in discharge of bills of ex- cliange drawn for the price, and he accordingly took pos- session of the goods l;y tlie consent of the vendee, who iiad become a bankrupt ; it was held that ha coidd not retain tlK'ui against the assignees of the bsuArupt, althongh tlie original consignor approved of the arrangement, there beirig no adverse stopi)i!'g in transitu. But in the case of Mills V. Bali^, where the consigute of goods being insolvent, atul liaving couiinitted an act of bankruptcy, informed the con- signor of his circuiMstancts, and refused to receive the goodt>; in c^iiseejuence of \vhich the consignor repossessed himself of the goods whilst in transitr. ; it v/as held that such repossession was valid, and that the iiiformation given by the consignee was not an e.ndue preference given by the bankrupt (o the consignor over the rest of his creditors.

The distinction between tliese cases, Mr. Ross ob:;erves in his Law of Vendors and Purchasers, p. 214, is \^ry fine spun. *' in Siifkeu v. Wray, the possession of the con- signor was obtained by the act of the baiikntpl, wlio deii- vered up the bdl of lading, willsout which (for the agenf had no duplicate) the goods coulJ not have b.'en stop'ied : whereas in the J »st case the stoppage was only eflected through the means of the bankrupt, as by his giving notice." It is remarkable, tliat in the case of Muls v. B;dl, Mr. Justice

' 6 East's Rep. 371. » 2 Bos. and Ful. 457.

Rooke

S56 Of Mercantile Conlracls for the

Rooke saiJ, " In wliai munnor (lie iuCornKition Mas obiuincd can make no diffcrt'iict'."

; WLerc the vendors h.ild possession of <bc goods upon a claim of riijlit to stop flieiii in Iransidi, tlioii<^h in point of fact at the time of (lie seizure the tniiisiius is at an end, it is competent lo tlie v(Miuec, tliouii,h in-.olvent, but who liad i;ol at tile time committed an act of bankrup.tcy, to give up such goods, provided the delivery is bona lide, and not fiom any niotive of voluntary and undue preference; and tjieiairness of tiie transaction maybe evidenced by the ven- dees, iiaving CiiUed a meetijig of his creditors, by whose advice he was encouraged to dvliver up the goods ; for until an act of bankruptcy tlie jus di.^ponenJi over goods remains by law wilh tlic trader, unless, in contem| Ittion of bankruptcy, he excrci^^e it by way of a voluntary and frau- dulent preference of a particular creditor '.

L;>.siiy, we have to consider, by vvhe.t acts the right of the consignor may be defeated during tlie tninsi!.

]u the con.sideration of this division of our subject, we shall have to inquire how far tlie negotiation of the bill (;f lading may tend to defeat t!ie right of stopping in transitu. And for this purpose we shall first ad.vcit to the diiicienfe forms iii comuion use.

Sonietiints a bill of lading is made for deUvery to ihe. consignor by name, or assigns ; sometimes to order, or as- signs, not naming any person ; and at other times to tlie consignee by name, or assigns. In the two first cases, the consignor either transmits it without any indor.siment, or indorses his own name generally upon it, without mention- ing any other person ; or he indorses it specially for delivery lo a person nan.ed i>y the indorscraent^.

' Divon nnd ot!irrs v. "R;.l;iwpn anH anothur, 5 Ensfs R. 175. ' Abbot: oil riiercbant^^l.if'piiig, ;Ji'5.

The

Conveyance of Goods, 257

The mere possession of a bill of lading, made for deli- yery to the consignor, and not indorsed by him, will not authorize the holder to dispose of the goods. But on the other hand, if the bill of lading be originally made for de- livery to the consignee ; or being made for delivery io the consignor or assigns, or to order or assigns, be indorsed by tlie consignor, either to a third person by name, or gene- rally without designating any person ; in both cases the con- signee named in the bill of lading, and holding it indorsed in blank, has authority to transfer his property in the goods '.

In commercial transactions it is usual for the consignee, Laving received the bill of lading, to sell the goods, or io raise money upon them, before their arrival, and indorse and deliver over the bill of lading to the vendee, by which indorsement and delivery the property in tlie goods is trans- ferred to such other person ^.

This practice of assigning bills of lading by the con- signee to a third person, who may be totally ignorant of the nature and terms of the consignment, and may not know that the consignee is not absolutely entitled to receive and dispose of the goods, has given rise to a very impor- tant question of law, as to the right of the consignor to countermand the deliviery as between him and the person to whom the assignment has been made, without any fraud or collusion'.

The earliest mention of this subject in our law books, Mr. Abbott observes, is in the case of Evans v. Mariett"*, in which Holt, C. J. said, " the consignee of a bill of la- ding has such a property that he may assign it over." But in this case, as well as in the subsequent ones 5, the question

• Abbott oh Merchtflit Shipping, 366. « Vide 5 T. R. 685. and 1 Bos.' and P\\\. 503.

3 Abbott on Merchant Shipping, 307. < 1 Ld. R.iym. 271.

5 Applcbv V. Pollock, Abbott, 368. Wright v. Campbell, 4 Bur. 2046. i Bl, Rep. 628. S. C. and Caldwell v. Ball, 1 T. R. 205.

s upon

'256 Of Mercantile Contracts for the

»

upon the effect of such an assignment not being properly b 'fore (he Court, tliere a]>poars no direct evidence of the legality of the transfer, until the casepf Lickbarrow and another v. Mafon and others reported in 2 T. R. 63. In that' case it was decided, that a bill of lading is a negotia- ble and transferable instrument, by the consignee's indors- ing his name on it, and delivering or lran>,mit(ing the same to the person to whom it is indorsed ; and that by an assign- rhent made by the consignee, for a valuable consideration, Inhere tlie transaction was bona tide, and the assignee has no notice that the goods are not paid for, the property is absolutely transferred to the assignee, and that the consignor is by such assignment deprived of the right to stop in tran- situ, which as against the original consignee he might have exercised.

So the mere circumstance of the indorsee's knowledge, at the time the bill of lading was indorsed and delivered to him, that the consignor had not received payment in money for his goods, but had taken the consignee's acceptances, pay- able at a future day not then arrived, is not sufficient to in- validate the title of the indorsee, if the transaction was bo- m\ fide, and the assignment Avas made for a valuable consi- deration '.

The legal title, however, of the indorsee of a bill of la- ding may be defeated on the ground of fraud, as between hitn and the consignor, who hi such case may repossess himself of flie goods *.

To enable a consignee to assign a bill of lading, an in- dorsement and delivery must have been made to him. There may, however, exist special circumstances which may bd tan( amount to an indorsement and delivery, which may en-

» Cumingv. Brown, 9 East's Re|>. 506.

' 'Wneht and another v. Campbell and anothrr, 4 Bar. £9-16. Solomons V. Mssen,2T. R. 674.

able

Conveyance of Goods. 259

able the consignee to do this. As where the consi<^nors sent a bill of ladiiio^ not indorsed to their factors, but having the names of the factors on the back, and being applied to by them for an indorsement, answered by letter, that if the bill of lading was not indorsed it was a mistake, and they would send an indorsement : held that a letter of this kind was a sulficient transfer of property, and amounted to an indorse- ment, so as to enable the factors to transfer tlie property in the goods*.

But if there be not sucli facts, and the bill of lading be for delivery to order or assigns, and transmitted unindorsed, the consignee cannot, by a transfer of the property in the goods to a third person, although such assignment be for a va- luable consideration and without fraud, divest the right of the consignor to stop the goods in transitu *.

Of the Dissolution of Contracts for the Carriage of Goods iy Water.

Contracts of this natnre may )je dissolved either by the voluntary act of the contracting parties, or some extrinsic matter happening after the making of the contract, and be- fore its completion. If before tlie commencement of a voy- age, war or hostilities take place between the state to which the ship or cargo belongs and that to which they are de- stined, or commerce between them is totally prohibit d, the contract for conveyance is at an end, and the owner is not entitled to any damages against tlie freighter, who has thus been compelled \o abandon his agreement'. But as the laws of one nation do not give eOect to the positive institu- tions of another inconsistent with its own, if a merchant hire a ship to go to a foreign port, and covenant to furnish

» Dick V. Lumsden, Peakn's N. P. C 1 89.

« Nix V. Olive, Guildhall Sitt. afler Trin. T. 1805, cited in Abbott on Merchant Shippins;, 37 7.

3 Abbott's Law of I\Ierchant Ships and Seamen, 406.

s 2 a lading

260 Of Mercantile Contracts for the

a lading tbere, a prohibition by (lie government of tlisit country to export Ihe inlcnded articles neiiber dissolves the contract, nor absolutely excuses a pcrlbrniaiice of it '.

An embargo imposed by the government of the country in Tvhose ports the vessel may happen to be, will not operate as a dissolution of a contract of this nature *. But in tlie case of an embargo impo.'-ed by the government of the country of whicii the merchant is a subject, in the nature of reprisals atid partial hostility against the country to which the ship be- longs, the m( rchant may put an end to the contract, it' the object of the voyage is likely to be defeated by the delay ^

O'P CIIARTERPAnXIES OF AFFREIGHTMENT.

Of the Nature of a Charterparty.

The terfti charterparty is generally understood to be a corruption of the Latin words chai ta partita. It is a con- tract l)y which an entire ship, or some principal part there- of, is let to a merchant for the conveyance of goods on a de- termined voyage to one or more places.

The contract by charterpaity is in general mutually obligatory upon each party ; they may however by particu- lar clauses render it obligatory upon one, and optional to the other. Tlius, if a ciiarterparty is executed, in which it was covenanted, that if the ship should not be arrived at Winyaw, in South Carolina, by the first day of March, that it should be in the option of the m.erchaijt cither to load the &])ip on the terms specified, or not, or to refuse entirely, provided that the merchant declared such his intention to th€ master of the said ship, within forty -eight hours after ap- plication ; it was held that it was optional to the merchant

' Rliffhtand cthrrs v. Page, Guildhall SUtin-s after M. T. ISOl, cited in 3 no<;. and Piil. ^9"). n (a.)' •' Had!, yv. Clarke, 8T. K.'i59. 3 Touicng V. Hubbard, 3 Bos. and Pnl. 291.

to

Conveyance of Goods. — Cliarterparties. 261

to loail or not, if the ship arrived after the first of March, althougk the master had been unavoidably delayal by rea- son of contrary winds and bad weallier '.

If before the dejiartnre of a ship there should happen an enibarg-o occasioned by war, reprisals, or otherwise, with tjie country to whicli tlic sliip is bound, so that she cannot proceed on her voyage, t!ic charierparty shall be dissolved without damages or charges to eitiier party, and the mer- chant shall pay the charges of unlading his goods ; but if the restraint arises ftom a difference between the parties th(Miisdves, the charterjiarty sliall remain valid in all its points. If the ports of (he country to which the ship is bound be only shut, and tlic vessel slopped for a time, the charterp'iity will still be valid, and the master and merchant will be reciprocally obliged to wait the opening of such port, without any pretensions for damages on either side. The merchant may, however, unlade his goods du- ring the shutting up of the port, upon condition either to reliidetlicm or indemnify the master ^.

By IV horn it may he exercised.

TJiis instrument may be executed by an agent lawfully authorized on the part of the owner or merchant, who may Govenaut in his own naine for performance by his principal, go as by force of the deed to aus->ver for his principars dq-^ fault. 13 ut if the authority of such agent arises from a power of attorney, then the execution must be in the name of his principal^.

Of the usiial Slip7ilatio?is.

The usual sti|3uIatior!s on the part of the owner or master qre, that the ship shall be tight aiid staunch, furnished

' Siuibrick v. Siilinonil, 3 Rnr. 1SS7. ^ Bcawcs's Lex IMerc. 141.

i Wilks V. Back, '2 East's It<;[). \i'>,

with

262 Of Mercantile Contracts for the

■with ail necessaries for the intended voyage, ready by a day appointed to receive the cargo, and wail a certaiji num- ber of days to take it on board. That after lading she shall sail with llie first fair wind and opporlnmly to the de-stined port (tlie dangers of the seas excepted), ami there deliver the goou's (othc merchant or his assigns in the same condi- tion they were received 0!» board ; and further, that (hiring the conrse of the voyage the sliip sliall be kept tight and staunch, and furnished with sufficient men and olher ne- cessaries, to tl'.c best of tlie owner's endeavours '.

On the other hand, the merchant usually covenants to load and unload the ship within a limited number of days after slie shall be ready to receive the cargo, and after ar- rival at the destined ]-»ort ; and to pay the freight in the manner aj-pointed. It is usual also for each of the parties to bind himself, h's heirs and executors, in a pecuniary pe- nalty for tl;e true pcrform-ancc of tiieir respective covenants. Frequently also it is stipvdated that the ship shall, if re- quired, wait a further lime to load and unload, or to sail with convoy, for which the m.erchant covenants to pay a daily sum. This delay, and the payment to be made tor it, are both called demurrage. Sometimes also particular clauses are introduced in fitvour of the owners, to takeaway their responsibility for embezzlement by the master, or other matters, for which they woitld otherwise be responsible *.

Of the Construction of a Charterparty.

In the construction of charterparties it is a general rule that it should be agreeable to the intention and design of the parties concerned, and conformable to the usage of trade in general, and of the particular trade to which the con- tract relates. Thus, wliere it was covenanted that the ship

AbboU's Law of Merchant Sliips and Seamen, 191. - Ibid.

should

Conveyance of Goods. — Charterpariies. 263

should hail on the mlciule.] voy'ige with the first fair wind, it was held not to mean the next wind, but such a wind as would enable llic vet-scl to perform the voyage '. But if by a tlclay in (ho conimcnccinent of (he voyage the merciiant sustains any injury, he will be cntided to a compensation commcnsura(e to IiJs loss-.

But although a chadcrparty is to receive a liberal con- struction, ye( the constnic(lor» must not be inconsistent with the jilain and obvious meaniiii^ of the parties in(erested. And therefore, i\\ an action of covenant for demurrage on a chaitcrparly given " while waiting at Portsmouth for convoy, and discliar^iir.g her cargo at Barpelona," it was held that demurrage coui j onl\' be claimed for the time (he ship A\as waiting for convoy at Portsmouth, and discharg- ing her cargo at Barcelona, and not for any delays at other intervening places ^

Upon the construction of a cliar(erpar(y of the East In- dia Conipanj-, it has been decided, (hat the owner is not liable to make satisfaction to the Company for the damage done (o goods in the ship by storm -».

JVhcn a Cliarlcrparty takes its Eff'ect and Operation.

A charterparty takes its effect and operation from the day. of its execution, and not from the day of its date, if difiereiit from the day of (be delivery, unless the contrary appears'.

Of ike Rights and Duty of the Charterer.

As the hirer of any thing must use it in a lawful manner, and according (o the purpos(^ for which it is let, the char- terer mast not !a le any prohibited goods by which the ves-

' Constablr v. Cliberie, Palm. 307. ^ Malynf , 08.

3 MarshaH v. Do la Torrp, i Ksp. N. P. C. 367. * Tod V. the Vast Ipdia Company, Dong, 'iVZ. 5 Oshey V. HkkB, Cro. Jac. i^GJ.

2(i4 Of Mercantile Co7itracts for the

sel may be subjected to detention or forfeiture '. Neither can he, after having laden his goods, insist upon having them rdancJcd, and delivered to him, without paying the freight that might become due for the carriage of them, and indemnifying the master against the consequences of any bill of lading signed by him *.

But if eilher party is not ready by the time appointed for the lading of (lie ship, the other may seek another ship or cargo, and bring an action to recover the damages he has sustained '. And if the freighter has not sufficient goods of his OMn, he may take in the goods of other persons, or may wholly underlet the ship.

]f a person freight a ship at 48/. per month, and afterwards agrees to allow certain merchants to lade the ship at 9L per ton, the owner, in the event of the freighter's bankrupt- cy, cannot recover of the merchants any more than they had engaged to pay the freighter **.

In general, incase of affreightment by charterparty, the command of the ship is reserved to the owners or the master appointed by them, and therefore the person freighting or lading has not the po^er of detaining the ship beyond the stipulated time, or employing it in any other than the sti- pulated service. But by the charterparties under which ships are freighted to the East India Company, the com- mand and disposal of the ship is reserved to them, and the master, although appointed by the owners, is bound to obey the orders of the Company at home, and of their factors and seiTants abroad ; and it is always stipulated that nothing shall be paid by the Company for freight or demurrage, unless the ship returns home in safety. Yet if the Company detain a ship so long in India that she becomes unfit for the voyage ; or if they employ a ship in a service not warranted

« Roccus, not. 45. '^ 2 Eq. Ca. Abr. 98.

3 Beawcs's Lex Merc. 134. ♦ Paul v. Birch, 2 Atk. 621.

. by

Conveyance of Goods. — Char terpar ties. 205

by the charterparfy, and without the knowledge or con« ser.t of the owners, and it is lost, the owners will be en- titled to a proper allowance for the actual and probable earnings and the value of the ship '.

As this Company are by their charterparties warranted in employing their cliartered ships in trade, warfare, or on any other service whatsoever, it lias been decided that a ship of that description was still under the charterparty, though alterations were ordered to be made in her upper works by the Company, to enable her to carry a larger number of guns, &c. than her stipulated force; and though a king's oflicer assumed the command of her, and hoisted the king's broad pendant on board ^

OF DEMURRAGE.

The payment of demurrage, which is an allowance sti- pulated to be made while a ship is waiting for convoy or to receive a cargo, ceases, in the first case, as soon as the con- voy is ready to depart ; and, in the second, as soon as the ?hip is fully laden and the necessary clearances are obtained; although the ship may in either case happen to be further detained by adverse winds or tempestuous weather. And if the ship has once set sail and departed, but is afterwards di'iven back into port, the claim of demurrage is not there- by revived'.

By the custom of the merchants of I^ondon, the word " days" used alone in a clause of demurrage, without the p,nnexation of the words "-working" or " running," does not comprehend Sundays or holidays ■*.

' Edwin and others v. the T'ast Tndia Comj)any, 2 Vern. 210. Lewiu and others v. the liast India Company, Peake, N. P. C. 241.

* Dobreeaiid others v. tlic Kast India Company, 12 East's Ilep.290.

3 Lannay v. W erry, 2 Bro. P. C. 60. Jamieson v. Lauvie,6 Ibid. 474.

* Cochran v. iletberghetal. 3 Esp. N. P. C- I'^l.

OF

gt)6 Of Mercanlile Contracts for the

OF BILLS OF LADING.

TJie dinerencc between ci b 11 of lading and a charter- party is, that the first is required and given for a single ar- ticle or more laden on board a ship uliicli lias sundry mer- chandize shipped on sundry accounts ; the latter is a con- tract for ihe wboL' ship. Bills of lading ougiit to be signed by th;' master within twenty-ibar hours after the delivery of the goods on board. And upon ilic delivery of the g(jods, the master, or oilier person officiating for him in his ab- sence, is to give a common receipt for them, whieli is to be lielivered up, upon tiie master's signing the bills of lading '.

Upon delivering the goods at the port of destination to ihe shipper's factors or assigns, the giving up of the bdl of lading sentto the factor or assigns is noi a sufficient dis- charge, but the master niust ir.sist upon a receipt *.

As the transfer of property by assignment and indorse- ment of a bill of lading' ii intimately connected Avith the ria;hf of the consignor to s'op in transitu, t'le law concerning it will b^ found under that head.

OF FREIGHT.

Freisrht is the sv.m agreed on for the hire of a ship, en- tirely or in part, for the carriage of goods from one port to anotlicr, or to many ports ; and must be paid in preference to ail other dobts ■*.

If a merchant f; eights a ship, b'lt declines to lade her in pursuance of his agreement, or if before tlie commence- ment, or during the course of the voyage, he withdraws his goods from the ship, or having hired a ship to go to a distant po. t, and engaged to funii di a cargo homewani, fails

' Bcawe.'s Lex Merc. 142. - Ibid. 3 Jbid. 133.

to

Conveyance of Goods.- — Freight. 2G7

to do so, whereby tlic sliip is forced to return in ballast, by tlie law of England the owners are entitled to a compensa- tion, to be ascoriaii'.ed, in case of disagreement, by a jury, upon a consideration of all thc^ circumstances of the case, and of the real injury sustained by the owners '.

Unless a contract for the conveyance of merchandize is cornplettly perf )rmed by the delivery of ihe goods at the place of destination, tl:e merchant will not be subject to the payment of any freight whatever. But an interruption, as in the case of capture and recai:turc, of the regular course of the voyage, not arising from any iault of the owner, will not deprive him of his freight, if the ship afterwards pro- ceeds with the cargo to the place of destination -.

So if part of the cargo be thrown overboard for the pre- servation of the ship and the remainder of the goods, or if the master is compelled (o sell a part of the cargo for victuals or repairs ; in these cases, if the ship afterwards reach the place of destination, the owners will be entitled to the value of the freight for the goods so thrown overboard or sold ; as in the first case they must answer to tlie merchant for the value of the goods thrown overboard by way of general average ; and, in the second, must pay him the price which the goods would have fetched at the place of desti- nation ^

As to the payment of freight for the conveyance of living animals, whether men or cattle, which may die during the voyage, the following distinction has been taken : if the agreement be to pay freight for lading them, the owners will be entitled to freight notwithstanding their death ; but if for transporting them, then no freight is due for those

• See Wesdand v. Robinson, cited 2 Vern. 212. •^ The Racehorse, 3 Roii. Adm. Rep. 101. 3 Roccus, not, 89. Ord. of Wisbuy, art. 35.

that

2(5S Of Mercantile Contracts for the

that die on the voyage. No freight however is due for an infant born during the voyage '.

U\ the case of a char<erpaity, if the stipulated payment is a gross sum for an entire ship, or an entire part of a ship, for the whole voyage, the gross sum will be payable althoiigli the mercliant may not have fully laden the ship*. But if a mort-hant hires an entire ship, the burtbcn of which is expressed in the cliarterparty, and covenants to pay a certain sum for every ton, &c. of goods which he shall laue on board, the owners will only be entitled to payment for the quantity of goods actually shipped, unless a com-, plete lading had been agreed to be furnish«l ^

A ship was let to fnight.for the voyage, to take out a small cari;0 of lead to Petcrsburgh, and to bring liorae a return c irgo, for which freight was to be pnid at eleven guineas a ton for tlic Avhole ship's admeasurement. If from political circumstances she should be unable to discharge Iier cargo, and consequently to obtain a return caifgo, the freighters agreed to pay a gross sum, less than the amount of the freight per ton. The ship being prevented from dis- charging, and the freighter supplying no home-cargo, the master took in i!;oods pn freight, and brought them home together with tlie lead. The Court held that lie was en- titled to receive the gross sum stipulated, and also to retain (he freight which the ship had earned ^.

In general, the chance of the duration of the voyage falls upon tlie owner, unless the merchant stipulates to pay a certain sum for every month, week, or other portion of tltc voyage. If no time is iixed for the commencement of the computation, it will begin from the day on which the ship

' Mollny. b. 2. c. 'k s. 8. ■> Rocrus, not. 12.

3 Ladv James v. E. I- Company, Guildhall Sit. afier Mich. T. 1789.

4 Bell r. Puller, 2 Taunt. '^83!

breaks

Conveyance of Goods. — Freight. 269

bfeaks ground, and will continue during the whole course of the voyage, and during all unavoidable delays, not occa- sioned by capture, or such circumstances as entitle to gene- ral average or contribution.

If a neutral vessel, having on board enemy's gooLls, is taken, the captor is to pay the whoie freight, although it has not been "wholly earned by the completion of the voyage', unless the goods so captured are contrabund ac- cording to the law of nations, such as naval stores, &c ; and then no freight is to be paid by the captor : and it makes no difference wiiether the master does or does not know the <^uality of the goods ^. Neither is any freight to be paid by the captor, if a neutral ship is employed in a direct trade between the colonies and the mother country of the enemy ^; or in the coasting trade, between one port and anotiier of a belligerent power •*; or in carrying tlie goods, even of neutrals, directly from the mother country of an enemy to its colony ^; or from one enemy to the colony of another enemy allied in the war *'; if these trades were not, in time of peace, open to the neutral nation whose ship is so employed. But freight is to be paid to the owners of a neutral ship employed in carrying the goods of an enemy from the port of one enemy to the port of another nation eq-ually hostile to the country of the captors ".

If a ship is carried by the recap<ors into a port short of the port of destination, and there restored, the owners will be entitled to the whole freight, subject only to the deduc- tion of salvage upon the amount of it, notwithstanding a restitution of the cargo lias not taken place ; provided the

' The Copenhagen, \ Rob. Adm. Rep. 2Si>.

• The INIercmius, Rob. Adin. Rep. 288. -t The Rebecca, 2 Ibid. 101.

« The Emaiigel, 1 Ibid. 296.

s The Immanntl,2 Fiob. Adm. Rep. ISO, ^ The Rose, Ibid. 206,

^ The "VVilheiiniiia, 'i Ibid, in no!i?.

master

S70 Of Mercantile Contracts for the

master has waited a reasonable time belbre departure for the result of a claim of restilntion '.

If an eiiemj's vessel, havini^ on board neutral goods, l)e taken, and the captor conduct the ship and cargo to the original port of destination, having performed the contract of t!'.e master, he is, upon rcfstitution of the goods to tlie consignee, entitled to the freight, on tiie same principle on which he would be held not to be entitled, where he does not proceed, and perform the original voyage*.

^VIlere goods have been so deteriorated during the course of the voyage, as lo be of no value, it is undecided, whether the merchant is bound to receive tliem, or is at li- berty to abandon thcni, and by so doing discharge him- self from tlie freight. Jf the deterioration has proceeded from the fault of the master or mariners, the merchant is entitled to a compensation, and may recover it in an ac- tion against tije owners or master, provided he has not re- ceived the goods ^ But if it has proceeded from an in- trinsic principle of decay naturally inherent in the com- modity itself, the merchant must bear the loss and pay tlse freight. In the case of BaiUic v. I\Ioudigliani -*, Lord Mansfield said, the ov\ner of tlie ship has a lien for freight, but in a total loss, literally so called, no freight is due ; irt case of a loss total in its nature, wi(h salvage, the merchant may either take the part saved, or abandon. And again, in the case of Luke and another v. Lyde ', the same judge said, if a freighied ship becomes accidentally dis- abled on its voyage, without the fault of the master, the master has his option of two things ; either to rciit it, (if that can be done within convenient time,) or to hire another

' The R;i'-ehnr?e,3 Rob. Atlm. U^p. 101. '^ Th.- Fortnnn, 4 Ibid. 278.

3 Millrs and otliori v. Baiiibrid^-e and others Guil'iiiall, Dcr. 'iOtii, 1804. « .'ark's Insurance, bll. s 2 liur. SS2. I Bl. Rep. 190.

ship

Conveyance of Goods. — Freight. 271

ship to carry the goods to the port of dcliverj. If the mer- chant disagree s to lliis, and will not let hiin do so, \]\q mas- ter will be entitled to the Avhole freii^ht of (he full voyage ; and so it was determined in the House of Lords in the casS of Lutwidge and How v. Grey et al. As to the value of the goods, it is nothing to the master of the sliip, whethcif the goods are spoiled or not, provided the freighter takes them ; it is enougii if the master has carried them ; for hy so doing, he has earned his freight : and the merchant sludl be obliged to take all that is saved, or none : he shall not take .some and abandon the rest, and so pick and choose what he likes, taking that which is not damaged, and leaving that whicli is spoiled or damaged. If he abandons all, he is excused freight ; and he may abandon all, though they arc not all lost.

In the case of the ship York, which had been chartered by the East India Company, and on her return home from India met with a violent storm off Margate, where she was stranded and sunk under water, the Company were held liable to pay the freight of a quantity of pepper delivered io and received by them, although greatly damaged by the sea water ; and the owners were held not to be answerable for the expense incurred in endeavouring to remove the in- jury occasioned by the salt water '.

A covenant in a chartcrparty of affreightment, that the owner shall at his expense forthwith make the ship i\g\\i and strong, ^zc. for the intended voyage, and keep her so, is not a cor!(^ition precedent to tiie recovery of freight, after the freighter had taken the ship into his service and used her for a cerlain j5eriod. But if the freighter be afterwards delayed or injured by the necessity of repairing her, or if the owner's neglect to repair in the first iisbtance liad prc-

' Ilotham and clhers v. th- Ea*t India Company, Douj;. 27'2.

cludei

S79 Of Mercantile Contracts for the

cludccl (lie froigliter fn^m making any use of the vessel, th'e iVeighter has his remedy in damages \

The cases in -which an apportionment of freight, or a part only of the sum stipulated for freight, may be claimed, rire, fiikt, When the shij) has performed the ivhole voyage, bat lias brouglit apart only of tiie merchant's goods in safe- ty to the place of destination. Secondly, When the ship from any disaster is unable to pS^osecutc and complete the whole voyage, but the master has delivered the goods to the merchant at a place short of the port of destination.

Upon this subject of the apportionment of freight Malyne says*, " that if from any disaster the master is unable to prosecute the voyage, he may repair his ship or freight an- other ; but if he is uriable, or if he declines to do this, the raeithant shall pay freight according to the proportion of the voyage performed. And ■with this the maritime law conforms K

This rule of the maritime law, wliich directs the pay- ment of freight according to the proportion of the voyage performed, pro rata itineris peracli, was recognised and fully adopted in the casi^s of Luke and another v. Lydc, and of Lutwidge and another v. Grey and another, before mentioned ; in the latter of which Lord Mansfield further observed, 'If ths master lias his election to provide another ship to carry the goods to the port of delivery, and the merchant does not desire him to do so, the master is stiiJ entitled t(i a proportion, pro rat fi, of tlie former part of the voyage.'

.But if a ship, having proceeded but a few days on the voyage, is, from had weather and beconuug leaky, obliged to return, and is there detained by an embargo; it has been.

> Ilavrlock v. Geddes, 10 East's Rrp. 555. ■= P. 9S.

3 Sec A'jbutfs Law of Sicrcliant Sliips and Seamen, p. '.iSj.

held

Gonveyance of G'aq^s. — Freighti 213

\f^Xil lliat no freight is due : if any expenses, however, have been incurred by the ship on account of the cargo, they must be paid '.

So if the ship is prevented from setting forth on the Yoy* at^e, no partition of freight pro rata itineris can be claimed for goods laden on board, even if such prevention arises without the fault of the master ; as where the vessel while waiting for convoy was cut out of (he river by the enemy. For freight dcfes not commence until the ship ha« brolien ground and begun the voyage *;

So where, under an agreement in a charterparty, the plaintiff let his ship to the defendants on a voyage from Shields to Lisbon, with convoy, the freight to be paid on riglit delivery of the cargo ; the ship having sailed from Shields with tlie cargo, and joined convoy at Portsmouth, and after being detained near a month off Lymington, her sailing orders being recalled by the convoy in consequence of the occupation of Portugal by the enemy ; and the de- fendants having refused to accept the cargo at Portsmouth^ to which the ship returned, it was unloaded by the plain- tiff after notice to the detendants, and then was sold by consent of both parties without prejudice : Iseld that the plaintiff could not recover freight pro rata on demurrage ^

So where the master of a vessel coveng^nted witli the freighter (inter alia) that the vessel should proceed v,iih the first convoy from England for Spain and Portugal, o? either, as he should be directed by the freighter or hi? agents, and there make a right and true delivery of the Cargo agreeably to the bills of lading signed for the same, and (o take in a home cargo, and return and make a right and true delivery thereof at London, &c, ; in consideration

> The Isnbella .Tarobina, 4 Rob. Adm. Rep. 77.

« Cnrlino; v. Lon-, I Bos. and Pul. 634.

3 Liddsrd v. Lopes and another, 10 liasfs Rep. B23.

whereof,

!^74 Of Mercantile Contracts for the

whereof, the frciohter covenanted (uiter alia) to load the vessel out and home, and pay certain frei<i,ht per ton, part before, and the remainder on right and true delivery of the homeward cargo at London : it was held, 1st, That the freighter, having first ordered the master to pvoceed to Lis- bon, in consequence of which the master had taker; in goods and signed bills of lading for that port, could not afterwards countermand that order, and order him to proceed to Gi- braltar, without first recalling the bills of lading, or at least tendering sufficient indemnity to the master against the consequence of his liability thereon . 2d, That the master having proceeded with the outward cargo to Lisbon under the first order, and brought home a return cargo, and deli- vered the same io the freighter at London, was entitlal to his freight for that voyage, though he had not sailed with i\\e first convoy, the sailing with the first convoy not being a condition precedent to his recovering freight lor the voyage actually performed under the first order, but a distinct cove^ nant, for the breach of which he was liable in damages. And 3di That he was entitled to recover such freight as upon a right and true delivery of the cargo, agreeably to the bills of lading, and upon proof of having delivered the goods for which the bills of lading had been signed, though it appeared that the goods liad been damaged by the negli- gence of the master and crew on board, by not ventilating them sufficiently : the party injured having his counter remedy by action for such negligence'.

Where a ship is chartered to sail from one port to an- other, and from thence back to the first, the wliole being one entire voyage, no freight will be due if the ship should be lost in the homeward voyage, although the merchant has had the benefit of tlie outward voyage. But if the outward

> D.iVidionv.G Wynne, 12 i:as*,S81-

^ and

Conveyance of Goods. — Freight. 275

^nd homeward voyage are distinct, freight will be due lor the proportion of time employed in the outward voyage'.

If a ship freighted to H. is prevented by restraints of princes from arriving, and the consignees direct the muster to deliver the cargo at G., and accept it there, be is entitled to freight pro rata itincris. And if he is prevented by the default of the consignees from delivering the whole cargo there, he will be entitled to freight pro rata for the part delivered*.

And from the same case it seems, if a ship }3e freighted on a single voyage outwards, and be prevented from deli- vering her cargo, that she is entitled to freight from the owner of the cargo for bringing it back ; as also demurrage from the time of her arrival at the port of loading and lio- ticCj till the owner receives the cargo, or the master has had time to discharge it, if abandoned by the owner.

If there is no express stipulation to the contrary, the master is not bound to part with the goods, until his freiglit is paid. And if, by the regulations of the revenue, the goods are to be landed and put into tlie king's warehouse, if the duties are not paid, the master may enter them in his own name, and thereby preserve his lien'.

If a consignee receives goods in pursuance of the usual bill of lading, by which it is expressed that he is to pay the freight, he by such receipt makes himself debtor for the freight, and may be sued for it ■*. But tlie master's right to exact payment of the freight from the consignee, does not arise till the delivery is completed or determined^.

If a consignee, known as such to the master, sells the goods before they are landed, iie and not the buyer is liable

> MoUoy, b^2. c. 4. s. 9. Malyne, p. 98. iMackrcll v. Sitnoud and Han- key, Trin. T. 16 Geo. III. B. R.

"- Christy v. Row, 1 Taunt. 300. 3 Abbott, 276.

* Roberts v. Holt, 2 Show. Ali'.i. Cock v. Taylor^ 13 iinst's Rep. S39.

« Christy v. Row, I Taunt. 300.

• . t2 • to

276 Of Mercantile Contracts for the

to be sued for the freight, although the buyer enters the goods at the ciistoui-house in his own name'. Neither does such entry of goods at the custom-house, made by a person who is only agent for the consignor, and known to the master to be acting in that character, render such agent liable to be sued for the iVeight*.

or INSURANCE.

Insurance is a contract by which the insurer undertakes, in consideration of a premium, to run the hazard to iudeui- nify the person insured against certain perils or losses, or against some particular event'.

The origin of insurance, like that of many other customs, which depend rather upon traditional than written evidence, lias occasioned much doubt among the writers upon mer- cantile law. From a passage in Suetonius ■♦, the origin of this contract has been ascrib<5d by MoUoy and Malyne to Claudius Caesar, the fifth emperor of Rome. Other authors have given the honour of it to i\\e Rhodians. But from several concur'^ent testimonies, it is evident that the inven- tion of marine insurance is of modern date : both Grotius' and Bynkershoek^ expressly declare, that among the an- cients this contract was unknown,

1. Of the Policy.

The policy, which is the instrument in which the terms of the agreement are set forth, is generally printed, with a few terms superadded in writing, calculated either to con- tract or confine, or to enlarge or extend the printed language, and thereby to render it subservient to the intention of the

« 7\rtaza v. Rmallpiero, 1 Esp. X. P. C. 23. ' Ward V. Fclton, 1 Easfs R. 507. ^ g jj. ^om. 458.

« In Vita Tiberii Claiulii, c. 18. • ' 5 Dc Jure B. ac P. lib. ii. c. 12. s. .S.

* Quasst. Juris Pubiiri, lib. i. c. '^I. ■ ' '

parties:

Conveyance of Goods. — Insurance. ^IT

parties to the particular contract'. It is not, like most con- tracts, signed by both parties, but only bj the insurer or underwriter^.

Policies aro of four kinds : I . An interest policy. S. A wager policy. 3. An open policy. 4. A valued policy.

1. An interest policy is where the assured has a real, substantial, assignable interest in the thing insureds

2. A wager policy is an insurance founded on an ima- ginary risk.

. 3. An open policy is where the value of the thing in- sured is not inserted in the policy, but must be proved if a loss happens.

- 4. A valued policy is where the value of the thing in- sured has been settled by agreement between the parties, and that value inserted in the policy ■♦.

After a policy of insurance has been once underwritten, it cannot be altered by either party, eitlier on the ground that the intention of the parties Avas mistaken, or that the policy had been framed contrary to the real agreement ' ; unless by the consent of the parties ^ ; cr that there exists some written document to show that the meaning of the parties was mistaken''.

Of the Requisites of a Volicy.

The essential parts of which a policy is composed arc

eight.

First, The Name of the Party inspired.

It was formerly the practice to eiFect policies of insurance

in blank, without naming the persons on whose accounts

they were made. But this being found both mischievous and

inconvenient, by the statute 25 Geo. III. c. 44, it wasdi-

• 3 Bur. 1555. S^-lw. N. P. Q.'JQ. " Park's Insuranre, 1. 3 Mar-ihali's Insurance, \^0- * Srhv. N. P. 940.

5 Henklc v. 'J'he Royal Exohan^o Asfurancc Company, 1 Vcs. S17.

• Bates V. (irabham, 2 Salk. 414.

« Motteuj V. The Gov. and Coinp. of the London Assurance, 1 Atk. 545.

rectcd,

i?78 Of Mercantile Contracts for the

reeled, that the name of all persons interested, or, if they resided abroad, the name of their ag-eats in this kingdom, should be inserted in the policy. The provisions of this act, however, being found inadequate to the purpose for which it iviis designed, it was rep(\iled by the 28th Geo. III. c. 5C, which enacts, that it sliall not be lawful for any person to effect any policy on siiips or goods, without first inserting the names or usual style or form of dealing of the parties interested ; or of the consignors or consignees of the pro- perty insured ; or of the persons receiving the order for, or elTecting, tlie policy ; or of tiie persons giving directions to the agent immediately employed to effect the same; and that every policy made contrary to the meaning of the act shall be imll and void.

Upon this act it has been held, that it is not necessary, ivhere a policy is cflected by an agent, that the name of the agent, or any other description to his name, should be in- serted in the policy, eo nomine, as agent'. And it has also been decided, that a policy effected by a broker, de- scribiiig Jiimself therein as " agent," was a sufficient con^- pliauce with the requisition of the statute*.

Secovdlij^ The Names of the Ship and Master,

By the common law and usage of merchants, it seems necessary to insert the name of the ship. But should this be misfaken, tlie insurance will not be vitiated, provided the identity can be proved, and that there was no fraud*.

To avoid any inconvenience which may arise from a mistake in the name of a ship, it is usual to add in the policy, to tlie name given, these words, " or by whateveir other name or names the same ship should be called •*.'*

' Ci- Vic^nifr v. Srvanjon, 1 Bos. and Pul. 346, n.

^ Bell V. Gir<.n, 1 B-ns. and Pul. 315.

3 Le McBuriir V. Vr,iigliaii, 6 Last's R. SSI. * Schv. N. P. 944.-

Thirdly^

Convey ance of ^oods . — Insurance . 279

Thirdly^ The Siihject Matter of the Insurance.

It must be specified whether the insurance is made upon ships, goods, or merchandises. With respect to goods, ihere are some kinds of property Avhich do not foil under the general denomination of" goods in a policy ; and for the loss of which the underwriters arc not answerable, unless they are specifically named. Thus goods lashed on deck, the captain's clothes, or the ship's provisions ; fot none of these things are within a general policy on goods, which meaiLS only such gooils as are merchantable, and a part of the cargo'. So goods stowed on deck have been held not within a general policy on goods, for tlie risk is greater as to them tlian as to other goods -. But ]\Iagens, in his Es- say on Insurances % says, that gold and silver, whether coined or uncoined, pearls, and other jewels, may be iiisured at London and Hamburgh, and several other places, under tiie general expression of mcrchandi>,c.

Fourthly, The Voyage i/isiired.

The. voyage insured must be truly and accurately de- scribed in the policy, namely, the time when, and place at which, the risk is to begin, the place of the ship's depar- ture, tlie place of her destination, and the time Avheii the risk shall ehd''.

On the goods, the risk usually begins from tlie lading on board the ship, and continues till they are safely landed; on the ship, from her beginning to lad(^ at A. and continues till she arrives at the port of destination, a;'d is there moored in safety twenty-four Iiours.

From the words of the policy, it is obvious, Mr. Park observes, that insurers are not answerable for any accidents

« n('s> V. ThwaiJf , Guildlmll Sittings attrr Hil. 16 Qm), III,

= Rackiionse V. Ripley, Sitt. alter Mich. 180i, C. P.

3 Vul. i. J). 10, ' 4 S.'lw. N. P. 915.. _ .

■\vhich

230 Of Mercantile Contracts for the

ivhicli may happen to (he ^oods in lighters or boat? going aboard, previous to the vo/age. Yet, as the policy says, the risk shall continue '' till the goods are safely landed," it seems no loss obvious, m here ships cannot come close to the quay, in order to utiloiid, the insurer continues responsible for the risk to be run in carrying the goods in boats to the sliore. If there be a loss, however, in these cases, the accident must have happened while the goods were in the boats or lighters belonging to the ship ; for then it is consi- dered a continuance of the same ship and voyage. But if the owner of the goods chooses to emj^loy his own private lighter to land them ' ; or if, after the goods are put on board a public liglitrr, the owner takes them into his own possession, and discht^rges the lighterman % the underwriter in such cases will not be liable* But where the goods were laiidcd in a public lighter, publicly registered, the under- writers were held liable for Ihe damage which happened, although the lighters had been employed and paid by the consignees of the goods ^

Ffthly, The various Perils against ivhich the Insurer under -> takes to indemnify the Assured.

The words now used in policies are so comprehensive, that there is scarcely any event unprovided for. The insurer undertakes to bear " all i;erils of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart an4 countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, aiid people, of what nation, condition, and quality soever; barratry of the mas- tej arid mariners ; and all other perils, losses, and rnisfor-

X Sparrow V. Carr^itliprs, 2 Str. 1236-

« Strons;v. Natallv, 1 N. R. 16.

3 Ifurry V. Th? Royil Exch. Ass. Comp. 2 Bos. and Piil. 4 SO- See Rucker V. •TheLoatlon Assurance Coir.p. ibid. 432, n. (a). Matthie v. Potts, '3 Ibid. 23.

tunes,

Conveyance of Goods. -^Insur mice. S2SI

tunrs, dial have or sIi;;U come to the liiut, dctrimenf, or damage of the saiJ c^oods and merchandises, and ship, or any other part thereof." But although the words descriptive of the hazards run by t'le insurers, arc so very comprehensive, it should seem, says Mr. Park, that a great diflerence is to be made between the damage sustained by goods from inju- ries on board a ship, and that which occurs by external ac- cidents. 'I'liat the insurer is liable in the latter case cannot admit of a doubt ; but as the former may proceed from bad stowage of tlie goods, or from their being ex[)osed to wet, the, ship, and not the insurer, ought to be answeral:»Ie. lu Malyne' it is said, that if any loss arises from theft on board the ship by the mariners, the insurers are not chargeable with the loss, but the master must make it good; which opinion is supported by tlie statute 26 Geo. III. c. SG. by which the owners of the ship arc liable to make goodaiT losses happening on shipboard, to the aiiiount of the value of the ship and freiglit.

But that the underwriter is liable for a robbery of the goods insured, when committed by thieves from without, cannot be doubted ; as thieves are a peril expressly insured against by the j olicy ^.

The policy is frequently made with the M'ords"}ost or not lost'- in it, by which the hisurcr takes upon himself, not only the risk of future loss, but also the loss, if any, that may already have happened ^.

Sixthly y The Premium, or Consideration for the Risk or Hazard run.

This is the most material part of the policy, because it is the consideration of the premium received, that makes the underwriter liable for the losses that may happen. For,

> P. ^g.l 2 Harford v. Maynard, Guildhall, Hil. Vac. 1T85.

3 -Marshall's Insurance /JoT.

if

•^2 Of Mercantile Contracts for . the

if the premium Aveie not acliially paid at the time of the stil^sciiption, it does not apprar (hat tlie underwriter can aftc'iwardi maintain an action for ii against the assured^ the policy expressing it to have been received at the time .of underwriting.

Seventhly f The Date,

Rc^^ularly the policy should be dated ; tliat is, the day,

month, and year iij which it is made should be added. It

is usualj tliough not essentiidly necessary, to specify the sum

insured.

Eight/dj/j The Stamp.

The policy m\ist be duly stamped, according to the regulatiojis of the 48 Geo. III. c. 140, Schcd. Part I. ■which are as follow :

1. Wi)ere the policy of assurance of any ship, or upon any goods or properly on board, or upon the freight of any ship, or upon any other interest relating to any ship, or upon, any voyage to or from any port or place in th<; United Ki?igdom of Great Britain and Ireland, or in the islands of Guernsey, Jersey, Alderncy, or Sark, or tlie isle of Man,. to any other port in the said United Kingdom of Great Britain, &c, where tlic premium or consideration shall not exceed 205. per (^ent. on the sum insured ; if the whole sum insured s:;all not exceed 100/. a duty must be paid o( Is. 3d.

If it exceeds lOOl. then for every 100/. and also for any fiiictional part of 100/. whereof the same shall consist. Is. 3d.

And where the premium or conidcration"" shall exceed 205. per cent, on the sum insured, if the whole sum shall jiot exceed lOOZ.— 25. 6d.

' If it exceeds' 100/. then for every 100/. and also fdr any fractional part of 100/. whereof the same shajl con- gist, 25. C(^.

But

Co?iveyance of Goods. — Insurance. 2S3.

But if the separate interests of two or more distinct persons shall be insured by one policy, then the said duty pf Is. 3d. or 2s. 6d. shall be charged in respect of each fractional part of 100/. as v,e\l as in respect of every full sum of 100/. insured, upon any separate and distinct in- terest.

2. Policies of assurance upon any other voyage than before specified, or for any certain term, not exceeding twelve calendar months :

Where the premium shall not exceed 205. per cent, on the sum insured, if the whole sum insured shall not exceed 100l.—2s. 6d.

If it exceeds 100/. then for every 100/. and also for B.ny fractional part of 100/. whereof the same sliall consist, £5. 6d.

And where the premium shall exceed the rate of 205. per cent, on the sum insured, if the ^\hole sura insured shall not exceed 100/. — js.

If it exceeds 100/. then for every 100/. and also for any fractional part of 100/. whereof the same shall con- sist, 5s.

But if the separate interests of two or more distinct per-, sons shall be insured by one policy, then the duty of 25. 6d. and 5s. shall be cliarged in resjiect of each and every^ fractional part of 100/. as well as in respect of every full sum of 100/. insured upon any separate interest.

3. Policies of assurance, commonly called a mutual in- surance, whereby persons insure one another without any premium or pecuniary consideration :

Upon any voyage from any port in the United Kingdom of Great Britain, or in the islands of Guernsey, Jersey, AI- derney, or v^ark, or the isle of ?vlan, to any other port in jthe said kingdom, or islands, or isle of Man, for every 100/.-

and

'SSi Of Mercantile Contracts Jbr the

and also for each fractional part of 100/. thereby insured to any person, 9s. 6d.

Upon any other voyaj^c whatsoever, or for any certain term, or period of time, not exceeding twelve calendar months ; for every sum of 100/. and also for each fractional part of 100/. insured to any jjcrson, 5s.

The cases when alterations may be made in a policy of in- surance duly stamped, without an additional stamp being ne- cessary, arc regulated by the statute 35th Geo. Ill . c. 63. s. 1 3. which enacts, that provided the aKeration be made before notice of the determination of the risk originally insured, and tiiat the premium or consideration originally paid or contracted tor, exceed the rate of ten shillings on the sum insured, and that the thing insured remain the property of the same person or persons, and that the alteration do not prolong the term insured beyond the period (twelve months) allowed by this act, and that no additional or further sum be insured by means of such alteration ; that no additional stamp duty is necessary by reason of such alteration.

Upon this statute it has been held, that where a policy of insurance had been ellected " on goods and specie on board of ship or ships sailing between the first of October 1799 and the first of June 1800," an alteration in the po- licy, extending the lime of sailing to the first of August 1800, did not require a new stamp ; for by the words of the act, " so that the alteration be made before the determina- tion of the risk originally insured," is to be understood such a determination of it, as is occasioned either by the loss or safe arrival of the thing insured, or by the final end and conclusion of the voyage'. But where the original policy was effected " on sliip and outfit," and after the ship had sailed, and the risk had attached, was altered to " on ship and goods," it was held that the policy in its altered

' Kensington v. Inglis, in error, 8 East's Rep. 273.

state

Conveyance of Goods. — Insurance. 2S0

state required an additional stamp; for the words, "the thing insured shall remain the property of the same persons," apply to one identical and contitmei subject matter during- the whole time insured '.

2. Of the Consiructinn of tfie FoUcy.

A policy of insurance being considered as a simple con- tract of indemnity, must always be construed, as nearly as possible, according to the intention of the contracting par- ties, and not according to the strict and literal meaning of the words. And, in questions on such construction, no rule has been more frequently followed than the usage of trade '.

lu the case of Robertson v. French ^, Lord EUcnborough said, " that the same rule of construction which applies \o all other instruments, applies equally to the instrument of a policy of insurance, namely, that it is to be construed according to its sense and meaning, as collected in the first place from the terms used in it, which terms arc tkemsclves to be understood in their plain, ordinary, and popular sense, unless they have generally in respect to the subject matter, as by the known usage of trade, or the like, ac- quired a peculiar sense distinct from the popular sense of the same words ; or unless the context evidently points out that they must, in the particular instance, and in order to effectuate the immediate intention of the ])ariies to that contract, be understood in some other special and peculiar sense.''

A policy on a ship gonendly from A. to B. shall not be construed to be discharged until tlie ship is unladed. But if it contain tlie usual words, " till moored twenty-four hours in safety,'* the insurers shall be answerable for no loss that does not happen before the expiration of that time ;

• Hill V. PaUen, 8 East's Rep. 373. » " 1 Bar. 348.

3 4 East's Rep. 130.

even

^86 Of Mercantile Contrdcts for the

even though the loss "vvas occasioned by an act of barratry of the master during the voyage '.

So if a ship be insured for six montlis, and three days before the expiration of the time receive her deatli's wound, but by pumping is kept afloat for three days after the time, the insurer is discharged ^.

Under a policy containing the usual words, *' till moored twenty-four hours in safety," and where the cap- tain, the very day on which t]>c ship arri\cd at her moor- ings, was served with an order from Government to return in order to perform quarantine, the underwriters were held lia- ble for a subsequent loss ; for under such circumstances the ship could not be said to have been moored twenty-four Lours in safety, although she did not go back for some days^

In an insurance upon freight, if an accident happens be- fore any goods are put on board, which prevents her sail- ing, the freight cannot be recovered •*.

But if the policy be a valued policy, and part of the cargo be on board when such accident happens, the rest being ready to be si lipped, the insured may recover to the whole amount of the policy \

So in an open policy on freight, the underwriters were held liable to pay the insurance, tliongh the ship had saili^d in ballast, and was captured before her arrival at the place where the cargo was to be put on board ; for on the instant of the departure of the ship, the contract for freight has its inception, and the right to freight commences ^\

When an insurance is '*at and fiom" any place, the sliip on her arrival at that place, is protected during her

' Lockver v. Omev, 1 T. R. 252.

' Meretonv v. Dnnlop, liastcr T. 23 Geo. TIT. B. R.

3 Waplrs V. Kaincs, 2 Str. J 243. • ■• Tonge v. Watts, 2 Stn. lioX, 5 Montgomery v. i;j^s;ii«.;toTi, ?, T. R. 36i. ^ Thompson V. Taylor, 6 T. R. 4TS.

preparation

Conveyance of Goods. — Insurance. 287

preparation for the voyage upon which it is insured : but if all thoughts of the voyage be laid aside, and the ship be there for a considerable time with the owner's privity, the insurer is discharged '.

But a policy at and from a place, the name of whicli equally designates a particular town, and a port compre- hending an extensive district of coast, does not protect a cargo laden any where within the limits of the port, but refers to the town itself ^.

Neither will a policy, if it describes a voyage at and from a place which is the head of a port, cover a voyage at and IJrom a distinct place which is a member of the same port '. And if a policy be cflected on goods on a voyage defined from A. to B., the risk to commence at and from the load- ing thereof on board, not specifying where, it must be in- tended a loading at tiie place from which the voyage com- menced. And if it be proved, tiiat the goods were loaded in an earlier part of the ship's coarse, and before her arrival at the place where the voyage insured was to commence, tlie assured, iu case of lois, cannot recover on the policy •*. Wlicre a ship was charteretl on a voyage from London to Dominica, and back to London, at a certain freight upon the outward cargo, and after delivering her outward cargo at Dominica, the charterers were to provide her a full cargo homeward, at the current freight from Dominica to London, it was held that an insurance, by the owner of the ship, on the freight at and from Dominica to London, attached while tlie ship lay at JJomiuica, delivcrino,- her outward cargo, and before asiy part of the liomev/ard cargo was shipped, during which time siie was captured \ :

• Chitty V. Srhvyii, ? Atk. :ir,9.

^ Constable v. iVohle, 2 Taunt. 403,

3 Payne v. HiUchinsoii, Ibid. n.

4 ''"pitta V. Wootimnii, Ibid. 4)6.

5 Honicastle v. Stuart, 1 iiast's Rep. 400,

So

^8; Of Mercantile Contracts for thi

So on a policy on freii;lit, *' at and from London (o Ja- maica, with liberty to touch at Madeira, and to discharge and take ingoods there;" 8uch freight to be paid in Madeira, on delivery of the gooils shipped at London for that place, by Madeira Avine at 40/. per pipe, to bo carried in the said ship free of freight ; the uiiderwritcrs Mere hild liable for the total freight, though wlien tlie sliip was QJipturcJ the wine to be paid for freight was not on board ; for the con- tract of freiglit was entire, and the charterparty treats the whole as one voyage '.

Where there was an assurance on the outward and home- ward bound voyage, and the latter ran *' at and from Ja- maica to London," it was held, thiit the homeward risk be- gan when the ship moored at any port of the island, and that there the outward risk ended, and did not continue till she came to the last port of deliver}' -.

In the cases ofBarrass v. The London Ass. Comp.', and Leigh V. IMather ^, it was held that the risk upon the ship ended twenty-four hours after its arrival in the first port of the island for which it was destined ; but that the outw^ril risk upon goods coiitinued till tliey were landed.

Li the construction of policies, the strictum jns, or apex juris,' is not to be the rule : but a liberal construction is to be adopted, and the usage of the trade called in to explain any doubts. Thus, in an insurance on goods from Malaga 4o Gibraltar, and from thence to England or Holland, the parties liaving agreed that the goods might be unloaded at Gibraltar, and reshipped in one or more British ship or ships, and it appearing in evidence that there was no Bri- tish ship at Gibraltar, but that the goods had been unloaded and put into a store ship (which was ab.vays considered as

' Atty V. Lindo, 1 New Rep. 230. ^ I'niTideii V. Cov.lpy, 1 151. Rp\). 111. 3 GiiiMliall Sin. aftrr Hil. MH->. < CiuildhaH Sitt. after Midi. T. 1795.

a warehouse),

Conveyance of Goods.— Ins2trance. 289

a warehoiistO, the insurers were held to be liable for the loss of these gooils in the store ship '.

In the case of Pelly v. lloyul Exchange Assurance Gompany % Lord Mansfield s;iid, "the insurer ut thcdtne of umlerwriting-, has under his consideration the nature of the voyage, and the usual nuuuier of doing it ; aad what is usually done by snch a ship, with such a cargo, in such a voyage, is uiulcr.stood to be referred to by every policy." The same })rinciples were adhered to ia Noble V. Kennoway \, v»here the same learned judge said, " that every under uriter is presumed to be acquainted with the practice of the trade he insures, and that whether it is recently established or not."

In no instance is a reference to tlic usage of trade more apparent than in the cases of insurance upon East India voj-ages. The charterparties of the East India Company give leave to prolong the sliip's stay in India for a year, and it is common by a new agreement to detain her a year longer. The v/ords of tlie policy too are very general, without limitation of time or place. These charterparlies are so notorious, and the course of the trade so well known> thatilic underwriter is always liable for any intermediate voyage^ upon which tiie ship might be sent while in India, though not expressly mentioned in the policy. Th(;se principles were fully laid down and settled in the nine causes tried upon the ship Winchelsea, Ea^t Indiaman ; the verdicts in whicli were ultiniutely uniform for the plain- tiifs the insured, against the underwriters •*.

From these casi\s it is evident, that in the construction of East India policies, whether the wonb be large and com- prehensive, or restrained and limiti'd, the usage of trade will always be conxsiclered, and tiie intermediate and coun-,

' Timeyv. Ethcrinittoi), 1 Cur. 3!8. ' 1 Bur. 341.

'' D<nig.'49?. * ^Hlvadur v. liopkir.s. 3 Dur. 17'JT.

tr;.'

290 Of Mercantile Conlracts for the

try voyages held to be insured. Ilcnvevcr, tlie parlies may, by llicir own agreement, prevent such latitude of constnic- tion. Nor need tliis be done by express -words of exclu- sion : but if, from tlie terms used, it can be collected that such -was the intention of the parlies, that construction -will prevail '.

But though this contract meels the most liljcral construc- tion, yet the equitable principU^s of construction have never been carried so i'ar as to entitle a man Avho has insured one species of property, to recover damage occasioned by the loss of a species of property different from tliat named in the policy. Thus, one who has insured a cargo of goods, cannot under that insurance recover the freight paid for the carriage: nor can an owner, who insures the ^A//) merely ^ demand satisfaction for the loss of merchandise laden there- in ^, or extraordinary wages paid to seamen, or the value of provisions during a detention of the ship at any port to repair^, or a detention by embargo +.

Nor is the underwriter on goods liable for the freight ^aid by i\\Q owner of the goods to the proprietors of the hliip, where the g(xjds were partially lobt '.

In the construction of policies of insurance upon timr-, the same liberality prevails as in other cases ; and an atteji- tJon to the meanhig of the contracting parties has always been paid ^'.

If a ship, from stress of weather, is in a decayed condi- tion, and goes to the nearest place to relit, it is to be con- sidered in the same light as if she had been repaired in the very place from whieli the voyage was to commence, and no deviation from the terms of the policy'.

» Park's I nsiiranrp,fiS. - .Molloy,b. 2. c. T. y. 8.

3 rictclipr rt :il. v. J'oole, Guildhall Siu. after liash r, 1769. Eden v, J'oolc, Sitt. ufUT iiil. i:85.

4 ll(,l>n^l^^)n v. i:wrr, I 5'. W. Vit.

5 l',ailli>- V, Moii(ii^li.i:ii,JIiI. 25 Gen. ]il. B. l\. « Doug. 327. ■ .\iott<''*i6 it al. V. r.'jr.doii As-ura(n;c C((!jij,ianv, 1 Atk. 5'15,

Liberty

Conveyance of Goods.— Insurance. 22 i

I/ibf'riy given in ii policy on a Mshing voyiigc, to cliase, capture, and man prizes, does not aulhorise the ship to liy- by nine days oiKa port, -waiting lor an enemy's ship to come out, "when she shouhl have completed her cargo ; althougk she lay in wait during that lime within the limits of her fishinn^ oTonnd'.

3. What Versons may he insured. In this country all persons, wliethcr British subjects or aliens, may, in general, be insured. But an action cannot be maintained on a policy at the suit or on the behalf of an alien enemy during war, although the property insured be of British manufacture, and exported from this country*. An insurance, however, may be effected on a ship belonging to an alien by a British subject, as trustee on behalf of the ship-owner, and an action on tiie policy may be maintained at tlie suit of the trustee even in lime of war ^. So an alien domiciled here in time of war, and who is licensed to carry on commerce with the belligerent counlry lor the benefit o\^. himself or of his correspondents, may sue and recover upon a policy in his own name in case of a loss by capture, al- though his correspondents may be residing at the time in the enemy's country/.

A neutral, although domiciled and carrying on trajc in an enemy ""s country, in partnership wilii an alien encrnvj may insure his interest in tlie joint property, and, oncomii.^- into this country, may sne for the recovery of the lutsS arising from one of the perils insured against ^

4. IVIio may he Inmrers. By the comm.on law and usage i)f merchants, any person whatever nught be an insurer. But much inconvenience

' Ilibbi-rtv. JIalliday, 2 Taunt. 49H.

• Hiandon v. ,\fs.I)itt", li T. II, '23. l!ri:tmv v. To-rVen, 5 Hid. S^. 3 Kciisin^itoii V. liij;;lis, b least's Ut-p. 'sibji,

* Uspnriclia v. .Noble, l.'i Ibid. 'd'ai. ^ llnuii V. Etlic, 0' T. U. 'llS.

V 2 ana

^2 Of Mercantile Contracts fur the

and niihcbkif having arisen from insurances made bj persons in insolvent circmnsliiiiccs, by the htatiite ii Geo. I. c. 18, all socielies and part net siii^js, except tljc Royal Exchange and London Assurance Companies, arc prohibited from granting, signing, or under-writing any policy of assurance, or making any contracts for assurance, of or upon any ship or ships, goods or merchandises at sea or going to sea, and from lending any moneys by way of botlomr}', on pain of the policy being ipso facto void, and the mo- ney snbscribed or underwritten forfeited : and in case of any money advanced by way of bottomry contrary to this . act, (he bond or other security for the same to be voitl, and the offenders Iial>le to be sued for an usurious con- tract. It is however provided, that any individual may subscribe any policy or assurance, or may lend money by Avay of bottomry, notwithstanding this act, so that it be nut on the account or risk of a corporation or body politic, or upon account or risk of persons acting in a society or part- nership for that purpose.

And therefore a contract for a marine insurance, in which the phuntiif did uot alone stand the risk insured, but asso- ciated one or more in partnership with him, cannot be en- forced'. And although one partner in such illegal in- surances has paid the whole of the loss, he will not be allowed to recover any part of the premiums from his co-partners". Which decisions have been fully confirmed in the case of Aubert v. Mdze, 2 Bos. and Pul. 371.

But though this statute deprives the assurers of their remedies against each other, it does iiot operate so as to -tleprive thv assured of their action agaiijst the underwriter, ■if there be another secretly concemed with him in the risk*.

' Sullivan Vi Grea> PS. sittings iil'ic r i:. T. 1789.

» |}....t!i V. llo.l!;:-,)!!, 6 T. K. -^n-). Mitihtl V. CockhajT.c, 2 IIpd. B1. Jiy, ' » i» 1'. !l. 403.

The

Conveyance of Goods. — Lmirunce. 2P3

,. The rule then establislicd by llicsc cases teems to be, lliat if the credit of any {oriipany or society (except the two r.iciitioned m the sta(utc) be in any event pledged irj a con- tract of tills nadire, the coaliact is void. Thus, where a company of ship owners engaged to insure each others ships, thougli tlicy covenanted severally, and not johUly, to pay a crrhdn sum in case of loss, in proportion to their respective shares ; yciy as there was a clause providing tlud in case of tlie insolvency of any one of the members, ail Uie others were to be responsible, the contract was void '•

But if in such an association, each iiidividual subscriber is liable only for t!ie sum <o AViiich his name appears, and not for the default of the oIiut subscrifxTs, such an associa- tion is !\ot an infringement of the act^.

By sections 24, 25, and 23 of (he statufe, all the rights and privileges whicii the South Sea and East India C'omiyanies enjoyed previous to the passing of the act, and the right of lending money on buttoniiy to the captains of their owa ships, are secured.

5. What Things may Is insured.

The subjects of marine insurance are ships, goods, mer- chandisc% freight +, bottomry, and respondentia interest'; a special interest in go^ds, as the lien of a factor^'; money expended bythecaplain for the use of an East India ship'; the captain's commission and privileges in an African tra.de ship^ ; the profits expected <o aris<^ from a cargo*^. AVith respect, however, to aii insurance on freight, it is to be ob^

' Lpcs v. Sin'.th, 7 T. l\. S.7.S.

'■' U.-iirison v. Millar, 2 I-.sji. N. P. ('. 51.S.

' 1 Magrns's Kpcayon Iiis' raiicf , 4.

* Montgoincrv v Ks;ri"t(iii, :\ 1. 1'. ^(i-''.

* (ilovorv. lilack,-'^ liur. 1.191. I 111. \Wx>. AOri.

* (iodin V, 'I'hr l,onilon Assurance Coinpniiy, 1 liur. 489. 7 (in o;orv V. Clirislie, l';iik. 11.

* Kins; v. (Jlovrr, 2 Now Roj). 206.

9 Cirantv. rarkinson, Park, 267. Larilaiy v. Cous\^s,2 E^ist'i Rep. 5 14,

: served.

294 Of Mercantile Contract for the

served, l.st, that the freight oiidit to bo insured eo nomine as fieij;b<, and lliat it will not be covercil i>y an insurance on jroods'; and, 2dly, unless an inchoat, ri.'iht to the freight has commenced, the assured ~,vi'i not be oniitlcd to recover *.

By the maritime regulations of most if not all the tradiiig pov,cvs i)i Europe, insr.ranccs upon the wages of seamen are forbidden. In Great Britain, for the ])urpose of making tlie sailors interested in the return of the ship, it is enacte<l by the Sih Goo. I. c. 2i. s. 1'7, that no master or owner of any m.erciiaiit ship sliall ray to any seaman beyond the seas any money or effects on accoujit of wages, exceeding one moiety of the wages due at the time of such payment, tili such snip shall return to Great Brilain or Ireland. But tlie good eile.^ls of this law would be entirely defeated, if they ^vere |)ermiited to insure their wages. A sailor, there- fore, can neiihrr injure his wages, nor any commodity which lie is to receive at the end of the voyage in lieu of wages \ It should, however, seem, that this regulation does not extend to ])revent mariners from insuring for the home- ward voyage those wages which they have received abroad, or i^oods which they have purchased with those wages-*.

M\ insurances upon the property of an open enemy are void, and subject the party oflending to imprisonment for

three months' .

6. Of Losses.

By Perils of the Sea. Every accident happening by the violence of the winds or waves, !)y thunder and lightning, by driving against rocks, by the strandlngof the ship, or I)y any other violence wliich human prudence could net foresee, nor human streno^th resist, may be considered as a peril of the sea; and

» Bainic v. 'SToiidi^iliani, Park, b3. ' Tonsc v. W:;(ts, 2 Str. I2j1.

•i "W.-bster V. i)e Tsisset, 7 T. K. 157.

♦ I Mxig'^tl%, -ly. s 33 Geo. III. c. 27. 5. 4.

tie

Conveyance of Goods. — Insurance. 295

{he insurer must answer for all damages sustained in conse- quence of such accident'. But if a ship be driven by stress of v.eathcr on an enemy's coast, and is there captured, it is a loss by capture, and not by perils of tlie sea*.

The mistake of the captain, as where he missed the island for which lie was bound, is not a peril of the sea '.

Neither is the destruction of a ship by a species of worms infesting the rivers of Africa, a peril of the sea •*.

A sliip whicli is not lieard of within a reasonable time ^fter \\x departure shall be presumed to have perished at sea 5. What shall be deemed a reasonable time, must depend on the distance and the length of the voyage, &c. A practice prevails among merchants, that a ship shuli be deemed lost, if not heard of v/iihin six months after her de- parture for any part of Europe, or within tw;he monthsj if for a greater distance ^.

By Capture.

As between the insurer and insured, the sliip is to be considered as lost by tlm capture, though she be never con- demned at all, nor carried into any port or fleet of the enemy? and the insurer is answerable to the extent of the sum iu- pured for the loss actually sustained ".

No capture by the enemy can be so total a loss as to leave no possibility of recovery. If the owner himself should retake at any time, he v. ill be entitled ; and by the statutes S9 Geo. II. c. 54. s. 21. J:J Ge;), HI. c. (jti. s. 4i», if an English ship retake the vessel captured, either before or afier

' IShow. 3';3. Mais'iali's Insuriiace, 4i0. ' Green v. lilmslic, l>e:ike's \. I'. C '?.U. J (irojson V. Gillxrl, i.aster, "^i?. Gen. III. B. Ft. * Rolil V. Parr, Gaililhalt Sittin-s afd-r llil. }790.

5 (;reen V. Crown, '2 Str. lit)-). .Newby v. Uead, Sittings after IMuh. 3 G>o. III.

^ Parks Insurance, 86.

-'^Eur. GOi. Uepaiba V. Ludlow, Coin. Rep. 3i:0.

coil-

996 Of Mercantile Contrncisfor the

condcmrl'ition, the o-svner is entillcd to restitnlion upon stafcd salvnge. In which cases it is to be observed, tliat if the ship be recovered before a demand, the underwrilcr is responsible for the amount only of the loss sustained at the timeof the demand*; and that if he has paid the loss before the recovery, he Avill be entitled to stiuid in the place of ihe assured '.

Altliough, by tlie terms of the policy, the underwriters undertake to indemnify the assured against all captures and detentions of princes, yd. it has been hfkl, that any assu- rance made on enemy's properly agaiiu^t liritish cai)ture is illegal and void, and consequently tliat thi^ assured could not recover, even after tlie c; ssation of lior tilities, on a policy of insurance e/Tccted in this country belbrc the commence- jnent of hostilities ^.

By Detention oj Princes, &'c.

On questions of detention not mucli dilficulty has arif^cn : the underwriter, by express "words, undertakes to indemnify against all dr.mages arising from the arrests, restraints, and detainments of iviiigs, princes, or people.

Under these terms in a policy, dj-tent ioii is said to be an arrest or embargo in time of war or peace, laid on by the public antjiovity of the state'. And therefore, in case of an arrest or embargo by a prince, though not an enemy, the insured is entifled to recover against tlie underwriter •*.

In case of detemion by a foreign power, who in time of war ri!) V h;'.ve seized a neutral ship, in order to be searched for enemy's property, the costs and cliarges consequent thereon must be lx)ri;e by the underwriter ', ^

' Park's Insurance, f<S.

» Fur»a:lr) v. Rodgirf, 3 Bos. and Piil. 191. Gamlia v. Le Mesuricr, 4 East's Rip. .*07. Kcllner v. Le IMesuricr, 4 Ibid. 3yt>.

» Malynr, I JO. * i? Bur. 69G,

^ Saloiicci V. Johnsnr, Hil. 25 Geo. IH. 15. K.

But

Conveyance of Goods. — Insurance. 397

Rut a dotoiition fi)r non-payment of customs, or for navi- gating against the laws of those countries where the ship happens to be, shall not fall upon the underwriter '.

Where the risk is " at and from," insurers arc liuble for the payment of damage arising by the detention or seiznra of ships before the commenceniciit of the voyage, by t!i« government oftlie country Viheie the ship loads '.

But if a party of rioters board a ship, and take part of tlie cargo, the underwriters are not liable, on a cou!:t stating a loss to be hy people to the plaintitfs unknown ; for (he Avord people in the policy means the ruling and supreme power of the country ^

British undervtriters are not liable for damages wliich owners of Ibreign vessels may sustain from endj.irgo laid by the British government on foreign ships *.

But -where the assured is a subject of this country, lie may recover against a Britisli underwriter for tlic lobS sustained by the detention of the llritish government \

In all cases of losses by dcteiitio^i, before tiie insnied can recover, he' must abandon to the underwriter whatever claims he may have to the projrei ty insured '\

By Barratry.

The derividion of tlie \vord barratry is very doubtful ; it comes most probably from the Itali;in barratrare, to cheat. It may be thus defined : Any act of the master and m.sri- ners of a criminal nature, or which is grossly negligent, tending to their own benefit, to the prejudice of tiie owners of the ship, and without their ponsent ai:d privity ">. But to constitute l>airatry, there must be a breach of <iuty by

' 9 Vern. IJfi.

^ Green v. Vdun?, 2 Loni Raym. 810. IJotoh v. Edie, 6 T. IJ. 113.

•■» NcfbiU anit anojlier v. Lu.shii!f>;iou, 4 T. R. 1S3.

* Tniitt^nir r. ihiMian!, 3 Bos. and Piil. '291.

s l-:iic V. TliDiupson, Guildhall Sltt. afUT Hil. If^Ol.

^ Park's Insurance, 1G9, " ibiJ. 111.

S9$ Of Mercantile Contracts for the

the master, in respect of li is owners, ^vitll a fraudulent or criminal intent, or ex malcficio ^ .

It is not necessary, in order to make the insurers liable, that the loss shouhl happ>"n in tlie very act of barratry ; that is, it is immaterial -whether it take place during ihe. fraydu- lent voyage, or after tlie sliip has returned to the regular course ; for the moment the ship is carried Irora its right track with a fraudulent intention, barratry is committed *.

But the loss in consequence of the act of biirratry must happen during the voyage Insured, and wilhin th(; time limited for the expiration of ilie policy, otherwiso the un-» derwriters arc discharged '.

Barratry may be committed either by a ^vilful deviation-', in fraud of tlie owner, by smuggling', by running aAvay ■with the ship, by sinking or deserting Iicr, or by defeating or delaying the voyage w ith a criminal iiitcnt ^\

So barratry may be committee], if the master cruizes and captures a prize, in consequence of which the vessel was lost, although he thought he was acting for the benefit of the owners'.

So if the master trade "with an enemy, even with a view to the advantage of Iiis owners, it is barratry, if on account of such illc-ral traflic the vessel insured is condemned ^.

So if he sail out of port, without paying the port duties, •wliereby (he ship is forfeited, it is barratry '\ . But where a ship sailed a different course from that first intended, uhich alteration was publicly notified before the ship sailed, and where tjio master was to have no benefit by the change, it was held not to be barratry '".

• Farlev. Rowrroft, S i:.n?t's R. Vid.

'- Lockytr v. Offloy, 1 T. R. 2o'2.

3 Ibid. * Gowp. 143. 5 I T. R. 252.

c Sehv. N. P. 9f)!K 7 Moss v. IJjrom, 6 T. R, 370.

» Earlp V. Rowcroff, 3 East's Rpp. 120.

s Kgi};htv. Canibridgr, 1 Str. 5^1.

1' Stainma V. Bronn, I, Str. 1179.

So

Conveijance of Goods. — Insurance. 299

So if a ship tuko ;) prize, and iti.stc;ul of pioccccling- oi> her vojage (he captain is forced by the maripers (o return to port ^vi(h his prize, ai2;ainst the orders of his owners, ths captain is justified of necessity ; and it is not bunatry, be- pause not done to defraud liis owners '.

Neither is an act, of the captain, \vith the kno';vledi:i^e of the owners of the ship, though \yithout the priyii'y of the owner of the goods, who liapj)eiied to b^' the per-ori insured, barratrj-- : for barratry cannot bo couiinitted by any person except tile master or inaiin'TS, nor agaiiist ivjy person ex- cept the owners of the shin \

And if tiie master of the siiij) be also ow7ier, any act, w li ich in another master would be construed barratry, cannot be sq in him' ; eycn thougli he has n^'.ortguged his ship ■+.

It -will be proper also to reniari^ that barratry cannot be pommiited against the owner of the ship with his consent'.

Bif Fire.

Fire is expressly mentioned in tJK' policy as a loss within ihe perils against which the underwiiters agree to iiidejunily the insurorj. Aiid therefore Avlicrc a ship was se! on fire to prevent her falli'ig into the hands of an eiieniy of sujK'rior force, it was held tl)at tlic underwriters were liable to make good the loas^'. Fire, said Lord Eik'ubprongh, is expressly lueatipiK'xi in the policy, as one of tlie perils a^aiirst which the underwriters undertake to indemnify t.he assiu'cd : and if the ship is destroyed by tire, it is of no consiquence whether this is occasioned by a cotmnon accident or by lightning-, 04" by au act done to the stale'.

' F,lt-ii V. Ci-oi;ilt>n, 2 Str. I'iivJ.

' ^utt V. iiomdifii, 1 T. R. .Tiri. Vallojo v. Wheeh-r, Cowp. 143,

•2 11. .ss V. H'.uUtr, 1 T. II. 33: ^ Park's lusunuK-e, Iv'rf.

'• S.-hv. .\. P. 9;->.

* Ciortlon V. liimiuin^fcn; 1 Camp. N. P. C. l-^'J. ' JViii.

So,

oOO Of Mercantile Contracts for the

So, if a ship be driven a niilc on shore bj a liuniranr, or be burnt in a dry dock while repairing, the insurer is liable '.

7. Partial Losses.

A partial loss upon a siiip or goods is snch a proportion of the priir.e cost, as is equal to the diminution in value occasioned by the loss*. By express stipulation in the terms of the London policies, the underwriters declare that they will not be answerable for partial lo.tscs not araounthig to SI. per cent, llowxvor, thougli tliey provide against trifling claims for partial losses, they umlertake to indem- nify against lOiSOo, however inconsic|erable, tliat arise from a general average \

If several articles be insured for one sum, with a.disiinvt valuation on each, as upon ship so much, on cargo so much, and no part of the c:rgo be taken on board, so that the risk on that never attat^hes : if the ship be lost, tiie insured shall recover such a pfjrtion of the sum insured as tlie value of the article lost bore <o the value of the whole ■*.

When goods are partially damaged, the underv,ri(er must pay the owner s\ich proportion of the prime cost or value in the policy, as corresponds wifh the proportion or diminu- tion in value occasioned by the damage : if no value is stated in tlie policy, then t!ie invoice price, together with all charges until the goods are put on board, and the premium of insurance, will be the ground of compu- tation.

An;l Avhethcr (lie goods arrive at a good or bad marl^et, it is inunaierial t) ihc insm-er ; for the true way of c.>timat-' ing the loss is, to take ilu- value of the commodity at the prime cost or f"air invoice pri( e \

. ' Per Lord Mansti- 1(1, 1 I?tir. 341.

^ Mar,-h.')ll'-^ lii'^tirnncc, 5.'3a. 3 ParW's Insnranrf, J;}j.

■* Anirry v. Kod^t-r-, I lisp. \l. ydT.

5 Dick and another v. Allrn, G>!i!d!ial! Sitl. aft-r Miclt. T. ]7^5.

But

Convc}jance of Goods. — Insurance. ^i

But tliesc ruk's can only apply to cases whore there is a specific description of goods : i\here the property is of various kinds, an account must be taken of the value of the whole, and a proporiion of that as tlie amount of tlie goods lost '.

la adjust hig a partial loss on goods arising from sea dainapjc, the calculation is to be made on the diUi^'ience be- iween the respective gross proceeds of the same goods M'lien sound and when damaged, and not on the net proceeds ^ ; for the loss for v/hich the underwrite! is alone responsible, is tlie deterioration of tlie commodity by sea damage, and not for any loss -which m.ay be the consequence of the fluc- tuation of the market, or of ti)e duties or charges to Jje paid after the arrival of the commodity at the place of its de- etination ^.

Since tlie I9th of Geo. II. in case of a total loss, the con- stant usage has been to let the valuation in the policy re- main, unless there be proof that the plaintiff had a co- lourable interest oniy, or tliat he has greatly overvalued the goods +.

Some goods are of a perishable nature ; agai;'st the losses arising from tiie natural and inherent principle of corrup- tion in them, the underv.rittrs, by the ordinances of most countries, are held to be disc'iarged. Tlie underwriters of London have, indeed, Ijy express \\oids inserted in their policy declared, that they w ill not be asiswerablc for any partial loss happening to corn, Msh, salt, fruit, flour, and geed, unless it arise by way of a general average, or in con- sequence of the ship being stranded ; agaiast a loss by whicli lat{er event, the two insurnjice companies do not un- dcrtalve to be answerable K

' l,e das V. Huglies, KiistT, 21 Cen. HI. B. R.

■= JohiuoH V. Shcd:!on, 2 KaUVRrp. 5ol. reco^r-i^'-d in 3 Bo';. and Pul.

■■' LpwN V. RiH-ker,2iitir. 1!67. < Park's Insaranrf, ll'J

5 3 li'jr. '.35^.

On

.502 Of Mercantile Contracts for the

On this clause it has been hehl that no loss of such com- moililies sliall be dcrmcd a total our, so ii.s \q charge tl«: insarers, as loiii^ as the coinr.iodily sj-jocifically rtir.ains, tliough perliaps wlioily unfit for use. '^h^ ^'*-^^ ^" - ^^''''• 1065. to the contrary lias been .since ovcrrn'cd by that of Mason v. Skurray '; in which it was also held, tiiat the term malt, includes pens, beans, and malt ; though rice has lately been held not to lie so considered -. Neither is salt- petre included within tlic term malt '.

The doctrine thai the nnderwri(er is discharged while the commodity specifically remains, though it may be so da- maged as to render it on that account (lie subject of tolal loss, was held with respect to a cargo of wheat, which was partially damaged in a btorm •♦.

The same was held whh respect (a a cargo of iish, which tras stinking and of no value when exaniin<'d\

But where a cargo of fruit was so much putrefied from sea diimaije that it was obliged to be thrown overboard, the undeiwriters w ere held liable ^\

S. Of Adjustment » The adjustmeat of a policy is the settling and ascertain- ing of tlie ainouut of the indenmily which the assured, after all allowances and deductions are made, is entitled to receive under the policy, and the fixing of the proportion which pach underwriter is liable to pay". And alter the signing of wliicli, if he refuse to pay, the owner has no occasion to go into the proof of his loss, or any of the circumstances

• fiiiih'.ha!! Sin.-nfier Mil. HSO.

"^ Mootlv V. Sun-ui^jf, Sitt. after llil. KDS. Srott v. BounliUion, 2 \ew R'-p. '21.S. . 3 .Toiirnu v. llourrrtni, Sitt. .iftor Easft-i, -il (".eo. III.

4 Wilson V. Smith,:} Cur. 15.30.

s Co'.-kin- V. fr.isor, ^5 Geo. III. B. R.

' Dystiii V. F^aivcroftj .'} l'>o«. ami Ptil. AH. Ji'Aiulrews v. Vanglian, Giiil.ih.il! Sitf. aftor ^licii. 1191.

' Marshall's liisurance, 529,

respecting

Conveyance of Goods. — Insurance, oO^

tfspecting it : the adjusfmetit being considered as a note of lumd'.

Cut though an adjustment is prima facie evidence against the imderwrittT, yet, if there has been any misconception of the law or fact upon which it hiis been made, (he under- writer is not absohitely concluded by it -; and until lie ac- tually pays the loss, he may avail himself of any defence, either upon the facts or the law of the case ^

So unless there was a full disclosure of tlic circumstances of the case as they really existed, before the luiderwritcr signed, his liability to the assured will be discharged, not- withstanding the adjustment •*.

9. Of Total Losses and Ahandomnent.

A total loss is of two kinds ; one, wliore the propeiity in- sured peribhes ; the other, where the property exists, but the voyage is lost, or the expense of pursuing it exceeds the bcneiit arising from it K In the latter case the assured may elect to abandon to the underwriter all right to such part of the property as may be saved ; and having given due notice of his intention to do so, the assured will tlien be entitled to demand a compensation as for a total loss : but if the assured docs not in fiict abandon, or if he omits to give the uiiderwriter notice of his having abandoned, or if, being required by the underwriter to assign over bis in- terest in the property insured, he refuses to do so % he will iiot be entitled to claim as for a total loss''.

\Vlien the assured has received intelligence of such a loss as entitles him to abandon, it is incumbent on him tp

' Ilog V. Gouldnoy, GuikihiiU Sitt. after Tihi. 1T45. Beawcs's Lex Merc.

3iq:

^Roiiors V. Majlor, Sitf. after Trh). 17S0. De Garron v. GaUjraith, Sit\ aftiT Trii. 1795.

i iU'Yhcvi V. Chnnipinn, 1 Campb- N. P. C. 134.

* yhepturd V. Chcwtcr, 1 Campb. N. P. C. 274.

sex: U. 4^5. « a T. R. 2Ge. ? Solw. N. p. 974.

make

504 Of Mercantile Conlracisfor the

make his election to abandon, nnd to o;ive notice thereof io tlie nnderwriiei' %villiin a reasonable liuie alter receipt of flic intelli^rcnce ': otherwise the assured will be coitsiderecl a^. hiH'iiig- waved his right to ab;jndon ; and in case any part of t3;c pro^xTty insured be saved, lie can recover as for a partial loss only '.

In the case of Hodgson v. Blackistoji % it was he^ld, lliat a notice of abandonment ^\as necessary, though tiic ship and cargo Iiad been sold and converted into money whea the notice of the hiss was received.

But if the insured, hearing t!»at his ship is much disabled and has put into port to re|xiir, express liis desire io the underwriters to abandon, and be dissuaded from it by them, and they ordi r (lie repairK to be made : they are liable to the owner for all Use subsequent damage occasioned by the refusal, ti'.ough it should ainount to tiie whole suni insured*.

When an abandonment is mtide^ it muit be a total, not a partial one ; that is, one pait of the property insured shall not be retained, and the other part aband«ne<l''.

In case of a capture the assured may abandon, and claim as for a tot d loss ; and a r(vaj)tare ^vill not deprive him of this right, if neither the thing insun^ nor the voyage be lost^. But where a mere capture, followed by a recapture, has taken place, and neither the thing insur-^d nor the voy- age be loit, and tlie damage sustained does not amount to a rnoitty of the valuo, the assured can only claim for the loss he has actually sustained. For the right to abandon raust depend on the nature of the case at the time of X\ic action brough!, or at tl-e lime of the oiler to abandon '.

' T3a-V^r V. Tjtu'^rF, 9 J- asf s Ren. 2S.7.

- Mit.-hcll V. l.dic, 1 T. R. Wi^ All.vood v. nor.ckel!, Guildhall SJtt. "aftrr Mifh. 1795, 15. R. citrdin I'ark, i:2, .

a Sitt. after J/ii. 38 vieo. III. IJ. it-

* D.-i Costa V. Ncv.'i)}ianj,'2 T. H. -lUT. 5 pof!:;rr. -. 1 :;-.

» (;t)ss V. \\\t\\fxs,l Bur. (W:}. Mill?? v. FU-trhfr, Vjod^. i:j(J. 7 Hamilton V. Mt-ndez, 2 Bur, ntliJ. 1 UI.Rfu. i:76i

If

Conveyance of Goods. — Insurance* 305

If the ship and goods are restored in safety, between the Offer to abandon and the action brought, the assured cannot proceed as for a total loss ' .

If by a peril insured the voyage is lost, it is a total l6ss ; and therefore if the voyage be defeated by damage done to the ship, the assured may abandon ^.

Where a neutral ship bound from America to Havre was detained and brought into a British port for the pur- pose of search, and pending proceedings in the Admiralty the king of Great Britain declared Havre in a state of blockade, by which the further prosecution of the voyage was prohibited ; this was held to be a total loss of the voy- age, which would entitle the neutral assurer to abandon, and to recover as for a total loss. But not having given notice of abandonment in due time, he could only recover for a partial loss '.

But to justify an abandonment, the loss must be occa- sioned by one of the perils specified in the policy ; and therefore it has been held not to be a loss within the policy, for which the assured can abandon, and recover as for a total loss of the cargo, that the port of destination has been shut by order of the enemy against ships of the nation to which the insured ship belongs, although the cargo was of a perishable nature, and it was sold at another port for a very small priced.

So if a ship, finding her port of destination shut, sail back for her port of outfit, without intending to complete the voyage insured, this is a voluntary abandonment of the voyage, and will discharge the underwriters *.

Before a person insured can demand from the under-

' Bainbridge v. Neilson, 10 East's Rep. 3'29.

* Manningv. Newnhairt, Trin. T. 22 (^ej. III. 3 Barker v. Blakes, 9 East's Rep. 283.

♦ Hadkinson v. Robiiison, 3 Bos. and Pul. 3$8. Lubbock v. Rowcroft, » Esp. N. P. C. 50.

$Blanckeahagen v. London Assuiance Comp. Sitt. b,-fore Mieh. 1808.

X writer

306 Of Mercantile Contracts for the

writer a recompense for a total loss, he must abandon to bim Avhatever claims he may Lave to the ])r()perty insured ; and when the underwriter has discharged his insurance, and the abandonment is made, he stands in the place of the insured, and is entitled to all the advantages resuUirg from that situation, in case the ship or property, &c. is recovered from shipwreck, capture, or any other peril stated in the policy'.

But though the assured stands as a trustee for the insurer, and, in case of ai)andoiiment, iflie has received the freight, is liable to pay it over to the underwriter on freight, yet it lias been held that the assured mny deduct out of it the fol- lowing expenses : 1. The exj)enses of the ship and crew iu the foreign port, including port charges, besides the ex- pense of shipping the cargo, which exclusively belongs to the underwriters upon freight. 2. Insurance thereon. 3. W ages and provisions of the crew, from their liberation iii the foreign port till their discharge here. 4. Wages to the crew during their detention. But it was decided, that the assured was not entitled to deduct out of such freight, —

1. Charges paid at the port of discharge on ship and cargo.

2. Insurance on ship. 3. Diminution in value i)f ship and tackle by wear and tear on the voyage horae^.

10. Of Fraud in Policies. In every contract good faith and integrity are indispen- f^ably necessary to give it its due operation. No contract can be goot!, unless it be equal ; that is, neither side must have an advantage by any means, of which the other is not aware'. Tliis being admitted of contracts in general, is of double force in those of insurance, which are vacated and

' I'ofhier, Traite dii Cor.trat d'Assiirancc, 133. Randall v. Cockran, 1 Vfs. 98.

» Shn.rp V. Gladstone, 7 East's Rep. 24.

3 Crot. De Jure B.ac P. lib. ii. c. 12. s. 23. Puff. 1. v. c.9. s. 8. Bynk. Q. J. P. p. 4. 1.4. C.26.

annulled

Convey ance of Goods . — Insurance. 307

annulled by any the least shadow of fraud or undue con- cealment'. Both parties, the insurer as well as the insured, are equally bound to disclose circumstances that are within their knowledge, whether in fact true or false; and there- fore if the insurer, at the time he underwrites, can be proved to have known that the sliip was safe arrived, the contract will be equally void, as if the insured had concealed from him some accident which had befallen the ship *.

Cases of fraud upon this subject are liable to a threefold division: 1st. The Allegatio felsi ; 2d. The Suppressio veri; 3d. Misrepresentation^. The latter, though it hap- pen by mistake, if in a fact or circumstance material to the risk, will vitiate the policy as much as actual fraud ^.

As to the first point, that a false assertion in a policy will vitiate the contract, several cases have determined that the policy shall be void where goods, &c. are insured as the property of an ally, or as neutral property, when in fact they are the goods of an enemy '. So a misrepresentation of the time of the sailing of the ship has been held to vacate the policy^'. And such false assertions in a policy will vacate the contract, even though the loss arises from a cause wholly unconnected with the fact or circumstance misrepresented''.

The second species of fraud which affects insurances, is

the concealment of circnmstances known only to one of the

parties entering into the contract. The facts upon which

the risk is to be computed lie for the most part within the

knowledge of tlie insured on]y. The underwriter must

therefore rely upon him for all necessary information j and

must trust to him that he will conceal nothing, so as to raalie him form a wrong esliniate.

' 9 Bl. Com. 460. ^3 Tnunt. ST. 1 Bl. Rep. 594. ^ Fark, 213.

* Macdoivall v. Fraser, Don;;;. gOO. «

5 Skin. S-il. Woohnei- v. Muilman, 3 Bur. 1419. 1 Bl. Rep. 42". Fcr- naii'lcs V. Da Cosfa, Silt, aftirllil. 4 G( o. 111.

• Roberts v. Fonnereau, Guildhall Sitt. after Trin. 1742. " Per Ltte C. J. in Seaman v. Fonnereau, f-tr. llbS.

X 2 A mer-

308 Of Mercantile Co7itracls for the

A merchant having an account that a ship, described like his, was taken, insured her, without j^iving any notice to tlie insurers of wl)at he l)ad heard ; the policy was de- creed in equity to be delivered up, the concialrnent of the intelligence being considered a fraud '.

If a ship is adverti^'d to be in danger, and the insured ef- fects a policy " on sliip or ships," knowing that the ship ia danger is one of them, without stating the ships' names, this is a conceahnent wliich avoids the policy, although the- ru- mour was false -.

And it seems that if a merchant effects a policy on ship or ships, knowing their names, but not conmiunicating them, the policy is void ; such insurance being tantamount to a re- presentation that he does not know by what ships the goods will com* ^

A ship being bound from the coast of Africa to the Bri- tish West Indies, sailed to St. Thomas's on the coast of Africa, on the 2d of October, a circumstance with which the plaintiff was acquainted by a letter received in Fe- bruary. The policy was not made till the 2}»t of March. The letter was not shown, nor was any thing said of her sailing from St. Thomas's; but in the instructions " the ship was said to have been seen on the coast the 2d of Oc- tober." The policy was held to be void *.

But although the rule is laid down thus generally, that one of the contracting parties is hound to conceal nothing from the other ; yet there are many matters as to which the insured may be innocently silent. lie need not men- tion what the underwriter knows, Scientia utrinque par pares contrahentes facit. It will be presumed that the underwriter is acquainted with tlie usage and circumstances of'the brancli of trade to which the policy rel;ites ; and if

' Da Co«ta V. SranilreJ.y P. Wmi. 170.

^ I.Micli V. }lami)ti)n, " 'J'autit. ,'iT. ^ \h'u\.

* Kail ilftV and another V. Shoolbred, GiiilJIial! citt. after Trin. 17S0.

the

Conveyance of Goods. — Insurance. S09

tiic usage of the tmde is general, it is immaterial for tliis purpose that it is not uniform. The insured need not men- tion what the undcrAvritcr ought to know ; what he takes upon liimsclf tlie knowk-d^^e of; or what he waives being informed of. The underwriter need not be told what lessens the risk agreed and understood to be run by tlie express terras of the jwlicy. lie need not be told general topics of speculation : as for instance, the underwriter is bomid to know every £ause which may occasion natural perils ; as the difiicuKy of ihe voyage ; the kind of seasons ; the probability of iightaing ; hurricanes and earthquakes. He is bound to know every cause wJjich may occasion po- litical perils ; from the rupture of states ; from war, and the various operations of war. He is bound to know the probability of safety, from the continuance and return of peace ; from tlie imbecility of the enemy ; through the weakness of their councils, or their want of strength. If an underwriter insure private ships of war, by sea, and on shore, from ports to ports, and from places to places, any where, he need not betuhl the secret enterprises on which they are destined ; bcc;iu.se he knows some expeditions must be in viev/ : and from tli;; iisture of liis contniet, he waives the informatiofi, without being told. If he insures for tliree years, he need not be told any circumstance to show it may be over in two : or, if he insure a voyage with liberty of deviation, he need not be told what tends to show there will be no deviation. And, as the njcans of information and judging are open to both, and each proitis-ses to actjrom his own skill and sagacity, there is no need to communi- cate ojie another's conclusions from known facts. In short, the question in cases of concealment musit always be, whe- ther there was, under all the circumstances, at the time the policy was underwritten, a fair statruient, or a concealment; fr^-udulent, if designed ; or, if not designed, varying ma- terially

310 Of Mercantile Contracts for the

terially (he object of the policy^ and changing the risk unrlprstood to be run '.

Within this principle, Lord EllenI)orough was of opi- nion that it was not necessary, where an insurance was made on the homeward voyage, to communicate a letter from the captain, stating the damages he liad encountered on the outward voyage, and describing the ship as being then unseaworthy, and standing in need of a great many repairs, as governing the time when the ship would be able to sail ; for if it were so, said his lordship, it would be ne- cessary in all cases to inform the underwriters ^\llen repairs are wanting *.

An underwriter refused to pay a loss by capture, the ship being Portuguese and condemned for having an English su- percargo on board, because the insured had not disclosed that circurhstance. The court held that the condemnation was unjust, and was not such a circumstance as the insured was bound to disclose '.

The third means by which policies are rendered void, is by misrepresentation.

A representation is a state of the case, not a part of the written instrument, but collateral to i(, and entirely inde- pendent of it. Therefore, if a representation be false in any material point, even through mistake, it will avoid tlie policy, because the underwriter has computed the risk upon circumstances which did not exist. In Pawson v. Watson ^, Lord Mansfield stated, that " there cannot be a clearer distinction than that which exists between a war-

» Per Lord Mansfield, in Carter v. Boehm, 3 Bur. 1905. 1 Bl. R. 593.

Lord Mansfield in Ihe course of his argument in this case said, that if the iindprv.riter at ihe timo of nndcrwriiingappr.-hfnds or is aware of any sup- pression or omiti'on of circuaistanres by the insured, he cannot take advan- taj2:e of it after the, loss has happened ; for he ought not to have signed the policy, with a secret reserve in his own mind to make it void.

^ Beckwith V. Sydebotham, 1 Campb. N. P. C 116.

3 Mayne v. Walter, Eajter,22 Geo. III. B. R. * Cowp. 785.

ranty,

Conveyance of Goods.'— Insurance, o\\

ranfy, wliich makes part of the written policy, and a col- lateral representation, which if false in point of materialify makes the policy void ; but if not material, it can liardly ever be fraud uk^it.

The same rule holds if the broker conceals anything ma- terial, al; hough the concealment may be innocent, and the only ground fur not mentioning the facts concealed was, tliat they appeared immaterial to him'.

But the thing concealed must be material; it must be some fact, anil not a mere supposition or speculation of tlie insured ; and tlie underwriter must take advantage of any misrepresentation the first opportunity, otherv.ise he will not be allowed to claim any benefit from it at a future pe- riod. If therefore (he vessel insured is represented as ex- pected to sail at such a time, this will not amount to a misrepresentation.

Thus, where a broker insuring several vessels, speaking of them all said, " which vessels are expected to leave the Coast of Africa in November or December;" the policy was helcl good, all Lough in fact the ship in question had sailed in the month of May preceding^.

In all cases of fwiu!, wherever there has been an allega- tion of a faiseiiood, a concealment of circumstances, or a misrepresentation, it is immaterial whether such allegation or concealment be the act of the person himself who is in- terested, or of his agent ; for in either case the contract is founded in deception, and the policy is consequently void'.

A. policy W:ll not be set aside on the ground of fraud, unless it be fuliy and satisfactorily proved ; and the bur- then of pro(>f lies upon the person wishing to take advan*- tage of the fcau !. But though fraud will not be presumed unless it be fully and satisfactorily proved, positive and

1 Shirlev v. Wilkinson, B. R. Mich- 2i? Gon. HI. Douj;. SOG,

" Barber v. Fletcher, Doug. 292. 3 Fitzherberl v. Matlier, 1 T. R. i2.

direct

312 Of Mercantile Contracts for the

direct proof is not to be expected : from the nature of the thing, circumstantial evidence is all that can be given'.

II. Of Sea-worthiness.

In every marine insurance, whether on ship or goods, it is a tacit and implied warranty, that the sliip is, at the tmie of the insurance, able to perform the voyage. Any defect which may ciidaniier the ship, though wholly un- known lO the assured, will vacate the contract, gnd dis^ charge the insurers from their responsibility*. But though the insured ought to know whether she was sea-worthy or not at the time she set out upon her voyage; yet, if it can be shown that the decay to which the loss is attributable, did not cornmciice till a period subsequent to the insurance, the nnderwriter will be liable if she should be lost a few days after her departure^ In Eden v. Parkinson-', Lord Mans- field said, by an implied warranty every ship insured must be tight, staunch, and strong, but it is sufficient if she be so at the time of her sailing. She may cease to be so in twcnty=four hours aficr her departure, and yet the under- writer will continue liable.

But if a ship sail upon a voyage, and in a day or two become leaky and founder, or is obliged to return to port without any storm, or visible or adequate cause to produce such au eftect, the jury may presume that she was not sea- worthy when she sailed ^

The sea-woiii»iness of a ship being an implied condition in a policy of insurance, it follows of course, that in en- tering into the engagement, it is not necessary that there should be any previous representation of the condition of the ship ; because, unless it be fit for the performance of the voyage insured, there is no binding contract. But

' Park'-t Insurance, 282. ' Ibib. 288. ' 5 Bur. 2804.

1 Dour. 7.'^. = Munro aii(^ another v. Yandam, Guildhall Sittings

After ^li'.h. 1794.

' thougl^

Conveyance of Goods. — Insurance. 313

though a ship must be sea-^vorthy at the time of entering into the policy, no insufficiency of the vessel in a former voyage will vacate tlie policy'. So if the assured has coTicealed no circumstance relative to the sca-^vo^t^liness which he was required to disclose, and did not know, at the time of effecting tiie policy, any fact wliicli rendered her, with reference to the risk insured, otherwise than sea-worthy, , he is entitled to recover -.

But the assured cannot recover on a policy of insurance, unless the ship is equipped with every thing necessary to Jier navigation during the voyage ; the ship must be sea- worthy ; properly equipped with sails, rigging, and stores; she must be maimed with a sufficient crew, and have a captain and pilot of competent skill to navigate her for the voyage insureds

12. Of Illegal VoT/ages. AVhenevcr an insurance is made upon a voyage expressly prohibited by the common statute or maritime law of this country, the policy is void. And in such a case, it is im- Uiatcrial whether the underwriter did or did not know that the voyage was illegal ; because the very cpntract is a nul- lity, and a court of justice can never lend its authority to substantiate a claim founded upon a contract in direct contravention of the known and ehtablished laws of the land^. Of tliis opinion is Bynkershoek, who says, that even if it be told to the underwriter that the voyage is illicit, he shall not be bound ; because the contract is null and void ; aiisl where that is the case, the compliance with the terms of it depends upon the will of the contracting parties merely ^

VShoolbrcd v. Niitt, Guildhall Sitt. after Hil. 1782.

■^ Haywood v. Rogers, 4 Easts Hep. 190.

3 Law V. Ilollingwortli, 7 T. R. l()0. Fanner v. Lcgrg, 7 T. R. 186. Wedderburn ct al. V. ivll, 1 Campl). N. P. (\ 1.

i Camdfii V. Anderson, 6 T. K. 123. 1 Bos. and Pul. 273. Wilsrn y. Marrjat, 8T. R. 31. I Bos. and Pul. 430.

; (iux-H Jur. Pub. 1. i. c. "^l.

In

314 Of Mermnt'ile Contracts for the

In the case of Camden v. Anderson, Lord Kenjon said, " If in llie commencement of one entire voyage there be any thing illt'gal, and an insurance be el;ect(d on the latter part of the voj'age, which taken by itself would be legal, such illt^gal commencement will make the whole illegal, and the assured cannot recover upon (he policy." In pursuance of this principle, it his been held that if a ship be insured " at and from A. to B.," and there be any illegality in the traffic during her stay at A., the insured cannot recover on the policy for a loss happening between A. and B.' • But in the same case it was held, that an insurance on the home- ward voyage is not affected by the illegality of the traffic in the outward-bound voyage ; and that goods purchased with the proceeds of a former illegal cargo may be the subject of insurance.

If a ship, though neutral, be insured on a voyage pro- hibited by an embargo laid on in time of war, such an in- surance is void *.

So an insurance upon a smuggling voyage, prohibited by the revenue laws of this country, is void ; but the rule has never been extended to cases against the revenue laws of a foreign state, because no country takes notice of the revenue laws of another*.

We come now to consider how far insurances upon the goods and merchandises of an e:iemy are legal, expedient, or political. By the common law, the insurance of enemy's properly has been sanctioned ; and Lord Hardvvicke,in the case of lienklc v. The Royal Exchange Assurance Com- pany*, observed, that thrre liad been no determination that insurances on enemies' ships during war is unlawful. The legislature have, houever, repeatedly thought it neces- sary to interfere to prevent these insurances' ; the illegality

' Bird V. Appleton, 8 T. R. 562.

' Delmada v. Moltt .:x, Mich. So Geo. IIT. B. R.

3 Planche v. Fl?trher, Doii^. 238. ■» I Yes. 31T.

« Stat. 21 Geo. II. c. 4. and 33 Geo. III. c. 'il.

and

Conveyance of Goods. — Insurance. 315

and inexpediency of which have also l:)een liiially seUled by two unanimous decisions of the Court of King's Bench'.

But though an insurance on the properly of an enemy is illegal, yet an insurance effected on the property of an enemy by virtue of a general license to tiade with sucli eneray is valid ^. So a policy lawfully eifectod by a British subject on a ship belonging to an alien, and trading by virtue of a general license of the king, is good, and may Le. enforced by such British subject in a court of law, for the benefit of such alien owner'.

But if it be provided in such license that tiie party acting under it shall give bond for the due exportation to the places proposed of the goods intended to be exported to such country, and tliey are exported without sucli bond having been. given, such exportation is illegal, and the owners cannot recover on a policy to protect the goods ^.

So an insurance on goods, the property of Frenchmen, shipped in France in time of peace, but exported after the commencement of hostilities, cannot be enforced against the underwriters on the restoration of peace'.

An insurance on the goods of a neutral to a neutral and friendly port is valid, although he may be resident in a place occupied by the enemy '^.

So a Britisii under writer was held liable to the neutral owner of goods insured in a neutral ship, which was carrj-- ing enemy's property from its owner to the enemy's country, either as for a total loss, if notice of abandonment upon the loss of the voyage be given in due time ; or for an avenige loss, if such notice be given out of time''.

' Brandon v. Nosbilt, 6 T. R. 23. Brittow v. Tovrcrp, 6 T. R. 35.

* Potts V. BpU, 8 T. R. 518.

3 K.nsington v. Inj;!!-, in laror, S Easfs R. 273.

* Vantlyck v. Whiimoro, 1 East's Rpp. 4'J5. 5 Brandon v. Ciirling, 4 IDasts Rep. 410.

* Bromley v. Heseltiiie, I Campb. X. P. C. 75. 7 Barker v. Blakes, 9 £;ist's Rpp. 'iS.'J.

Ali-

5H) Of Mercantile Contracts for the

A license to export goods to certain places within the in-. fluence of the enemy interdicted to British commerce, granted to H. N. on behalf of himself and other British merchants, &c. is suificient to legalize an insurance on such adventure, if it appear that H. N. was the a^ent employed by the British merchants really interested in it to get the lir cense, though he had no property in the goods himself'.

An insurance on ships engaged in trading to the East Indies in contravention of the statute 9 and 10 W. III. c. 44, whereby a monopoly is vested in the East India Company, is illegal ^.

No insurance can be made upon a voyage to a be- sieged fort or garrison, with a view of carrying assistance to them; or npon ammunition, warlike stores, or provi- sions ; for these commodities are pro]iil)itcd by the laws of all nations ^

1.3. Of Prohibited Goods,

By the laws of almost all countries, the exportation and importation of certain commodities are declared to be illegal. If the act itself be illegal, the insurance to protect such an act must also be contrary to law ; and therefore void. Agiecabl}- to this principh', all insurances upon commodi- ties the importation or exportation of which is prohibited by law, are void ; and it makes no difference whether the underwriter did or did not know that the subject of the in- surance was a proliibited commodity**.

To prevent all such insurances, the stat. 4 and 5 W. and M. c. 15: inflicts a penalty of 500 Z. on any pi'rson who, by A^ay of insurance, shall procure the importation of any uncustomed or proliibited goods, with a like penalty on the insured. Also by the stat. 8 and 9 W. HI. c. SG, the im- portation of any foreign alamode or lustrings, by way of

' RaMlinson ct al. v. J.anson, 12 East's Rep. 223.

' Cariiden v. Anderson, 6 T. R. 723.

3 Parks, liisuraiict-,a-^H, * Ibid. 329.

insurance

Conveyance of Goods. — Insurance, 517

insurance or otherwise, ■without paying the duties, iis ex- pressly prohibited.

Wool being the staple manufacture of this kingdom, it was always deemed a heinous offence to export it out of the realm. But notwithstanding the provisions of numerous statutes, the practice of insuring it tended only to encourage such illicit commerce ; it has therefore been restrained by divers statutes, and all insurances thereon are declared void. For the penalties for exporting wool, see page 164.

As to what goods come under the general description of prohibited goods, so as to render an insurance upon them void, it may be laid down as a general proposition, that all insurances upon goods forbidden to be exported or imported, by positive statutes, by the general rules of our municipal law, or by the king's proclamation in time of war; or which, from the nature of the commodity, and by the law of nations, must necessarily be contraband, are absolutely null and void '. But insurances on goods, the exportation or importation of which is forbidden by the revenue laws of other countries, are valid, because the foundation of the contract is not illicit ^

14. Of Wage?' Policies.

An assurance being a contract of indemnity, its object is not to make a positive gain, but to avert a possible loss. Hence a policy Avithout interest is not an assurance, but a mere wager only. Such policy, therefore, is properly de- nominated a wager policy ^ By the law of merchants, these contracts were, till the statute 19 Geo. II. c. 37, legal contracts, provided the words," interest or no interest" were inserted in tiie policy. But it being found that the indulgence given to these fictitious or gambling policies had increased to such an alarming degree as to threaten the very annihilation of that security which it was the original

' Park's Insurance, 335. ' Dou^. 238. 3 Selw. \. P. 1019,

in(6nt

'SIS OJ AleVcantile Contracts for the

intent of insurance to introduce, it was enacted by stat. 19 Geo. II. c. 37, that insurances made on ships or goods,, interest bx no interest, or without further proof of interest tlian the policy, or by way of gaming or wagering, or witjiout benefit of salvage to the insurer, shall be null and void. The statute, however, contains an exception for in- surances on private ships of war titled out solely to cruize against his majesty's enemies ; and also provides, that any nicrcliandiscs or eiFects from any ports or places in Europe or America, in i\\Q possebsion of the crowns of Spain or Por- tugal, may be insured in such way or manner as if the sta- tute had not been made.

The above provision of tiie statute relative to insurances from any ports or ]dac(s in Europe or America, in the pos- session of Spain or Portugal, is founded on the regulations of those states to prohibit illicit trade. But it is loosely worded, and a-lmits of some latitude of interpretation. Upon this section of t!.e act it miiy be observed, that the equitable construction of such contracts of insurance as are protected by it, seems to be, that they may be made ^s ithout interest, since in such instances it is impossible for the person insured to bring any ceitain proof of interest on board '.

And, in the conslriiction of the same statute, it has been held that it does not extend to insurances of foreign pro- perty or foreign ships, but that insurances, " interest or no " intt-rest," may be made upon them ^.

An insurance on the profits expected to arise from a cargo of molasses, belonging to'the idaintifl's, v/as held to be good, altljough there was a clause declaring, " that in case of loss the profits should be valued at 1000 1, without any other voucher than the policy 5."

Proi'its to arise from the sale and disposal of a cargo of goods are an insurable interest. But in such a ca?e it is ne-

V Park's Inenrnnre, "68. " T!k Ilason v. Fletcher, Dcug. S15.

••» Grant v. Piirkiiiscm, Miclu 22 Geo. 111. E. K.

cessary

Convsyance of Goods. — Insurance. 319

cessaiy to show satisfactorily that the loss of the profits arose from a peril insured against, such as j^erils of the st a, &c. not from the state of the market, for which the underwriters are not responsible. In short, it is incumbent on the assured to show, that if there had been no shipwreck, there would have been some profit '.

But where not only the profits are an expectation, but the obtaining of a cargo, out of which tiie commission is to arise, is also -da expectaiion, the commission of the consignee is not insurable^.

Where a house in Spain, which was indebted to the plain- tiffs, had consigned goods to i^-essrs. Dubois, and indorsed the bill of lading to them, with a letter annexed, directing them to hold a part of the said cargo for the u§e of the plain- tifis, \\ ho upon getting such intdligencc made the insurance in question, although they had given no orders for the goods ; the court held that the plaintiffs, beiiig creditors of the house in Spain, raised a good consideration for the assignment ; and that therefore there could be no doubt that the plaintiffs had a good insurable interest K

But all insurances made by persons having no int(;rest in the event about wliicli they insure, or without reference to any property on board, are merely wagers, and are void. Thus, where the defendant, in consideration of 20 /. paid by the plaintiff, imdertook that the ship shoidd save her passage to China that se;)son, or that he would pay 1300 /. within one month after the arrival of the said ship in the river Thames ; the contract was held to be void, although the plaintiff had some goods on board '^.

So where the plaintiffs had lent ^6,000 /. on bond to a captain of an East Indiaman, and had insured the ship and

' Barclay v. Cousins, 2 East's R. 544. Ilodson v. Glover, 6 East's R.316. * Knox V. Wonil, Mich. Sitt. at Guildhall, 1808.

3 Hill and another v. Scrretan, 1 Bos. and Pul. 315.

4 Kent V. BirJ, Cowp. 5aa.

carffo

320 Of Mercantile Contracts for the

cargo to that amount, and " in case of loss no other proof of interest to be required than the exhibition of the said bond," the contract was held to be void '.

13. Of Reassurance and Double Assurance.

Reassurance is a contract which the first underwriter enters into, in order to relieve himscll from those risks which he has previously undertaken, by throwing them upon other underwriters who are called reassureis.

This is a species of contract still countenanced in most parts of Europe, and was admitted in England till the 19th Geo. II. c. 31. s. 4. declared it to be unlawful to make re- assurance, unless the assurer should be insolvent, become a bankrupt, or^ie; and even in these cases it must be ex- pressed in the policy to be a reassurance, and the reassurance must not exceed the amount of the sum before assured. \iy this statute also reassurance upon foreign ship-s is prohi- bited, unless in the three instances above mentioned ^.

In France and other countries it Avas formerly allowed io the insured to insure the solvency of the underwriter ; but this practice is not allowed in England : and though no ex- press notice is taken of it in the above statute, it seems that such a ])olicy would be looked upon a wager policy, and treated accordingly ^

Double assurance, which is totally different from reassu- rance, is where the same man is to receive two sums instead of one ; or the same sum twice over for the same loss, by reason of his having made two assurances for the same pro- perty •♦.

The fir,-,t dislinction between these two contracts is, that a reassurance is a contract made by the tirst underwriter, his executors or assigns, to secure himself or his estate: a double

» Lr.urv v. BdurdJPii, Dong. 468. ^ Andrr-e v. Ik-tcher, g T. R. 161. 3 Tark's liisirance, Ti.i. * 1 liur. ;96.

insurance

Conveijance of Goods. — Insurance. S21

Insurance is entered into by the insured. A reassurance, except in the cases provided for by the statute, is absohitely void. A double insurance h not void ; but still tlie insured shall recover only one satisfaction for his loss. This requires explanation. Where a man has made a double insurance, he may recover his loss against which set of the underwriters he pleases, but lie can recover no more than the amount of his loss. This depends upon the nature of an insurance, and the great principles of justice and good failh. An insu- rance is merely a contract of indemnity in case of loss : it follows as a necessary consequence tliat a man shall not re-? Cover more than he has lost, or recover a greater satisfaction than the injury he has sustained '.

It being thus settled, that the insured shall recover but one satisfnction,and that, in case of a double insurance, he may fix upon which of the underwriters he vt ill for the payment of his loss, it is a principle of natural justice that the several insu- rers should all of them contribute in their several propor- tion?, to satisfy that loss against which they have all in- sured '.

Hut though a double insurance cannot be wholly sup- ported, so as to enable a man to rcct-ver a two-fold satisfac-- tion, yet various persons may insure various interests on ihe sjune thing, and each to the whole value ; as the master for Ivages ; the owner for freight ; one jjerson for goods, and another for bottomry '.

If the same man for his own account, though not in his own nartie, insure doubly, it is stitl a double insurance ^

16. Of CI Lan gin g the Ship, It being necessary, Except in some special cases, to insert

' Park's Insurance, 373.

^ Newby V. Kceil, Sitt. in London ahpr Ea-ter Vac. 1763.

3 Godin ct al. v. the London Ass. Coinp. I Riir. 4S9. J Bl, Rep. 103.

* Per Lord Mansfield, nt supra.

S22 Of MercanlUe Contracts for the

the n;ime ot the ship on which the risk is to bo run in the ]^olicy, it fallows as an implicil roiul'Jion, tliat the insured shall neither snbstUute anoUicr ship ibrtli;;l mentioned in the policy, before the voyage eon5menc<\'^, nor ciutingthc course of the voyage remove the property insured froja one ship to another, witliout consent of the insurer, or -svitliout an un- avoidable necessi<3'. If he do, the implied condition is broken, and he cannot, in case of loss, recover against th? underwriter'.

17. Of Deviation,

Deviation is understood to mean a voluntary departure, v,'i(u"ut necessity or any reasonable cause, from the regular and usual course of the specific voyage ensural. \Vhen- ever this happens, even for the shortest space of time, the voyage is determined, and the insurers are discharged from all responsibility. Ncjr is it at all material whether the loss be or be not an actual consequence of the deviation ; for the insurers are in no case answerable for a subsequent loss, in Ti batever place it happen, or to whatever cause it may be attributed. Neither does it make any difference whether the deviation was either witli or without the consent of the as- sured -.

The elicct of a deviation is not to avoid the contract ab initio, but only to determine it from the time of the deviation, and to discharge the insurer from all responsibility ^

If ports of call are named in the policy in a successive order, the ship must take them in the same succession in M-hich tliey are named, unless some usage, or some special facts be proved to vary the general rule -*.

And if ti»e poris of call are not named in a?iy order in

' Park's Insurance, .'583. » Ibid. 387.

3 C;rpon ^. Youn^, "2 Lord RayDi. 340. Salk.'Jit.

4 Btutson V. llaxVorlh, 6 T. H." a.'il. Mar»dji» v. Keid^ 3 East's Rep. 5T2.

the

Conveyance of Goods. — Insurance. 523

the policy, they must be taken in the order in which they occur in the usual and most convcuiont and practicable course of the voyage, not according to (he sliortest geogra- phical distance'.

A -ship was insured from Lisbon to England, with liberty to call at any one port in Portugal : it ^vas held, that under such a policy tlie party had only a liberty to call at some port in Portugal in the course of the voyage to England*.

Liberty given to a merchant ship with a letter of marque, to cha«e, capture, and man prizes, does not justify her in shortening and lying to for the purpose of protecting a prize as a convoy into port K

Neither will liberty to a merchant ship to see prizes into port authorise her to stay till they receive necessary repairs, which they could not otherwise procure *.

But though the consequences of a voluntary deviation are fiitai to the validity of the contract of insurance, yet whenever the deviation arises from necessity, force, or any just cause, t:lic underwriter still remains liable, although the course of the W)yage is altered ; for a deviation never puts an end to the insurance, unless it be the voluntary act of those who have the management of the ship 5.

The circumstances that will operate as a justification for a deviation seem to be these : — To repair the vessel ; to avoid an impending storm ; to escape from an enemy ; or to seek for convoy ^.

The first ground of necessity winch justifies a deviation, is that of going into a port to repair. If, therefore, a ship

' Hairdner v. Senliouse, 3 Taunt. 16.

^ IIoo;5v. Hornrr, Mar^halTs Insurance, .^97.

* r.awrrnce v. Svdebotliam, 6 Fast's If. 45.

* .I.-irrat v. Ward, 1 Campb. N. P- C. 2G3.

5 I.lton V. Broaden, 2 Str. 1265. Scott v. thnmpson, 1 New Rep. 181,

* Park's Insurance, 400.

Y 2 1

A^St Of Mercantile Contracts for the

is decayed, and goes to the nearest port to refit, it is no devi- ation '.

The next justification for a deviation is stress of weather. Therefore, tyhenever a ship, in order to escape a storm, goes but of the direct course ; or -when in the due course of the voyage, is driven out of it by strps-s of weatlier, this is no deviation. It has also been held, that if a storm drives a sliip out of the course of tlie voy;i<>-e, and she does theberf ■she can to get to her port of destination, she is not obliged to return to the point from which slie was driven*.

When tlie excuse for a deviation in going into a port is a necessity to procure medical absistance for the captain and crew, the assuied must siiov/ that tl'.e ship was supplied with !?uch raeclicincs and iusiruments as were likely to be neces- STiVy in the course of tlie voyage ^

A deviation mny also be justified \o avoid an enemy, or to seek for convoy at th.c usual place of rendezvous, though such place be out of (he direct course of tlie voyage '; Ijecause it is in truth no deviation to go out of the course of the voy- age, in order to avoid danger, or to obtain a protection against it, if in all cases the master of the ship fairly and bona fide act according to the be>,t of his judgement '*.

Where a captain justifies a deviation by the usage of a particular trade, there must be a char and established usage; not a few vague instances only. But when the usage has de- clared it lawful in a specific voyage to go to any place, though not in the direct course from the port of loading io that of delivery, it is as much a part of the contract oi in-

• Mottpux et a1. v. the London A?smaricc C(im[). i Atk. 545. Guibert \. Ilrads'iaw, Sitt. in LonJ. ilil ^'ar. 1781.

^ Ilairingtoii v. H.-ilkcld, Silt, in London, ]\lich. Vac. IT'S. Dfhuiv V. Stoduart, 1 T. R. 2'?. 3 Wolfe v. Classen, .'J Esp. Rep. 257.

4 Campbell v. BordiiU, 9 Sir. l'ifi5. Bond v. y^n^ CQwp.601. Endciby and'anotlfer v. fletchei', Sitt. In Lond. Trin, Vac. 1780.

snrance

Cojiveyance of Goods. — Insurance. S2^

surance between the parties, as if it had been particularly mentioned '.

In all cases of deviation it may be laid down as a general rule, that whenever a ship does that which is for the general benefit of all parties concerned, the act is as mucli witbin the intention and spirit of tiie policy, and consequently as much protected by it, as if expressed in terms. And, there- fore, in all cases, in order to determine whether a diversion from the direct course of the voyage is such a deviation as in law vacates the policy, it will be proper to attend to trie mo- tives, end, and consequences of the act, as to the true ground of judgement ^.

It has b;^en held that if a ship deviate from necessity, the ship must pursue such voyage of necessity in the direct course, and in the shortest time possii3le, otherwise the un- derwriters will be discharged. Ami in such a case nothing more must be done than what the necessity requires \

So also if a ship be insured upon a trading voyage, it is incumbent on the parties insured, to carry on that trade with usual and reasonable expedition, otherv/ise their conduct will amount to a deviation, and discharge the policy •*.

But although an actual deviation from the voyage insured is thus fatal to the contract of insurance ; yet a deviation merely intended, but never carried into eflect, is considered as no deviation, and tiic insurer continues liable ^ But if it can be shown that it never v(as intended by tlie parties to sail upon the voyage insured, and if all the ship's papers are made out for a different place tVom that described in the policy, the insurer is discharged from all responsibility, even

' Park's Insurance, 410. ^ Park's Insurance, 411.

3 Lnvahre v. Walter, Dong. 281.

4 llartlcy V. Biiscoin, Mich. 22 Geo. III. &. R. Parkinson v. Collier, SvUinj^^ in B. R. after Mich. n97.

J Foster V. 'VYiim.r, 2-Ktr. \ii9,

though

326 Of Mercantile Conlructs for the

tliougli the loss should happen before the dividing poiJit of the two voyages '.

In a fcHll later case the same doctrine was advanced ; namely, that if a ship be insured from a day certain from A to B, and before the day sail on a different voyage from that insured, llie assured cannot recover ; even though slie afterwards fall into llie course of Ihe voyage insured and l^e lost after the day on whicli t!ie policy was to have attached*.

It is to be observed also that iji a poHcy on ship and freight, it is not an implied condition lliat Ihe ship shall not trade in the course of lier voyage, if tiiat may be done witliout deviation or delay, or otherwise increasing the risk of the underwriter. Hence wliere a ship was compelled in the course of her voyage to fntcr a port, for the purpose of ob- taining a ncccss;'.vy stock of provisions, which slie could not obtain before in the usu.d course, l)y reason of ascarciiy at ])er loading {^orJs, and during her justifiable stay in tlie port so entered l()r that purpose, slie took on l)oard bullion for freight, no delay having been occasioned thereby, it was held not to avoid the policy '.

17. Of JVarrantics.

A warranty in a policy of iusur ince is a condition or a contingency, tliat a certain thing shall be done or !iay)pen ; and unless that is performed, there is no valid contract-*.

Every warranty incorporated in the body of tlie policy, or appearing on the fare of th(! instrument, or inserted in any print or writing, wImcIi is by relerence incorponited with the policy, must be strictly and lifer;d!y complied with.

It would be endless toenumerate tiie various ki;uisofv/ar- rantics v/hicli aretobclound in policies; because; they must

' WooJdrid,^'- V. Bovdcll, Dov,.-. 16. » Way v. Moili-liani. 2 T. l\. 30. 3 Kaine v. Bell, 9 East's iU-p. 195. i I T. K. 313.

fnxpicnlly

Conveyance of Goods. — Insurance. 327

frequently, and for the most part, do depend upon tlic par- ticular circumstances of each case. The most usual kinds inserted in policies of warranties, are, 1st, As to the time of sailing ; 2dly, Departing with convoy ; iJdly, That the thing insured is neutral property.

Jls io the time of sailing.

If a man warrant to sail on a particular day, and be guilty of a breach of that warranty, the underwriter is no longer liable '. A detention by Government, previous to the proposed day of sailing, is no excuse for not complying with the warranty, nor a peril within the terms of the po- licy *. So if a warranty be to sail after a spccitic da}^, and the ship sail before, the policy is equally avoided as ia the former case'.

But M hen a ship leaves her port of loading, having a full and complete cargo on board, and having no other view bnt'the safest mode of sailing to her port of delivery, for which purpose she touches ut any particular place of ren- dezvous for convoy, &c. her voyage must be said to com- mence from her departure from that port ; and though she be detained at such place of rendezvous hy an embargo, she has complied widi the v.'arranty ; had her cargo, ho-.vevcr, not been coniplcic, it would not have been a commcnccaient of the voyage **.

What shall be a departure from the poitof London, or rather what is the port of I;ondon, remains yet undecided. It seems, however, that GnvisenJ is !he limit of thai ])orf, where vessels receive tlie customhouse cockit, their tijuil clearance en board, and from whence they jnust drpart ou (he day mentioned in the warn\ uty '.

' Don?:; V2 imio^is. ' Horc v. WhUmoif', Cowp.TSJl.

3 Vozian v. Cnmt, at Giiildliail, L'.aiter'Var. 1779.

« lioricl V. Nutt, t'owp. (iOl. * Park's Xnsura,n:e, 4'»2.

"9S Of Mercantile Contracts for the

As to departing uitltout convoy.

By the stiitiite 43 Geo. III. c. 57, no ship belongini;- tu any of his majesty's subjects (except, 1, ships not required to be registered ; 2, ships licenced by the lord hii;h admiral to depart witUoi.'t conVoy ; 3, ships proceeding- v/ith due diligence, from tlieir port of clearance outwards, to join convoy appointed to sail from some other port; 4^ ships bound (o or from any place in Ireland ; 5. Ships bonnd from one place in Great Britain to another; 6. Ships bdonging to the East India or Hudson's Bay Company; 7. Ships saiUng from a foreign port or place, in case Ihcfe be no| any convoy appointed, nor persons at such foreign port duly authorized to appoint convoys, or to grant licenses for sail- ing without convo}-,) shall sail from any port or place with- ' put convoy, and entering into a bond, with one surety, i)i the penalty of the value of the ship, conditioned not to sail or depart without convoy, nor to separate without leave, on pain of a departure without convoy, or wilful separation, that the insurance on the same, or if on goods, freight, or other interest, shall be void, ^y s. 3. a penalty is imposed upon the master of 1000/., or, in case tlie cargo be military or naval stores, 1500/. for such wilful sailing without convoy, or separating therefrom. And by s. 4. all persons settling losses upon such insurances shall forfeit 200/.

Upon this statute it has been held, that a ship cannot le- gally proceed Avithout convoy from her port of cL-arance to the port of convoy in order to join convoy, unless a bond has been given according to the directions of the act, that she shall not sail without convoy '.

And where a ship has been licensed to sail without con- voy, provided she is armed with a certain force, it has been

' Hinckley y, Walton, 3 T:i'4n«. 131.

determined

Conveyance of Goods, — Insurance' S?9

determined that she mast take that force on board before she breaks ground '.

^Y the term convoy is to be understood a naval force un- der the command of a person appointed by tlie governmer\t of the country to which the ship sails, or by any person authorized by that government. Therefore where a ship put herself under the diiection of a man of war accidentally bound on the same voyage, till she sliould join the convoy, which had left the usual place of rendezvous before she ar- rived there ; it was held nut to be a departure with convoy, although she, in fact, joined, and was afterwards lost in a storm ^.

But if tlie course upon a particular voyage has been to have a relay of convoy, to protect the trade from one port |» another ; or if government appoint a convoy to escort the trade of a place to a given latitude and no further, and there be no otiicr convoy oa that station, a vessel taking the advantage of such a convoy, has complied with the warranty to sail with convoy for the voyage^.

How far sailing instructions from tlic commander of the convoy arc necessary to the sailing with convoy has not been clearly decided. In point of law it seems to be clear, that a warranty to depart with convoy is not complied with, unless sailing instructions arc obtained before the ship leaves the place of rendezvous, if by due diligence of the master they can be then obtained.

In the case of Webb v. Thomson ■^, Mr. Justice Butler said. If the captain from any misfortune, from stress of weather, or other circumstances, he absolutely prevented

' Hinckley v. Walton, 3 Taunt. \?A.

- Ilibbert v. Pi2;ou, Easter, 2S Geo. HI. B. R.

J Smith V. Ile.idshaw, Londor, Sittiiij^s after Eacter, nSl. De Garay t. Cla^SCtt, London Sittings after Easter, 1795. D'Lquino v, B«wiclic, 2 Hen. B1.551.

^ 1 Bos. and Pnl. 5.

from

350 Of Mercantile Contracts for the

from ob(aininf^ liis instructions, still it is a (kparturc ^vith coMVO}' : but {\\c\\ he must take the earliest opportiinily to obtain them. GoncraUy speaking unless sailing instructions are obtained, the warranty is not complied with : the cap- tain cannot answer signals ; he does not know the place of rcnder.vous in cuse of a storm ; he does not in ctlcct put himself under the protection of the convoy, and therefore the underwriters are not benefited.

Having seen what shall be deemed a convoy, let us pro- ceed to consider what siiall be a departure witli convoy, within the meaning of a warranty " to depart witli convoy." The clause warranted to depart witli convoy, must be con- strued according to the usage among mercliants ; that is, that the ship shall go with convoy from the usual place of rendezvous at which the sliips liave been accustomed to assemble ; as Spithead, or Wo; Dowiis, for the port of Lon- don ; and Bluefields for the ports in Jamaica '.

Although the terms of the warranty do not express it, yet it is essentially necessary that the ship should not only depart with convoy for the whole of tlie voyagi*, but also continue with the convoy until the end of the voyage, un- less she be prevented from absolute necessity*.

But if a ship is by stress of v/cather separated from her convoy ', or is prevented from joining it at all ^, if she does all in her power to join the couvoy, it will be deea^.ed a suf- ficient compliance with the warranty to sail \yith convoy'.

But it is other. vise, if the not joining be; owing to the neg- ligence and di'lay of the captain of tlie insured ship. As where repeated signals for sailing had been made the night before, and continued next d.iy from seven o'clock till twelve.

> Lrthillier's raj", ? Sa'k. 4^5. Gord«r, v. Modry, 2 Str. 126,>. IFU)- bert Y Fis;oii, iif Pi'pra-

' Miiri-ke V. Diii.in, Selw. N. V. 1001.

3 Jeffrey V. Ijeji^prAiz, 3 Lev. SiQ. * Vicloiia v. Cli^eve, 2 Str. 1250.

not with-

Conveyance of Goods. -^Insurance. 331

notwlllistandin:^ wbicli the ship insured did not sail till two hours after; itvas held that the warranty to depart was not complied with, and that the underwriter was discharged *.

As to Neiitral Propcrtij.

The last species of warranty above mciitioned is tliat of neutrality ; or that tlie sliip and goods insured are neutral property. This condition is very diflerent fioiii either of the two former; for if this warranty be not complied with, the contract is not merely avoided for a breach of the war- ranty, but is absolutely void ab initio, on account of fraud ; bluing a fact at the time of insuring witliin the knowledge of the insurer. Thus in an insurance upon goods, which the insiired warranted to be neutral, the jury expressly find- ing tliat they were not neutral ; the court, although t];e loss happened by storms, and not by capture, declared that the contract was void -.

If, however, the ship and property are neutral at llie time when the risk commences, this is a suilicieiit compliance with a warranty of neutral property; because it is impos- sible for the insured to be answciable for t!ie consequences of a war breaking out during the voyage. Tiie insurer tr;kes upon himself the risk of peace or war ; they are pub- lic events, equally kwown to bolli parties ^. But though it is not necessary that a ship warranted neutral should continue neutral during the whole voyage, yet she nm^t not violate her neutrality by the misconduct of the parties on board. Antl, thtTtfore, w^here the matter and crew had, in the course of tlie voyage iivsured broken tlieir neutrality, by forcibly rcscuuig the sliip, which had been seized and car-

' Taylor V. Wnn-lness, SiUins:? at Gnildhnll, Ilil. Vnr. 4r.oo. III. - Woolmcr v. .\hiilnian, .'? I'.in-. 1419. 1 Bl. Rep s"i7. 3 !,<lcii and nnoLuei- T. i'arkii!Si;ii, Doi'i;. '^^-- ''''•-"'' and another v. Gnr- Kcv, 2 T. W. 111.

lied

^52 Of Mercantile Contracts for the

ried into port by a belligerent pow€r, for the ]>urpose oi search, it was held that the assured could not recover '.

That a Avarranty of neutrality may be .satisfied, it is ne- cessary that the vessel should be navigated, not only accord- ini;* to the laws of nations, but also in confonnily to tlie particular treaties subsisting between the country to \\hich shi' belongs and the belligerent states -.

.If, therefore, a state in amity with a belligerent power has, by treaty, agreed that the ships of their subjects shall only have that cliaracter wlien furnislied with certain docu- ments, wliocver warrants a stiip to be the property of such sub- ject, should provide himself at the time when the ship sails, with those evidences, which have, by the country to \shich he belongs, been agreed to be necessary proofsi of that cha- racter'.

And therefore in th.e late case of Steele v. Lacy, M. 5 J Geo. III. C. B. which was an action upon a policy on a ship from a port in Great Britain to Riga and back again ; the ship was not warranted, but only represented to be Ame- rican; and having been met by a British cruiser in flu; course of her voyage, who demanded her passport, whicii she refused, was thereupon brought into port aud con- demned : the court held, that as sl)c was bound to carry a passport, and as she did not produce it when demandedj, it was a good cause of condemnation, and therefore the assured co\ild not recover.

So where an American ship, insured here, was captured by a French ship, and condemned in a French court as prize, upoii the express ground !»faied in the sentence of condemnation, that the ship was not properly d(.'cumented

• Garrclls v. Kensincfon, 8 T. R. S30. ' .'Jnlw. N, P. 1007.

s Barzillav v. L.-,vit,Tri". T. 22 Geo. 111., B. R. llich. v. Pavktr, T. T. R. 70J.

according:

Conveyance of Goods. — hisibrante. 33^

c1ccordin« to tho existin"^ treaty between France and (lie United States of America ; it was held that tlie assured could not recover their loss against tho Uritihh undiTwriter, although tliere was no warranty or reprosental ion that tJie ship was American ; the neglect of the shipowners them- selves, who are bound at their peril to provide proper na- tional documents for th.eir ship, being' in such a case the efficient cause of their loss. Neither can the ai;ent of the as'^ured, some of whom were also interested in the cargo as well as the ship, recover for the loss of the cargo insured, which was also condemned at the same lime and for the same reason.'; sucli assured of the goods being implicated' ill the same neglect in their character of ship owners. But it is otherwise in the case of a mere assured of goods, wlio is not answerable for the proper documep.ting of tiic ship. without a warranty or representation of lier national cha- racter ^

But it is not necessary, in order to satisfy a warranty of neutrality, that tliC vesh,el should be navigated in confor- mity to an ex parte ordinance m^ade by ojie of the belligerent states, and to wluch the neutral state is not a party *.

A neutral sliip may carry enemy's property from its own to the enemy's country, witliout being guilty of a breach of neutrality ; provided that neither the voyage or commerce be of a hostile description, nor otherwise expressly or im- pliedly forbidden by tJie law of this country : although such ship, in consequence of carrying enemy's property^ be liable to detention on byng carried info Briti!;h ports for the pur- pose of search '.

* Rell V. Cnrstnirj, 14 East's Rep.,",? 1.

•' Pollard V. Kell, ti. T. R. 434. Bird v. Apnlclon. 8 Ibiri, 562.

■■' iiarker v. Blakes, 9 Ea-iVs Rep. 9.^3.

i^'. or

S5-'i Of ]\ [errant iln Contracts for the

] 8 . Of Return of Prem him. In ;[:^c!icr;il, wlicrc property Ins been Jiisured to a linger amount Ihan t!ic reat value, the overplus prcnuiiin, or, if the:^ooils are insured (o come in certain ships from abroad, but arc not in fact shippct!, the whole preniiiun shall be re- turned, irtlie.ship be arrived before the policy is made, the insiucr being apprized of it, artd the insured being igno- rant of it, the insured is entitled to liave his premium restor- ed, on i\\c ground of fraud. But if both parties are ignorant of tlie arrival, arul the policy be lofct or not lost, it seems the undeaviita- ought to retain it; becau.'-e under such a policy if the ship had been lost at the time of underwrit- ing, he would have been liable to pay the amount of his sub- scription '.

Jn Cases where the contract of insurance is void, as on the ground of non-compliance with a warranty, e. g. to sail with convoy, sea-worthiness, or the like, and fraud carmot be imputed to tlie insured, he will be entitled to a return of premium ; because where tlie contract does not attach, there is no risk ^.

^y tlie statute 28 Geo. III. c. 38. s. 47. to prevent

insurance on exported wool, if the underwriter informs

against the party insuring, he may retain the premium ;

but if the insured inform, he shall be entitled to recover it

, back.

With respect to the retnrn of premium, two general rules have becii establisbxid, which govern almost all cases. The first is, Tliat where the risk not having been run is at- tributable to the fault, will, or pleasure of the insured, or to any otlier cause, the premium shall be returned. And, secondly. That where the contract is entire, whether for a

' Taik^ Iniiir.incp, 503. ' ?, Bur. l«40. Coup. 663.

specific

Conveya7ice of Goods. — Insurance. 335

spec^Hc time, or for a vojngc, and tlie risk is once com- mcticecl, nud there is no cunliii,";<:iic>on Avhicli (he risk is to "end at any iraniediate })t'riod, there shall be no appoint- ment or return of premisim afterwards. Hence in oases of deviation, thougb the underwriter is disc!iarn:ed from his euii-agement, jet the risk iK^ing once commenced, he is en- titled to retain the premium'.

Therefore where tlie premium is entire in a policy on a voyage, and there is no contingency at any period in the coujrse of (he outward and homeward bound voyage, upon the happening or not happening of which the risk is to end, nor anj- usage e^tab!i^5iled upon sucli voyage; al- though there be teveial distinct ports at whicli the ship is to stop, yet the voyage is one, and no part of the premium is recoverable *.

So where a ship was insured for twelve months, but was taken within two months, it was held that no part of the premium was to be relumed ; because the contract was en- tire, and the premium being a gross sum stipulated and paid for twelve months '.

But if there are tv/o distinct points of time, or, in eflecl, two voyages cither in the contemplation of the parties, or by the usagr, and only one of the voyages was made, the premium shall be returned an (he other, iliough both are contained in one policy. Thns in an insurance ^' at and from London to Halifax, warranted to depart with convoy from Portsmoiith ;" but when the ship had arrived at Portsmouth the convoy was gone ; it was held thu.t the premium for the voynge from Portsmouth to Halifax should be returned-*.

' 3 Eur. 1237. Park's Insurance. 516, 525.

■^ Bermaii v. Vv oodbricljce, Doug. 781.

3JH'rie v. Fletcher, Coup. 66R. Lorain:.* v. Thoailirjson, IbiJ. 5S5.

* Steve.iion v. Snow, 3 Bur. 1^257. 1 h\. Hep. iife. S. Ct

If

336 Of Moxantile Contracts for the

If t!ie jury find an express usage, an apportionment oi ihc premiura shall take place '.

Where .1 clause was inserted that 8/. per cent, of the premium should be returned *' if the ship sailed from any of the Mest India islanJs with convoy for tlic voyage and arrived:" it Was held that the arrival of the ship, whctiief with or without convoy, entitled the party to a return of the premium stipulated ^.

So also, though there had been a capture and recapture during the voyage insured ^

In all cases where the words " and arrived" follow otlier conditions, these words annex a condition which over- ruk's all the other stipulations ; anci no arrival at any inter- mediate stage will do, unless the vessel arrives at its ulti- mate port of destination ■♦.

When. a policy is void being made witi)Out interest, con- trary to the statute of the J9 Geo. If. c- 57, ii" tlie ship has arrived sale, the court will not allow the insured to re- cover back the premium K

And upon the authority of Lowry v. Bourdicu, it has been held, tliat an action for money had and received will not lie to recover back the premium of reassurance void by the above statute ^\

Where a policy was made to cover a trading v;ith the enemy, the insurance is void, and the assured cannot re- cover the premium ' .

So where the insurance is contrary to tlie navigation laws. For no man can come into a British court of justice'

» Per Lord Mansfield, Lon? v. Allen, Easter, 15 Geo. Ill, C. R.

' Simon v. Boydell, Douj. "ibb.

3 Asiuilarand another v. Kclsjcr?-, 7 T. R. 421.

♦ Kellner v. Lc \iesurier,4 East's Rep. 396

s Lowry v. Bouraien, Doug. 463. '^ .\ adrce v. Fletcher, S J. R. $CG.

' Vandyckv. Hewitt, 1 Last's i!cp. 96. ^ ,

to

Conveyance of Goods.— Insurance. S37

to seek the assistance of tlie law, when lie founds liis claun upon a contravention of the British laws '.

An insurance having been made on goo.ls at and from a port in Russia to London, by an agent residing here, for a Russian subject abroad, which insurance was in fact made after the commencement of hostilities by Russia against this country, but before the knowledge of it here, and after the ship had sailed, and had been seized and con- fiscated : held that the policy was void in its inception ; but that the agent of the assured was entitled to a return of the premium paid under ignorance of the fiict of such hostilities *.

19. Of Bottomry and Respondentia. Bottomry is a contract by which the owner or under cer- tain circumstances (viz. in the absence of the owners, or in cases of necessity), the master of a ship borrows money to ejiable him to carry on the voyage, and pledges the keel or bottom of the ship, as a security for the repayment. In which case it is understood, that if the ship be lost, the lender loses also his whole money ; but if it returns in safety, then he shall receive back his principal, and also the premium or interest agreed upon, however it may exceed the legal rate of interest. And this is allowed to be a valid contract in all trading nations, for the benefit of commerce, and by reason of the extraordinary hazard run by the lender.^ And in this case the' shij) and tackle if brought home, are answerable (as well as the person of the borrower) for the money lent. But if the loan is not upon the vessel, but upon the goods and merchandise, which must necessa- rily be Sold, or exchanged in the course of the voyage, then

• Morck V. Abel, 3 Bos. and Pnl. 35. I-ubbock v. Potts, 7 East's Ke.o.49. ' Oom et ai. t. Bruce, 12 East's Kep. 295,

" z only

S38 Of Mercantile Contracts for the

Only the borrower, peisonally, is bound to answer tl»e con* tract ; ulio tiierctbre in this case is said to take up money ftt ncspondeiitia'. It may be added, that in a loan upon bottomry, the lender riu's no risk thoiiyh the ijoods should Iw lost ; and in respondentia, the lender must be paid the priMcip:d aiid interest, though the ship perish, provided th;; goods are safe. In this consists the chief diflorence b;.>tween bottomry and n^spondentia ; in most other respects they arc ttic same ^.

These terms are also applied to contracls for the repay- ment of money borrowed, not on tlie slap and goods only, bnt on liic mere haznrd of the voyage itself; as Avfeen a man lends a merchant 1000/. to be employed in a beneficial trade, wi(h condition to be repaid with extraordinary in- terest, in case a specific voyage named iii the condition be safely performed : which kind of agreement is sometimes called foedus nauticum, and sometimes Ubura maritima. But as this gave an opening for usurious and gaming con- tracts, especially upon long voyages, it was enacted by the statute IQ Geo. II. c. 37. that all moneys lent on bottomry or at respondentia!, on vessels bound to or from the East Indies, shall be expressly lent only upon the ship or upon the nierchaiulise ; that the lender shall have the benefit of salvage ; and that if the borrower has not an intcnst in the ship, or in the effects on board, equal to the value of the sum borrowed, he shall be responsible to the lender for so much of the principal as has not been laid out, with legnl interesf and all ot]:er cliarges, though the ship and mer- cliandise be totally lo-t '.

This statute has entirely put an end to that species of contract which arose from a loan upon the mere voyage

' 2 Bl. Com. -157. - Park's In'surancf. r)3«. ^ 9. Bl. Com. 458.

itself,

C&nveyance of Goods. — Insurance. 339

-itself, as far, at least, as relates to India voyages. But as none other are mentioneJ, and as expressio uiiins est exclu- sio attcrius, these loans may still be made in all other cases, as at common law, except in tlie following instance, which is another statutory proliibilion. This statute (7 Geo. I. c. 21. s. 9.) declares, that all contracts made or entered into by any of his majesty's subjects, or any person in trust for them, for or upon the loan of any moneys by way of bottomry, on any ship or ships in the service of fo- reigners, and bound or designed to trade in the East Indies, or places beyond the Cape of Good Hope (mentioned in the statutes relating to the East India Company), shall be null and void.

This act, it should seem, does not extend to prevent Bri- tish subjects from lending money on bottomry on foreign ships trading from their own country to their settlements in the East Indies. The purpose' of t!ie statute was only to pre- vent the people of this country from trading to the British settlements in India under foreign commissions ; and to en- courage the lawful trade thereto '.

The contract of bottomry and respondentia seems (o de- duce ils origiji from the custom of pe.-mitting the master, when in a foreign country, to hypothecate the ship and goods, in order to raise money to refit, or for necessaries *. But he cannot do either for any debt of his own ; but merely in cases of necessity, and for completing the voyage-'. And to justify such an act of the master, the the ship must be abroad. Molioy in express terms di-clares, that a master has no power to take up money on bottomry, in places wliere his owners dwell ; other .use he and his es- tate must be liable thereto ■».

' Park's Tnsurancp, 551.

-2 Bl. Coin. 457. 3 Rob. AJm. Rpp. ?!0. 1 Salk. 34.

» AloUoy,b. 2. c. 2. s. 14. ♦ L<. i!. c. 11. s. 11.

^2 The

340 Of Mercantile Contracts for the

The principle upon ^vlllcll bottomry is allowed, is, tJiat the lender runs the risk of losinjr his principal and interest ; and therefore it is not usury to take more than the legal rate '. But if a contract were made under colour of bottomry, in order to evade the statute against usur}/, it would then be usurious^. And as tiie hazard to be run is the very ba- sis and foundation of the contract, it follows, that if the risk be not run, the lender is not cntided to the extraordi- nary premium ^

The risks to wliicli the lender exposes himself are gene- rally mentioned in the condition of tlie bond ; and are nearly the same as those against which the underwriter, in a po- licy of insurance, undertakes to indemnify. It luis been determined that piracy is one of these risks -"; and that if a loss by capture happen, the lender cannot recover against the borrower. But in bottoiury and respondentia a capture does not mean a temporary taking, but it must be such as to occ'asion a total loss. And therefore Avherc a ship was taken and detained for a short time, and yet arrived at the port of destination within the time limited, it was held that the bond was not forfeited, and the obligee might re- cover ^. In the same case it was also settled, that a lender on bottomry, or at respondentia, is neither entitled to the benefit of salvage, nor liable to contribute in case of a ge- neral average ; for which reason the statute 19 Geo. II. c. 31. above-mentioned, contains a positive provision to allow tlie benefit of salvage, in the cases there mentioned. If, however, a man insure respondentia interest on a foreign ship, and be obliged to contribute to an average-loss, by

' Paik"5 Insurance, 558. ^^ I Com. Dip:. 193. 2 Vo«. 146.

•' Dc^uildir V. Depoistcr, 1 Veni. 'ifi.S. * liaifon v. M oilifoid,Comb. 5G.

5 Joyce V. \\ illiam.-on, Mich. ','.3 Geo. III. B. 11.

the

Convey ance of Goods. — Insurance. oil

the laws of ber country, English underwriters are bound to indemnify '.

The lender is not liable for accidents arising from the misconduct of tlie borrower, or of the captain. If, there- fore, a ship be lost by wilful deviation from the tract of the voj-age, the event has not happened, upon which tiie bor- rower was to be discharged from his obligation ; as she was not lost by a peril to which the lender agreed to make him- self liable -.

So as bottomry bonds generally express from what time the risk shall commence ; if a ship receive injury by storm, fire, &c, before the beginning of the voyage, the person borrowing alone runs the hazard ; for the contingency docs not commence till the departure. But if the condition be, *' that if the ship shall not arrive at such a place by such a time, then, &c." in these instances, the contract com- mences from the time of sailing, and a different rule, as to the loss, will necessarily prevail '.

Bottomry and respondentia may be insured, provided it be specified in the policy to be such interest. And by statute 19 Geo. 11. c. 37. the lender alone can make such insurance; and the borrower can only insure the surplus value of the goods over and above the money borrowed. But money expended by the captain for the use of tlie ship, and for which respondentia interest is charged, may be recovered under an insurance on goods, specie, and ef- fects, provided it is sanctioned by the usage of trade *, Finally, where a person insures a bottomry interest, and rc-

* Walpole V. Ewer, Sitt. after Trin. 1789.

» Western V. Wildy, Skin. 152. Holt's Rep. 126. I Eq. Ca. Abr. 372.2. Ch. Cas. l.SO.

3 Beawrs's Lex. Merc. 127.

4 1 Glover v. Black, 3 Bur. 1394. 1 Bl. Rep. 405. Gregory v. Christie, ante,

covers

342 Of Mercantile Contracts for the

covers upon the bond, he cannot also recover upon the policy '.

AVERAGE.

Average signifies a mean proportion of loss between the owners of goods thrown overboard in a storm, in order to preserve the remainder, and the proprietors of those that are saved, and of the ve'-sel *.

This principle of general contribution is derived from the ancient law of Rhoies, and has been adopted by all commercial natio.is. The rule of the Khodian l.iw is this: ^' If goods are thrown overboard in order to lighten a ship, the loss incurred for the sake of all sliall be made goOvl by the contribution of alP." In order to make the act of throw* ing overboard legal, it mi;st be the effect of deliberate in- tention : for if the gooJs are forced out of the ship by the violence of the waves, or are de'stroyed in the ship, by lightning or tempest, the merchant alone must bear the loss. Th.y must be thrown overboard to lighten the ship : if they are cast overboard by the wanton caprice of the crew or passenge s,they, or th • m:tstc", or the owners of the ship, must make good the loss. The goods must be thrown overi^oard for the sake of all : not b cause the ship is too heavily laclen to prosecute an oidinary course through a tranquil sea, which would be the fiult of those who had sh!!;ped or recuved the groJs ; but, because at a moment of ilistress and danger, their weight, or their presence, pre- vents tlie ext.aordinary exertions required for the general safety ■•.

If the jettison (that is the throwing over of the goods) does not save the ship, but she perish in the storm, there

' Park's Insurance, 570. ' B-'awe's's I,px Mrrc. Ifi.?.

3 Dig. 14. 2. i. * Abbott's Law of Merchant Ships, &c. 328.

shall

Conveyance of Goods. — Average. 343^

shall be no contribution of such goods as may happen to be savvd. Bwi if the ship, beuig" once preserved by suck means, and contiiuiing lici course, should afterwards bft lost, the properly saved from the second accident, shall con- >ribnte to the loss sustained by tliose whose goods were cast Out upon the former occasion '.

The vaiious accidents and charges, which will enfille tin* suffering party to call for a contril)iition, cnnnot easily bQ enumerated ; but it may be laid down as a general prin- ciple, that all losses sustained and expenses iucutrcd volun- tarily and deliberately, with a view to prevent the total loss of the ship and cargo, ought to be equally borne by iha ship and her remaining ladiiig-.

If goods be put on board a lighter to enable the ship to sail into harbour, and the liii,htcr perish, the owners of the ship and the remaining cargo are to contribute. But if the ship should be lost, and the lighter saved, the owners of the goods preserved are not to contribute to the proprietors of the ship and cargo lost '.

It is not only the value of the goods thrown overboard that must be considered in a general average ; but also the value of such as receive any damage by wet, &c. from the jettison of the rest ^.

And not only may the loss of goods Ijccome the subject of general contribution, but also in some casQs the expense incurred in relation to them '. Thus if it be necessary to unlade the goods in order to repair the damage done to a sJiip hy tempest, so as lo enable it to prosf-'cute and com- plete the voyage, it seems that the expense of unlading, warehousiug, and reshipping the goods, should be sustained

' Park's Ir.siiranrp, H?. ^ Park's Insurance, 173.

3 2 Mnsens96, \b:i. Mo'iloy, tit. Avprage, s. M. * lipawrs's l.e\ .ViiMT. 148. Molloy, b. y. c. 6. s. 8. 5 The Co))enha<(*i!, 1 Rob. Adm. Jlcfi. V89. Da Costa v. Newhham, 2 T. R. 407. The ^Jr^tUi'.diac.S lU'o iVdm. Ktp. 3.i7.

by

344' Of Mercmitile Contracts for the

by general contribution, because all persons arc interested in -the execution of the measures necessary to the completion of the voyage '.

The term " goods" extends to the ship aiid its furniture, its provisions, guns, boat, or other tackle \

Y^y the law of most of the eoiitiaenlal nations of Europe, the injury done by one ship to another, or to its cargo, by mere misfortune and without fault in the persons belong- ing to either ship, is to be equally borne by the owners of the two vessels ; but by the law of England, in the case of damage happening in this manner, the proprietors of the ship or cargo injured must bear their own loss '.

If the ship ride out the storm, and arrive in safety at the port of destination, the captain must, as soon as possible, make regular protests, and must swear, in which oath some of the crew must join, that the goods were cast overboard for no other cause, but for the safety of the ship and the rest of the cargo ■*.

If a ship be taken by force, carried into some port, and the crew remain on board to take care of and reclaim her, not only the charges of reclaiming shall be brought into a general average, but the wages and expenses of the ship's company during lier arrest, and from the time of her cap-: ture K But an allowance will not be made under general average for sailors' wages and victuals during performance of a quarantine ^.

It seems agreed, that extraordinary wages and victuals expended during a detention by a foreign prijice not at war, may be brought into a general average, so as to charge the underwriter, if such expenses were necessary and una- voidably incurred for the general safety of the; ship and

• Abbott's Law of Mprdiant Shipping, 333. "^ Ibid. 3 Bolier v. Fisher, Guil/Jhail Sin., after Mich. T. 40.Geo.' 111.

* Bcawes's Lpx Idcrc. 148. iMollov* b.. 2", c, G. s. 2.

k Beawes's Lex Merc. 150. 1 Magtns, 67. ^1 Magens, G7.

cargo.

Conveyance of Goods. — Average. 343

car^o '. As also wages and provisions expended during a detention to repair *.

So when a ship is obliged to go into a port for the bene- fit of the whole concern, the charges of loading and un- loading, and tlie wages and provisions of the Avorkmen liired for the repairs, are a general average '.

Bj the ancient laws of Rhodes, Oieron, and Wisbuy, the ship and all the remaining goods shall contribute to the loss. Diamonds, jewels, gold, and silver, when a part of the cargo, must contribute according to tiieir value. But ship provisions, the persons of the passengers, Avetiring apparel, and such jewels as merely belong to the person, bottomry or respondentia bonds, and the wages of the sailors, shall not any of them contribute •♦.

In order to fix a right sum on Avhich the average or con- tribution may be computed, and w'lich in general is not to be made till the ship's arrival at her port of discharge, it is to be considered, wh.lt the whole ship, freight, and cargo would have produced net, if no jettison had been made: and then the sliip, freight, and cargo are to bear an equal aiid proportionable part of the loss. According to the custom of the merchanls of England, the goods thrown overboird are to be estfmated at the price for which the goods saved were sold, freight and all other charges be- ing first deducted 5.

W here goods are shipped on an invoice, an average loss upon a policy must be calculated upon (he invoice price, and not upon the price of the markel at which tJie damaged goods are arrived ^.

If sails are blown away, or masts or cables broken by the

• 1 Magcns, 67. ' Park's Insurance, 174.

3 Beawes's Lex Mere. 150.

4 .Mnl:o.', b, 2. c. 6. s. 4. 1 Ma^cns,71.

5 1 Ma^ens, 69. MoUoy, tit. Avera?;e, s. 15. ^ Waldron V. Coombe, 3 Taunt. 162.

violence

348 Of Mercantile Contracts for the

'violence of the -wind, the owner alone must bear the loss '. But if the master Is compelled to cut away and abandon his masts, sails, or cables, to preserve and lighten his ship, their value must be made good by contribution *.

The contribution is in f::eneral not made till the ship ar>» rives at the place of delivery ; but accidents may happen, which may cause a contribution before she reach her de- stined port^.

Small or petty averages arc (he next species. These con- sist of such charges as tlie master is obliged to pay by custom for the benefit of the ship and cargo: such as pilotage, towage, light-money, beaconage, anchorage, bridge-toll, quarantine, river-charges, signals, instructions, pasrsage-money by castles, expenses for digging a ship out of the ice, and at Loudon, by custom, the fee paid at Dover pier^.

The term is also used for a sm:ill duty which merchants, Avho send goods in the ships of other men, pay to the mas- ter, over and above the freight, for his care and attention for the goods so entrusted to him ^

For these charges the insurers are never answerable ; but one third of the expenses is borne by the ship, and two thirds by the cargo. But in order to discharge the insurer it must appear that the disbursements were usual and cus- : tomary in the voyage : for if they were incurred for any extraordinary purpose, or in order to relieve the ship and -cargo from some impending danger, they shall then be re- puted a general average, and consequently be a charge upon the insurer. In lieu of these petty averages, it lias become usual at some places to pay five per icui. calculated on the freight, and five per cent, more for primage to the captain ^.

> WrUwood'; Sea Lan-s,tit. IT. ^ Abbott, S34.

3 Rocciis dp Navib"s, Not. 96. I Ma^PDS, fiO.

< 2 Mageni, 189. '■^lii. 5 Parle's lnsuraiic(\ US. . * 1 M.igens, 72.

Of

Conveyance of Goods. — Salvage. 347

OF SALVAGE.

Salvage is an allowance macie for saving a ship or goods, or both, from the dangers of (he seas, fire, pirates, or ene- mies : and it is also sometimes used to signify the thing it- self wliich is saved '.

The propriety and jii&tice of such an allowance must be evident to every one ; for nothing can be more reasou- ablethanthat he, who has recovered the property of another from imminent danger by great labour, or perhaps at (he hazard of his life, should be rewarde/l by him, who has been so materially benefited by that labour ^. Accordingly, all foreign codes of maritime l:iw, both ancient and modern, contain provisions and enactments on this head. In some of them the value to be paid is fixed at a certain portion of the article saved, or of their value, according (o tlieir nature and quality, or the circumstances of tlie case. The Jaws of Rhodes fixed tliC r;ites of salvage in several in- stances, sometimes giving for salvage o;ie-fift)i of wliat ■\vas skived ; at other times only a (ent'i ; and at others one- half. The regulations of Oleron left it more unsettled, and declared that the courts of judicature should award to the salvers, such a proportion of the goods saved, as they should think a sufficient recompense for the seiyice per- formed, and the expense incurred '. Almost every state has regulations on this head peculiar to itself; the law of England, like the laws of Oleron, has fixed no positive rule or rate of salvage, but directs only as a general principlCj that a reasonable compensation shall be made '*.

When goods have been either abandoned in distress at sea, or cannot be protected and secured, by the common law of England the salvor is entitled to retain the possesion of them, uutil a proper compensation is made to him for

' Bpawes's Lex. Merc. 148. ^ Kaim's Prinr. of Eq. Introd. 6.

3 l,cp;. Hhod. s. 2. art. 45. Les;. Oleron, art 4. * VvVUwood's Sea Laws, tit, 24.

bis

318 Of Mercantile Contracts for the

for his trouble'. This compensation, if the parties cannot Hgrce upon, may, by the same law, be ascertained by a jury ill an action hruuj^iit by the salvor against the piOinietor of the goods; or the proprietor nsay tender to the salvor such sum of money as he tiiinks suflicient, and upon refusal to deliver the goods, bring an action of detiinieor trover against the salvor ;'and if the jury think the sum tendered suUici.-nt, he will recover his gootfe or their value, and the cosis of his suit. If the salvage is performed at sea, the Court of Ad- miralty has jurisdiction over; the subject, and will fix the sum to be paid, and adjust the proportions, and take care of the property pending the suit ; or if a sale is necessary, direct a sale to be made, and divide the proceeds between the salvors and the proprietors according to reason and equity. And in fixing the rate of salvage, this Court usually has regard not only to the labour and peril incurred by the salvors, but also to the situation in which they may happen to stantl with respect to the property saved, to tlie promptitude and alacrity manifested by them, and to the value of the ship and cargo, as well as the degree of danger from which they were rescued^.

In the case of a homeiward bound West India ship, taken by the French near the coast of Jamaica, while proceeding from Savaimah le Mar to Bluefields to join convoy, and re- captured by persons going in boats from the shore, one-* sixth M as allowed for salvage ; and as the voyage home- ward, and consequently the right to freight, had com- menced, and the freight was ultimately earned, th.e sal- vage was paid upon the freight as well as the ship and cargo'.

In the case of a slave-ship rescued from insiirgciit slaves

' Harffort v. Jonos, 1 Ld. Ra-yni. 303. Baring and otJicrs v. Day, S Enst's H('p.57. 2 Salk. 3M. " >

^ Th'j V.ir.iam Bet kfnid, .'} Rob. Adni. Ylf\u 355, 3 Thc.Dorothy, 6 Ibid. 88.

on

ConveyaiKe of Goods. — Salvage. 349

on the coast of Africa, by another vessel employed in the same trade, one-tenth of the vahie was allowed'. In the case of a Danish ship, deserted by its crew on the Etiglish coast, and bronght into Harwich without any considerable danger, two-fifths were decreed for salvage^. In the case of another ship, which having struck upon a rock, lost her rudder, had her bottom beaten in, and been deserted by the crew, was weighed off with great peril by one set of persons, and placed in such a situation as to enable the master to bring oft' some bullion, but which afterwards sunk, and was again weighed up and brought into Harwich by another set of persons, two-thirds were decreed, and the amount dis- tributed among the first and second set of salvors ^ But the Court will not sufter a claim of salvage to be ingrafted on the local ignorance of foreigners, who cannot be expected to be well acquainted with our coast, although a recom- pense must be made for tlie service actually rendered to them *. Neither will merely preventing a ship from enter- ing an enemy's port entitle tlie captors to salvage K Nor is a passenger entitled to make a claim for the ordinary assist- ance he may be enabled to afford to a vessel in distress. A passenger, however, who has rendered any very extraordi- nary services, will be entitled to salvage. A ship bound to the West Indies, struck upon the shoals of Chichester, in a gale of wind, and in that situation was deserted by the master, who took part of the crew witii him. A person who had commanded in the same trade, and was tlien on board as a passenger, took the command of the ship by the desire of the passengers, and with the consent of the mate and the remainder of the crew, and carried her back in

• The Trelawnev, 4 Rob. Adm. Rep. 223.

2 The Fortuiia,4 Ibid. )93. 3 The Junge Eastiaan, 5 lljid. 322.

« The Vroiuv Margarplhri, 4 Ibid. 103.

5 The frankling, 4 Ibid. 147.

safety

550 Of Mercantile Contrnets for' the

^tAy to Ramsofafe harbo'.ir. By the direction of Lord Alvaiil'y, the jury found him entitled to 400^.'

We now proccerl to the consideration of salvage payable upon the recapture of thips or goods the piopcrty of th« subjects of this country from the crx-my.

It nnay b;; taken as a general proposilion, liable only to one exception, that the ships or goods of the subjects of this country tiken at se-a by an enemy, and afterwards retaken at any indefinite period of time, and whether before or after sentence of condemna(if)n, arc to be restored to the original proprietors upon pnytnent of salvage to the recaptors.

By the statutes Vd Geo. II. c. I, 17 Geo. II. c .S4, and 2d Geo. II. c. 34. the legislature fixed and asccrfaim^ tlje rale of sidvage, in case of a recapture, proportioning the amount of the reward to the length of time the ship or goods had been in the possession of the enemy, because the longer they remained in the hands of tlie enemy, so much the less was the hope of recovery. At the same time, however, those statutes fixed a boundary, l^eyond which the allowanc* should not pass : namely, that in no case whatever should tlie recaptors be enlided to more than a moiely of the pro- perty rescued from the; encm3\

But the statute 3"} Geo. III. c. QQ. s. 42. has fixed the rate of salvage at one-eighth lor the royal navy, and at one- sixth for privj^te ships : and in case of recapture by the joint operation of his Majesty's ships and private ships, autliorixed tlie judge of (he Court of Admiralty to order such salvage as he should deem fit and reasonable. But the same statule enacts that recaptured ships, set forth by the enemy as vessels of war, shall AvhoUy belong to the re- captors, and not b;" rcsforetl to the original owners.

The same rate of salvage is fixed by the statutes 43 Geo. III. c. 160. s. ^>9 and 41, and 43 Geo. Ml. c. 72.

' Newman v. ^Yal;cr=, ^. »o?. and Put. 612.

s. 7,

Conveyance vf Goods, — Salvage. 351

5. 7, for his Majesty's hired armed sliips, as for the royal navy.

A convoying- ship mny be entitled to salvage for (he re- capture of a vessel which !iad been taken while under its protection'. In this cass Sir William Scott said, The only material question for me to consider is, Avhether there was such a capture made by the enemy as would found a case of recapture. Many c;;ses might be put of the eflect of re- capture, to show, that it is by no means necessary th.ut the posscEsioji by tlie enemy should te long maintained, or at any particular distance from the convoying ship. The question will always be, whether it was an effectual posses- sion, aiid such jis would siis}}end the relation of the convoy- ing ship ; not, whether it is a complete and firm possession, -which, for some pur{)oses is, in contemplation of law, not held to be eiFected till the prize is carried infra prajsidia. The rule of infra pracsidia, however, is certainly not the measure to be applied to questions of this kind : the very clause of the Prize Act alludes to cases of salvage, in which no such complete possession is supposed, since it speaks of vessels being recaptured, and permitted to continue on their original voyage. As little can it be contended that the ves- sel should have been out of sight to found a case of recap- ture ; it will be sufficient if tlicre has been that complete and absolute possession, which supersedes the authority of iht convoying ship.

With respect to neutral projjcrty recaptured by the sub- jtKits of this country from the enemy, by tiie ancieiit prize law of Great Britain, it was not subject to salvage. But in consequence of the violent conduct and notorious injustice of France dining the last war, the prize courts of that country having proceeded without any pretence of sanction from the law o{ nations, to conden}n neutral property, it was not

' The Wlgh!, 5 Rob. AAm. Uep. ?15.

thouffht

352 Of JSlercantilt Contracts Jor thj

thought unreasonable bj neutrals tlicmselvcs, lliat salvage shoiiKl bo paid for deliverance from French capture'.

But this deviation from the general rule, viz. iljat neu- tral properly recaptured is not subject U) salvage, is not applied in recaptures from tliose states "^vhich have ahvays adhered to the principles of the prize system Avith its accus- tomed regularity and honour. And therefore, on a recap- ture from a Spanish cruizer of a cargo of naval stores on a destination to ?*ia!ta, on tlie account of the American go- vernment, and for the supply of an American squadron, and not lucrandi causa, or consigned to English possessions and English use, the captors arc not entitled to salvage*.

In the case of tlie recapture of the property of allies of this country from a common enemy, by tlie subjects of tliis country, the rule is, that Erjgland restores on salvage to its allies ; but if instances can be given of British property re- taken by them and condemned as prize, the Court of Admi- ralty Avill determine their cases according to their own rule. *' The maritime krw of England," said Sir William Scott % *' having adoptt d a most liberal rule of rcvstitution on salvage, with respect to the recaptured property of its own subjects, gives the beiicfit of that rule to its allies, till it appears that they act towards British property on a less liberal principle ; in such a case it adopts their rule, and treats them accord- ing to their own measure of justice." In conformity to this rule, the San Jago was noi restored to the king of Spain, because retaken from his then enemy the French, under circumstances in which the Spanish Courts had condemned British property retaken by the Spaniards : and shortly afterwards two Portuguese ships were for the same reason condemned ; and several others at the same time restored,

» The Two Tricnds, I Rob. Adir. Rep. S71. The Elcoiiora Catharina, 4 Ibid. 150. a The lluatress, 6 Ibid. 104. 3 S.inta Cruz, 1 Rob. Adm. Rep. 63.

because

Conveyance of Goods. — Salvage. S53

because in the interval between the different captures, an ordinance of the Court of Portugal had altered the rule of restitution in (hut country, and tliey were restored upon payment of the rate of salvage established in Portugal ; viz. one-cighlh to king's ships, and one-fifth to privateers'.

OF PARTNERSHIP.

1. Of the Nature of Partnership.

IMercantile associations are either public or private, and for the purpose of carrying on lawful trade and commerce, all partnerships are valid, To this rule, however, there is an exception in the case of marine insurances. For by the statute 6 Geo. I. c. 18, all societies and partnerships, ex- cept the Royal Exchange and London Assurance compa- nies, are prohibited from granting, signing, or writing any policy of insurance, or making any contract for assurance, of, or upon, any ship or si)ips, goods or merchandises at sea, or going to sea, and from lending any moneys by way of bottomry.

Of public partnerships, some are incorporated by letters patent, or act of parliam_eiit, such as the East India Com- pany, the Bank of England, &c. ; others are not, such as most of the fire and life insurance companies.

The laws aflecting these public companies or societies, when not confirmed by public authority, are the same as in common partner.sjiips, the partners being liable for the debts of the compaiiy without any limitation. But when incor- porated by royal cliarter or act of parliament, the merabers are not liable in their individual capacities, on account of the joint trade, but only for their respective shares or interest in the joint stock, their risk being limited by the express provisions of the charter.

To constitute a private partnership, the bare consent of

• Santa Cruz, 1 Rob. Adru. Ilcp. 63.

2 A the

354 Of Partnership. .

the parlies concerned, certified bj acis or contiacts, is suf- ficient nitliout any articles of copartnership or express agree- ment entered into by t!iem, provided they appear ostensibly -to the world as joint traders '.

If a person suifers his name to be used in a business, and lioids iiiinsclf out as a j)artncr, he is to be considered, Avhat- cver tneaii;reemei!t may be between him and the other part- ners, and although it was not known at <he time of the deal- ing tJKit he was a partner, or that his name was used *-

And the law is tlie same with respect to dormant or- sleep- ing partners, who, when discovered, are liable to the part- ,nership debts ; because were they not subject tQ-thc-rtsX'? ihcir profits in the partnership would be of an usurious na- ture ^

Iftwoor jnore persons agree between themselves to lake jointly the profits, and bear equally the loss, in any trade, it shall, upon principles of general policy, be deemed a part- nership in general, with respect to strangers or the world '*.

But though a participation in the profits.of the trade will conslitute a partnership between the parlies and strangers, yet to constitute a partnership between the parties them- selves, they must have joint shares in t!ie slock, and must be jointly interested in the trade or adventured

When a person who lias retired from a partnership con- cern, receives from the profits of the trade a casual indefinite advantage, depending on accidents, as au annuily during the lite of the person who exercises the trade, he will be deemed a partner, especially if he reserves a right of inspecting the books*. But if a person retiring from business reserves a certain and defined profit, or premium, as an annuity for

' To. \aU lib. 2 Kol. Abr. 114. ' Youns v. Axtcll and anotlier,

Guiklhall Sitlin^saft^-r Ilil. 2! Geo. III.

' Hoare V. Dawes, Do-.'.fj. 31 1.

« Melcnlf V. the Itoyal Etch. Ass. Comp. narnanl 313. . 5 HcbkKth V, Blanchar.l and .inolhrr, 4 Last's Il'.'p. 114.

» j-loxhaii. V. Pell, -i Bl. IL-p. 999.

a cer-

Of Partnership, Sbb

a certain number of years, together with legal interest for the loan of the capital originally vestal in the partnership concern, it is not a continuance of the partnership '.

And this liability is not obviated by an agreement en- tered into between the partners, that neither shall be an- swerable for the acts or losses of the other, but each for his own ; for though with respect to each other they are not considered as partners, yet if they have a mutual interest in the profit and loss, they become liable as partners to all per- sons with whom eilhtr contracts *.

Only the partners to a contract are considered as partners. Therefore if a man subdivides his beneficial interest under a partnership agreement among others, he alone is liable to the performance, and the subcontract does not constitute a partnersliip ^

^o if a person, though not a broker or factor, is employed to sell gooJs, and is to iiave for himself whatever money he can procure beyond a certain sura, lie is not a partner with the owner of the goods, as there is no participation of profit and loss between them, his profit not arising from the profit of the principal, but being collateral to and beyond it ■*.

If a contract be entered into which is in its conditions immoral, or a violation of the general laws of public policy, as if an agreement purporting to be, or assuming the shape of a partnership in trade, be entered into for a single deal- ing, by which one of the partners advances a sum of money for the purchase of particular goods, stipulating at the same time to have half the profits upon a resale of such goods, if the profits exceed 5 /. per cent., and the principal is not risked, such partnership contract is not binding K

So, no action lies on a bond for securing. ^>oney knt at

' Grace v. Smitli, 2 Bt. Ftep. 998.

« Waugh V. Cirvcr .ind others, 'i Hen. Hi. 235.

3 Conpe V. Kyre, 1 Ibid. 37. * Bf njamin v. Porteus, 2 Ibid. £90.

5 Jestoiis V. Brooke, Cowp. 79.3.

2a2 5/.

33(5 Of Partnership.

51. por cent., together 'svilh a portion of the trade; for 5uch an agreement is coiitrary to tlie priiiriple on -which the partnership contract must be fonncled, viz. reciprocal risks and advantages'. And yet the obligee of such bond will be subject to all the debts accruing from such partner- ship.

In all cases of special partnerships, which are formed for a particular concern, or for a single dealing or adventure, though the persons forming them have all the rights, and are subject to a!l the liabilities of partners, yet the relation of copartnership between them ceases with the consummation of such single dealing or adventure, and at no time extends to any of their other concerns.

With respect to the division of the profit and loss de- rived from a partnership concern, where the proportion of capital, stock, hibour, and skill of the partners are equal, the division of the gain or loss will be equal ; where they have coi'.tiibuted unequally, the distribution of their respective shares I'll the gain or loss must be regulated according to the stii)ulated proportions, and the different conditions of the partnership.

2. Of the LiahiUties of Partners with reference to each other.

As to the interest w hich partners have by law in tlie goods or capital v.liicli they contribute at the commencement of the parliiLrship, or acquire in the course of trade ; it is held by tliC legem rccrcatoriam, that partners are either tenants in common of the partnership effects, or joint tenants with- out benefit of survivorship : for in all undertakings upon hazard of profit or less, the jus accrcsccndi, or benefit of sur- vivorship, is never allowed-. And in wliatever proportion each individual partner may contribute, or whctlier the part- nership be general, or only for a particular adventure, the

« Morse V. Wilson, 4T. U. 'ih2. "" Co. Lit. 18?.

partners

Of Partnership. 357

partners liave all the same species of iiileiesl in the stock in trade. And after an agreement executed between the parties, the stock and effects which are put info partnership become common to all the parties, although they are not delivered, but remain in possession of that ]>aitner who was the sole owner of them before the partnership commenced '.

And this community of interest extends not only to such particular stock as may be brought into trade at the time of entering into partnership, but to all such as may at any time arise in the course of the partnership dealings \ But to whatever slmre a partner may be entitled, he has no exclu- sive right to it until a balance of accounts be struck between him and his copartners K

How far the acts of one partner are binding upon his co- partners, the general rule of la^v is, that if the act concerns the partnership trade or business, it binds all, unless there. be an express previous dissent ; but if such act do not con^- cern the partnership trade, or be not in the usual course of trade, as signing a deed, ^c. it shall not be binding on the J-est, but by their assent express or implied ^.

As to the power of transferring any house or real estate held for the purposes of partnership business, no partner can dispose of more than his own share in such property. Neither will a general partnership agieement, tliotigli under seal, authorize partners to execute deeds for each other, unless a particular power be given for that purpose '. B.jtwith regard to all effects contributed, manufactured, or purcJiased, to be sold for the benefit of" the parlnership, a s Je thrrtof by one of several copartners is equ;d!y valid as if I hey liad ail been present at the time the bargain was made, and had given their assent to it, provided there was no collusion on

' Domat. Edit. 1TT2, b. 1. tit. 8. s. 3.

« Skipp V. Harwood, 1 Vos. '<;42. 3 Saavfli v. De Svlva, Cow). -171.

4 1 .^;alk. 126. 4 T. R. 31'5. 6 Vcs. Jun. 60^." 7 Ea<;t's Reo.210. 10 Ibid. 2G4. 7 T. R. 207. 5 Hanibon v. Jackson, 7 T. R. 207.

the

358 Of Partnership,

the part of the vendee. So although one partner cannot bind his copartners by deed, -vvilhout an authority by deed, 3'et, in the course of mercantile transactions, one partner may, by drawing-, accepting, or indorsing bills of exchange or promissory notes, in the name, or as on the behalf of the firm, bind the rest even without their knowledge or assent'. A new partner, however, cannot be bound in this manner for an old debt incurred by the other partners before the new partner was taken into the firm *.

A secret act of bankruptcy committed by one partner docs not take away the power of the others to dispose bona fide of the goods which belonged to them. Thus, in the case of Fox V. Hanbury, it was held, that if one of two partners become bankrupt, the solvent partner may, if for a valuable consideration and without fraud, dispose of the partnership effects : and that if he afterwards fail, tiic assignees, under a joint commission against both, cannot maintain trover against the bona fide vendee of such partnership effec's '.

The property in partnership effects may be transferred not only by the acts of the partners, but by operation of law. This happens either by means of bankruptcy or by the effect of legal process directed against the goods of partners in a civil action. Where there is execution against one of several partners, the sheriff must seize all the goods, and sell a moiety thereof undivided *. And, there- fore, though the creditor of any one partner may take in execution the partner's interest in all the tangible property of the partnersliip, yd an account must be taken before the fruits of an e^cecution upon the partnership effects can be reai>ed K

But it is in equity only that relief can be obtained in

• Swan V. SteHp, 7 East's Rpp. 210. Ex parte Bonbonns, 8 Ves. Jan. 542. ' ShrriflFv. Wilks, 1 East's Rrp. 48. 3 Cowp. 445.

* Heydon v Hejdon, 1 Salk..S92. Jackcy v. Butler, 2 Ld. Raym. 871, •' lA>lor V. Field, 4 Ves. Jun. 396.

sucl^

Of Partnership. 359

8Uc.li Cijscs. A court of law has no right to ivstrain against pavtner.>]iip cfTccts, or to direct an inquiry into the i:itercst of the partner who is sued, as also of the several claims. vpon the partnership property. If the other partners therefore are desirous to remove the inconvenience of the execution and prevent the sherifl" from disposing of iln-. property seized under it, they must file a bill in equity against the vendee of the sheriff '.

As to the coutioul of partners over the partnership pro- party, it depends upon the articles of partnership, iliit if there has been no express stipulation between them, the ma- jority must decide-as to the disposition and management of the partnersijip concerns. Siiips are, however, an exception to tliC rule, that the consent of all parties is necessary to part- nership ; ibr one part-owner may, at any time, against tiie will of the rest, sell or assign his share of the ship, and clothe the assignee wit hall the rights and privileges which he himself en- joyed *. But where the several parties became parl-^owners in a ship under a fixed contract for the employment of it ; or where, by common consent, they delegate the manage- ment of it to one of them, who, by a very intelligible figure of speech, is called the husband of tho ship ; then the com- pact or agreement Ijctween the parties may be enforced by the law of the state, according to its own mode of adminis- tering justice in analogous cases. It is only when the ca- jpymqut of the property has not been thus settled by the par- ties that it becomes necessary to inquire what mode the laAv of the country has prescribed for the regulation of it. But while it authorizes the majority in value to employ the ship upon any probable design, it takes care to secure the interest of the dissentient minority from being lost in an employment they disapprove. For this purpose it has been the practice

» Parker v. Parker, 3 Bns. anl Pal. 288. Chapman v. Koops,Ibid. IH^. ' IJcawes's Lex Mercatoria,53. Mollov rte .] ure Maritimo, 310,

of

S60 Of Partnership,

of the court of admiralty, from very rertiote times, t6 take k stipulilion from those Avho desire to send the ship on a voy- age, in a sum equal to the value of the shares of those "who disapprove of the adventure, either to bring back and re- store to them the ship within a limited time, or to pay them the value of their shares. When this is done, ihe dissentient part-owners bear no proportion of the expenses of tlie outfit, and are not entitled to a sliare in the pioiits of the under- taking, but the ship sails wholly at the charge and risk, and for the profit, of the others. This security may be taken upon a warrant obtained by the minority to arrest the ship ; and it is incumbent upon the minority to have xe* course to such proceedings, as the best means of protecting their interest ; or, if they forbear to do so, they should at all events expressly notify their dissent to the others, and if possible to the merchants also who freight the ship ; for the general rule of law is, that where one tenant in conimoA does not destroy the common property, but only takes it out of the possession of another, and carries it away, no action lies ag^iinst him ; but if he destroys the common property, he is liable to be sued by his companion. And it has also been decided in equity, that one part-owner cannot have redress against another for the loss of a ship sent to sea with- out his assent'.

But if a part-owner expressly notify his dissent, the court of chancery will not compel him to contribute to a loss ^

If the minority happen to have the possession, and refuse to emp'oy the ship, the majority also may, by a similar warrant, obtain possession of it, and send it to sea upon givi ig such s<^curity '.

And whatever doubts may have been entertained, whether

' Abbot's Law of Alerchant Ships and Seamen, part I. c. 3. s. 4.

» Horn V. Gilpin, Ambl.255. 3 Ouston v. Hebden, 1 Wils. 101.

this

Of Partnership. 561

th^s practice ©f the court of admiralty was an unfounded assumption of jurisdictioa in a matter not within its cogni- zance, several late decif^ions have recognised and confirmed it, both as to taking such security, and enforcing the per- formance of the stipulation upi)n the loss of a ship'. In the case of Onston v. Hebden above cited, lord chief justice Lee said, I have no doubt but the admiralty has a power in this case to compel a security, and this jurisdiction has been alio \ed to that court for the public gciod. Indeed, the ad- miralty has no jurisdiction to compel a sale; and if they siiould do (hat, you nu<i!i! I'.ave aprohibidon after sentence ; or we may grant a prohibi(ii>n against selling, or compelling the pa'ty to sell, or to buy the shares of others.

But tlough the part-owners of a ship are tenants in com- ftiou W'th eacli other of their respective shares ; jci if, upon Cntrring into partnership, a ship is brought in as part of the stock in ttade, or is aft r purcliasetl out of the partnership funds, it is necessary there should be a new register in tlie names of all the partners, otherwise the sliip will be consi- dered as the separate property of that one whose name is ex- clusively on the register ^.

As to the rights which partners acquire between them- selves, it is to be observed, that each partner is not only entitled to his proportion of the partnership estate accord- ing to express agreement or what he originally contributed, but he has a lien upon it for any sums of money advanced by him to, or owing to liim from, the partnership. And this extends even to property in sln'ps ; for in the case of Doddington v. Hallet, lord chancellor Hardwicke held, that part-owners have a specific lien on the shares of each other for what they have paid, or are liable to pay, for build- ing and equipping the ship '.

' 1 Ld. Raym. 223, 2.'55. 6 Mod. 162. 2 Ld. R.iym. 1285. 2 Str. 890, '' Curtis v.Pcn-y,6 Ves.Jun. T39. 3 j Yes. 497.

562 Of Partnership,

If one partner pays a debt arising out of a legal contract, for Avliich the partnersliip was liable, he lias an action against the others for a contribution. But if partners should be engaged in any thing malum in se, one of them can- not acquire a right of action by paying a sum of money which they liad jointly promised to a third person in the course of their immoral transactions. Although these two points "have always been considered perfectly clear, consi- derable uncertainty seems for some time to have prevailed in cases where the debt arose out of a transaction being not malum in se, but only malum prohibitum. In Faikney V. Reynous, it was held, that a bond to reimburse a person who had compounded the difiVrcnce of stocks, half of what he had paid for himself and a person jointly concerned in the contracts compounded, is not void'. For though tiie statute 7 Geo. II. c. 8. s. 5., prohibits the compounding or iriaking up difterences for stocks or other public securities, without specially executing the contract, and actually deli- vering the stock ; yet it does not prohibit the recovery of money paid by one of two partners on account of the other, for which a bond had been given to secure the re-payment.

A distinction, however, has been taken between a debt arising out of a prohibited transaction paid by one partner, with or without the consent of tlie other. And therefore when the contract is not morally bad, its illegality aris- ing only from its being prohibited by a positive statute, it has been held, that a debt paid by one partner with the conseitt and direction of tlie other who has jointly contracted, . is recoverable in an action for money paid to the ollier's use. Accordingly, two persons having jointly engaged in a stock-, jobbing transaction, and incurred losses, one of them hav-,; ing repaid the broker, employed the whole difi'erences with., the privity and consent of the other, was, notwithstanding

» Eur. 2069.

the

Of Partnership, 563

the statute 7 Geo. II., allowed to recover a moiety from that other'.

But the authority of these two cases has been in some mea- sure shaken by subsequent decisions. For it has been de- termined that no implied promise can arise directly out of an illegal proceedinc^, so as to be the foundation of an ac- tion, whatever the law may be, where the parties are a step removed from the illegal transaction itself, or one acts by the direction of the' oihcr. In Mitchel and others v. Cockburne ^, it was held, that if A and B are engaged in an illegal partnership for the insurance of ships, and A pays the whole of the losses incurred, he cannot maintain an ac- tion against B to recover a share of the money that has been so pa'd. And this decision has been fully confirmed in the case of Aubert v. Maize' ; in which an arbitrator having awarded a sum to be paid by one partner to another, on ac- coutit of money paid by the latter lor losses incurred by them on partnership insurances, that part of the award wa& set aside.

And of such contracts, which are not immoral in them- selves, but are prohibited by statute, a specific executioo will not be decreed in equity ^.

3. Of the Lialilities of Partners luith reference to third Persons.

The transactions of partners, in which they all severally jind respectively join, ditler in nothing as to legal conse- quences from transactions in which they are concerned in- dividually ; for although the general rule of law is, that no one is liable upon any contract, except such as are privy to it, the liability of partners under contract is commensurate and co-extensive with their rights, and arises from their

• Petrie v Ilannav, 3 T. R. 418. ' ? Hen. Bl 379-

? 2 Bos. and PiO. 371. « K.n«wle5 v- Ilougbten, 11 Ves. Jun. 168.

beiniT

364; Of "Partner sliip.

being considered as virtually present at and sanctioning the proceedings they singly enter into in the course of trade'. This responsibility of partners for the acts of each other in the course of trade cannot be limited by any agreement, co- venants, or provisos, in the articles by which the partnerships are constituted ; it is not merely the sum which they bring into the partnership fund that is risked, but they are answer- able to the last shilling of their fortunes ^.

But though the act of one partner binds the otliers, yet if they can show a disclaimer, they will be relieved from such, responsibility. And it should seem that even during the subsistence of the partnership, and in the established course of trade, one partner may, to a certain degree, limit his re- sponsibilif}^, by giving distinct notice to those with whom his copartners are about to contract, of his dissent to such contracts

When a dormant partner is discovered, he is equally li- able as if his name had appeared in the firm ; and it will be no security to him that he stipulated that his copartner should carry on the trade at his own separate risk, and that h.e should not be answerable for any of the other's debts and engagements ■*.

This appears from the case of Stracey, Ross, and others v. Deey, London Sittings after Mich. 1789. The plaintifls jointly carried on trade as grocers, but Ross was the only ostensible person engaged in the business, and appeared to the world as solely interested therein. By the terms of the partnei"ship, Ross was to be the apparent trader, and the others were to remain mere sleeping partners. The de- fendant was a policy broker, and being indebted for grocery (as he conceived) to Ross, lieefliscted insurances and paid premiums on account of Ross solely, to the amount of his

' 1 Falk. 292. ' 5 T. R. 601. 3 Watson on rarlnership, 194.

4 Hubert v. Nelson, Davies, B. L, p. 8.

debt,

Of Partnership. 365

debt, under the idea that one demand might be set off against the other. Rois's affairs bei:iQ: macU deraiiged, payment of the money due from tiie defendant u as demand(d by the firm, and was refused by him on the ground of his having been deceived by the other partners keeping back, ajid hold- ing out Ross as the only person concerned in the trade. Lord Kenyon, C. J. was of opinion, that as the defendant had a good defence by way of set off, as against Ross, and had been hy 'he coiukict of the plaintiffs led to believe that Ross was the only person he contracted with ; they could not now pull off the mask and claim payments of debts supposed to be due to Ross alone, without allowing the defendant the same advantages and equities in his defence that he would have had in actions brought by Ross.

Neither can they excuse tliemsclves from the liability of a debt fraudulently contracted by their copariners in the course of business, and to which they were not privy ; for by the formation of the partnership each partner has im- pliedly undertaken to he responsible for what his copartners shall respectively do within the compass of the partnership concerns ' .

But unless the debt relates to, and has been confrn.cted in the course of the partnership concerns, no joint liability arises, but tliat partner only will be bound who contracts it. It is only to act in the course of their purticular trade, or line of business, that an authority is delegated by partners to each other ; and it is only in such transactions that strangers have a right to go upori the credit of the partnership con- cerns *.

Still less can d bts contracted by one partner l)efore the commencement of the partnership constitute a joint demand upon the firm, unless there were an express agreement to bc-

• Willct V. Chambers, Cowp. HM, ■» Yin. Abr. v. IG. p. 2i'2.

come

566 Of Partnership.

coinc responsible for siicli debts, and then perhaps equity ■would ciirorce the payment of them '.

Altbough slight circumstances might be sufficient to in- duce courts of equity to render a person liable who was not a partner at the time of the original transaction, but had aftcrwarJs acquired all the benefit of a partner in such trans- action ; yet if it clearly appi^ars that no partnership actually existed at the time the contract was entered into, no .subse- quent act or acknowledgement will create the responsibility arising from partnership *.

The power of one partner to bind his copartners in draw- ing bills of exchange, indorsing such as are payable to the iirm, and making and indorsing promissory notes, has ne- ver been doubted, if such bills, &c. concern t'je joint traded But it is otherwise if they concern the acceptor only in a distinct interest and respect, and tlie holder of the bill, at the time he became so, was aware of that f.ct-*.

And in Sheriff V. Wilks 5 it was held that two of three partners who had contracted a debt, prior to the admission of the third partner into the firm, cannot bind hi;n with- out his assent, by accepting a bill drawn by the creditor upon the firm in their joint names.

When a partner for his own accommodation pledges tlie partnership property, if the party advancing the money can be considered as being advertised that it was not intend- ed to be a partnership proceeding, but for tlie separate ac- count of the single partner alone, prima facie the partner- ship is not liable ; unless a previous authority or subsequent approbation is shown'''.

' Ex parte Perlc, 6 Vcs. Jun. 603.

» Saville V. Robertson and Hutchinson, 4 T. R. 720.

3 Fi;ikncy V. liall, 1 Salk. 126.

« Arden v. Sharpa^od another, 2 Esp. N. P. C. 593. .

5 1 East's Rep. 48. ® Ex parte Ik-nbonus, 8 Ves. Jun. 5A0.. -

So,

Of Fartnership. 367

So, if a creditor of one of several partners collude with him to take payment or security for his individual debt out of the partnership funds, kno\viiig at the time that it Avas with- out the consent of the other partner, it is fraudulent and void ; but if taken bona fide without such knowledge at the time, no subsequently acquired knowledge of the miscon- duct of the partner in giving- such security will prevent the holder fiom recovering against all the partners '.

But the power of one partner to bind the firm by a nego- tiable instrument ceases with the existence of the partner- ship. And therefore wiien the partnership is dissolved, a power to receive and pay all debts due to and from the jiart- ncrship will not authorize one of the late partners to in- dorse a bill of exchange in the name of the partnership, though drawn by him in that name, and accepted by a debtor of the partnership after the dissolution ^.

And in Abel v. Sutton ^ it was determined, that after the dissolution of a partnership, one of the persons who com- posed the firm cannot put the partnership name to a nego- tiable security so as to charge the others, even though it existed prior to the dissolution of the partnership, or w ere for the purpose of liquidating the partnership debts ; not- ■withstanding such partner may have had authority to settle the partnership aiFaits : to render such security negotiable all tlie partners must join.

We have seen that one partner cannot by deed bring any fresh bur(hen upon his copartner ; he can, however, bar him o[ a right w iiich they possess jointly. For where there is a promise to several jointly, or where there are several joint obligees or covenantees, a release by one binds all. In cases, however, of gross collusion with creditors, relief would probably be granted in a court of equity ''.

' Swan V. steel, 7 East's Rep. 210.

' KilgourT. Finlyson, I ilen. HI. Ibb. . '3 Esp. N. P. C. 108.

* J it. Rek^use, Com. Dig. and Bac. Abr.

But

3(i8 Of Partnership.

But it will always be consiclcjcJ in what right a release is i^-iveii by a joint obligee. IHic releases all actions in a representative ca])acity, a joint bond in liis own right is not discharged, and so vice versa '.

' To compensate, however, for any hardship which may arise from the operation of a release by one of several part' ners, the law considers a release to one as enuring to the benefit of all *. If two or more are jointly and severally bound in a bond, a release to one discharges the other ; and in such case the joint remedy being gone, the several is so likewise. Even if the release were lo one, proviso that the other shall not take advantage of it, the proviso would be void and the release would discharge both K

A release will have operation upon a debt due from a partnership by simple contract as well as by specialty. Where a creditor receives anly part of his demand from one partner upon a bill of exchange or for goods sold, lie may come upon the others for the residue ; but if he seals a release to one, whatever sum may still be due to him, he is barred as against each and all of them : Tiiougli the debt may not be extinguished, lie has for ever parted with his remedy ^.

With regard to tlie liability of part-owners for the re- pairs of a ship and other necessaries for the employment of it, one part-owner may in general, by ordering these things on credit, render his companions liable to be sued for the price of them '. Yet, if the person who gives the credit does not at the time know that there are other part- owners, he may sue him alone from whom he receives the orders ''. But o:!e part-owner c.muot, by ordering an in- surance of the ship without authority from another, charge

» stokes V. Stokes, Vent. S5. 2 Keb. 530. ^ Co. Lit. 232.

3 Lit. Rep. ISO. 4 WVitson on Partnership, 2'-27.

5 Wri.^iit V. Hyntor, 1 Kast's flep. 20.

6 Doo V. Ch^ppenden, at Westm. Sitt. il. T. 1790,

the

Of Partnership. 369

the other with any part of the premium, unless the other afterwards assent to the insurance '.

It is a general rule, that the owners are bound by every lawful contract made by the master of the ship relative to the usual employment of such ship *. And to constitute such a contract for the owners and on their behalf, the course of the usual employment of the ship is evidence of authority given by the owners to the master. But one part-owner, who dissents from a particular voyage in the manner mentioned at page 360, is not bound, because he does not employ the ship on that voyage, nor derive any profit from it '.

So if the master make a particular engagement or war- ranty relating to the conveyance of merchandise according to the usual employment of the ship, the owners will be bound by such engngcment or warranty, although made without their knowledge, and must answer for a breach of it \

As to the extent of the responsibility of part-owners, much difference has prevailed among mercantile nations. In England, formerly, part-owners were answerable to the merchant for the loss or damage of his goods up to the full extent of the amount of such loss or damage. But this proving a great discouragement to trade, it was cnacied by the statute 7 Geo. II. c. IS. that no owner or owners of any ship or vessel, shall be liable for any goods or merchandise of any kind shipped on board any vessel, or for any act, damage, or forfeiture done, occasioned or incurred by the master or mariners, without the privity

' Ogle and another v. AVran^ham, et nl. Guildliall Sift. IT. T. 1793. ^ Mollov tie Jure ISlaritimojih. 2. t. ^2. s. 14. « T. II. 531. 3 Lev. 258. 3 Mod. S2\. 1 Show. '29, 101. 3 Boston V. Sandford,Carfh. 58. * Ringui^t V. Ditcheli, Cluildhall Sitt. after Mjch. Terra, 40 III.

^ B and

370 Of Partnership.

and knowlc(%e of such owner or owner?, further than the value of (he ship or vessel, witli nil her appurtenances, and the full amount of the frcic^hf, due or (o grow due for and during (he voyage Avherein such embezzlenien(, &c. shall be commi(ted, &c. i\nd by section 2. where (he ship or vessel, appurtenances, and freigh( are no( suHicient to make full compensu(ion (o all (he freighters or proprietors, they shall receive their satisfaction (hereout in average, in pro- portion to their respective losses or damages ; and in every such case, it may be lawful for such freighters or proprie(ors, or for the owners, or any of them, on behalf of himself, and all the res(, (o exhibit a bill in any court of equi(y for (he discovery of (he (olal amount of such losses or damages, and also of (he value of the ship or vessel, and for an equal dis(ribulion and payment (hereof amongst such freighters or proprie(ors, in proportion to their respective losses or damages, according to (he rules of equi(y. Pro- vided (sec(. 3.) (hat the plaintifl'or plaintiffs shall annex an affidavit to such bill or bills, that he or they do not col- lude with any of the defendants thereto ; and shall ofler to pay the value of such ship or vessel, appurtenances and freight, as such court shall direct. Provided also (sect. 3.) that nothing in the present act shall extend, or be cons(rued to ex(cnd (o (akc away any remedy which any person or persons had^ betbre the making of tliis act, against the mas- ter and mariners respectively, in resp.-ct of any fraud, abuse, or malversation.

By the 26th Geo. III. c. 86. s. 1. the same limits to the responsibility of tiie owners in the several case si mentioned in the preceding statute were fixed, and also in the case of robbery, " althougli the master or mariner shall not be in any wise concerned in, or privy (o, such robbery, embezzle- ment, secreting, or making away with." This statute also

contains

Of Partnership. 371

contains the same provisions as the preceding act, for re- medy against the master and mariners, and has entirely taken away the responsibility of the owners in the case of loss or damage by fire.

4. Of the Liabilities' of Partners for the Torts or Wrongs committed ly a Partner.

Though partners are in general bound by the con- tracts, they are not answerable for the wrongs of each other. If they all join in one trespass or tort, of course they all may Ije sued, and compelled to make compensation for the injury they have committed. Bat this action arises from their personal misconduct, and not from the relation of partnership which subsists between them. With regard to matters quite unconnectc^d with the partnership, trade, or business, there can be no question ; and, in gene- ral, acts or omissions in the course of the partnership, trade, or business, in violation of law, will only implicate those "who are guilty of them. If one of two bankers in part- nership should commit usury in discounting bills ; if one of two attorneys in partnership should practise without a certificate ; if one of two surgeons in partnership should wantonly ill-treat a patient, the innocent partners cer- tainly could not be liable to an action for penalties or da- mages '.

However, this rule admits of exceptions. Partners, like individuals, are responsible for the negligence of their ser- vants upon the maxim of qui facit per aliura facit per se ; and if one of the partners acts, he is considered in this in- stance as the servant of the rest. In these cases the tort is looked upon as the joint and several tort of all the partners; so that they may either be proceeded against in a body, or

' Watson's Law of Partnership, 235.

2 B 2 one

372 Of Partnership.

one may be singltd out and sued alone for the whole of the damai^e done. This happens not unusually in actions for driving against carriages, running down ships, &c. '

Of the liability of partners as to smuggling, it appears that if one of the several partners engages in transac- tions of this kind with the consent or privity of the others, lie alone is liable to be prosecuted for tiie penaUies imposed by <hc revenue laws ; but (luit if more than one should be concerned, they are jointly and severally liable, as the vvliole of (he penalties may be recovered from them all to- gether, or from any one of them separately *.

Likewise if goods are imported by one partner on the partnership account, without the duties being regularly paid, each of the other partners who were so at the time of the importation, is liable for the A\hole duties to the crown, although the importation and entry were only in the name of such one partner^.

If a contract is entered into by one partner in contra- vention of the laws of this countrv, Avi(hout the privity or personal participation of his copartners; as if goods are packed by him in a particidar manner for the purpose of smuggling ; neither the person entering into such illicit contract, nor his copartners, can recover on it. And it makes no difference if the parly who executed the contract live* abroad, if his copartners reside in England *.

Neither can a contract for a marine insurance contrary io tlie statute 6 Geo. 1. c. 18. be enforced, if the plaintiff did not alone stanJ the risk insured, but associated one or more in partnership with him in the transaction. And therefore in Sullivan v. Graves', the plaintifl'was not allowed to re- cover the moiety of a loss upon a policy paid into the

, ' Watson's Law of Partnership, 235. * Alt. Gen. y. I^urgess, Uunb. 2'2:3. Rex. v. Manninjr, Com. Rep. 616.

3 Att. Gen. V. Stannyforth, Bunh.9T.

4 liiggs V. Lawrence, .'i T. R. 151. 5 sitt. after E. T. 1789.

hands

Of Partnership. S73

hands of the defendant by a person who had agreed to take half the plairitift's risk. And although one partner in such illegal insurances has paid the MJiole of the loss, he will not be allowed to recover any part of the pre- miums '.

But a number of ship-owners may subscribe a joint fund, proportioned to the respective value of th( ir property, and insure each other's ships respectively, if they are liable to losses only in their proportion of the fund so subscribed, and do not undertake collectively for each other *.

But where it was stipulated among the members of a similar association, " that in case of the insolvency of any one of the members, or his inability to pay, the propor- tionable part or share of such member should be made good by the other members of the company , the partners being considered to be jointly responsible, the insurance was held to be void by the statute 6 Geo. I. c. 18 '.

5. Of the Dissolution of Partnership.

The modes by which a partnership contract may be dis- solved are various. Bankruptcy, death, outlawry •*, or attainder for treason or felony, will ipso facto produce that effect. It may also be determined by express stipulation, or effluxion of time; by implication, as in case of a parti- cular adventure ; or by consent.

• Booth V. Hodjon, 6 T. R. 405.

^ Harrison v .MiUaPj-i i;s|>. N. P. C. 513. J Lepsv. Smith,? T. R. 3.{^.

* Upon tlie oiithnvry or altaindcr the share of the outlaw or convirt, ns also all the partnership clViTts are forfeited to the cronn ; for it is unbe- coming tlie dij^nity of thecro.vn to be joint (enant, or tenant in common, with another person. (2 Bl. Com. -i09.)

But upon an '^xtent against one partner, the cro^^'n ran only take the sepa- rate interest of the partner, and that liable to the partnership debts. (The King V. Sanderson, V\ ightw. llcp. 50.)

I. By

374 Of Partficrship.

First J By the Act of the Parties.

Where the partnership is formed for a single dealing oi transaction, as soon as tliat is coniplefed the partnership is at an end of course. But wliere a general partnership is en- tered into for an unlimited time, it may be put an end to at any time by either of the partners ; so that he acts bona fide, Tamdiii socirtas durat, quamdiu consensus partium ir)teger perseverat'. Therefore, if either of the partners should think proper to relinquish the partnership, he may do so ; provided he does not b-cak off witli some sinister view, or does not quit after some particular business is begun, or at an unseasonable time, which might occasion loss and damage to the partnership^.

But it almost always happens, that by articles of partner- ship a precise term is fixed for the duration of the contract, Irt that case tlie partnership is regularly dissolved by the effluxion or expiration of tl.at time for ^vhich it was origi- nally agreed between the parties to continue their portion, for the purpose of carrying on the joint trade with a view to their mutual benefit. If the business should still be con- ducted after that period by all the partners, without any new arrarigemcnt of the concern, it would probably be held, in analogy to the law of landlord and tenant, that the part- nership continued under the conditions and covenants con- tained in tiie original articles, with a power to either parfy to put an end to it at pleasured

A partnership for a term of years cannot Ije dissolved by the will of one, or of any number of the partners short of the whole of them ; but of course, if they all agree upon scpa- yating, they may do so at any time-*.

If one partner grossly misconducts himself, and seems dis-

• 1 n'lir. lib. xvii. tit. 2. ' Watson's Law of Partnership, 3S1.

3 Ibid, * Ibid..

posed

Of Partnership. S75

posed to involve his copartners in ruin, a court of equity will interfere, and dissolve the partnership before it has come to its natural termination.

Where the purposes for which a contract was entered into can be no lona^er served, the contract may be disan- nulled. Therefore, it should seem that a partnership may be dissolved by the insanity of any one of the partners, pro- vided the malady be not of a temporary nature, but such as to render him incapable of conducting the business for a length of time, according to the articles of partriership ' .

A partnership may likewise be dissolved by the award of arbitrators.

It is customary in regular partnerships to insert a clause in. the articles, by which the partners covenant to submit io arbitration any mutter or thing which may become t!ie sub- ject of controversy or dispute between them. And although in such cases the arbitrators are usually judges of the parties' own choosing, and proceed in a summary way ; yet, if duly authorised, their award is considered final, (as well as where a settlement of accounts is referred to their decision*) aiul consequently binding upon the parties, unless there should appear just grounds, either at law, or in equity, to set it aside.

In order to empower the arbitrators to proceed to thje dis- solution of a partnership, it is not necessary for the parties submitting to arbitration, to authoris.^ the arbitrators to dis- solve the purtnersliip ; for if two partners refer all matters in difference between them, the arbitrators have clearly a right to dissolve the partnership'.

Articles of partnership frequently contain a provision for a dissolution, upon notice to be given by any one of the

' Savor V. Bennett, at the Rolls, 1st Pec. 1785. » Rouih V. Hearh, Anst. Cas. Exch. 319. 3 Groeu v. Waring, I HI. li. 475.

partners.

376 Of Partnership.

partners. In such case the mode of proceeding pointed out must be strictly pursued, and a regard to good faith must govern the conduct of the partner who withdraws, in the same manner ^s a partner withdrawing from a partnership for an inilefinite time'.

The ciiect of marriage of a feme sole partner has never been expressly decided, but it would probably l)e held io operate as a dissolution of the partnership. However wo- men are not unfrequently entitled to shares in banking-houses and other mercantile concerns, under positive covenants : when this happens, their husbands are entitled to such shares, and become partners in their stead \

A partnership may be dissolved as between the partners themselves, and still subsist as between them and the rest of the world. From this liability of partners to answer for the acts of each other, it is necessary that after the dissolution of their connections, to avoid continuing liable to each other's creditors after they have ceased to have dealing together, <o give notice in the London Gazette of the dissolution of the partnership'. And even this notice in the Gazette Avill not be sufficient against persons who were customers of the firm during the existence of the partnership, unless an actual knowledge of the dissolution of the partnership can be brought home to them. Therefore when partners dissolve partnership, they should, besides inserting an advertisement in the Gazette, send notice of the dissolution to all their individual correspondents with whom they had dealings while in partnership*.

When a partnership is dissolved, it frequently happens that it is only to mate some alteration in the firm, after which the partnership business goes on as before. In these

' Waf.>-on's Law of Partnership, 384. '- Ibid.

3 Gorham V. Thompson, Peake's N.P. C. 42. « Graham v. Hopo, Ibid. 254.

cases

Of Partnership. 377

eases the partner coming in or retiring generally pays or receives a sum of money in proportion to his share in the concern. If the business is to be given up, or the ])artncrs cannot arrive at any amicable arrangement, then the part- nership eft'ecfs are all to be reduced into money, and the produce, together with <he other funds of the house, rate- ably divided among the partners. But before there is any dividend the partnership debts must be paid ; and it is only to his share of the surplus that any partner is entitled. Upon this principle it has been held, that if a partner, when he retires, draws out of the partnership stock all that he had paid in, the house being insolvent at the time, he wi'l be obliged to refund to the creditors of the other part- ners'.

As to tlie effect of bankruptcy on a partnership con- tract, sec the head Bankruptcy.

Secondly, By the Death of Partners.

By the death of one of several copartners, the partner- ship is dissolved, unless there is an express agreement for the transmission of an interest in the business to the deceased partner's family, or for its continuation by his executors or administrators. But tliough there should be an express stipulation, that upon the de:th of one particular partner of two, the business should be carried on by his representatives, such a stipulation will not entitle the representatives of the other partner who dies first, to share in the business*.

Upon the death of one partner, his representatives become tenants in common with the survivor of all the partnership effects in possession. For it is a maxim of the lex niercato- ria, that jus accrescendi inter mercatores, pro beneficiocom- mercii locum non Iiabet^ But the good will of a trad«

• Anderson v. M.iltby, 4 Bro. C. C. 423. Sec 2 Ves. Jun. *I4. '^ Pcarce v. Chamhrrhiin, '2 Vcr. 33. 3 l Insl. 18'?.

carried;

378 Of PariJiersh'tp. *

carried on in parlnership survives, and is not to be consi- dered partnership stock to which the representatives of a deceased partner have any right, unless there is an express stipulation in t'le articles of partnership to that effect'. Neither are choses in action considered as partnership stock, of ^yhich an executor may compel a division ; tor the remedy for their recovery rests exclusively in the survivor. But when such choses in action are reduced into possesjiion, tlie representative of a deceased partner is entitled to a share of them *.

After the death of one partner, the survivor must, within a reasonable time, account with the representatives of tiie deceased ; and if he will not come to any settlement with them, the Couit of Chancery will grant an injunction to restrain him from disposing of the joint stock and receiving the outstanding debts ^

Upon the death of one partner, the survivor is to be sued alone by the partnership creditors, to Avhoniheis responsible for the whole of their debts. But if a separate creditor of the deceased partner will have satisfaction out of the partner- ship effects in his hands, all the partnership debts must be first paid ; and he can never be liable to such separate credi- tor but in respect of the surplus-*. An executor of tlie de- ceased partner and the survivor cannot be sued jointly ; for the rights of the executor and the survivor are of several natures ; the first is to be charged de bonis testatoris, and the other de bonis propriis'.

But if the surviving partner is not responsible, the part- nership creditors nsay in equity come upon the assets of the deceased partner which arc in the hands of his executor.

' Hammond v. Doiij^las, 5 Ves. .T»in. 5.09.

' Martin v. Crr.mpc, I lA. Raym.;i;0. 2 Salk.444. S. C.

3 Hartz V. Srhradcr, 3 Ves. .Tun. '31T.

« Croft V. Pvkc, 3 P. W ms. 182.

5 Kemp. V. Andreivs, Carth. 170. 3 Lev. 290, S. C. 2 Salk. 414.

But

Of Mercantile Guarantees* S79

Such creditors, however, cannot before the final adjustment of the account retain any separate property of tiie deceased which may come into their possession, but must pay it into court ' .

And it would seem that it is not here as in bankruptcy, that the joint creditors shall come only on the surplus of the separate estate alter the separate creditors are satisfitd : for it has been held, that a joint bond shall be considered as several against creditors, and tliat the obligee must come in as a specialty creditor in the administration of assets*.

Although the security for a partnership debt should be in any way altered or exchanged after the death of one part- ner, yet till the debt be actually satisfied, his estate is liable inequity. Thus, if tht-re be judgement in an action a:^ainst the surviving partner, the debt, nevertheless, retains its ori- ginal qwallty, and the assets of the deceased partner are not discharged \

So, where bankers upon a deposit of money in their hands had given notes bearing interest, and the partnersliip being di6solvv.d, and one of the partners having soon after died, another partiiership had been formed between the survivors and others, who had reissued notes of the former partner- ship, and paid the interest of the deposit notes for nearly two years ; it was held, that upon their failure the assets of the deceased partner were not discharged-*.

CHAPTER VIII.

OF IMEHCAXTILE GUARANTEES.

1. Of the General Lata of Guarantees,

Bv the statute of frauds, 29 Car. II. c. 5. s. 4. it is enacted, '■• J'hat no action shall be brought, whereby to

' Stephenson v. ChisHell,3 Ves. Jiin. 506.

* Bnrn v. Burn, S Ves. Juii. 57.'i.

■3 .Tacornl) v. Ilarwodd, 2 Ves. <ifi5.

* Daniel V. Cross, i Ves. Juu. i2"7?

charge

380 Of Mercantile Guarantees.

chartje the defendant upon any special promise to ans\Ter for tbc debt, default, or miscarriage of another person, un- less the agreement upon which such action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorised."

In the construction of this statute, a distinction has been taken between an o'iginal promise and a collateral one.

An absolute and original undertaking is where the gua- rantor has a community of interest with the person for whom he is security' : a collateral undertaking is where the ori- ginal debtor is sol«ly liable in the first instance, and the surety adds his credit to that of his principal, but condition- ally, in case of his default^. Consequently, the former is not within the statute ; the latter is.

Where a promise is at all doubtful, the court will take into consideration the situation and circumstances of the parties, to enabU them to judge whether it was understood at the time of the agreement made, that tlie pr;.mise was to be considered an original or a collateral undertak ng'.

The distinction between collateral and original pro- mises is well exemplified in the nisi prius case of Watkins V. Perkins •♦ by Lord chief Justice Holt. If, says his Lordslup, A. promises B., bring a surgeon, that if he will cure D. of a wound, he will see him paid ; this is only a promise to pay if D. does not, and therefore it ought to be in writing to be within the statute of frauds. But if A. pro- mises in such a case, that he will be B.'s paymastt^r, what- ever he shall deserve, it is immediately the debt of A., and he is liable without writing. In the case first put, it is clear

' Srholes and another v. Hajnpson and McrrioU, Lancastrr Spring Assizes, Coram Chanibrc J. r'-ported in I'dl's Mrrcantili' (Juaranfios, p. ^11.

' Anderson v. llavman, I Hen. Bl. \ 10. Saymond v. Gentj 1 Rol. Abr. J4. pi. 2. Bfickmvrv. J)arnan, I Salk.'iT.

3 Keatc V. Temple, 1 lios. and Ful. 158. ♦ 1 Ld. Raym. 224.

that

Of Mercantile Guarantees. 381

that B. will hive a double remedy ; in the second case, the credit would be considered wholly given to the express pro- miser. And even, if by subsequent circumstances, D. should render himself liable, such liability not liaving existed, or come into existence at the time of the promise, would not have any effect in varying the predicament of the first pro- miscr, whose promise would stiU be good without writing. Again, if A. ]> omise B.', that in conhideration of liis doing a particular act, C. would pay him such a sum ; or that if C. do not pay him such a sum, he, A. will pay the same ; this is no collateral promise, unless C. was privy to the con- tract, and recognised himself as a debtor also; but other- wise A. is the sole debtor, and the statute is out of the case.

A promise in writing of a third person to be answerable for the debt, default, or miscarriage of another, will be valid as well where the promise is made previous to or at the time of the sale of the goods, or other credit given to, or liability incurred by the original debtor or defaulter % as where such debt, default, &c. has been contracted prior to the promise'.

But though the statute requires the promise 6f the gua- rantor to be in writing, so as to render him liaijle for the debtor default to which the originil debtor or defaulter is already subject, yei^ if the guarantee had possession of the property of his debtor, and was induced to part with it o\i the promise of the guaranlor, no note in writing is neces- sary (o bring the guarantor within the statute.

Thus in Catling v. Aubert-*, the plaintiff", a broker, having a lien upon certain policies of insurance in his hands, on account of acceptances he was under for his principal, was applied to by the defendant to give up such policies, in order (o enable him to recover against tiie underwriters ;

' FitZRibbon, .S02. ■» Matson v. AVhamin, 2 T. R. 80.

^ Fish V. lIutcliinsoD, 2 VVils. 94. * 2 Kasfs Rep. 325.

which

582 Of Mer candle Guarantees.

wbicli ihe plain! ifT did npon (ho dofondant's verbal uri(]fr- takinij to pay a certain sum for the debt and costs incurred upon one of those acceptances. This sum not being- paid, on an action brought, the case was held not to be within the statute.

2. Of the Extent and Construction of Guarantees.

As to the extent atid construction of an engagement io guarantee, it is a general rule that the surety shall not be bound beyond the extent of the express words of the en- gagcnunt into which he has entered. And, therefore, if a person engages for the due performance of a trust for a spe- cific time, as in the case of tlie Liverpool Water Works Company' for twelve months, and in that of Lotd Arling- ton V. Merrieke for six months^, tlic responsibility of the surety is restrained to the time specified, and he will not be liable if his principal makes default in the execution of such trust after the time conditioned.

So, even though no specific time is limited, yet if the office executed by the princi])al is an annual office, and he continues in that office over the year, the security enteral into for his faithful discharge of the same during the first year is at an end at the ex[)iration of that year^

But notwithstanding a surety is not to be charged beyond the express words of the bond into which he has entered, yet if he does not limit his responsibility, his undertaking will be construed a continuing or standing guarantee to the specified amount.

Thus M'here the defendant engaged in writing to guaran- tee the plaiutiif " for any guoJs he hath or may supply my brother W. P. with to the amount of 100/." It ap- peared that the plaintiff after this guarantee had furnished

• 6 East's Rep. 507. ' 2 Saund. 403.

3 Warden of St. Saviours's Southw;u-k v. Bostock, 2 New Rep. 175.

goods

Of Mercantile Guarantees. S83

j^oods to the amount of lOOZ., for which he liad been regu- larly paid ; and (hat the sum now in dispute was for a fur- ther supply of goods to W. P. The question was, whe- ther this was a continuing- contract for guaranteeing the supply of goods at any time afterwards furnished as long as the parties continued to deal together ; or whether it was confined to the first hundred pound's worth of goods fur- nished. Held that it was a continuing or standing guaran- tee to the extent of 100/. which might at any time become due for goods supplied until the credit was recalled '.

And if the surely has been once called upon to pay a sura, and having paid it, docs revoke his security, it is not sufficient that he write to the obligee, cautioning him against giving any further credit to the party, for whose payments or integrity, he is security ; but he will still re- main liable, at least, to the amount of the difference be- twcen what he has already paid and the whole sum se- cured *.

Where a party is surety for any particular debt, and after the incurring of that debt, transactions continue be- tween the debtor and creditor for whom he is surety, in the course of which the latter makes payments generally, the creditor may apply such payments in discharge of the sub- sequent transactions, and still hold the surety liable for the original debt '.

Neither will a variation in (he terms of the agreement, as where the sum secured was conditioned to be paid at a fu- ture day, but part thereof was paid down, and the residue was to be paid at a future day, release the surety from his obligation, unless such variation increases his risk '' ,

• Mason v. Pritc'aard, 12 East's Rep. 127. Merle v. Wells, 2 Camu. N. P. R. 413.

' Shepherd v. Beeclier, 2 P. Wms. 288. 3 Hutchinson V. BcII, lT;iunt. Rep. TjSS.

♦ Turnes v-.^ PWSUiis, \ Rol. Abr, SO. pi. i4.

581 Of Mercantile Guarantees.

It ri'inains to consiiler how the responsibility of a surety is aii'ecled by any change in the parties constituting a part- ncrslii}) /inn.

Tiiough all traiisactioMs in the course of partnership deal-* ings are considered as for the benefit of all tlie members composing it, yet it has no conlirmance independent of the particular Individuals of whom it is composed : rights are not vested in it, but in them ; so that there is no transmis- sion of rights to successions in a mercantile house, and all running agreements \\i(h a partnership cease Mhcn any change takes place by death, the retiring of cue partner, or the admission of another in tlie set of partners existing at the time when the agreements were concluded or the se- curities were entered into. And, therefore, it has been de- cided, that an indemnity bond does not remain in force after a change has taken place in the tlrm with which it was originally entered into ; for from the moment of the admission of the new partner the liability of the surety ceases '; unless the undertaking is renewed, or that a con- dition was in!-erted in the bond that the obligor should be ans^verable not only to the present but to all future partners in the house*.

Neither will a promise given in writing to three part- ners to pay for goods to be furnished by them to a third person, extend to goods furnished by two of them after the third had wit!)drawn from the partnership ^

Nor will a bond for payment to three partners, of all sums of money advanced by them to a third person, be binding after the death of one of them, so as to cover sub- sequent advances made after another partner had been taken into the firm ^.

' Wright V. Ru5sel,9 PI. Rep. P31. 3 Wil=. ^j^2.

' I'pr Lawrence, J. in l-tran^'C v. Lee, 3 East's Rep. 391.

3 Myers V. Edge, 7 T. R. 23-i.

« Strange v. Lee, 3 East's Rep. 391.

But

Of Mercantile Guarantees. - S85

But where the security is given to the house, as a bank'tfig house for instance, for the fiddUy of a clerk in the shop and counting house, and not to particular persons, no change of partners will discharge the surety from his liability '.

So a surety will continue liable on his bond given to trus- tees of a united company, (e.g. The Globe Insurance Com- pany), although not incorporated by charter, for a breach oi faithful service by a clerk committed at any time during his contirmance in the service of the actual existing body of persons carrying on the same business under the same name, notwithstanding any intermediate change of the original holders of the shares by death or transfer ; the intention of the parties to the instrument being apparent to contract for such service to be performed to the company as a fluctuat- ing body ; and the intervention of the trustees removing all legal and technical diliiculties to such a contract made w ith, or suit instituted by, the company themselves as a natural body *.

3. How a Promise of Guarantee may be discharged.

A promise of guarantee may be vacated by any act of the promisee, which tends to increase the risk of (he pro- miser, or to defeat his remeJy. And, therefore, if a guaran- tee gives time to the principal debtor, without the know- ledge or concurrence of the surety ', or otherwise changes the nature of the security and the credit, as if a bond is conditioned for (he payment of money by instalments at difl'erent periods, and the obligee agrees with the principal to take notes at distinct periods different from the dates of

• Lucas V. Barclay,! T. R. ?91. n. (a)

» Metcalf Barf. v. Bruin, 12 East's Hep. 400.

' NUbitt v..S.irub, tittd in 6 Vcs. Jun.«09.

2 c the.

S86 Of Mercantile Guarantees.

the iiistaln^ents ', in both cases t'le surety will be released from bis engagement.

So if a creditor parts Avidi a lien which he may have in his pow<r or poesession, as wlieie the principal, has left a sufficient fund in his hands, and he, iiislead of reimbursing himself, pays it kick to ilie priacipal, the surety v/ill be discharged from his re^ponsibility \

If a Cicciitor once wave his" original security, and come to a new agreement to take other security, which turns out to be insufficient, a court of equity will not compel pay- ment from the original surety.

In the case of Skip v. Ilucy and others ', the defendants Hucy, W'iicox, and Edwards, were jointly bound to the plaintiff in a bond for the payment of 2000/. which had been advanced to the two iirst named defendants, who were the principals.

At the instigation of Edwards, Ilucy persuaded the plaintiff to give up the bond, and take certain notes in lieu of it ; and, at the same time, gave him an agreement, in his own name, and the other two obligors, to make up the deficiency, if an}', between the sum lent, and what should be paid on the notes. But it did not appear that Edwards had assented, or had any knoAvledge of this agreement.

The notes turning out very insufficient for the payment of the debt, the plaintifi' applied to be relieved against Ed- wards, as co-obligor in the bond which had been given. But Lord llardwicke. Chancellor, was of opiidon, that as Edwards had l^een guilty of no fraud, and the plaintiiT had discharged him knowingly, and intentionally, he was not now entitled to any relief against him.

The neglect of obligees in a bond, in not properly ex-

' Rees V. Brrrmjrfon,? Ves.Jun. 542.

» Law V. East India Comi any, 4 Ve«. Jun. 424. 3 3 Atk. 91.

ammms:

Of Mercantile Guarantees. 387

iimining for eight or nine years the accounts of a person in tl^eir employment, for whose fidelity they had taken se- curity, is not swell a laches as will discharge the surety from his responsibility at law '.

But Mr. Fell in his Treatise on Mercantile Guarantees, p. ]56, is of opinion, that in a court of equity a surety would be relieved from all demands which had occurred from an embezzlement prior to the time when the defend- ants might, by proper care, have detected it.

Where a surety covenants wilh the party to whom he is bound for the fidelity of another, that he shall make up his accounts at stated times with the y.erson for whose fidelity he has given bond, if such party omits so to do, the surety will not be answerable for any embezzlement after the time stated that the accounts should have been investi- gated *.

Though a creditor, by compounding with the principal creditor or taking other security from him, thereby releaseis (he security from his responsibility, the law is not the same if he compounds with, or takes other security from the surety, but the principal, or sureties, will remain liable ?.

4. What the Surety may compel the Guaratitee to Jo for his Benefit.

As to the steps the surety may compel a creditor having a security, to adopt for his benefit, against a bankrupt prin- cipal, see title " Bankruptcy."

Where the principal is solvent, it may be laid down as a general rule, that a surety may, by application to the court of Cliancery, compel a creditor to bring his action against the principal -♦. How far a surety can compel a,

' The Trent Navigation Company v. ITarley, 10 East's Rep. 34.

* Montague v. Trdcombc, '2 Vein. 518. 3 Exparte Gifford, 6 Vcs. Jun. 734.

* Reesy. JJerrington, "i V'cs. Jun. 542.

2 c 2 creditor

o88 Of Mercantile Guarantees.

creditor having a sccurify to proceed against the person or estate of the principal debtor, will aj-pear from lord El- don's jtidgemeiit in the case of Wright v. Simpson '. " As to the case of principal and surety, in general cases, I never understooil, said his h)rdship, tha*, as between the obligee and the surety, t!iere was an obligation of active diligence against the principal. . Jf the obligee begins to sue the principal, and afterwards gives him time, tlicre, the surety has the benefit of it. But the surety is a guarantee; and it is his business to see, nhcthcr the principal pays, and not that of the credi(or. The iioMer of the secujitjs there- fore, in general cases, may l\y hold of t!'e su'ety ; and, till very lately, even in circumstan. es \>hcre the surety would not have had tlie same benefit that tiie creditor would. But in Jate cases, provided there was no risk, delay, or expense, the surety has a right to call upon the creditor, to do the most he can for his benefit ; and the latter cases have gone further. It is now clear, that, if the surety deposits the money, and agrees that the creditor shall be at no expense, lie may compel the creditor to prove under a commission of bankruptcy, and give the benefit of an assignment in that wy.

But a surety cannot compel a creditor to assign a bond, either upon a tender of payment, or upon actual payment*.

5. The Surety's Remedy against his Principal.

Formerly it was held, tliat a surety who had paid the debt of his principal, could not maintain an action, unless he had taken a counter security. But by more modern decisions it has been established, that if the surety has beea

• 6 Ves. .Tun. 734.

» Gammon v. Stone, I Ves. 339. Robinson v. Gee, 6 Ves. Jun. 734.

damnified,

Of Mercantile Guarantees. S89'

damnified, he may maintain an action against liis principal, whether he has taken a counter security or not '.

But vvheiher a surety who, Avhen called upon for pa}'- ment, gives, in lieu thereof, a security to the creditor, can recover against the piincipal as for money paid to his use, before a'tual p 'y. icnt, does not appear quite char. In the case of B.iiclay v. Gooch ^, wlure the surety liad given a promissory note payaMe with interest, and wiiich the cre- ditor had accepted as payment of the dibt of the principal, it was decided, that such an action might be supported. But in the subsequent case of Taylor v. Higgins ', a bond and warrant of attorney given by the surety to the crwlitor, and accepted by him as payment and satisfaction, was not held a sufficient payment to entitle the surety to maintain such action.

Mr. Fell, p. 169, in commenting upon these two cases, says, " Certainly it seems impossible that these two deci- sions can stand together : for a promissory note, till pay- ment, is but a security ; and, however it may pass as the current representative of money, that will not bind its legal operation ; and, if the giving a security of a higher nature cannot be the ground of an action for money paid, till ac- tual discharge, a fortiori, one of a loweh" nature cannot. Besides, the creditor taking such security from a surety, does not discharge the principal, who might, therefore, have two actions brought against him by two different persons for the same debt.

But if ihe surety take a counter security, as a bond, he cannot, on his being obliged to j/ay, proceed against his principal, but mubt resort to such counter-security *.

Wliere a party has become bound for the debt of an-

' Laver V. Nelson, 1 Vcrn. 456. Toassainf v. Martinnant, 2 T. R. 100, ' 2 Ksp. N. P. C. 57 1, -i S Kast's Rep. 169.

* Toussaint v. iMaitiniiant, 2 T. R. 100.

other,

S90 Of Mercantile Guarantees.

other, and the money is due upon the bond, the cmirt of Chancery Avill, on application, decree the principal to dis- cbarge the debt'.

So if the principal absent Wmself, the surety may, by ap- plication to that co\irt, be equitably relieved oat of the pro- perty of the principal ^.

And if the principal has given bail in an action of debt with surety, the surety, alter payment of the debt, has pre- cisely the same right against the bail as against the prin- cipal ^

If the principal becomes bankrupt, and at t!ie time the surety has in his possession, or under a control equivalent to possession, properly of the principal, as agent, bailee, or otherwise, he has a lien upon it to the amount of the suni for which he was security •*.

G. Of Co-sureties.

Where tliere are more sureties than one, and one alone is obliged to pay, his co-sureties, or their representatives, must contribute a proportional part of the payment to which they were originally liable ^

And where there are more than t\\o sureties, and some of them b come insolvent, the party, or parties, paying the insolvents' share, shall, in equity, have equal contribution of such share ajjainst such of the other sureties as remain sol- vent ^.

Neither is the principle of contribution affected by their being bound by separate instruments ; but they will be liable to contribute in proportion to the sums for which they had respectively made themselves liable".

' Lord Ranelagh v. I{ayps, 1 Vern. 189. ' Wiijht V. Morlcv, U Vf>s. Jiin.23.

3 Parsons v. Briddork, 2 Vern. 60tJ.

4 Drill lew ater V. Goodwin, Cowp. '231.

5 Cowcll V. !d wards, -2 Bos. Ik PmI. ii68. Primrose v. Bromley, 1 Atk. 89. « Peter v. Rich, 5 ('. 1 Ch. K. .-^5.

■^ Ware v. Horwood, 14 Vis. J up. 28,

But

Of Principal and Agent. — The Appointment. S91

But where a party is bound as a further security, in case those already g-iven hhonld be iusuflicient, there lie shall not be called upon, by the tbrnier sureties, to contribute, for in such case he is nut a surety '.

CHAPTER IX.

OF PRINCIPAL AND AGENT.

Of the Relation of Principal and Age7it.

Jt is a general rule of law, that where a person has power as owner to do any thin£>-, he may, as incident to his light, authorise another to do it. Hence arises the authoiity of agents to do acts, and make enjjaijements in the names of their principals. And as the ollice of an agent is merely ministerial, infants, feme-coverts, persons attainted, out- lawed, excommunicated, aliens, and others, though dis- qualitied trom acting in their own capacity, so as to bind themselves, may yet act as agents for others ^.

We shall consider this division of our subject, first, witii. respect to tlie appointment and authority of an agent ; se- condly, the rights and liabilities of principal and agent with reference to each other; and thirdly, the rights and liabili- ties of principal and agent with reference to third persons.

SECTION I.

OP THE APPOINTMENT AND AUTHORITY OF AN AGENT.

1. Of the Appointment of nn Agent. The appointment of an agent may be by deed, or by pa- rol. It lias been said, that an appointment or authority to do an act for another, or to make engagements in his name, must be by deed ^ ; but this is by no means the case •*, for in

' Craythornp v. Swinburrir, 14 Ves. Jun. 161. '^ Co. Lit. 5'^. a.

3 Beawes's Lex Merc, pi 86. « 2 Kol. Abr. 8.

commercial

392 Of Principal and Jgent. — The appointment.

commercial Iransactions agcnfs are most usually appointed by a letter of orders, or simply by a retainer '. An appoint- ment by deed is only necessary where the principal is bound by articles under seal ; and then in order to bind the prin- cipal by the agent's execution of such deed, the agent must be empowered by an authority of as high a nature ^ Au authority to make or sign a promissory note ', or to indorse, draw, or accept a bill of exchange *, may be, and indeed most usually is, by a parol. And it is not necessary that the authority of an agent to contract for the sale of goods to the value of ten pounds and upwards, according to the provisions of the seventeenth section of the statute of frauds, should be in writing.

Besides these express modes, viz. by deed or by parol, of creating an authority, an authority may, in some cases, be implied or inferred from the conduct of the principal in sanctioning the acts of his agents It has also been de- cided, that the subsequent assent or acquiescence will make the act of an agent binding on (he principal''. And if a principal once adopts tlie acts of his agent, he cannot after- wards discharge himself from his responsibility ''. Neither can he adopt one part of the act of his agent and disavow the rest ; for an adoption of one part of the transaction will operate as an adoption of the Avhole act ^. And a principal Avill remain liable for the acts of his agent even after the agency has ceased, unless the parties giving the credit have had notice of the determination of such authority, or from length of time and othe^f circumstances ought to have in-

' Palev's Law* of Principal and Asenf, 118.

» Harrison v. .larkson, 7 T. II. '209. ' v'^tat. 3 and 4 Anne, c 9.

■» Anon. 12 Mod. 364. Harrison v. .Tarkson, 7 T. R. 209. 5 IVawes, pi. 86. Barber v. Gingpll, 3 Esp. N- P. ('.60. e W ard V. Evans, 2 Lord Raym. 930. Salk. 444. 8. C. Boulton v. Hil- Jesd.n, Comb. 450. 7 ibid.

? Wilson V. Poulter, 2 Str. 859.

ferred

Of Principal and Agent.— Extent of Authority. 393

ferret! that it did not continue '. On the dissolution, there- fore, of the rehition of principal and agent, it is indispen- sably necessary th;it express notice thereof should be given to all the principal's correspondents individually : notice in the Gazette will affect a former customer *.

2. Of the Extent of the Authority, The extent of an agent's authority is either general or special. A general agent is uhcre a man appoints another to transact ail his business of a particular kind, or to do all acts connected with a particular employment. A special agent is where one is constituted for a particular purpose, or is employed about one specific act, or certain specific acts only. By a general aulhorily or delegation the prin- cipal is bound by all the acts of his agent, whicli are not inconsistent with tlie nature of his employment, and which have been bona fide entered into with the parties dealing, however disadvantageous the terms of the contract may be to the principal. And therefore, if a factor without fraud or collusion sells for a less price than his commission directs, the sale is nevertheless valid, and may be enforced against his priucipaP. But no acts of a special agent beyond the scope of his authority m ill biud the principal. Therefore, if a broker is employed to purchase goods of a particular description, and at a specified price, and he does not com- ply with his instructions, the principal is not bound by his contract ■* ; but he is liable himself to fulfil the bargain '. Had, however, the contract, in this case been entered into by a factor or general broker, the contract would have been enforced against the principal''. And such general power

' V. Harrison, 19 Mod. 346. Beawes, pi. 231.

"^ Gorham v. Thompson, Peake's N. P. C. 42. 3 Daniel v. Adams, Ambl.498.

* Kast India Company V. Henlcv, 1 E^p. N. P. C. 111. 5 Per T. Srwpll in Daniel v. AdaiKS, Ambl. 498.

• Last India Company v. Henley, I Esp. N. P. C. Ml. Petlies v Soamc, |3Vin. Abr. 6.

caimot

394 Of Principal and Jgent. -^Extent of Autliorily,

cannot be limited by any private instructions to the agent, not known at the time to (he part}' dealing.

As the authority of a special or particular agent must be strictly pursued, if there is any restriction annexed to the commission, it is incumbent on tlie party dealing to observe It, or the principal >v ill be discharged from his liability. Therefore, where a special agent was employed to negotiate a bill of exchange, and expressly directed not to indorse it for his principals, it was held that he could not bind them by indorsing it '. Yet where a particular agent Avas commissioned to get a bill discoiyited, and no express direc- tions were given him not to indorse it, his principals were held to be bound by his havuig done so ^ And though an a^ent, acting under a limited autliority, exceeds the price specified in his instructions, yet if he understood that he had a discretionary power so to do, his principal will be bound by the contract : for t!:e limitation should be express and positive, and not subject to the agent's discretion ^

The extent of an agent's authority depends on the usages of trade. In the absence of particular instructions, a general power to sell implies a power to sell in the usual way ; and therefore a commission to a factor to sell, entitles him to sell upon credit in those trades where that is the usual mode of dealing ■*; provided that the vendee is not insolvent, or noto- riously discredited at the time of sale, and that that circum- stance is not known to the factor K But if there is no such usa^e, and the factor upon thegejieral authority to sell, sells upon trust, the factor is only chargeable ; for in (hat case the factor having gone beyond his authority, there is no contract created between the vendee and the lactoi's principal, and such sa'e is a conversion in the factor ; and if it be not in

' Fenn v. Harrison, 3 T- R. 757. "^ Ibid. 4 T. R. 177.

3 Hifks V. Hankin,4 Fsp. N^. P. C. 116.

* Sroit V. Surman, Wilt, s, 406. Houghton v. Matthews, 3 Bos. & Pul. 489.

5 fcadock V. liurton, Yelv. 'zfyZ.

market

Of Principal and Agent .—Extent of Authmily. 395

market overt, no property is thereby altered, but trover will lie against the vendee : so likewise if it be in market overt, and the vendee knows the f-ictor to sell as factor '. And as this authority is referred to universal usage, no such autho- rity will be implied, unless it appears that it was the usual manner of dealing with reference to t!ie thing sold. There- fore, on the transfer of stock, which is usually sold for ready money only, a sale of it upon credit will not bind the prin- cipal, unless the broker was specially authorised so to do, although he acted boia fide, and with a view to the benefit of his principal, and that there was no possibility of making a transfer of the stock in questio.), until the expiration of the time of credit given ^.

The employment of a factor or broker being merely to sell, he cannot dispose of them in any other manner. There- fore it has been decided, t!)at if a factor or broker pledge the goods of his principal, the latler may recover the value of them in tt over against the pawnee ', on tendering to the f:ictor what is due to him, without any tender to the pawnee''. And (his rule holds equally good wliere the pawnee is wholly ignorant of the factor's not being the owner K Pseither can a factor, by way of pledge, transfer a bill of lading'', although by way of sale he may, by indorsement of a bill of lading to a bona fide assignee, divest the principafs right to stop in transitu". And even thougl; the factor may have a lieu upon the goods pledged for his balance due at the time of the pledge, the pawnee cannot retain the goods against the owner; lor liens being a pergonal right, cainiot be trans- ferred to the pledgee, so as to give him a title even to the

• Per Holt, C.J. Anon. 12 Mod. 514.

" Wiltshiri- V. '^ims, I Camp. N.P. C 258.

3 Patorson v. Tash, 2 Str. 1 182.

4 Daul)i2;ny v. Duval, 7 T. II. 006. jMH'ombie v. D iviog, 6 East, 538.

5 Nevvsom v. 'I'hornton, 6 hlast's I'cp. 17. * ibid. 7 Wright V. Campbell, Eur. '^051.

amount

396 Of Principal and Agent. — Extent of Authority.

amount of the lien ' . But where the broker does not pledge the goods as his own, but delivers them over to the pledgee as a security, and wilh a notice oi^ the lien, the pledgee may retain them against the owner for the balance due to the broker *. So as the riirhl of properly, in bills of exchange, and other negotiable instruments of a like nature, passes by delivery alone, it has been held, that if a banker pledges in- dorsed bills, which had been deposited with him, for the purpose of being received when due, for his own debt, the owner cannot follow them into the hands of a bona fide pledgee'.

Where several merchants employ the same factor in the same transaction, they must run the joint risk of his ac- tions, although they are strangers to each other. Thus, if four or five merchants remit to one factor distinct parcels of goods, which he disposcsof jointly to one person, who pays- a moiety down, and contracts for the rest at the end of six months ; if the vendee fails before the second payment, the principals must share the loss proportionally among them *».

As to an agent's autliority to discharge, compound, or release debts : in the cat^e of an agent who has a general au- thority to receive payments, if he receives them according to the usual course of transacting business, he will not be li- able for any loss Avhich his principal may sustain thereby. And therefore, where an agent received a check in pay- ment of a debt, the debtor was held to be discharged, as this is a mode of receiving payment warranted by the usual course ofstrade ^ But an agent specially employed to re- ceive money, will be considered to have departed from his authority if he should take a bill in payment '''. An agent

' Daubigny v. Duval, 5 T. R. 604.

' jMTombie v. Daviis, 1 Fast's Rep. 5.

3 Collins V. Martin, 1 Bos. 6c Pul. 649.

4 Malyne, 81. 2 Mollov,328. s Thorald v. Smith, 11 Mod. 88. « Ward V. Evans, 2 Lord Raym, 930.

without

Of Principal and Agent . — Execution of Authority. 397

without ail expr€Ss authority caiinot compound or release a debt.

3. Of the Execution of the Authority.

As to the execution of a dclegited aulhorilj-, as tlie con- fidence is merely personal, the power can be exi cuteJ by the person only to whom it is given ; and therefore a com- mission to contract will not autlijorise an agent to depute that power to a clerk or underagent, notwithstanding any usage of trade, unless the principal's assent has been ex- pressly obtained for that purpose'. In the execution of a delegated authority, it is also an established rule, that where the power is to be executed by virtue of a deed or power of attorney, the act must be executed in the name of the prin- cipal, and not in that of the agent^ . The form of the words in the execution is not material, for in somp cases an in- formal mode of executing the authority will not vitiate'. The safest way, however, is for it to be stated to be done by the agent for, or in behalf of, the principal : thus, A B., (principal) by C. D., (agent-*.) In tlie case of an agent's drawing, accepting, or indorsing a bill for his principal, he should either write the name of his principal, or state in writing that he draws as agent: for if he draws in his own name, without stating that he acts as agent, his principal will not be bound, but the agent himself will be personally liable 5. But an agent effecting a policy of insurance ^\ or contracting on thebehalf of government ", need not state his authority.

' rol<>s V. Trecothic, 9 Ves. Jun. 2^1. » Combe's Case, 9 C). 76.

s Coles V. Davis, 1 Camp. N. P. C. 485. Mason v. Rurasey, Ibid. 384.

* For Grose, J. 2 East's Rop. 144. 5 Tlioinas v. Bishop, 2 St^.955. Applelou V. Biiiks, 5 East's Rep, 148.

* De Viifnipr v. Sanson, Park's Insurance, 19. ? ii.'itkbeath v. Haldiuian.l, I T. 11. 172.

4, Of

398 Of Principal and Agent. — Agent's Duties.

4. Of the Determination of the Authority.

The manner in which the power of an agent may be determined is either by fulfilment of the commission the agent was to execute ', or by the death ot^ the principal*, or by the principal's countermanding the authority which he had given.

The authority of a broker may be countermanded at any time before a memorandum of the contract of sale is written and signed by him pursuant to the statute of frauds, al- though he has previously entered into a verbal agreement to sell the goods '.

All acts bona, fide done by the agent before he knows of the revocation of his authority will bind his principal •*; and all his transactions with those who havel>een accustomed to deal with him in that character, will be valid against his principal, until they have notice of the determination of his authority ^, or until that fact has become notorious.^.

SECTION II.

OF THE RIGHTS AND LIABILITIES OF PRIXCIPAL AND AGENT AS BETWEEN EACH OTHER.

First, The Agent's Rights and Lialilities with Reference to his Principal.

I. His Duties.

It is the duty of an agent intrusted with the disposal and manfjgement of his principal's property to use the utmost diligence and care, and possess a competent skill and know-

• Setonv. Slade,7 Ves. Jun. 276. * 1 Bac. Abr. tit. Authority, E.

3 Fanner v. Robinson, 2 Ciimp. N. P. C. 399, n.

4 Salte V. Field, 5 T. R. 215. * Hazard v. Treadwell, Str. 506.

* \'^ Alod. Ui}'.

ledsre

Of Principal and Agent. — Agent's Duties. S99

ledge ill the execution of the service he has undertaken ' ; for if in the purchase of goods he give considerably more than they are worth, he will be ansv\erable for the over- value himself*. In the absence of particular instructions, he should follow the rognilar and and accustomed course of transacting the business in which he is employed. When the contracts entered into by him in behalf of his princi[)al arc concluded, he ought to apprise his principal with a'l convenient expeditioii : for any culpable delay in this re- spect on the part of the agent whereby the pi iiicii)al is damnified, as where the vendee becomes iiisolvent, the fitctor will be responsible '. U he sells upon credit or takes se- curity, it is inciuiibcnt on him in the first case to take care that the security is good, and in the second that ihe time of credit given is reasonable, and according to the usual course of the trade in which he is employed •♦. If no price is specified in his instructions, be is bound to obtain the real value of the thing sold'. If the price h fixed, he cannot sell for less ^. And it is his duty to keep clear and regular accounts of his transactions on beJialf of his prin- cipal, and communicate the result thereof at proper oppor- tunities 7.

V\ here a factor has been accustomed to effect insurances on behalf of his principal, whether at the time of receiving the order he has effects or not of his principal in his hands, lie is bound to comply with the order ^. And if he neglects to efl^ect an insurance, or does not effect a:i available one, he is responsible to his principal in the event of loss**. But if he exerts all his endeavours to effect aii insurance, but does

' RusfpI v. Palmer, 2 Wills. 325. * Rol. Abr. 195.

3 Beawes, 43, 4.S1. 4 Barton v. SaiUiocks, Balsf. 104.

5 Beawes, <13. 6 Bexw.-ll v. Christie, Cowp. 395.

7 Lord Chedworth v. Edwards, 8 Ves. Jun. 49-

• Smith V. Lascclles, y T, R. 1»9. 9 Wallace v. Tellfair, in 2 T. R. ISS. is.

not

400 Of Principal and Agent. — Agent's Liabilities.

not succeed, he ^\ill not be liable for any loss that muy occur '. In an action against an agent for not eflecting an insurance, he may justify his default on the ground of the illegality of the intended insurance, fraud, deviation, non- compliance with the warranty, &c,^, or of deviation in the voyage ^.

In the case of a gratuitous or voluntary agent, though he is not like a hired agent chargeable for ignorance in the exe- cution of his duty ■*, or responsible for neglecting to pro- ceed at all in his undertaking ', yet he is liable for gross negligence or fraud ^', or for not exerting that knowledge in the execution of the trust he has undertaken, which from his situation or profession he may be presumed to possess. And therefore if a ship-broker or clerk in the custom house undertakes to enter goods, a wrong entry by them will be gross negligence, because their situation and employment necessarily imply a competent degree of knowledge in mak- ing such entries ; but where the entry is made by d mer- chant, without any compensation for his trouble, and from an erroneous entry the-goods are forfeited, if the merchant has acted bona fide, and to the best of his knowledge, he will not be chargeable for the lofcs occasioned thereby to the 6uner of the goods ".

2. His Liabilities,

In mercantile affairs, w hen goods hare been intrusted to the dispofial and mana;^ement of an agent, the law imposes no hi;:;lier obligation upon him in regard to their safety and preservation than a prudent man would bestow in the

' Smith V, Cado2;an, 2 T. R. 188. n.

2 Webster v. l>e Tastet, 7 T. R. 157.

-3 Delany v. Stoildart, I T . R. Vi. Park, 404. n.

4 Shiells Y. Bla-'kblr^n.^ 1 Hen. Bl. 161.

5 l.lsec V. Gat\vard,5 T. R. 14*^}. fogtrs t. Barnard, 2 Ld. Raym. 909.

6 Wilkinson v. Coverdale, 1 tsp. N. P. C. 75. Cogga v. Barnard, 2 Ld, Raym. 909.

7 Shiells V. Blackburae, 1 Hen. Bl. 16-2.

care

Of Principal and Agent .-^ Agent' s Liabilities. 401

Care of his own property '. Therefore, if any loss arises to the g'oods of his principal while in his possession, from robbery, lire, lightning, or any other accidental damage not occasioned by his default, or improper delay in the re* moval of the property, he is not answerable for the conse- quence ^. Neither is an agent with unlimited authority answerable for any lessor fraud arising fiom the conduct of a person to whom he lias given credit pursuant to the re- <5ular and accustomed course of transacting business. Thus, if a banker -vvho has received bills from his correspondent to procure payment, instead of payment, takes the ac- ceptor's check, wliicli is afterwards dishonoured, as such a practice is according to tiie usual course of banking busi- ness, tlie banker will be discharged fiom ail responsibility *, So if it is the usual way of transacting business to remit mo- ney or bills by the post, an agent is released from responsi- bility for money so remitted, if lost ; and a fortiori if re- mitted in this manner by (lie express directions of the prin- cipal ^. Neitlier is an agent liai)le fjr a breach of his in- structions, where a compliance with them would have been a fraud upon the purchasers ; as where an agent had se- cret instructions not to sell under a limited sum, notwith- standing which he sold for the higliest sum offered, though less than the limited price K Nor is an agent liable for tlie neglect of an act Avhicl), when performed, the princi- pal could not have enforced. Thus, if the principal directs his agent to effect an insurance on a subject which cannot legally be insured, he cannot, in case of loss, recover the value thereof against his agent for negligence in not pro- curing an insurance ^'.

* Vere v. Smith, 1 Venf. 121. Co%^i v. Barnard, 2 Ld. Rayin. 917.

" Co. Lit. 88 b. Bro. tit Account, 10. CaQrey v. Darby, 6 Ve^. Jun. 496, 3 Hus.«>l V. Hankoy, 6 T. R. I'i.

* Warwick V. Noakej, Poake'i N. P. C. 6S. 5 Ce.xwell V. Christie, Cowp. 395.

* Webster v. De Tastet, 7 T. R. 157.

2d But

402 Of Principal and Agent. — Agent's Liabilities.

Bui if an agent by a disposal or adventure of the princi- pal's property not authorised by the usage of trade, or the terms of his eniploymcnt, and wilhout the express consent of tlie princip;il, occasions any lohs to the principal, though intended for his benefit, he is answerable for the conse- quence to the ani;nmt of the damage sustained '. But though an agent by an unauthorised disposition of his principal's property, subjects himself to any loss or damage that may be occasioned thereby, yet he may be exempted from his liability by the subsequent conduct of his princi- pal, by -whieh he assented to such disposition. Thus, where an agent puts out his principal's money to interest, the ac- ceptance of interest by the principal, was held to be an af- firmance of the transaction, and to have discharged him from all liability on the borrower's becoming insolvent, al- though the original transaction was executed without the principal's knowledge or authority ^. If an agent deals or speculates with his principal's eflccts, whatever profit or advantage he derives from this indirect dealing, is the pro- perty of the latter, to Avhom he is accountable by bill filed in equity, notwithstanding that he bore the risk (if any) of failure'. So if an agent purcliases goods according to the order of his princip d, and appropriates the gain to him- self, he is accountable to his enijjloyer for the profits, that is, for the surplus gained above the prime costof the goods, though the principal could not have procured the goods of any other merchant for a less sum than that for which the agent sold the goods •*. And as tlie principal is entitled to all the increase raatle upon his property, if any interest

> 2 i\Io!!oy, 327. Lewson v. Kirk, Cro. Jar. '265.

" Ctarke V. Perrlf, Eq. Cas. Abr. 708 Biaumont v. Boultbce, 11 Vfs, Jun.559.

3 East India Company v. Henchman, 1 Vos. Juti. 289. Russel v. Palnvpr, 2 W'ils. 325. B. awes, 48.

* Massey v. Davics, 2 Vcs. Jun. 317. Beawes, 48.

Las

Of Principal and Ageht. — Agent's Lialilities. 403

has been made upon a balance in an agent's hand, the prin- cipal is entitled to the benefit of it, unless waved by the ex- press or implied consent of the principal '. Where how- tver the agent has, at the principars desire, kept a balance by him *, and it has lain unemployed in his hands % in-" terest has been denied.

If an agent places his principal's money to his own ac- count in the hands of his banker, and without specifying it to be the property of his employer, in case of the fdlure of the banker, the agent will be liable to make good the loss *.

And it is a settled rule, applicable to both sales and pur- chases, that an agent employed to sell, cannot be the pur- chaser 5; nor, if employed to purchase, Can he be himself the seller '', unless by the express consent of his employer '^ knd that it clearly appears, ihat he furnished his employer with all the knowledge which he possessed himself^.

If a principal directs his agent to pay over his property to a party authorised to receive it, it is incumbent on the agent to examine wiiether such authority is genuine; for, if it sliould be forged, the payments made by virtue of it will not be protected'^.

Jf a factor makes a false entry at the custom house df goods remitted to him, or lands them without entering, whereby they incur seizure or forfeiture, he is responsible fot the damage or injury his principal may sustain. But if the factor makes his entry according to the invoice, or his letters of advice, and it happens that these are erroneous,

' Rojere V. Boehni, 2 Ksp. N. P. C. 701. ' Lord Ciiedworth v. Edwards, 8 Ves. Jun. 48o 3 Uogers V. Boebm, 2 lisp. N. P. C. 704. ♦ Wren v. Kifton, 1 1 Vf s. Jnn. 382.

5 Lowtherv. Lowtlior, l.'3 Ve«. Jun. 103.

6 IMiigsey V. Davi.s,« Ibid. 317. ' Ibid. 3 Wreh V. Kirton, 8 Ibid. 50^?.

? Foster v. Clenientf,2 Camp. N. P. C. IT.

9 I) 2 the

404 Of Principal and Jgent.^Jgent's Liahilities.

tju; factor is discharged from all liability, in case the goods arc lost'.

. And if a factor enters into a chartcrpartj of frcijilitmcnt ■\villi a mastef, be is liable lor the frcii;ht ; but if ho lades the goods aboard generally, the merchant and the lading arc made liable for Xhv fn-ii^ht. and not the fa(tor\

A factor is not liable to make good a loss arising from a cominoJity'fi brcomiiig daninicd after the purchase ^

If a merchant directs his agent to ship him a sum of money, when exportation is prohibited, and the money is. seized in endcavoiningto ship it, the merchant must sustain the loss ^. And if an a^^erit takes in payment money Mhich is afterwards depreciated i)y edict, or proclamation, he is not liable to make good the loss : but it is otherwise if he takes bad money in payment'.

"SA'here an agent delegates the trust he has undertaken to another, he is responsible to his employer for the due execu- ti )n of it by such sul)-ag(>nt, and is his surety ^\ But as the trust reposed in an agent is personal, the principal cannot compel such inferior agent to account to him : he is liable only to his immediate employer '.

Where an agent is limited by instructions it is incuuibent on him to adhere punctually to them^; for if, in the execu- tion of a commission to purcliase, he deviates from his or- ders in price, quality, or kind, or if, after t!icy are bought, he sends them to a place difierent from his directions, the principal is not bound to adopt the contract, and accept the gooils ; but the factor is responsible for the consecpience of hisacf^. And for a breach of duty, not only the agent, but the merchant who knowingly forms an illegal contract

' Leviron V. Kirko, Lane's Rpp. 65. Bcawcs, 47. "^ P.caT\es, 48.

3 Malyiie,H^l. ♦Ibid. 5 I\i()lloy,42l.

' Lord N'nrthVCase, Dyfr, IGK

7 CarUvrlsiit v. llateley, 1 Vt<. Jiin.'?!.>2. * Malync, 131.

9 IJcawcs, 48.

with

Of Principal and Agent, — Agent's Liabilities. 405

witli him, is li 'ble to iiidnnnify the principal for iiiiy loss or damage he may liavv siistaiiieil '. Also, by a nei>'lect of any precaution pr<.'scdl)eJ by the ordinary couiso of busi- ness, though not expresjly included in his insti uctions, tin ai^ent is cliargL'able *. Bit from tlic case of Wilson v. Cornwall % it seems, tliat if an a^ni exceeds tiie j5rice li- mited by his instructions, but c.Tects an equal saving in some other respect in the same transaction, the principal is bound to adopt his act. Thus, where a factor commissioned to purchase lierap at a certain price, gave a higher price for the hemp than he Avas directed by his orders, in order to save in the freight, then low, but which was rising in price much faster than the hemp was falling, the principal was held bound by the factor's contract, as the saving in tlie freight exceeded the excess of the stipulated price.

An agent is not liai)leto account with his principal until be has actually received payment from the vendee. Tlu>re- fore, if an agent receives part only of the value of the goods sold, it has been held that he is not compellable to account to his principal until he has received the final payment ; unless he has sold contrary to the usual course of trade, or express instructions, or that the delay has 1)een occasioned by his neglect •*. And though the agent may have debited himself with the amount in his accotmt with the vendee, the principal cannot sue for it uiitil actnrd payment '.

But an aiicnt actinjr under a del credere commission is answerable for the produce of any contract made by him, whether he has received payment or not^'.

The commission called del credere is '\\here a factor un- dertakes for an additional premium beyond the usual coni-

' Ea=t India Company v. Henchman, I Ves. Jiiii. 2S9. » 3 V'os. Jun. :Wi. ' 3 i Ves. 509.

♦ Vardenv. Parker, y Esp. N. P. C. 710. s Taylor V. Leiidie, 9 l-aiit's Rep. 12. « Grove V. Dubois, I T. Ji. 112.

mission.

406 Of Principal and Agent. — Agent's Rights.

mission, not only to be responsible for the solvency qf the purchaser, but aUo for the absolute payment of the price '.

Joint agents, although residing in different places, are liable for each other's contracts as ug<'nts, notwithstanding any private agreement between them that each shall bcUable for his own acts or losses *. And it is no discharge of one of two joint factors, that the businei>s y/as w holly trani,- acted by the other with the knowledge of the principal'.

But a discharge of one joint factor is a release of the other •♦,

3. His Eights.

Besides their commission, wliich is cither regulated by express contract, or depends on the usage of trade, agents are allowed all disbursements, such as premiums, duties, charges for postage, warehouse room, &c. made by thera in the execution of their employment ', and according to the regular course of transacting business. And if an agent has been limited by his instructions as to his advances, but exceeds them, his principal will be bound by the contract, if he accepts the goods, or does not on the receipt of them object to receiving them on his own account, or does any other act from Avhich a subsequent acquiescence can be in- ferred ^.

So if an agent acting for the advantage of his principal ensures a cargo on account of the lateness of the season, or other good cause, he will be entitled to ci^arge his principal with the premium ^

But where an agent is appointed the husband of a ship,

» M'Kcnziev. Scott,6 Bro. p. C. 287. Beawes,429.

» "Wau^^h V. Carver, 2 Hen. Bl. 235. 3 Goore v. Daubeny, 2 Leon. 73.

4 Bro. tit. Charge, 49. * 1 Rol. Abr. 124,

8 Wilson V. Cornwall,! Ves. 510,

7 Wolfe V. Horncastle,! Bos.and Pul. 323.

althougl^

Of Principal and Jgent, — Agent's Rights. 407

although it is usual for the owners <o direct him to act dis- cretiotially for them all ; yet if he docs advance preiniums witliout express directions, he cannot recover repayment thereof, unless the owners subsequently acquiesce in l)is transactions '. Nor will tlie direction of one past ownor be sufficient to chnrge the rest ^.

Neither is an agent entitled to an allowance for payments or advances made to his principal, or by his order, after he has knowledge that he has committed an act of bank- ruptcy. But all payments bona tide made to or by a prin- cipal more than two calendiir months before the.date of a commission, are protected by virtue of the statute 16 Geo .III. c. 135, provided that at the time of the payment the agent so paying or receiving has no notice that the principal has committed a prior act of bankruptcy, or that he is insol- vent, or has stopped payment.

Nor can an agent after parting with the possession of hi* principal's property recover payments voluntarily made, although intended for the benefit of the principal ^

And if on the principal's refusal to ratify a contract en- tered into by the agent on his authority, the agent, from a misapprehension of his liability, pays the money himself, he cannot recover it from his principal, unless the agent is to be considered in t!ie light of a guarantee for the fulfil- ment of the contract, or that by the general usage of trade he is to be considered as impliedly pledging his own credit +.

Neither comn)ission ^j nor payments or advances made in behalf of his employer '\ pan be recovered by an agent against his principal, if the transaction out of which tlie contract arose was of an illegal nature. Nor is an agent, if

' French V. Barkhonsp, 5 Bur. 2T27. '^ Ibid.

3 Edmistonv. Wri-lit, I Camp. N. P. C. 88.

« Child V. Morley. 8 r. Fl GiO. 5 Stackpole v. Earl, 2 Mils. 133.

• Steers v. Lashley, 6 T. R. 61. Brown v. Tuvner, 1 Ibid.GSl.

appointed

408 Of Principal and Jgeiit, — Agent's Rights.

appointed his principal's executor, entitled to claim cora'« mission upon sums sent by his principal in his lifetime, but not received till after his death '. If an agent onght to have kept an account of his dealings with his piin- cipal, and has omitted to do so, he is not entitled to com- mission *=

And if the principal is by tlio agent's conduct prevented from enjoying the benefit of the contract entered into by his agent on his behalf, the agent is neither cfititled to com- mission, nor can he recover tlie price or duties he may have paid. Tbus, where a broker purchased goods on com- mission at a month's credit, and paid dulirs for them, and sent them to the place of his employer's abode, consigned to his own order, but on the seller's apprehension of the pur- chaser's credit, the broker did not deliver the goods until the expiration of the month's credit ; it was held that on the purchaser's refusal to receive the goods the broker could neither recjver the price, duties, or commission '.

AVith respect to an agent's lien on the property of his principal, it is now a settled rule of law, that an agent, whether home or foreign, has a lien upon all properly of his principal in his hands, or upon the proceeds thereof, or securities received in the course of his business, both for in- cidental charges, and for the general balance due to him^ ; and this not only on the particular goods for which the charges are incurred, but on each portion of goods in hi^ possession '.

So a factor who has become surety for his principal, has a lien on the price of the goods sold by him for his prin-r

' Hovpy V. Blaketnan, 4 Ws. Jiin. 596.

» W liite V. Ladv Line oln, 8 ibid. 37 1. 3 Hurst v. Holding, 3 Taunt. 32.

4 Kruj:.-!- V. Wilcox, 4 iJiir. 222\. Drinkwater v. Goodwin, Cowp. 2.)1. Man. V. Shiftiier, 2 Lasts Rep. 529. Kinlork v. Craig, .IT. R. HP. Goding V. London Assuranre Compauy, 1 Bur. -194. Hammond v. Barclay, 2 Ji^ast's Rep. 227 . Foxcroft v. Devousbirc, 2 liur. 936.

s Ibid. , ,

cipal,

Of Principal and Jgent. — Agent's Rights. 409

cipal, to tlie amount of the sum for which he has become surety '.

And if an aijent has accojjted bills for 1 lie accommodation of his craplojer, he may retain money in his hands to dis- chari^e them, unless lie is indemnified *.

Neither is a faclor's lien which he may have acquired by tlie accejtlance of bills on the faith of having goods consigned to liim, divested by the death of the principal between the consignment and the arrival of the goods.

But to found this lien of the agent on the goods of his principal, it is necessary that they should Jiave actually come into his possession : for, if stopped in transitu by the owner, no such right vests in him \ And on this principle it has been held, that where a trader, after a secret act of bankruptcy, consigned goods to a factor, who agreed to advance moiiey thereon, and accordingly accepted and paid bills drawn on him by the trader ; the factor was held answerable for the proceeds of the sale of the goods to the assignees of the trader '♦.

So if goods are sent for the express purpose of paying the principal's acceptances, the factor can have no lien upon theai lor his general balance ^.

Neither has an agent a lien on goods consigned to him for debts contracted prior to the commencement of his em- ployment as agent, for liens extend only to demands arlsino- subsequent to the time he begins to be employed in that cliaracter^.

So if goods come into the possession of a factor, not by the consignment of the owner, but by consignment or de-

' Drinkwatcr v. Goodwin, 1 ('owp. 251.

^ Ma(l<len v. Kempster, I Camp. Hep. 12. 3 Kinloik v. Craiff,

« T. R. 1 19. 4 Copeland v. Stein, 8 T. R. 199.

6 Per A>liluirst J. in Tooke v. Hoirm^^worth, h IbiJ. 228. I Ilougliton V. Matthews, 3 iios. and I'ul. 185.

livery

410 Of Principal and A gent. --^ Agent's Rights.

livery of the person to whom he has transrericd the pro^ perty in (hern, the factor can have no lien upon them for advances made to the owner'.

And if a factor comes into possession of goods in conse- quence of an agreement commnnicated to him, that they should be sold for the benefit of a creditor, the factor can- not retain them on account of any other claim he may have against the owner of the goods. For the lien which a factor has upon the goods ot his principal arises from an agreement uhlch the law implies; but where there is an express stipulation to the contrary, it puts an end to the rule of law *.

The right which iactors have to retain for a general ba- lance, or for advances made by them, may also be lost l)y parting with the possession of the goods, either by de- livering them up to their employers ', pr shipping them to their order **.

But from the case of Whitehead v. Vaughan 'j it seems that if the goods return into the factor's possession in the course of dealing, the lien will be restored.

And if a factor procures goods on his own credit, and ships thcui to his principal ^, or if he ships goods to his own order", he has a suflicient lien upon them, so as to entitle him to stop them in transitu.

Where an agent employs another to execute the com- mission of his principal, i^uch inferior agent has no lien on the property of the principal, for any claim he may be en- tilled to agjiinst the person immediately employing him, if he was informed of the nature of the transaction ^. But

* Hoiishton V. Matthews, 3 P.os. and Piil. 485.

' Waliier v. liircii, 6 T. il. 25S. Weymouth v. Boypr, 1 Ves. Jun. 416. 3 Knigprv. Wilcox, 4 iiiir. 2221. * Sweet v. Pym, I East's Hep- 4. 5 Cooke's B.-ink. Laws, 519. * Feize v. Wray, J East's Hep. 93.

7 Sweet V. Pym, 1 Ibiil. 4.

• Maanss v. Henderson, I East's Rep. 33 4.

\yhere

Of Principal and Agent. — Principal's Rights, &c. 411

where the agent Avas a creditor of the prhicipal and a debtor of the sub-agent, the sub-agent was held entitled to retain the property of the principal which wi^s in his handjs until the agent's claim was satisfied '.

Where an agent cannot safely deliver up his principal's property lo him from a bona tide apprehension of conflict- ing claims, if sued for the same, he should make applica- tion to the court of Chancery, or the court in which the ac- tion is brought, for leave to pay the money into court ^.

Secondly, The Principal's Rights and Liabilities with reference to his Agent.

From what has been already said it will appear, that if an agent makes a wrongful and unwarrantable disposition of the property of his principal, he is liable to account for the damage sustiiined. But, in genera!, the death of an agent puts an end to personal remedies for Jiis misconduct, unless he has been guilty of fraud in selling his principal's goods at a price less than his orders, or under their value ; and then his estate will in equity be liable ^

So a principal may recover money paid into an agent's hands on an illegal contract ; although the principal could not have recovered it from the person by whom it was paid. Thus, a principal was held entitled to recover the amount of the loss received by his broker on an insurance contrary to the provisions of the statute 7 Geo. I. st. 1. c. !^J. s. 2 .•» So an agent was held liable to account to his prin- cipal for the price of counterfeit coin received by him from the purchaser ^ The court holding in both cases, that the liability of an agent arises solely from the fact of

» Man. V. Shiffner, 2 East's Rep. 522.

» Lang:ston v. Boylston,2 Vcs. Jiin. 101. Edwards v. MincU, ITarinl. ICl,

' Lord Hardwicke v. V>rnon,4 Ves. Jim. 418.

♦ Tenant V. Elliott, I Bos. and Pui. 3.

5 farmer v. Russel, Ibid. 296.

havinof

412 Of Principal and J gent, — Principal's Rights, is'c,

having received money for the use of his principal, and <ha< the orio^inal traiis;>ction forming no part of such an im- plied contract, wlien the original transiiction is at an end, its iUfgality will furnish no ground of defence to the ag-ent toresl-t his principal's cl.drn, if the agent has received no notice from the peison by Avliom tlie money was paid to retain it '.

And as long as money deposited with an agent, for an il- legal purpose, remains unemployed, or if the purpose is countermanded bv tlie principil, before application, it is recoverable from (he agent ^. But where an agent has ac- tually applied money to the purpose for which it was dc- posiled with him, it is not recoverable by the principal '.

But a principal cannot recover from his agent (he profits obtained on illegal stockjobiungtransa< (ions *. Nor can he recover from him <in ove'charge in the purchaseof sliarcs in a company con(rary to the statute t) Geo. I. c. 18. s. 18.

As an agent stands in the situation of a trustee with his principal, whatever property he has of his principal at the time of his bankruptcy^ and can be distinguislied from the general mass of his property, does not pass by the as- signment, but belongs to his principal ^ subject to a lien for every thing for which the estate is creditor ^.

But by the statute 21 Jac. I. c. 19. s. 10. if the agent has, by the permission and conscr^t of the true owner, ex- ercised reputed ownership over goods committed to his luanagement and disposal, such goods shall be liable to the bankrupt's debts.

Whether the agent's possession of the goods of his prin^

' Sullivan v. Greavrs, G T. R. 409. « Ex i)arte FUilnier, 13 A'es. .hin. 313. 3 Smith V. Bromley, Doup.fiOT. n. * Ex parte V.ulnirr, 13 Vcs. .Tun. 31.3.

5 L'Apostrf V. Flaistrier, 1 P. Wnis. 31S. Godfrey v. Turzo, 3 Ibid. J85. Alace V. Cadell, C'owp. 232-

6 Zinck V. Walker, 2 Bl. Rep, 1156.

cipal

Of Principal and Agent. — Vr'inc'ipaVs Rights, &c. 4 IS

cipal has been such as to hold out a credit io the world, and induce manldiid to treat with the a^ent in the disposi- tion of such orpods as if they were his o^vii, may be col- lected from the decision of Lo d Chancellor Couper in t!ie case of Copeman v. Gallant, 7 Vin. Abr. 89. If (said his lordship) a factor continues in long possci,^,iori, by which the goods are taken as his own, and credit given to hlni on that account, it would bring tiie case within the statute ; for if possession and disposition be given to a person who becomes a bankrupt, though no intent of iraud appears, yet if it gives a f ilse credit, there is the same i^iconvenience as if fraud was inteiided, and it matters not whether it was by fraud, or only by neglect '.

And the law is the same whether the agent acts under a del credere commission or not ^.

If the price of goods sent to a factor for sale has been received by him, and can be identitied from the general mass of his propL^rty, (as if it has been kept in separate bags,) it will not pass by the assignment of the factor's estate in case of his bankruptcy, but will belong to his principal^.

And notwithstanding the property of the principal may have been mixed with tliat of the bankrupt, yet if it has once got out of the general fund again, and can be iJentiried at the ti:«c of the bankruptcy, it may be specifically claimed. Thus, if a factor buys other goods for his princi- pal with the proceeds of his principal's goods, the principal is entithid to the goons so purchased in case of the factor's bankruptcy "». So where a factor having money of J. S. in his hands, bought South Sea stock as factor for J. S.,

' But it s-ems that this '.voulil not hf the rase where it is notoriously known that t'le person exereising th" reputed ownership acts a-^ a;;ent.

* i'aiil V. Bircli, 2 .\tk. 621. l.\ parte Oinsell, Ain!)l. '<>97.

3 I'er Lord Ki nyon, in Tooke v. Hollinqsworth, 5 T. R. 'ivT-

♦ \\ iiitecomb v.Jacob, 1 Salk. 100.

and

414 Of Principal and Jgent. — PrincipaVs Rights, ^c.

and (ook the slock in his own name, but entered itinhisac- count book as bought for .1. S., it was held that the stock did not pass by liis bankruptcy '.

But Avhere money arising from the sale of the principal's ^oods has been mixed by the factor willi liis own funds, the prirjcipal cannot reclaim it, but must come in ratenbly with ihe other creditors under (he commission *. And the law is iliesamc if the factor negotiates the securities of his principal wliich may be in his hands ^, or does not apply money in- trusted to him to pay over, but mixes tlie produce of the securities or llie money so intrusted with his own funds *.

If a factor sells his principal's goods upon credit ', (# receives bills or notes for the amount^, the principal is en- titled to the payment of the pi ice or the bills or notes as the case may l)c, and not the assignees.

' So if bills or notes are deposited with an agent or banker, for any special purpose, as for answering other specific bills; or for being presented for payment, such bilh or notes, if they remain in (he possession of the agent or banker at (he time of his bankrnptey, will not pass by the cOmm-issioners' assignment to tlie assignees, but are recoverable by (he owner'. And it does not alter the case that the banker has credited iiis cusfomcr, as for cash, for the amount of bills deposited for any specific purpose, charging interest fat the time they have to run, if it was his cu^tom so to do, and provided (he balance of his cash account, independent of such bills, was in favour of the customer at the time of his bankruptcy ^.

But unless they are specifically a])propriatcd for some particular purpose, but are paid in from time to time, on k

' Kx part? Chion, 3 P. Wms. 186. n. = Scott v. Sminan, Willrs, 401.

3 Ex parte Dumas, ^ Vcs. oSJ. < Cooke's 8. L. ^80 (o .'>94.

5 Garratt v. Culliiin, Bui. N. P. 142. '^ Scoit v. Surman, Willes, 400.

7 Elf parte Diimas, 1 Atk. 2:J2. Zinrk v. Waller, 2 Bl. Rop. 1156. Ex parte Oursel!, Ambl. 297. ilasjall v. Smithers, 12 Ves. JuD. 119,

8 GHcoV. i crkins, 9 East's Hep. 12.

general

Of Principal and Agent, — Principal's Rights, ^c.-415'

general running ticcounf, and as an item in (he account, they are not rechiimablc by the owner, but \vill pass under the assignment '.

And (hough iicgotiable securities deposited for a special purpose in nn agent's or banker's Iiands are reclaimable while in his possession ; yet if he has parted with them, they cannot, if they were indorsed, be followed into other hands to which they may have come by the banker's as- signment *.

If a factor under a del credere commission sells his prin- cipal's goods as his own, the purchaser may set off any demand he may have on the factor against the demand for the goods made by the principal, if the transaction was bona fide entered into without any knowledge on the part of (he purchaser that the goods were (he property of the principal '.

So if a factor at the time of the sale agrees to set off for the price of the goods a debt of liis own due to the pur- chaser, (he principal cannot recover (he value from the pur- chaser.^ but must come in rateably ^itli the other creditors under the factors bankruptcy "♦.

It is to be observed, that in all cases where a principal is entitled to reclaim liis property in the event of his factor becoming, bankrupt, he can only reclaim such property subject to a lien for every thing for which he is a debtor to the agent's estate K

In the event of an agent's death, the amount of goods sold upon credit, if unpaid at the time of his death, is the property of the principal, but subject to a lien for what- ever the principal is indebted to his agent's estate ^. But

» Bent V. Puller, 5 T. R. 491. Ex Darte Oursrll, Ambl. '^97.

» Collins V. Martin, 1 Bos. and Pul.'Oib. Bulton v. Ful, Ibid. .539.

3 Georfce v. Claggett, 7 T. R. 359. Ex partt; Murray, Cooke's B. L. 400.

* Scott V. Sunnan, Wiiles, 400. • .

s Ziiirk V. Waller, 2 lil. Rrp. 1156. llx parte Dumas, 8" Ves, 582.

« BurdKtt V. Willeit, 2 Vorn. GiiS. " . '

money

416 Of Pr'mdpal atid Jgeni. — Principal's Rigfds, Mc.

tiioncy uncTnploycd in an aii^iit's liaiuls at the time of liis clealli, and not kept separate from his own funds, is a debt due from his estate, as to >vhic!i tlie principal will be postponed to debtors of a liigher class '.

If an agent Avith a linuted commission exceeds his au- thority, eitlier as to price, quality, or kind, his princi])al is not bound to adopt the contract, or return the goods into his agent's hands, but may dispose of them as agcnit for tlic latter ^. But in so doing, he must, at first, decisively re- ject the contract ; for if he ships the goods on a new risk, with the hopes of deriving a benefit thereby, he cannot re- turn them on the factor's hands, but must account for tlie whole price '.

SECTION III.

OF THE nlGllTS AND LIABILITIES OF PRINCIPAL AND AGENT WITH llESPECT TO TIllUJ) PERSONS.

First, The PrincipoVs Rights and Liabilities with reference to third Persons.

1. His Liabilities.

A PRINCIPAL is not onh bound by the contract itself en- tered into by his authorised agent, but is affected by his rc- prcsentalioiis or admissions, ^vhether true or fal;-e, or by his knowledge, from whatever charnul it may happen to be known to t!ie agent ; for Vac declarations of an agent arc eqnivident in eliect to those of the principal ■*.

But to produce this effect, the representation or admission of the agent must l>e made at the tijnc of sale', or iu the

' ^Inr'.in v. Crorrp'', 1 Ld. Raym. SIO.

^ rnrnwall V. Wiisnii,! Ves. 509.

3 Kfiiij) V. Prior, 7 Ves. Jui).240.

* -Mnosfrrs v. Abraham, 1 I's-p.' X. P. C. S'T5.

•= IJrIvcar V. IJawke, 5 ll)id. 7^.

courb*

Of Principal and Agent . — Principal's Liabilities. 417

course of the execution of the particular transaction about ^vhicli he is employed '. And in ordtr that the laKAvledge of a fact in respect to a contract coiicliideJ by the interpo- sition of an agent, should affect liis principal, the know- ledge must have been obtained by the ngcnt in the execution of the identical transaction, and must have taken pl>ce be- tween the same parties*. Neither will a knowledge of a fact obtained by one who was merely employed to carry proposals from one side to the other, but who was not em- powered to treat, operate as a notice to the principal K

In contracts of insurance, the mistate;nent or su{)pression of any fact within the knowledge of tlie agent at the time of effecting the policy, from whatever source such know- ledge may be derived, will invalidate the principal's right to the benefit of the insurance in case of loss •*. Nor will it alter the case that the principal has made a full disclosure of all the facts within his knowledge, with tlie intention that they should be communicated to the insurers, if the agent has concealed any material part of that intelligence'.

A principal is likewise responsible for the nt^g!ig(>nce, fraud, or tortious acts of his agent while acting within the scope of his employment ^\

Thus the East India Company Avere held liable to the owner for the value of a ship and cargo v\ hicL their ngcnt had purchased for them from the master, but wlio had no power to sell, notwithstanding the contract was entered into without their privity''.

Nor is the principal re'eased from this responsibiliiy

' P<'to V. Ila^Uf, 1 Esp. N. P. C. 375.

* Warrick v. Warrick, 3 Alk, 'i9!. Worsley t. Earl of lSc:irboroi;^h, Ibid. 39-i.

-» SheU)orne V. Inrhiquin, 1 i'ro. C C 351,

* Seaman v. FoiiivTeau/i Str. 118J.

5 Ibid Fitzherb rt v. Matii-r, I T. R. 12,

^ Tubervillf v. St:impe, 1 Ld- Itav-n. 2d-i. Middleton v. Fowlc r, I Satk. 282, Oraimnar V. Ni\oii, 1 Stri €31.

1 EJtins V. East India Company, 1 P. Wins. 39i5.

2 E where

418 Of Principal and Agent. -^Principal's Liabilities.

where the agent employs another to execute the coiitracf, but he is answerable for the wrongful acts of such inferior or sub-agent '.

If a principal employs an agent in the commission of a fraud, he is responsible for the consequences of it. Thus, where a merchant consigned counterfeit jewels to his factor abroad, knowing them to be counterfeit, and the factor pro- cured a person to sell them as real jewels, who was im- prisoned by the laws of the country for (he deceit, (he mer- chant was held liable to damages for the injury arising from the imprisonment *.

Principals are responsible for all contracts entered into with their authorised agents, without any regard to the state of the accounts between them '. Therefore a vendee by paying his own broker the price of the goods does not discharge himself from the demand of the vendor ; unless, when the goods are sold for a lirailed credit, the vendor al- lows the day of payment to pass without making any de- mand upon the vendee •*.

And no private agreement between the pri-ncipal and agent, that the latter only is to be ans^verable to the seller, will affect the vendor's right of claiming payment from the principal^', unle-s (he vendor had notice of such agreement, and in consequence gave credit to the agent individually as the responsible person ^.

An acknowledgement ' or promise ^ of an agent who has usually transacted the business in reference to which the acknowledgement or promise was made, will prevent the statute of limitations from operating in favour of his prin- cipal.

•» Bu;h V. Steinnian, 1 Bos. and Pul. 409.

° Southern v. How, Bridgman, 126.

3 Waring V. Favcnr, 1 Camp. N. P. C. 85.

* Kvmer V. Suwrcropp, Ibid. 109. 5 Rich v. Coe, Cowp. 636. s Ibid. 7 Burtv. Palmer, 5 Esp. N. P. C 145,

* Palethorp v. Furnish, 2 Ibid. 211.

The

Of Principal and Agent . — Principal's Rights, &c. 419

The principal is bound by the delivery of goods to his accretKted agent in the course of liis employment, and is liable to account to the vendor of the goods for their value, notwithstanding he never received them from the agent '.

So if a purchaser of goods has paid tlie amount of the purchase to tli€ agent, and the agent has not p.iid it over to his principal, the principal cannot recover it again from the purchaser*.

A receipt given by a creditor to an agent does not ne» cesssarily of itself operate as a discharge to the principal % unless the principal has allowed it in his agent's ac- count, or that he has given him faitlier credit oa the faith of it *.

2. His Fiighls.

As a principal is bound by tlie contracts and acts of his agent while acting witiiin the scope of his authority, it fol- lov/s as a consequence, that those who deal with an agent authorised to bind his employer by his contracts, are liable to the principal for the completion of such contracts, un- less the agent has acted with fraud, misrepresentation, or concealment in the execution K And this liability of tlie buyer to the principal is not altered by the circ:imstaiice of the agent's acting under a del credere commission ".

If an agent sells his principal's goods on credit, where his instructions or the usual course of trade authorise him to sell for ready money only"; or if he pledges or ex- changes goods which he was employed only to sell^; as no

' Mead v. Hamond, 1 Str. 505.

« Corey V. Wtbsfcr, 1 Ibid. 480.

3 Wyatt V. Marquis of Hertford, 3 East's Rep. 147. * Ibid.

5 Petov. Hague, 5 Ksp. N. P. C. 134.

fi Grove v. Dubois, I T. U. 1 1.'?.

7 Hicks'.',HJiiikin,4 };«p. N.P. C. 116.

' Newfon v. Thornton, 6 East's Rep. 17.

2 E 2 contract

420 Of Principal and Agent. — Principal's Rights, &c.

contract is tlien^by created between the principal arxd the yendce, the former is not bound by his agent's act, but may reclaim his goods or recover their valup from the latter.

The principtil may recover back money paid by his agent, if the party witli whom the contract is mude fails to fulfil tiic bargain ', or if paid by mistake *, or illegally extorted from his agent % or if fraudulently applied by the agent to an illegal purpose, provided its identity can be traced and ascertained -*.

If an agent enters into contrf\cts in behalf of his princi-r p:il without his privity or directions, it is optional to the principal either to reject or affirm them. But he cannot adopt the agency in one part which is beneficial, and re- ject the remainder : he must either affirm or reject alto- gether ^

As to payments and receipts by agents, if the money is due on a written security, it is incumbent upon the debtor, if the payment is demanded by an agent, to see that he is in pos- session of the security, or of a special authority from the ob- ligee, otherwise he is not discharged from his responsibility to the obligee, but must pay it over again to him ^. Nor is he discharged by a payment to an agent, though the money may have been borrowed through his medium, or that he is usu- ally employed toreceive his principal's money, if the security is not in the agent's possession at the time of payment '' . But where a debtor has made a payment to an agent in possession of the security underwhich the payment isclaimed.he is not liable to repay il to the principal although he never re- ceived it from his agent by reason of his bankruptcy ".

» Duke of Norfolk V. Wortliey, 1 Camp. N. P. C, 337.

* Arrher V. Bank of Kiifrland, Don^. 419

3 .Stf'v^nson v. Mortimer, Cowp. 805. ♦ Clarke v. Shce, Cowp. 197.

s W ilson V. Poulter,2 Str. 8j9.

*" Duchess of Cleveland v. Dashwood, 2 F.q. Ca. Ahr. 709.

T Ibid. ? Abington v. Oroie, 1 Ibid. 145.

• Of Principal and Agent. — Principal's Rights j ^c. 421

i^ut as to payment of debts not arising upon written se- curities, payment to an agent properly authorised, and kn^jvvn to act as the representative of his principal, is equi- valent to payment to the principal, and will discharge the debtor, if the usual mode of transacting business warrants such payments, and tile debtor has received no notice from the jmncipalto withhold payment from the agent '.

And even after notice, and notwithstanding the purchaser was aware of the representative character of the agent, he may safely pay the price to him, if tlie principal on the general balance of the account is indebted to tlie factolr '.

So if a purchaser deals with a factor or broker wholly in his own name, and not apprized at tlie time that he was dealing with him in a representative capacity, or that there was any other party to the contract, he is discharged by payment to him '; and if payment has not already been made, he may, in an action brought against him for the value of the goods-, set off any claim he may have against the factor in answer to the demand of the principal 4; pro- vided there was no collusion between him and the factor, as that the insolvency of the factor was known at the time of the contract to the purchaser ^; or that, before tlie con- tract was completed by the delivery of all the goods, he w^s not apprized that the contrat;t was made in behalf of the principal ^.

Neither will the circumstance of its being known to the purchaser, that the seller was a general factor, deprive him of the benefit of set-off in an action brought against him by the owner of the goods, unless he had express kriowledo-e

• 7 Ves. Jun. 470. Drinkwatcr v. Goodwin, Cowp. 256. Scrimshire V. Aldnrtoi), 2 Sir. 1182.

' Drinkwater v. (ioadwin, Cowp. 25!.

3 Coat^s V. F.nwcs, I Camp. N. P. C. 444.

« Georj^e v. Chig^et, 7 P. R. 359. * Estcott v. Milward, T T. R. 361. a.

* Moore V. Cleuiciitson,2 C;irap. N. P. C.24.

tJaat

422 OfTiincipalandJgent. — Agent's Rights.

that be acted as agent in that particular transaction Avliich is t!ic ground of the action '.

Nor can a rcpajment of money paid to a faclor acting; under a del credere commission, be enforced by the prin- ci])al against the purchaser -.

We have seen tliat the receipt of an authorised agent is equivalent to tliat of the principal. But if an agent gives a receipt without having received the money, the principal is not tliereby excluded Irom maintaining his claim against the vendee '.

So a demand by a known agent, or one suflieiently au- thorised to receive the thing demanded, is equivalent to that of the principal *, But to give this effect to the demand of an agent, he must produce his authority if required '. This appears from wh;it was said by Lord Kenyon in the caj^e of Solomons C Dawes ^\ U (said his lordship) the de- mand of the things for uhich the action is brought, is not made by the plaintiff himsell", who is the owner, but by another person on his account, and tiie defendant refuses to deliver tliem, on the ground that he does not know to whom they belong, and Ihercfoie keeps them till that is ascertained ; or tljat t!ic person wiio applies is not properly empowered to receive them ; or until he is satisfied by what authority he a]:)plics : that shall not be deemed such a refusal as shall be evidence of a conversion.

Sccojidly, The Agent's Rights and Liabilities with reference to Third Perso?is.

1. His Rights.

It is an acknowledged principle of law, that on all con- tracts entered into by an agent, whether on his own credit^

> iVIoorpv. Cleinontsor,2 Camp. N. P. C. 24.

» e^crimshire v. Alderton, S Str. 1 18^^ 3 DocJor and Slud. 286.

4 Bohi!in»;k v. Indis, 3 East s Rep. 3Sl. 5 jtoe v. Davis, 7 Ibid. S63.

«* 1 Esp. N. r. C^ S3.

or

Of Principal and Ag^i.—- urgent' s Liabilities. 423

or under a del credere commission, or as the known repre- sentative of another, it is a right incident to his em- ployment, to enforce the completion of them by maintain- ing an action -in his own name '.

And after notice and tender of indemnity by the factor to the vendee of goods, the latter may, in opposition to the claim of the principal, compel the payment of the price of the goods to himself, if he has a lien on such goods for sums advanced to his principal, or for the general balance of his account ^.

2. His Lialnlities.

It is also an admitted principle of law, that where a man is known to act merely as an agent, under a proper authority, for a known responsible principal, he is not personally re- sponsible on the contract ^ But although it is known that the agent acts in a representative character, yet if the prin- cipal is not known or notified at the time of making of the contract ■♦jor the agent becomes expressly liable by any un- dertaking of his own ^; or that there is no responsible prin- cipal to resort to ^', the agent is liable in his individual ca- pacity ; unless some subsequent act is dbne to show that the vendor waved the liability of the agent, and relied upon the principal ''.

These positions receive illustration from the judgement of LordKenyon in the case of Owen v. Gooch^. The mere act of ordering goods, said his lordship, does not make the

• Bui. N. P. !30. Per Cliambre, J. in 3 Bos. and Pul. 49. ' Diinkwater v. Goodwin, Cowp, ^56. Atkyns v. Amber,2 Esp. N. P. C. 493.

3 Ex parte Hartop,l2 Ves. Jiin. 359. Johnson v. Ogilbv, 3 P. Wms. 279.

4 Hanson v. Rnbcrileaii, Peake, 120. Milrhinson v. Ilewson, 7 T, R. 350.

5 Stevens v. Hiii, 5 Ksp. N. P. C. 217. 1 T. 11, 181. «• Horsely v. lidl, Ambl. 7f 0. Hardr. 20.j.

' Morgan v. Corder, Guildhall Sittingf af*er E T. 1809. " 2 Esp. N. P. C. 567,

424 Of Principal and jigent.-^AgenVs Liabilities.

party o.dt'rinq; liable. If a party orders goods from a tralesmaii, thougli in fact tlicy are for anallicr, if the tradesman was not informed at the time that they were for the use of another, he who ordered them is certainly liable ; for the tradesman mast be presumed to have looked to his cndit o;ily. So if !hey were ordered for another person, and the tiadesman refuses to deliver them to that person's cn-dit, but to \\\> credit only who orders them, there is then no {)rete\t tor charL,iiigsuch third person ; or if goods are onicred to be delivered on account of another, and after delivery the person who gave the order refuses to inform the tradesman who the person is, in order that he may sue him, 'under such circumstances he is himbclf liable. But wherever an order is given by one ])ei son for another, and lie informs the tradesmaji who that person is lor whose use tlie goods are ordend, he thereby declares himself to be merely an agent, and there is no foundation for holding him to l)e liable.

]f an agent undertakes to deal with the goods of his prin- cipal as if he were principal himself, the party dealing with him is entitled to the same rights against him as if he were in fact the principal, if ho was not aware of his representative character'.

So, if a special agent under a limited authority not to warrant g(jo:ls as to soundness or the like, transgresses his instructions, he is personally responsible to the purchaser *. But a v>arrai;ty by a known agent or broker, in pursuance of his authority, will not render him personally responsible to the purchaser, unless from the terms of the Warranty it a])pcais that he has pledged his own responsibility '. ••So if a special agent exceeds his instructions in the pur-

» Ante. •» Fenn v. Harrison, 3 T. R. 761.

3 iDiX

chase

Of Principal and Jgent; — Agent's Liabilities. 425

chase of goods, he is liable to the sellers* for all loss which may be occasioned thereby '.

An agent is also personally responsible for the repayment of money deposited with him for an ille^^al purpose (as to induce a creditor of his principal to sign his certificate ^), as long as the money has not been paid over by the agent, and that he has not given his principal fresh credit ou the faifhofit'.

Payment over by an agent, after he lias received notice to withhold the money, will subject him to answer personally for the amount to the person from whom he received the money •♦.

If an agent borrows money ', or undertakes to pay money for his principal '\ without being authorised to that effect, he only is personally liable.

But to the general rule of law, that agents properly au- thorised, contracting for a known principal, are not person- ally responsible on their contracts, masters of ships are an exception ; for unless they expressly provide to the contrary, it has been held that they are personally responsible on all contracts made bj' them for repairs, &c. notwithstanding it was known to the parties executing the contract who the owners were ''.

Agents are personally liable for any tortious act com- mitted by them in the course of their euiployrneiit, notwith- standing it was committed in submission to the authority of their enaployers ^.

But an agent is not answerable for the negligence or mis- conduct of those whom he has retained for the service of his

' Last India Company v. Ilensley, 1 Esp. N. P. C. 112. * Smith V. Bromley, Don;. G70. ^ Buller v. Harrison, Cowp. 565.

'^ llariacre v. Stpuari,5 Esp. N. P. C. 103. * V Kq. Ca. Abr. :JOS.

6 .>,.hnson V. Osilbv, 3 \\ Wms. 277. 7 lUch v. Coe, Cowp. 636.

•^ Perkins V. Smith, 1 Wils. 323.

principal,

•i26 Of Bills of Exchange, ^c,

principal, unless the act from Svliich tiie damage arises was

<lofie by the express orders of the agent '.

Neither are the agents of government answerable for th^ eontracts made by them in their public capacity, if it is known at the time the contracfs are entered into that they are acting in that capacity, and that Ihey do not render them- selves liable by any tiling amounting to a personal contract ^»

CHAPTER X.

or BILLS OF EXCHANGE, PROMISSORY NOTES, &C.

]. Of the l\ainre and Properties of a Bill of Exchange ^

Bills of exchange are either foreign or inland : foreign Avhen drawn by a person residing abroad upon his corre- spondent in England, or vice versa ; and hiland \\hen both the dirawer and drawee reside within (he same country.

Formerly foreign bills of exchange were much more re- ,o-ardcil in tlie eye oif the law than inland ones, as being thoughtof more public concern in tlie advancement of trade and commerce. But now inland bills of exchange are, by the statutes 9 and 10 AVili. III. c. 17. and 3 and 4 Anne, c. 9. put npon the same footing as foreign ones; wliat was the law and cusiom of merchants with legard to the one, and taken notice of merely as such, is by these statutes ex- pressly enacted with regard io the other ^.

The properties of a bill of exchange are, L That, if as- signed, the indorsee or assignee may sue thereon, in his own name, contrary to the rule of law, that no action can be maintained on (he assignment or transfer of a chose in ac- tion, unless it be brought in tlie name of the assignor ; the

' Ston? V. Cartv, right, 6 T. R. 411. « Macbcath v. Ilaldimandj

I T. R. \'y.. 3 2 Bl. Com. 467.

consequence

Of Bills of .Exchange, ^c. 427

consequence of which exception to the general rule is, that no release by the drawer to the acceptor, nor set-ofF or cross demand, due from the former to tlie latter, can affect the payee or indorsee's right of jjction against the acceptor. And, 2 'J'liat although a bill of exchange is not a specialty, but merely a simple contract, yet it uill be presumed to liave been originally given for a good and valuable coiisideration, unless in an action brought against the defendant by the person witli wliora he was immediately concerned in the ne- gotiation of the bill, or by a person who has given no value for it, in which cases he may give in evidence that he has not received any consideration for it '.

Bills of exchange are witliin the statute of limitations : but the operation of the statute does not begin to take place from the date, but from the time the bill becomes due, or is payable ^.

By the statute 17 Geo. III. c. oO. all bills of exchange, or drafts in Avriiing, being negotiable or transferable for the payment of twenty shillings, or any sum of money above that sum, and under five pounds, or on which twenty shil- lings or above that sum, and less than five pounds, shall re- main undischarged, must be payable within twenty-one days after the day of the date tiiereof, shall express the names a (id places of abode of the persons respectively to whom or to whose order (he same shall be payable, and shall bear date before or at the time of drawing or issuing thereof, and not on any day subsequent thereto.

And by the statute \b Geo. III. c. 51. no inland bill or draft can be drawn for any sum under twenty shillings, on pain of forfeiting twenty pounds.

« 1 Sclw. N. P. 317. Cliitty, 6, 16.

" Wittersheiai v. Countess of Carlisle, 1 Ken Bl. 631. Renew v. Ax- ion, Garth. 3.

2. Of

428 Of Bills of Exchange. — Of the Parties.

2. Of the Parties to a Bill nf Exchange.

Tlic person wlio makes or draws the bill is termed the drawer; he to whom it is addressed is, before acceptance, calli'd the drawee, and afterwards the acceptor. The person in whose favour it is drawn, is termed tlie payee, and when he indorses t!ie bill, the indorscr ; and the jjerson to whom he transfers it is calh d the indorsee ; and in all cases the person in possession of tlie bill is called the holder '.

lint besides these immediate parties, a person may become a party to it in a collateral way ; as where the drawee refuses to accept, any third party, altet protest for non-acceptance, ma^' accept for the Ijonour of the bill, generally, or of the drawer, or of any particular indorser, in which case an ac- . reptance is called an acceptance supra protest, and the per- son making it is styled the acceptor for the honour of the person on whose account he comes forward ; and he acquires certain rights, and subjects himself to nearly tlie same ob- ligations as if the bill had been directed to him. A person may also become party to the instrument by paying it supra protest, either for the honour of the drawer or indorscrs ^

All persons, whether merchants or not, having capacity aiid understanding to contract, may be parties to a bill of exchanged ^

Corporations, by the intervention of tlieir agents, mny be parties to a bill of exchange; but by the" statutes (j Anne, c. 22. s. 9. and 15 Geo. 11. c. 1^. s. 5. it is not lawful for any body politic or corporate whr.tsocver, other than the go- veruoj and company of the baidc of England; or for persons united in covenants or partnership, exceeding the number of six persons, in England, to borrow or take up any sum

' Chitty, 2. •^ IbJd 28. a Carth. 82. Salk. I'iS.

or

Of Bills of Exchange.~Of the Parties, 429

or sums of monej on Iheir bills or notes payable on demand, or at any loss time tlian six months from the borrowing thereof, during the continuance of the privilege of exclusive banking granted to the governor and company of the bank of England.

An infant cannot bind himself by a bill or note drawn in the coiuse of trade ' ; nor can an action be supported against liira on a bill or note given by him even for necessaries*, if in the hands of a third person, for he would then be pre- cluded disputing the value of the necessaries ^ But if, after attaining his full age, he expressly promises payment of such bill, it \7ill be as operative against him as if he had been of age at the time it wns made ■*. To create this liabi- lity, however, neither a b;ire acknowledgement of the debt, nor a promise to pay part, nor even an actual payment of part, is sufficient '.

A feme covert cannot bind herself by drawing a bill of exchange, thougli she has a sej)arate maintenance secured to her by deed, and is living apart from her husband'' ; unless he is transportel, banished, or the like^ Neither will a promise after the death of her husband oi)erate so as to ren- der her liable^.

But thoui^h no action can be supported on a bill against a person incapacitated to draw, indorse, or accept it, such bill will nevertheless be valid against all other competerit persons, parties to it subsequent to such incapacitated person "\

' VVilliams v, Harrison, Carth. 160.

"^ Williaimim v. Watts, 1 Cainp. N. \\ C. 559.

3 But it s'^eins that a promissory nolo ^iven by an infant for necessaries would be biadin};, if payable only to the person who supplied them. (Co. Lit. 172. a. 1 Camp. N. F. C. 552. "n.

* Tavlor v. Croker, I Esp. N. P. C. 187.

SThrupp V. Fielder, 4 Ibid. Cr'S.

6 Marsliall v. llnttnn, 8 T. 11. 515.

7 De Gaillon v. L'Ai.-le, 1 Bos. and Pul. 358. » Llovd V. Lee, I Str. 9,'.

9 Holt V. Clarencieux, ',> Str. 937.

A per-

430 Of Bills of Exchange, -^Of the Parties,

A person may become a party to a bill of exchange, not only by his own act, but also by that of his agent or part- ner ; in which case he is said to draw, accept, or indorse by procuration'.

Bills of exchange may be drawn by a party's agent or attorney, who may be constituted by parol*. But in such case it is incumbent on (he agent, if required, to produce his authority to the holder ; and if he does not, tiie owner may treat the bill as dishonoured^.

When a person draws, accepts, or indorses a bill as agent'', unless he states that he draws, &c. as agent, his principal will not be bound '. Besides, should an agent draw, accept, or indorse a bill in his own name, which was directed to him personally, and not to his principal, he will be person* ally liable, although such direction described him in his official character, unless he states that he acts as agent '^'. An agent, however, contracting on the behalf of govern- ment need not describe hijoself as agent '.

Where there are joint traders, and one of them, during the existence of tlie partnership, draws, accepts, or indorses a bill or note, in the name, or as on the behalf of the firm, such acceptance, indorsement, &c. will render the other partners liable, although they were ignorant that the bill was negotiated by such partner for his own individual benefit ; and no subsequently acquired knowledge by the creditor taking the bill, that such acceptance, &c. was made with- out the consent or concurrence of the other partniTS, will defeat his claim against the whole partnership concern^. But the acceptance, &c. of one of several partners, on behalf

' Beawes, pi. 83. » 7 T. R. 209. 3 Rcawes, pi. 87.

4 Th:- fl ty of an a<>;rnt praplo-tol in the negotiation of billsof exchange is, first, to endeavour tn procure acct-pfanre ; secondly, on r<>f:isai,to protest for ao.i-aereptan-e; thirdly, to advis;- the remitter of the receipt, acceptance, or protestina; ; and fourthly, to advi?e any third person that is concerned ; and all this without any delay (B-awes).

5 p.arlow V. Bisiiop, I last's Rep. 431.

^ Applefon V. liinks, 5 Ibid. M.'}. ' Rice v. Chute, 1 Ibid. 579.

'Swan V, Steele, 7 East's Rep. 210.

of

Of Bills of Exchange. — Of the Requisites. 431

of himself and copartners, will not bind the others if it be given for his hulividual debt, and the holder of the bill at the time he became so was aware of that circumstance'.

And after a dissolution of a partnership by agreement, an express authority given to one of the persons who composed tlic firm to settle .the partnership aQairs, as to receive all debts owing to, and to pay those due froin the partnership previous to i(s dissolution, will not authorise him to draw, accept, or indorse a bill of excliange in tlic partnership name, even for a debt that existed prior to the dissolution ; it being a principle of law, that the moment the partnership ceases, the partners are distinct persons, and from that time tenants in common of the partnership property*.

On the same principle, after an act of bankruptcy by one of several copartners, the bankrupt partner cannot binrl the partnership by any bill or note which may be issued by him after that event'.

It is not necessary that a partner when he draws, accepts, or indorses a bill on behalf of the partnership, should ex- press the name of the firm, or all the partncr.>hip names ; it will be sufficient to bind the firm if lie subscribes his own name only*.

If the members of a copartnership, each in his individual capacity, employ one factor, and one of tliem aca'pts a bill drawn upon all by the factor, the acceptance will not bind the rest'.

S. Of the Requisites of a Bill of Exchange.

In order to constitute a bill of exchange or promissory note, no particular form or precise words are requisite^' : an

' Sheriff v. "VVilkes, 1 East's Rop. 48. Henderson v. Wild, 2 Camp. N. P. C. 5G1.

' Kilgour V. Finlyson, 1 Hen. BI. 155. Abel v. Sulton, 3 Esp. N.P.C, 108.

3 Thom.ison v. Frcre, 10 East's Rop. 418.

« Mason v. Rumsey, 1 Camp. 381. S Bcawcs, pi. 228.

« Com. Dig. lit. Obligation, B. 1,2,

order

439 Of Bills of Exchange.^Of the Requisites.

order or projnise <o deliver money, or to receive money, or to be accountable or rc^i)oni,ible for it, will be suflicient for this purpose'.

The two requisites essential to tlie validity of a bill or note are : iirst, that it be payable at all events, and not depen- dent on any contingencies. Thus an order or promise of payment out of money when received, or the produce of merchandise when disposed of is no bill of exchange ; be- cause of the uncertainty whether one will be received, or the other di^^posed of; or that its produce when disposed of will be sufficient^.

Neither is a bill or note valid if the payment depends upon a condition ; as if an order or promise be given *' to pay money on demand, or surrender A.B. to prison within a limited time ;" " or provided A. B. shall not pay the money by a particular day ;" or a promLe to pay within a month, if A.B. did not pay'.

So if payment be directed to be made out of a particular fund, it will render the bill inoperative on account of the uncertainty to which the payment is subject. Thus a bill drawn by an officer on his agent, requiring him to pay so much out of his growing subsistence, was held to be no bill of exchange *. So an order to pay out of rents or other money ' ; or on the sale or produce of certain property'^'; or out of money Avhen received"; or out of tlie drawer's money,

which should ariie from his reversion of when sold^,

altliough it is averred in the declaration that the money and tlie rents have been received, and that the property and the reversion have been sold ; is inoperative as a bill,

• 8 Mod. 364.

' Dawkes v. Lorr] Dilor-iia, 2 P.l. Rrp. 782. 3 Wils. 207, S. C.

3 Smith V. lloht-mc-, ii Ld. Kayin. I'JSG- Coiehan y. Cooke, Willis, 397.

* Ihid. " s Jeiiney v. Ik'ilf , Str. 592.

6 Hill V. Ilalford, 2 Bo-, and Piil. 413.

7 Wilkes V. Adcock, S T.R. 28. ^ Carlos v. Fancourl,5 T.R. 482.

Ti«

Of Bills of Exchange. — Of the Requisites. 4SS

The second requisite to render a bill or note valid, is, that ii must be for the payment of mcmey only, and not for the payment of money and tiie perfonuance of some other act, or in the alternative. And therefore a promise " to pay money and deliver up horses and a wharf on a particular day," does not amount to a bill or note within the statute '^ And to render bills or notes effectual, they must be for the pay- ment of money in specie, otherwise tliey will be inoperative. On this principle, therefore, a written promise to pay three hundred pounds to B. or order, " in good East India bonds," is not a bill or note within the statute^.

Aijifl if a bill or note be insulBcicnt in its formation in either of these particulars, no subsequent transaction, ren- dering the payment no longer contingent, will give it va- lidity.

If, however, the event on which the pajanent is to depend must inevitably happen, as if the payment is to be made within a certain time after the drawer's coming of age^, or after the death of his father or the like-*, the bill will be valid and negotiable.

So, the statement of a particular fund will not vitiate a bill of exchange, if it is made payable at all events, but is inserted merely by way of direction to the drawee, how he should reimburse himself. And therefore where J. S. drew a bill on J. N., and directed him one month after date to pay to A. B. or order, a certain sum of money " as his quarter's half-pay from the 2Uh of June to the ^Sth of Sep- tember next in advance," the bill was held to be valid ^

Tke other principal requisites of a bill of exchange are.

First, That it be properly stamped ; for unless it be duly

^ Martin V. Chawntrv, 9 Str. 1271. » Bui. N. P. 272.

3 Goss V. Nelson, 1 Bur. 226. ♦ Cooke v. Colehan, Str. l'>17.

9 Maclecd v. Snell, 2 Str. 76'2.

2 F stamped,

43i Of Bills of Exchange. — Of the Requisites.

stamped, and that not only with a stamp of (he proper value ' , but also of the proper denomination, it cannot be reitd in evidence, nor can it be in any way available*.

Secondly, Tliat the date ought to be clearly expressed. If, however, no date be expressed, it Avill be intended to bear date on t!ie day on which it was issued ^

Thirdly, That every bill of exchange oujjjht to \yc given for a good and valuable consid{Tation. But no evidence of Avant of consideration, or insutlicicncy of the amount thereof, will impeach the validity of a bill, as between the acceptor or drawer and a third person holding* the bill for value given, although the holder knew at the time of his Ixicom- ing so that no consideration had been given for the bill^. Between the drawer and acceptor, the drawee, the payee and his agent, and the indorsee and his immediate indorscr, however, no bill will be invalidated for the want of consi- deration*, or the original insufficiency of the amount^.

80, if at the tune a person became holder of a bill, he knew that at its inception it was founded on an illegal trans- action" ; or that he became holder of it by transfer jifter it became due^, he cannot in either case recover on it.

So, if the holder of an accoraraodation bill has given value only for a part of the amount, he cannot recover bryond the sum he has given '^ But it is otherwise where a bill has been given for money really due from the drawee to tlie drawer ; for there tin? indorser, although he has given only a part

' By the statute 43 Geo. ITT. c. 127. s. fi. it is, hoAvever, enacted, tb.it iT any iiijtrumpnt is stamped willi a stamp of srreater value than that n quir* d by law, it shall be valid, provided such stamp be of the proper deiiomiDUtion required bv l;nv.

■' Bavlev's Summary, 20. n. 6. 43 Geo. III. c. 27. 44 Geo. III. c. 98. 48 Geo! III. c. 119.

3 Hague V. French, ^ Bos. and Pul, 173.

* CoHinsv. Martin, I Bos.and Pul. 0)1. Simmond«fv. Parminstcr, I AVils. 187.

s Jefferics v. Austin, Str. P'4.

* Barber v. Backhouse, Peakc's X. P.C. r»l.

' Steers v. Lashlev, 6 T. R. 61, » Brown v. Tinner, 7 Ibid. 6W.

9 Bacon V. Searle^, I Hen. Bl. 88.

value

Of Bills of Exchange. — Of the Delivery, 435

value for the bill, may recover the whole sum payable, hold- ing the overplus beyond his own demand as trustee for the use of the party entitled to receive it'.

Illegality of consideration is another objection to thfe va- lidity of a bill. In those cases in which the legislature has declared, that the illegality of the contract or consideration shall make the bill or note void, the holder, notwithstanding he took tlie bill bona fide, and gave a valuable consideration for it, can only resort to the party from whom he received it, and from whom he can recover only on the original con- sideration^.

But where tlie illegality of the bill does not fall within any statutory prohibition, the holder cannot be affj cted with tlie transaction between the original parties, unless he had either notice of the illegality', or obtained the bill after it became due from a person who had notice of the illegal con- sideration for which it had been given'*.

And in general, where the bill is fair and legal in its in- ception, a subsequent illegal contract or consider ;tion taking place on the indorsement, &c. will not invalidate it in the hands of a bona fide holder^.

S. Of the Effect of Delivery of a Bill.

If a bill of exchanofe is given in satisfaction of a debt^', or ft)rthe amount of goods sokP, the drawer cannot be sued for X\\i', original debt before the biU is due, neither can he go into evidence to impeach the charges on which the debt arose. But if the person delivering the bill knew that it

' WifiVn V. PwobertE, 1 Esp. N.P. C. 9. Barber v. Backhouse, Pcake's N.P.C. 6!.

J" Bowjerv. Eampton, Str. 1135. 'VVithain v. Lee, 4 Esp. N.P.C 264. V/fbb V. Brooltp, S i ai:nf. 6.

3 Wyatt V. Buliner, '2 T.sp. N.P. C 338.

* l'>n>v/n V. Turner, 7 T. K. G30.

s i'arr v. Eliason, 1 East s Rep. 92.

* Kearslake v. ilorgan, 5 T. II. 513.

7 Knox V. Whalley, 1 Esp. N.P.C. 159.

2 F 2 was

4 C6 Of Bills of Exchange.— Of tfie AUeration.

was of no value, the holder may immediafely sue him on his original liabilily'. Tlu' circumstance, ho'vxevcr, of the bill Ixiui^ on a wrorii:^ stamp will not entitle the holder to sue the party before it becomes due, unless he refuses on re- quest to give a proper bill *.

And where a bill ddivercd under the above circumstances has been dishonoured, if the holder has not been guilty of neglect, but has used due diligence in giving the acceptor notice thereof; the original consideration revives against his debtor, from whom he may recover the amount of the debt K

4. Of the Effect of AUeration of a Bill.

If a bill, &c. after it has been drawn, accepted, or in- dorsed, be altered in any material respect, as for instance in the date or sum, Avithout the consent of the parties there- to, it will discharge those parties who were not privy to such alleration, from all liability thereon, though the bill may afterwards come into the hands of an indorsee not aware of the alteration •♦ ; and such alteration w ill have the same effect as to the drawer's liability on the original considera- tion, if there was no privity between him and the holder ^ But a mere corrcciion of a mistake, as by inserting the words " or order ^'," or the alleration of the place where the bill is to be presented for payment ', will not vitiate a bill, or render a new stamp necessary, if the .insertion or alteration is made with the consent of all tlie parties, and before the bill is issued, or before the time when it is to be payable **.

In general, if a bill has been altered, or any insertion becu

' Puckford V. Maxwrll, 6 T. R. 52.

' Swears v. Wells, I J.sp. N. P. C. 317.

3 Bolton V. Richard, 6 J'. R. 139.

« Master v. JViill.T, 4 T. R. 3S0. s ibid.

^ Kerstraw v. Cox, 3 Esp. IS'. P. C. 21t). > Trapp v. Spearman, Ibid. 57.

» Kiiill f, William?, 10 Last's Rep. 435. Cardv.tllv. Martin, 9 Ibi.l. 190.

made,

Of Bills of Exchange. — Loss, of a JiUL 451

made, before acceptance or indorsement, the acceptor or indorser cannot take any advantage of the alteration, for by acquiescing: in such aK'-ration lie has given validity to Hie bill'. The effect is the same, if, on presentment of a bill for accept I nee, the acceptor ahers it as to the time of payment, and the holder acquiesces in such alteration and acceptance - ; although, as between the drawer and prior indorscvs and the bolder the bill is thereby vacated '.

5. Of the Loss of a Bill.

In case of tlie loss of a bill *, &c. transferable by mere de- livery, any person who has previouslj' to its becoming due given a bona fide consideration for it, may enforce payment against the acceptor and the olher parties, notwithstanding he derived his interest in the bill from the person who found or stole it^ And if a lost or stolen bill, t.ansferable by mere delivery, and for which no consideration has been given, is presented to the drawer at the time of its becoming due, and he pays it before he lias notice of the loss or robbery, he will not be liable to pay it over again to the real owner''.

But when a bill transferable only by indorsement, and not indorsed, is lost by the person entitled to indorse, no person getting possession of it by a forged indorsement will acquire any interest in it, although he gave a sufficient con- sideratio)!, and was not aware of the forgery ; but will be liable to repay the bill to the original holder when he has regained possession of it^.

' BeavTs, pi. l^A. - Patoii v. Winter, 1 TawrK. Rep. 420.

3 Master v. Miller^ 4 T. R. .^^..O.

* In the case ()t'foroi;;n hills it is usual to make three of the same tenor and date, (called a set, each ot" wiiich contains a condition, thu itsfiall be paid provided the others arc not,") in order that the hearer, having lost one, may receive his money on the other. And if the dra-Acr only gives one, he will, if it should be lost, be obliged to j;ive another of the same tenor to the loser. Potb. pi. .S9.

s Sir John Lawson v. Weston, 4 Esp. N. P. C. 56. Grant v. Vau(;han, B'.ir. 1516. ■ 6 Ibid.

' Cheap V. Harlcv and Drummond, cited in Allen v. Dundas, 3 T, R. 28. Mead v. Young, 4"lbid. '28.

In

438 Of Sills of Exchange. ^Lossdf A Bill

In case of the loss of a bill, to entitle the holder to reco- ver, he should immediately give notice thereof to <he ac- ceptor, and all the anti-cedent parlies ; and when the bill is transferable by mere delivery, should also give public no- tice of the loss ' ; but this will not be available unless the no- tice of the loss be brought home to the knowletlge of the party taking the bill*.

By the statute 9 and 10 Wil. III. c. 17. s. 3. it is enact- ed, that in case any inland bill, expressed to be for value received, and payable afierdate, shall happen to be lost or miscarried %vithln the time belbie limited foi payment of ihc same, <he drawer must give another bill of tiie same tenor with that first given ; the person to whom it is dt livered giving security, if demanded, to the drawer, to indemnify him against all persons whatsoever, in case the said bill so alleged to be lost or miscarried shall be found again. And Matius says, p. 77, " that if the acceptor refuse, on suffi- cient security and indemnification offered, to pay a bill which he has accepted, he Avill be liable to make good all l{jss, re-exchange and charges."

But notwithstanding the above statute, the owner of a bill of exchange, &c. which has been lost, cannot support an action on the bill, or on the original consideration of the bill, against the drawer or other party to the bill, so as to oblige him to give another bill of the same tenor with that first given, although a bond of indemnity has been tendered to the defendant % except he can prove that the bill has been destroyed ■* ; or that, after cotice of the loss, the party receives a bond of indemnity from the loser ' ; or that the bill was not negotiable, or has not been indorsed, or has

' Beawes.

* Sir John Lawson v. Weston, 4 Esp. N. P. C 50. 3 Bevan v. Hill, 2 Camp. N. P. C. 38.

* Pierson v. Hutchinson, 2 Camp. N. P. C. 212. 6 Esp. N. P. C. 126. ^ Williamson v. Clements, 1 Taunt. 523>

been

Of Bills of Exchange. — Lialillly of the Drawer. 4S9

been only specially indorsed ' ; or tliat it ^vas lost after .it was due^ A court of equity will, however, in all cases of the loss of a bill, compel payment, or a new bill to be given, on proper indemnity being given by the loser^ to pro- tect the defendant from being compelled to pay the bill over again to a bona fide holder^. yVnd if sucli indemnity has' been tendered, the defendant will in general have to pay the costs in equity.

C. Of the Liability of the Drawer,

If the drawee refuses to accept or to pay the bill, on such refusal the drawer is immediately liable to an action for the amount thereof, the payee or holder of the bill not being obliged to wait until the time arrives which is specified for payment in the bilM. But if abilldrawn by a person abroad on ar.other in this country be refused acceptance or payment, the drawer will, if discharged by the loreign law, be discharged in this country'.

Where a bill has been accepted for accommodation, if the acceptor sustains any loss in consequence of such accept- ance, the drawer must indemnify him^'.

7. Of the Presentment of a Bill for Acceptance,

When a bill is drawn within a certain time after sight, in order to fix the time when the bill is to be paid, it must be presented to the drawee for acceptance". Afid in all ca.ses where it is necessary for the holder to present a bill for acceptance, due diligence must be used that the bill be pre- sented within a reasonable time**; the neglect of doing which can ojily be excused by proving that the drawer or

» Long V. Bailie, 2 Camp. N. P. C. 214. n.

' J infon V. Fniiicis, I Ibid. 19. 3 Mobsop v. Eadon, 10 Yes. Jun. 430.

* Mrllisli V. Simeon, 2 Hen. bl. 379.

s Cook V. Tower, I Taunt. Rep 372. l»orU r v. L'rown, 5 East's Rep. 121.

•Poth.pl. 97.

"' .Niuilojan v, D'Egiiiiio, 2 Ileii. Bl. J6.). ** ibid.

Oilier

410 Of Bills 6f Exchange. — Acceptance,

other person insisting on it as a detence, had no effects in the hands of the drawee, or had given no consideration for the hill'. Illness, or any other reasonable cause not attri- butable to the misconduct of the holder, will also excuse a presentment witliin a reasonable time *.

On the presentment of a bill the drawee is entitled to keep it twenty-four Lours in his possession after the presentment, for the purpose of examiiiing whether he has any eflects of the drawer's in his hands'. But if he should require further tim.e, the holder should give immediate notice to the indorsers and drawer of the circumstance-'.

In all cases of presentment for acceptance, or payment, of a bill, it is incumbent on the holder to present it at the house of the drawee '. If he has removed, the holder must use every reasonable endeavour to find out where he has re- moved, and make presentment there ^. In case of his de- cease, presentment must be made to his personal represen- tative, if he lives within a reasonable distance ". But if, on ipquiry, it appears that <he drawee never lived at the place where the bill states him to reside, or that he has abscond- ed^ then the bill is to be considered as dishonoured^.

S. Of the /Acceptance of a Bill of Exchange,

An acceptance may be either absolute or qualified. But whether an acceptance be absolute or qualified, is a question of law 9, An absolute acceptance is an engagement (o pay the bill accordin«: to its tenor. The most usual and formal method of making such an acceptance, is for the drawee to write on the bill the word -' accepted," and subscribe his

> De Brrdt V. Atkinson, 2 Hrn. Bl. 336.

^ ^cc post, Dishonour ot a Bill by >'on-arcep<anrp, &c.

' Bcawes, pi. 17. ■* Molloy, b. ii. c. 10. pi. 16.

."^ Cromwell v. Hynson, 2 E?p. N. P. C 511.

« Colliiisv. Biillcr, 2 Str. 1087.

7 Mollov, b. ii. c. 10. s. 34, » Lord Raym. 743-

3 I T. ii. Iii2.

name:

Of Bills of Exchange. — Acceptance. 441

name ; or to write the worJs " accepted," " seen ',"" " pre- sented %" the day of the month ^ only ; or merely to subscribe^ his name at the bo-toni, or across the hill. For the conveni- ence, hov/evr, of meicantile afiliirs, an acceptance, or a pro- mise to accept, bj collateral writing, or even by parol, is equally binding- wilh an acceptance on the face of the t)ill ■♦. Any act, indeed, of the drawee, which deinonbtraies a con- sent to comply with tlie request of the drawer, will constitute an acceptance. A promise of this nature, " Leave the bill, and I will accept it," will amount to an acceptance, although the holder had no consitleration for the promise'. A direc- tion to a third person to pay the bill ^', written thereon, or ou any other paper relating to the transaction, will amount to an acceptance ". A verbal or written promise to accept, at a future period, a bill already drawn, or that a bill then drawn shall meet due honour*', or shall be accepted, or cer- tainly paid when due^, amounts to an absolute acceptance. And although, regularly, a bill ought to be accepted before the day on which the money is to be paid, yet an acceptance after the day will bind the drawee '°. The drawer and in- dorsers are, however, discharged, imless due notice of non- acceptance, or non-payment, at tiie time the bill became due, were given ' ' .

An acceptance may be implied as well as expressed ; and tliis implied acceptance may be inferred from the drawer's keeping the bill a great length of time '^, which induces the holder not to protest it, or to consider it as accepted '^-

' Poth. pi. 45. ■ Via. Abr. tit. Bills of Fxch 1. t, 3 Comb. !0l.

* Luinleyv. Palmer, 2 Str. 1000. Kop. 'IV-mp K.ir-.Jw. 74. S. C. i'dwcll ■V. Mounier, 1 Atlc. 611. Wynne v. llaikes, 5 East's Rep. 514. Clarke r. rock, 4 Ibid. 57.

■> Bivl. N. P. '270. '^ Moor v. Whitby, Bur. i'it3;5. 1 Cul. N. P. 270.

1 Pillaiis V. Van .Mierop, Bur: 1 6(3'}. 8 |^;|^,'k. v. Cock, 4 East's Rep. 70.

9 Wvniic V. Raikes, 5 Ibid. 5 14.

'" Jackson V. Pi.^'ott, Carth. 45ii. Ld. Ravm. iOl. Salk. 1-27.

" .Mitford V. AValcott, 12 Mod. iiO, '- Powell v. Motinier, 1 \(k. Gil.

ti JB;i>ley, 4S. n. a.

But

442 Of Bills of Exchange.-^Acceptance,

But a promise to accept a bill not in existence at the tirne tlic promise to accept was given, but which was to be drawn at a future time, has been held not to amount to an accept- ance, unless it influences some person to take or retain the bill'.

And by the usage of trade in London, a banker may re- tain a check drawn on him, till five o'clock in the afternoon of the day on which it was presented lor payment ; and such retention of the bill will not be considered as equivalent to an acceptance, although it may have been cancelled by mistake^.

JNcifher will the expression " There is your I)ill, all is right," amount to an acceptance, unless intended to induce the holder to conceive it as such K

Nor will the entry of a bill in the drawee's bill-book, and the minuting upon it the day of the month, constitute an acceptance, if it appears to be the drawee's practice to enter all his bills, whether he meant to accept them or not ■*.

A qualified acceptance is when the drawee undertakes to pay the bill in any other manner than according to the tenor and eliect thereof. This species of acceptance, if qualified with a condition, is called a conditional acceptance. The holder of the bill may consider a qualified acceptance as a nullity, and protest the bill for non-acceptance ' ; but if he does receive it, he should, in order to bind the other parties to the bill, give immediate notice of the nature of the accept- ance oilered ''.

Any act which evinces an intention not to be bound, un- less upon a certain event, is a conditional acceptance. Thus, an acceptance by ihe drawee of a bill, to pay, " when goods

' Johiisoa V. Collings, 1 tast's Rep. 98. Castling v. Aubert ,2 East's Rep. 325. ' PVrnaiidez V. (ilvnii, 1 Camp. 426.

3 PowpI y. Joncs/l Esp. N. P. C. 17.

4 V'owrll V. Mounier, 1 Atk. 61 1.

5 Selw. N. P. 350. ^ Gliitty, 155.

consigned

Of Bills of Exchange. — Acceptance. 443

consigned to him were sold '," or, "as remitted for*," have been held to be a conclitioaal acceptance, and not to render the acceptor liable to the paynieat of the bill until the con- tingency has taken place, when such conditional acceptance will become as binding as an absolute one'.

An acceptance may also be partial ; as when the drawee nndertakes to pay part of the sum for which the bill is drawn, or to pay at a different time or place -*. But in all cases of a conditional or partial acceptance, the holder should, if he means to resort to the otlur parties to the bill, in default of payment, give notice to them of such con;li- tional or partial acceptance ^. And in the likt; circumstances the acceptor should be careful to express in the acceptance the condition he may think proper to annex ; for, if the con- dition is not expressed in a written acceptance, he will not be entitled to avail himself of it against any subsequent party between him and the person to whom the acceptance was given, who took the bill without notice of the condition, and gave a valuable consideration for it. But if the agree- ment to accept is conditional, and a third person takes the bill, knowing of the conditions annexed to the agreement, he takes it subject to those conditions '\

If a bill be accepted payable at the house of the acceptor's banker, the party taking such special acceptance must pre- sent it for payment within the usual banking hours (which in London do not extend beyond five o'clock), at the place Vi here it is made payable '.

In case of the failure of the drawer, the drawee ought not to accept bills after he is aware of that circumstance". But if the drawee accept a bill drawn upon him after the bank-

' Smith V. Abbot, 2 Str. 1152. ^ Banbury v. Lis5et,2 Str. 1212.

3 1 T. R. 182. Str. 1212. * Mar. 68. 81. Molloy, 28.?.

s Ibid. * Per Ld. Mansfield in Mason v. Hunt, Doug. 299.

' Parker v. Gordon, 7 T. R. .'iHS. » Piiikerton v. Marshall, 2 Hen. Bl. 334.

ruptcy

4i4 Of BilU of Exchange.' — Acceptance,

rnptcy of the drawer, he will, by the statute 1 Jac. I. c. V&. be justified in paying his acceptance, if he had no know- ledge of such bankruptcy at the time of his accepting the bill'.

On refusal of acceptance, cither ^^holly or partially, th© holder may insist on immediate payment by all the parties whose names appear upon the bill *.

9. Of the LialUity and Discharge of the Acceptor.

It has already been observed, that an acceptor will not be released from his liability to discliarge a bill, on the ground that he has not received a consideration, although that cir- cumstance was known to the holder. His responsibility is also in general irrevocable ; for from the current of cases it a];pears, that if the drawee of a bill puts his name upon it as acceptor, he cannot afterwards, even before it has been de- liveied to the payee, discharge his acceptance by erasing his name, unless such acceptance has been made by mistake ^

The responsibility of the acceptor cannot be discharged but by payment, express release, or by the statute of limi- tations •*. No indulgence granted to the acceptor or drawer will have that eifccf. Neither will the receiving a part of the amount of the bill from the drawer, and granting an en- larged time for the payment of the residue, discharge the accepior's liability '. And an alteration by the holder of a partial into an absolute acceptance, Avill not release the ac- ceptor from his liability under his partial acceptance ^\

Eut an acceptor is discharged by the alteration of the

> WUkins V. Caspy, 7 T. R. 7 11 .

- Ballingalls V. (iloster, 3 East's Rep. 481. Tuckford v. Maxwell, 6 T. R. b-i.

3 Tnmmor v. Oddy, Guildli;ill Sittings, July 12, 1800. Thornton v. Dick, 4 I'.sp. N P. C. 70. ISenliiif k v. Doricn, G Last's Rep. 199.

« Din^'w .-i!T v. Dnnstcr, Doutf. 2 !7.

5 Ellb V. Gallin:lo, Ibid. 250. ii.

• Master v. Miller, 4 T. R. 336.

bill,

Of Bills of Exchange, — Indorsement. 445

bin ', or of his acceptance*, if made without his privity. So, if a bill is made payable at a banker's, and it is not presented there, the acceptor is discharged from Ids liability, if he can prove that he has sustained thunage in cons; quence of the holder's laches ^ In case of an accommodation-acceptance, the acceptor w ill be discharged, if tlie holder, after notice that the bill had been accepted for the accommodation of the drawer, gives time to the drawer without tlie acceptor's concurrence*. Or if, upon an offer of a conditional or par- tial acceptance by the drawee, the holder gives a general notice of non-acceptance, omitting to state sucli condi- tional or partial acceptance, the drawee will be released from all responsibility K

In cases of accommodation-acceptances, it is advisable to have a written undertaking, or a counter- bill or note, from the drawer, in order to indemnity the acceptor. If the un- dertaking is for a sum above 20/., it nuist be stamped as an agreement. Where the accommodation-acceptor is in- debted to, or has any property of the drawer in his hands, in case of the insolvency of the drawer, or where there is any ground of apprehending such an event, he may retain the same for the payment of the bill until it is delivered up to him, or he is indemnifted against his liability as acceptor ^'-.

10. Of the Indorsement and Transfer.

An indorsement of a bill or note is usually made upon the back of the bill, and must be in writing : but no set form of words is necessary fl)r this purpose ; and therefore, if a man writes his name upon the back, or any otlier part of a bill of exchange, or "This is to be paid to J.S.," or, " Pay

' Master v. Miller, 4 T. R. 336. ' Long v. Moore, 3 Esp. N. P. C. 155.

3 Bishop V. Chitu , Str. ] 198. ■» Laxton v. Pc.il, 2 Camp. N. P. C. 1^5.

the

s Sproat V, Mnttficws, 1 T. il. \Si.

* Wilkin* V. Casey, 7 T.R.711. Madden v. Kcmpstcr,! Camp.N.P. C.12

416 Of Bills of Exchange.' — Indorsement.

the contents to J. S.," and signs his name to it, it will be a good indorsement ' .

But by the I7th Geo. III. c. 30. s. 1. the indorsement of a bill or note for the payment of less than five pounds must mention the name and pla^e of abode of the indorsee, and bear date at or before the time of making it ; and must be attested by one subscribing v, itness.

If a person authorises another to indorse for him, the agent must merely wrile the name of liis principal, or indorsee, as " Per procuration G. H. A, B." otherwise the indorsement will be inoperative ^

Indorsements are of two kinds, in blank or in full. An indorsement in blank, which is tlie most common, is made by writing the indorser's name upon the back of the bill, without any mention of the name of the person in ^vhose favonr the indorsement is made. A full or special indorse- ment is where the name of the indorsee, in Avhose iavour the indorsement is made, is mentioned, as thus, " Pay the con- tents to A. B. or order," and is subscribed with the name of the indorser.

The negotiability of a bill originally transferable may be restrained by express restrictive words ; for, the payee or the indorsee having the absolute property in the bill, he miiy by express words reslrict its currency, by indorsing it " Payable to J. S. only," or, " To J. S. for his use ;" or any other words clearly demonstrating his intention to make a restrictive and limited indorsement ^

An indorsement of a bill of exchange may be made at any time, either before it is complete, or after the time appointed for the payment of it. If it is indorsed before it is complete, as if a man indorse his name upon a blank stamped piece of paper, it will have the effect of binding the indorser to the amount of any sum which may be inserted, consistent with

» 3 >V\v -Ahr. GI3. » Wilks v. Rack, 2 Cast's Rep. 144.

3 iidit v.tkc last India Company, Bur. 1216.

the

Of Bills of Exchange. — Indorsements 447

the stamp, and made payable at any (late '. If the indorse- ment takes place after the time of the bill's becoming due, in order to make the transfer valid, the hill must remain unpaid by some of tlie parties ^ And if a bill is indorsed before the day on which it bears date, and the payee dies before the day of payment, such indorsement is valid*. Bnt bills drawn for less than five pounds cannot by the statute 17 Geo. 111. c. 30. s. 1. be indorsed after the time of their becoming due.

With respect to a transfer made before a bill is due, and one made after it is over-due, there is a material distinction. In tlie former case the assignee is not bound to inquire into any circumstances existing between the assignor an;] any of the previous parlies to tlie bill, as he will not be affected by them •*. But in the latter, whether the transfer has been made by indorsement or mere delivery, it is incumbent on the indorsee \o satisfy himself that the note is a good one ; and ir he omits so to do, he takes it on the credit of the indorser,aiid must stand in the situation of the person who was holder at the time of its becoming due K

Bills payable to order, or to bearer, are equally negotiable from hand to hand ad inrniitum.

But, in general, unless th<; operative words of transfer, viz. or " order " or " bearer," or some other words autiio- rising tlie payee to assign it, be inserted t!u*rein, it cannot be transferred so as to give the assignee a right of action against any of the parties except the indorscr himself'"; unless the negotiable words were omitted by mistake ". The omission, however, of negotiable words will not aflcct t!ie validity of a bill ^. And in all cases, thougli no operative

• Doplim V. S(irlin?, 7 T. R. 4.'^0. ^ R.uon v. Scarlcs. I II<-n. Bl. 88. ^ Pasinore v i\«rtb, (iuililliall Riuinp after Uil. IVrm, 1811, K. IJ.

• Browu V. Davis, ?, T. K. H-t.

5 Ibid. 80. Tinson v. Vrrincis, I Camp. N. P. f. 19.

« Hill V. Lewis, I S;.l!c.l.'JJ. 7 K, rsliaw v. Cox, 3 I'sp. X. P. C 246.

• .Smitii V. Kendall, 6 T. li. 123.

words

^4S Of Bills . of Exchange, — Indorsement,

words of transfer are inserted in a bill, yet it \vill always have the same operation against the party making the trans- fer as if he had had power to assign '.

A transfer by delivery, without a?iy indorsementj when made on account of a preexisting debt, or for goods sold at the time of the assignracnt, imposes an obligation on the assignor in favour of the assigned', similar to that of a trans- fer by indorsement ; and in default of payment by the drawee, the assignee may maintain an action against the assignor on the consideration of the transfer *; unless it was expressly agreed at tlie time of the transfer, that the as- signee should take the bill assigned as payment, and run the risk of its being paid ', or that he has been guilty of la dies.

As to the capacity of transferring a bill of exchange, it may be said in general, that a valid transfer may be made fey all persons Avho have an ab.solutc property in it. And if indorsed bills be delivered to a b -.inker, to be received when dne-», or to an agent for a particular purpose 5, and they negotiate them on their own account, the holder will be entitled to n'tain the bills, however fmudulent the con- duct of the agent or b;mker, if lie has gircn a valuable con- sideration for them, and was not acquainted with the trust on which they were deposited.

If an indorsement is made in favour of an infant, and he indorses it in favour of another, no recovery can be had on that indorsement against the infant, because he cannot ren- der himself liable on his contract : yet as it is to be pre- sumed, unless the contrary appears on the face of the in- dorsement, that every indorsee has given a valuable con-

' Ilndir'-FV.St'i'Tiarf, 1 Sglk. 125. Bnllin-jalls v. Glosfc^S F-apf's Rep.-'!R2. ' .Moore V. Warrcii, I Str 415. Owensoi! v. lMor>;r,7 T. K. 65. Ex parte BlackburiiP, 10 Vcs. Jun. '201.

3 T T. R. 65. ♦ Collins v. Martin, I Bo.s. and Tul. C J8.

s HoUon V. Puller, ibii. 5iC.

sideration.

Of Bills of Exchange. — Indorsement. 449

sideratioii, the iiif;inl's indorsement cannot be considered as such a restraint upon the negoliabilitj of the bill as to pre- vent the indorsee's recovery aii^ainst the acceptor or drawer, or any of the other endorsers '.

Where a bill has been made to a feme covert *, or to a ferae sole Avho afterwards marries', the right of transfef vests in her husband, and the indorsement must be in his name.

And in the case of bankruptcy, the right of transfer of a bill or note is vested in the assignees from ihe time of the act of bankruptcy •*. But if a trader delivers a bill for a valuable consideration previously to an act of bankruptcy, ■without indorsing it, it has been held that he may indorse it after Iiis bankruptcy ^

As to the effect of a transfer by indorsement, it vests in the holder a right of action against all the precedent par- ties wliose names are on the bill; and he may recover judgement against all, if satisfaction be not made by the payment of the money before judgement obtained against all; and proceedings will not be stayed in any one action but on payment of di;bts and costs in that actiouj and the costs in all the others in which the holder has obtained judgement ^'.

But unless the payee, or the drawer, when the bill was payable to his order, has first indorsed it, a party wlio be- comes possessed of it can sue the person only from whom he obtained it '.

' Taylor v. Crokcr, 4 Esp. N. P. C. 187. ' Barlow v. Bishop, 1 Lasts Kop. 43-2. 3 Hatchet V. Baddi-lev/^ Bl. Rep. lOSi.

* Vink rlon v. TviarsluilIvS Hen. Bl. :il-5. 5 Smith V. Pickering, Pi ake's N. P. (', 53.

* Alilh-r V. Hare, Bur. 45-2. Grant v. Vaughan, Ibid. ITilG- 7 Peacock V. Ilhodcs, Doug. 6^3.

2g 11.0/

450 Of Bills of Exchange, — Presentment for Vaymeni.

11. Of F resentment for Payment.

When a time of payment is specified in a bill of ex- change, the holder, or his authorised agent \ must present it to the drawee for payment at the time when due ; and when no time is expressed, within a reasonable period after receipt of the bill -; or otherwise the drawer and indorseis will be exonerated from their liiibility. And it has lx;en held that even the bankruptcy, insolvency, or death of the acceptor will not excuse a neglect to make presentment. \n the first case prei^eritmcnt should be made to the bankrupt or his assignees ; and in the latter to the personal representa- tive of tlie deceased, or, in case there should not be a per- sonal representative, at the house of the deceased '. Neither will the insutliciency of the bill in any respect excuse the omission of presentment ^.

But by the custom of merchants recognised by law, a bill drawn payable at usance, or at a certain time after date or sight 5, or after demand, is not payable on the day of its becoming due ; a further time of three days is allowed, called days of grace. In the case of foreign bills, if pay- ment is not made on the last of the three days before the hours of business are expired ^', a protest should imme- diately be made, so as to be sent, if possible, by post on • that day. But as to inland bills, it seems that the acceptor has the whole of the third day of grace for payment with- out regard to banking hours ; and therefore notice of non-

' Coore V. Callaway, 1 Esp. N. P. C. 1 13.

'^ Cowley V. Uuiilo|)", 7 T. K. 581.

3 Esriaile v. Sowrrljy, 11 East's Rep. 117.

* €hambeiivn v. Delarive, 2 Wils. '<5.-{.

5 When bills are made payable at one, two, or more months after Hate, the computation of the time when they vvill become due mast be by calen- dar months, (lieawes, pi. 25;J.) And when a bill is payable a certain num- ber of days after sight, the days are computed from the day the bill was accepterl, exclusiv>-ly thereof. (Campbell v. French, 6 T. II. "iVl.) *» Parker v. Gordon, 7 East's Rep. ci85.

payment

Of Bills of Exchange. — Presentment for Faymcnt. 45 1

payment need not be given before the following morning '. For it has br;en held, that if a second presentment bemads alter banking hours on thclastvday of gni.ce, and the acccp- tor offers (o pay tlie bilfon such second presentment^ he is not liable for the fees of noting or protest! n-;-^. If however, by the known custom of any particular place, bills are payable only within limited hours, or at any paiticulur place, a pre- sentment out of tliose hours, or not at that place, would be invalid K So if a bill is payable at a banker's, presentment after the usual hours of business, viz. five o'clock, will re- lease the drawer and in:]orsers from their liability -♦.

But as the contract of the acceptor is absoluie. he is pri- marily liable, and cannot in grncral take advantage of non- presentment of a bill at the precise time when due^; unless he has, by his acceptance, undci taken to pay within a cer- tain period after demand, and then he may insist on the want of presentment ^\ So, if he appoints payment to be made at Jiis banker's, if he is really prejudiced, as if the banker fails, having property belonging to the acceptor in his hands, he will be discharged from his liability, if the bill has not been properly presented at such banker's ".

Whether a presentment to the acceptor is first necessary, before an action is commeucc'd against him for ihe dis- honour of a bill, the courts of King's Bench and Common Pleas adopt difibrent rules. In the court of King's Bench, it has been held, that where a bill of exchange or promissory note is made payable at a bunker's or asiy other particular place, there is no necessity for prejentment to tiie acceptor

' Leftley v. Mills, 4 T. R. 170. Hayncs v. Birks, 3 Bos. antl Pul. 602.

' 4 T. \i. no.

3 Parker V. Gordon, 7 Ila'^t's Rep. .'385. Sa.U!Kierson v. Jiulj;e, 2 lien. BL 509.

•« Ibid. I5arclay v. BiiiLcv, 2 Caiwp. N. 1'. C. b'il. Jameson v. Svvinion, 2Taunt.2'J-l.

5 Dingwall v. Dunster, Doug. 247'.

s The D;iko of Norfolk v. Kov/ard, 2 Sho-.v. "i^S.

' Bishop V. Chit:y,'2 Str. 1195.

2 G 2 of

452 Of Bills of Excha?)g€. — Presentment for Payment.

of a bill or (he maker of a note for payment before the comnieiicement of (he action, the bringing of the action being a siilhcient demand '. But in the court of Common Pleas, a presentment is required to be made to them before an action Cctn be commenced against them*.

The causes which excuse a neglect to present for payment being the same as (hose which do away a negh ct (o present for acceptance, it would be repetition (o mention (hem in this place : we therefore refer the re;ider (o that head.

If the political state of the country where the bill is due, renders a presentment for payment in due time impossible, presentment as soon as it is practicable willen(i(le the holder to recover ^

In all cnscs of bills of exchange, &c. whether foreign or inland, if the last day of grace fdlson a Sunday, Christmas- day, or Good Friday, the holder ought to demand payment on the second day, and, if it is not then paid, treat the bill as dishonoured *.

In the case of bank post bills', bills payable on demand, or when no time of payment is expressed^, no days of grace are allowed, but they are payable instantly on pre- sentment. Bills payable at sight seem entitled to (he al- lowance of the usual days of grace". On bills payable to the excise, six days beyond the three days of grace are al- lowed, if required by the acceptor.

The number of the days of grace allowed on a bill of exchange vari(s according to the custom of different coun- tries, and is computed according to the law of the country 3^ here the bill becomes due.

' Nicholls V. Bowc?, 2 Camp. N. P. C. 498. Fenton v. Goiindry, Ibid. fi5R. Lyon v. Suiidius, 1 Ibid. i'ZS. ' Caliingham V. A-yhtt, 2 ibid- 549.

3 Patieiif-e v. Townly, 2 Smith's Rpp. 22.S. « Mar. 95.

5 J.ovelass,247. ''' C\uU\.222.

' Dehers V. IlaYriot, 1 Show. 16J. CoKinan v. Sayer, Barnard, 303'

In

Of Bills of Exchange. — V resentment for Paijment. 453

In the dominions of Great Britain, Bergamo, and -Vienna, three days are allowed; at Frankfort, out of the fair time, four ; at Leipsick, Naumberg-, and Augsburgh, five ; at Venice, Amsterdam, Rotterdam, Middleburg, Antwerp, Cologri, Breslau, Nuremburg, Lisbon, and Portugal, six ; at Naples, eight ; at Dantzic, Koningsburg, and France, ten ; at Hamburgh and Stockholm, twelve ; in Spain, fourteen ; at Rome, fifteen; at Genoa, thirty. At Leghorn, Milan, and some other places in Italy, there is no fixed time '. Sundays and holidays are always included in these days of grace in Great Britain, Ireland, France, Naples, Amsterdam, Rotterdam, Antwerp, Middleburg, Dantzic, and Koningsburg ; but hot so at Venice, Cologn, Breslau, and Nuremburg. At Hamburgli, and in France, the day on which the bill falls due makes one of the days of grace; but no v/here else^.

. Instead of an express limitation by months or days, fo- reign bills are usually drawn payable at one, two, or more usances ; a term which signifies (he time which it is the usage of the countries between which the bills are drawn to appoint for payment. Double or treble usance is double or treble the usual time ; an half usance is half that time, and consists of fifteen days notwithstanding the inequality of the length of the months '.

Usance between London and any part of France is thirty days alter the date of the bill. Between London and the following places, viz. Hamburgh, Amsterdam, Rotterdam, Middleburg, Antwerp, Brabant, Zealand, and Flanders, one calendar month. Between London and Spain and Por- tugal, two calendar months. Between London and Genoa, Leghorn, Milan, Venice, and Rome, three calendar months. Ttc usance of Amsterdam on Italy, Spain, and Portugal,

' Kvd,9 Beawes, pl.^ifiO. Poth pi, 139. « Beawes,p!. 474.

3 Potb. ^I. 15. Mar. 93.

is

454 Of Bills of Exchmige. — P resentment for Payment.

is two nio?)(li,s. On France, I'landers, Brabant, and on any place in Holland or Zealand, is one month. On P'rankfoit, Nuremburi^, Vieniia, and other places in Germany, on Hamburgh, and Breslan, f<!urteen days after sight '.

As usances vary accordiiig to the custom of different countrii s, it is iihvnys necessary that the usance should be particularly descri!:)ed ; tor where the pluintifrdeclarrd on a bill of exchange drawn at Amsterdam, payable at London, at two usances, and did not show what the two usances were ; judgement wss given for the defendant, because the court could not take notice of foreign usances, which vary, being longer in one particular place than in another, unless the usance of that particular country had been shown and proved -.

The conduct the holder of a bill is to pursue, in case he cannot find the drawee so as to make a prei-entment, is so very similar to that which he is to adopt when he cannot find the drawee so as to obtain acceptance, that it is suffi- cient to refer to that head.

12. Of Payment.

Payment slioukl be made only to the holder of the bill, or some person properly authorisetl by him'. In case of the death of the holder, payment sl.ould not be made to his personal representative, unless he has power to administer to his effects'*. Neither ought payment to be made of a bill or check before it is due : for where a check which had been lost by the payee Avas paid by a lianker the day before it bore date, he was liekl liable to repay the amount to the loser'. So payment of a lost bill, transferable only by in-

'. Kv,l. 4. Bpawes, pi, S59. Potli. pi. 15.

' B«cklcy V. Cambcl!, I Salk. 1,J2.

s Favenc v. Brnrifti, II Kast's F{ej). 40. * Poth. pi. 166.

? Da tiiiva V. I'"uiler, Lundo.i Sitiinj^s, Laster, 1776. Sfhv. Ca. 283. MSS.

dorsement,

Of Bills of Exchange. — Payment. 455

dorsement, but not indorsed to a bona fide holder, is not protected ; but the Idser may compel the payee to repay the amount '. But payment of a lost bill or note, transfer- able by mere delivery, or indorsed in blank, to the person finding or stealing it, will discbarge the drawee from paying it over again to the loser, if he has no knowledge of such loss or robbery ^ ; and although he has notice of \\\q loss or robbery, yd payment to a holder for a sufficient con- sideration will be protected ; and the original holder who lost the bill will consequently forfeit all right of action against the drawee'.

Payment of a bill to a trader or his order, after a secret act of bankrnptcy, is, by virtue of the statute 1 Jac. I. c. 15. s. 14. effi'ctual, and discharges the person making it, provided that the party had not notice at the time of the transaction of such act of bankruptcy, or that the bankrupt had stopped payment or was insolvent, and provided also that such payment be made more than two calendar months before the issuing of the commission ■♦. So if a bankrupt from the importunity of his creditor, or from fear of a pro- secution, has indorsed a bill or note to him, although at the time he had an act of bankruptcy in contemplation, a pay- ment of sucli indorsement will be protected '. And pay- ment of an acceptance given by a debtor not having notice that his creditor had committed a secret act of bankruptcy, is by virtue of the statute 1 Jac. I. valid, although between the time of acceptance and payment notice of the bank- ruptcy came to the debtor's knowledge*''.

So payment by a trader, after a secret act of bankruptcy,

■ Mead v. Yoiin;?, 4 T. R. ?8. « Sir John Lawson v. Wc^ston, 4 Esp. N. P. C. 56. s Good V. Toe, cited in l?ophm v. Stirling;, 7 T. R. 4S7. * 46 r.fo. HI. c. 135. s. 11?. Taniplin v. Diis^ins, 2 Camp. N. P.C. 31?. 5 Crosby v. Crouch, 11 East's Ilep. ^36. Bailey t. Ballard, 1 Camp, N. I'.C. 4!G. s VVilkins V. Casey, 7 T. R. 711.

/is

456 Of Bills of Exchange. — Payment,

is protected by <he statute 19 Gen. II. c. 32. provided such payment be maclc to a benel fide creditor not having notice of such act of baiiknrptcy at the time of the transaction, and tlmt it be made by virtue of (lie iCtli Geo. III. c. 135. s. 112. more than two calendar months before the issuing of the commission.

In case of the bankruptcy of a fictor or banker, bills re- mits d to Ihem and entcied sliott while unpaid, being con- sidered in the nature of a deposit, must be returned by the assignees (o the owner, subject to such lien as the fiu tor or b inker may have on tliem ' ; and if paymtnt be received upon such bills by the assignees, they must refund it to the owner.

The holJer of a bill of excliange niay receive part pay- ment from the acceptor or indorser, and sue the other par- ties for the residue, provid(d he does not give time to such acceptor or indorser to pay the residue^.

But if when a bill becomes due the holder compounds with the acceptor % or gives time to him-^, or releases him wlien he h;is taken him into custody^, or takes a frtsh security'', by Avhich further time is given", or a new acceptance^, without the concurrence of all the other parties to the bill, he thereby discharges them fiom ail responsibility, although the holder n;ay have given due notice of the dis- lionour. For though ihe holder may forbear to sue the ac- ceptor or any other party as long as he chooses, he cannot agree fp give time or a new credit to the acceptor without the assent of the other parties '^ And therefore where the

• Zinck V. Walkrr,9r>l. Rep. 115^. Giles v. Peikin5,9 East's Rep. 12.

^ (iould V. Robson, 8 F.as('s lU'i). '>S0. -3 V\ parte V. il-on, 11 Vis. Jun. 410.

« Clark V. Devlin, 3 ]!os. and Pul. ^65.

5 l.\ parte Wilson, 11 Ves. Jun. 410.

'•' The Kinj; v. tti»" Sheriff of Surry, 1 Taunt. 159.

7 Claxtoii V. SMift, ti Mod. b7. . • Goulo V. Robfon, 8 I'-ast's Rep. 580.

9 Per Lord Lldon, in AViiglit v. Siin|»son, C V'cs. Jun. 734.

defendant

Of Bills of Exchange. — Payment. 457

'defendant lent his indorsement on a promissory note to the drawer, which nole was payable on demand, for the pur- pose of enabling him to raise money on that security from the plaintiffs, his bankers, who agreed to make advances thereon ; it was held that the bankers, who had renewed their advances at the end of the six months, without the knowledge or consent of the defendant, could not recover upon, the note thus indorsed by him, without proof of a de- mand on the drawer, and regular notice of the dishcmour to the defendant'.

Similar indulgence to a drawer or prior indorser will also discharge all sul'sequent parties ^.

But though the giving time to, or taking a fresh security from, an acceptor, indorser or drawer,will in general discharge all subsequent parties who would be entitled to resort to the party indulged, yi^t such subsequent parties will not be dis- cliarged by the holder's granting the above indulgences, if they had no effects in the hands of the party to whom the indulgence was given' ; or that the drawer, &c. had given his j'.ssent to the fresh security being taken from the accep- tor •♦ ; or that no furtlier time was given by such fresh secu- rity^.

If a bill of exchange is remitted by the po->t, if this is the customary mode of remittance, or has been done by the ex- press direction of the creditor, it will amount to payment of the debt, and discliarge the debtor^'; provided the letter containing the bill has been put into the General Post Of- fice in Lombard-street, or a receiving house appointed by

« Smith V. Bocket, 13 East's Rep. 187.

•^ Gould V. Robson, 8 East's Hep. 580.

3 1 Ii.)s. and Pu!. 65-'. 8 East's Rt-p. 5TS.

•» riai Icp V. Devlin, 3 Bos. and Pul. 363. V.ithall v. Masterman, 2 Camp.

N. P.C. 179.

i Avrev V. Davenport, 2 New Rep. 474.

» Warwick V. Noakes, Peake's N.P. C. 67.

that

458 Of Bills of Exchange. — -Payment.

t!ial office ; but a delivery to a bellman in the street -will not liavc that effect ' .

Payment of a bill, -whether foreign or inland, being re- fused, any third person not patty to the bill may pay it for the honour of the ilrawcr or any of the indorsers ; and he tliereby acquires all the same rights that the holder of thc^ bill had, although no regular transfer of the bill was made lo liim*. Tills payment, as it is always made after pro- test for non-payment, and in prudence should not be made before', is called payment supra protest. But the acceptor, if he has previously made a simple acceptance, cannot ])ay in lionour of au iiidorser unless he has made such acceptance without having effects of the drawer in his hands ; because he is already bound as acceptor •♦. If the acceptor supra protest for the honour of the drawer or indorscr receives his approbation of the acceptance, he may pay the bill without any protest for non-payment'.

In all cases on payment of a bill or note, a receipt should be written upon the back of the bill. This receipt is de- mandable by virtue of the act 46 Geo. III. c. 12G. s. 5. and should state by whom the payment has been made'''. If part only has been paid the same should be acknowledged upon the bill, or the party paying may be liable to pny the amount over again to a bona fide indorsee".

If a promissory note of twenty years date be unaccounted for, it aftbids a presumption of payment unless the contrary appears*'.

' IIuHkins T. Run, Peace's N. P. C IS5.

' Mertens v. Winningtoii, 1 lisp. N.l'.C 112. 3 Bcawes, pi. 50.

< ibi'l. pi. 51. 5 11,)d.

« fScholey v. W alsby, Peakc's N". P. C. 2.5.

* Cooper V. Davics, I Ksp. N'. P.C. 465.

' Oitliirld V. Civefl, h Ibid. 5'^

13. Of

Of Bills of Exchange. — Dishonour and Notice. 459

13. Of the Dishonour of a Bill by Non-acceptance or Non- payment ; and Notice thereof.

If a bill is presented, and an acceptance is refused, or only a qualified acceptance oiFercd, or any other default ni;\de, after notino- or protest, immediate notice must be given to all the parties to whom the lioldc-r means to resort for payment ; or they wiil be discharged from their respec- tive liabilities' ; unless the holder can prove that the party insisting on the want of notice has not sustained any damage by the omission of it, as that he had no effects in the hands of the drawee, or that he had given no considera- tion for the bill ; or he must give in evidence such facts as ■will throw the onus proband! the actual damage on the defendant^.

So if, on presentment of a bill, the dnwee refuses to pay the amount, or makes default of payment, in case the bill is foreign it is incumbent oa the holder to protest it, and whe- ther foreign or inland to use due diligence in giving imme- diate notice of the dishonour to those parties to whom Jie means to resort for payment, or they will be discharged from their respective obligations'.

The rule which requires notice to be given within a rea- sonable time by the holder of a bill of exchar»ge to the drawer, of the drawee's refusal to accept, is calculated for the benefit of (he drawer, to enable him to withdraw his effects out of the h;mds of the drawee.

But though the neglect on the part of the holder to give immediate notice of the dishonour of a bill, discharges the parlii's entitled to insist on the want of it froin their respec- tive liabilities ; yet the consequences of such a neglect may

' Roscoe V. Hardy, 12 East's Rep. 43}.

' De Berdt v. Atkinson, 2 Hen. lil. 3JG. Bickcrdike v. Bollman, I T. R. 406. 3 Gale V. VValsli, 5 t. R. 239.

be

460 Of Bills of Exchange. — Dishonour and Notice.

be done away by otlur circumstances. The absconding or absence of the drawer or indorser may excuse the neglect to advise hiin ' ; and the sudden illness or death of the holder, or of ills agent, will dispense with notice to any of the par- ties,' provided it has been given as soon as possible after the impediment was removed *. It has also been held, that a payment of part, without objcclion to (he want of notice, Avill dispense with proof of notice, and in the case of a fo- reign bill also of protest for non-payment K A promise lo pay the whole, or to see it paid, or an acknowledgement that it must be paid, made by the person insisting on the want of notice, amounts to a waiver of i\ui consequence of the laches, and admits tlie holder's right to action ■*. So if the day on which the notice should be given is a public festival ^, or that the holder is unacquainted with the indorser's place of residence "^j an omission to give notice of the dishonour of a bill is dispensed with. But the death, bankruptcy, in- solvency of the acceptor, or his being in prison'', or the in- solvency or bankruptcy of both the drawer and acceptor, will not dispense with the necessity of notice of the dishonour of a bill, although those facts are fully known to the parties^. Neither will the mere offer of t!ie drawer or indorser, after arrest, to give a bill by way of compromise for the sum de- manded, without acknowledging his liability, dispense with the' necessity of proving notice '^. Nor w ill the giving of a second bill as security for the payment of a bill overdue and dishonoured, discharge the holder from giving notice

1 \V:,lwyn v. St. 0"ii)tin, 2 Esp. N. P. C. 316.

■^ Jlilton V. Shepliiid, () Last's Rep. 16.

3 Taylor V. Jones, i Camp. N. P. C. lOJ. * Chitty, 192.

5 LiJido V. Unsworfh, 2 Camp. N. P. C. 602.

" B.itfnian v. Jost-pli, 12 I'.ast'.s Rt>p. 433.

~ lix parte Wilson, 11 Ves. Jiin. 412. Whitfield v. Savage, 2 Bos. and Pill. 279- Ilaynis V. Birks, 3 Ibid. 001.

8 Nicliolbon V. Gouthil, 2 Hen. Bl. 612. Esdaile v. Sowcrby, 11 East's

PapH-1-

B rumniing v. French, 2 Camp. 106,

of

Of Bills of Exchange. — Dishonour and Notice. 461.

©f the dishonour of the second : by ihe hohler'.s Inches, tlie drawee is discharged from all liabil, ty on both bills '. Nor is the holder of a bill lxcuscJ from giving; notice of the dis- honour where a drawer has eflects in tlie liantls of the drawee, although tlie drawee vcvwy have appropriated sucli effects to the satisfaction of ids own debt^. Nor is a notice dispensed with where the drawer has no effects in the hands of the drawee at the time of drawing the bill, if he has con- signed effects to him to answer the bill ^ So if the drawer has effects in the hands of the drawee at the time of drawing the bill, though il does not appear to what amount, and though such effects are withdrawn before the bill can be pre- sented, the circumstance of ihcfe, not being effects in tlie hands of the drawee at the time when the bill is presented for acceptance, and refused, will not supersede the necessity of notice ; for it would be very dangerous and inconvenient, merely on account of the sl)ifting of imbalance, to hold notice not to be necessary 4. In Walwyn v. St. Quintin % Eyre C. J. said, " Perhaps, indeed, notice ought never to be dis- pensed with, since it is a part of the same custom of merchants which creates the duty; especially as the grounds for dis- pensing with it are such as cannot influence the conduct of the holder of the bill at the time when he is to determine whether he will or Avill not give notice ; for ninety-nine times in a hundred he camiot know whether the drawer have or have not effects in the hands of the acceptor, or of him for whose accommodation the bill was drawn. Il hass, how- ever, been resolved in many cases, that where the drawer h;is had no effects in the hands of the acceptor, notice might be dispensed with. But it may be proper to caution bill-

« Brickes v. Brrrv, 3 Tnuiit. 130. ' filackiin V. DonMi, 2 Camp. N. P. C. 503'. 3 Lea;.°;e V. I horpe, 1'2 East's Rep. KJ. ♦ Oir V. ^taicinnis, 7 East's Rep. 359. 5 1 Bos. and Ful. 632.

holders

462 Of Bills of Exchange, — Dishonour and Notice.

holders not to rely on it as a general rule, that if the drawer have no effects in tlic acceptor's hands notice is not neces- sary; the cases of acceptances on the faitli of comignmetUs from the drawer not come to hand, and the case of accept- ances on the ground of fair mercantile agreements, may be stated as exceptions, and there may possibly be many others.

But though the want of effects in the drawee at the time of drawing the bill will supersede the necessity of notice of the dishonour of the bill to the drawer, yet the omission of giving such notice to bona tide iiidorsers is not excused because the acceptor had no effects of the drawer in his hands '.

If the parly entidcd to notice be a bankrupt, notice of the dishonour should be given to him or liis assignees ; if dead, to his executor or administrator ^ ; if he has absconded, tliat circumstance will excuse the not making of any furtiier inquiries ' ; if abroad, a demand at his residence, or of his agent in this country, will be sufficient 4. "VVIicre the holder is ignorant of the place of residence of tlie party en- titled to notice, if he uses reasonable diligence to discover it, it will be sufficient K

What is to be deemed due diligence in giving notice of the dishonour of a bill is a question of law dependent upon facts, viz. the situation of the parties, the distance at which tJiey live, and tlje facility of communication between them '\ In case of a foreign bill notice should be given on the day of the refusal to accept, if atiy post or Oixlinar}'- conveyance sets out on that day '• ; and if not, by the next ordinary con- veyance.

' Wlikps V. Jnrks, Peakp's N. P. C. 202.

* Cooke's Bank. Laws, 178. 3 Lord Raym. 743.

* Crop.iwell V. Hynson, 'i Esp. N. P. C. 511.

5 Batenian v. Joseph, 12 East's Rep. 4Jj. Sturges v. Derrick, Wis^Iit- wJck's Itep. 76.

^ Darbishire v. Parker, 6 East's Rep. ?j. ' Leftley v. Mills, 4 T. R. 174.

Thus,

Of Bills of Exchange. — Dishonour and Notice. 465

Thus, in Muilnuin v. D'Eguino', >ybicii was the case of a foreign bill of exchange drawn in the East Indies, a cer- tain time after sight; it Vr'as held that it was not necessary to send notice of the dishonour by an accidental foreign ship which sailed fioin thence not direct for England, but that it was sufficient to have sent notice by the fust regular English, ship which sailed for England.

In regard to the precise time when notice of the disho- nour of inland bills siiould be given, there is no settled rule. It is however certain, that it is in no case necessary iii y.land bills to give such notice on the day of refusal^. The gene- ral rule, as may be collected from Tindal v. Brown ^ and otlier cases, seems to be, with respect to persons living in the same town, that the notice shall be sent by the post suffi- ciently early in the morning after tlie day on which the bill has been dishonoure;!, or on which the party hitnself has received the notice, that the person to whom the letter con- taining the notice is addressed, may receive the letter on that day*. But where parties live in different pjaces, it will be sufficient that each party gives notice to his immediate in- dorser by the next practicable po.t after he has himself re- ceived notice 5. And if in any particular place the post should go out so early after the receipt of the intelligence, as that it would be inconvenient to send notice by the next post, then, with respect to a case so circumstanced, if notice is sent by the second post it will be valid ^\ I f the parties live in London or within the limits of the twoj)e:>!]y post, the time of sending notice of the dishonour of a bill is to be re- gulated by the directions given in the first case ; but if they

' 2 Hen. Bl. 565.

^ Russcl V. Langstaffe, Doii^. 515. Miiilman v. D'Eguino, 2 Hnn. Bl. 563. 3 1 T. R. 167.

♦ Marsh v. Maxwell, 2 Cnmp. N. P. C. Jamcsow v. Sainton, Ibid. 374, Smith V. INhiHef, Ibid. 208. Hilton v. Falrcloiigh, Ibid. 633. s Darbishirc v. I'-irkcr, 6 East's Hep. 3. '' I'tr 3ir. Justice Lawrence, Ibid.

reside

464 Of Bills of Exchange, — Dishonour and Notice.

reside out of London, then notice bj the next practicable post after the party has received liotice hini^lf will suffice.

In Hajncs v. Birks', wliere the bill, which was put by the plaintiff in the hands of his, banker to present for pay- ment, having been dishonoured in London about twooVIock on Saturday, and pres(Mited a,<jaiii at nine in flic cvtMiinc^, by a notary, and notice given of the dishonour to the pl;untiff on Monday at Knightsbridgc, who gave notice to tlie in- dorscr of it by lelter on I\Ionday at noon, which letfcr the indorser received on Tuesday at noon in Tottenham-court road ; it Avas held that this notice was sufficient to entitle the holder to recover against the indorser. For though a banker is bound to give notice to his principrd on tlie very day on which the bill is dishonoured, it was impossible in this case for the bankers to give effectual notice before the Mon- day, the bill not having been presented by the notary until between nine and ten o'clock en Saturday night.

So where the indorsee of a bill of exchange placed it in the hands of his bankers, who returned it the day after its being dishonoured (o the indorsee; it was held that notice given to the drawer (the defendant) by the mdoisec (the plaintiff) on the day after the receipt of the dishonour was sufficient ; for a banker is not obliged to give notice of the dishonour to anyone but his customer ; neither is a holder, on return of a bill dishonoured, bound omissis omnibus aliis negotiis to devote himself immediately to giving notice*.

Where tliere are several indbrscmenls, and the holder gives notice of the dishonour to his indorser, each successive in- dorser must on receipt of the notice give a fresh notice to the party licible over to him, so that such notice may be re- ceived on the day after tliat on which the party giving the notice was informed of tlie dishonour of the bill'. And

' 3 Bos. and Pul. 659. "" Scott v, Liffonl, 9 East's Rep. 317.

? Smith V. Mullctt, 2 Caaip. N. P.C. 2W.

therefore

Of Bills of Exchange. — Dishonour and Notice. 465

therefore where a fourth indorser, having received notice of tlie dishonour of the bill from his indorsee on the 20th of the month, did not send notice to his immediate indorser until so late in the evening of the 2Jst that it was not deli- vered to the defendant (the first indorsee) till the morning of the 23d, it was held that by this neglect the plaintiff had discharged all the prior indorsers, although in the course of the 22d notice of the dishonour was given both to the second indorsee and to the defendant '.

Where it is necessary to give notice of the dishonour of a bill to a banker, the notice should be given during the hours of business *.

With respect to the mode of sending notice of the disho- nour of a bill, it seems that in the case of either a foreign or inland bill, sending notice by the post will be sufficient, however near the residence of the parties may be to each other, or even though the letter containing such notice should miscarry'. But where it is necessary or more convenient for the indorsee to send notice by any other conveyance than the post, he may do so, and charge for the same '♦. And in all cases where notice is sent from London by tlie general post, the letter containing the notice should be delivered at the General Post Office in Lombard-street, or at least at a re- ceiving-house appointed by that office ; for a delivery to the bellman in the street will be insufficient '.

As to the party by whom the notice'should be given, it appears that in general the notice of non-acceptance or non- payment should come from the holder, or from some per- son authorized by him ^. However, if a drawer or indorser receives due notice of tlie dishonour of a bill, from any per-

' Smith V. Mullett, 2 Camp. N. P. C.208. Marsh v. Maxwell, Ibid, 210.

* Barclay V. iJavley, Ibid. 527.

3 5 Lsp. N. P. C. 157. 3 Bo>. and Pu). 599.

* Pearson v. Crallan, 2 Smith's Rep. 404. sHawkinsv. RuU, Peake'sN.P. C. 186.

* Stewart v. Kejinet, 2 Camp. N. P. C. 177.

2 H son

466 Of Bills of .Exchange. — Protest.

son who has a right of action on the bill, it is not ncciessary that he should receive a notice from a subsequent indorser'.

When a bill is dishonoured, thfc only expe>\se the holder or other party can demand is the charge for noting and pro- testing it, notwithstanding any very extraordinary loss he may have been put to by travelling, &c. if not necessarily incidental *. Re-exchange, postage, commission, and pro- vision, are other charges to which the parties to a bill are subject. Re-exchange is the expense incurred by the bill being dishonoured in a foreign country, where it was pay- able, and returned to that in which it was made or indorsed, and there taken up : the amount of it is regulated by the course of the exchange between tlie courrtries through which the bill has been negotiated'.

But the liability to pay re-exchange does not extend to the acceptor of a bill ; he is only liable for the principal sum, together with interest, according to the legal rate of the interest where the bill is payable^.

14. Of the Protest of a BUI.

If on presentment of a bill for acceptance or payment, the drawee refuse to pay or accept, (as tiie case may be,) it is incumbent on the hoklcr, or, if he be ill or absent, on some other person for him, if the bill is foreign, iri\ mediately to protest it, and whether foreign or inland to give notice of the dishonour to all those parties to wliom he means to re- sort for payment ' ; the neglect to do which can only be ex- cused by proof that the drawer had no effects in the hands of the drawee from the time of drawing the bill to the

» Jameson v. Swinton, 2 Camp. N. P. C. 513. ^ Ciillen's Bank. Laws, 10'^. ^ Auriol V. Thomas, 2 T. H. 52.

4 Woolsey v. Crawford, 2 (ami). 'I'^S.

5 llogers V. Stephens, 2 T. 11. 713. Gale v. Walsh, 5 Ibid. 239.

timd

Of Bills of Exchange. ^Protest. 467

lime of the non-acceptance or non-payment, as the case may be'.

In foreign bilk certain formalities are required : if the person to whom the bill is addressed, on presentment, will not accept or p:iy it, (as the case may be,) the holder is to carry it to a notary public, who (on the same day, viz. the last day of grace*,) is to present it again to the drawee, and demand acceptance or payment ; which if refused, he is to make a minute upon the bill itself, consisting of his initials, the month, the day, and the year, together with his charges for the same. He must afterwards draw up a protest, signifying that the bill has been presented for ac- ceptance or payment, which was refused, and that the holder intends to recover all damages which he or any other party to the bill may susta;in on account of the dis- honour ^ If, however, no public notary should be at the place where the bill is dishonouredj the protest may be exe- cuted by any substantial person of that place in the presence of two or more credible witnesses.

In the case of foreign bills, the protest is by the custom of merchants indispensably necessary. The noting which constitutes the minute above njentioned is unknown in the law, and is merely a preliminary step to the protest, the want of whiph it will not in any case supply ^.

The protest must be written upon a proper stamp % and be made within the regular I)ours of business '', on the day on which the bill is dishonoured ''; the neglect to do which can only be excused by the illness of the holder, or cir- cumstances of a like nature ^. In practice, however, if the bill is noted on the day of its dishonour, the protest

' Orr V. Maginnis, 7 East's Rep. 359.

^Tassel v. Lee, I Ld. Ravm. 74:3. s Mar. 16.

♦IT. R. 175. Ml Geo, III. c. 98. 48 Geo. III. c. 49.

^ War. 1 12. ■ Lcftley v. Mills, 4 T. R. 175.^ ^ Fotb. pi. 144.

2 H 2 may

468 Of Bills of Exchange. — Protest.

may be drawn up any day afterwards, and bear the date of i\xe day on which the noting was made'.

In the case of iiil;incl bills, the protest for non-payment, or non-acceptance, is by no means necessary*; aud the omission of it will not, if due notice of the dishonour has been given, afl'ect the holder's riglit to the principal sum, as it would in the case of a foreign bill of exchange ^: the only benefit arising from il. Is to entitle the holder to the accumulative advantage of interest, damages, and costs •♦; toclaim which, the holder must by the fifth section of 3 and 4 Anne, c. 9. send the protest or notice thereof within four- teen days after the same has been made. If the bill is under the amount of twenty pounds, by the statute 9 and 10 Wil. III. c. 17. s. 6. it appears that the holder will be entitled to the accumulative remedy, though no protest is made.

Besides the protest for non-acceptance, and non-payment, there may also be a protest for better security. This is usual when the drawee absconds or becomes insolvent before the bill is due, or when the holder has any reason to suppose it will not be paid '. But though the holder is entitled to make this protest, the drawer or indorsers are not compella- ble to give this security ; and therefore, before the holder can sue them, he must wait until the bill becomes due ^'.

If the drawee does not choose to accept on the account of him in whose favour the bill is drawn, he may accept it supra protest^ which is adled an acceptance for the honour of the person on whose behalf it is made ". And if the drawee refuses to accept the bill, or absconds, or is incapa-

' Chaters v. Bell, 4 Ksp. N. P- C. 48.

^ If an inland bill is protestfd, it must not be done till the day after the third day of grace. (Leftlev v. Mills,! T. R. HO.) 3 Broiighv. Parkins, U\. Ravm. 993.

< Boulager v. Tallevrand, y j.sp. N. P. C. 550. 5 K^ d, 139.

« Eca\ves,pl. 22. 26. 7 Bcawcs, pi. U.

ble

Of Bills of Exchavge. —-Promissory Notes. 469

bio of making a contract, any other person may, without the consent of the drawer or intlorsers, accept it for the honour of the bil!, or of the drawer, or of any particular indorser '; and he thereby acquires a right of action against all those parties for whom he pays such acceptance *.

1'5. Of Promissory Notes^ Bonk Notes, Bankers' Notes, and Checks or Drafts on Bankers.

Promissory Notes '.

A promissory note may be defined to be a written promise to pay a sum specified at a time therein limited, or on demand to a person therein named, or his order, or to the bearer.

The validity of these notes having beeu mucli questioned, as they were considered ouly as a written evidence of the debt, and not assignable or indorsable over, within the cus- tom of merchants, to any other person, by him to whom they were made payable ; and that if they had been in- dorsed or assigned over, the person to whom they were in- dorsed or assigned could not maintain an action, within (he custom, against the person who drew and subscribed the jiote ; and that within the same custom, even the person to whom it was made payable could not maintain such ac- tion •*; it was, for the purpose of encouraging trade and commerce, enacted by the statutes 3 and 4 Anne^ c. 9. s. 1. (made perpetual by the 7th Anne, c. 25. s. S.) " That all notes in writing, made and signed by any person or persons, body politic or corporate, or by the servant or agent of any corporation, banker, goldsmith, mercliant, or trader, usually intrusted by them to sign such notes for them, whereby

» Beawes, pi. 38. Mar. 125.

= Mertcns v. Winnin;;toii, 1 Esp. N. P. C. 112.

3 The indorser of a note corresponds to the drawer of a bill; the maker to the drawee or acceptor ; and the indorsee to tiie payee, or party to whom the bill is made payable. (Per Lord PiJansficld, in Ileylrn v. Adamson, 1 Bur. 676.)

< Clerke v. Martin, 2 Ld. Raym. 758. Bulkr v. Crips, 6 Mod, 29,

such

470 Of Bills of Exchange.— Promissory Notes.

such person^ &c. or their servant or agent, promise to pay to any other person or persons, body politic and corporate, or order, or bearer, the money mentioned in such note, shall be constrjjed to be, by virtue thereof, due and payable to such person, &c. to whom the same is made payable ; and also such note, payable to any person, &c. or order, shall be assignable or indorseable over in the same manner as in- land bills of exchange are, or may be, by the custom of merchants ; and that the person, &c. (o whom the money is payable, may maintain an action for the same in such man- ner as he might do upon any inland bill of exchange made according to the custom of merchants ; and that the person, &c. to whom such note is indorsed or assigned, may main- tain an action, either against the person, &c. who or whose servant or agent signed such note, or against any of the persons who indorsed the same, as in cases of inland bills of exchange ; and that the plaintiff shall recover damages and coftts of suit ; and in case of nonsuit or verdict against the plaintiff, the defendant shall recover costs."

By this statute, promissory notes arc pl'aced upon the same footing as bills of exchange, and consequently have a similar e^rct with them, the decisions and rules relating to the one being in general applicable to the other '. And therefore, wheii a promissory note is payable at a stated time, dayi; of grace are allowable ^.

No particular words are essential to the validity of this kind of instrument ; any ordsr or promise, which from the time of making it cannot be complied with or performed without the payment of money, will, as was said before, have that effect ^ Neither is it necessary that it should contain any words rendering it negotiable •*. A note merely promising to account with another, or to his or.ltr, is suffi-

» Brownv. Harradin,4T. R. 152. •" ri>i'!.

3 Colehaa v. Cooke, Wnies,39(>. ■• t?;nitli v. Kcmlal, 6 T. R. 23.

ciently

Of Bills of Exchange, — Promissory Notes-. 471

cicnlly valid, tliough it contains no formal promise to \}ay '. To render such notes valid, however, they must be made paj-able at all events, and not dependent on a contingency for payment. They must not l^e payable out of a particular fund ; and, to be valid^ must be for the payment of money only, and not for the payment of money and performance of some other act, or in the alternative *.

But the mere acknowledgement of a debt cannot amount to a promissory note, unless there appear some words from whence a promise to pay money can be reasonably inferred. Hence the common memorandum of I O U can be con- sidered only as evidence of an account stated and settled between the parties, and a balance due from one party to the other ',

It has been a point much agitated, whether it was neces- sary that a bill or note should import to have been given for value received ; but that question was settled in the ne- gative in the case of White v. Ladwick •♦. To entitle, however, the holder of a bill for the payment of 201. or upwards, to recover interest and damages against the drawer and indorser in default of acceptance, a bill must, by the statutes 9 and 10 W. III.c. 17. and Sand 4 Anne, c. 9. s. 4. contain words to that effect. The inserting of these words is therefore in all cases ad v iseable '.

A promissory note requires no protesting, though it may have been indorsed over by a variety of people ; for, as there is no drawee, there can be no protest either for non- acceptance or for non-payment. The law considcis a pro- missory note in the light of a bill drawn by a man upon himself, and accepted at th*^ time of drawing; and therefore, in cases of non-payment, the person hoUiing the note has his

' Morrisv. Lep,2 Ld. Raym. 1396. - « Sv-e pa^e 43'] ante.

3 Fisher v. Leslie, 1 Esp. N. I'. C. 426. ■» li. II. Hil. 25 Geo. III.

6 Pishop V. Young, 2 iJos. and Pul. 81,

remedy

472 Of Bills of Excha?ige. — Bank Noles,

remedy against the drawer at any distance of time withiFl the period of six j-ears, although lie has neglected to give advice of its dishonour. This is an advantage to which the holder of a promissory note is entitled, but which docs not extend, to the holder of a check or draft.

Bank Noles,

These notes are payable on demand, and, by the general consent of mankind, are treated as money in the ordinary course and transactions of business '. But a tender of them is not sufficient, if objected to at the time of the of- fer ^; though, after such a tender, a creditor cannot arrest his debtor'. They cannot be recovered by the legal owners from a bona fide holder for a valuable consideration, and who obtained possession of them without notice of the true owners ^i for the holder of a bank note is prima facie entifled to prompt payment of it, and cannot be affected by the previous fraud of any former holder in obtaining it, unless evidence be given to bring it home to his privity '. And as possession is prima facie evidence of property in nego- tiable instruments ; in trover for the recovery of a lost note, the defendant will not be called upon to show his title to the note, without evidence from the other side that he got pos- session of it mala fide or Avithout consideration ^.

Bankers' Notes.

Bankers' cash-notes, or goldsmiths' notes, as they were formerly called, are promissory notes payable to order or bearer on demand, and are transferable by delivery. They may however be negotiated by indorsement, in which case

' Miller T. Race, 1 Bur. 457. ^ Wriaiht v. Reed, 3 T. R. 554.

» 38 Geo. III. c. 1. s. 8. 43 Geo. III. c. 18. s. 2.

* Lowndes etal. V. Anderson, et al. 13 East's Rep. 130.

5 Solomons V. Bank of England, 13 I'.ast's Rep. 135.

6 King V. Milsom, 2 Camp. N. P. C. 5.

the

Of Bills of Exchange.-^Checks or Drafts. 473

the act of indorsing will operate as the making of a bill of exchange. On account of their being payable on demand, they arc considered as cash, whctlier payabFe to order or not ; but if presented in due time, and dishonoured, they will not amount io payment'. At present cash-notes are seldom made, except by country bankers, their use having been superseded by the introduction of checks-.

Checks or Drafts on Bankers.

A check or draft is as negotiable as a bill of exchange'. In case of default of payment by the drawee, the assignee may maintain an action against the assignor on the consi- deration of the transfer, unless it was expressly agreed at the time of the transfer that the assignee should take the instru- ment assigned as payment, and run the risk of its being paid, or that he has not used due diligence ; in which cases it will amount to payment, and in <he event of the failure of the banker, the assignor and every other i arty to tlie check will be discharged ■♦.

As to the precise time when a check should be presented for payment, there is some degree of uncertainty. It m.ay, however, be collected from the cases, that a check on a banker, payable on demand, ought, if given in the place where it is payable, to be presented for payment the same day it is received, or at furthest earl}' in the next morning, unless prevented by distance or sotne inevitable cause or ac- cident, which in all cases will excuse the neglect to make a presentment so soon as would otherwise be necessary 5. And therefore, where a check received at half-jjast eleven in the morning was not presented for payment till the next &dy

' Owenson v. Morse, 7 T. R. 61. 2 Chitty.

3 Boehm V. Sterling, T T. R. 423.

♦Owenson v. Morse, 1 T. R. 64. Ward v. Evans, 2 Ld. Ravm. 930. 5 Kyd, 45. EaylCy, G5. n. c. Ward v. Evans, Ld. Kajm. 92S." Flctclier T. Sandys, 'J Str. 1248. Tindal v. Brown, 1 T. R. 16S.

at

47-i Of Bills of Exchange. — Checks or Draffs.

at two, the holder was held to have been jriiilty of laches, the banker haviiig stopped pajmcnt at that time'. But in j»int of la\v> there is no otlier settled rule than that (he pre- sentment muat be made within a reasonable time, which, as observed by Lord Elh'uborongli, must be accommodated to other business and affairs of life, and the party, is not bound io neglect every other transaction in order to present the check on the same day that he receives it*.

Checks received by bankers in the course of one d;iy, if presented for pnynicnt on the following day, such present- ment will be Valid K

Payment of a check or draft before it is due is contrary to the usual course of business. And therefore, where a banker paid a check before it bore dafe, which bad been lost by the payee, he was held liable to pay the amount over again to the loser •*.

So, if bankers pay a ciuicelleJ check under circumstances ■wliich ought to have excited their suspicion, and induced ihem to make inquiries before paying it, they cannot take credit for the amuunt in their customer's account K

When payment of a bill or note is made by the drawee's giving a draft or check upon a baiiker, it is not adviscable to give up the bill until the draft is paid^.

I'l the holder of a draft on a banker receives payment thereof in tlie banker's notes instead of cash, and the banker fails, the drawer of the check will be discharged '.

By the statute U Geo. IJI. c. 98. sched. A. draffs or checks for the paj-ment of money to the bearer on demand, bearing date on or before the day on w hich they are issued.

' F.n^f India Company v. Cliitly, S Sir. 1H5.

^ f3;irl>Miire v t'aik(-r, 6 I atts K^p. S.

s RuckForcl V. Riilse, 2 (amp. 537.

* Da Sylva V. Fulifr, ChiU^, liiT.

8 Sch;)lf y v. Riimsbottoin, '^ <.'arDp. N.P.C. 48&.

? Aiar. 2i. ' Vernon v. Bovcric, 2 Sho',\'. 29G.

and

Of Bills of Exchange. — Usury. 4T5

and at the place where t!ie same are made, and drawn on a banker residing, or transacting the business of a banker, within ten miles of the place at which such drafts or orders are drawn or given, are exempt from stamp duties, provided that the place where the check Avas drawn is truly expressed in or upon such drafts or checks.

In the construction of this act, it has been determined that the person on whom the draft or check is drawn muit be bona tide a banker', and that if post dated and not stamped, it will be invalid \

16. Of Usury on Bills, Notes, &c.

As by the statute 12 Anne, st. 2. c. 16. all securities given for an illegal consideration are declared to be invalid ; if a bill of exchange, or note, therefore, is given in consequence of a contract usurious in its inception ', or of a subsequent usurious agreement on the indorsement^, or the discounting of it', it is absolutely void. And should it be in the hands of a bona fide holder, who may have taken it in the fair and regular course of busuiess without any notice of the usury, he can only recover the amount fiora the person from m horn he received it ; and moreover only on the original consi- deration^.

So if a bill of exchange is drawn upon an agreement be- tween one of the original parties to it, and a person not a party to it, that the latter shall get it discounted by another person likewise not a party to the bill, upon usurious terms, and it is so discounted accordingly, the bill is void for the usury in the hands of an innocent indorsee".

» Ruff v. Webb, 1 Esp. N.P. C. 128.

* Allen V. Keeves, 1 Kast's Rep. 4.S5. 3 Lowe v. "Waller, Doug, 735.

4 Daniel v. Cartony, 1 Esp. N. P. C. 274.

5 Acland v. Pearce, 2 Camp. N. P. C 599. 5 Ibid. Bowyer V. Bampton, Str. 1155.

7 Young V. Wright, 1 Camp. N.F.C. 139.

But

476 Of Bills of Exchange^ — Usury.

Biit if a new security is given, in lieu of a prior one, which was void in respect of the usurious consideration on which it was foundedj it will not be invalid in the hands of a bona fide holder for a valuable consideration, and without notice of the usury ', though it would be otherwise in the hands of the party to the first illegal transaction *.

Neither is a fresh promise or security given by the bor- rower to repay the principal and legal interest, and founded on a sufficient consideration, invalid, the original usurious securities having been destroyed by the consent of both, parties '.

§o if a credifor takes the joint security of his debtor and another person in satisfaction of his debt, it is not avoided by a plea tiiat it was made upon an usurious contract be- tween the obligors, provided the obligee was not privy to the usurious transaction "♦.

But a contract reserving to the lender a greater advantage than is allowed by the statute, is usurious, and therefore void ; for no colour, however specious, will exempt an usu- rious transaction from i\\Q danger of the statutes against usury. Therefore, if on discounting a bill or note the party requires the borrower to take goods in part, which are above the value which they would fetch on a resale, the transaction will be within the meaning of the statute ^ And this decision receives further authority from the case of Davis v..Hardacre^, in which Lord Ellenborough said, "If goods are forced upon a borrower, I must have proof that they were estimated at a sum for which he could render them available upon a resale, not at what might possibly be a fair price to charge to a purchaser who stood in need of them."

' Cuthbert v. Haley, 8 T. R. 390.

"^ Witlmm V. Lee, 4 l.sp. N.P. C. 264.

3 Barnes v. IJedley, 2 Taunt. ISl.

* Kllis V. Warnes, Cro. /ar. .S3.

5 Coombe V. Miles, 2 Camp. N. P. C. 553. « Ibid. 575.

But

Of Bills of Exchange. — JJsury, 477

But frohi the above case of Coombe v. Miles, if it appears that the borrower voluntarily acceded to such mode of dis- count as advantageous to him, the plaintiff is not bound to prove that the goods were fairly charged, but the burden of the proof lies upon the defendant.

It is not usury for an acceptor to discount his own ac- ceptance at a premium. Thus the acceptor cf a bill dated 4th of July, and due the 7th of September, taking a pre- mium of sixpence in the pound from the indorsee and holder for payment of the bill on the 20th of August following, before it was due, was held not to be guilty of usury, tliere being no loan or forbearance. Lord EUenborough said, that to constitute usury there must be a direct loan, and a taking of more than legal interest for the forbearance of repayment; or there must be some scheme contrived for the purpose of concealing or evading the appearance of a loan and for- bearance when in truth it was such. But here v/as no loan or forbearance, only an anticipation of the payment of a debt by the party before the time when by law he could be called Upon for it. He admitted that the defendant had been guilty of a very improper practice, but not of usury '.

If a bill or note is payable at a short date, it has been ad- judged not to be illegal to deduct the discount^. And it has been decided, that bankers, in discounting bills, may not only deduct five per cent, but also a reasonable sum agreeable to the usage of the trade, as commission for their trouble and risk in remitdng the bill or note for payment, and for other necessary and incidental expenses'. But if a banker deducts the discount of five per cent, upon a bill for the whole time it has to run, and, instead of paying money for the bill, gives a draft even at a short date, this has been held

' Barclay v. Walmsley, 4 East's Rep, 55. ^ l>loyd V. Williains, 2 Bl. Rep. 792. 5 Winch V. Fenn, cited iti '2 J'. II. 52.

to

478 Of Bills of Exchange. -^Usurij.

to be usury ; for lie not only gains five per cmi. but aW the further benefit of the money till that draft is paid '. Had it, however, been done at tlic request or for the convenience of the holder, who might have had cash instead of such bills, it would not amount to usury *.

Bankers cannot charge compound interest without an express conti^ct for that purpose'. Bni it has been de- cided, that they may strike a balance in their accoiints, and legally charge interest on that balance, if not done too frequently, and out of the ordinary course of business ■♦.

If a person discounts a bill for the drawer upon the terms that he shall receive five per cent, discount, and an addi- tional suin for guarantying the payment of the bill by the acceptor, he having no doubt of the acceptor's solvency, this is an usurious contract K

So if a factor' advances money to purchase goods, and he receives, besides legal interest, a higher commission on these purchases than he would have been contented to take had he not advanced, the transaction is usurious, and a bill given for the same will be invalid ^.

But if a broker gets bills discounted by another person at legal interest, the transaction is not usurious, and will not affect the valiuity of the bills in the hands of a bona fide indorsee, however large a commission the broker may have received himself, and although he is liable to the penalties of the statute'.

Where a check is given on an usurious transaction, with- out a special agreement to consider the check as cash, it

" Matthews V. Griffiths, Peakc's N. P. C, 200.

' Sir B. Hammrt v. Sir W. Yea, \ Bo«. and Pul. 141.

3 DriM-es V. FinniT, 2 V^my,. N. P. C 486. n.

4 Caliot V V. alker, I Anstr. 595. s Lee v. Cass, I Taunt. 511.

6 Hani? v. Dost^^n, 2 Camp. N. P. C. 348.

7 Uagnall v. Vv igley, 1 1 East's Rep. 43. 2 Camp. N. P. C. 33. S. C.

cannot

Of Bills of Exchange. — Interest . 479

cannot be deemed an advance of money within the statute of usury, until cash has been actually received for it'.

In all cases where a bill is in its origin illegal and usuri- ous, or where the holder has becotne a party to the usury, no action can be sustained for even the principal and lawful interest *. But thong-h all securities given on an usurious consideration are immediately void, yet the penalty imposed by the statute J 2th Anne is not incurred till more than legal interest is actually paid ^

17. Of Interest on Bills, &c.

As interest is generally payable on all liquidated sums, payable at a certain time ^, it is recoverable on bills and notes payable at a day certain ^, for money lent '', and for money paid "^ ; but it is not recoverable on a debt for goods sold, even on limited credit ^, or for work and labour done^.

The time when interest begins to run upon a bill or note is from the time of making the protest '°; and when it stops is when final judgement is signed". If it is expressed in the instrument itself that interest is to be payable, the time of its payment will then depend upon the conditions specified. When bills or notes are payal)le on denjand, interest is recoverable from the time of the demand proved '*. When a note is pnyable by instalments, and on failure of

» Brooke v, Middleton, 1 Camp. N. P. C 445. EorrodaUe v.Middlelon, 2 Ibid. 53.

' Benfi*!d v. Solomons, 9 Vf-s. Jun. 84.

3 Fisher V. Bpa«!cx, Doup-. ->i3.

4 Blaney V. tlmdrirk.a Bl R.>p.7Gl. Robinson v. Eland, 2 Bur. 10b5.

5 Upton V. Lord Ferrers, 5 V 'S. .Jun. 803. « Robinson v. Bland, '? Bur. 1085.

7 Trelawn* v. Th'):'ias, I Hen Bl. S05.

8 Gordon V. Swan, '•sJ East's Rep. 119.

9 Blaneyv Hendrirk,2Bl Rop. 781. *" Louviere V. Lai'bray, 10 Wo'l. S8.

" Robinson v. B!ard,".i Bur. 1085. ^- Farquhar v. i\iorriS, 7 T. R. l'J-1.

payment

480 OfBankrupiaj,

payment of any instalnicnt the ^vliole is to become dii?, the interest is to be Ciilcuhited on the whole sum remaining un- paid on default of any instalment, and not on the respective instalments at the respective times when they would becomd payable '. And when goods arc sold to be paid for by a bill of exchange, and the purchaser does not give the bill accord- ingly, the vendor is entitled to interest from the time the bill, if given, Avonld have become due % whether the defendant has or has not accepted the goods ^

To entitle a holder of an inland bill or note for the pay- ment of 20 1, or upwards to recover interest, &c. protest of the dislionour must have l>een made by virtue of the statiites 9 and JO Will. III. c. 17. and 3 and i Anne, c» 9.

CHAPTER XI.

OF BANKRUPTCY.

1 . What Persons are liable to the Bankrupt Laws*

All persons, whether natural born subjects, aliens, or denizens, being in trade, and capable of making binding contracts, by virtue of the statutes 13 Eliz. c. 7. s. L I Jac. I. c. 15. s. 2, and 21 Jac. I. c. 19. s. 15. are liable to the bankrupt laws. Clergymen ^, and persons having privilege of parliament, whether peers or commoners ^j are subject to the operation of the bankrupt laws. But infants ** and married women ' cannot be made bankrupts. And if a feme sole, being a trader, marries, a commission issued after the marriage cannot be supported ^. To these

' Blakf V. Lai^rence, 4 Esp. X. P. C. 147.

- Porter v. Palsgrave, 2 Camp. N. P. C. 480. Bcecher v. Jones, Ibid. •128. n.

3 Boyce v. Warburton, Ibid. 480. < Hankey v. Jones, Gowp. 7-J5.

^ 4 Geo. III. c. 33, 45 Geo, III. c, 124, s, 1. Ex parte Meymot, 1 Atk. 200.

« i:x parte Sydebofhani, Ibid. 146. 7 Co. B, L. S9.

* Jix parte Mcarand W'if<-, 2 Bro. C. C 266.

— ' positions

Of Bankruptcy,— Of Acts of Trading, 481

positions there are however exceptions. For a feme covert, being a sole trader, according to the custom of London, is subject to the bankrupt laws with respect to her separate effects in trade ' . So where the husband has abjured the realm, become an exile, been transported, is divorced a vinculo matrimonii, or the like, and the wife has become liable on her contracts so as to be sued at law and charged in execution, she is liable to a commission of bankruptcy *.

And in ex parte Watson ^, an infant who had held him- self forth to the world as an adult, and sui juris, and had traded in that character for two years, was held liable to the bankrupt laws.

In the case of partnerships, all the partners may become bankrupts together ; or one only may become bankrupt, even in respect of a joint debt due from all the partners, while the others remain solvent •*.

2. What constitutes a Trading within the Bankrupt Laws

Any merchant or other person using the trade of mer- cliandisc, by way of bargaining, exchange, bartering, che- risance, or otherwise, in gross, or by retail, or seeking his trade of living by buying and selling, is subject to the bankrupt laws \ Also bankers, brokers, factors ^, dealers in coals, scriveners', vintners, brickmakers ^, butchers 9, manufacturers of every description who purchase commo- dities, and manufacture tlicni into articles for sale, as clothiers, locksmhhs, brewers '°, goldsmiths", plumjjers '*, smiths'^, shoe-makers '"^, nailors ", tanners '^', bakers'", railU-

' Ex parte Carrin>?ton, 1 Atk. 200. ^ Corbet v. Poelnitz, 1 T. R. 5.

3 J 6 Ves. Jun. t>65. ■• Crisp v. Perritt, Willi-g, 467.

s 13 Eliz.c. 7 ; n .Trie. I.e. 19. s. 2. 6 5 Geo. II. c. 30. s. 39.

' Ex pjirte Pjiinhaii, 1 Atk. 111.

* Ex parte II;lrri^on, I Br». C. C. 173.

9 Dally V. Smith. 4 Bur. 2148. '0 I Ld.'Raym. 610. " Stone, 120.

" Hut 46. • '3 2 Bl. Com. 476.

•* Criinipe v. Rarne, Cro. Car. ."^l. '5 Goodinge, 12.

»* Newton v, Trigg. 3 Mod. 33U. '' Bcawes, Lex Merc. 488.

2 I ners.

482 Of Bankruptcy. — Of Acts of Trading,

ners, dyers ', pawnbrokers *, smugglers ', and carpenters wlio buy materials for the use of their trade ■♦, are liable to a commission of bankrupt.

'But contractors for victualling the royal navy K drovers of cattle, farmers, graziers'', innkeepers % alehouse keepers or victuallers^, receivers general of the parliamentary taxes', and the holders of stock in the Bank of England, in the East India, South Sea, Guinea, London Assurance, Royal Exchange, and English Linen Companies, and ad- venturers in the Royal Fishing Trade, are not, in respect of such stock, liable to the bankrupt laws.

Neither is it a trading sufficient to subject the party to be made a bankrupt, if the owner of a mine buys candles and sells them to his workmen'"; or if a schoolmaster buys books and shoes and sells them at a profit to his scholars ". Nor is a maker of alum '% or an underwriter, merely as such, within the statute '^

Neither is an innkeeper or a victualler subject to the bank- rupt laws while he confines himself to supplying his guests with necessaries, or selling liquors out of his house in small retail quantities. But if he deals in liquors as a distinct bushiess, and sells them to all persons who apply for them, he may be made a bankrupt ■'♦.

So if a farmer buys horses for the express purpose of selling Etgain at a profit '', or buys potatoes, and sells them with others raised upon his own land '^, he may be a bank- rupt upon such trading.

' Port V. Turton, 2 Wils. Ifi9. ^ Ilighmore v. Molloy, 1 Atk. 205.

' 3 Exvartp Mrymott, Ibid. lOO.

4 Chapman v. Lamphirc, 3 Mod. 155. 5 i Vent. 270.

• 5 Geo. II. c. 30. s. -10. ^ 3 Lev. 310. » 4 Bar. 2064.

9 5 Geo. II. c, 30. s. 40. '» Cooke, B. L. 58.

" Valentine v. Vaughan, Peake, N. P. C. 76. »» Cooke, B. L. 60.

»3 l-x parte Bell, 15 Ves. Jun S.'i.'i.

»« Patinan ▼. Vaiishan, 1 T. R. 572. Holme and Wilson v, Beugb, cited inlSel«. N. P. liJ9. '5 Bartholomew V. Sherwood, 1 T. R. 573. >' Alajov. Archer,! Str. 513.

But

Of Bankruptcy. ^Of Acts of Trading. 483

But in Stewart v. Ball ', it was held tliat a farmer, who occasionally bought hay, corn, horses, pigs, &c. with a view to sell again for profit, did not thereby make himself a trader within the bankrupt laws, because these commodi- ties are incident to the occupation of a farmer.

A farmer and grazier exercising also the business of a drover, by buying and selling cattle from time to time, be- yond the occasions of his farm, is exempted from the opera- tion of the bankrupt laws, by stat. 5 Geo. II. c. 30. s. 40. And the purchase of hay for the support of his cattle, and the sale of part of it again, because it was more than was required for their consumption, will not ma'ke him a trader ^

And though a brickmaker is within the statute, yet a distinction subsists where the business is carried on only as a mode of enjoying the profits of a real estate, and when it is carried on substantially, and independently as a trade. Thus, where a devisee for life of an estate, part of which consisted of brick ground, made bricks there for sale gene- rally, with a view to profit, he was held not to be a trader within the meaning of the bankrupt laws, though he pur- chased the coals and some of the wood used in burning the bricks, and had, before the estate came to him by devise, occupied the same ground as a brickmaker for general sale '.

If a man buys a coal-mine, works it, and sells the coals, he is not a trader within the meaning of the bankrupt laws *. But if he sells the coal from the mine, together with others which he bought at market, then he becomes a trader with- in the statutes 5.

A builder who buys timber which he works into the

> 2 New Rep. 78. ' Bolton v. Sowerby, U East's Rep. 274-

i Sutton V. Weelev, 7 East's Rep. 442.

« Port V. Turton,2 Wils. 169. 5 Ibid. 170.

S I :2 liouses

484 Of Ba7ikriiptcy.—0f Acts of Trading,

houses which he builds, and sells the houses when built, is nof a trader -within the statute '.

Neither is the building of a <heatre to be held in shares, and lo be {aid for by measure and value, and of which the builder held nine shares, a trading within the bankrupt la^\s*.

Being part OAvner in a ship, unless he freights it, or in a barge, waggon, or hackney coach, will not nuike a man a trader '.

Drawing and redrawing bills of exchange, with a view- to gain a profit upon (lie excliange, is a trading sufficient to subject the party to be made a bankrupt, if it be general, and not merely occasional ■♦. But an occasional drawing and redrawing of bills on a jxrson's own account, for the purpose of raising money to improve his estate, or for other private occasions, and j>;tying for their being dis- counted, besides interest, and borrowing accommo:la(ion notes in exchange for his own to the same amount, will not make a man an object of the bankrupt laws '• And the statutes relating to exchequer bills expressly provide that a party circulating the same shall not be deemed a trader within the bankrupt laws^.

A trader having retired from business, may become a bankrupt in respect of debts contracted during the period of iiis tiadinc:'.

One single act of buying and selling will not make a man *t trader, nor will buying only or selling only ; but it must be a repeated practice both of buying and s( lling in order to giii a livefihood^. Therefore a mere artisan or handicraftsman.

' Clirke V. Wisdom, 5 Fsp. N. P. C. 1-17.

'" Wiiliams v. Stevens, 2 lamp. N. P. C. .'{00.

^ Kx parte Bowf;:, A Ves. .Jnn. 168- I Ve:it. 29.

* K'ich;trd5.on V. Bradshaw, I Atk. V2S.

^ llaiikev V. Jones,, Cowp. I'b. ° Co. B. L. 67. ^ 1 Vent. 5.

" '2 lil. Colli. iTG. ) Com. Dig. b22. Holroyd v. Gwjnne, 2 Taunt. ITC.

who

Of Bankruptcy.— Of Jcis of Bankruptcy. 485

who obtains his liviii<r by his personal labour only, is not subject to the bankrupt laws'. And on this principle it has been decided, that if a person imports goods without selling them *, or sells olF i^'oods boug-ht for his private use, or for any special purpose', it is not a trading within the meaning of the statule.

If the executor of a person wlio was a trader dispose of his testator's stock in trade, it will not be such a trading as to subject him to be made a bankrupt, even if the executor found it necessarj' to purchase articles to mix with and make the stock of the testator more fit for sale**. But if the exe- cutor buy the sjime articles as the testator dealt in, and sell them entire, he will be a trader, and on such dealing be subject to a commission of bankrupt ^.

3. What Acts amount to Bankruptcy.

The better to obtain a clear and comprehensive view of the decisions upon the subject of this section, we shall con- sider separately each head of bankruptcy upon which any question appears to have been raised ; premising that the statutes of bankruptcy are, as to the act of bankruptcy and trading, conflned to England, and do not extend to acts done in other dominions of Great Britain, or in foreig-n countries *".

But if the trading should be by buying only in England, and selling beyond the sea ^ ; or buying beyond sea, and sell- ing only in England ; or if the party should only trade to England, and not reside there, it is a trading within the bankrupt laws^. And if a party residing abroad comes to

' Chapman y. Lamp hi re, 3 Mod. 155. "2 Keb. 487.

3 1 Vent. '29. ♦Cooke, B. L. 44.

« Ex parte Nutt, 1 Atk. 10>. 6 Alexander v. Vaiighan, Cowp. 398.

' Dodsworth v. Anderson, Raym. Rep. 315.

* Alexander v. Vaughan, Cowp. 398. Inglis v. Grant, 6 T. R. 350.

England J

486 Of Bankrupt cy.-^Of Acts of Bankruptcy.

England, and commits an act of bankruptcy, he is subject to the bankrupt laws '.

So if one of two partners in a house in Dublin purchase goods in England, in the joint name of himself and partner, it has been determined that the debt so created made the partner resident in Dublin subject to the bankrupt laws *.

With respect to the act of bankruptcy, stopping pay- ment, or refusing payment, does not amount to an act of bankruptcy, if the party appears in his business'. But by the statutes ISEliz. c. 7. s. 1. and IJac. I. c. 15. s. 2. it is enacted, that the following acts committed by any person using the trade of merchandise, &c. shall be acts of bank- ruptcy.

" Depart the Realm.'*

This must be done with an intention to defraud or delay creditors ; for delay without such intention will not be an act of bankruptcy •*.

But an intention to delay creditors, although no delay takes place, is an act of bankruptcy ^

" Or begi?i to keep House. ^^ To constitute an act of bankruptcy, (he beginning to keep house must be done with an intent to defraud or delay cre- ditors ; which intent is evidenced by being actually denied to a creditor^. But an order to be denied is not sufficient without an actual deniaP. And the denial must be to a creditor who has a debt due to demand. A denial, therefore, to the holder of a security payable at a future day will not be sufficient, although the security be such as may by the statute 7 Geo. I. c. 31. s. 1, 2. be proved under the com- mission^. But a denial to the holder of a bill, or his clerk,

» Williams v.Nunn, I Taunt. 270. ' Ibid. 3 Cullen's B. L. 65.

« Fowler V. Padget, 7 T. R. 509. Ex parte Mutrie, 6 Ves. Jun. 576.

5 Robertson v. LiddcU, 9 East's Rep. 487.

* Garratt v. Moule, 5 T. R. 575.

' Hawkesv. Saunders, Cooke, B. L. 74.

s Ex parte Levj, 7 Via. Abr. 6. pi. 14.

on

Of Bankruptcy ,— Of Acts of Bankruptcy , 487

on the morning of (lie day on wliich it becomes due is suffi- cient, and cannot be avoidid by aflcrwirds appeiriag in public, and paying the bill before five o'clock of tliat day'. So in the case of Jeffs v. Smith, 2 Taunt. 401. it was held that a denial by tlie express order of the trader to a tax- gatherer who called for the taxes, was an act of bankruptcy.

A denial by order of a trader to a creditor is liot of itself an act of bankruptcy, but only evidence of it, and therefore open to explanation. Being denied when sick, engaged in company, particular business, or owing to the lateness of the hour, are not acts of bankruptcy*.

On the other hand it is not necessary, in order to consti- tute a denial an act of bankruptcy, that the bankrupt should have given orders to deny any particular creditor ; for a general order of denial, followed by an actual denial, is suf- jScient^

It is not absolutely necessary that the denial should be to the creditor personally '* ; a denial to his clerk ^, or to his servant^, is sufficient.

In a case where it appeared that the creditor, to whom the denial was supposed to have been given by the plaintiff's clerk, had only demanded payment of the debt, but had not asked to see the plaintiff personally, and that the clerk sup- posed to give the denial had no specific directions for giving it, it was held that such denial did not amount to an act of bankruptcy '.

A denial to avoid an attachment for non-delivery of goods,

' Colkett V. Freeman, 2 T. R. 59. Mucklow v. Mav, 1 Taunt. 479.

* Ex parte Hall, 1 Atk. 201. Worseley v. Ue Mattos, 1 Bur. 484. Bui. N. P. 38.

3 Round V. Byde, Cooke, B, L. 94. Mucklow V. May, I Taunt. 479.

* Bramley v. Mundee, Bui. N. P. 39. s Colkett V. Freeman, 2 T. R. &9.

* tx parte Bamfoinl, 15 Ve?. Jun. 449.

"i Dudley T. Vaughan, 1 Camp. N. P, C. 271.

as

488 Of Bankruptcy . — Of Acts of Bankruptcy.

as it is only to evac^e doini^ a duty, does not amount to an act of bankruptcy'. But a denial to a creditor to avoid service out of chancery, upon a decree for payment of a debt, is otherwise^.

A conceited act of b;inkruptcy will not support a com- mission : and therefore, if a creditor calls upon the bank- rupt, by aii^reement, thit he may deny himself, or otherwise concerts an act of bankrnptcy wltli the bankrupt, the com- mission cannot be supported upon such concerted act^ If, however, a creditor not privy to the agreement calls upon the bankrupt, and he is denied, the denial will be good evidence of an act of bankruptcy •♦.

" Or alsent himself." This if done with a view to delay creditors is an act of bankruptcy, although no creditor has been thereby de- layed '. But it is not an act of bankruptcy if he absent himself for any other purpose than to defraud or delay hig creditors : as if to avoid an arrest upon an excommunicato capiendo '^, or the service of process to enforce a decree in chancery, or an attachment on an award for non-delivery of goods pursuant to the award • ; for these are not debts, but duties only.

*' Or willingly and fraudulently procure himself to he ar- rested or yield himself to prison." This, if done for a fictitious debt, is deemed an attempt tp defraud creditors, and cons( quently an act of bankruptcy. And even where a man yields himself to prison for a just debt, if done with an intent to delay or defraud creditors,

' Linirwood v. Eade, 1 Atk. 196. "^ 2 Com. Dig. 5.

3 BrHmley v.Mundee, Bill. N.P.,^9. Ex parte Bourne, 16 V^es.Jun. 145.

4 hx parte Edmonson, 7 Ibid. 30.S. Ex parte Bourne, 16 Ibid. 1-15.

5 Bistg V. Spooner, 2 Esp. IS. P. C. 651, Judine v. Da Cosbcns, I New Rep. '234.

« I Com. Dig. 521. ' Davis's B. L. 45.

anc^

Of Bankruptcy . — Of Acts of Bankruptcy. 489

and the party lies in prison two months, it is an act of bank- ruptcy '.

The act of bankruptcy by lyin:^ in prison two months, relates to the first day of the surrender*. But where bail is really put in, the bankruptcy takes its operation from the time of the surrender '. In case of mere formal bail, how- ever, the l)ankruptcy relates to the time of the first arrest^.

*' Or willingly or fraudulently procure his Goods, Money, or Chattels to be attached or sequestrated.''

The attachment meant by the legislature, is that by which suits are commenced in Loudon, Bristol, and other towns, where that species of process is made use of. Hence, where a person executes a bond an 1 warrar.t of attorney to confess judgement, either for a boiia tide debt % or for a larger sura than is really due ^, and judgement is entered up accord- ingly, and the debtor's goods taken in execution, such exe- cution is not an attachment, and consequently is not an act of bankruptcy within the meaning of this clause.

Neither is an adverse attachment or sequestration within the meaning of the statute : to produce this effect, it must be by the party's procuring, with an intent to delay cre- ditors ^

*^ Or depart from his Dwelling- house." To constitute this an act of basikruptcy, the bankrupt ''s intention to delay his creditor, by departing from his dwell- ing-house, is sufficient ^ But the motive of the party may be explained by circumstances which will negative the ap- parent intent '^. A. compulsory absence, as in the case of being arrested, will not be an act of bankruptcy '°. Nor an

' 13 Eliz.c.T. l.Tac. I.e. 5. Ex parte Tlarton, 7 Yin. Abr. 61, 62, pi. 15.

* King V. Leith, 2T. R. 141. ' 3 Hose v. Green, i Bur. 4:>7.

* Ibid. 5 Harwood v. Spottiswood, Cooke, B. L. 100.

* Cianey v.Hayley, Cowp. 427. 7 2 Com. Dig. 6.

* Hammond v.Hinks, 5 Lsp. N. P. C. 139.

^ Fowler v. Padget, 7 T. R. 509. '" Green, 63-

absence

490 Of Bankruptcy. — Of Acts of Bankruptcy .

absence to avoid an attachment for not performing an award for ttie delivery of j^oods ' : but it is otherwise if for the payment of a sum of money.

*^ Or suffer himself to Is outlawed.** An outlawry suffered must be with an intent to defraud creditors, otherwise it is not an act of bankruptcy *.

*' Or make or cause to he made any fraudulent Grant or Con- veyance of his Lands, Tenements, Goods, or Chattels.**

If a trader in contemplation of bankruptcy, in order to pay even a just and bona fide creditor, or one who by pos- sibility may become a creditor {viz. a surety), assigns by deed all, or even a part of his effects to such creditor, the deed is fraudulent, and consequently an act of bankruptcy, whether possession was delivered to the creditor or not ^. And the same rule holds if the assignment be to some cre- ditors, but in total exclusion of others ; or if the deed is exe- cuted in concert Avith several creditors, upon trust to pay all, and is afterwards abandoned by the creditors '♦. An assign- ment of all a trader's effects for the benefit of all his creditors, unless every creditor has concurred, is an act of bankruptcy ^ But those who execute the deed cannot set it up as an act of bankruptcy^.

And an assignment of part of a trader's estate and effects, if made in contemplation of bankruptcy, will be fraudulent, and of course an act of bankruptcy ". But if a trader exe- cutes an assignment by deed of part of his effects, and de- livers possession, or a nominal possession, and it does not

* Lingwood v. Eade, 1 Atk. 196. - 2 Sid. 69.

3 Worselcy v. Demattos, 1 Bur. 467. Wilson v. Day, 2 Bur. S27. Has- sel V. Simpson, Dnug. 88. n.

* Tappcnden v. Burgess, -1 East's Rep. 230. 5 Kettle V. Hammond, Bui. N. P. 40.

* Bamford v. Baron, cited in 2 T. R. 594.

' Linton v. Bartlet, 3 Wils. 47. Devon v. Watts, Doug. 86.

appear

Of Bankrupt C1J. — Of Acts of Banknipfcr/. 491

appear that he had his bankruptcy in contemplation, the assignment will be good, and not an act of bankruptcy '.

In the conveyance of the whole or part of a bankrupt's estate, the circumstance of his being, at the time of the con- veyance, under arrest at the suit of the creditor to y/hom the conveyance is made, will not give validity to the transac- tion *.

A conveyance of the whole or part of a trader's effects must be by deed to be valid. Therefore a fraudulent con- veyance not by deed is not an act of bankruptcy K But such conveyance, tliough it does not amount to an act pf bank- ruptcy, will be void by reason of the fraud •♦.

Having stated the decisions which have been made upqn the several acts of bankruptcy enumerated in the 13 Eliz. c. 7. and 1 Jac. I. c. 15. we shall proceed to the con- sideration of such acts as are mentioned in 21 Jac. I. c. 19. s. 2.

" Procuring or obtaining any Protection, not leing law^ fully protected by Privilege of Parliament."

By the statute 7 Anne, c. 12. s. 5. traders are declared not to be entitled to the protection given by that act to ambas- sadors and their servants.

" Or being arrested fur Debt, shall, after his Arrest, lie in Prison two Months or more, tipon that or any other Arrest or Detention i?i Prison for Debt."

In the construction of the act it has been determined, that lying in prison two lunar months will make the party a bankrupt from the first arrest ; and that in computing the time, the day of the arrest is to be included K But if there is not a continuing imprisonment from the time of the arrest,

> Jacob V. Shepherd, 1 Bur- 478. • Manton v. Moore, 7 T. R. 67, » Newton v. Chantler, 7 East's l?ep. 138.

3 Martin v. Pewtress, 4 Bnr. 2477. Rust v. Cooper, Cowp. 629. * Ibid. s GlassingtoD v. Rawlins, 3 East's Rep. 407.

then

492 , Of Bankruptcy . — Of Acts of Bankruptcy.

then the intention of the legislature appears to have been, that the two mouths should run only from the time of the party's going to prison, and not from the arrest '. Where bail is really put in, the bankruptcy only relates to the time of the surrender*.

" Qr he'ing arrested for 100 I. or more of just Debts, shall at amj time ajter such Arrest escape out of Prison."

This must be an escape against the v/ill of the sheriff, and such as shows that he intends to run away '.

The last mode by which an act of bankruptcy may arise depends on the statute 4 Geo. III. c. 33. which enacts, " That the creditors to a certain value, viz. one creditor, or two, being partners, to the amount of 100/. two creditors to the amount of 150/. and three to the amount of ^0/. of any trader within the description of the bankrupt laws, having privilege of parliament, may (upon affidavit of the debt, and trading of the debtor, filed of record in any of the courts at Westmmster,) sue out a summons, or original bill and summons, against such trader, and serve him with a copy; and if he shall not, within two months aflxr personal service thereof, pay, secure, or compound the debt, or enter into a bond in such sum, and with such sureties as the court shall approve of, to pay such sum as shall be recovered in such action, with costs, he shall be adjudged a bankrupt from the time of the service of such summons."

This provision of the legislature, as Mr. Selwyn observes 4, was salutary ; but having, on some occasions where bonds had been given in pursuance tiiereof, been rendercvl nuga- tory by the difficulty, and sometimes by the impossibility, of enforcing the entering of appearances in the actions, for the payment of the sums to be recovered, in which such

' Barnard V. Palmer, \ Camp. N.P.C. 509, ' Bui. N. P. 39. Tribe v. Webber, Willos, 464. 3 Rose V. Green, 1 Bur. 437. •» >'. P. ^06.

bonds

Of Bankruptcy . — Of the Petitioning Creditor's Delt. 493

bonds had been given, it was enacted by the statute 45 Geo. III. c. 124. s. 1. " that every person, deemed a mer- chant, bankc^r, broker, l^ictor, scrivener, or trader, having privjlog-eof parliament, shall be adjudged a bankrupt, unless he shall, within two months after being served with the pro- cess, enter a common appearance in the court in which the action is brought. And it has been determined, that by vir- tue of this statute, if such ])rivileged trader does not obey an order of the court of Chancery or Exchequer to pay money, lie thereby commits an act of bankruptcy, and may be de- clared a bankrupt accordingly".

Each of the acts of bankruptcy which have been specified must be committed during trading, or subsequent thereto, and during the existence of a debt contracted when in trade ^

To support a joint commission against all the individuals of partnersiiip, each of the partners must liave committed an act of bankruptcy '.

As to the effect of an act of bankruptcy, a plain direct act of bankruptcy, once committed, cjnnot be purged or explained away, as a dubious equivocal act may, even though the party continues to carry on a great trade*. But where the act is in itself doubtful, it may be explained ^,

4. Of the Petitioning Creditor's Delt. The petitioning creditor must have a legal demand to tJie amount of 100/, ; and if two creditors join in petitioning for a commission, their debts must be 150 1. ; if three or more join, they must be creditors for 200 1. ^' But a debt in equity will in no circumstance support a commission ; as in the

' Read v. Philips, 16 Ves. .fun. 4.S7.

" Ex parte B;imfoii1, l.'> Ves. .Tun. 449. Ex parte Dewdncy, Ibid 495

3 B^asley v. Bea'.lpy, I Atk. 97.

♦ VVor^eiey V. Demattos, 1 Rr.r. 484. Hopkins v, Ellis, S.ilk. 110,

s Colkett V. Freeman, 2 T. R. 59.

** r. Geo. II. c. aO. s. -23.

ca.se

494 Of Bankruptcy. — Of the Petitioning Creditor*s Delt„

case of an assignee of a bond, the assignee cannot be a pe- titioning creditor '.

Before the statute 5 Geo. II. c. 30. it was considered that it did not alter the case wliether the petitioning creditor's debt was contracted before or after the act of bankruptcy ; but since that statute it has been decided, that it must be contracted before the act of bankruptcy ^ And as it often happened, that after a commission had been issued upon a clear act of bankruptcy, and a good petitioning creditor's debt, a secret act of bankruptcy was proved to have been committed, prior to the petitioning creditor's debt being con- tracted, wliereby considerable confusion and inconvenience arose in the administration of the bankrupt's affairs ; it was provided by the statute 46 Geo. III. c. 135. s. 5. that no commission of bankrupt thereafter issued, should be avoided or defeated by reason of any act of bankruptcy having been committed by the bankrupt prior to the petitioning cre- ditor's debt being contracted, if such petitioning creditor had not any notice of such act of bankruptcy at the time when the debt was to him contracted.

So much of til is act as made the striking of a docket notice of a prior act of bankruptcy is repealed by the sta- tute 49 Geo. III. c. 121.

The statute 5 Geo. II. c. 30. s. 22. enables creditors by bills, bonds, promissory notes, and other personal securities, payable at a future day, and drawn and issued before an act of bankruptcy, to sue out, or join in suing out, a commis- sion of bankrupt, before they actually become due and pay- able ; and by the 7th Geo. I. c. SI . they may prove the same under the commission, deducting a rebate of five per cent, for the time the bill iias to run. And on the construction of this statute it has been held, that a bill of exchange for 100/.

' F.x parte IlvUianJ, 1 Atk. 146. ? Ves. 40T, ■" r,x parte Wahiman, Cooke, B. L. ?3.

Of Bankruptcy .-^Of the Petitioning Creditor's Debt. 495

is sufficient to found a petition for a commission of bankrupt, though allowing a rebate of interest for the time it had to run after the issuing of the commission, would dimmish the debt below 100/. at the time of the act of bankruptcy'. But goods sold and delivered on an agreement, to be paid for by a present bill payable at a future day, does not create a present debt on which to found a commission of bankrupt, if no such bill be actually given ; for the intention of the legislature plainly confines the power of petitioning to such creditors as have written securities *.

If, however, a creditor for goods sold receive in pay- ment a bill of exchange payable at a future day, and he negotiate it before the bankruptcy of the debtor, and is obliged to take it up upon its being dishonoured after his bankruptcy, he may sue out a commission upon his debt'.

If, after committing a secret act of bankruptcy, a trader gives his creditor a bond for a debt due on simple contract before the act of bankruptcy, it does not deprive the credi- tor of his right to petition ^,

And if a creditor, knowing that his debtor has committed an act of bankruptcy, receive part of his debt, as the pay- ment is void, he may support a commission on the original debt 5.

A creditor for a debt after the party quitted trade, cannot sue out a commission ^ ; but a creditor before he entered into trade, whose debt subsisted during the trading, may^.

If the debt is contracted before leaving oft' trade, and the act of bankruptcy is committed after leaving off trade, the creditor may take out a commission*.

' Brett V. Lovell, J3 East's Rep. 213.

» Hoskins v. Duperoy, 9 East's Rep. 498. Cothay v. Murray, 1 Camp. N. P. C. 335.

' Ex parte Marsden, 4 Mont. B, L. App.T.

« Ambrose v. Clendon, 2 Str. 1043. s Man v. Shepherd, 6 T. R. 79.

• Daw V. Iloldsworth, Peake's N. P. C. Gl.

^ Butcher v, Easto, Doug. 295.

' £z parte Bamford, 15 Vei. Jun. 419.

But

4.96 Of Bankmptcy . — Of the Petitioning Creditor's Debt.

But a debt arising by way of damages due upon a judge- ment after it is entered uj), is not a sufficient debt in law, wliercon to found a commission of bani<ruptcy against a trader who had committed an act of bankruptcy between the verdict and judgement '.

iVeitlier can a petitioning creditor proceed at law against the l>aakrupt ; for by suing out the commission he has de- termined his election, and is precluded from proceeding at law even for a debt distinct from the one he proved *. And by stat. 49 Geo. III. c. 121. s. 14. it is enacted, that prov- ing or claiming a debt mider a commission of bankrupt shall be deemed an election by such creditor to take the benefit of sucli commission with respect to the debt so proved and claimed.

Any objeclion that would preclude a creditor from reco- vering at law, or in equity, will equally preclude him from suing out a commission of bankruptcy. And therefore if a debt cannot be recovered at law, the statute of limitations having incurred, nor in equity by analogy to it, it will not be a sufficient petitioning creditor's debt ; neither is such a debt proveable under a commission ^

A commission sued out upon a debt due jointly to a per- son residing in England, and others residing abroad in an enemy's country for the purposes of trade, although British subjects-*; or if sued out upon the petition of only one of two partners to whom a joint debt is due ^ ; cannot be sup- ported, for all the parties must join in the petition. But in the case of partners, the ailidavit of one that ihe debt is due to himself and partners is sufficient ^.

' Tn re CliarVs, 14 East's Rep. 197.

^ Ex parte Callow, .'i \c^. .lun. 1. Ex partn AVard, i Atk. 15.3. 3 Ex parte Di^wdneyjo Vis..)ui). 193. Fowler v. Brov.n, Cooke, B. L. 13. SwavJie V. Wnlliiiger, V Str. 746. coiiira. * iiucklanit v. N^wsame, 1 Taunt. 177. 5 .M'Connr!! v. Hector, 3 Bos. and i\\\, 113. ^ 2 Cooke, B. L. 1.

5. Of

Of Bankruptcy. — Of the Commission. 497

5. Of the Commission. Of issuing the Commission,

By the statutes concerning bankrupts, the power of issuing commissions being vested in the Lord Chancellor, Lord Keeper, or Lord Commissioners of the Great Seal, when a creditor finds himself under the necessity of obtain- ing such a commission, if he resides in town he must make an affidavit of his debt before a Master in Chancery, if in the country before a Master Extraordinary, and execute a bond to the Great Seal ' ; and upon such affidavit and bond being presented and answered by the Lord Chancellor, the creditor is said to have struck a docket. But unless the party striking the docket seals the commission in four days exclusive of the day of striking the docket, or orders the commission to be sealed at the next public seal, in case there shall be a public seal within seven days next after such docket shall be struck, or by a private seal within eight days after the striking of such docket, then any other cre- ditor may strike a new docket, and sue out a commission^.

After the commission is sealed, the creditor is allowed fourteen days if it is to be executed in London, and twenty- eight days if the bankrupt resides forty miles from London, to prosecute such commission ; and at the expiration of such limited times the commission is supersedable, if not duly prosecuted ^

Ofopejiing the Comtnissionj and declaring the Party Bank- rupt.

When a commission has been sealed, one of the mes- sengers in bankruptcy is to summon three of the commis- sioners to attend a private meeting, for the purpose of open-

' Wvdown's Case, 14 Ves. Jtin. 80.

» General Orders, l?th Feb. 1774; g9th Dec. 1806.

» General Order, 26th June 1793.

2k

mg

498 Of Bankruptcy . — Of the Covimission.

ingthe connnission ; \vbo, after having qualified themselves by personally aclministcrin;i' to each other the oath directed by the statute, proceed to receive prot)f of the petitioning creditor's debt, the tradin^:, and the act of bankruptcy. My a ecnenil order, Suth Nov. 1798, Wxe petitioning credi- tor or creditors must appear before the commissioners for the puq)0se of proving his or their debts. And this order is to be so strictly adhered to, that tlie commissioners ought not to depart from it without the special order of the Lord Chancellor, even in cases where it is impossible for the cre- dilor to attend. Witnesses must also be produced and ex- amined bcfiire the commissioners to prove the trading and the act of bankruptcy '.

Of the Power of the Commissioners to seize the Bankrupt's Property.

Upon the parly's being declared bankrupt, the commis- sioners are by the statutes 21Jac. I. c. 19. s. S.and 5 Geo.II. c. SO. s. 14. empowered to issue a Marrant under their hands ai)d seals for the seizure of the bankrupt's effects, books, pnpers, or writings in his custody cr possession, and to break open the houses or places belonging to the bankrupt, in case of resistance, or not having the key of any door or lock, where any of his goods, &c. are, or are suspected to be. ,

But they cannot break open any but the bankrupt's bouse to search for his goods, &c.*

When goods have been sent by the bankrupt on board a ship to be conveyed to his correspondent abroad, the com- missioners caimot seize and take them away without paying the freight, and indemnifying the master of the vessel against a bill of lading sent to the consignee^. But sliould the messenger proceed to make a seizure, even though such

' Cooke, B. L. 105. » Anon. Show. 24T.

3 Mollo>, 2J3. 2 Eq. Ca.Abr. 98.

seizure

Of Bankruptcy. — Of the Commission. 499

seizure may be illegal, the forcibly (urning him out of pos- session- cannot be justified, but may be the ground of an attachment against the party using such force '.

Of the Power of the Commissioners over the Bankrupt.

The commissioners, if they have reason to apprehend that the bankrupt is making away with and concealing liis effects, or preparing to depart the kingdom, to avoid sur- rendering, may summon him to appear before them to be examined immediately * ; and in case he disobeys their sum- mons, it is enacted by the statute 5 Geo. II. c. 30. s. 14. that upon certificate under their hands and seals that a com- mission is issued, and the person proved before (hem to be a bankrupt, any judge or justice of the peace in England or Wales is empowered to grant a warrant under his hand and. seal to apprehend and commit him to the common gaol of the county where he-is taken ; there to remain till he is removed by order of the commissioners, or the major part of tliem, by warrant under their hands and seals.

But it is provided by the 15th section of the same statute, that if a bankrupt taken under such certificate, and thcAvar- rant thereon, shall within the time allowed by the sta- tute submit to be examined, and in all things conform as if he had surrendered, such bankrupt shall have the benefit of the statute as if he Lad voluntarily surrendered.

If a bankrupt does not answer the questions put to him by the commissioners, to their satisfaction, they may com- mit him until he does comply ^

Formerly, if the bankrupt was in execution, the commis- sioners were obliged to attend him in prison to take his ex- amination ; but by the statute 49 Geo. III. c. 121. s. 13.

" Ex parte TUner, 1 Atk. 136. Ex parte Dixon, S Ves- 104. ' Ex parte Lingood, 1 Atk. 240. ' Ex parte Ncian, llVes. Jun,511.

2 K 2 the

500 Of Bankruptcy. — Of the Commission.

the goaler or the keeper of the prison must, on the warrant of the commissioners, l)riiig up a prisoner charged in exe- cution, to be examined by them, in the same manner as is practised with respect to bankrupts in custody on mesne process.

Of the Poiuer of the Commissioners over other Persons.

By the statute 1 Jac. I. c. 15. the commissioners are em- powered to commit persons refusing to be sworn and make answer touchirjg the bankrupt's estate and effects ; and tliis power is adopted by the statute 5 Geo. II. c. SO. which further requires the party so examined to sign his examina- tion taken before the commissioners.

But tliere does not appear to be any power to commit, in case a witness refuses to obey the commissioners' summons to prove the act of bankruptcy or the trading '. The de- fect, tlierefore, must be remedied by an application to the Great Seal *.

If a witness is prevented from attending the commis- sioners according to their summons, he must make it known to them, and obtain their allowance for the excuse, and must attend the next meeting of v,hich he has notice'.

In the case of Dyer v. Missing •*, it- was held, that the commissioners had no power or authority to •ommit one suspected of detaining the bankrupt's effects, for not at- tending to be examiiied on the first summons : but this case has been since overruled in the court of Pving's Bench, in the case of Battle v. Greslcy and others, in which it was field , that a warrant for the arrest of the vitness, in order to examine him, may issue after his disokedicuce to the first summons '.

» Cooke, B. I,. ' F.x part'- Ki^^ins, H V^s. Jiin. 8.

9 1 Jac. 1. c. \b. s. 10. •« ii Bl. 10o5. 5 8 Last's Rep. SIS.

No

Of Bankruptcy . — Of the Commission. 501

No aclion will lie against commissioners for a commit- ment bad in consequence only of a formal defect in the warrant '. But an action of trespass will lie against them for committing a person for not answering iiiiproper ques- tions, or for not acquiescing in a proper answer *.

The wife of the bankrupt cannot be examined against her husband touching his bankruptcy, or whether he had com- mitted any act of bankruptcy, or how or when he became a bankrupt ^ But the statute 21 Jac. I. authorizes com- missioners to examine the wife touching any concealments of the goods, effects, or estate of the bankrupt.

The commissioners of bankrupt may issue process of contempt to compel an answer. They are a court of justice sufficient for the purpose of having their witnesses protected during their attendance eundo et redeundo *. This privi- lege also extends to persons who attend voluntarily, as to prove their debts, or the like '.

Witnesses attending commissions of bankrupt are entitled to such costs and charges out of the bankrupt's estate as the commissioners in their discretion shall think fit ^. But a witness is bound to attend the summons of the commis- sioners, althougli he has not been tendered the expenses of the journey, unless he can prove that he was unable to bear the expenses of if.

A witness is bound to give an account of what he knew of the bankrupt's effects, as well before as after the bank- ruptcy ^. But a person examined before commissioners is not bound to answer any thing which tends to criminate himself 9.

• Bray's Case, Comb. 391. » Miller v. Seare,2 Bl. Rep. 1 141.

3 Ex parte James, 1 P. Wms. 610. * Ex parte Stow, 2 Bl. Rep. 1142. s Arding v. Fowler, 8 T. R. 534, Ex parte King, 7 Ves. Jun. 315. « 1 Jac. I. c. 15. B. 1 1. 7 Baltic v. Greslev, 8 East's Rep. 318.

« Bracy'i Case, 1 Ld. Rayin.99. " 9 Comb. 391.

The

502 Of Bankruptcy* — Of the Commission.

The commissioners are also empowered by the 19th chap- ter, s. .9. of the 21st Jac. I., to examine upon oath, or by any other ways and means as to them shall seem meet, any person for the discovery of the truth and certainty of tlie several debts due to the creditors seeking relief under the commission.

Of the Effect of the Commission, A commission of b-mkrupt has the effect of immediately vesting all the rights and possibilities of the bankrupt under the administration of the Lord Chancellor in bankruptcy; and when it has issued, and the party is declared a bankrupt, his death will not prevent the further execution of it'.

Of the Costs of issuing out a Commission, By the statute 3 Geo. II. c. 20. s. 25. the petitioning creditor is directed at his own costs to prosecute the com- mission till assignees shall be chosen ; and the commis- sioners at the meeting appointed for the choice of assignees are to ascertain such costs, and by writing under their hands to order the assignees to repay the same out of the first money or effects received or collected by them under the commission.

Of the Remedy for maliciously suing out a Commission.

If the commission appears to have been fraudulently or maliciously taken out, the Lord Chancellor, on petition of the party grieved, is empowered by the statute 5 Geo. II. c. 30. s. 25. to examine into the same, and assign to such person the whole or part of the penalty conditioned in the bond of the petitioning creditor, w ho may sue for the same

* 1 Jac. I. c. 15. s. 17. Backwell's Case, 1 Vern. 153. Ex parte Dewd- Bpy, 15 Ves. Jun.491.

in

Of Bankniptcy . — Of the Commission. 503

in his name. Or if the bankruptcy is a di)ul)tf(il case, and the commission superseded, the Lord Chancellor may either direct an inquiry before a master of the damages sustained by the bankrupt, or a quantum indemnifiratus upon an issue at law ; and after the damages are settled, the court may, for the better recovery thi'n of, order the bond to be assigned '. But where a case is attended witli any flagrant circumstances, the bond will be assigned with- out further inquiry. And it is competent to the Lord Chancellor, to order the petitioning creditor to pay the costs of suing out the commission, with the costs of the ap- plication *.

But notwithstanding a remedy is provided against mali- ciously suing out a commission by enabling the Lord Chan- cellor to assign the bond, or award a specific sum by way of damages, it has been held, that the bankrupt is not de- prived of his remedy at common law by an action for da- mages, but may proceed by an action at law to obtain such redress for the injury he has sustained as a jury may think hira entitled to^

Of the Evidence to support a Commission.

The bankrupt cannot be a witness to support the com- mission, either by proving the petitioning creditor's debt, the trading, or the act of bankruptcy '♦. And no release will have that effect '.

Neither can a bankrupt be evidence to prove property in himself, or a debt due to his estate, unless he has ob- tained his certificate, and given a release to the assignees of his share in the surplus and the dividends ^. But he may

' Ex parte Oayter, 1 A«k. 144.

' Smithey v, Edmonson, 3 East's Rep. 22. Smith v. Broomhead, 7 T. R. 300.

' Brown v. Chapman, 3 Bur. 1418.

* Cross V. For, 2 Hen. Bl. '<;79. Ewens v. Gold, Bnl. N. P. 40.

s Field V. Curtis, 2 Str. 829. « Russel v. Russel, 1 Bro. C. C. 269.

be

504 Of Bankruptcy. — Of the Commission.

be evidence against tlie assignees, to prove property in, or a debt due from another ; for it is against his interest to di- minish the estate '.

A bankrupt having obtained his certificate under a se- cond commission even with a release, is not a competent witness to enlarge the fund ; for in the event of his not pay- ing 155. in the pound under the second commission his future effects are liable *.

Declarations made by the bankrupt at the time of his bankruptcy in explanation of his own act may be received in evidence. An admission by him before his bankruptcy, of a debt due to another, is sutficient to charge his estate. If he has been absent from home, an admission by him that he had been abroad to avoid his creditors, is good evidence. Whatever he says before his bankruptcy is evidence expla- natory of the act done by him '.

Creditors being obviously interested in the increase of the bankrupt's property, cannot, during the continuance of that interest, be admitted witnesses to enlarge the divisible fund '*. They are therefore incompetent witnesses to increase the bankrupt's estate, unless they release their debt to the assignees K

But from the case of Williams v. Stevens ^, it appears that a creditor who has not proved his debt under the commission is a competent witness to support the commission, by prov- ing the trading and the act of bankruptcy. So if a creditor has sold his debt, after proving it, he is a competent witness to support the commission, his interest being gone ''.

* Ewons V. Gold, Biil. N. P. 43. Butler v. Cooke, Cowp. 70. ' Kennett v. GreenwQllers, Feake, N. P. C. 3.

3 5 T, R. 512. Bui. N. P. 40. I Esp. N. P. R. 334. Cas. temp. Hard- •wicke, 267.

* Egglesham v. Lefevre, 2 Vin. 11.

s Koopes V. Chapnaan, Peake, N. P. C. 19. Ambrose v. Clendon, Cas. temp. Hardvvicke, 267.

* 2 Camp. N. P. C. 300. ' Granger v. Furlong, 2 Bl. Rep. 1273.

Of

Of Bankruptcy^ — Of the Commission. 505

Of a renewed Commission.

If by the death of more than two of llie comniLssioners, or any other cause, there are not a suiBcicnt number to execute the commission, it must be renewed ; upon which renewal only hah" the fees usually paid for granting a com- mission are payable '. And the commissioners under a re- newed commission proceed from the stage which was left incomplete by the former*.

6. Of a Joint Commission.

It was formerly the ])ractice, where there were several partners, to take out a joint commission against all and se- parate commissions against each at the same time ; but this practice being found to be attended with double expense, and to occasion confusion with respect to the effects, it has been since discountenanced.

Therefore, where parties have been declared bankrupts under separate commissions, if it can be shown that the joint effects would be disposed of to better advantage, or that the bankrupt's estate would be benefited by prosecuting a joint commision, the Chancellor will, on petition, supersede the prior separate one '.

Where a joint commission issues, and there appear dif- ferent sets of creditors, by a general order of the 8tli March 1794, the commissioners are directed to cause di- stinct accounts to be kept of the joint and separate estates, and that each estate shall be applied exclusively in the first instance to the payment of its own respective debts, aud that neither the joint creditors shall come upon the se- parate estate, nor the separate upon the joint : Ijut should there be a surplus of cither estate after paying its own re-

» 5 Gen II. c. 30. s. 44. ' Cooke, B. L. 13.

3 Lx parte llardcastle, Cooke, B. L. 9-

spective

506 Of Bankruptcy, — Of the Commission.

spective creditors, then such surplus shall be appropriated io the payment of the other set of creditors. But as the assignment under a joint commission is of the whole estate of the partners, both separate and joint, the separate cre- ditors are by the same order allowed to prove under a joint commission, for the purpose of receiving dividends from the surplus, if any, of the joint estate after the joint credi- tors are satisfied '.

Where there have been different partnerships, and a joint commission issues against the firm including all the part- ners, the creditors of each of the firms and of each partner must be paid out of the respective funds belonging to the estate which th;'y have trusted ; and the surplus, if any, of either of the estates must be applied to some deficient fund ».

All the partners in a firm may become bankrupt toge- ther ; or one or more may become bankrupt while the others remain solvent. In the former case a joint commission issues ; in the latter, separate commissions againt each indi- vidually'. Where a joint commission issues, all the partners must be included. And therefore, if under a joint com- mission only two or more of a partnership consisting of a greater number are found to have committed acts of bank- ruptcy, the commission is invalid •*.

Neitlier can a joint commission be supported where one of the partners is an infant % or a lunatic ^.

But it is only the ostensible partners who are required to be included in a joint commission. Therefore, if a commis- sion issues against the whole of an ostensible firm, the com-

» Sep Hankey r. Garrett, 3 Bro. C C 457. Ex parte Taitl, 16 Ves. Jun. 193.

' Watson on Partnership, 277. 3 Cullen, B. L.

* Allen V. Downr-*, Wille?, 474. n.

5 Ex parte Henderson, 4 Ves. Jun. 163.

* Ex parte Layton, 6 Ibid. 431.

mission

Of Bankruptcy, — Of the Commission. 507

mission cannot be invalidated by proving the existence of a secret and dormant partner ', unless the creditor had means of asccrtainins: his connexion with the firm '. Where the general word " Company " is part of the title of a firm, it is incumbent on the creditor to ascertain the members who constitute the partnership ^

To support a joint commission each of the partners must have committed an act of bankruptcy, and must be found a bankrupt *.

If, after a joint commission is issued against two or more partners, one of them should die, the commission may still proceed. But if one of the joint traders is dead at the time of taking out the commission, it abates and is absolutely void, because they must each be found bankrupt K

7. Of superseding a Commission,

By tlie statute 5 Geo. II. c. SO. s. 21. if any bankrupt, after the issuing of the commission against him, pay to the person who sued out the same, or otherwise give or deliver to such person, goods or other satLsfaction or security for his debt, whereby such person suing out such commission shall privately have and receive more in the pound in respect of his debt than the other creditors ; such payment of money, delivery of goods, or giving greater or other security or satisfaction, shall be deemed to be an act of bankruptcy, whereby, on good proof thereof, such commission shall be superseded.

There are many grounds on which a commission may be superseded. It may be superseded if taken out at tiie in- stance of the bankrupt ^' ; or if there is not a good petition-

' Ex parte Benfield, 5 Ves. Jun. 421.

"^ Kx parte Layton,6 Ibid. 434. » Ibid.

* Allan V. Hartley, Cooke, R. I,. 7.

5 ■\Varrinj;ton v. Norton, T'orrest, 184.

^ Ex parte Moule, 14 Vcs. Jun. 602,

ing

508 Of Bankruptcy . — Of superseding a Commission.

ing creditor's debt' ; or if the petifioning creditor is an in- fant*; or if there is not a suiTicient act of trading or of bankruptcy' ; or if the bankrupt is an infant* ; or that all the trading took place during infancy '; or if taken out against a feme covert upon a trading prior to her mar- riage^ ; or if not opened until a considerable time after it has been issued"'.

In the case of a copartnership, a commission may be su- perseded if one of the partners was dead at the time of issu- ing the commission against the firm ; or if the joint commis- sion cannot be supported as to any one of those against whom it is sued out^.

A commission may also be superseded by the agreement and consent of all the creditors of a bankrupt -vvho have proved their debts^. But the bankrupt liimself will not be permitted <o petition to supersede a commission until be has surrendered, even with the consent of all his creditors. He must first petition for leave to surrender, and then apply to supersede the commission '°.

The circumstances under which an uncertificated bank- rupt may petition to supersede a second commission against him, are, where a creditor who might have proved under the first is a petitioning creditor under the second. " I can also conceive," said Lord Eldon, " that the bankrupt might desire that the second commission might be superseded, if it was taken out under circumstances making it not expedient that it should remain ostensibly in force, if void at law ; though the conduct of all the parties under the first com-

» Ex parte Hylliard, 1 Atk. 146. ' Ex parte Barrow, 3 Vcs. Jim. 354. 3 Ex parte Bowes, 4 Ibid. 168.

♦ Fx parte Sydebotham, 1 Atk. 146. 5 Ex parte Moule, 14 Ves. Jun. 603.

* Ex parte Mear and Wife, 2 Bro. C. C. 265.

' Ex parte Pr.leston, 2 P. Wms. 545. • CuUcn, B. L. 441.

» Ex parte Crisp, 1 Atk. 134. '• Ex parte Jones, 8 Ves. Jun. 328. U Ibid. 409.

mission

Of Bankruptcy. — Of a provisional Assignee. 509

mission brought nothing forward that could be the founda- tion of ol)jection against the bankrupt, the assignees, or the petitioning creditor under that commission '."

As to the time when a commission of bankruptcy may be superseded, it has been determined that it may be superseded at any time after the first meeting upon consent of all the creditors who have proved S

Tiie usual course of superseding a commission is for tlie Lord Chancellor lo order a feigned issue to try the bank- ruptcy at law. But if the commission has been taken out fraudulently or maliciously, the Chancellor may either order a specific sum by way of damages to be paid by the peti- tioning creditor to the bankrupts, or assign the petitioning creditor's bond, and enable the bankrupt to recover the whole penalty of the bond^

8. Of the Assignees. Of a provisional Assignee. The statute 5 Geo. II. c. 30. s. SO. authorises the com- missioners, immediately upon declaring the party a bank- rupt, to appoint an assignee or assignees, and lo make a pro- visional assignment to such assignee or assignees of the whole or part of the bankrupt's estate or efl^ects, until a choice has been made of assignees at a meeting of the credi- tors. But as this practice is attended with expense, it has not been much used of late years. Where such provisional assignee has been appointed, and it is tlie pleasure of the creditors, at a meeting for tlie choice of assignees, that he should be removed, if he refuse or neglect, for the space of ten days next after notice given of the choice of assignees at a meeting of the creditors, and of their consent to accept the assignment of the bankrupt's estate and effects, signified to

' V.x parte Lees, 16 Ves. Jim. 474. ' Ex parte Duckworth, Ibid. 416. 3 Ex parte Gajter, 1 Atk. 141.

him

oIO Of Bankruptcy. — Of the Election of Assignees.

him bj such assignees, by writiiig under their hands, to assign and deliver up all the estate and efTeds of the bank- rupt come to his hands, such provisional assignee shall for- feit the sum of 200 /.

Of the Election of Assignees.

By virtue of the statute 5 Geo. IJ. c. 30. s. 26. the commissionefs, after declaring a par(y a bankrupt, are to appoint a time and place for the choice of assignees, which usually lakes place at the second meeting under ihe com- mission.

To be appointed assignee, it is not necessary that the party- should be a crcilitorof the bankrupt '. And although a cre- ditor, who has been a party to a deed of assignment of the bankrupt's eifects, cannot be a petitioning creditor, it has been held that he may be an assignee under the commis- sion sued out upon it by a third person^.

By the 27th section of the 5th Geo. II. no creditor can vote in the choice of assignees, unless his debt amounts to ten pounds or upwards.

Where a creditor cannot attend himself, the commis- sioners are required, by the 26th section of the same statute, to permit tixxy person duly authorised by a letter of attorney from the creditor, on oatli or affirmation being made of the due execution thereof, to vote in the choice of assignees in- stead of such creditor.

By the statute 49 Geo. III. c. 121. s. H. no creditor who has brought an action or instituted a suit against a bankrupt for any demand which arose prior to the bank- ruptcy, or which might have been proved under the com- mission, can prove for any purpose whatever without re- linquithmg such action or suit.

• Ex parte Grci»nier, 1 Afk. 90.

' Jackson v. Irvin, 2 Camp. N. P. C 48.

If

Of Bankruptcy, — Of the Duties of Assignees. 5H

If a creditor make oath of a certain sum being due to him, be ought to be admiitcd to prove to that amount for the purpose of choosing arisignees, unless there appear to the commissioners doubt of the fairness of the debt; and then he must be suffered to make a claim only, till lie makes out his demand (o their satisfaction'.

A new choice of assignees will not be ordered because cre- ditors Mere abroad, and prevented by accident from voting in the choice'. But it may be otherwise if creditors were kept back by fraud'.

Of the Nature and Duties of their Trust.

As assignees are in the nature of trustees, if they employ an agent to receive or pay money on account of the bank- rupt's estate, and he misapplies or embezzles it, the assignee will be liable to make it good to the creditors**, unless he has consulted the body of the credito s in the appointment of such person, or that he has employed him from necessity, or conformable to the common usage of trade'.

Assignees are answerable only for what each separately receives, and the misconduct of one assignee will not ope- rate against his coassignee where he is not at all privy to the act\

And notwithstanding the decision in Cann v. Read', it has been held that a bona fide payment to one assignee is good, and will bind the estate, provided the coassignee did not express his dissent*.

Assignees have not a general power to prosecute suits in equity, or submit matters to arbitration : for this purpose they must have a meeting of creditors, on notice given to

» Ex parte Simpson, 1 Atk. 70. " Kx parte Greignier, Thid- 90.

3 Ex parte Surtreos, \2 Ves. Jun. 10. * In re Litchfield, I Atk. 86.

* Kx parte Belcher, Ambl. 218.

• Primrose v. Bromley, I Atk. 8B. ' 3 Ibid. 695.

' Smith V. Jamieson, 1 Esp. N. P. C. 11-1. Bristow v. Eastman, Ibid. 172.

that

512 Of Bankruptcy. — Of the Duties of Assignees.

that eflfv'ct iii the London Gazelte, to consider of each parti- cular suit, or each particular case for arbitration, before they can proceed therein'. And if tlic majority of the creditors in value at the meeting are against bringing the suit, &c. the assignees cannot do it. It is optional, however, to anj creditor to do it at the peril of Iiis costs*.

Assignees are not, however, restricted from bringing ac- tions at law without the consent of the creditors; for the whole of the bankrupt's estate being vested in them by the assignment, as it was in the bankrupt himself, they have the same remedies to recover it as they in their discretion may think proper'.

Assignees must, by the statute 5 Goo. II. c. SO. s. 26. keep books of account of the bankrupt's estate, which every creditor has a right to inspect at all seasonable times. And by a general order, 8th March 1794, assignees under a joint commission are to keep distinct accounts of the joint and separate estates.

The assignees of a bankrupt stand in the same situation, and are subject to the same equities, as the bankrupt, and are bound by all acts lairly done by him* ; for although the court will favour creditors as much as it can, it must be where they have a superior riglit to other persons K

If t])e statute of limitations is pleadable against a bank- rupt, his assignees may be barred by it ; and the time is to be computed from the date of the original cause of action, and not from the date of the commissioners' assignment^'.

It is the duty of the assignees to collect-iti the bankrupt's property with as much expedition as the n iture of it will admit. But they are not bound to take all the property

' Ex parte Whitchurch, 1 Atk. 91. ' Rarnard. Rpp. 30.

^ y bl. Com. '185.

* Row V. i)awsi)n, 1 Ves. 3^\. Anderson ». MiiUby, 2 Vrs Jun. 555.

* brov.n V. Jones, 1 Atk. 187. " Grcv v. Mendez, 1 Str. 555.

which

Of Bankruptcy . — IVhen Jsaignees liable to Interest. 513

"which belonged to the bankrupt' ; they may make an elec- tion : but when tliey have elected, they cannot afterwards renounce that which they have adopted ^

It is the duty of the assignees to sell all the bankrupt's property as soon as it can be done with advantage ; and if they neglect to dispose of it, the Chancellor, upon a peti- tion of a creditor, will order a salc^ If the assignees, with the approbation of a considerable number of the creditors, defer the sale in the expectation of benefiting the estate, and any individual creditor call upon them to sell the same, they will be liable to make good any deficiency which may happen by their deferring the sale*.

Assignees are incapable of purcliasing the bankrupt's property on their own account, without the consent of all the creditors. A purchase however made by an assignee will only be set aside conditionally, in case the resale of the estate by the assignee should produce more than he gave for it ; and then he nmst account for such profit to the credi- tors 5.

When liable to Interest,

By the 5 Geo. II. c. SO. s. 32. before the creditors pro- ceed to the choice of assignees, the major part in value of the creditors present may, if they think fit, direct in what man- ner, how, and with whom, and where, the moneys arising by, and to be received from time to time out of, the bank- rupt's estate shall be, paid and remain until the same shall bci divided amongst the creditors ; and the assignees are to conform to such directions as often as 100/. shall be got ia or collected.

' Bourdillon v. Dalton, 2 Esp. N. P. C. 233.

^ Turner v. Richardson, 7 Last's Rep. 335. and Broome v. Robinson, cited there.

3 Kx parte Gorinj:, 1 Ves. Jiin. 163.

* Ibid. Ex parte iliigbes, 6 Ibid. 617.

5 Whichcole v. Lawrence, 3 Ves. .Urn. 710. Ex parte Reynolds, 5 Ibid. 707. Ex parte Morgan, J2 Ibid. 6.

2 1. But

514; Of Bankruptcy . — Of the Removal of Assignees.

But as it frequently happened (hat no directions were given, and that bankrupts' estates were often improperly re- tained in the hands of assignees, who made use of the nio- neys in trade, and considerable losses were sustained by the creditors ; it was enacted by the statute 4,9 Geo. III. c. 121. s. 3. that where the credifors omit such direction, the com- missioners shall, iinmerliately after the choice of asbignees, and at the same meeting, direct such disposition of the bankrupt's property. And by section the 4th, if the as- signees wilfully retain, or otherwise employ for their own benefit, any moneys belonging to the bankrupt's estate, the commissioners are directed to charge such assignees, in their accounts, interest upon such moneys, at the rate of 20/. per cent, per ann. for the time they have retained or employed the same. By the 6tli section, if an assignee become bauk-r rupt, being indebted to the estate of the bankrupt, of which he was assignee, in 100/. and upwards in respect of ma- neys received by him as assignee, and wilfully retained or employed by him for his own benefit, the certificate shall only discharge his person ; but his future effects shall remain liable for so much of such debt as shall not be paid by di- vidends, together with lawful interest.

Of the Removal of Assignees.

By statute 5 Geo. 11. c. 30. s. 31. the holder of the great seal is empowered, if necessary, to vacate assignments of bankrupts' estates, and order new assignments to be made of the debts, effects, and estate unreceived, and not disposed of by the then assignees, to other persons to be chosen by the creditors ; and such new assignees are empowered to sue for the same in their own names, and to give discharges, &c. in the same manner as the old assignees were entitled to do. And the commissioners are to give notice, in the two lion-

dou

Of Bankruptcy . — Of the Assignment, 515

don Gazeties that sliall immediately follow, of the removal and new appointment, &c.

The causes of removal are the death or banknipfcy of the assio-nee', making use of the bankrupts' property*, permitting- improper expenses by the commissioners ^, pur- chasing, or a coassignee permitting the same, an estate be- longing to the bankrupt at a sale by auction +, or residing in a place so that the court has no power over him'.

9. Of ike Assignment*

Of the Effect of the Assignment tipon the Bankrupt's real and personal Property.

By the statute 13 Eliz. c. 17. the commissioners, when a man is declared bankrupt, are empowered to dispose of all Iiis lands and tenements which he had in his own right when he became bankrupt, or which shall descend or come to him by any means at any time afterwards, before such time as Iiis debts shall be fully satistied and paid, or otherwise agreed for ; as also all lands and tenements which were purchased by him jointly with his wife or children to his own use, (or such interest therein as he may lawfully part with,) or pur- chased with any other person upon secret trust for his o\vn use ; and by virtue of the s:jme power they may cause the same to be appraised to tlieir full value, and sell them by deed indented aiid enrolled ; or they may divide them pro* portionabiy among the creditors. This statute expressly included not only free, but customary and copyhold lands, but did not extend to estates tail, further than for the bank- rupt's life ; nor to equities of redemption on a mortgaged estate, wherein the bankrupt has no legal interest, but only

' Genpral Order, 8th iNIarch 1794. Ex parte Newton, 1 Atk. 96.

V Kx parte Ifailiday, 1 \in. Ahr. 77. s ibid.

< Kx parte Ueyuold;, 5 Vce. 707. » Ex pp.rte Grey, IS Ves. Jun. 271.

' 2 L 2 an

516 Of Bankruptcy . — Of the Effect of the Assignment,

an equitable reversion. To remedy this defect the statute 21 Jac. I. c. 19. was enacted ; by which the commission- ers are empowered to sell or convey, by deed indented or enrolled, any lands or tenements of the bankrupt, wherein he shall be seized of an estate- t;iil in possession, remainder, or reversion, unless the remainder or reversion thereof shall be in the crown. The statute moreover provided that such sale shall be good against all such issues in tail, remainder- jnen, and reversioners, whom the bankrupt himself might have barred by a common recovery^ or other means ; and that all equities of redemption upon mortgaged estates shall be at the disposal of the commissioners, who are empowered to redeem the same, as the bankrupt himself might have done, and after redemption to sell them. Also by this and a former act, 1 Jac. 1. c. 15. all fraudulent or voluntary conveyances to defeat the intent of tliese statutes are de- clared void. The same statutes however enact, that no pur- chaser bona fide lor a good and valuable consideration shall be affected by the bankrupt law s, unless the commission be sued forth within five years after the act of bankruptcy committed, or that such voluntary conveyance shall have been made upon the marriage of any of the bankrupt's chil- dren, both the parties being of the. years of consent'.

In the construction of the statute \3 Eliz. c. 7. as to the effect of the assignment upon a purchase to the use of the bankrupt, his wife and childreji, it has been determined, that where a man not a trader, and not indebted at tlie time, purchased lauds and settled them to himself, and to his wife and son, and two years afterwards entered in(o trade and became a bankrupt, that the setdement was good against creditors-. But if a purchase is made by a trader in the joint names of himself and wife, and he afterwards becomes a bankrupt, it is void as against the creditors by virtue of

» 2 Bl. Com. 585. » Crisp, v. Pratt, Cro. Car. 548.

the

Of Bankruptcy .—-Of the Effect of the Assignment. 517

the statute 1 Jac. I. c. J 5.' And the law is the same if the purchase is made willi the wife's money, if it was previ- ously received} and disposable by liim as his own, and the receipt not connected witli the purchase, nor bound by any agreement with the trustee^.

The effect of the assignment upon the personal property of the bankrupt is regulated by the statutes 34 and 35 Hen. VIII. 0.4. ISEliz. c. 7. 1 Jac. I. c. 15. 21Jac. I. c. 19. 5 Geo. II. c. 30 ; by which it is enacted, that all the personal estate and effects of the bankrupt are considered as vested, by the act of bankruptcy, in the future assignees of his commissioners, whether tiiey be goods in actual pos- session, debts, contracts, or other choses in action. And it has been decided that tlie operation of these statutes extends to the property described therein, whether it be in England or elsewhere, provided there should be no positive law of the country where such property may happen to be, to the contrary'.

A right of action to recover real properly*, or a legacy given to the bankrupt, either before his bankruptcy or the signing of his certificate by the Lord Chancellor 5, is as- signable by the commissioners. So if a trader l)efore his bankruptcy lose money at hazard, the assignees may reco- ver it against the winner^. And where a bankrupt entered into an agreement, that in case of his bankruptcy, or insol- vency, the vendor should retake the goods, it Avas held, that if the order and disposition of them remained in the bankrupt, they would pass by the commissioners' assign- ment^. But if a person contracts with another for a chat- tel which is not in existence at the time of the contract,

' Glaisterv. Hewer, 9 Vcs, Juti. 12. ' Ibid. 8 Ibid. 1«5.

3 Good. 114. ■» Smith v. Coffin, 2 Hrn. Bl. 444.

5 Toulson V. Grant, 2 Vern. 43?. Tudway v. Bourne, 2 Bur. 716. « Branden v. Pate, 2 Hen. Bl. 303. 7 Holroyd V. Gnynnt-, 2 Taunt. >f6,

' thouirh

518 Of Bankruptcy , — Of ike Effect of the Aisignmtnt.

tbough he pajs him the tvhole value in advance, and tlic other proceeds to execute the order ; but befpre the chattel is delivered it is taken under an exectition, the assignee* of the btiyer cannot recover it in trover against the ;^hcrift'; for a bujer acquires uo property ia a chattel till it is finished and delivered'.

If after a*sif]^nment of a bankrupt's estate, a creditor knowing it, and ret^iding in England, should attach the mo- Jjey of the bankrupt abroad, the assignees may recover it in an action for money received to their use^ ^ui Mhero the attachment is complete before the act of bankruptcy, the creditor attaching is entitled to hold the property at- tached against the assignees in diminution pf his debt, and to prove for the residue under the commission ^

Effect of the Assignment upon Property in Possession of the Bankrupt, but belongings by Cpnveya^ice, to third Persons.

In the construction of the act 21 Jac. I. c. 19. s. 1 1. it has been repeatedly decided, that unless possession accom- panies and follows an absolute conveyance of personal chat- tels, such conveyance is fraudulent and void ■♦. The statute enacts, that wherever any trader makes a conveyance of liis goods upon good consideration to another, and yd is left in the possession, order, and disposition of them, by the con- sent and permission of such other person, in tlie event of the insolvency of such trader, the goods so conveyed, but left in the possession, order, and disposition of tlip bankrupt, arc assignable by the commissioners for the benefit of the creditors.

But a distinction Exists between mortgages pf real estates

* Mucklow V. Mangle?, 1 Taunt. 318.

' Sin V. Worswick, 1 T. R. 694. Itnnfer v. Potts, 4 1. ft. 182. 3 tjx parte Le Mcsurier, 8 Ves. .THn. 8'?.

* Edwards v. Harbpn, 2 T. R. 587. Bamford v. Baron, Ibid. 594. ft. Jacfcon V. Irving, 2 Camp. N. P. C. 48,

and

Of Bajikruptcy .^-^Of the Effect of the Assignment. 519

and chUtel interests in Liuds, and goods and other person £d chattels. The possession and powe'" of disposing oi goods and personal chattels arc the only evidencts of ownership to Vvhich persons dealing ^vith traders look ; and ther fore the statute is particularly directed to remedy the misc'iief aris^ ing from a trader's holding out a d;lusive responsibility to tlic world : but as to real estates, possession is not such an evidence as to induce creditors to rely '. - '

Where the property could not be absolutely delivel-ed at the time of the contract, but the best delivery has been given that the circumstances and nature of the property would admit, it has been held, that th6 bankrupt had not such a possession of the goods as to entitle his assignees to them *.

Thus, in the case of ships at sea and their cargoes, it has been held, that a delivery of their proper documents and iTiahimcnts, so as to enable the purchaser to teduce the pro- perty into possession upon the arrival of the ship iii port, is a sufficient compliance with the statute ^

But to render this effectual as a delivery within the statute, possession must be taken immediately on the arrital of the i)hip ■*.

U a trader adversely retains possession of goods, so that the party entitled to them is obliged to sue liim in a court of justide to obtain the possession, or to restnin him from disposing of the goods, in the event of liis bankruptcy ; sach possession is not within the meaning of the statute, as it is clearly not with the consent and permission of the owner of tlie goods K

* Rval V. RowIps, 1 Atk. 16S. Gordon v. F,a?t India Comp. 7 T. R. 528.

' Manlon v. >Joorp, 1 T. R. 67. 3 Brown v. Heathcote, 1 Atk. 160.

* Jonrs V. Gibbons, 9 Ves. Jun. 410.

* West. V, Skip, 1 Ves. Jun. 243.

Effect

520 Of Bankruptcy , — Of, the Effect of the Assignment.

Effect of the Assignment upon the Property of others in the Possession of the Bankrupt.

Where tbe bankrupt is in possession of the goods of an- other at the time of his bankruptcy, his possession of them will not amount to a possession within tbe statute 21 Jac. I. unless it is accompanied with a power to sell or dispose of them, or that the owner has been guilty of laches in letting them remain in the bankrupt's possession, so as to gain him a false credit from being reputed the owner '.

Where money, goods, or bills and notes have been depo- sited in a trader's hands, to be appropriated to a particular purpose, as money to pay over, goods until an opportunity offers for sale ^, or a remittance of bills of exchange or pro- missory notes, to answer acceptances', or to present for pay- ment +, and and the trader becomes a bankrupt with such money, goods, or bills in his possession, and unapplied to the purpose for which tliey were deposited, they are not dis- tributable under a commission of bankruptcy'. And the proceeds of goods or hills and notes deposited for a specific purpose, are also not subject to the assignment, while they can be identified from the general mass of the bankrupt's property ^.

As to tlie effect of the assignment upon property in the possession of the bankrupt, as factor, see title Principal and Agent, ante.

AVhen a trader is a trustee \ executor^, or administrator *>, and becomes bankrupt, and at the time of his bankruptcy

' West V. Skip, I Vcs. 243.

2 Ex parte Flyn, 1 Atk. 185, Collins v. Forbes, 3 T.R. 316.

3 Hassel v. Sniithers, »'2 Ves. Jun. 119.

4 E\ parte Oursel, Ambl. 297. s Cooke, B. L. 380. fi Tooke V. Hollin^worth, 5 T. R. 22T.

7 Copeman v. Gallant, 1 P. Wins. 314. » Ex parte Marsh, 1 Atk. 159.

9 Ex parte Llewellyn, Cooke, B. L. 137.

has

Of Bankruptcy . — Of the Effect of the Assignment. b2\

has any property belonging to his cestui que trust or testator in his possession, which can be distinguished from the ge- neral mass of liis own property, it will not pass to the assig- nees. And should the assiguccs have possessed themselves of such property, on an application of the creditors of the tes- tator, the court will appoint a receiver for receiving and se- curing the testator's effects '.

Effect of the Assignment on Property fraudulently delivered ly the Bankrupt in Contemplation of Bankruptcy.

Every disposition of property made by a bankrupt in con- templation of bankruptcy, to prefer a particular creditor, is fraudulent and void. Each case, however, must be de- termined on its own circumstances. But all questions of preference turn upon the act being complete before an act of bankruptcy committed, for then the property is trans- ferred ; otherwise an act of bankruptcy intervening, vests the property in the hands and disposal of the law ^.

But where a trader under a threat or apprehension of legal process, or from the importunity of his creditor, delivers property to him, or gives him a power to receive it, the transaction is valid, even though tlie trader knew himself to be insolvent'.

. But to render suc'i a transaction valid, the act must have redeemed the trader from some present difficulty. For where a trader, being pressed for payment or security, gave his creditor a bill of sale of apparently the whole of his stock, and immediately absented himself, it was held to be a preference of a particular creditor in contemplation of bankruptcy '*.

' Fjx parte Ellis, I Atk. 101.

' TIarman v. Fisher, Cowp. 1^23. Rust v. Cooper, Ibid. 699. IMarlin V. Pcwtress, 4 Bur. 2477. Alderson v. Temple, Ibid. 2235. Singleton V. Howel, 2 Bos. and Piil. 283-

3 Cosser v. Gou^li, I T. R. 1.56. Crosby v. Crouch, 2 Camp. N. P.C. 16G.

4 Thornton v. Ilargreavcs, 7 East's Hep. 5 14.

Effect

5^ Of Bankruptcy .—Of the EJJ^ect (flhe Assignment

Effect of the Assignment iipon the Estate of the Wife.

The assiijnccs of a bankrupt are entitled to the same in- terest in the property of the wife as the bankrupt himself; and whatever proper! j vested in the bankrupt, which lie could himself assign or release, the assignees become en- titled to by the coninii&sioners' assignment.

Debts due to the wife dum sola ', or stock in the public funds*, or a chose in action', or a mortgage to which the Avife was entitled before her marriage '», are assignable by the commissioners under the cotiimission.

But the necessary apparel of the wife and her children ', or a vested legncy not reduced into possession by the hus- band in his liletime^', or the property of a feme covert, sole trader according to the custom of London', of property given to the wife for her sole and separate use ^, or if the wife is entitled to dower ', or if the bankrupt is considered as trustee of an estate settled to the separate use of the wife during life '", these will not pass by the commissioners' as- signment.

And if the wife's property cannot be possessed by the as- signees, without the intervention of a court of equity, the court will compel them to make a competent settlement upon lier, before it will permit them to get possession of the pro- perty, unless the wife be previously properly provided for out of it".

And when a setllcment has been made, previous io the marriage, of part of a wife's property io her separate use, it

» Miirs V. Williams, 1 P. AVms. 218.

' Pringle v. Hodgson, 3 Vcs. fill.

3 Tudor V. Samyne, 2 Vcrn. 270.

,4 Bofvil V. Brander, 1 P. Wni^. 458. s 5 Geo. Tl. c.?,0. s. 1.

* Gaynerv, Wilkinson, 2 Dirk, -101. 7 Lavie v. Phillips, .S Bur. 1776.

** Vandenanker V. UeshrouBil), 2 \rni..9G. 9 Stone, Ifi^-

«" Tjrrcl V. Hope, 2. Atk. bbl. Bcnnet v. Davi?, 2 P. Wms. 31G. Lock- yet V. J>3vaj5P, 2 Str. 946.

" Jacobson v. Williams, 1 P. Wms. 382. Lumb v. Milnes, 5 Ves. JuD. 517.

docs

Of Bankruptcy . — Of the Effect of the Assignment , 3S,^

does not bar her claim to a further settlement out of newly acquired property'.

If a trader previous to his marriage covenant to settle specific lands upon his wife, and he becomes a bankrupt, and dies without performing the covenant, the court will compel the assignees of the husband io carry the settlement ^nto execution ^.

Of the Effect of the Assignment upon Partnership Property,

In the case of a joint commission, all the estate, both se- parate and joint, of the bankrupt partners, vests, by virtue of the assignment, in the assignees '.

Therefore if a partner in contemplation of bankruptcy deposit goods, as if purchased, witlj a third person for a creditor of the firm, such deposit being fraudulent, the goods will pass to the assignees under a commission against all the pArtners '*,

But a disposition of partnership eflbcts in the course of trade, for a valuable consideration and without fraud, by a solvent partner, after an act of bankruptcy by his copartner, but which was unknown to him, is valid ; and if the solvent partner afterwards fail, the assignees cannot recover such effects from the vendee '.

Where only one partner of a copartnership is declared a bankrupt, the assignees of the bankrupt partner take all the separate property of the bankrupt ''', and, from the time of the act of bankruptcy committed, become tenants in com- mon with the solvent partners of all his interest in the part-

* Biirdon V. Dran, 5 Vps. Jun. 60T.

* Jordan v. Savage, 'i Kq. Ca. Ahr. IflS. 3 BoWon V. PiTller, 1 Bos. and Fnl. 539.

* Hague V. Rolleston, 4 Bur. 217 C. 5 Fox V. HanburvjCowp. 415.

« Jix parte Cobhnm, 1 Bfo. C. C 576.

nership

524 Of Bankruptcy . — Of the Effect of the Assignment.

nership effects '. The assignees however take the share or interest of the bankrupt partner in the joint property, sub- ject to all the riijhts of his copartners, and to the account to be taken between them as partners S

Where one of three partners became a bankrupt, and the partnersl)ip consequent!/ dissolved, and the solvent partners continued to carry on the trade with the capital as consti- tuted at the time of the bankruptcy ; the assignees of the bankrupt were held entitled, beyond an account and distri- bution of the stock, &c. to a participation of subsequent profits made by tlie solvent partners carrying on the trade with such capital ' .

And as the assignees of a bankrupt partner take by the assignment the same interest as the bankrupt himself was entitled to at the time he became bankrupt ; where one partner advanced part of his share of the expense of an adventure, and gave his notes for the remainder, which did not become due till after he had become bankrupt ; it was held that the assignees were entitled to his full share of the profits of the adventure, although the note creditors re- ceived only a dividend under the commission, and that it was uncertain at the time of the bankruptcy whether the adventure would be attended with profit or loss ■♦.

But if one of the partners embezzles part of the part- nership effects, and becomes a bankrupt, the assignees arc entitled only to the balance of the account after the part- nership debts are paid, and the amount of the embezzlement has been deducted K

Neither are the assignees under a separate commission of

' Ex parte Hodgson, 2 Bro. C. C. 5. Ex parte Smith, 5 Ves. Jnn. 295. Smith V. Oriell, I East's Rep. 368. Barker v. Goodair, 1 1 Ves. 78. . » Whitm. B. L. 226. 3 Crawshay v. Collins, 13. Ves. Jun. 218.

< Smith V. De Sylva, Cowp. 469.

5 Richardson v. Gooding, 2 Vern. 293.

bankruptcy

Qf Bankruptcy. — Of the Effect of the Assignment. 525

bankruptcy entitled to the elFects of a solvent partner in the hands of third persons against hi^ consent'.

Nor are the assignees under a commission of bankruptcy against one of two partners entitled to theell'ects of the other, where two persons engaged in different trades entered into partnership in their respective trades, but on a dissolution of the partnership mutiwl releases of all demands were given by each partner, who took upon himself the payment of the debts due from his own trade *.

If upon a fair and open dissolution of the partnersliip, the retiring partner bona tide transfers his interest in the partnership effects to the contiiming partners, who carry on the trade, and against whom a commission afterwards issues before all the joint creditors have been paid, all the effects of the old partnership found in specie amongst the property seized under the commission vest absolutely in the as- signees ; and even though there should be outstanding debts of the former firm unsatisfied, these effects so found in specie will not be considered as the joint estate of the former firm, either for the benefit of joint creditors, or the partner who has withdrawn ^

And in ex parte Fell '*, where an outgoing partner as- signed by deed his share of the stock to the remaining partners, and they and a surety covenanted that they would in due time discharge all the partnership debts, and in- demnify the outgoing partner, and upon the bankruptcy of the remaining partners the outgoing partner was arrested by the creditors of the old partnership ; upon petition he was held not to be entitled to have .the specific stock and debts of the old partnership applied in satisfaction of tlie creditors of that partnership, in preference of the creditors of the new firm.

' West V. Skip, 1 Ves. 242.

^ Ex-ijarte Titner, 1 Atk. IJ6. 3 Ex parte RufBn, G Ves. Jun. 119.

* 10 Ibid. 347.

Of

526 Of Bankruptcy. — Of the general Effect ofBankrtiptcjj.

Of the general Effect of Bankruptcy on the Property of the Bankrupt^ and of others.

hy the act of banki-uptcy, all the real and personal estate of the bankrupt is vested in the assignees^ by relation, from the time of the act committed ; so that the transactions of the bankrupt from that time are void, except ia the cases- provided ft)r in the following statutes.

By the statute 1 Jac. I. c. 15. s. I L it is provided, that no debtor of the bankrupt shall be endangered for the pay- ment of his debt trul}'^ and bona fide made to any such bankrupt, before such time as he shall understand and know he has tecorae a bankrupt.

By the statute 19 Geo. II. c. o2. it is provided, that no creditor of a bankrupt for goods sold, or upon bills of ex- change, shall be liable to refund to the assignees any mo^ ney received by him of the bankrupt upon such account, in the usual and ordinary course of trade and dealing, be- fore such creditor knew, understood, or had notice, that he had become a bankrupt, or was in insolvent circumstances.

By the statute 21 Jac. I. c. 19. s. 14. it is provided, th?it no purchaser for a good and valuable consideration shall be affected by the bankruptcy of the vendor, unless the com- mission is sued out within five years after he ihall have be- come a bankrupt.

And by the statute 46 Geo. III. c. 135. s. 1. it is enacted, tliat all conveyances by, all payments by and to, and c:i contracts and dealings by and with, any bankrupt, bona, iide made and entered into more than two calendar months before the date of the commission, shall be valid, notwith- standing any prior act of bankruptcy, provided the person so dealing with the bankrupt had not at the time of such conveyance, &c. any notice of any prior act of bankruptcy, or that the bankrupt was insolvent or had slopped payment.

The

Of Bankruptcy .^ — Of the general ^ff'ect of Bankruptcy . 537

The third section pf the net also declares, that the issuing of a comnjission, or the striking of a docket for that pur- pose, ^vhethcr any cornmission actually issues t!iereon or not, is to be deemed a notice of a prior act of bankruptcy for the purposes of the act, provided it shall appear that an act of bankruptcy had been actually committed at the time of issuing such commission, or i:triking such docket. But by the statute 49 Geo. III. c. 1^1. s. 1. so much of tlie 46 Geo. HI. as makes the striking of a docket notice of a prior act of bankruptcy is repealed.

In the construction of tiic 19 Geo. II. c. 32. it has been determined, that to bring pajments made by a bankrupt, within the protection of the statute, they must be made in respect of goods sold, or bills drawn, &c. in the ordinary course of trade, as also without notice of an act of bank- ruptcy, and before the issuing of a commission. And therefore, in the construction of this act, it has been helil, where money had been paid by a trader, after a secret act of bankruptcy, to a carrier, for the carriage of the trader's goods, that the payment was not within the statute, which was confined to payments made for goods, and payments of bills of exchange '.

So where A. recovered a verdict for a sum of money against B., who afterwards committed an act of bankruptcy ; A., instead of entering up judgement and taking out execution, consented to take a bill for the amount drawn by B. on C. his debtor, which bill when it became due was duly paid by C. : it was held that this payment was nt»t protected by the statute *.

But if a payment is made by a trader under an arreat, it has been held to be a payment in the usual antl ortlinary course of trade and dealing, and cuusequenlly witliin the

' Bradlev v. Clark, T) T. R. 197.

"* Pinkerton v. Marshall, 2 iien. Bl. 334.

protection

528 Of Bankruptcy . — Of the general Effect ofBankniptviJ.

protection of the statute, although siicli payment was' made after he had committed a secret Ziti of bankruptcy '.

And so wil! a payment made immediately to a creditor, >vho brings an officer with a writ into the trader's shop ^

But it ap})cars that the act extends only to payments made by the bankrupt himsdr, or his authorifced agent ; and not to pnyments made by a third person upon com- pulsory process, or for the accommodation of the bankrupt. And tlierefore payment by a garnishee of money attached in his hands, is not protected l)y the statute ^

As to the efftict of bankruptcy on bills of exchange and promissory notes, it has been held, that if a bankrupt, be- fore, liis bankruptcy, assign to a creditor a debt or bill of exchange or note, for a valuable considerati(m, the assign- ment is protected by the statute of the 19th George the Second-*. So if a trader, after a secret act of bankruptcy, indorse a bill of exchange to a creditor, payment of such bill before a commission is issued against the trader is within the statute '. And if a bill or note be not capable of de- livery at the time, a transfer of it without delivery will be binding upon the assignees, provided notice of the assign- ment be given to the debtor ^. But to render this effectual as a payment in the usual course of trade within the statute, the bill, &c. must, as soon as it is capable of a de- livery, be delivered ; otherwise, if it remains in the hands of the bankrupt, his assignees will be entitled to it'.

But if the holder of a bill of exchanjre give time to the acceptor, upon condition of receiving interest:; payment of the bill after a secret act of bankruptcy has been de- cided not to be stjch a payment in the ordinary course of business as to come v.ithin the meaning of the statute*.

' Holmes v. ^Vinni^s:ton, cited in 2 Bo?, and Piil. 398.

^ Jones V. l.ing^aid. Ibid. 3 Hovil v. Browning,? East's Rep. 134,

« Graffe v. Greffiilhe, 1 Camp. N. P. C. 89.

s Hawkins v. Penfold,2 Ves.550. <= CiiUe*), B. L. 189.

" Jones V. Gibbons, 9 Ves. Jun. 410. « Vernon v. Hall,'2 T. R.648.

So

Of Banhiiptcy . — Of the general Effect of Bankruptcy . 529

So where bankers having accepted bills for the accommo- dation ot" a trader, who after committing an act of bank- ruptcy, bnt before a commission was sued out, lodged money with them to take up the bills, which did not be- come due till after the commission was sued out, and then were rcge.larly paid by the acceptors ; it was held they were bound to refund tlie money which the bankrupt had lodged with them, and that they neither had a right of set-off under the 5th Geo. II. c SO. nor could they protect thon- sclves under the 19th Geo. if. c. 32. as having received the money in payment of bills of exchange in the ordinary course of trade '.

And if a banker, after notice of an act of bankruptcy committed by his customer, pays his draft ^, or pays over any money to the bankrupt himself^, the assignees may recover the money ; and he cannot set off such payment, nor be allowed to receive a dividend under the commission in the place of tlie creditor whose debt lie paid, although such creditor's debt M'ould have been proveablj under the commission •*.

As to payments made to a bankrupt, it has been decided, that if a trader after a secret act of bankruptcy consign goods to a factor, who agrees to advance money theieon, and accordingly accepts and pays bills drawn on him by the trader for their amount ; the assignees of the bankrupt may recover from the factor the value of the goods j because the accepting and payment of the bills is not a payment of goods sold widiin the meaning of the statute '.

So if a broker, liaving goods of a trader under arrest in liis possession for the purpose of sale, receives notice from the attorney of the future assignees not to sell ,them, as a

' Tamplin v. Di!iirins,'2 Camp. N. i^. C 312.

' Vernon 7. Huniioy, 2 T. !{. <!.'}.

3 ihinkcy V. Vornon, 3 Hro. C. C. 313.

* Trammeisl<*y v. PiirlinG;, 3 Ves. Jun. 757.

* Copland v. Stein, S I'. R. 199.

2m commission

530 Of Bankruptcy . — Of the general Effect of Bankruptcy .

commission would shortly be issued against the trader, and that the act of bankruptcy would relate to the day when it was committeJ, which was sonic time past ; if the broker notwithstanding sells the goods, and pays the money over to the trader before the expiration of the two montljs from the time of the arrci«t, it has been held that he is liable to repay the proceeds to tJie assignees'.

But if a debtor of a bankrupt, in consequence of a suit or a judgement at law, is compelled io pay his debt before the execution of an assignment under a commission of bank- ruptcy, although he had notice of an act of bankruptcy committed ; the assignees cunnot recover the money a se» cond time from the debtor, unless they can prove fraud and collusion between him and the bankrupt ^.

But notwithstanding by the act of bankruptcy all the bankrupt's property is vested in the assignees ; ye^i it is an established principle of law, that they take it in the same situation, and subject to the same liens as it was affected in his hands, and they stand in his place, and are bound by all acts fairly done by him in relation to his property ^

As to judgements, statutes, executions, &c. it is provided by the statute 21 Jac. I. c. 19. s. 9. that all judgements, statutes, recognizances, attachments by the custom of Lon- don or any other place, against the lands or goods of a bank- rupt, are void as against the assignees. But if such exe- cutions and attachments have been bona fide executed and levied more than two calendar months before the date and issuing of i\\G commission, they are by virtue of the statute 49 Geo. III. c. 121. s. 2. valid, unless the creditor had no- tice of a prior act of bankruptcy, or that the bankrupt was insolvent or had stopped payment.

' Kin?: V. Lrith, 9 T. R. U\. « Foster v. AUaiison, 2 T. R.479.

3Ciillcn, B. L. 185.

10. Of

Of Bankruptcy,— Of Proof of Debts. 5SI

10. Of the Proof of Delis binder the Commission. IVIiat Debts are proveable.

By the statute 46 Geo. III. c. 135. s. 2. it is enacted, that all persons with whom the bankrupt shall have bona tide contracted any debt, before the date and suing forth of the commission, which if contracted before any act of bank- ruptcy committed might have been proved under the com- mission, shall, notwithstanding any prior act of bankrupt- cy, lie admitted to prove such debt, and be creditors under such commission, in like manner as if no such prior act of bankruptcy had been committed ; provided such creditors had not, at the time such debt was contracted, any notice of any prior act of bankruptcy.

And by statute 7 Geo. I. c. 31. debts upon bills, bonds, notes, or other personal securities, but payable on a future day, are also proveable under a commission.

But as this statute was considered to be confined by the operation of the 5th Geo. II. c. SO. s. 22. to written secu- rities, it was provided by the statute 49 Geo. III. c. 121. s. 9. that all persons who shall give credit upon good and va- luable consideration bona fide, for any mouf^y whatsoever not due or payable at or before the bankruptcy of the per- son credited, shall be admitted to prove their debts under the commission, as if the same were payable presently, de- ducting a rebate of interest for what they receive, to be computed from the actual payment thereof, to the time such debts would become payable according to the terms upon "which they were contracted.

So contingent debts, provided the contingency has taken place at the time of the bankruptcy, may be proved '.

But debts made void by statute, as being founded upon

' Ex parte East Tndin Company, 2 P. Wras- 395. TiilW v. Sparkes,

2 Str. 867. Ex parte Groome, 1 Atk. 114. GodJard v. Vanderheyden,

3 Wils. 270.

S M 2 an

532 Of Bankrvptcij.—Of Proof of Belts.

an usurious or otlier illegal consideration ', or for stock- jobbing transactions *, or for goods sent to India contrary to the charter of the company ^

Of the Time of Proof.

Formerly, crec'ilors were not aIlo\^ ed to prove their debts, if at the time of their coming in to prove the same any part of the bankrupt's estate had been actually distiibuted ; but now, except in cases of gross negligence, proof is al- lowed to be made at any time, while any thing remains to be divided ^. And though, in strictness, a creditor vvho has neglected to prove his debt is entitled to be paid only fu- ture dividends pari passu with the other creditors ; yet it is the practice to admit such creditor, if his d^lay was not fraudulent, but owing to accident or unavoidable circum- stances, to fee paid former dividends rateably with the other creditors, (provided former dividends are not thereby dis- turbed,) and then to receive dividends rateably with them ^

But in the case of a bill or note to which there are several parties, if proof is delayed until a dividend has been de- clared, thouih not paid, under one of the commissions, if the holder has not proved his debt under that commission, he cannot prove under comn.issions against (he other parties for more than the residue, after deducting the amount he would have been entitled (o under the dividend- declared^.

Of claiming a Deli.

If a creditor cavmot suflicirntly ascertain or substantiate Iiis debt, as where the agent of a creditor cannot produce

« Benfi'-lfl V. Solomons, 0 Ves. Jyii. SL Ex parte Skip, 2 Ibid. 489. Ex parte IV'J -ther, S Ibid. 37'i.

2 Ex pa.r'<' Buimer, 13 I hid. 'M:i.

3 Ex parti- Mo^!;rid;'-e, Couk'-, H. L. 1ST. * Ex par'e Pf^arhv, I Aik. ill

s Ex parte Long, 2 Bro. C. C. 50. In re Wheclor, 1 Sclio. and Lef. 242. Cooke, 5J1. ^ Cooper V. Pepj's, 1 Atk. 106. Ex parte Leers, 6 Ves. Jun. 644.

his

Of Bankrupfaj.'^Of Proof of Dtlts. 533

Ill's authority, it is usu;il for the commissioners to suffer a chiim to L)e entered ; which entitles the party to have a di- vidend reserved upon liis claim, and to donian 1 it as soon as his debt is ascertained, and his proof admitted '.

But if the claim is not substantiated in a reasonable tinie, it is the general practice for the commissioners to strike it out before a dividend is declared, unless sufficient reason is olTered to them for prolonging the time. Tlie creditor, however, is afterwards at liberty to prove his debt and re- ceive his share upon any future dividends, on satisfactorily substantiating his claim ^.

By statute 19 Geo. II. c. 32. s. 2. the obligee iii any bot- tomry or respondentia bond, and the assured in any policy of assurance, bona fide made and entered into before the bankruptcy, on a good and valuable consideration, shall be admitted to claim under tlie commission, and to prove his deniand, after the loss and contingency shall have hap- pened.

Of the Mode of Proof

The ordinary mode of proof is by oath of the creditor ^. And by the statute 5 Geo. II. c. SO. s. 26. the commisdoners ore to admit the proof of any creaitor's debt, who sh;ill live remote from i\\e place of meeting of the commissioners, by affidavit ; or if tlie party be a quaker, by solemn affir- mation. But to prove a petitioning cred'tor's debt, the creditor must be present before the commissioners'^.

If the commissioners have just gioun is to doubt the fairr ness of a debt, althoujrh the creditor has made a positive oath, they may reject it, or admit it only as a claim K The party *s remedy is by petition to the Lord Chancellor^'.

And by the 29th section 5 Geo. 11. c. 30. if any creditor

' Cooke, B. L. 255. ^ Ibid. 3 Cullen, B. L. 140.

4 Geiier-l Order, Nov. 26th 1798. s Ex parte Simpsoij, I Atk. 70.

• Clark V, Capron, 2 Ves. Jun. 666,

perjure

53i Of Bankruptcy.— Of Proof of Belts.

perjure himself in swearing to or aflirming a debt, he is guilty of perjury, and liable to pay double the sum so sworn or affirmed to be due or owing ; which double sum is to be rqually divided among all the creditors under the com- mission.

Of the Creditor's Election, ivhether he will proceed at Law, or prove under the Commission. Before the statute 49 Geo. III. c. 121, a creditor might proceed at law, and also prove his debt under the commis- sion, against the same party ; or he might make a claim, and still proceed at law: but by the fourteenth section of that act it is enacted, that no creditor who has brought an action against a bankrupt shall be permitted to prove, or to make a claim for any purpose whatever, without relinquishing such action, and all benefit from the same ; and th^t the proving or claimipgof a debt under a commission of bank- rupt shall be deemed an election by such creditor to take the benefit of such commission witii respect to the debt so proved or claimed by him. Provided always, that such creditor shall not be liable to the payment to the bankrupt or his assignees of the costs of such action or suit which shall be so relinquislied by him. And provided also, that where any such creditor shall have broTight any action or suit against any such bankrupt jointly with any other person, his relinquishing such action or suit against such bankrupt shall not in any manner affect such action or suit against any other person.

This statute does not, however, afibct the right of a cre- ditor (not being the petitioning creditor), who has distinct demands, to prove one under the commission, and to pro- ceed at law upon the other ; as where a creditor has a bond debt, and another debt for rent ' ; or a note for one sura,

• £x p;irte Botterill, 1 Atk. 109,

and

Of Bankruptcy.— Of Proof of DehU, 535

and a bond for another '. Or if he has a demand in right of his wife, and another due to himself* ; or if one is a joint debt, and the other a separate one ^

And it has been held in the construction of this section, that if a creditor has both proved his debt under a commis- sion of bankrupt, and commenced an action against the bankrupt before the passing of the statute, the statute does not compel him to relinquish his fiction''.

The being chosen assignee will not prevent the creditor from suing the bankrupt at law, if he has not proved his debts.

And if a Creditor has the bankrupt in execution at the time a commission issues against him, he mny prove his tlebt under the commission upon condition of discharging the bankrupt out of execution ; but such creditor cannot sue out a commission ^.

But if after a commission has issued a creditor takes the bankrupt's body in execution, it is a conclusive election ; and althougli he afterwards discharge the bankrupt out of custody, he will not be entided to a dividend of the bank-i rupt's estate".

Jt has been held that a landlord cannot distrain for rent and come in under the commission at the same time ; but he must make his election either to waive his proof, or his distress ^.

JVeither can a creditor split an entire demand, and prove part under tiie commission, and sue the bankrupt at the same time 9; and it seems that a creditor cannot adopt these

' Per Lord Eldon in ex parte Grosvenor, 14 Ves. Jun. 588. ' Ex parfe Matthews 3 Atk. 816. 3 Ex parte Stevens, Cooke, B- L. 25.

* Atljerstone V. Huddlestoii, a Taunt. 181.

* Ex parte Ward, I Atk. 15<i.

6 Ex parte Ilicklin, Cooke, B. L. I."!. ' Ibid, ex parte Knowell, 13 Ves. Jun. 192.

* V.x parte Grove, 1 Atk. lOJ.

9 Ex parte Bottsriil, 1 Atk. 109.

double

336 Of Bankruptcy.— Of Proof of Debts.

double remedies even upon separate notes, if given by the bankrupt in respect of the same transaction '.

Of reducing and expunging Froof of Dells.

If after a creditor has made his proof, it appears that it ought not to have been adniitled, or at least not to the extent, the commissioners may, in pursuance of an order upon pe- tition *, either reduce the proof, or expunge it altogether '.

But if since the proof was expunged circumstances have occurred so as to materially alter the state of the debt, the proof may be restored, in order that the parly himself, or some third person, may have the benefit of the origiiial proof, and receive dividends which would not otherwise be recoverable •*.

Having stated the general nature of proof of debts under a commission of bankrupt, we shall now treat of the law re- lating to the proof of each particular description of debts.

Of Creditors having a Mortgage or other Security.

By the statute 21 Jac.I. c. 19. s. 9. no creditor having a security by judgement, statute, recognizr.nce, &c. or having made attachments b}-^ the custom of London or elsewhere, shall be relieved for more than a rateable proportion with the other creditors, without respect to any penally contained in the security, unless such judgements, &c. have been bona fide executed more than two calendar months before the date and issuing of the commission K

When a creditor offers to prove his debt, he is obliged io state in his deposition whether he has a security or not ; which if he has, he must either deliver up, or obtain an

' Ex parte Grosvenor, 14 Ves. Jun. 58T.

^ Ex parte Nixon, Mont. B. L Ai)pend. 34.

3 Ex parte Smith, Cooke, B. L. 124. <> Cooke, B. L. 151.

s 49 Geo. III. c. 121. s. 2.

order

Of Banlmiptcy.—Of Proof of Belts: 537

otder for the sale of; after v»hich he may be aduiitted to prove for the deficiency '. So if a creditor abroad has by attachment or other process obtained a priority of payment out of the bankrupt's effects there, before he can be admitted to prove, he must abandon the priority lie has obtained ^. And if a creditor by a demand partly proveable, and partly not proveable, as from having been paid after the bank- ruptcy, has a security, he may apply it to the demand not proveable under the commission, and may be admitted a creditor for the proveable demand K

But if a creditor has a joint security fn>m the bankrupt and another person, he is not obliged to deliver up the se- curity ; but is entitled to receive dividends under tiie com- mission for such part as he may not have recovered from the co-security, provided that he does not receive more than twenty shillings in the pound upon the whole debt ^.

A creditor who has a mortgage, or a pledge, if he is ap- prehensive that the security is not equal to the payment of his debt, may have the pledge sold. But the commissioners cannot order the property mortgaged or pledged to be sold, but upon an application of the creditor ; for they have no power to dispose of a creditor's security without his con- sent.

If a security is deposited by a debtor generally to indem- nify his creditor for a balance then due, and tor such sums of money as shall be advanced to him, and at the time of the bankruptcy of the debtor the creditor has two demands, the one proveable under the commission, and the other not; he may apply his security, in the fiist place, to reduce that demand which is not proveable under the commis- sion K

' Ex parte Trowfon, Cook^, B. L, 124.

* Ex parte Lc Mesurier, 8 Yes Juii.8i.

s Ex parte Htin.er, 6 Yes. Jun. 94. -* Ex parte Bennct, 2 Atk. 527.

5 Ex parte iluntcr, 6 Yes. Jun. 9-i.

Of

538 Of Bankruptcy. -^OfVroof of Delis.

Of Creditors by Annuities,

15y the statute 49 Geo. III. c. 121. s. 17. it is enacted, that it shall be competent to any annuity creditor of any per- son against whom a commission of bankruptcy shall issue after the passing of this actjwhetJier the annuity shall be se- cured by bond or covenant, or bond and covenant, or by what- ever assurance or assurances the same shall be secured, or whe- ther there shall or shall not be or have been any arrears of such aimnity at or before the time of the bankruptcy, to prove un- der such commission as a creditor for the value of such an- nuity, which value the commissioners shall have power and are hereby required to ascertain ; and the certificate of every bankrupt under whose commission such proof shall be or might have been made, shall be a discharge of such bank- rupt against all demands whatever in respect of such an- nuity, and the arrears and future payments thereof, in the same maimer as such certificate would discharge the bank- rupt with respect to any other debt proved, or which might liave been proved, under the commission.

Of Creditors hy Partner skip.

As all the s'ock and effects of the partnership are vested in all the partners, subject to their respective rights against each other, each partner is to be allowed against the other whatever he has advanced or brought into the partnership, and to charge his copartners with what they have not brought into, or have drawn out of the partnership funds beyond what they were entitled to. l^herefore, where one partner is indebted to the firm of which he is a member, there is no doubt but that, if the firm continues solvent, they, or in case of their insolvency their assignees, may prove under a sepa- rate coniniission against their copartner a debt due to them

by

Of Bankrvptcy.—Of Proof of Belts. 339

by him'. But if the firm is called upon, after the bank- ruptcy of their copartner, to pay more than their share of the partnership debts, they cannot prove such debt under the commission ^

Where, hou ever, tlie firm is indebted to one of the part- ners, he cannot be a creditor upon the same footing and in competition witli tlie joint creditors ; he can only have sa- tisfaction out of (he surphis which shall remain after the joint creditors arc paid K And in case of such partner's insol- vency, the law is the same with respect to the assignees ; they can be admitted to prove on the surplus only 4.

If money is paid by a solvent partner to another, who afterwards becomes a bankrupt, for the purpose of being paid over to creditors as his liquidated share of the joint debts, arid the bankrupt partner does not apply the same for that purpose, the solvent partner may prove the amount under the commission against his bankrupt partner ; and that al- though the solvent partner did not pay tiie debts to the joint creditors until after thi; bankruptcy ^.

Where one partner has, either with or without the con- sent of his copartner, taken more than his share out of the partnership funds, the joint creditors cannpt be admitted to prove against the separate estate of the partner who drew out the money, until his separate creditors are satisfied ; unless it can be shown thiit such partner took the joint property with a fraudulent intent to augment his separate estate ^\

Where there are several partners constituting one firm, and some of them carry on a distinct trade, and in such character deal with and become creditors of the other firm,

• Craven v. Knight, 2 Chan. Rep. 926.

" Wright V. Hunter, 1 Iiasl'.s Kep. 20.

s Ex parte Hunter, I Atk. 227. ^ Ex parte Burrell, Jan. 29d, 17S3

s .5 Ves. Jun. 79i;.

« Lx parte Batson, Cooke, IJ.L. 334. Ex parte Cust, Ibid. 535.

and

5 40 Of Bankruptcy.— Of Proof of DehLs.

and a joint commission issues, proof may be made of such debt as if they dealt with strangers'.

But if the concern carried on by one partner is merely a branch of the joint concern, proof will not be per- mitted \

Of Apprentices.

An apprentice is only entitled to come in as a creditor under the commission for the residue of the premium paid to his master, after deducting a proportionate part for the time he lived with the bankrupt '.

Of Creditors by Award, Bonds, Bills of Exchange and Promissory Notes, or Delts payable at a future Day.

If an award be made before bankruptcy, it creates a debt at law which may be proved under the commission -*.

A cj-editor by bond is entitled io prove liis demand against all the parties to it, and io receive dividends upon the whole Slim from each estate, until he receives twenty shillings in the pound. But if he has received any part of the debt before he proves under the commission, he can only prove and receive dividends for the residue due to him ^

By the statute 7 Geo. I. c. SI. s. 1. bills of exchange and promissory notes,'although not due and payable at the time of issuing a cormnission, are proveable und<.r it, de- ducting a rebate of interest after the rate of five per cent, per ann. for what the creditor shall receive, to be computed from the actual payment io the time such bills, &c. would have become due and payable.

But bills founded on an usurious or other illeg il conside-

• Ex parte Jolms Cook'^, B. L. 538. Ex parte St. Baibe, 11 Ves. Jun. 413.

» Ex parte St. r.nrbe, 11 Ves. Jun. 413.

3 Ex parte !?;inlh/, 1 Atk. 149. •» Bakers case, 2 Str. 1152.

5 Ex parte V. ilJman, 1 Atk. 109.

ration,

Of Bankruptcy, — Of Proof of Belts. 541

ration ', or on an illegal contract^, if defective us to form% or invalid as to the mode of acceptance or transfer ■♦, are not provcahle under a commission.

So if the liold<'r of a bill has been guilty of such laches or conduct as would have discharoed the party at law if he had continued solvent ^, or that the statute of limitations has begun to operate on the bill '^, he is equally precluded from proving under a commission.

But where the consideration of a bill is partly ba:d and partly good, the bill to the extent of the good consideration may be proved under a commission ".

And where a bill ffiven for an antecedent debt is invalid on account of iisury, or otherwise, the antecedent debt may be proved under a commission^.

Where there are several parties to a bill of exchange or promissory note, the holder is entitled to prove against all the parties to it under their respective commissions, and to receive dividends under eacli commission upon the whole amount, until he has received twenty shillings inthepound^; or such holder may prove it under one or more commis- sions against some x)f the parties, and proceed at law against the others •°. And if the holder, after having proved the whole amount of the bill, receives a part of the amount from any one of the parties to it, he is nevertheless entitled to re- ceive dividends upon tlie whole bill from the estates of the other parties, provided such dividends do not exceed twenty shillings in the pound upon the remainder of the bill". But if he has received any payment or composition pre-

* Ex parte Skip, 2 Ves. Jnn. -189. Ex parte Mather, ?? Thid. 37'?,

* Ex parte l}iilnifr, l.> Ibid. '?>\:i. * Ex parte Adney, Cowp. 460. <lnr'» Barrington, Scho. ar)d Lef. 112.

5 Ex parte V. ilson, 1 1 Ves. Jun. 410.

* Ex parte Dewdney, 15 Ihid. 179. ' Ex parte Mather, 3 Ibi.l. 373.

* Ex parte Flarkbiirii'-. 10 Ibid. "cOS.

9 V.% parte Wildmaii, 1 Atk. 109. Ex parte Bloxam, 6 Ves. Jun. 449, '* Ibid. ~ " Cooper v. Pepys, I Atk- 106.

vious

5-42 Of Bankruptcy. "'Of r roof of Belts.

vious to the time of his applying to prove, he can only prove for so much as remains due upon the bill '.

A bill drawn by way of accommodation, though it can- not be proved as between the parties to the accommodation, yet it may be proved by a bona fide holder against all par- ties, whether thry have received value or not *.

In the case of accommodation acceptances, if cross pa- per has passed between the parties for their mutual accom- modation, the holder may prove it under a commission of bankruptcy, before he has taken up his own or been dam- nified ^

There is a material difference, however, between the right of such a party to a bill to prove it, and that of a person who has actually advanced a valuable consideration for the bill. The latter is entitled to prove and receive a dividend immediately ^ ; but tlje dividends will be withheld from the former till his own paper has been paid '.

So where a party to an accommodation bill or note re- ceives from the party accommodated, another bill or note by way of indemnity, he will be entitled to prove and receive a dividend immediately upon such counter security, though the debtor becomes a bankrupt before such counter security is payable, and before the surety himself has been called upon such accommodation bill or note ^'.

But to create a debt capable of being proved in conse- quence of a counter security of this nature, the security must be a bill, note, or bond, payable at all events : an un- dertaking from the drawer to indenniify the acceptor, or a receipt for his acceptance, will not have that effect".

» Cooke, B. L. 150, ' Ex parte Marshall, 1 Atk. 130.

3 Ex parte Clanricgjrde, Cooke, P.. L. 160, Buckler v. Buttivant,3 East's Rep. 72.

4 Ex parte Kin^, Cooke, B, L. 157, 5 ] Mont. B. L, 139. * Ex parte Maydwell, (:ooke, B. L, 157.

7 Vanderhavdcn V. De Paiba, 3 Wils. 5?8. Ex parte Metcalfe, 11 Ves. Jun. 404.

And

Of Bankruptcy.— Of Proof of Debts, 543

And it is the practice, where there are cross demands be- tween the surety and the bankrupt upon counter paper, to suspend the dividends until it appears what tiie surety ac- tually pays, and how far he exonerates the bankrupt's estate from his own paper'.

If a person has accepted a bill in consideration of the drawer's accepting a cross bill, and it is understood tbat each party shall pay his own acceptances, he cannot prove under a commission against such drawer any payment made on his own acceptance, either before or after the bankrupt- cy of the drawer. And therefore where cross paper had passed between two houses for mutual accommociation, and both became bankrupt, and the a.ssig-nees of one liouse pe- titioned to prove against the estate of the other, bills that were outstanding and capable of proof against both estates; it was held, that as between the two estates no proof could be made in respect of the unsatisfied bills in the hands of either party, but that they must be excluded from the account*.

As to the proof of ilebts. payable at a future day, as (he statute 7 Geo. I. was coasidered lobe confined by the ojx- ration of the 5th Geo. II. c. SO. s. 22. to written securities only, and not to extend to debts for goods sold upon credit merely, it was enacted by the statute 49 Geo. HI. c. 121. s. 9. that all persons who shall give credit upon good and valuable consideration, bona fide, for any money whatso- ever not due or payable at or before the bankruj)tcy of the person credited, may prove (heir debts under the commis- sion, as if the same were payable presently, deducting a rebate of interest for what they receive, to be coinputed from the actual payment thereof to the time such debts would become payable, according to the terms upon which the same were contracted.

' Cullen, R. L. 134.

» Ex parte Walker, 4 Ves. Jun. Zli. Ex parte EarJe, 5 Ibid. 8'33.

As

544 Of Bankrupt ci/.— Of Proof of Debts.

As the preamble of the statute 7 Geo. I. recites only " securities for the sale of goods and merchandize," a ques- tion arose, whether securities g-iveu upon any other account were within the meaning of the act ? and it was decided, tliat the statute is not merely confined to securities for goods sold and delivered in the course of trade, but that it ex- tends generaU} to all p( rsonal securities for a valuable con- sideration, w'icre ihc time of payment is certain, though pos(poned to a future day '.

Of Creditors ly Compositio??.

0 If a creditor agrees with his debtor to take a composition to be paid by instalments, and after payment of the first instalment the debtor becomes bankrupt, the creditor may prove the whole amount o( his original debt, after deduct- ing the instalment so paid %

Of Contingerd Debts,

Debts depending upon a contingency which has not taken place at the time of the bankruptcy, cannot be proved under a commission of bankrupt'.

Of Creditors of a Banhiipt Executor or Trustee.

As an executor acts in auter droit, his bankruptcy does rot take away the' right of executorship'*. And whatever property the bankrupt may possess as excculor or trustee, whether in effects or money, which can be distinguished from his own, is not aflected by the commissioners' assign* ment' ; unless he is beneficially entitled to any part of the

» Swaine v. De Ma(tos, 2. Str. 1211. Brooks v. Lloyd, 1 T. R. 189.

* Ex parte Bennrt, '2 Atk. b'-i.l-

3 i'.x parte Kast India Conij)any, 2 P. V/ms. 396.

■» Kx parte Ellis, 1 Atk. iOI.

i iJenDet v. Davis, 2 i\ Wiils, 318.

(csiator's

Of Bankruplcij.'-Of Proof of Belts. 515

testator's property, and then bis interest passes to his as- signees ' .

If tlie testator's property cannot be distinguished froiu the bankrupt's, proof mast be made lor the amount due to the testator's estate ^.

Of Creditors of Femes Covert.

If a woman be indebted, and she marries, her debts by the marriage become the debts of her luisband, and may be proved under a commission of bankrupt against him^.

Of Creditors hij hisurance.

By the statute I^)Gco. II. c. 32. s. 2. the obligee in any bottomry or respondentia bond, and the assured in any policy of insurance, bona tide made auJ entered into before the bankruptcy of the obligor in such bottomry or respondentia bond, or of the underwriter or assurer in such assurance upon a good and valuable consideration, shall be admitted to claim under a commission against the same ; and after the loss or contingency shall have happened, to prove his de- mand, and receive a dividend proportionably %vith the other creditors, in like manner as if it liad happened before the bankruptcy.

And by the statute 49 Geo. III. c. 121. s. 16. persons elFecting a policy of insurance upon ships, goods, waresj merchandises, or other effects, with any person as a sub- scriber or underwriter, who is or shall become bankrupt, may prove any loss under the commission io which the bankrupt shall be liable, notwithstanding the person effect- ing such policy is not the person beneficially interested iu such ships, &c. provided the person really interested is not in that part ot the United Kingdom where the commission issued.

' Ex parte Butlor, Aml>l 74. » Ex part,- Marsh, I Atk. 158.

3 I Soh, and l.( f. Rep. Wi.

Ss Of

546 ^ Of Bankruptcy.— Of Proof of Dells.

Of Creditors by Joint Debts.

It is an establislied rule, that a cndilor cannot prove against the joint estate of two bankrupt partners, and also against the separate estate of one of them, although he has distinct securities'. But he must make an election against Tvhich estate he ^vill come in upon in preference ; for he cannot prove against both estates so as to receive dividends at the same time'. When however he has made his elec- tion, if there should be a s'arplus from the estate wliich he rejected, he may come in upon that surplus^.

But though a creditor having distinct securities is obliged to make an election against which estate he will prove in preference, yet he is entitled to a sufficient time to examine the state of the different funds'*; and may defer such election until a dividend is declared ^ And even if he has received a dividend, the court will permit him to change his proof on refunding the dividend received''. But if the creditor has elected to proye under one estate, and a divi- dend has been made upon the otiier, the court will not per^ mit the dividend to be disturbed'.

When the credit has been joint, the creditor may be ad- mitted to prove under a commission against the joint estate, notwithstanding he has taken a separate security^.

And if money is lent on th6 separate notes or bills of dif- ferent partners in the same firm, and is applied to the use of the partnership, the creditor may be admitted to prove against the joint estate, if the firm, when solvent, agrees to

' Ex parte Boiibonus, 8 Vcs. .Tun. 542.

« Ex parte Banks, 1 Atk. 107.

? Ex parte Rowlandson, 3 P. Wms. 405. Ex parte Hay, J5 Ves. Jiin. 4.

* Ihid. * Ex parte Clowes, 2 IJro. CiC. .'iQS. ^ Ex parte Rowlandson, 3 P. AVms. 405.

7 Ex parte Beilby, 13 Ves. Jun. 70.

* Ex parte Brown, cited in Ex parte Hunter, 1 Atk. 225.

consolidate

Of Bankruptcy. -^Of Proof of Belts. 547

consolidate tlie debts, aud to consider tlicm us partnership debts'.

So, on the other hand, v/lien the credit lias been separate, the creditor may be admitted to prove against tlie separate estate, notwitlistanding he has taken a joint security ^

Where new partners are admitted into a firm, and the debts of the old firm are, with the consent of the new part- ners, acknowledged to be the debts of the new firm, on the bankruptcy of the new partnership the creditors of the old firm may prove as joint creditors of the new^.

If a partner, with the privily or consent of his copartners, apply to the purposes of the partnership money with which he is separately intrusted, (as money intrusted to him as aa assignee under a commission of bankruptcy,) the debt may be proved against the joint estate, under a commission after- wards issued against the firm. But if money so separately intrusted has been applied to the purposes of the partner- ship without the consent or privity of the copartners, the debt can be proved only against the separate estate^.

If a partner signs the partnership signature to an instru- ment for his own private use, and the party taking it is aware of the transaction, he can only prove against the separate estate of such partner, unless his copartners adopt his act by a subsequent approbation'.

When the same partners are concerned iti different trades, and the paper of one firm is given to t!ie creditors of the other, such creditors have been permitted to take dividends from both estates^.

' Kx parte Clowes, 2 Bro. C. C. 595, ' Ex parte Lobb, 7 Ves. Jun. 59^. , 3 In re Staples and Co. Cook*-, C. L. 5S3. « Kx parte Apsev, 3 Bro. C. C. y65. » 8 Ves. Jun. 540. • Ibid.

2 N 2 Of

5i8 Of Bankruptcy .^Of Proof of Belts.

Of Creditors by Marriage Articles.

In questions whether the wife of a bankrupt, or her trus- tees, shall be admitted to prove money settled by marriage articles under a commission against the husband, it has been held, that if the debt was from its nature contingent and uncertain, and the contingency Iiad not taken place at the lime of the bankruptcy, it cannot be proved under the commission. Therefore, wliere a husband, by articles pre- vious to marriage, covenanted, in consideration of marriage and a portion, to leave his wife a sura of money in case she survived him, and he became a bankrupt, it was decided that such a debt was not proveable under the commission '.

And where the contingency, as the death of the husband, has taken place after the bankruptcy, but before any distri- bution made of his estate, the wife or hrr trustees are not entitled to a dividend. In cases however of this nature, the €Ourt generally recommends the creditors to make some pro- vision for the wife*.

Of Creditors ly Rent.

"While the goods remain upon the^remises a landlord is entitled, notwithstanding a tenant becomes a bankrupt, to distrain for the whole arrears of the rent due to hi^i. And though the messenger is in possession, if no assignment is raade ' ; or if the assignment is made, and the assignees are in possession, the landlord's right to distrain still exists while the goods are on the premises ■♦. And even after assignment and sale by the assignees, if the goods are not removed, the landlord may distrain for his whole rent \

But if the goods have been sold by the assignees, and

' Ex parte Croome, 1 Atk. \\^. ^ Ex parte Grecnaway, 1 Atk. 113.

3 Ex parte Jacques, cited in Ex parte Pluintner, 1 Atk. 101.

♦ Ex parte Dillon, Ibid. 5 Kx parte Plsnimcr, 1 Atk. 103.

taken

Of Bankruptcy. ^Of Proof of Belts. 549

taken off the premises, the landlord loses his remedy by di- stress, and can only come in under the commission pro rata, with the rest of the creditors '.

If a landlord distrains for arrears of rent, and also proves his debt under the commission, he must be put to his elec- tion to waive his proof or distress ^. But whether a land- lord's rig-ht to distrain for arrears of rent is barred by prov- \ng the debt under the commission, has not been deter- mined, altiioug-h the worclsof the shitulc 49 Geo. III. c. 121. •earn sufficiently comprehensive for Ihat purpose.

Of Sureties.

As to the proof by a surety \v!io has no counter security to indemnify him, it is provided l>y the statute 49 Geo. III. c. 121. s. 8. that " in all cases of commissions of bankrupt already issued, under wiiich no dividend has yet been made, or under wliich the creditors, who have not proved, can re- ceive a dividend equally in proportion to their respective debts without disturbing' any (iividcnd already made, and in all cases of commissions oi" bankriipfs licreafter to be issued, where at the time of issuing the commission any person shall be surety for, or be liable for any debt of the baidcrupt, it shall be lawlnl for such surety or person liable, if he sliall have paid the debt, or any part thereof in discharge of the whole debt, although he may have paid the same after the com- mission shall have issued, and the creditor shall have proved his debt under t!ie commission, to stand in the place of the creditor as to the dividends upon such proof; and when the creditor shall not liave provetl under tlie commission, it shall be lawful for such surety, orpersoii liable^ to prove his demand in respect of such payiuenl as a debt uiider the commission, not disturbing the tbrmer dividends, and to receive a divi-

* Ex parte Descharmes, 1 Atk. 103. ' Ex parte Grove, Ibid- lO?,

deud

550 Of Bankruptcy .—Of Proof of Belts,

liend or dividends proporlionably with the other creditors taking the benefit of such commission, notwithstanding such person may have become surety or liable for the debt of the bankrupt after an act of bankruptcy had been commided by such bankrupt, providecl that such person liad not at the time when he became such surety, or when he so be- came liable for the debt of such bankrupt, notice of any act of bankrupfcy by such bankrupt committed, or that he was insolvesit, or had stopped payment ; provided always, that the issuing a commission of bankrupt, although such com- mission shall afferwards be superseded, shall be deemed such notice ; and every person against whom any such com- mission of bankrupt has been or ijhall beaAvarded, and who has obtained or shall obtain his certificate, shall be dis- charged of all demands at the suit of every such person hav- ing so paid, or being hereby enabled to prove as aforesaid, or to stand in the place of such creditor as aforesaid, with regard to his debt ifi respect of such suretyship or liability, in like manner to «i!l intents and purposes as if such person had been a creditor before the bankruptcy of the bankrupt for the whole of the debt in respect of which he was surety, or was so liable as aforesaid."

And if a creditor has proved tlie wliole debt before he called upon the surety, the surety, or (in case he too has become a bankrupt, and his estate has paid dividends on account of the principal,) his assignees are entitled to have the benefit of his proof, and to receive dividends upon it '.

And to enable the surety to have the benefit of the statute, on his bringing tlie money into court, he may on a bill filed for thai purpose compel the creditor to prove for his benefit^ ; which if the creditor should refuse to do, the court will stay hb proceedings against the surety until he complies '.

• Ex parte RyKwirhe,2 P. Wins. 89. Ex parJi* 'I'rrncr, ,'i Ves. Jim. 2'13. ^ W right V. Simpson, 6 ibid. 134. 3 Phiilips v. Smith, CooJco, Bi L. 21 1 .

But

Of Bankruptaj .— Of Proof of Dehts. 551

But fhis equity of the surety to stand in the place of the principal crerlilor, will not be permitted to operate to such creditor's prejudice : and therefore, -where such creditor has any other distinct demand upon tlie bankrupt's estate, it has been held, that any diminution of his dividends upon such debt, occasioned by the surety's standing- in his place and receiving dividends upon his proof, shall be made good to him by tlie surety out of such dividends '.

If the payment of the surety be after the bankruptcy of the principal, and before the creditor has proved his debt, it cannot be proved either by the creditor or by the surety ; for the creditor cannot prove, because he cannot swear to any existing debt ; and the surety cannot prove, because his payment is after the bankruptcy *.

Of Friendly Societies.

For the encouragement and relief of friendly societies it is provided, by the statute oo Geo. 111. c. 54. s. 10. that if any person appointed to any office by any society regu- lated according to the provisions of this act, or being in- trusted with, or having in his hands or possession, any njo- neys or eflects belonging to such society, or any securities relating to the same, shall become a bankrupt, or insolyent, his assignees must, witliin forty da}s after demand made by the order of any such society, or the major part of them as- seml>Ied at any meeting thereof, deliver over all things be- longing to such society, to such person or persons as such society shall appoint, and pay out of the assets or effects of such person ail sucli suuis of money remaining due, which such person received by virtue of his said office, before any of his other debts are paid or satisfied.

But this provision of the legislature, in preferring the

' Palcy V, Field, 1! Yes. Jun. A^d. ' Cooler, V>. L, 152.

claim

532 Of Bunh upicy.^~0/ Proof of Debts.

claim of fiicnilly societies to the claiin of all olhcr credKors, IS not favoured ' : for upon the construction of tlii.s act it has been decided, that the clause is confined to persons duly and formally a ppoinud oiliccrs ; and that it does not extend to a person to ^vhom fhe money of the society has been paid as a banker, or to whom money has l)cen lent l)y them upon security, bearing interest ^. And in ex y.nrie Stamford Friendly Society^ it was held, that tlic jjreference given to frirndly societies by the statute of the JJd Geo. III. over other creditors was confined to debts in respect of money in the l-.ands of their officers, by virtue of their offices, and in- deper.deut of contract; and that therefore money lent to a tre:-.surer duly np])oiutecl, upon the security of his promis- sory note, payable with interest on demand, is not within the operation of the act, and therefore not entitled to a pre- ference.

Of Interest.

With respect to the proof of interest under a commission, it has been d< teiminecl, th.at where by the custom of a trade, after accounts settled, interest is payable after a certain cre-r dit, such interest is provcable under a commission against the de'jtor '. But it is a rule for the commissioners never, in any case, to compute interest upon debts lower than the date of the commission K And where the act of bankruptcy to which (he commission relates is ascertained, no interest is •allowed after that act^'.

Where joioi and separate commissions have been issued,

• Ex parte Ross, 6 Vcs. Jiin. 804.

' !x pai<e Ashley, \h;:]. 44). F.x ]>arte .-VDiicablp SociK-lv of Lancastrr, Ibid. 9y.

■5 J.T Ibid. 280.

♦ Ex parte Champion, 3 Bro. C. C. 436. F.x parte Kankey, 3 Bro. C. C, 501. Ex pane iMills. 2 Ves. Jim. 295.

5 Ex parte Brnnt-t, 2 Alk. 5^7. Butcher v. ChurchilJ, )4 Ves. Jun. 573.

6 Ex parte Moore, 2 Bro. C. C. 597.

p.nd

Of Bankruptcy. — Of Costs and Damages. 553

and an order oblained for keeping distinct accounts, neither set of creditors will be entitled to interest upon their debts out of the surplus, until the other set have received 20^. in the pound '.

It has been decided, that note creditors arc not entitled io prove interest upon them, unless it has been expressly re- served in the body of the note, or that there is a special con- tract or agreement between the parties to that effect, or that it is the known and established cnstom to allow it^.

But in all cases wlierc the bankrupt is entitled to a sur- plus, if there is an actual contract for intei'est appearing ei- ther on the face of the security, or by evidence, creditors will be entitled to it, up to the actual time of payment, without regard to the date of the commission ^

The difference upon the re-exchange of bills protested, and redrawn before the bankruptcy, or the costs and charges of protesting bills incurred before the bankruptcy, are prove- able uud^r a comu)ission'^. 13ut if incurred after the bankr ruptcy, they cannot in either case be proved, unless they are fixed at a particular rate, by express stipulation, or by the particular law of the country from which the bill is drawn \

Of Costs and Damages.

From the cases on this head, it appears, that if a verdict has been obtained before a commission is issued, though judgement is not signed till after, the costs incurred in such action are provcable under the commission ^.

• Ex parfp Riardman, Conke, B. L. \8\.

^ Kx parte Chaniiiion, .'J Bro. C. C. isd. Kx parte Jlankry, Thid. 504. E:? parte MiMs, '2 \ ls. Jun. 295. And see Parker v. Hutchinson, 3 Vcs. Jon. 134.

3 Kx parte Hankey, .3 Bro. C. C. 501. Ex parte Goring, I Ves. Jim. 170. And see Ex parte Hill, 11 Ibid. 654. Butcher v. Churchill, 14 Ibid. 373.

* CuUen, B. L. 101, 102. 5 n,id,

« 2 Bl. Rep. 1317. 1 Hen. Rl. 20. 3 Bro. C C, 46. 5 T. R. 365. 6 Ibid. -2b2. I Bos. and Pul. 131.

But

554 Of Bankrnptaj,—Of Mutual Credit mid Set- off.

But if a verdict and judgement be obtained after the bank- ruptcy, the costs cannot be proved as a debt under the com- mission'.

If a demand in the nature of damages be capable of being liquidated and ascertained at the time of the bankruptcy taking place, so that a creditor can swear to the amount, he may prove it as a debt under the commission*.

But if the damages be contingent and uncertain, as in cases of torts, and in many cases of demands founded upon contracts, whicli are unccitidu both as to their amount, and whether a jury will sfive any damages, they cannot be proved under a commission ^

11. Of Mutual Credit and Set-off.

By the statute 5 Geo. II. c. SO. s. 28. it is enacted, that where it shall appear to the commissioners, that there has been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners, or the major part of them, or the assignees of such bankrupt's estate, shall state the account between them, and one debt may be set against another ; and what shall appear to be due on either side on the ba- lance of such account, and on setting such debts against one another, and no more, shall be claimed or paid on either side respectively.

And by the statute 46 Geo. III. c. 135. s. .?. it is enacted, that in all cases where there has been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, one debt or demand may be set off against another, notwithstanding any prior act of bankruptcy committed by such bankrupt before the credit

* Ex parte Hill, 11 Ves. .Tun. 64fi. » Johnson v. Spilter, Doiig. 167.

3 3 Wih.272. Doug. Se-i. 6 T. R. 695. Ibid. 483. 1 H. Bl.'iG.

was

Of Banktuptcy.— Of Mutual Credit and Set-off. 555

Tvas given to, or the debt was contraclej by such bankrupt, in like maTiuer as if no such prior act of bankruptcy had been committed : provided such cr*^dit was given to tlie bankrupt two CMlendar months before the date and suing forth of sucli commission, andprovided the person claiming the benefit of such sot-ofi' hfid nut, at the time of givincr such credit, any notice of aiiy prior act of bankruptcy by such bankrupt committed, or that he was insolvent, or had stop- ped, payment.

It has been htld, that the statute 5 Geo. II. relates not only to mutual debts, but also to mutual credits. And in the construction of tliis act, as aiso the 46th Geo. III. it has heea determined, that no debt or credit can be set against another by way of set-ofF, unless both respectively accrued or were given before thebardiruptcy, or two calendar months before the commission where there has been a second act of bankruptcy '. Thus where bankers having accepted bills tor the accommodation of a trader, who afjer commitlingan act of bankrupty, but before a commission was sued out, lodged money with them to take up the bills whiclj did not become due till after a connnission was sued out, and were then regu^ larly paid by the acceptors ; it was held that the bills coidd not be set off under the statute, but that the acceptors were bound to refund the money to the assignees \ Neither can a debt contracted after notice of an act of bankruptcy be set off"^ Nor can a bill or note inJ.orsed to the claimant after the bankruptcy •♦. Jkit a creditor on a bill or nole of the bankrupt's indorsed to him before the bankru[)tcy, may set itolf against a debt due from him to the banla-ipt for goods bought after the indorsement, aiul also before die bank-; ruptcy '. So an accommodation acceptor, who has been ob-

' (ullrp, l')7. 2 Tainplin v. Digi?.-ng, 2 Camp. iS. P.C. 313.

3 Ua« kin^ V. I'rnfiilii, 2 Ves. .hill. 5."iO.

* Dkiiion V. Kvan.^, 6 T. R. 5". ^ IlanLev v. Smith, 3 T. R. 507.

liyed

5j6 Of Bankruptcy,' — Of the Dividend,

liged to pay his accoptKince after the bankruptcy of the party :\vhoni he accommoda<cil,niay set off such payment a^^ainst a debt due from him to the bankrupt at tiie time of his bank- nipt cy'.

To constitute mutuality of debts or of credits, it is in ge- neral necessary, that the sura claimed was due to the bank- rupt and is due to the creditor in their own respective rights. For a joint and separate dcl3t cannot be set ofl" against each other *.

12. Of the Dividend.

The statute 1 Jac. I. c 15. s. 4. allocs any of the cre- ditors of a bankrupt, within four months after the com- mission is issued, and until distribution is made, &c. to join with the other creditors in partaking of the benefits of the commission ; and if the creditors do not come in witlria four months, then the commissioners are empowered to dis- tribute, &c.

With iespect to the time v.Iicn a dividend is to be made, the assignees are, by virtue of the statute 5 Geo. II. c. SO. s. 33. compellable after the expiration of four months, and within twelve months from the time of issuing the commis- sion, to make a dividend or distribution of the bankrupt's estate and effects, and to cause at least twenty-one days notice to be given in the London Gazette, of the time and place the commissioners and assignees intend to meet for that purpose. And if the assignees, after the four months are elapsed, refuse to make a dividend, the Chancellor will, upon petition, order them to attend the commissioners at a meeting appointed for that purpose, who are to declr-re a dividend, if on examining the accounts, and the assignees on oalh, they find there is a sufficient fund : or the commissioners may themselves, with- out any order of the court, summon the assignees to produce

= Smith v.IIodson,4 T. R. 211. » T.x parte Tv.rgood,!! Ves. Jun. 519.

their

Of Bankruptcy . — Of the Dividend. 557

their accounts, and show cause why a dividend should not be declared ; which summons and meeting for tlie asisignees' attendance may be had witliout any expense, upon the ap- plication of a creditor who has proved his del)t '.

By the statute 49 Geo. III. c. 191. s. 5. " For the pur- pose of ascertaining in what manner the money which shall from time to time come to the hands of such assignee or as- signees has been emploj'cd, the comiuissioners shall in no case declare a dividend upon admission only of a certain sum in the hands of the assignees, but shall require such as- signee or assignees to tloliver upon oatli a true statement in writing of all the sums of money received hy such assignee or assignees, and when received by him or them respectively, and on what account, and how employed ; and shall examine such statement, and compare the receipts with the payments, and ascertain what balances have been from time to time in the hands of such assignee or assignees respectively ; and shall inquire for what reason any sum appearing to be in the hands of such assignee or assignees ought to be retained; and thereupon shall declare a dividend on the remaining sum, specifying in their order the sum so allowed to be re- tained, and the grounds oa which they may conceive it proper that the same should be retainet!, and not divided amongst the creditors.

The assignees in pursuance of such order, and Vtithout any deeds of distribution for that purpose, must forthwith make such dividend accordingly, and take receipts in a book to be kept for that purpose ; and such order and receipt shall be a full discharge to tlie assignees, for so much as they shall fairly pay pursuant to such order *.

By the iburth section of the statute 49 Geo. III. c. 121. assignees wilfully retaining in their hands, or employing for

' Ex parte Whitchurch, 1 Atk. 91. Cooke, B. L. 321. '^ 5 Cieo. II. C.3U. s. 33.

their

558 Of Bankruptcy . — Of the Dividend.

their own benefit, any money, part of the estate of the bank- rupt, shall be charged hy the commissioners in their ac- counts with interest at tl;e rate of 20Z. percent, per annum on all moneys hO retained, during the time they so wilfully retain and employ the same.

If assignees neglect to make a dividend in proper time, they may be charged with interest, although the money has laiii at a banker's, and they have not beeji paid interest for if.

By the statute 5 Geo. II. c. SO. s. 37. within eighteen months next after the issuing of the cooimi&sion, the assignees must make a second dividend, and cause a notice to be in- serted in the London Gazette, of the time arid place tlic commissioners intend to meet to make a second dividend, and for the creditors who shall not before have pr5ved their debts to come and prove the same ; and at such meetings tlie assignees shall produce upon oath (or, if quakers, upon afErmation.) their accounts of the bankrupt's estate; and what upon the balance tliereof shtll appear to be in their Lands sliall, by the like order of the commissioners, be forth- with divided among such of the bankrupt's creditors who shall have made dise proof of their dcbtv«, in proportion to their several debts ; which second dividend shall be final, unless any suit at law or in equity be depending,, or any part of the estate standing out, that cannot be disposed of, or that the major pavt of the creditors shall not have agreed to be duly sold ; or unless some other or future estate or elTects of the bankrupt shall afterwards come to or vest in the assig- nees ; in ^\hich case the assignees shall, as soon as may be, convert such fnture or other estate and effects into money, and shall within two months naxi after the same shall be converted into money, by the like order of the commissioners,

» Treves v. Towr.scnd, 1 Bro. C. C 384.

divide

Of Ba7ikruplcy , — Of the Conduct of the Bankrupt. 559

divide the same amongst such bankrupt's creditors "vvho shall have made due proof of their debts under the com- mission.

If creditors have not been able to prove theii* debts in time to receive a first dividend, and they can reasonably account for the delay, such as by making an alHdavit that they have not read the Gazette, the Chancellor will make an order that they be at|mitted to prove ; and then they must, in the first place, be brought up equal to tlie creditors under the former dividend, before the commissioners can proceed to make a second, provided the former dividend be not disturbed by so doing ' .

And it is the practice, "without an order, to permit cre- ditors who can reasonably account for their delay, to prove at a meeting convened for the purpose of declaring a divi- dend, and in the iirst place to direct them to be paid equal to those who had proved before, and then to direct a general distribution of the residue -.

13. Of the Bankrupt.-

Of his Conduct. When a trader has been declared a bankrupt, and no- - tice thereof has been left at his usual place of abode, or per- sonally served in case he is in prison, and after notice of the issuing of the commission, and of the time and place of the meeting of the commissioners, he must, under the penally of death, surrender within forty-two days to, and submit to be examhied by, the commissioners named in the com- mission, or tlie major part of tirem ; provided that tlie com- missioners appoint not less than three several meetings with- in the said forty-two days ; and that the last meeting is on the forty-second day^

> Ex partp Stilps and Pickart, 1 Atk. 208.

• Cooke, Ekpt. Laws, 521. ^ 3 Geo. II. c 30. s. 2,

Bat

560 Of Bankruptcy, — Of the Conduct (ftlie Bankrupt.

But by the third section of the same statute, the Lord Chancellor, or the person hoUling the great sea!, may en- Luge the ixmt for the surrenth'r, &c. for any term not ex- ceeding fiOy days from the expiration of the said forty-two days, by an order made at least six days before the time on Mliich (he bankrupt was to surrender.

The omission to surrender must be \vilful, to make it felony'. And therefore if the bnnkriipt is prevented from surrendering by illness ^, or makes an at/empt fo surrender % it M'ill be a goocl defence if he shouKl be tried for felony .

Where tlierc does not appear any intention in the bank- rupt of defrauding his creditors by not appearing within the time appointed, and when his absence proceeds rather from an ignorance of the consequence, or from accident, the Lord Chancellor Mill supersede a commission to prevent a prosecution for felony in not surrendering •*.

After Ills surrender he is required by the statute 5 Geo. IL c. 50. s. IG. to attend the commissioners at all times till his affairs are finislied, (o be examined touching all matters relating to his trade, dealings, estate, and effects. The fourth section of the same statute also compels liim to attend the assignees upon every reasonable notice in writing f )r that purpose given by such assignees, or left for him at his house or place of abode, in order to assist snch assignees in making up, adjusting, or settling, any ac- count or accounts between such bankrupt and any debtor lo or creditor of his estate. He is moreover obliged to at- tend any court of record in order to be examined touching the same, or for such other business which such assignee shall adjudge necessary for getting in the bankrupt's estate for the benefit of his creditors. And in case of contumacy

" F.x parte Rofrrrs, Amhl. 307. " Kx nnrlp Rickctts, 6 Vrs. .Jiin. 415. 3 Ex purte Cirey, 1 Ves. Jun. 195. ])x parte llijrginson, I'J ibid. 496. * lix parte Wood, 1 Atk. 2-22.

or

Of Bankruptcy . — Of the Bankrupt's Priuilege. 561

or that the bankrupt neglects or refuses to attend, or on such attendance shall refuse to assist in such discovery, "without good and sufficient cause to be shown to the com- missioners for such neglect or refusal, to be by thern allowed as sufficient ; the commissioners are empowered to commit the bankrupt until he sliall conform to their satisfaction '.

After the time allowed to the bankrupt for the discovery of his property is expired, any person who shall voluntarily discover any part of the bankrupt's estate not before known to the assignees, either to the assignees or to the com- missioners, shall be allowed hi. per cent, upon the pro- perty discovered, and such further reward as the assignees and major part of the creditors at the next meeting shall think fit.

And any trustee, wilfully concealing the real or personal estate of the bankrupt, who does not within forty-two days after the issuing of the commission, and notice given in the Gazette, disclose his trust aud estate in writing to one of the commissioners or assignees, shall forfeit 100/. and double the value of the property concealed, to be recovered by action of debt in the name of the assignees *.

His Privilege from Arrest.

A bankrupt is free from all arrests, restraints, or impri- sonment of any of his creditors in coming to surrender, and from his actual surrender to the commissioners, for and during the forty-two days, or the further time for finishing his examination, provided he was not already in custody at the time of his surrender and submission to be examined ; and if when coming to surrender he is arrested for debt or on an escape warrant, or if after his surrender he is so arrested within the time before mentioned, then en provlu-

1 Sect. 36. "^ 5 no<-. II. r. 30. s. ?0,2'.

2 o cing

562 Of "Bankruptcy, — Of the Bankrupt's Examination.

cing the notice or summons under the hands of the com- missioners or assignees, and making it appear to the officer that such notice is signed bj the commissioners or assignee?, and giving him a copy thereof, he shall be immediately discharg-ed. In case the officer shall, after such production and notification, defcun the bankrupt, he is liable to a \)€- nalty of ol. for every day's detention '.

And if, after the bankrupt has passed his final examina- tion, he is summoned by the commissioners to attend them on declaring a dividend, he is entitled to the privilege ^.

But he is not privileged from arrest by virtue of an ex- tent, even Avhilst under examination, for the crown is not bound by the bankrupt laws ^

Neither is he entitled to the privilege, if taken by his bail while ur.der examination; for the statute 5 Geo. II. c. 30. E. 5. expressly excepts the case where a bankrupt is in custody at the time of his surrender and submission •*.

A bankrupt is entitled to the privilege, although the debt upon which he is arrested is not proveabie under the com- mission K And every mode by v/hich a creditor can arrest a bankrupt for a debt, whether in law or equity, comes within the protection of the bankrupt laws'".

Of his Examination.

By the statute 5 Geo. II. c, oO. in conjunctioTi with the statute 1 Jac. I. c. 15. the commissioners are empowered to examine tiie bankrupt on oatli, (or if a quaker on af- firmation,) as well by word of mouth as on interrogatories in writing, touching all matters relating to the trade, deal- ings, estate, books of account, effects, and such other things of the bankrupt, as may tend to disclose his estate or

> 5 Geo. II. c. 30. s. 5. ' Arding v. Flower, 8 T. R. 534.

3 Ex parte Oick, cited 2 Bl. R. 1 112. * Kx parte (Uhbons, 1 Aik. 238.

5 Darby v, B4ughan,5 T. K- 209, ^ \ Sch. and Let Rep. 169.

transactions,

Of Bankruptcy , — Of the Bankrupt* ^ Examination. 563

trausactions, as they think fit. By virtue of (he same sta- tutes tliey may lake down or reduce into writing the verbal cxainijwition of th<; bankrupt; which examination so taken down or reduced into wriling-, the bankrupt must si<j:n under pain of beins; committed until he does si^n it, unless !ie hus a reasonable objection either to the wording of it, or other- wise, to be allowed by the commissioners.

And by the first section of the ofh Geo II. the bankrupt is required to disclose and discover all his effects and estate real and personal, and how and in what manner, to whom and upon what consideration, and at wliat tin!e or times, he has disposed of, assigned, or transferred any of his goods, wares, merchandises, moneys, or other estate and eflects, and all books, papers, and writings relating thereto, of which he was possessed, or in or to which he was any ways interested or entitled, or which any other person had in trust for him or for his use, at any time before or after the issuing of the commission; or whereby he or his family have or may expect any profit, posr^ibility of profit, benefit, or advantage whatsoever ; except only such part of his es- tate and effects as shall have been really and bona fide sold or disposed of in the way of his trade and dealings, and also such sums of money as shall have been laid out in the or- dinary expenses of his family, fie is also required to deliver up, on his examination, to th'* ct)mmisstoners, all such part of his goods, wares, merchandises, money, estate, and effects, and all books, papers, and writings relating thereto, as at the time of his examination shall be in his possession, cus- tody or power, the necessary Aveariniv app irel of himself", his wife, and children, only excepted. And if he conceal any part of his property to the amouhtof twenty pounds, with intent to defraud his creditors, he is guilty of felony without benefit of clergy.

To enable a bankrupt to make a full discovery of his es- 2 o 2 tate

561; Of Bankruptcy. — His Rights luider the Commission.

ta(e and effects, by the 5th section of the same act, he is at all reasonable times before the expiralion of the forty-two days, or the enlarged time, to inspect his books, papers, and writings, in the presence of his assignees, or some person appointed by them ; and to take with him for his assistance snch persons as he shall think fit, not exceeding two at any one time, and to make such extracts and copies as he sliall (hink fit.

If the bankrupt is in prison, the assignees are reqnired to appoint one or more persons to attend him from time to time, and to produce to him his books, &;c. in order to pre- pare his last examination ; a copy of which lie must, on their application for it, deliver to the assignees, or their or- der, ten days at least before such last examination '.

liy the J6tli section of i\\e same statute, in case the bank- rupt refuses to answer or does not fully answer to the satis- faction of tlie commissioners, or the major part of them, all lawful questions put to him by them, or the major part of them, as well by word of mouth as by interrogatories in writing, the commissioners, by w arrant under their hands and seals, may ccmmit him to such prison as they may think fit, there to remain, without bail or mainprize, until such time as he submits to tlu; comndssioners, and makes full answer to their satisfaction to all such questions as shall be put to him as aforesaid.

Of his Rights under the Commission. It seems to be a general custom, when a bankrupt duly conforms, that the common expenses of maintaining himself and family until he has passed his examination, are to be al- lowed in his accounts. But a third person will not be al- lowed to take any of his efiects and appropriate it for that purpose ^,

» Sch. and Lef. Rrp. 169. « Thompson v. Counccl, 7 T.R. 157.

By

Of Bankruptcy .—His Rights under the Commission. 565

By the statute 5 Geo. II. c. 30. s. 7. if a bankrupt sur- renders witliin the time limited by the said act, and in all things conforms as therein directed, he is to be allowed the siira of 5 1, per cent, out of the neat produce of all the estate tliat sliall be recovered in and received, to be paid to him by the assignees, in case the neat produce of the estate after such allowance made shall be suificicnt to pay. the creditors who have proved their debts under the commission ten shil- hugs in the pound, so astlie 5Z. per cent, shall not amount to more tlian 200/. And in case the neat produce of the estate shall, over and above the allowance thereafter mentioned, be sullicicnt to pay tlie creditors twelve shilling's and sixpence in the pound for their respective debts, the bankrupt so conforming shall be allowed 71. 10 s. per cent, out of such produce, so as the same sliall not amount in the whole to ai)ove the sum of 250/. And in case the neat produce of the estate shall, over and above the allowance thereafter mentioned, be sufficient to pay the creditors fifteen shillings in the pound for their respective debts, the bankrupt so con- forming shall be allowed 10/. per cent, out of such neat pro- duce, to be paid by the assignees, so as the same shall not amount in ihe whole to above 300 /.

But if (he neat produce of the bankrupt's estate shall not amount to so much as shall pay all his creditors, who shall iiave proved their debts under the commission, ten shillings in the pound for their n^spective debts, after all charges first had and deducted, then such bankrupt shall not be allowed 51. per cent, out of such estate as shall be recovered in, but so much money as the assignees shall think fit to allow him, not exceeding 31. per cent. (sect. 8.)

Until a final dividend is made', and the bankrupt has obtained his certificate', he is not entitled to his allowance.

' Ex parte Stiles and Pickart, 1 Mk. 208. ' J\x oartf Grie;-, lh*.(!. 5^07-

A bank-

5C6 Of Bankruptcy . — Of the Bankrupt's Rights.

A bankrupt is not entitU d lo an allowance under a second commission, unless he pays fifteen shillings in the pound '.

Paitners under a joint commission are not entitled to a double allowance, one in respect ot the joint, and the other of the separate estate ; but one allowance in respect of their joint and separate efiects is to be divided between them, ac- cordinu- io the proportions w hicli the surplus of each of their separate e tates, after payment of their respective separate debts, and the respective moieties of their joint estate, have contriijuted to the payment of their joint debts*.

If the bankrupi's estate and eflects are equal to the pay- ment of twenty shillings in the pound on his debts, he is en- titled to the surplus alter the expenses of the commission have been disihari^ed ; and if the residue and remainder of his debts, after lull .satisfaction of his creditors, have not been collected in, he miy recover and reci ive the same^

But he is not entitled to any surplus until interest upon all btmds, contracts, or notes carrying interest, or interest allowed by the course of dealing, is first paid out of the estate ^.

An uncertificated bankrupt may maintain an action of assumpsit agtiinst a third person for work and labour ' ; and for woik and labour, and materials furnished necessary to his labour ^.

And where no claim is made by tlie assignees of a bank- rupt for goods acquired, or for money lent and advanced by him after hib bankruptcy, he may recover the goods in an action of trover ", and the money lent in an action of as- sumpsit'.

• » Ex prirte firr??, 6 Vps. Juh. '2^8. ' ^ V\ partp Kate, 1 Bro. (' C. 453. 3 13 l.)iz. c. 7. s. 4. 1 Jac. 1. c. 15. s. 15. * V>Ti;m\cy v. Goodhfrr, 1 Atk. 15. / C^ippf-ndiile v. Tomlinton, Cooke, B. L, 4.31. « Silk V. Osborn, 1 i.sp. N. P. C. 140. ' Fo^lrr y. Down, 1 Hos. and Pul. 44. » Evans V. iirown, 1 Lip. M. P. C. HO.

If

Of Bankruptcy .— Of the Bankrupt's Rights. 567

If an uncertificated bankrupt assign after acquired pro- perty in trust for a valuable consideration, and a creditor of the bankrupt seize it in execution, the trustee may main- tain trover against him '.

But if an jnicertificatcd bankrupt carries on trade, cither by himself or in partnership, the creditors under the first commission will be entitled to all the property he acquires until he obtains his certificate *. And therefore where an uncertificated bankrupt entered into trade in partnership with another person, and a joint commission issued against them, it was decreed that the creditors of the partnership bad no equity against the assignees under the first commis- sion, for an account, and application to their debts, of the property used or acquired in tliat partnership K

Of the Lial'ility of the Bankrupt on a new Contract or Promise.

Though a bankrupt is discharged by his certificate from all debts due at the time of the commission, yet he may make himself liable on a new promise, or fresh contract en- tered into bona fide without fraud or imposition, after aij. act of bankruptcy, even before •♦ or after he has obtained his certificate' ; and such new contract or promise will be valid and binvHng, though there should not be any new cou- sideration''.

But a promise made by the bankrupt subsequent to ob- taining liis certificate, will not revive the old debt, if the con- sideration of the debt is fraudulent ; as where the bankrupt promises to pay the creditor a certain sum in consideratioa that he will not come under the commission " ; or where the

' Larocho V. Wakoman, Po.ike's N. P. C. 140.

^ \.x part? Proiidf.Mif, 1 Atk. •Q^\. Kx pane Crew, 16 Ves. Jun, 236.

3 Fvpn tt V. Uarkhousp, 10 ibid. 94.

* Truotnnn v. Fent;>n, Ccvvp T's''!. ' Ibid.

« Cullcn, B. L. 3«6. ? Colls v. Lovell, I Esp. N.P.C 282.

bankrupt,

teS Of Bavkrtiptcy .—Of the Certifcate.

bankiupf, to induce his creditor to sij^n a composition deed, gave liim a promissory note for the residue of the demand '.

IS. Of the Cerlficaie. Of the Signing of the Certificate.

By tlie fctatutc 49 Geo. III. c. 121. s. 18. it is enacfc'd, timt '' in all cases of commissions of bankrupt heretofore issued, and in wliich the bankrupts have not obtained their rerlific;;tesj ami in all cases in which commissions of bankrupt shall liereaftcr be sued forth, the signature and consent of three j)ar(s in five in number and value of the cre- difois of tlie bankrii])t or bankrupts, who shall be creditors for not less than 20/. rcspedively, and who shall have duly proved their debts under the commission, or some other per- son by them duly authorized thereunto, to the allowance and certificate and discharge of the bankrupt or bankrupts, sliall be, to all intents and purposes, as available for the be- nefit of the baidirnpt or bankrupts as before the passing of this act the signature and consent of four parts in five in number and value of such persons would have been available, a: id such signature and consent of three parts in number and value of such persons shall be sufficient to authorize all acts to be done by the lord chancellor, lord keeper, and lords commissioners of tlie great seal, and the commissioners in such commissions of bankruptcy, and all others, for the be- nefit of the bankrupt or bankrupts, which under any prior act or acts of parliament would have been authorized by the signature and consent of four parts in live in nujuber and value of such persons."

Creditors were formerly entitled to proceed at law for their debts, and to prove under the commission for the purpose of assenting to or dissenting from the certificate. JBiit by

• CockihoU V. Beirnet, 2 T. R. 763.

the

Of Bankruptcy. — Of the Certificate, 569

the fourteenlli section of the above statute, a creditor prov- ing a deot under a commission for any purpose whatever, or liavmg a claim of a debt entered upon the proceedings, is to be deemed an election by the creditor to take the be- nefit of the commission with respect to the debt so proved or claimed by him.

By the statute 5 Geo. II. c. SO. s. 7. if theplaintiif in am action against the bankrupt can prove the certificate was obtahied unfairly and by fraud, or that any concealment has been made by the bankrupt to the value of 10/., the cer- tificate will be of no avail to the bankrupt in such action ; and by sect. 1 1. every bond, bill, note, contract, agreement, or other security whatsoever, made or given by any bank- rupt, or by any other person, unto or to the use of, or in trust for any creditor or creditors, or for the security of the payment of any debt or sum of rnoney due from such bank- rupt at the time of his becoming bankrupt, or any part thereof, between the time of his becoming bankrupt and such bankrupt's discharge, as a consideration, or to the in- tent to persuade him, her, or tljem to consent to or sign any allowance or certificate, is void ; and the moneys thereby secured, or agreed to be paid, are not recoverable.

Upon this act it has been decided, that an agreement made by the friend of the bankrupt, to induce creditors to sign his certificate, is void ' ; and that if money is actually paid by a third person to induce a creditor to sign a bankrupt's certificate, it may be recovered back in an action for money had and received ^. If such agreement should be made with the bankru})t's privity before the actual allowance of the certificate, the certificate will be void '.

By the 10th section of 5 Geo. II. a bankrupt is not en- titled to the benefit of the certificate, unless before its allow-

' Holland v.Pal.-ncr, I Bos. and Pul. 95. " Smith V. Bromlev, Dou^. G9fi. J E.\ parte Butt, 10 Yes. Jun. 359.

ance

570 Of Bankruptcy .^Of the Certificate.

Since he m;\ke oath, or, if a Quaker, solemn affirmation, \ii wriiin^, that euch ccrtilicatc and consent of the crcditorB thereunto were fairly obtained and without fraud.

By the statute 24 Geo. III. c. 57. s. 9. " If any person sliall fraudulent ly swear or depose, or, being of the people called Quakers, afiirni, before the major part of the commis- sioners named in any commission of bankruptcy, or by affi- davit or aflirmation exhibited to them, that a sura of money is due to him or her from any bankrupt or bankrupts, which shall ill fact not be really and truly so dnc or owing ; and shall, in respect of such fictitious and pretended debts, sign his or her consent to the certificate for such bankrupt's dis- charge ftora his debts ; in every such case, unless such bankrupt shall, before such lime as the major part of the said commissioners shall have signed such certificate, by writing by him to be signed and delivered to one or more of the said commissioners, or to one or more of the assignees of his estate and elfects under sucli commissioners, disclose the said fraud, and object to the reality of such debt, such certificate shall be null and void to all intents and purposes, and such bankrupt shall not in that case be entitled to be dis- charged from his debts, or to have or receive any of the be- nefits or allowances given or allowed to bankrupts.

0/ the Effect of the Certificate.

The certificate of a bankrupt discharges him from all debts proved or proveable under the commission ', and that w he- tlu^r jijint or separate ^.

But a bankrupt's certificate does not discharge him fiom a debt due to the crown ^ ; nor from an express collateral covenant, which does not run with the land-*; nor from a covenant or agreement for non-payment of rent, or for ar-

' 5 r,co. II. r.SO. 46f;eo. III. C.S5. 49 Geo. III. c. 121.

2 Ex parte Yale, 3 P. Wnis. 9,b.

i I Atk. 'IQi. * Mayer v. bitcward, i Bur. 2446.

rears

Of Bankruptcy.— Of the Certificate. bll

rears accrued since the ban^ruplcy ' ; nor from an agreement for the support of an illegitimate child *.

Neilhor will the certificate discharge a bankrupt wlierc it is in the power of the creditor to convert his demand into a tort. Thus if a bankrupt, to whom a bill has been delivered for the purpose of remitting the payment, when obtained, to his employer, discounts it at a loss before it is due, and embezzles the money, his certificate will be no bar to an action for the amount'.

So if bills are deposited merely as a pledge, if the bank- rupt j)ledges Ihem as his own, he will, notwithstanding liis cettificale, continue liable for this tort'*.

Neither is a certificate obtained abroad a bar to an action in this country, although at the time of making the contract the bankrupt resided a'broad in the country where he ob- tained his certificate, if the cause of action accrued here, and w:is to be executed in this country ^

But where the cause of action accrued abroad, and the contract M'as made there, a certificate obtained in the country ill which the cause of action accrued, or the contract was made, will be a bar to any action in this country''.

The certificate of a bankrupt partner will not discharge his copartner ; but such copartner stands chargeable with and liable to pay the partner hip debts, and to perform the joint contracts, as if the bankrupt had not been discharged from them". The certificate, however, of such bankrupt partner will not bar his copartner who has been obliged to pay the partnership debts out of his own estate, from bring- ing an action against the bankrupt \o enforce payment of his proportion, even after he has obtained iiis certificated

• Mills V. AurioU 4 T. R. 91. Bi)o» v. Wilson. 8 East's Rep. 311. ' MHIer V. Whiitpiibury, 1 Camp. N. P. C 4-.;B.

3 Parker v. Norton, 6 T. It. (iH,-).

4 Joliii>on ». Spiller, Dong. 167. * (^'••iii v. Korfe, 2 Hen. I?I. 553.

* Potter V. I'nnvii, 5 l.astV R, jj. I'?t. 7 Jo Anne, c. 15. s.3. ' Wiight V. liuiiter, J Last's Tlep. isJO.

By-

572 Of Bankruptcy.— Of the Certificate.

By the sfatiilc 5 Geo. II. c. 30. s. 9. if any com- mission s]iall issue a|j;ainst any person who has been before discharged by virtue of the act, or compounded with his creditors, or delivered to <heni his estate or effects, and been released by them, or been discharged by any act for rcllof of insolvent debtors ; then in cither of these cases, the person only of the bankrupt shall be free from arrest, but his future estate and effects shall remain liable to his creditors as before the making of the act (his tools of trade, necessary household goods and furniture, and necessary wearing apparel of himself, his wife, and children, only ex- cepted), unless the estate of such person against whom such commission shall be awarded, shall pay every creditor under the said commission fifteen shillings in the pound.

And it has been decided, that a certificate under a second commission will not protect a bankrupt's future effects, not- withstanding the first may have been superseded, unless fiAeen shillings in the pound are paid under the second commission '.

But though the future estate of a bankrupt remains liable to the claims of his individual creditors under a second commission not having received tiftet.'n shillings in the pound ; yd that will not prevent the vesting of the bank- rupt's estate in the assignees under a third commission, for the benefit of all the creditors ^.

If a bankrupt obtains his certificate before the bail are fixed, the certificate will discharge them ; but if they are fixed before the certificate is allowed, they will not be dis- charged ; for the certificate has no operation till it is al- lowed, and has no relation back ^

But bail in error are not entitled to relief, although the

» Thornton v. Dallas, Dou?. 16. ' Hovil v. Browning, 7. East's Rep. 159, 1 Woulfy V. Cobbe, 1 Bur. 2-14.

bankrupt

Of Bankruptcy .—Of the Certificate. 573

bankrupt obtains his certificate pending the writ of error ; for they cannot surrender the principal '.

Of Invalldatuig the Certficate.

By the statute 5 Geo. II. c. 30. s. 12. " if tlie bankrupt^^ for or upon the marriage of any of his children, give, ad- vance, or pay above the value of 100/. unless he prove, by his books fairly kept, or otherwise on his oath, (or, if a Quaker, on alSrmation) before the mtijor part of the coiiynlssioners, that he had, at the time thereof, over and above the value so given, advanced, or paid, remaining in goods, wares, debts, ready money, or other estate real or personal, sutfi- cient to pay or satisfy unto each and every person to whom he was any ways indebted their full and entire debts ; or if he has lost in any one day the sum or value of five pounds, or in the whole the sum or value of 100/. within the space of twelve months next preceding his becoming bankrupt, in playing at or with cards, dice, tables, teimis, -bowls, billiards, shovel-board, or in or by cock-fighting, horse races, dog matches, or foot races, or other pastimes, game or games whatsoever," or in or by bearing a share or part of the stakes, wagers, or adventures, or in or by betting on the sides or hands of such as do or shall pki}^, act, ride, or run as aforesaid ; or if within one year before he became bankrupt, he has lost the sum of 100/. by one or more contracts for the purchase, sale, refusal, or delivery of any stock of any company or corporation, or any parts or shares of any government or public funds or securities, where every such contract was not to be performed within one week from the time of the making such contract, or where the stock or other thing so bought or sold was not actually transferred or delivered in pursuance of such con- tract; the certificate is void."

» Southcote V. Braithwaite, 1 T. R. 621.

But

574: Of Postlwtinium,

But where a bankrupt had given lOOOZ. to his niece upon her marriage, Lord Hardwicke b(>ld, tliat the clause in the act being penal, it ought <o he construed sti ictly, and confined to the children of a bankrupt and no further '.

And it has been detx'rmined, that insuring in the lottery % or keeping a lottery oilice ', arc not within the statute.

The following having been omitted in its proper place, at the end of page 144, the defect is endeavoured to be remedied by its insertion here.

Of PoslUminium.

Postliminium is that right in virtue of which per- sons and things taken by the enemy are restored to their former state, when coming again under the power of the nation to which the}' belonged •*.

When a power succeeds in conquering a country, or re- capturing a vessel, it should seem that, according to the rigour of the law of nations, the reconquered territory or vessel, as well as all property, of whatever description, found therein, ought to return to the original proprietors. And this principle is strictly adhered to with respect (o n itional and immoveable property; for, 1. 1 he national domains return to the sovereii;n along with the sovereignty, and ihe sovereigii ought, of course, to re-establis!i the constitution existing previous to the conquest. 2. Siicli immoveable property belonjring to the subjects as has bee i seized on by the enemy, returns, in virtue of the right of postliminium, to tlie original proprietors. But, as \o moveable property taken in a Lmd war, the riglit of postliminium ceases when

» Ex parte Saumcrez, 1 A(k. 86. "^ Lewis v. Pierry,! Hen. Bl. 29.

3 Ex parte Richardso;), Cooke, B. L. 46;j. ♦ Vatt. b. iii. c 14. s. '^04,

the

Of Postliminium, 575

tlie booty has been twenty-four honrs in the hands of the captors. In a maritime war, 1. If the recapture be made by vessels of the state, the recaptured vessels and merchan- dises return to the original proprietors, after a certain pro- poriionafe deduction to defray the expenses of the n capture : 2. If the recapture be made by a ^jrivateer, neither vessel nor merchandise returns to the original proprietor ; exc(^pt, J. When the recapture is made within twenty-four hours after the capture ; 2. When the cnpturc has been made by pirates; or, 3. When it has been made against the laAvs of war in general. The exception does not liold good in the two last cases, unless the recapture is made from the first captors'.

^niong English subjects the jus postliminii continues for eve* By the stut. 43 Geo. ill. c. 160. s. 39, when the ships or goods of Brilish subjects are retaken from an enemy, the original owner is entitled to have them restored, upon payment of a stated salvage to the captors ; viz. one-eighth of the value if ihe recapture is made by any of his majesty's ships ; if by a privateer or other ship, one-sixth ; if by the joint operation of one or more of his majesty's ships, and one or more private ship or ships, then such salvage is to be paid to the recaptors as the judge of the high court of admiralty, or other court having cogni2ance thereof, s'lall adjudge fit and reasonable; unless the ship so retaken shall appear to have been, after the taking tiiereof, set fortii by his majesty's enemies as a ship of war ; in which case she shall be deemed good prize to the captors.

' Marten's Law of Nations, S01.

THE END.

576

INDEX.

ABA^'DON ME\T, 303. Acceptance (of goods), 212.

r- {of b'Uhj, 440.

• supra protest, 468.

Acceptor of bills of exchange, 444. Accommodation acceptances, 445. Acts of bankruptcy, 485. Adjustment, 302. Agent, of his appointment, 391. , of the extent of his autho- rity, 393. •

• , of the execution of his au-

tiiority, 397.

, of the determination of his

authority, 398. , of his duties uitli refer- ence to his principal, 398.

, of his liabilities with refer-

. ence to his principal, 400. I

, of his rights with reference I

to his principal, 40(j.

, of hisri<;hts with reference

to third persons, 422.

■ , of his liabilities withrefer-

ence to tliird person.s,423.

, of his lien, 408.

Agreement, 178.

Aliens, contracts with, ll9, 190.

■ ^ — , liberty of trading, 149.

Allowance, under a ceruhcate of bankruptcy, 5(55.

•— , in cases of agency, 40G.

Alteration, of policies of insur- ance, 277.

, of bills of exchange

and promissory notes, 436. '-, of a contract, 222.

Annuities, bow affected in case of bankruptcy, 538.

Apportionment, in cases of insur- ance, see Return of Preraium.

Assent, to a contract, 212.

Assignees, provisional, 509.

• , election of, 510.

, nature and duties of

their trust, 511.

, when liable to inter-

est, 513.

-, removal of, 5 J 4.

Assignment, effect of, upon the bankrupt's real and personal property, 515.

, effect of, upon pro- perty in possession of the bank- rupt, but belonging by convey- ance to third persons, 518. , effect of, upon the

property of others in the pos- session of tlie bankrupt, 520. ■ , effect of, upon pro- perty fraudulently delivered by the bankrupt in contemplation of bankruptcy, 321.

-, effect of, upon the

estate of the wife, 529.

-, effect of, upon part-

nersliip property, 523.

Average, 342.

Avoidance of a contract, 222.

Authority, of an agent, 393.

— , of a partner, 3.57.

— , to draw, accept, or in- dorse bills or notes by procura- tion, 430.

Bank notes, 472. Bankers' cash notes, 472. Bankers' checks, 473,

I N D E X.

67 r

Bankrupt, lils conduct, 559.

, his privilege iroin ar-

rtbt, 56 1 .

-, his exiimiuatiori, 56-J.

■ ^, his riiilits under the

commission, 5(54 • • , his iial)ility on a new

contract or promise, 567. Bankruptcy, "hat pcraons are li;i-

bio to tiic bankrupt laws, 430. , wliat constitutes a

tratiinfi within tlic i)ankrupt

laws, 481. ■ , what acts amount

to, 485. dcht, 493.

497.

-, petitioning creditor's

>.

-, of the commission,

, of the assignees, 509. -, of the assigmiient,

515.

-, of the general effect ot bankruptcy on the property of tiie bankrupt, and of others, 526.

-, of the proof of debts

under a commission of bank- ruptcy, 531.

Barratry, 297.

Bills of Exchan'oh:,

— :"; , tlie nature and pro-

perti. s of, 426.

■ ■ , the parties to, i'tS.

-, the effect of deli-

Vjcry of, 435. t.onof, 436.

draw (,r, 439.

-, the effect of altera-

-, the ](jss of, 437. -, the liability of the ).

-, the presentment for acceptance, 4i59.

■ , tlie acc;ptance,

410.

, the liability and

discharge of the acceptor, 444. -, the indorsement

and transfer, 445. , j)resentmcnt for

payment, 450.

, payment o*", 454.

, dishonour of a bill

by noh-acccptance or non-pay- ment, and notice thereof, 459. ■ — , protest ot", 466.

-, usmy upon, 475.

-, interest upon, 479.

-, etfect of bankrupt-

cy npf)n,540. Bills of larlinu, 266. Bdls of sale, •■J.27. Blockade, 144.

Bottomry and respondentia, 337. By-laws, 153.

Capture, 137.

, ill cases of insurance,

^95.

Carri.^gk of Gooiis,

, by land, 233.

, by water, 238.

, duty of the owner

and master during the prepara- tion for, and tfie commence- ment of tlie voyage, 238.

, duty of the owner

and masterduring the course of the voyage, '239.

, duty of the owner

and master on the completion of the voyage, '240. , of tiie causes wliirh

excu.se the owner and master,'24 1 . of the limitation

and responsibility of the owner

and master, M43. , of r.ie dissolution

of contracts for the, 259. Ceutiuc.vi'e of Bankrupts,

signing of, 568.

, elFect of, 570.

, itivuiidating, 573.

Changing the ship, effect of^ in

cases of insurance, 321. Charge upon trade, 16 1 Charges, in cases of agency, 406, Cheating, 171. Checks, 473.

ClIASlTEU PARTIES OF AFFREIGHT- MENT.

. the nature of, 260.

, by wiiom they mav

be executed, 261.

,of the Ubuul stipu-

lations, 261 « P

578

INDEX.

Charterparties of Affreightment, of die construction, 202.

■ , when tliey take

their tfFtct and operation, '26S. -, of the rii;hts and

duty of the charterer, 263.

Clainiinii debts under a commis- sion of bankruptcy, 532.

Combinations among artificers and victuallers, 175.

Commencement of risk in insur- ance<i, 'i79.

Commercial politics, 2S.

Commission of B.ankhuptcy,

, issuing of, 497.

, opening of and de- claring the party bankrupt, 497.

!_. — , effect of, 502.

'■ , costs of issuing out

a, 502.

, remedy for malici- ously suing out a, 502.

-, evidence tosupport

a, 503.

— , renewed, 505. - — , joint, 505.

-, superseding a, 507.

Commission, in cases of agency,

406. Commissioners of B;t\KRtJPTCY, , power of, to seize the

bankrupt's property, 496.

, power ofjOver the bank-

rupt, 499.

poKer of, over other

persons, 500.

Composition, creditors by, 544.

, of bills of exchanee, 456.

Concealment of bankrupt's pro- perty, 563.

C'oncert€dactsof bankruptcy,488.

Conditional sales, 212.

Construction of policies of insur- ance, 285.

of a promise of

guarantee, 302.

Contingent dehts, proof of, under a commission of bankruptcy, 5-1 i.

Contingency, bills payable on

CoiJtrabanil commodities, 120-123.

Contracts for the sale and par- chase of goods, 178.

■, of the jiencral nature

of a contract, 179.

-, of the parties to a

contract, 179.

-,of the subject matter

of a contract, 195.

of the assent to of

acceptance of a contract, 202.

• — , of the time when a

contract may be made, 213.

, of the place where a

contract may be made, 214.

, of the falfihnent of a

contract by payment and deli- very, 217.

-,of the avoidance and

alteratiop of a contract, 222.

Contracts for the Carriage of

Goons,

, by land, 233.

, by water, 2S8.

Contracts, by agents, 420.

— — — — , by partners, 856 — 37T.

Conveyance, voluntary, 516.

, fraudulent, 490.

Co-sureties, 390.

Costs of issuing out a commission,

50-!. Convoy, 327, 328. Credit, goods sold upon, .554. Creditor, petitioning, 493. Creditors tjndkr a Commission o?

Bankriiftct, , by mortgage or other

security, 536.

-, by annuities, 538

, by partnership, 538.

— , by award, bonds, bills

of exchange, and promissory notes, or debts payable at a fu- ture day, 540.

, by composition, 544.

-, by contingent debts,

-, of a bankrupt, execu-

544.

tor, or trustee, 544.

, of feme coverts, 545.

, by insurance, 545.

-, by joint debts, 546.

-by marriage articles,548.

I X D E X.

379

Creditors, by rent, 548.

Date, in policies of insuranrp, 282.

Deatli, effect of, in cases of agen- cy, 398.

, effect of, in cases of bank- ruptcy, 37 r.

, effect of, in cases of bills

of excbange, 440, 430.

Del credere commission, 405.

Delivery of goods, 217.

to agents, effect of, 419.

Demand, by an agent or clerk, 422.

of acceptance or payment

of a bill, 43a, 450.

Detention, in cases of policies of insurance, 29d.

Determination of an agent's au- thority, 398.

Demurrage, 265.

Deviation, in cases of policies of insurance, 322.

Disbursements by agents, 406.

Discharge, of a bankrupt, 570.

, of a surety, 385.

Discount, 477.

Dishonour of bills, 459.

Dissolution of contracts for the carriage of goods, 259.

Dividend, 556.

Docket, striking of, 497.

Double assurance, 320.

Drafts on bankers, 473.

Drawee of Inlls, 428, 444.

Drawer of bills, 439.

Earnest, in what cases necessary

to bind a bargain, 206. , iiow far the property of

goods is bound by, 206. Effects, assi mnent of, under a

commission of bankruptcy, 515. , of money upon commerce,

34. Effect of a certificate, 570. Election to abandon in policies of

insurance, 304. , of a creditor under a

commission of LaMkruptcv5534. , of assignees, 510.

Embargo, 143

Employment of capital in coiii- nierce, 28.

Enlarging bankrupt's time of sur render, 560.

Examination of bankrupts, 562.

ExchaniTe, 466.

Encouragements of the coiri- mcrcial system, 42.

Execution of an agent's authority, 397.

Exercising of trades, 145.

Executory contracts. 179, 203.

Expenses of suing out a commis- sion, 502.

Exportation, 42.

Exporting prohil)ited tools, 176.

Expunging of proofs, 536.

Factor, his appointment, 391.

, his duty, 399.

, his responsibility, 400.

, iiis riy,hts, 406.

, his lion, 408.

Felony, in cases of bankruptcy,

559. Feme coverts, contracts by, ISO. Forestalling, 173. Fraud, in cases of bankruptcy, 569.

, in cases of insurance, 306.

, in cases of agency, 401,

403,418. Fraudulent sales of goods, 200,

227. Freedom of commerce, 88. Freight, 266. Friendly societies, proof in case of

bankruptcy, 551. Fulfilment of a i ontract, 217.

General average, 342.

Giving time, effect of it in case of

bills of exchange, 444. Good'*, prohibited, 3 16. fira. .■, days of, 450. Gratuitous promises, 203.

(iUARANTEES, 203.

— , the general law of, 379.

, the extei'.t and con- struction of, 382. , how a promise of gua- rantee may be discharged, 385.

5S0

INDEX.

Guarantees, what tVie surety may compel the jruarantee to do for his l)eiiefit, S87.

, the surety's remedy a-

gainst his princijial, SlMi.

— ■ , co-surety's, l90.

IIoLpEn or A Btil,

, his coiiduct in case a

bill is h>5t, 4;;8.

,nn iion-arccptancc, 440.

• , on uon-puyinent, -134.

, excused iiivint; imme- diate notice iu case of illness, 440.

Hostilities, a suspension of all le- gal renudifs dui ini:;, 119.

Ilushand, when liable for his wife's debts or contracts, 180 — 186.

Idiot, lunatics, persons insensible, under duress, or attainted, con- tracts by, 186.

Illegal voyages, ol3.

contracts, 195—198.

tradiuj^, 10.3.

Immoral contracts, 199.

Importation, 69.

Indorsement ol' bills of exchange, 445.

Indorsee, 4'2n.

ludorser, 4i3.

Indnltience, cjfcct of, in cases of bills of exchaoiie, 4-14.

Infant, when his contracts are binding, 187.

Ingrossioii, 173.

Insolvency, effect of. in cases of bills of exchange, 5iO.

IXSURANCE,

, of the policy, 276.

-, of the requisites of,

ii77.

285.

-, of the coustrnclion,

— , what persons may be

insured, 291. , what tilings may be

insured, '293.

, of losses, 294.

• , of losses partial, ?>00

• , of losses total, '6Vo.

Insurance, of adjustment, 302.

, of abandonment, 303.

— , of fraud, 306.

, of seaworthiness, 3 12.

-, of illegal voyages. 3 1 ti.

, of prohibited goods,

316.

, of wacrM- policies, 317.

, of reas>-nrance and

double assurance, 320.

, of changing the slnp,

321.

— , of deviation, 322.

, of warrairtie?, SI'G.

, of return of premium,

334.

- ■ , of bottomry iind re- spondentia. 337.

Intert'st, when allowed for tlie \ a- lue of t^oods sold, 1-21.

, in cases of bills of ex- change, 479.

• ,in cases of bankru))frv,55'2

, what insurable, 279.

International law, 86.

Joint commission, 505.

debts, proof of, 5.J6.

Judgements, eiFt-ct of, in relation to the act of bankruptcy, 531.

Laches, in ca-es of bills of ex- change, 4S9, 462. -

Lading, bill of, 2t;6.

Landlord, his right in respect of rent under a commission, 548.

Letieis, when a sufficient niem</- randuni within the statute of frauds, 207.

Liberty of trade, 145.

Licenses to fade with a bellige- rent, 129, 1.56.

Letters of inar-jue and reprisal, 157.

Liens, ctTect of, in ca^es of bank- ruptcy, 408.

, of a factor or a!:ent,408.

, of a guarantee or creditor,

386.

, of a guarantor or surety, S87.

Liuiitation, btaiutc of, how it ope- rates, 224.

Loss, of bills of exchange, 437.

INDEX.

581

Loss, in cases of agency, 39G, 401, 402, 404.

Loss, IN CASES CF TNSrRANCE,

, by perils of tlie soa,204.

, by capture, 295.

■ , by detention, '296.

— — , bv barratry, 297.

, by fire, 299.

, partial, 300.

, total, 303.

Malicious commission, suing out, 502.

Marketovert, what places are, 2 14.

Maintenance, bankrupt's, during his examination, 5S4.

Marque, letters of, 157.

Wanied women, when their con- tracts are valid, 180 — 186.

Masters of ships, '238—241.

Medmm of comnicrce, 20.

Alemorandum, requisites, form, and parties, under the statute of fraud, 203—210.

Monopoly, 160.

Misrepresentation, in cases of in- surance, 307.

Jvlooring, what sliall be deemed in oood safety, '286.

MortL'aires by a liaukrupt, effect

of, 536. Mutual Credit, 554.

. Name, in a policy ofiiisurance,277.

J*Jatioiial character of traders, how determined, 103.

Natural born subjects, trade by, 145

Neglect, consequences of, in cases of bills of excliange,

■: , to present for accept- ance, 439.

, to prebent for pay.rcnt,

450.

, to give notice of disho- nour either by non-acceptance or non-payment, 459.

Negliii,ence in cases of agency, 399.

Neutrality, 120.

New promise, liability of a bank- rupt on, 467.

Non-acceptance of bills of ex- change, 459.

Non-payment of bills of exchange,

459. Notice, when to he eivcn in cases

of abandonment, 303. , when to be given in cases of

dissolution of partnership, 376. , agent's duty to give notice

to his |)rincipal of the contracts

entered into in his belialf, 399. -, of non-acceptance of bills

of exchange, 459

— , of conditional acceptance,

442.

, of partial acceptance, 443.

, of non-payment. 459

■ , of the loss of a bill, 437.

Noting of bills, 467.

Oath of petitionino; creditor, 497.

Open policies, 277.

O'.vlmii, 164.

O'-vnership. goods in possession of

a bankrupt as reputed owner,

520. Overdue bills, transfer of, 417.

Parol contracts, 203.

Parol proijriise, S31.

Parties to a contract, 179,

Partial payment in cases of bills of exchange, 454.

Partial acceptance, 443.

Partial indorsement, 446.

Parfics to a bill of exchange, 428.

Parti;;! losses in cases of insurance, 800.

Parikership.

, the nature of, 353.

, the liabilities of part- ners with reference to each other, 356.

, the liabilities of part- ners witfi reference to ttiird per- sons, 363.

■ , the liabilities of part- ners for the tcrts or wrongs com- mitted by a partner, 371.

, the dissolution of, by

the act of the parties, 374.

, the dissolution of, by

the death of the partners, 375.'

>82

1 N D E X.

Passage of mcrchanriize, 93. Payment of" ijoods, a 18. , when it may be dcmaiui-

ed, 218.

, in cases of agency, 420.

, iu cases of guaraiueet>,

383. , in cases of barikruptcv,

526—530. — — , in cases of bills of ex- change, 454-. rerjury, under a commission of

bankruptcy, 570. Perils of the sea, what, ?R0. Perfjiniance of a contract, what,

218. Petitions in cases of bankruptcy,

503. Petitioning:; creditor, 493. Petty avcraue, 346. Pirates, 280

Policy of insurance, 276. Post, reniittwjg or sending notice

by, 457. Premium of insurance, 334. Preference of creditors, 49 1 — 521. PRTNCir.VL AND y\GENT.

. , relation of, 391.

, ajipouilment of

an ai:enl, 391.

-, extent of ijis au-

thority, 393.

, execution of his authority, 397

, dclermination of

his authority, 398.

-, his duties with re-

ference to iiis principal, 398.

-, his liabihties with

reference to his principal, 400.

— • , his rights wi'h re- ference to his prificipal, 406.

, principal's nuhts

and liabilities with reference to his agent, 411.

jjrincipal's liabili-

ties with reference to third per- sons, 416.

i , principal's rights

with reference to third persons, 419.

aiicnt's rijihts with

reference to third persons, 422.

Principal and agent's liabilities with reference to third persons, 423.

Principal and surety, 379.

Procuration, authority to draw, ac- cept or indorse a bill or note, 430, 446,

Prohihited goods, 153—155. 3 16.

Promissory notes, 469.

Presentment of Bills op Ex- change.

for acceptance, 439.

for payment, 450.

Proof of debts under a commis- sion of bankruptcy, 531.

of tiie time of proof, 532.

of cLdiniii;: a debt, 532.

of the mode of proof, 533.

of the creditor's election,

whether he will proceed at law, or prove under the conmrfssion, 534.

of reducing and expunging

proof of debts, 536.

of costs and damages, 552.

Protection of a bankrupt from ar- rest, 561.

Protest of Bills of Exchavge.

fornon-acceptance,467.

— — — — for non-payment, 467.

for better security, 468.

Provisions, whpn contraband, 121.

Provisional assignee, .^09.

Provisional absignment, 509.

Rc-a-^su ranee, 320.

R« capture, 137.

Receipt, given by ascnts, 419,420.

— , wiietiier dcmandabie on

payment of bills and notes, 458.

Reducinsr proofs, 536.

Re-exchaiiiie, 466.

Regrating, 173.

Release, -156, 459.

Removal of assignees, 514.

Remitting inoney by post, 457.

Rem, under a commission of bank- ruptcy, 548.

Renewe»i commission, 505.

Requisites of a policy, 277.

INDEX.

58S

Reprisals, 14?. Kescinding contracts, 222. Respondentia, 337. Responsibility of av Agent.

with reference to his

principal, 400. with reference to third

persons, 423.

Restraint upon trade, 155.

Restraints and encouragements ot" the commercial system, 42.

Retaininsi; a dividend, 457.

Return of prcnii;iin, 334.

Revocari<in of an agent's autho- rity, 398

, of an acceptance, 444.

Riijlit and freedom of commerce, 88.

Riuht of passage of merchandize, 93

Risk in the conveyance of goods, 436.

in policies of insurance, 286.

Sale.

of goods, 202, 211, 212.

of bankrupt's property, 513.

in cases of agency, 413.

Sailing (warranty of), 337.

instructions, 329.

Salvage, 347.

Sea-worthiness, 312.

Seizure of goods, 103!

Security.

under a commission of

bankruptcy, 536.

■' when the taking of it

from the acceptor of a bill of exchange discharges the other parties, 444.

Setting up trades, 145.

Seducing artificers, 176.

Set-off.

— ■■ under a commission of

bankruptcy, 554.

in cases of agency, 415.

Sight, bills at or after, 454."

Signature, what is a sufficient sig- nature within the statute of frauds, 207.

of creditors to a certifi- cate, 568. Smuggling, 1§5.

Stock-jolil.insj, 196.

Siolcn bills, 437.

Stoppage in transitu, 244.

Stowage, 281.

Stranding, '^94.

S'lpru-proti-st, 468.

Superseding a connnission of bank- ruptcy, 507.

Surety, 379.

under a commission of

bankruptcy, 449.

Surplus under a commission of bankruptcy, 566.

Surrender under a commission of bankruptcy, 55^.

Tender, effect of, 2)8.

Trade, contracts in restraint of,

when illegal, 155. Total loss in cases of insurance,

303. Trading, w!iat acts constitute it

within the bankrupt laws, 485. Trading with an enemy, 103. Transfer of bills and notes, 445. Total loss, 303.

'I'.IUSTEES.

under a commission of

bankruptcy, 544 — 561.

Uncertificated bankrupt, 566. U.sage, in the construction of polv-

cies, 283. Usance, 453. Usury, 167. , on bills, 475.

Valuation of a policy of insurance, 277.

Valued policies, 277.

V^cndee, refusing to accept goods, 223.

, vv'hen he may set olF a

debt due to himself from the factor against the demand of the principal, 421.

) when discharged by pay- ment to the agent, 421.

Vendor, when he has a lien upon property sold, 244- 259.

Verbal acceptance. 203.

Visitation and search, 136,

584

I X D E X*

Void policies, 778. Vo^jagcs, illcgiil, 313,

Watrer poiicios, 317.

Want of effects, when the givino;

notice of the dishonour of a bill

is excused by, 459- Warranty of f;uoils, 230. Warranty in cases of policies of

insurance, 326.

Warranties by agents .and factor!, 424.

Wife, wlien bound by lier con- tracts, 180—186.

Witnesses attendiii};; under a com- mission of bankruptcy, 601.

Wuol, t.^portation of, 161.

Wreck, 347.

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By WILLIAM ROBERTSON, D.D. This Lilitiun of a Work so peculiarly interest- ing, forms a part of the unitoriu and general Series of Histories uow pubushi iig in weekly Nuni- hers, under the Title of IIijtorical Clasmcs: includinjc t!ie Historical Works of the most cele- brated and popular Authors in the English Lau- giuige.' — Either of which wiil be uricL:nnectcd and complete iu itself, and may bo had together or separately.

Mode of FubUration.

I- This Work will be accuratily printed in O ■- tavo, oa superfine wove Puv-er, with ..n e)iti.> new Type, the whole forming Two ii:uHlsi)mc Volumes.

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The great demand for Dr. Robertson's History of Scotland, h-\s induced the Publishers to com- mence the present F '.iiiou of the A'lthor's com- rplttc Works with that inucli admireil pmrluctiou, iso jvo-ly considered as the Standard of Taste in Hist'v^-.eal Writing.

Thc--HiSTO.<Y of SroT i./tNP was the work wh; /b laid the ibundatiun of that fame, vhose s-ibse- queut lusti-e was jiermaneutl}' incrvascd lv> tlie puhiication of his H- TOKY of A:vii:RtCA, and of CiiAR'.Es V. It is wuitlen with a purity of dic- tion and elegance of style, which Gibbon praised but did not imitate; and it embraces a succes- sion of evei'ts peculiarly interesting in themselves, an.' iniinn ly connected with tl.e history of our own country at tne same period. Thut the reader, however, r.iin-ht not find himself in the midst of circumstances to wliich pro> ibly ne. had no pre- cife knowledge of tl' ■ leauin? cr-.ses,. the Author has taken a rapid but compreueusive view of the transactions in Scottish History from the earliest periods to that where he conimercts his own work, whiith then forms a continuation, up to that time when t.re affairs of Scotland became cons', icrably identified with those of England, b;- the aci ssiou oi James VJ to the throne of the latter kingdom.

and iiistr motion, wlicther in fumishiny subject* for the Historian, the Poet, or the Novelist: it woul.l be i.iere.bre oxtraordmary, if, at this pe- riod, the moot lively interest should tail to be ex- cited. The emigration of the Oourt oi Portugal, anu the .Abolition of rhe Slave Trave, are events m wiiicli ti.e aft'aus of he two hemispiieres Ije- eome closely connected, and the mind is naturally led from cuno»ity to review the bisiory of country' — the liieatre on which such great events are displayed.

liOBERTSON's AMERICA. No. 1. })rice One Shilling, elegantly printed in Octavo, ou a beautiful wove Paper, erabcllished V. ith a fine Portrait ol the Author, from a I'uint- ing by Sir Joshua Reynolds, and an engraved emblematical Vignette Title, of The

HlSrORY OF AMERK^A,

By WILLI AM' ROBERTSON, D.D.

The History of the New World has at ail times proved a source of the bighe^jt entertainment

ROBERTSON'S CHARLES V.

No. I. price One Shilling, elegantly printed in Octavo, u^iiform with the History of Scotland, and Am'criea, cmbellisl. 'd wiia a fine Portrait of CnARLi.f. the fii'in, from a Painting by Ti.lan, of The.

IIiSTORY OF THE REIGN

EMPEROR CHAIiLES THE FTFTH OF SPAIN.

By WILLIAM ROl-ERTSON, D.D.

At a time wher) the attein: n of the world ii turned to the gre"l eveuls p:-'-<;-.ng '>■ s5i)am. .he History of that Country, vvbea in nc:- zeni.o of power, and ranking l-.rr-t runojig liio n-i. .>ns of Europe boih for arts and arms, cannot ail of excitirg interest; and everj' one is imxions that the s;^.me persevering spirii, which u'lStliiguished the iiation in the time of Charles V. may now ti;ivunp!i in a nobler cause — che Emancipation of itself and cf Europe.

The established reputation of the Work ren- ders panfgyric vinnecessary, and the period of time wlii:;!: it embraces, is, i-'ernaps, the most imporsant und fullect of events of any which modern history can boast.

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(pr^ The Works of the celebrated Historian, RoBE&TSON, have endured the test of criticism ; the}' have established their own celebrity, and no attempt, has been made to supersede their utility and value ; the publishers have only to add, that the mode of their present publi^^^ation shall be such as to do justice to the merit of the Au- thor, and to gratify the Eye of Taste,, by a neat- ness and elegance of execution, the more deserv- ing of notice in confidcration of the eheappess witl^ which they are pr«seBte<i to the f ublie,

Paternoster-IIow, London.

ODi)Y's HISTORICAL CLASSICS, Forminsf an elegant, uniform, aud cheap Libran- Euition ot the most estecmea auil \aluabie Histories in the English Language.

This Daii is published. Price Is. No. I. exnbtllished >?ith a fine Portrait of the Au- thor, copied by p<.rniission from the orii;,inal Painting by Sir Joshua Reyuolus, aud eugrave^ expressly for this Work, ot

Ttih HISTORY

OF

THE DECLINE AND FALL OF THE

no MAN EMPIRE.

BY EDWARD GIBBON, ESQ.

To which is prefixed, a Sketch of the Life and Writings of the Author.

TO THE PUBLIC. It must be wholly uTinccessary to panegyrize a Work which has gained admittance, throu'^h its icknowledged merit, into the cabinets of u.u st Men ! Scionce and Geuins in Euroj^e, Asia, and .A-. .'rica; l.-ut it may not be amiss to remark, thai there never was a crisis when tbe History of t .e Decline and Tall of t'ne Ronmn Enipiie might be pt.'used with more interest than at the present moment, when so many Revolutions of Empires, Kingdoms, Suites, and lU'pubi-scs, are acting befijre us. We may read, compare, trace the germ oi Corruption through its progress to baneful maturity, reflect on the instability of human grandeur, and bow with awe before the Disposer of all those events, whose power alone is ininuitable.

.As for the Execution of the present Edition, the Proprietors announce it to the l'ul>liei in fuli confidence, thdt this celebrated production of English genius will appear, roK i iiE first iime, in a dignilied style, t-qualiy worth)' of the Author and the Sii' ject. The following are the grounds upon which they rest their pretensions to the public patronage of this Edition in preference to ' former ones : — That it not only stands unrivalled in point of ek'gance and correctness, but is even cheaper than the most common Editions that have hitherto appeared ; whilst at the same iime it is brought out in such a cOTivenient mode of publication, as will place it within tiie reach of evi'ry rlass of readers, and ensure it that exten- sive circulation which is due to its intrinsic meiit

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SPIRITUAL MAGAZINE;

OR,

THE CHRISTIAN'S GRAND TREASURE.

Wherein the peculiar Doctrines of the Gospel are unfolded, and the Types and Sliadov>s of the Old Testament unveiled and spiritually explained, in familiar Eialogues, between Friend/i/ & Truth,

By the Rev. .lOIlN ALLEN, Author oi the Spiritual Exposition of the Bible,

&c. &c.

With a EF.corMEXDATOHv Preface, by the late '

Rev. William Romaine, A.IM.

The decided advantage this Ediuoii possesses above every preceding one will na doviL'l be duly appreciated by adiscernintj Public, as it is printed .vith a large Type, on a superfine Paper, and may be ca-sjiy ! ead by aged persons, embeliislied with Er.gravings executed by eminent Artists.

DEDICATED TO HIS MAJESTY.

BARRINGTON's HISTi)RY OF NEIV\

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INCLUDING BOTANY BAY AN D ITS DEPENDENCIES.

jVode of PVBLKATIOX.

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No. L price Is. enriched witli fine coloured Plates, A New, Complete, and Authentic i

HISTORY of NEW SOUTH WALEsJ

From its firit Visitation by Captain Cook, down) to the present State of that prouiising Country ;] its Natural History, Soil, Nature, and Produce •! the C^istume, Manners, and Customs of the Na4 tives ; and a particular Detail of the Proceedings in founding and establishing the English Colony ^ with an Account of its Progress to the present Time ; the Clonduct of the Convicts, and everjj other interesting Particular. To wdiich is addedj Barrington's Voyage to New South Wales^ with the Life, Trials, &c. of the Author, accom- panied with a fine engraved Portrait.

By GEORGE P.ARRINGTON, Late Officer of the Peace at Paramatta. The whole to be completed in Twent}-six Num hers, forming Two large VolumCvS Octavo, (eaol Number to be cmbcHished with one or more Prints finely coloured) and neatiy printer! on fine yelloW Paper, illustrated with elegant l^ngraviiigs o| Vitrrts and Customs, and Subjects of Natural His- tory, coloured from Natvire, with a Map of tht Country.

The rapid sale of the PiTFt Edition of this eni tertaining Work, and the frecjucnt demands ant enquiries since made relati^•e to the same, togeJ ther with the incrcesing importance of our setllej ments in New South Wales, &c. having induce* the Publishers to reprint the present Edition, i has been thought proper to extend and enlargi the original plan b\' a Supplement, bringinj down the History of tlie Settlement to the pre?tn period of 1811.

4

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A SYSTEM OF MODERN GEOGIlArHY^

OH THE

NATURAL AND POLITICAL History cf the Present State of the WorkU

BY JOHN SMITH.

Until wii^iin these few years, the populisr works on Geojjraph}' were merely copies of caoli other, alike replete with erroneous statements, full of obsolete repetitions, and defective in their plan as Avell as their arrangement. Later publications indeed are exempt from same of tiiese defects ; but the rapid prog-ress of discovery, the important and more exact accotmts of different countries, which have transpired in the numerous voyages and travels of intelliijent observers, .JL'.stii'y the appearance of art, entirety new Treatise nn Gco- graptiij, the oVjject of which is to incorporate all those discoveries and observations. In addition to more ample information respecting; Norv.ay, Sweden, Spain, India, many of the islands of Asia, and the northern boundaries of America, the different changes of states and Ivingdoms Avhich have recently taken plnce w'ill be detailed in this work, and much of v/hat was wanting to complete the description of Germany, France, and even Great Britain, extracted from numcroiis publications, as well in foreign languages as our own.

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^ C- '^"i'-'/f-

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