economize that he may have anything left at majority. Food,
proper clothing, shelter, medical attendance and instruction,
are necessaries, but strangers should inquire whether his law-
ful guardian is not able or willing to supply the infant with
these necessaries before they do so, for if he is, then others
should not unless they want to do it for nothing. If you fur-
nish an infant necessary supplies do not take a note for it
the note is worthless if he resists it," while your claim for
goods sold, if necessaries, will be allowed. The rule of neces-
saries holds good also in case of lunatics and idiots. A con-
tract made by a lunatic in a lucid interval is good. This rule
of prohibiting infants from contracting is intended for their
benefit. The time when an infant comes of age is on the last
day of his twenty-first year. That is if he were born July 4
he would come of age July 3 and would be held just as re-
sponsible for all acts done on that day, as signing a note,
making a will, etc. as if he were fifty years old. He can not
plead the Baby Act for any thing done on that day, he is then
a legal man.
An infant, while unable to contract is still held liable for
all torts that he may commit, such as slander, trespass, assault,
etc. If he falsely represent himself to be of age and by such
370 THE LAW OF BUSINESS.
representation procure goods the party from whom he pro-
cured them can take them away and in some States prosecute
him for obtaining goods under false pretenses.
Married women, by the common law, were almost entirely
disabled to contract, their personal existence being merged in
that of their husbands. Contracts made by them before mar-
riage made be enforced by their husbands after marriage but
not by themselves. The result is that the contract of a feme
covert is generally void unless she act as the agent of her hus-
band, in which case it is her husband's contract and not hers.
Nearly all the States have special statutes on the rights, duties,
privileges and obligations of married women, many of them
very much enlarging their powers in this respect, and for a
full knowledge of this subject for any State the statutes of
that State will have to be searched. Slaves can not make
contracts with their masters or with any one else without the
master's consent, but as there is no slavery in the United States
at the present day this subject need not be further discussed.
A contract made by a drunken man is voidable unless it be
for necessaries for himself and family. And if it be not for
necessaries and the man retain and use the thing bought after
becoming sober he will be held to affirm the contract and have
WHAT CONTRACTS MUST BE IN WRITING.
Statute of Frauds. The law requires that certain contracts
to be binding on the parties shall be in writing. Over two
hundred years ago this necessity was recognized and in the
year 167.7, in the reign of Charles II., the celebrated "Statute
of Frauds" was enacted. The object of the statute is well set
forth in its title, "for the prevention of many fraudulent
practices which are commonly endeavored to be upheld by
perjury and subornation of perjury," by requiring that certain
contracts shall be in writing. The statute of frauds was an
STATUTE OF FRAUDS. 37 1
elaborate affair. It covered six distinct heads or subjects and
was comprised in twenty-seven chapters. As parts of this
statute have been re-enacted by nearly every State in the
Union and are now law which every one ought to be familiar
with we give the principal features. The great change which
this law has introduced was in parol contracts. Up to that
time the law recognized only two great classes of contracts,
those by deed and those by parol, or sealed and unsealed.
This statute drew a distinction between written parol and oral
parol, rendering a writing necessary in some cases, though not
under seal. The following must be in writing, otherwise the
law will not allow an action to enforce them: i. Any special
promise by an executor or administrator to answer damages
out of his own estate. 2. Any special promise of any person
to answer for the debt, default or miscarriage of another. 3.
Any agreement made upon consideration of marriage. 4. Any
contract for the sale of lands, tenements and hereditaments,
or any interest in or concerning them. 5. Any agreement
not to be performed within the space of one year from the
making thereof. 6. Any agreement for the sale of any goods,
wares and merchandise, for the amount of ten pounds sterling
or upwards, unless part of the purchase price is paid or part
of the goods delivered.
These are the most important features of the statute and as
they are all very important law 7 at the present time perhaps a
few words of explanation would be well received.
1. Executors and administrators in settling up estates are
liable to suffer damage and loss, and the attempt was fre-
quently made to make them answer for such loss out of their
own private estates, and in attempting to do this it was easy to
affirm that the executor had said that he would stand good for
any damage the estate might sustain under his management.
The law says that he can not be held on that kind of a
372 THE LAW OF BUSINESS.
promise; if the heirs expect to hold him personally liable his
promise must be put in writing.
2. This provision relating to standing good for another
man's debts is very important and little understood. It means
simply that if a shop keeper proposes to hold me liable on a
promise to pay your debt if you do not he must get that
promise in writing. To illustrate : Jones and Brown go into
Smith's store; Jones wants a coat and Brown says, "He's all
right; if he don't pay you 1 will." Smith sells Jones the coat
and charges him with it. Jones fails to pay and Smith at-
tempts to collect from Brown. He can not; that promise to
be good in law must be in writing. If Brown had said to
Smith, "Give Jones a coat and charge it to me," or "Give
Jones a coat and I will settle the bill," then he would be liable
on his naked promise for it is a contract between Brown and
Smith and Brown is charged on Smith's books. Merchants
should be very careful in this regard and have a distinct un-
derstanding who is to be charged on the books, and if one
proposes simply to stand good for another or pay if he don't,
insist on having a written memorandum of the agreement.
3. Any agreement upon consideration of marriage. This
does not mean an agreement to marry at some future time, nor
the contract of marriage itself, but an agreement to do some-
thing else provided a marriage take place. A promise to give
to a woman, or settle upon her, a specific sum upon her mar-
riage is valid if in writing. But the promise must be to the
other party to the man. A letter will suffice for the writing,
but a letter written to the daughter by her father making the
promise, which she did not show to the intended husband or
make known to him until after marriage, is not a promise
within the meaning of the statute. It must be a promise to
one party in consideration that he or she will marry a certain
other party. . This clause of the Statute of Frauds has only
been adopted by a few of the States and so has no general ap-
plication in this country.
4. Any contract for the sale of lands, etc. This does not
refer to the deed of conveyance or the actual sale, but to the
preliminary contract to sell. The words are obviously in-
tended to have a wide operation, as the clause, "or any interest
in or concerning them," is very far reaching in its application.
The courts have construed the meaning, however, in most un-
certain cases. The question might arise whether a contract
for the sale of growing crops would be a contract or sale of
"any interest concerning lands." This seems to depend upon
the intention of the parties. If the grain be reaped and in
barns or stacks it is evidently severed and a mere chattel. If
it be growing and the sale contemplates a severance when
grown and a delivery of it then, it is in the estimation of the
parties a mere chattel. As a general rule it may be stated that
if the parties consider the land merely as a place of deposit or
storing for the vegetable productions they are so far discon-
nected from it that they may be sold as chattels, and are not
within the statute. If a contract provide for the sale of land
and the growing crops, they go as part of the land and come
within the statute. An agreement to release dower must be
in writing. An agreement to sell growing trees with the priv-
ilege to enter and take them away is a contract for sale of an
interest in lands and must be in writing. This section is in
general force in the States of the Union.
5. The rule of law for determining whether a contract is
to be performed within the space of one year from the making
is this: If, when made, it was in reality capable of a full and
bona fide performance within the year, without the interven-
tion of extraordinary circumstances, then it is to be considered
as not within the statute. The understanding or intention of
the parties does not control the decision. They may contera-
374 TH E LAW OF BUSINESS.
plate a much longer continuance of the contract, or a suspen-
sion of it and a revival at a future time, but the above rule
governs the construction. This clause relates more frequently
to contracts for labor and services than anything else and is in
force in perhaps all the States of the Union.
6. Contract for the sale of goods must be in writing signed
by the parties or their agents. The payment of earnest money
or the acceptance and receipt of a part of the goods takes it
out of the statute and renders a written memorandum unneces-
sary. The question arises what constitutes acceptance and re-
ceipt of a part of the goods, for this statute requires both de-
livery and acceptance, and therein differs from the old com-
mon law principle which only required delivery of the article
in kind and quality ordered. If A order orally B to send him
one thousand bushels of wheat, naming the quality and price
to be paid; B sends the wheat as ordered. At common law
the sale is complete and all A can do is to object to the quality
or kind. But under this statute he can immediately return
the wheat to B and refuse to pay for it even if it was exactly
the kind and quality he ordered, as not only delivery but ac-
ceptance is required to complete the sale. If A accept the
wheat then he must pay and can not after that resist because
the order was not in writing. To avoid cases of this kind
merchants should insist on having orders for goods in writing.
This clause has been adopted in nearly all the States and
where it has not the common law rule holds good. The mini-
mum limit, "ten pounds sterling," as written in the original
statute, is usually made fifty dollars in this country although
some States make the amount less. The subject of " De-
livery," which has an important bearing on this question, will
be found discussed further on under that head.
IMPLIED PROMISES OR CONTRACTS.
Implied contracts are such as reason and justice dictate,
and which the law presumes ever}- man undertakes to per-
form. If A employ a person to do work for him without
naming a price the law implies that he contracted to pay the
real value of the services. Parsons says that " these contracts
form the web and woof of actual life." Closely allied to these
are certain engagements or promises which the law will
always imply and which are seldom expressed.
If a man undertake a trust or office the law presumes a
promise on his part to perform his undertaking with integrity,
diligence and skill, and the want of any of these lays him
liable to his employer for damages.
When an agent contracts in the name of his principal he
implies that he has the authority of the principal.
The law requires a man to pay taxes and presumes his
promise to do so, and if he fails a suit is brought to collect
the same. Towns and cities are obliged to take care of their
Metcalf says truly that the only ground upon which an
action can be maintained on an implied contract is that of
justice, duty and moral obligation. A man is bound to sup-
port his wife and children and if he drive them from home
and then publish a notice that he will not be responsible for
debts contracted by them, it will not avail, he will be com-
pelled to pay bills they may contract for the necessaries of
life. But if they left his house against his wishes, it would
If I know a man is rendering me service and I permit him
to continue I am bound to pay him the fair value for his
work, but if I know nothing of it and don't see him he can
not collect wages even though his services benefit me. If a
plasterer is plastering your house and before he is done it
burn down you will have to pay him for work done.
Construction." The intention of the parties is the pole-
376 THE LAW OF BUSINESS.
star of construction," says Bouvier. But the intention must
be found expressed in the contract, and be consistent with the
rules of law. If the contract is so defective that the meaning
of the parties can not be determined, the court will not make
a new contract for them, nor will it force words out of their
real signification. The situation of the parties and the subject-
matter will be fully considered in arriving at the sense of the
If the contract relates to a trade or profession the words
peculiar to that trade will be given their technical meaning.
Words that are manifestly inconsistent with the declared pur-
pose or intent of the contract will be rejected, and words
omitted so as to defeat the effect of the contract, will be sup-
plied by inference from the context. If words have two mean-
ings, that will be given them which gives effect to the design
of the parties. The whole contract is to be considered with
relation to the meaning of any of its parts. All parts will be
construed, if possible, so as to have effect.
Lex Loci. The law of the place where a contract is made,
a right is acquired, or an act done relating to personal prop-
erty governs it. This rule applies to determining the validity,
or invalidity, of the contract, also the rights of parties under
it in all matters pertaining to the modes of execution and au-
thentication of the form or instrument of contract ; also to the
interpretation of the contract, the meaning of words and use
of language employed in it, the legal duties and obligations
imposed by it and rights acquired under it. If the parties,
however, at the time of making the contract had the laws of
another Kingdom or State in view, this general rule of lex
loci stated does not apply, neither if the lex loci is itself unjust
or contra bonos mores (against good morals).
The capacity, or incapacity, of the parties to the contract
as effected by the questions of minority, coverture, guardian-
ship, slavery and other personal disabilities, is to be decided by
the law of the place of making the contract.
A discharge from the performance of a contract under the
lex loci is a discharge everywhere.
A contract of marriage, if valid where contracted is valid
everywhere, unless it is repugnant to the settled policy and
laws of the country where sought to be enforced ; the recog-
nized exceptions in the United States being incestuous and
polygamous marriages, and the like.
The law that governs the conveyances of real estate is the
lex rei sitae (law of the place of location of the thing). It is
a universal rule of law that any title or interest in land, or any
form of realty, can only be acquired or lost conformably to the
law of the place where the realty is situated. This rule holds
good as to the capacity of the parties to transfer as affected by
questions of minority or coverture; or by relations of parent
and child, guardian and ward ; also executors and administrat-
ors. A man residing in Ohio, and making a deed to land
located in Indiana, must conform in every respect to the law
of Indiana respecting conveyances, recording, signing, sealing,
release of dower, etc.
Sale. See definition of Sale.
Sale is a species of contract. The delivery must be im-
mediate and complete otherwise it will only be a contract for
sale. The payment must be in money. If in goods or any
thing but money it is barter or exchange and not sale.
A sale to be valid must have these conditions: i. The
thing sold must be in existence; 2. The parties must be com-
petent; 3. The seller must be the owner or his authorized
agent; 4. There must be a consideration or price paid; 5.
There must be an immediate delivery.
If a man sell a horse, and on going to the stable to get the
horse to deliver find him dead, the sale is void. But a man
378 THE LAW. OF BUSINESS.
may sell things that are partly in existence only, as a growing
crop, or the milk a cow may produce for a certain time, or a
colt which a mare may be carrying. A man can not sell what
he does not own unless he be an agent for the owner. If you
find a watch and sell it, the owner can take it wherever he
finds it. See the Law of Finding.
But in the case of negotiable paper this rule does not hold
good. If a man find or steal a negotiable note not yet due
and sell it he passes title to an innocent purchaser for value.
If I sell J. B. Smith goods thinking I am selling to J. D.
Smith, who is entirely responsible, I do not pass title to the
goods and J. B. Smith could not pass any title to any one to
whom he might sell them that would defeat my right to take
them away. If I represent myself as solvent, when I am not,
and buy goods on the representation the seller may take them
away, but not from an innocent purchaser after I have sold
them. It is now the custom with wholesale merchants to
have retailers who ask for credit make a representation in
writing of their actual financial condition, and a merchant
who misrepresented in this respect and got a large quantity
of goods for which he could not pay was found guilt}' in Cin-
cinnati of obtaining goods under false pretenses.
As to the competency of the parties the same rules hold
good that have been previously set forth.
There must be a price paid and the price must be certain
or be capable of being made so. An example would be this:
j I buy of A one thousands bushels of wheat at the price at
which it opened at the Chicago Grain Exchange that morning.
Neither of us knows what it is but it can be ascertained; or I
buy a horse of B for whatever any three dealers say he is
worth; the price is not certain but may be made so. If they
fail or refuse to fix a value the sale is void. While the price
must be certain the goods must also be specific and capable of
positive identification. If I buy one thousand bushels of
wheat that exact quantity must be separated from the bulk
before the sale is complete. There must also be an exact
understanding as to price, quantity, quality and all the ma-
terial terms of the sale, for an honest misunderstanding rela-
tive to any material fact will vitiate a sale. As to what
constitutes a delivery and other important information con-
nected with that subject, see the discussion under that head
Delivery. It is a maxim of the law that an actual or con-
structive delivery must follow a bargain to complete a sale.
Originally delivery was a clear and unequivocal act of giving
possession by placing the subject of the sale in the hands of
the transferee or his agent or in their warehouses, w
carts, etc., but in these times delivery is frequently symbolical,
as delivering the key to a room where goods are stored, for a
delivery of the goods. At common law delivery was not nec-
essary to complete a sale as between the parties to the sale,
but as against third parties it was necessary, as the posse
of an article by the seller after a supposed sale raised a pre-
sumption of fraud. If I sell you a horse and you permit me
to retain possession of him, and I then sell him to another who
knows nothing of the first sale and he takes possession of the
horse you have no enforceable claim against him for the horse;
only an action against me for the money paid for the horse.
The rule of delivery is modified in the case of bulky ar-
ticles, in which a delivery of a part for the whole will be con-
strued as delivery.
If the buyer is to take goods away, then the separating of
the goods from the rest and counting, weighing or measuring,
will constitute delivery.
Instructions are frequently given by a buyer to a seller as
to the manner, time and place of delivery. These should be
380 THE LAW OF BUSINESS.
followed exactly, and if any loss occur it falls on the buyer,
whereas, if instructions are not followed and a loss occur it
falls on the seller. As to the place of delivery if no instruc-
tions are given the nature of the article and its use should be
taken into consideration. If it is to be used in a shop or barn
it should be delivered there ; it is not delivered if left at his
If a man buys goods and then refuses to take them when
delivered or tendered he is liable ; the seller may sell them
again and if he does not realize as much as the first was to
pay he will be held liable for the difference.
Stoppage in Transitu. Under some circumstances a mer-
chant who has sold and shipped a bill has the right of Stop-
page in Transitu. This means the right to stop goods while
in transit. It is a right that vests in the seller when the goods
have been sold upon credit.
The right may be exercised by the vendor, or a consignor,
to whom the vendor is liable for the price, or a general or
special agent acting for him. If it is ascertained that the
buyer has become insolvent after buying the goods, and before
their delivery, the seller may exercise the right of stoppage in
transitu. It must be exercised before the goods have been de-
livered to the purchaser, and before he has transferred any
title in the goods to any other. Notice should be given to the
warehouseman, or carrier, or whoever has custody of the
goods, that the right is to be exercised, and that he shall not
deliver the goods. If the goods have been delivered to the
buyer, or to an agent of the buyer, or have been deposited in
a public warehouse for him, or a part have been delivered for
the whole, or they in any way, either actually or constructively,
come into the possession of the buyer, then the right of stop-
Page in transitu is defeated. If they have been put in a ware-
house and held for the payment of freight, they are not in the
WARRANT V. 381
buyer's possession. But if the sale is made, and then for the
accommodation of the purchaser, the goods are let lie in the
store of the seller for a time, they have been delivered and are
constructively in the possession of the buyer.
Warranty. When a sale is made the seller warrants the
title and his right to sell, either expressly or by implication.
If the thing sold is in the seller's possession the warranty is
implied; if the thing is not in the seller's possession the com-
mon law rule was " caveat emptor " (let the buyer beware). A
man ought to use all his senses in making a purchase and de-
mand warranties for what he is in doubt about. Misrepresent-
ation of any material fact vitiates the sale, for it is a species of
fraud. A warranty made after a sale is completed is worthless
as it has no consideration to support it. If the seller expressly
refuse to warrant the goods then no warranty can be implied.
If goods are not as ordered the buyer may refuse to receive
them and return to seller and bring suit for breach of condi-
tion ; but if he keeps the goods and sells any of them before
he discovers the defects the value of the goods sold will be de-
ducted from any judgment he may obtain. He may return the
goods, or any part of them, as soon as he discovers the fact
that they are not in accordance with the contract. If. when
.returned, the seller refuse to take them, then the buyer may
sell them and recover from the vendor the loss on the resale
of the same, as well as storage and charges for selling.
FORM OF BILL OF SALE.
Cincinnati, August 5, 1889.
Mr. Thomas Smith.
Bought of STEINAU & FURST, Jewelers,
One H. C. Gold Watch, - - $250-0
Paid, August 5, 1889, Steinau & Furst.
382 THE LAW OF BUSINESS.
For ordinary every day business the above form is as good
If it is desired to have a more pretentious instrument the