Front Page Titles (by Subject) CHAPTER XXX.: OF TITLE BY GIFT, GRANT, AND CONTRACT. - Commentaries on the Laws of England in Four Books, vol. 1
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CHAPTER XXX.: OF TITLE BY GIFT, GRANT, AND CONTRACT. - Sir William Blackstone, Commentaries on the Laws of England in Four Books, vol. 1 
Commentaries on the Laws of England in Four Books. Notes selected from the editions of Archibold, Christian, Coleridge, Chitty, Stewart, Kerr, and others, Barron Field’s Analysis, and Additional Notes, and a Life of the Author by George Sharswood. In Two Volumes. (Philadelphia: J.B. Lippincott Co., 1893). Vol. 1 - Books I & II.
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OF TITLE BY GIFT, GRANT, AND CONTRACT.
We are now to proceed, according to the order marked out, to the discussion of two remaining methods of acquiring a title to property in things personal, which are much connected together, and answer in some measure to the conveyances of real estates; being those by gift or grant, and by contract: whereof the former vests a property in possession, the latter a property in action.
VIII. Gifts then, or grants, which are the eighth method of transferring personal property, are thus to be distinguished from each other, that gifts are always gratuitous, grants are upon some consideration or equivalent; and they may be divided, with regard to their subject-matter, into gifts or grants of chattels real and gifts or grants of chattels personal. Under the head of gifts or grants of chattels real, may be included all leases for years of land, assignments, and surrenders of those leases; and all the other methods of conveying an estate less than freehold, which were considered in the twentieth chapter of the present book, and therefore need not be here again repeated: though these very seldom carry the outward appearance of a gift, however freely bestowed; being usually expressed to be made in consideration of blood, or natural affection, or of five or ten shillings nominally paid to the grantor; and in case of leases, always, reserving a rent, though it be but a pepper-corn; any of which considerations will, in the eye of the law, convert the gift, if executed, into a grant; if not executed, into a contract.
*[*441Grants or gifts, of chattels personal,1 are the act of transferring the right and the possession of them; whereby one man renounces, and another man immediately acquires, all title and interest therein; which may be done either in writing, or by word of mouth,(a) attested by sufficient evidence, of which the delivery of possession is the strongest and most essential. But this conveyance, when merely voluntary, is somewhat suspicious; and is usually construed to be fraudulent, if creditors or others become sufferers thereby. And, particularly, by statute 3 Hen. VII. c. 4, all deeds of gift of goods, made in trust to the use of the donor, shall be void: because otherwise persons might be tempted to commit treason or felony, without danger of forfeiture; and the creditors of the donor might also be defrauded of their rights. And by statute 13 Eliz. c. 5, every grant or gift of chattels, as well as lands, with an intent to defraud creditors or others,(b) shall be void as against such persons to whom such fraud would be prejudicial, but, as against the grantor himself, shall stand good and effectual; and all persons partakers in, or privy to, such fraudulent grants, shall forfeit the whole value of the goods, one moiety to the king, and another moiety to the party grieved; and also on conviction shall suffer imprisonment for half a year.2
A true and proper gift or grant is always accompanied with delivery of possession, and takes effect immediately:3 as if A. gives to B. 100l., or a flock of sheep, and puts him in possession of them directly, it is then a gift executed in the donee; and it is not in the donor’s power to retract it, though he did it without any consideration or recompense:(c) unless it be prejudicial to creditors; or the donor were under any legal incapacity, as infancy, coverture, duress, or the like; or if he were drawn in, circumvented, or imposed upon, by false pretences, ebriety, or surprise. But if the gift does not take effect, by delivery of immediate possession, it is then not properly a gift, but a contract; **442]and this a man cannot be compelled to perform but upon good and sufficient consideration; as we shall see under our next division.
IX. A contract, which usually conveys an interest merely in action, is thus defined:—“an agreement, upon sufficient consideration, to do or not to do a particular thing.” From which definition there arise three points to be contemplated in all contracts: 1. The agreement; 2. The consideration; and 3. The thing to be done or omitted, or the different species of contracts.
First then it is an agreement, a mutual bargain or convention; and therefore there must at least be two contracting parties of sufficient ability to make a contract; as where A. contracts with B. to pay him 100l. and thereby transfers a property in such sum to B. Which property is, however, not in possession, but in action merely, and recoverable by suit at law; wherefore it could not be transferred to another person by the strict rules of the antient common law; for no chose in action could be assigned or granted over,(d) because it was thought to be a great encouragement to litigiousness if a man were allowed to make over to a stranger his right of going to law. But this nicety is now disregarded: though, in compliance with the antient principle, the form of assigning a chose in action is in the nature of a declaration of trust, and an agreement to permit the assignee to make use of the name of the assignor, in order to recover the possession. And therefore, when in common acceptation a debt or bond is said to be assigned over, it must still be sued in the original creditor’s name; the person to whom it is transferred being rather an attorney than an assignee. But the king is an exception to this general rule, for he might always either grant or receive a chose in action by assignment:(e) and our courts of equity, considering that in a commercial country almost all personal property must necessarily lie in contract, will protect the assignment of a chose in action as much as the law will that of a chose in possession.(f)4
*[*443This contract or agreement may be either express or implied. Express contracts are where the terms of the agreement are openly uttered and avowed at the time of the making, as to deliver an ox, or ten loads of timber, or to pay a stated price for certain goods. Implied are such as reason and justice dictate, and which therefore the law presumes that every man undertakes to perform. As, if I employ a person to do any business for me, or perform any work; the law implies that I undertook, 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 concludes that I contracted to pay their real value. And there is also one species of implied contracts, which runs through and is annexed to all other contracts, conditions, and covenants, viz., that if I fail in my part of the agreement, I shall pay the other party such damages as he has sustained by such my neglect or refusal. In short, almost all the rights of personal property (when not in actual possession) do in great measure depend upon contracts, of one kind or other, or at least might be reduced under some of them: which indeed is the method taken by the civil law; it having referred the greatest part of the duties and rights, which it treats of, to the head of obligations ex contractu and quasi ex contractu.(g)
A contract may also be either executed, as if A. agrees to change horses with B., and they do it immediately; in which case the possession and the right are transferred together: or it may be executory, as if they agree to change next week; here the right only vests, and their reciprocal property in each other’s horse is not in possession but in action; for a contract executed (which differs nothing from a grant) conveys a chose in possession; a contract executory conveys only a chose in action.
Having thus shown the general nature of a contract, we are, secondly, to proceed to the consideration upon which it is founded; or the reason which moves the contracting party to **444]enter into the contract. “It is an agreement, upon sufficient consideration.” The civilians hold, that in all contracts, either express or implied, there must be something given in exchange, something that is mutual or reciprocal.(h) This thing, which is the price or motive of the contract, we call the consideration: and it must be a thing lawful in itself, or else the contract is void. A good consideration, we have before seen,(i) is that of blood or natural affection between near relations; the satisfaction accruing from which the law esteems an equivalent for whatever benefit may move from one relation to another.(j) This consideration may sometimes, however, be set aside, and the contract become void, when it tends in its consequences to defraud creditors, or other third persons, of their just rights. But a contract for any valuable consideration, as for marriage, for money, for work done, or for other reciprocal contracts, can never be impeached at law; and, if it be of a sufficient adequate value, is never set aside in equity; for the person contracted with has then given an equivalent to recompense, and is therefore as much an owner, or a creditor, as any other person.5
These valuable considerations are divided by the civilians(k) into four species. 1. Do, ut des: as when I give money or goods, on a contract that I shall be repaid money or goods for them again. Of this kind are all loans of money upon bond, or promise of repayment; and all sales of goods, in which there is either an express contract to pay so much for them, or else the law implies a contract to pay so much as they are worth. 2. The second species is, facio, ut facias; as, when I agree with a man to do his work for him if he will do mine for me; or if two persons agree to marry together; or to do any positive acts on both sides. Or, it may be to forbear on one side on consideration of something done on the other, as that in consideration A., the tenant, will repair his house, B., the landlord, will not sue him for waste. Or, it may be for mutual forbearance on both sides; *[*445as, that in consideration that A. will not trade to Lisbon, B. will not trade to Marseilles; so as to avoid interfering with each other. 3. The third species of consideration is facio, ut des: when a man agrees to perform any thing for a price, either specifically mentioned, or left to the determination of the law to set a value to it. As when a servant hires himself to his master for certain wages or an agreed sum of money: here the servant contracts to do his master’s service, in order to earn that specific sum. Otherwise, if he be hired generally; for then he is under an implied contract to perform this service for what it shall be reasonably worth. 4. The fourth species is, do, ut facias: which is the direct counterpart of the preceding. As when I agree with a servant to give him such wages upon his performing such work: which, we see, is nothing else but the last species inverted: for servus facit, ut herus det, and herus dat, ut servus faciat.
A consideration of some sort or other is so absolutely necessary to the forming of a contract, that a nudum pactum, or agreement to do or pay any thing on one side, without any compensation on the other, is totally void in law; and a man cannot be compelled to perform it.(l)6 As if one man promises to give another 100l., here there is nothing contracted for or given on the one side, and therefore there is nothing binding on the other. And, however a man may or may not be bound to perform it in honour or conscience, which the municipal laws do not take upon them to decide; certainly those municipal laws will not compel the execution of what he had no visible inducement to engage for: and therefore our law has adopted(m) the maxim of the civil law,(n) that ex nude pacto non oritur actio. But any degree of reciprocity will prevent the pact from being nude: nay, even if the thing be founded on a prior moral obligation, (as a promise to pay a just debt, though barred by the statute of limitations,) it is no longer nudum pactum.7 And as this rule was principally established, to avoid the inconvenience that would arise from setting up mere verbal promises, for which no good reason could **446]be assigned,(o) it therefore does not hold in some cases, where such promise is authentically proved by written documents. For if a man enters into a voluntary bond, or gives a promissory note, he shall not be allowed to aver the want of a consideration in order to evade the payment: for every bond from the solemnity of the instrument,(p) and every note from the subscription of the drawer,(q)8 carries with it an internal evidence of a good consideration. Courts of justice will therefore support them both, as against the contractor himself; but not to the prejudice of creditors, or strangers to the contract.
We are next to consider, thirdly, the thing agreed to be done or omitted. “A contract is an agreement, upon sufficient consideration, to do or not to do a particular thing.” The most usual contracts, whereby the right of chattels personal may be acquired in the laws of England, are, 1. That of sale or exchange. 2. That of bailment. 3. That of hiring and borrowing. 4. That of debt.
1. Sale, or exchange, is a transmutation of property from one man to another in consideration of some price or recompense in value: for there is no sale without a recompense: there must be quid pro quo.(r) If it be a commutation of goods for goods, it is more properly an exchange; but if it be a transferring of goods for money, it is called a sale; which is a method of exchange introduced for the convenience of mankind, by establishing a universal medium, which may be exchanged for all sorts of other property; whereas if goods were only to be exchanged for goods, by way of barter, it would be difficult to adjust the respective values, and the carriage would be intolerably cumbersome. All civilized nations adopted therefore very early the use of money; for we find Abraham giving “four hundred shekels of silver, current money with the merchant,” for the field of Machpelah;(s) though the practice of exchange still subsists among several of the savage nations. But with regard to the law of *[*447sales and exchanges, there is no difference. I shall therefore treat of them both under the denomination of sales only; and shall consider their force and effect, in the first place where the vendor hath in himself, and secondly where he hath not, the property of the thing sold.
Where the vendor hath in himself the property of the goods sold, he hath the liberty of disposing of them to whomsoever he pleases, at any time, and in any manner; unless judgment has been obtained against him for a debt or damages, and the writ of execution is actually delivered to the sheriff. For then, by the statute of frauds,(t) the sale shall be looked upon as fraudulent, and the property of the goods shall be bound to answer the debt, from the time of delivering the writ. Formerly it was bound from the teste, or issuing of the writ,(u) and any subsequent sale was fraudulent; but the law was thus altered in favour of purchasers, though it still remains the same between the parties; and therefore if a defendant dies after the awarding and before the delivery of the writ, his goods are bound by it in the hands of his executors.(v)9
If a man agrees with another for goods at a certain price, he may not carry them away before he hath paid for them; for it is no sale without payment, unless the contrary be expressly agreed. And therefore, if the vendor says the price of a beast is four pounds, and the vendee says he will give four pounds, the bargain is struck; and they neither of them are at liberty to be off, provided immediate possession be tendered by the other side. But if neither the money be paid, nor the goods delivered, nor tender made, nor any subsequent agreement be entered into, it is no contract, and the owner may dispose of the goods as he pleases.(w)10 But if any part of the price is paid down, if it be but a penny, or any portion of the goods delivered by way of earnest, (which the civil law calls arrha, and interprets to be “emptionis venditionis **448]contractæ argumentum,”)(x) the property of the goods is absolutely bound by it; and the vendee may recover the goods by action, as well as the vendor may the price of them.(y)11 And such regard does the law pay to earnest as an evidence of a contract, that, by the same statute, 29 Car. II. c. 3, no contract for the sale of goods, to the value of 10l. or more, shall be valid, unless the buyer actually receives part of the goods sold by way of earnest on his part; unless he gives part of the price to the vendor by way of earnest to bind the bargain, or in part of payment; or unless some note in writing be made and signed by the party, or his agent, who is to be charged with the contract. And with regard to goods under the value of 10l. no contract or agreement for the sale of them shall be valid, unless the goods are to be delivered within one year, or unless the contract be made in writing, and signed by the party, or his agent, who is to be charged therewith.12 Antiently, among all the northern nations, shaking of hands was held necessary to bind the bargain; a custom which we still retain in many verbal contracts. A sale thus made was called hand-sale, “venditio per mutuam manuum complexionem;”(z) till in process of time the same word was used to signify the price or earnest, which was given immediately after the shaking of hands, or instead thereof.
As soon as the bargain is struck, the property of the goods is transferred to the vendee, and that of the price to the vendor; but the vendee cannot take the goods until he tenders the price agreed on.(a)13 But if he tenders the money to the vendor, and he refuses it, the vendee may seize the goods, or have an action against the vendor for detaining them. And by a regular sale, without delivery, the property is so absolutely vested in the vendee, that if A. sells a horse to B. for 10l., and B. pays him earnest, or signs a note in writing of the bargain, and afterwards, before the delivery of the horse, or money paid, the horse dies in the vendor’s custody, still he is entitled to the money, because by the *[*449contract the property was in the vendee.(b) Thus may property in goods be transferred by sale where the vendor hath such property in himself.14
But property may also in some cases be transferred by sale, though the vendor hath none at all in the goods; for it is expedient that the buyer, by taking proper precautions, may at all events be secure of his purchase; otherwise all commerce between man and man must soon be at an end. And therefore the general rule of law is,(c) that all sales and contracts of any thing vendible, in fairs or markets overt, (that is, open,) shall not only be good between the parties, but also be binding on all those that have any right or property therein. And for this purpose, the Mirror informs us,(d) were tolls established in markets, viz., to testify the making of contracts; for every private contract 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 directed every bargain and sale to be contracted in the presence of credible witnesses.(e) Market overt in the country is only held on the special days provided for particular towns by charter or prescription; but in London every day, except Sunday, is market-day.(f) The market-place, or spot of ground set apart by custom for the sale of particular goods, is also in the country the only market overt;(g) but in London every shop in which goods are exposed publicly to sale, is market overt, for such things only as the owner professes to trade in.(h) But if my goods are stolen from me, and sold, out of market overt, my property is not altered, and I may take them wherever I find them. And it is expressly provided by statute 1 Jac. I. c. 21, that the sale of any goods wrongfully taken, to any pawnbroker in London, or within two miles thereof, shall not alter the property; for this, being usually a clandestine trade, is therefore made an exception to the general rule. And even in market overt, if the goods be the property of the king, such sale (though regular in all other respects) **450]will in no case bind him; though it binds infants, feme-coverts, idiots, and lunatics, and men beyond sea or in prison: or if the goods be stolen from a common person, and then taken by the king’s officer from the felon, and sold in open market; still, if the owner has used due diligence in prosecuting the thief to conviction, he loses not his property in the goods.(i)15 So likewise, if the buyer knoweth the property not to be in the seller; or there be any other fraud in the transaction; if he knoweth the seller to be an infant, or feme-covert not usually trading for herself; if the sale be not originally and wholly made in the fair or market, or not at the usual hours; the owner’s property is not bound thereby.(j) If a man buys his own goods in a fair or market, the contract of sale shall not bind him so that he shall render the price: unless the property had been previously altered by a former sale.(k) And notwithstanding any number of intervening sales, if the original vendor, who sold without having the property, comes again into possession of the goods, the original owner may take them, when found in his hands who was guilty of the first breach of justice.(l) By which wise regulations the common law has secured the right of the proprietor in personal chattels from being divested, so far as was consistent with that other necessary policy, that purchasers, bona fide, in a fair, open, and regular manner, shall not be afterwards put to difficulties by reason of the previous knavery of the seller.
But there is one species of personal chattels in which the property is not easily altered by sale without the express consent of the owner; and those are horses.(m) For a purchaser gains no property in a horse that has been stolen, unless it be bought in a fair or market overt, according to the direction of the statutes 2 P. & M. c. 7, and 31 Eliz. c. 12. By which it is enacted, that the horse shall be openly exposed, in the time of such fair or market, for one whole hour together, between ten in the morning and sunset, in the public place used for such sales, and not in any private yard or stable; and afterwards brought by both the vendor and vendee to the book-keeper of such fair or market, that toll be paid, if any **451]be due, and, if not, one penny to the book-keeper, who shall enter down the price, colour, and marks of the norse, with the names, additions, and abode of the vendee and vendor; the latter being properly attested. Nor shall such sale take away the property of the owner, if within six months after the horse is stolen he puts in his claim before some magistrate where the horse shall be found; and within forty days more proves such his property by the oath of two witnesses, and tenders to the person in possession such price as he bona fide paid for him in market overt. But in case any one of the points before mentioned be not observed, such sale is utterly void; and the owner shall not lose his property, but at any distance of time may seize or bring an action for his horse, wherever he happens to find him.
By the civil law(n) an implied warranty was annexed to every sale, in respect to the title of the vendor; and so too, in our law, a purchaser of goods and chattels may have a satisfaction from the seller, if he sells them as his own and the title proves deficient, without any express warranty for that purposo.(o) But with regard to the goodness of the wares so purchased, the vendor is not bound to answer: unless he expressly warrants them to be sound and good,(p)16 or unless he knew them to be otherwise, and hath used any art to disguise them,(q) or unless they turn out to be different from what he represented them to the buyer.17
2. Bailment, from the French bailler, to deliver, is a delivery of goods in trust, upon a contract, expressed or implied, that the trust shall be faithfully executed on the part of the bailee. As if cloth be delivered, or (in our legal dialect) bailed, to a tailor to make a suit of clothes, he has it upon an implied contract to render it again when made, and that in a workmanly manner.(r) If money or goods be delivered to a common carrier to convey from Oxford to London, he is under a contract in law to pay, or carry them, to the person appointed.(s) If a horse, or other goods, be delivered to an innkeeper or his servants, he is bound to keep **452]them safely, and restore them when his guest leaves the house.(t) If a man takes in a horse, or other cattle, to graze and depasture in his grounds, which the law calls agistment, he takes them upon an implied contract to return them on demand to the owner.(u) If a pawnbroker receives plate or jewels as a pledge, or security, for the repayment of money lent thereon at a day certain, he has them upon an express contract or condition to restore them, if the pledger performs his part by redeeming them in due time:(w) for the due execution of which contract many useful regulations are made by statute 30 Geo. II. c. 24. And so if a landlord distrains goods for rent, or a parish officer for taxes, these for a time are only a pledge in the hands of the distrainors, and they are bound by an implied contract in law to restore them on payment of the debt, duty, and expenses, before the time of sale: or, when sold, to render back the overplus. If a friend delivers any thing to his friend to keep for him, the receiver is bound to restore it on demand; and it was formerly held that in the mean time he was answerable for any damage or loss it might sustain, whether by accident or otherwise;(x) unless he expressly undertook(y) to keep it only with the same care as his own goods, and then he should not be answerable for theft or other accidents. But now the law seems to be settled,(z) that such a general bailment will not charge the bailee with any loss, unless it happens by gross neglect, which is an evidence of fraud: but, if he undertakes specially to keep the goods safely and securely, he is bound to take the same care of them as a prudent man would take of his own.(a)
In all these instances there is a special qualified property transferred from the bailor to the bailee, together with the possession. It is not an absolute property, because of his **453]contract for restitution; the bailor having still left in him the right to a chose in action, grounded upon such contract. And, on account of this qualified property of the bailee, he may (as well as the bailor) maintain an action against such as injure or take away these chattels. The tailor, the carrier, the innkeeper, the agisting farmer, the pawnbroker, the distrainor, and the general bailee, may all of them vindicate, in their own right, this their possessory interest, against any stranger or third person.(b) For being responsible to the bailor, if the goods are lost or damaged by his wilful default or gross negligence, or if he do not deliver up the chattels on lawful demand, it is therefore reasonable that he should have a right of action against all other persons who may have purloined or injured them; that he may always be ready to answer the call of the bailor.
3. Hiring and borrowing are also contracts by which a qualified property may be transferred to the hirer or borrower: in which there is only this difference, that hiring is always for a price, or stipend, or additional recompense: borrowing is merely gratuitous. But the law in both cases is the same.18 They are both contracts, whereby the possession and a transient property is transferred for a particular time or use, on condition to restore the goods so hired or borrowed as soon as the time is expired or use performed; together with the price or stipend (in case of hiring) either expressly agreed on by the parties, or left to be implied by law according to the value of the service. By this mutual contract, the hirer or borrower gains a temporary property in the thing hired, accompained with an implied condition to use it with moderation, and not to abuse it; and the owner or lender retains a reversionary interest in the same, and acquires a new property in the price or reward. Thus if a man hires or borrows a horse for a month, he has the possession and a qualified property therein during that period; on the expiration of which his qualified property determines, and the owner becomes (in case of hiring) entitled also to the price for which the horse was hired.(c)
*[*454There is one species of this price or reward, the most usual of any, but concerning which many good and learned men have in former times very much perplexed themselves and other people, by raising doubts about its legality in foro conscientiæ. That is, when money is lent on a contract to receive not only the principal sum again, but also an increase by way of compensation for the use; which generally is called interest by those who think it lawful, and usury by those who do not so. For the enemies to interest in general make no distinction between that and usury, holding any increase of money to be indefensibly usurious. And this they ground as well on the prohibition of it by the law of Moses among the Jews, as also upon what is said to be laid down by Aristotle,(d) that money is naturally barren, and to make it breed money is preposterous and a perversion of the end of its institution, which was only to serve the purposes of exchange and not of increase. Hence the school divines have branded the practice of taking interest, as being contrary to the divine law both natural and revealed; and the canon law(e) has proscribed the taking any the least increase for the loan of money as a mortal sin.
But, in answer to this, it hath been observed, that the Mosaical precept was clearly a political, and not a moral, precept. It only prohibited the Jews from taking usury from their brethren the Jews, but in express words permitted them to take it of a stranger:(f) which proves that the taking of moderate usury, or a reward for the use, for so the word signifies, is not malum in se; since it was allowed where any but an Israelite was concerned. And as to the reason supposed to be given by Aristotle, and deduced from the natural barrenness of money, the same may with equal force be alleged of houses, which never breed houses; and twenty other things, which nobody doubts it is lawful to make profit of, by letting them to hire. And though money was originally used only for the purposes of exchange, yet the laws of any state *[*455may be well justified in permitting it to be turned to the purposes of profit, if the convenience of society (the great end for which money was invented) shall require it. And that the allowance of moderate interest tends greatly to the benefit of the public, especially in a trading country, will appear from that generally acknowledged principle, that commerce cannot subsist without mutual and extensive credit. Unless money therefore can be borrowed, trade cannot be carried on; and if no premium were allowed for the hire of money, few persons would care to lend it; or at least the ease of borrowing at a short warning (which is the life of commerce) would be entirely at an end. Thus, in the dark ages of monkish superstition and civil tyranny, when interest was laid under a total interdict, commerce was also at its lowest ebb, and fell entirely into the hands of the Jews and Lombards: but when men’s minds began to be more enlarged, when true religion and real liberty revived, commerce grew again into credit: and again introduced with itself its inseparable companion, the doctrine of loans upon interest. And, as to any scruples of conscience, since all other conveniences of life may either be bought or hired, but money can only be hired, there seems to be no greater oppression in taking a recompense or price for the hire of this, than of any other convenience. To demand an exorbitant price is equally contrary to conscience, for the loan of a horse, or the loan of a sum of money: but a reasonable equivalent for the temporary inconvenience, which the owner may feel by the want of it, and for the hazard of his losing it entirely, is not more immoral in one case than it is in the other. Indeed, the absolute prohibition of lending upon any, even moderate, interest, introduces the very inconvenience which it seems meant to remedy. The necessity of individuals will make borrowing unavoidable. Without some profit allowed by law, there will be but few lenders; and those principally bad men, who will break through the law, and take a profit; and then will endeavour to indemnify themselves from the danger of the penalty, by making that profit exorbitant. A capital **456]distinction must therefore be made between a moderate and exorbitant profit; to the former of which we usually give the name of interest, to the latter the truly odious appellation of usury: the former is necessary in every civil state, if it were but to exclude the latter, which ought never to be tolerated in any well-regulated society. For, as the whole of this matter is well summed up by Grotius,(g) “if the compensation allowed by law does not exceed the proportion of the hazard run, or the want felt, by the loan, its allowance is neither repugnant to the revealed nor the natural law: but if it exceeds those bounds, it is then oppressive usury; and though the municipal laws may give it impunity, they can never make it just.”
We see that the exorbitance or moderation of interest, for money lent, depends upon two circumstances; the inconvenience of parting with it for the present, and the hazard of losing it entirely. The inconvenience to individual lenders can never be estimated by laws; the rate therefore of general interest must depend upon the usual or general inconvenience. This results entirely from the quantity of specie or current money in the kingdom; for the more specie there is circulating in any nation, the greater superfluity there will be beyond what is necessary to carry on the business of exchange and the common concerns of life. In every nation or public community there is a certain quantity of money thus necessary; which a person well skilled in political arithmetic might perhaps calculate as exactly as a private banker can the demand for running cash in his own shop: all above this necessary quantity may be spared, or lent, without much inconvenience to the respective lenders; and the greater this national superfluity is, the more numerous will be the lenders, and the lower ought the rate of the national interest to be; but where there is not enough circulating cash, or barely enough, to answer the ordinary uses of the public, interest will be proportionably high: for lenders will be but few, as few can submit to the inconvenience of lending.19
*[*457So also the hazard of an entire loss has its weight in the regulation of interest: hence the better the security the lower will the interest be; the rate of interest being generally in a compound ratio, formed out of the inconvenience and the hazard. And as if there were no inconvenience there should be no interest but what is equivalent to the hazard, so if there were no hazard there ought to be no interest save only what arises from the mere inconvenience of lending. Thus, if the quantity of specie in a nation be such that the general inconvenience of lending for a year is computed to amount to three per cent.: a man that has money by him will perhaps lend it upon a good personal security at five per cent., allowing two for the hazard run; he will lend it upon landed security or mortgage at four per cent., the hazard being proportionably less; but he will lend it to the state, on the maintenance of which all his property depends, at three per cent., the hazard being none at all.
But sometimes the hazard may be greater than the rate of interest allowed by law will compensate. And this gives rise to the practice of, 1. Bottomry, or respondentia. 2. Policies of insurance. 3. Annuities upon lives.
And first, bottomry, (which originally arose from permitting the master of a ship, in a foreign country, to hypothecate the ship in order to raise money to refit,) is in the nature of a mortgage of a ship; when the owner takes up money to enable him to carry on his voyage, and pledges the keel or bottom of the ship (partem pro toto) 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 *[*458nations, for the benefit of commerce, and by reason of the extraordinary hazard run by the lender.(h) And in this case the ship 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 necessarily be sold or exchanged in the course of the voyage, then only the borrower, personally, is bound to answer the contract; who therefore in this case is said to take up money at respondentia. These terms are also applied to contracts for the repayment of money borrowed, not on the ship and goods only, but on the mere hazard of the voyage itself; when a man lends a merchant 1000l. to be employed in a beneficial trade, with condition to be repaid with extraordinary interest, in case such a voyage be safely performed:(i) which kind of agreement is sometimes called fœnus nauticum, and sometimes usura maritima.(j) But as this gave an opening for usurious and gaming contracts, especially upon long voyages, it was enacted by the statute 19 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 merchandise; that the lender shall have the benefit of salvage;(k) and that, if the borrower hath not an interest 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 hath not been laid out, with legal interest, and all other charges, though the ship and merchandise be totally lost.20
Secondly, a policy of insurance is a contract between A. and B., that upon A.’s paying a premium equivalent to the hazard run, B. will indemnify or insure him against a particular event. This is founded upon one of the same principles as the doctrine of interest upon loans, that of hazard; but not that of inconvenience. For if I insure a ship to the Levant, and back again, at five per cent.; here I calculate the chance that she performs her voyage to be twenty to one against her being lost; and, if she be lost, I lose 100l. and get 5l. Now, this is much the same as if I lend the merchant, whose whole fortunes are embarked in this vessel, 100l. at **459]the rate of eight per cent. For by a loan I should be immediately out of possession of my money, the inconvenience of which we have supposed equal to three per cent.: if therefore I had actually lent him 100l., I must have added 3l. on the score of inconvenience, to the 5l. allowed for the hazard, which together would have made 8l. But, as upon an insurance, I am never out of possession of my money till the loss actually happens, nothing is therein allowed upon the principle of inconvenience, but all upon the principle of hazard. Thus, too, in a loan, if the chance of repayment depends upon the borrower’s life, it is frequent (besides the usual rate of interest) for the borrower to have his life insured till the time of repayment; for which he is loaded with an additional premium, suited to his age and constitution. Thus, if Sempronius has only an annuity for his life, and would borrow 100l. of Titius for a year; the inconvenience and general hazard of this loan, we have seen, are equivalent to 5l., which is therefore the legal interest; but there is also a special hazard in this case; for, if Sempronius dies within the year, Titius must lose the whole of his 100l. Suppose this chance to be as one to ten: it will follow that the extraordinary hazard is worth 10l. more, and therefore that the reasonable rate of interest in this case would be fifteen per cent. But this the law, to avoid abuses, will not permit to be taken; Sempronius therefore gives Titius the lender only 5l., the legal interest; but applies to Gaius, an insurer, and gives him the other 10l. to indemnify Titius against the extraordinary hazard. And in this manner may any extraordinary or particular hazard be provided against, which the established rate of interest will not reach; that being calculated by the state to answer only the ordinary and general hazard, together with the lender’s inconvenience in parting with his specie for the time. But, in order to prevent these insurances from being turned into a mischievous kind of gaming, it is enacted, by statute 14 Geo. III. c. 48, that no insurance shall be made on lives, or on any other event, wherein the party insured hath no interest; that in all policies the name of such interested party shall be *[*460inserted; and nothing more shall be recovered thereon than the amount of the interest of the insured.
This does not, however, extend to marine insurances, which were provided for by a prior law of their own. The learning relating to these insurances hath of late years been greatly improved by a series of judicial decisions; which have now established the law in such a variety of cases, that (if well and judiciously collected) they would form a very complete title in a code of commercial jurisprudence: but, being founded on equitable principles, which chiefly result from the special circumstances of the case, it is not easy to reduce them to any general heads in mere elementary institutes. Thus much, however, may be said; that, being contracts, the very essence of which consists in observing the purest good faith and integrity, they are vacated by any the least shadow of fraud or undue concealment; and, on the other hand, being much for the benefit and extension of trade, by distributing the loss or gain among a number of adventurers, they are greatly encouraged and protected both by common law and acts of parliament. But as a practice had obtained of insuring large sums without having any property on board, which were called insurances interest or no interest, and also of insuring the same goods several times over; both of which were a species of gaming without any advantage to commerce, and were denominated wagering policies: it is therefore enacted, by the stat. 19 Geo. II. c. 37, that all insurances interest or no interest, or without further proof of interest than the policy itself, or by way of gaming or wagering, or without benefit of salvage to the insurer, (all of which had the same pernicious tendency,) shall be totally null and void, except upon privateers, or upon ships or merchandise from the Spanish and Portuguese dominions, for reasons sufficiently obvious; and that no re-assurance shall be lawful, except the former insurer shall be insolvent, a bankrupt, or dead: and lastly, that, in the East India trade, the lender of money on bottomry, or at respondentia, shall alone have a right to be insured for the money lent, and the borrower *[*461shall (in case of a loss) recover no more upon any insurance than the surplus of his property, above the value of his bottomry, or respondentia bond.
Thirdly, the practice of purchasing annuities for lives at a certain price or premium, instead of advancing the same sum on an ordinary loan, arises usually from the inability of the borrower to give the lender a permanent security for the return of the money borrowed, at any one period of time. He therefore stipulates (in effect) to repay annually, during his life, some part of the money borrowed; together with legal interest for so much of the principal as annually remains unpaid, and an additional compensation for the extraordinary hazard run of losing that principal entirely by the contingency of the borrower’s death: all which considerations, being calculated and blended together, will constitute the just proportion or quantum of the annuity which ought to be granted. The real value of that contingency must depend on the age, constitution, situation, and conduct of the borrower; and therefore the price of such annuities cannot, without the utmost difficulty, be reduced to any general rules. So that if, by the terms of the contract, the lender’s principal is bona fide (and not colourably)(l) put in jeopardy, no inequality of price will make it an usurious bargain; though under some circumstances of imposition it may be relieved against in equity. To throw, however, some check upon improvident transactions of this kind, which are usually carried on with great privacy, the statute 17 Geo. III. c. 26 has directed, that upon the sale of any life-annuity of more than the value of ten pounds per annum (unless on a sufficient pledge of lands in fee-simple or stock in the public funds) the true consideration, which shall be in money only, shall be set forth and described in the security itself; and a memorial of the date of the security, of the names of the parties, cestuy que trusts, cestuy que vies, and witnesses, and of the consideration-money, shall within twenty days after its execution be enrolled in the court of chancery; else the security shall be null and void;21 and, in case of collusive practices, respecting the consideration, the **462]court, in which any action is brought or judgment obtained upon such collusive security, may order the same to be cancelled, and the judgment (if any) to be vacated: and also all contracts for the purchase of annuities from infants shall remain utterly void, and be incapable of confirmation after such infants arrive to the age of maturity. But to return to the doctrine of common interest on loans:
Upon the two principles of inconvenience and hazard, compared together, different nations have, at different times, established different rates of interest. The Romans at one time allowed centesimæ, one per cent. monthly, or twelve per cent. per annum, to be taken for common loans; but Justinian(m) reduced it to trientes, or one-third of the as or centesimæ, that is, four per cent.; but allowed higher interest to be taken of merchants, because there the hazard was greater. So too Grotius informs us,(n) that in Holland the rate of interest was then eight per **463]cent. in common loans, but twelve to merchants. And lord Bacon was desirous of introducing a similar policy in England:(o) but our law establishes one standard for all alike, where the pledge of security itself is not put in jeopardy; lest, under the general pretence of vague and indeterminate hazard, a door should be opened to fraud and usury: leaving specific hazards to be provided against by specific insurances, by annuities for lives, or by loans upon respondentia or bottomry. But as to the rate of legal interest, it has varied and decreased for two hundred years past, according as the quantity of specie in the kingdom has increased by accessions of trade, the introduction of paper credit, and other circumstances. The statute of 37 Hen. VIII. c. 9 confined interest to ten per cent., and so did the statute 13 Eliz. c. 8. But as, through the encouragements given in her reign to commerce, the nation grew more wealthy, so under her successor the statute 21 Jac. I. c. 17 reduced it to eight per cent.; as did the statute 12 Car. II. c. 13 to six: and lastly by the statute 12 Anne, st. 2, c. 16, it was brought down to five per cent. yearly, which is now the extremity of legal interest that can be taken.22 But yet, if a contract which carries interest be made in a foreign country, our courts will direct the payment of interest according to the law of that country in which the contract was made.(p) Thus, Irish, American, Turkish, and Indian interest, have *[*464been allowed 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 contracts would put a stop to all foreign trade.23 And by statute 14 Geo. III. c. 79, all mortgages and other securities upon estates or other property in Ireland or the plantations, bearing interest not exceeding six per cent., shall be legal, though executed in the kingdom of Great Britain; unless the money lent shall be known at the time to exceed the value of the thing in pledge; in which case also, to prevent usurious contracts at home under colour of such foreign securities, the borrower shall forfeit treble the sum so borrowed.24
4. The last general species of contracts which I have to mention is that of debt; whereby a chose in action, or right to a certain sum of money, is mutually acquired and lost.(q) This may be the counterpart of, and arise from, any of the other species of contracts. As, in case of a sale, where the price is not paid in ready money, the vendee becomes indebted to the vendor for the sum agreed on; and the vendor has a property in this price, as a chose in action, by means of this contract of debt. In bailment, if the bailee loses or detains a sum of money bailed to him for any special purpose, he becomes indebted to the bailor in the same numerical sum, upon his implied contract that he should execute the trust reposed in him or repay the money to the bailor. Upon hiring or borrowing, the hirer or borrower, at the same time that he acquires a property in the thing lent, may also become indebted to the lender, upon his contract to restore the money borrowed, to pay the price or premium of the loan, the hire of the horse, or the like. Any contract, in short, whereby a determinate sum of money becomes due to any person, and is not paid, but remains in action merely, is a contract of debt. And, taken in this light, it comprehends a great variety of **465]acquisition; being usually divided into debts of record, debts by special and debts by simple contract.25
A debt of record is a sum of money which appears to be due by the evidence of a court of record. Thus, when any specific sum is adjudged to be due from the defendant to the plaintiff, on an action or suit at law, this is a contract of the highest nature, being established by the sentence of a court of judicature Debts upon recognizance are also a sum of money, recognised or acknowledged to be due to the crown or a subject, in the presence of some court or magistrate, with a condition that such acknowledgment shall be void upon the appearance of the party, his good behaviour, or the like: and these, together with statutes merchant and statutes staple, &c., if forfeited by non-performance of the condition, are also ranked among this first and principal class of debts, viz., debts of record; since the contract, on which they are founded, is witnessed by the highest kind of evidence, viz., by matter of record.
Debts by specialty, or special contract, are such whereby a sum of money becomes, or is acknowledged to be, due by deed or instrument under seal. Such as by deed of covenant, by deed of sale, by lease reserving rent, or by bond or obligation; which last we took occasion to explain in the twentieth chapter of the present book; and then showed that it is a creation or acknowledgment of a debt from the obligor to the obligee, unless the obligor performs a condition thereunto usually annexed, as the payment of rent, or money borrowed, the observance of a covenant, and the like; on failure of which the bond becomes forfeited and the debt becomes due in law. These are looked upon as the next class of debts after those of record, being confirmed by special evidence, under seal.
Debts by simple contract are such, where the contract upon which the obligation arises is neither ascertained by matter of record, nor yet by deed or special instrument, but by mere oral evidence, the most simple of any; or by notes **466]unsealed, which are capable of a more easy proof, and (therefore only) better, than a verbal promise. It is easy to see into what a vast variety of obligations this last class may be branched out, through the numerous contracts for money, which are not only expressed by the parties, but virtually implied in law. Some of these we have already occasionally hinted at; and the rest, to avoid repetition, must be referred to those particular heads in the third book of these commentaries, where the breach of such contracts will be considered. I shall only observe at present, that by the statute 29 Car. II. c. 3 no executor or administrator shall be charged upon any special promise to answer damages out of his own estate, and no person shall be charged upon any promise to answer for the debt or default of another, or upon any agreement in consideration of marriage, or upon any contract or sale of any real estate, or upon any agreement that is not to be performed within one year from the making; unless the agreement or some memorandum thereof be in a writing, and signed by the party himself, or by his authority.
But there is one species of debts upon simple contract, which, being a transaction now introduced into all sorts of civil life, under the name of paper credit, deserves a more particular regard. These are debts by bills of exchange, and promissory notes.
A bill of exchange is a security, originally invented among merchants in different countries, for the more easy remittance of money from the one to the other, which has since spread itself into almost all pecuniary transactions. It is an open letter of request from one man to another, desiring him to pay a sum named therein to a third person on his account; by which means a man at the most distant part of the world may have money remitted to him from any trading country. If A. lives in Jamaica, and owes B., who lives in England, 1000l., now if C. be going from England to Jamaica, he may pay B. this 1000l., and take a bill of exchange drawn by B. in England upon A. in Jamaica and receive it when he comes hither. Thus does B. receive his debt, at any distance of place, by transferring it to C.; who carries over his money *[*467in paper credit, without danger of robbery or loss. This method is said to have been brought into general use by the Jews and Lombards, when banished for their usury and other vices; in order the more easily to draw their effects out of France and England into those countries in which they had chosen to reside. But the invention of it was a little earlier; for the Jews were banished out of Guienne in 1287, and out of England in 1290;(r) and in 1236 the use of paper credit was introduced into the Mogul empire in China.(s) In common speech such a bill is frequently called a draft; but a bill of exchange is the more legal as well as mercantile expression. The person, however, who writes this letter is called in law the drawer, and he to whom it is written the drawee; and the third person, or negotiator, to whom it is payable, (whether especially named, or the bearer generally,) is called the payee.
These bills are either foreign, or inland; foreign, when drawn by a merchant residing abroad upon his correspondent in England, or vice versa;26 and inland, when both the drawer and the drawee reside within the kingdom. Formerly foreign bills of exchange were much more regarded in the eye of the law than inland ones, as being thought of more public concern in the advancement of trade and commerce. But now, by two statutes, the one 9 & 10 W. III. c. 17, the other 3 & 4 Anne, c. 9, inland bills of exchange are put upon the same footing as foreign ones; what was the law and custom of merchants with the regard to the one, and taken notice of merely as such,(t) being by those statutes expressly enacted with regard to the other. So that now there is not in law any manner of difference between them.27
Promissory notes, or notes of hand, are a plain and direct engagement, in writing, to pay a sum specified at the time therein limited to a person therein named, or sometimes to his order, or often to the bearer at large. These also, by the same statute 3 & 4 Anne, c. 9, are made assignable and endorsable in like manner as bills of exchange. But, by statute 15 Geo. III. c. 51, all promissory or other notes, **468]bills of exchange, drafts, and undertakings in writing, being negotiable or transferable, for the payment of less than twenty shillings, are declared to be null and void; and it is made penal to utter or publish any such; they being deemed prejudicial to trade and public credit. And by 17 Geo. III. c. 30, all such notes, bills, drafts, and undertakings, to the amount of twenty shillings, and less than five pounds, are subjected to many other regulations and formalities; the omission of any one of which vacates the security, and is penal to him that utters it.28
The payee, we may observe, either of a bill of exchange or promissory note, has clearly a property vested in him (not indeed in possession, but in action) by the express contract of the drawer in the case of a promissory note, and, in the case of a bill of exchange, by his implied contract, viz., that, provided the drawee does not pay the bill, the drawer will: for which reason it is usual in bills of exchange to express that the value thereof hath been received by the drawer;(u) in order to show the consideration upon which the implied contract of repayment arises. And this property, so vested, may be transferred and assigned from the payee to any other man; contrary to the general rule of the common law, that no chose in action is assignable: which assignment is the life of paper credit. It may therefore be of some use to mention a few of the principal incidents attending this transfer or assignment in order to make it regular, and thereby to charge the drawer with the payment of the debt to other persons than those with whom he originally contracted.
In the first place, then, the payee, or person to whom or whose order such bill of exchange or promissory note is payable, may by endorsement, or writing his name in dorso, or on the back of it, assign over his whole property to the bearer, or else to another person by name, either of whom is then called the endorsee; and he may assign the same to another, and so on in infinitum. And a promissory note, payable to A. or bearer, is negotiable without any endorsement, and payment thereof may be demanded by any bearer **469]of it.(v) But in case of a bill of exchange, the payee, or the endorsee, (whether it be a general or particular endorsement,) is to go to the drawee, and offer his bill for acceptance; which acceptance (so as to charge the drawer with costs) must be in writing, under or on the back of the bill. If the drawee accepts the bill, either verbally or in writing,(w) he then makes himself liable to pay it; this being now a contract on his side, grounded on an acknowledgment that the drawer has effects in his hands, or at least credit, sufficient to warrant the payment. If the drawee refuses to accept the bill, and it be of the value of 20l. or upwards, and expressed to be for value received,29 the payee or endorsee may protest it for non-acceptance; which protest must be made in writing, under a copy of such bill of exchange, by some notary public; or, if no such notary be resident in the place, then by any other substantial inhabitant, in the presence of two credible witnesses; and notice of such protest must, within fourteen days after, be given to the drawer.30
But, in case such bill be accepted by the drawee, and after acceptance he fails or refuses to pay it within three days after it becomes due, (which three days are called days of grace,) the payee or endorsee is then to get it protested for non-payment, in the same manner, and by the same persons who are to protest it in case of non-acceptance; and such protest must also be notified, within fourteen days after, to the drawer. And he, on producing such protest, either of non-acceptance or non-payment, is bound to make good to the payee, or endorsee, not only the amount of the said bills, (which he is bound to do within a reasonable time after non-payment, without any protest, by the rules of the common law,)(x) but also interest and all charges, to be computed from the time of making such protest. But if no protest be made or notified to the drawer, and any damage accrues by such neglect, it shall fall on the holder of the bill. The bill, when refused, must be demanded of the drawer as soon as conveniently may be: for though, when one draws a bill of *[*470exchange, he subjects himself to the payment if the person on whom it is drawn refuses either to accept or pay, yet that is with this limitation, that if the bill be not paid when due, the person to whom it is payable shall in convenient time give the drawer notice thereof; for otherwise the law will imply it paid: since it would be prejudicial to commerce if a bill might rise up to charge the drawer at any distance of time: when in the mean time all reckonings and accounts may be adjusted between the drawer and the drawee.(y)
If the bill be an endorsed bill, and the endorsee cannot get the drawee to discharge it, he may call upon either the drawer or the endorser, or, if the bill has been negotiated through many hands, upon any of the endorsers; for each endorser is a warrantor for the payment of the bill, which is frequently taken in payment as much (or more) upon the credit of the endorser as of the drawer. And if such endorser, so called upon, has the names of one or more endorsers prior to his own, to each of whom he is properly an endorsee, he is also at liberty to call upon any of them to make him satisfaction; and so upwards. But the first endorser has nobody to resort to but the drawer only.31
What has been said of bills of exchange is applicable also to promissory notes, that are endorsed over, and negotiated from one hand to another; only that in this case, as there is no drawee, there can be no protest for non-acceptance; or rather, the law considers a promissory note in the light of a bill drawn by a man upon himself, and accepted at the time of drawing. And, in case of non-payment by the drawer, the several endorsees of the promissory note have the same remedy, as upon bills of exchange, against the prior endorsers.
[1 ] A gift or grant of personal property may be by parol. 3 M. & S. 7. But when an assignment is for a valuable consideration, it is usually in writing, and, when confined merely to personalty, is termed a bill of sale. An assignment or covenant does not pass after acquired personal property, (5 Taunt. 212;) but where there has been a subsequent change of new for old articles, and the assignment is afterwards set aside, it will in general be left to a jury to say whether the new were not substituted for the old. In general, there should be an immediate change of possession, or the assignment made notorious; or creditors who were ignorant of the transfer may treat it as fraudulent and void, on the ground that the grantor was, by his continuance of possession, enabled to gain a false credit. Twyne’s case, 3 Co. 81. See cases, Tidd. Prac. 8th ed. 1043, 1044. 1 Camp. 333, 334. 5 Taunt. 212. As to the notoriety of the sale, 2 B. & P. 59. 8 Taunt. 838. 1 B. Moore, 189. If possession be taken at any time before an adverse execution, though long after the date of the deed, it seems it will be valid. 15 East, 21. An assignment to a creditor of all a party’s effects, in trust for himself and other creditors, is valid. 3 M. & S. 517. And, as a debtor may prefer one creditor to another, he may, on the eve of an execution of one creditor, assign his property to another, so as to satisfy the latter and leave the other unpaid. 5 T. R. 235. But an assignment made by way of sale to a person not a creditor, in order to defeat an execution, will, if the purchasor knew that intention, be void, although he paid a full price for the goods. 1 East, 51. 1 Burr. 474.—Chitty.
[(a) ] Perk. 57.
[(b) ] See 3 Rep. 82.
[2 ] In Clayt. 135 it was said that if A., being at York, give his horse in London to I. S., the latter may have trespass without other possession, (F. N. B. 140. Perkins, 30,) and that though, by the civil law, a gift of goods is not good without delivery, yet it is otherwise in our law. 1 Rol. R. 61. Vin. Abr. Gift. It was, however, recently determined that, by the law of England, in order to transfer property by gift there must be a deed or instrument of gift, or there must be an actual delivery of the thing to the donee. 2 Bar. & Ald. 551.—Chitty.
[3 ] And now, by the statute 17 & 18 Vict. c. 36, s. 1, bills of sale, which is the usual denomination of a grant of chattels personal, must be filed with the clerk of docquets and judgments in the court of Queen’s Bench within twenty-one days after the making or giving them; otherwise any such grant will, as against assignees in bankruptcy or insolvency, or creditors, be null and void.—Kerr.
The leading case on the construction of 13 Eliz. c. 5 is Twyne’s case, (3 Rep. 81,) in which it was decided that if the grantor be allowed to retain the possession it is a badge of fraud. In the army of cases which have followed this leader, both in England and this country, there is in many respects great discordance, especially upon the important question whether the retention of possession be per se and in law fraudulent, or whether it be only an evidence of fraud to be submitted to the jury. In Edwards vs. Harben, (2 T. R. 587,) the court of King’s Bench laid down the principle emphatically, that if the vendee took an absolute bill of sale to take effect immediately by the face of it, and agreed to leave the goods in the possession of the vendor for a limited time, such an absolute conveyance, without the possession, was such a circumstance per se as made the transaction fraudulent in point of law. It was admitted, however, that if the want of immediate possession be consistent with the deed, as it was in Bucknal vs. Roiston (Prec. in Ch. 285) and Cadogan vs. Kennet, (Cowp. 432,) and as it is if the deed be conditional and the vendee is not to have possession until he has performed the condition, the sale was not fraudulent, for then possession accompanied and followed the deed within the meaning of the rule. 2 Kent’s Com. 518. Chancellor Kent admits, however, that under subsequent English decisions it has become difficult to determine when the circumstance of possession not accompanying and following the deed is per se a fraud in the English law, or only presumptive evidence of fraud resting upon the facts to be disclosed at the trial. I subjoin a few leading American cases on this subject on both sides of the question. Holding that retention of possession is a fraud per se are Hamilton vs. Russell, 1 Cranch, 309. Clayton vs. Anthony, 6 Rand. 285. Laughlin vs. Ferguson, 6 Dana, 117. Sibley vs. Hood, 3 Missouri, 290. Newland vs. Dews, R. M. Charlt. 386. Babb vs. Clemson, 10 S. & R. 419. Thornton vs. Davenport, 1 Seamm. 296. Contra, that it is evidence of fraud for the jury, are Smith vs. Henry, 2 Bailey, S. C. Rep. 118. Muncy vs. Killough, 7 Yerger, 440. Bissell vs. Hopkins, 3 Cowen, 166.—Sharswood.
[(c) ] Jenk. 109.
[(d) ] Co. Litt. 214.
[(e) ] Dyer, 30. Bro. Abr. tit. chose in action, 1 and 4.
[(f) ] 3 P. Wms. 199.
[4 ] To this rule of the common law there are several exceptions. Bills of exchange by the law-merchant may be transferred by endorsement and sued on by the assignee, who is then called the endorsee; and the statute 3 & 4 Anne, c. 9 places promissory notes on the same footing. This statute was passed in consequence of the refusal of lord Holt (in Clesh vs. Martin, 2 Ld. Raym. 757) to yield to the custom which had sprung up among merchants of treating promissory notes as negotiable in the same way as bills of exchange. His lordship treated the attempt of the merchants with great indignation, saying “that it proceeded from the opinionativeness of the merchants, who were endeavouring to set the law of Lombard Street against the law of Westminster Hall.” Drafts on bankers are equally negotiable. Bills of lading constitute a fourth exception. These are transferred by endorsement; and not only is the property in the goods thereby passed to the endorsee, but also all rights of suit, and all the liabilities of the original contractors, the shipper and the ship-owner. 18 & 19 Vict. c. 111.—Kerr.
[(g) ] Inst. 3, 14, 2.
[(h) ]In omnibus contractibus, sive nominatis, sive innominatis, permutatio continetur. Gravin. l. 2, 12.
[(i) ] Page 297.
[(j) ] 3 Rep. 83.
[5 ] If there be no fraud in the transaction, mere inadequacy of price would not be deemed, even in equity, sufficient to vacate a contract. 10 Ves. 292, 295. 1 Brid. Eq. D. 359. Nor is mere folly without fraud a foundation for relief. 8 Price, 620. And on the question of executing an agreement, hardship cannot be regarded, unless it amount to a degree of inconvenience and absurdity so great as to afford judicial proof that such could not be the meaning of the parties. 1 Swanst. 329. But if there be such an inadequacy as to show that the person did not understand the bargain he made, or that, knowing it, he was so oppressed that he was glad to make it, this will show such a command over the grantor as may amount to fraud. 2 Bro. C. C. 167. 2 Bird. Eq. Dig. 55. An action was brought on an agreement to pay for a horse a barley-corn a nail for every nail in the horse’s shoes, and double every nail, which came to five hundred quarters of barley; and, on a trial before Holt, C. J., the jury gave only the value of the horse, (1 Lev. 111;) and in an action of assumpsit, in consideration of 2s. 6d. paid and 4l. 17s. 6d. to be paid, the defendant undertook to deliver two rye-corns next Monday, and double every succeeding Monday, for a year, which would have required the delivery of more rye than was grown in all the world, on demurrer, Powell, J., said, that though the contract was a foolish one, yet it would hold in law, and the defendant ought to pay something for his folly; and the defendant refunded the 2s. 6d. and costs. 2 Ld. Raym. 1164. This seems to have been a vacating of the bargain as void, and a return for that reason of the money received without consideration. See, further, 3 Chitty’s Com. L. 158, 159. Bridgm. index, tit. Inadequacy of Price or Consideration.—Chitty.
In bonds, covenants, and instruments under seal, a consideration between the parties is implied conclusively. The seal imports it. A voluntary bond is both at law and in equity a gift of the money. Such a bond must be postponed until creditors are paid: it is fraudulent and void as to them, but it is always good against the party himself, and against heirs, legatees, and others who stand in no higher equity. Sherk vs. Endress, 3 Watts & Serg. 255. Candor & Henderson’s Appeal, 3 Casey, 119. Bills of exchange and promissory-notes primâ facie import consideration. As between the original parties to these instruments, they may be rendered ineffectual by proving want of consideration; though as to an endorsee or holder bona fide in the usual course of business this is unavailing. In an ordinary parol contract, whether oral or written, the consideration must be averred in the plaintiff’s declaration, and must either appear on its face, or be shown affirmatively by him who seeks to recover on it.
A consideration may be briefly defined to be any benefit, delay, or loss to either party. More fully, a consideration is something that is either a benefit to the party promising, or some trouble or prejudice to the party to whom the promise is made. Any damage or suspension or forbearance of a right will be sufficient to sustain a promise. It is not essential that the consideration should be adequate in point of actual value. The law does not weigh the quantum of consideration, having no means of deciding upon that matter; and it would be unwise to interfere with the facility of contracting and the free exercise of the judgment and will of the parties. The law allows them to be the sole judges of the benefits to be derived from their bargain, provided there be no incompetency to contract, and the agreement violates no rule of law. There is no case where mere inadequacy of price, independent of other circumstances, has been held sufficient to set aside a contract between parties standing on equal ground and dealing with each other without any imposition or oppression. Such an inequality as would amount to fraud, and avoid the contract on that score, must be so strong and manifest as to shock the conscience and confound the judgment of common sense. Hind vs. Holdship, 2 Watts, 104. Silvis vs. Ely, 3 Watts & Serg. 428. This legal principle as to the extent of consideration is in some measure practically modified by an equitable one, which relieves the parties to a contract in equity wherever the consideration of it fails; as where a contract was made upon the expectation of an actual benefit which has not been realized, and that without the fault of the party seeking relief. Bellas vs. Hays, 5 Serg. & R. 427. Miles vs. Stevens, 3 Barr, 21.—Sharswood.
[(k) ]Ff. 19, 5, 5.
[(l) ] Dr. and St. D. 2, c. 24.
[6 ] This must be read as confined to simple contracts; for no consideration is essential to the validity of a contract under seal, though in some cases creditors may treat voluntary deeds without consideration, as fraudulent and invalid. 7 T. R. 477. 4 East, 200. 2 Sch. & Lef. 228. Fonbl. Treat. Eq. 2d ed. 347, n. f. Plowd. 308, 309. The leading rule with respect to consideration is that it must be some benefit to the party by whom the promise is made, or to a third person at his instance, or some detriment sustained, at the instance of the party promising, by the party in whose favour the promise is made. 4 East, 455. 1 Taunt, 523. A written agreement, not under seal, is nudum pactum without consideration; and a negotiable security, as a bill of exchange or promissory-note, carries with it prima facie evidence of consideration, which is binding in the hands of a third party, to whom it has been negotiated, but may be inquired into between the immediate parties to the bill, &c. themselves. The consideration for a contract, as well as the promise for which it is given, must also be legal. Thus, a contract for the sale of blasphemous, obscene, or libellous prints, or for the furtherance of immoral practices, or contrary to public policy, or detrimental to the rights of third parties, or in contravention of the statute law, in all these cases the considerations are invalid and the contracts void. See 3 Chitty’s Com. Law, 63, et seq.—Chitty.
[(m) ] Bro. Abr. tit. dette, 79. Salk. 129.
[(n) ] Cod. 2, 3, 10, and 5, 14, 1.
[7 ] Where a man is under a moral obligation which no court of law or equity can enforce, and promises, the honesty and rectitude of the thing is a consideration. As if a man promise to pay a just debt, the recovery of which is barred by the statute of limitations; or if a man, after he comes of age, promise to pay a meritorious debt contracted during his minority, but not for necessaries; or if a bankrupt, in affluent circumstances after his certificate, promise to pay the whole of his debts; or if a man promise to perform a secret trust, or a trust void for want of writing by the statute of frauds. In such and many other instances, though the promise gives a compulsory remedy where there was none before, either in law or equity, yet, as the promise is only to do what an honest man ought to do, the ties of conscience upon an upright man are a sufficient consideration. Ld. Mansfield, Cowp. 290. These are the words of lord Mansfield; but perhaps the promise would only be obligatory in the three first instances. How far moral obligation is a legal consideration, see a learned note to the reports by Messrs. Bosanquet and Puller, 3 vol. p. 249. But if a bankrupt after obtaining his certificate, an infant after coming of age, or any person where the demand is barred by the statute of limitations, promise to pay a prior debt when he is able, it has been held that this is a conditional promise, and that the plaintiff must prove the defendant’s ability to pay. 2 Hen. Bla. 116. See further, on this subject, 3 vol. Ch. C. L. 72.—Christian.
[(o) ] Plowd. 308, 309.
[(p) ] Hardr. 200. 1 Ch. R. 157.
[(q) ] Ld. Raym. 760.
[8 ] Mr. Fonblanque, in his discussion of the subject of consideration referred to in the last note but one, has taken notice of this inaccuracy. He says—what certainly is fully established—that the want of consideration cannot be averred by the maker of a note if the action be brought by an endorsee; but if the action be brought by the payee, the want of consideration is a bar to the plaintiff’s recovering upon it. 1 Stra. 674. Bull. N. P. 274. 1 B. & P. 651. 2 Atk. 182, and Chitty on Bills, 68. An endorsee who has given full value for a bill of exchange may maintain an action both against him who drew it and him who accepted it, without any consideration. 4 T. R. 339, 471. 5 Esp. Rep. 178. 3 Esp. Rep. 46. The most important authority respecting the consideration of written contracts is the case of Rann vs. Hughes before the house of lords, in which lord chief-baron Skynner delivered the unanimous opinion of the judges that an administratrix was not bound by a written promise to pay the debt of her intestate out of her own property. See it reported in 7 T. R. 350. In that case, the chief-baron said that “all contracts are by the laws of England distinguished into agreements by specialty and agreements by parol; nor is there any such third class as some of the counsel have endeavoured to maintain,—as contracts in writing. If they be merely written, and not specialties, they are parol, and a consideration must be proved.” He observed that the words of the statute of frauds were merely negative; and that executors and administrators should not be liable out of their own estates, unless the agreement upon which the action was brought, or some memorandum thereof, was in writing, and signed by the party. But this does not prove that the agreement was still not liable to be tried and judged of as all other agreements merely in writing are by the common law, and does not prove the converse of the proposition, that when in writing the party must be at all events liable.—Christian.
[(r) ] Noy’s Max. c. 42.
[(s) ] Gen. xxiii. 16.
[(t) ] 29 Car. II. c. 3.
[(u) ] 8 Rep. 171. 1 Mod. 188.
[(v) ] Comb. 33. 12 Mod. 5. 7 Mod. 95.
[9 ] If two writs are delivered to the sheriff on the same day, he is bound to execute the first which he receives; but if he levies and sells under the second, the sale to a vendee, without notice of the first, is irrevocable, and the sheriff makes himself answerable to both parties. 1 Salk. 320. 1 T. R. 729.—Christian.
[(w) ] Hob. 41. Noy’s Max. c. 42.
[10 ] The authorities cited do not support this sentence. It is true that there is no right in the vendee to recover possession of the goods without payment or tender of the price; but that is another thing from saying there is no contract. Nor is what follows true,—that, independently of the statute of frauds, part payment or earnest is necessary in such a case to bind the bargain. The statute 29 Car. II. ch. 3, s. 17 (the provisions of which prevail in most of the United States) declares that no contract for the sale of goods for the price of 10l. or upwards shall be good, except the buyer shall accept part of the goods so sold and actually receive the same, or give something in earnest to bind the bargain or in part payment, or unless some note or memorandum in writing of the bargain be made and signed by the parties to be charged, or their agents thereunto lawfully authorized. It is true that, if nothing of this kind takes place, it is no contract and the owner may dispose of his goods as he pleases. But at common law, when the terms of sale are agreed on and the bargain is struck, and every thing that the seller has to do with the goods is complete, the contract of sale becomes absolute as between the parties without actual payment or delivery, and the property and the risk of accident to the goods vest in the buyer. 2 Kent’s Com. 492. The sale is complete when the terms are either certainly fixed or a rule adopted from which they can be ascertained by measurement or calculation, and when the subject-matter of the sale is definitively and certainly ascertained and distinguished. A sale is defined to be a transmutation of property from one man to another in consideration of some price or recompense in value. When the name of the vendee is written, by his direction or by the direction of his agent, on the articles sold, or the goods are made up to be delivered, or are otherwise separated from a larger quantity of goods of which they formed a part, with a view to deliver, or when the vendee, by the consent of the vendor, deals with the property as his own, it has been construed to be evidence of a delivery so as to enable the vendor to maintain an action for the price, as of goods actually sold and delivered. A man, buying a hat, selects the article which suits him. It is put aside; but, for some reason, it is inconvenient for him to take it with him. He is to send for it, or the vendor is to send it to his lodgings. From that moment there is a change of property: the bargain is complete, and the vendee becomes the owner. Rogers, J., in Parker vs. Donaldson, 2 Watts & Serg. 9. Smyth vs. Craig, 3 Watts & Serg. 14. Scott vs. Wells, 6 ibid. 357.—Sharswood.
[(x) ] Inst. 3, tit. 24.
[(y) ] Noy, ibid.
[11 ] The property does not seem to be absolutely bound by the earnest; for lord Holt has laid down the following rules,—viz., “That, notwithstanding the earnest, the money must be paid upon fetching away the goods, because no other time for payment is appointed; that earnest only binds the bargain and gives the party a right to demand; but then a demand without the payment of the money is void; that, after earnest given, the vendor cannot sell the goods to another without a default in the vendee; and, therefore, if the vendee does not come and pay and take the goods, the vendor ought to go and request him; and then, if he does not come and pay and take away the goods in a convenient time, the agreement is dissolved, and he is at liberty to sell them to any other person.” 1 Salk. 113. See 3 Camp. 426.—Christian.
[12 ] And this enactment is, by lord Tenterden’s act, (9 Geo. IV. c. 14,) extended to all contracts for the sale of goods of the value of 10l. sterling or upwards, notwithstanding the goods may be intended to be delivered at some future time, or may not, at the time of the contract, be actually made, or provided, or ready for delivery, or some act may be requisite for the making or completing thereof or rendering the same fit for delivery.—Kerr.
[(z) ] Stiernhook de jure Goth. l. 2, c. 5.
[(a) ] Hob. 41.
[13 ] When, however, the sale is complete and the title vested in the buyer, it is still in the power of the seller to reclaim the possession of the goods in case of the insolvency of the purchaser, provided they have not come to his actual possession. This is called the vendor’s right of stoppage in transitu. It does not proceed upon the ground of rescinding the contract. It assumes its existence and continuance; and, as a consequence, the vendee or his assignees may recover the goods on payment or tender of the price, notwithstanding they have been stopped, and the vendor may sue for and recover the price, notwithstanding the stoppage, provided he be ready to deliver the goods upon payment. If he has been paid in part, he may exercise the right for the balance. There must be actual payment of the whole price before the right to stop in transitu, in case of failure of the vendee, ceases. Though a bill or note has been taken and endorsed away for the price, even that will not destroy the right. This right is so strongly maintained that while the goods are on the transit and the insolvency of the vendee occurs, the vendor may seize and take them by any means not criminal. It is not necessary, however, that he should obtain actual possession before they come to the hands of the vendee; nor is there any specific form requisite in which to exercise the right. A demand of the goods of the carrier, or notice to him to stop the goods, or an assertion of the vendor’s right by an entry of the goods at the custom-house, or a claim made to the possessor whoever he may happen to be, is equivalent to an actual stoppage of the goods, and vests the vendor with the right to recover possession. Hodgson vs. Loy, 7 T. R. 445. Kymer vs. Sawercropp, 1 Camp. 109. Feise vs. Wray, 3 East, 93. Newhall vs. Vargas, 13 Maine, 93. 2 Kent’s Com. 541.—Sharswood.
[(b) ] Noy, c. 42.
[14 ] By the custom of merchants, which is part of the lex mercatoria, a bill of lading is transferable by endorsement, and by this endorsement the right of property in the goods passes to the endorsee. The consignor of the goods has a right to stop the goods in transitu upon the insolvency or bankruptcy of the consignee; but he cannot do so against an assignee for value of the bill of lading, who had no notice of the insolvency. Lickbarrow vs. Mason, 2 T. R. 683. This doctrine is at variance with the general principle of our law, which does not permit any one to transfer a greater right than he has himself.
And here I may add that, by the statute 18 & 19 Vict. c. 111, s. 3, it is enacted that every consignee named in a bill of lading, and every endorsee of a bill of lading, to whom the property therein mentioned shall pass upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.—Kerr.
[(c) ] 2 Inst. 713.
[(d) ] C. 1, 3.
[(e) ]LL. Ethel. 10, 12. LL. Fadg. Wilk. 180.
[(f) ] Cro. Jac. 68.
[(g) ] Godb. 131.
[(h) ] 5 Rep. 83. 12 Mod. 521.
[(i) ] Bacon’s Use of the Law, 158.
[15 ] To encourage the prosecution of offenders, it is enacted, by the 57th section of the statute of 7 & 8 Geo. IV. c. 29, that the owner of stolen property, prosecuting the thief or receiver to conviction, shall have restitution of his property, with an exception as to securities or negotiable instruments which have been transferred bona fide, for a just and valuable consideration, without any notice or without any reasonable cause to suspect that the same had by any felony or misdemeanour been stolen, taken, obtained, or converted.—Chitty.
[(j) ] 2 Inst. 713, 714.
[(k) ] Perk. 93.
[(l) ] 2 Inst. 713.
[(m) ] 2 Inst. 719.
[(n) ]Ff. 21, 2, 1.
[(o) ] Cro. Jac. 474. 1 Roll. Abr. 90.
[(p) ] F. N. B. 94.
[16 ] In the case of Jones vs. Bright, (decided in the court of Common Pleas in Easter Term last, but not yet reported,) the plaintiff, a ship-owner, sued the defendant, a manufacturer of copper, on an implied warranty, on a sale of copper for sheathing the plaintiff’s vessel, that the copper was reasonably fit and proper for the purpose for which it was sold. It appeared by the evidence that, in consequence of some improper treatment in the manufacture, by which the copper had imbibed too great a portion of oxygen, its decay was materially accelerated, it being thereby rendered less capable of resisting the action of the salt water. Best, C. J., left it to the jury to say whether the decay of the sheathing were produced by intrinsic or extrinsic causes. The jury found that its decay arose from some intrinsic defect in the quality. The court, after argument in banc, held the defendant liable, and said that a person who sells goods manufactured by himself, knowing the purpose for which they are to be used by the purchasor, impliedly warrants that they are reasonably fit and proper for that purpose, and is answerable for latent defects, inasmuch as, being the maker, he has the means of ascertaining and guarding against those defects, whereas the purchasor must necessarily be altogether ignorant of them.—Chitty.
[(q) ] 2 Roll. Rep. 5.
[17 ] There is an inaccuracy in this statement of the law. The vendor, in general, is not bound to answer when the goods turn out to be different in quality merely from what he represented them to the buyer, unless he made such representation fraudulently, knowing it to be false. Chandler vs. Lopus, Cro. Car. 4. It has been held in Pennsylvania that there is an implied warranty that the article is what it is sold for,—the article it is represented to be; and that even though the sale be by sample. Thus, where a person sold an article as blue paint, and it was so described in the bill of parcels, it was held to amount to a warranty that the article delivered should be blue paint, and not a different article. Borrekins vs. Bevans, 3 Rawle, 23. Fraley vs. Bispham, 10 Barr, 320. It is well settled with regard to the quality of goods that the vendor is not answerable unless he expressly warrant them, or there has been a false and fraudulent representation or affirmation of a quality known by the vendor to be false. Jackson vs. Wetherill, 7 Serg & Rawle, 482. The rule is expressed by the phrase caveat emptor,—let the buyer beware. His eyes are his market. And though the seller is answerable to the buyer that the article sold shall be in specie the thing for which it was sold, yet if there be only a partial adulteration, which does not destroy the distinctive character of the thing, the buyer is bound by his bargain; and in doubtful cases there is no practical test but that of its being merchantable under the denomination affixed to it by the seller. Jennings vs. Gratz, 3 Rawle, 168. In Massachusetts it seems to be settled that on a sale of goods with a bill of parcels describing or clearly designating the goods sold, there is a warranty that the goods are as described or designated in the bill. Heashan vs. Robins, 9 Metcalf, 86. Still, a bare representation and no warranty will not afford an action, if the vendor believes the representation to be true in part. Stone vs. Denney, 4 Metcalf, 151. The New York case maintains the general rule of caveat emptor, except where there is a warranty or fraud. Seixas vs. Wood, 2 Caine’s Rep. 48. Welsh vs. Carter, 1 Wendell, 185. Hart vs. Wright, 17 Wendell, 267. There are some cases in that State which hold to an implied warranty that the article is merchantable. Gallagher vs. Waring, 9 Wendell, 20. The recent English cases of Gray vs. Cox, 4 Barnw. & Cressw. 108, Jones vs. Bright, 5 Bingh. 533, and Shepherd vs. Pybus, 3 Mann. & Gr. 868, give countenance to the same doctrine.
But the rule of caveat emptor fitly applies only where the article was equally open to the inspection and examination of both parties, and the purchaser relied on his own information and judgment without requiring any warranty of the quality; and it does not apply to those cases where the purchaser has ordered goods of a certain character, or goods of a certain described quality are offered to sale without being open for examination, and when delivered they do not answer the description directed or given in the contract. If the article be sold by sample, and it be a fair specimen of the article, and there be no deception or warranty on the part of the vendor, the vendee cannot object on the score of the quality. It amounts to an implied warranty that the article is in bulk of the same kind and equal in quality with the sample. If the article should turn out not to be merchantable from some latent principle of inferiority in the sample, as well as in the bulk of the commodity, the seller is not responsible. The only warranty is that the whole quantity answers to the sample. 2 Kent’s Com. 481.—Sharswood.
The following distinctions seem peculiarly referable to the sale of horses. If the purchasor gives what is called a sound price,—that is, such as, from the appearance and nature of the horse, would be a fair and full price for it,—if it were in fact free from blemish and vice, and he afterwards discovers it to be unsound or vicious, and returns it in a reasonable time, he may recover back the price he has paid in an action against the seller for so much money had and received to his use, provided he can prove the seller knew of the unsoundness or vice at the time of the sale; for the concealment of such a material circumstance is a fraud which vacates the contract.
But if a horse is sold with an express warranty by the seller that it is sound and free from vice, the buyer may maintain an action upon this warranty or special contract without returning the horse to the seller, or without even giving him notice of the unsoundness or viciousness of the horse. Yet it will raise a prejudice against the buyer’s evidence if he does not give notice within a reasonable time that he has reason to be dissatisfied with his bargain. H. Bla. 17.
The warranty cannot be tried in a general action of assumpsit to recover back the price of the horse. Cowp. 819. In a warranty it is not necessary to show that the seller knew of the horse’s imperfections at the time of the sale.—Christian.
[(r) ] 1 Vern. 268.
[(s) ] 12 Mod. 482.
[(t) ] Cro. Eliz. 622.
[(u) ] Cro. Car. 271.
[(w) ] Cro. Jac. 245. Yelv. 178.
[(x) ] Co. Litt. 89.
[(y) ] 4 Rep. 84.
[(z) ] Lord Raym. 909. 12 Mod. 487.
[(a) ] By the laws of Sweden the depositary or bailee of goods is not bound to restitution in case of accident by fire or theft, provided his own goods perished in the same manner; “jura enim nostra,” says Stiernhook, “dolum præsumunt, si una non pereant.” De jure Sueon. l. 2, c. 5.
[(b) ] 13 Rep. 69.
[18 ] The learned commentator has here followed lord Holt, who has treated a commodatum and locatio without distinction. Lord Raym. 916. But this seems to be properly corrected by Sir W. Jones, (85;) who concludes that the hirer of a thing is answerable only for ordinary neglect, but that a gratuitous borrower is responsible even for slight negligence. Ib. 120.—Christian.
[(c) ] Yelv. 172. Cro. Jac. 236.
[(d) ]Polit. l. 1, c. 10. This passage hath been suspected to be spurious.
[(e) ]Decretal. l. 5, tit. 19.
[(f) ] Deut. xxiii. 20.
[(g) ]De j. b. & p. l. 2, c. 12, 22.
[19 ] It is not the amount of money circulating in a country which determines the rate of interest. Money is but the representative of value. The effect of a larger or smaller currency is to depress or raise the prices of all commodities. What is really the subject which produces interest is not the money, but what it will purchase. No man borrows money to hoard. He borrows it to employ in productive industry. He is willing to pay such an interest as the profits in the business in which he invests it will enable him to pay, and compensate him besides for his risk and trouble. The capitalist who has money to lend is willing to take such a sum as will equal the average rate of profits less the trouble and risk of employing it in that way. It will be seen that the actual rate of interest depends on the demand for, and supply of, capital; and its necessary rate—that centre about which it oscillates—is the average rate of profits on capital. It is proper to remark, in order to avoid a very common mistake upon this subject, that the rate of profits in all employments of capital is nearly the same, allowing for the effect of certain circumstances of convenience or inconvenience, honour or dishonour, which often make a great apparent difference, but which form no element in that which determines the interest of money. A large nominal rate of profits often includes compensation for skill and responsibility, as, for example, in the business of the apothecary or druggist. Another remark is, that in periods of great mercantile pressure there often arises a sudden demand for capital, which makes interest run up very high. This is because merchants willingly incur large sacrifices, and will give much more than money is really worth to them in any investment, in order to avoid the ruinous consequences of mercantile dishonour.—Sharswood.
[(h) ] Moll. de jur. mar. 361. Malyne, lex mercat. b. 1, c. 31. Bacon’s Essays, c. 41. Cro. Jac. 208. Bynkersh. quæst. jur. privat. l. 3, c. 16.
[(i) ] 1 Sid. 27.
[(j) ] Molloy, ibid. Malyne, ibid.
[(k) ] See book i. page 294.
[20 ] The general nature of a respondentia bond is this: the borrower binds himself in a large penal sum, upon condition that the obligation shall be void if he pay the lender the sum borrowed and so much a month from the date of the bond till the ship arrives at a certain port, or if the ship be lost or captured in the course of the voyage. The respondentia interest is frequently at the rate of forty or fifty per cent., or in proportion to the risk and profit of the voyage. The respondentia lender may insure his interest in the success of the voyage, but it must be expressly specified in the policy to be respondentia interest, (3 Burr. 1391,) unless there is a particular usage to the contrary. Park. Ins. 11. A lender upon respondentia is not obliged to pay salvage or average losses, but he is entitled to receive the whole sum advanced, provided the ship and cargo arrive at the port of destination; nor will he lose the benefit of the bond if an accident happens by the default of the borrower or the captain of the ship. Ib. 421. Nor will a temporary capture, or any damage short of the destruction of the ship, defeat his claim. 2 Park. 626, 627. 1 M. & S. 30.—Christian.
Where bottomry bonds are sealed and the money paid, the person borrowing runs the hazard of all injuries by storm, fire, &c. before the beginning of the voyage, unless it be otherwise provided. As, that if the ship shall not arrive at such a place at such a time, &c., then the contract hath a beginning from the time of sealing; but if the condition be that if such ship shall sail from London to any port abroad, and shall not arrive there, &c., then, &c. the contingency hath not its beginning till the departure. Beawes Lex Merc. 143. Park. 626. A lender on bottomry or respondentia is not liable to contribute in the case of general average, nor is he entitled to the benefit of salvage. Park. 627, 629. 4 M. & Selw. 141. See, however, Marshal on Insurance, 6 Ch. book 2. In the case of hypothecation, the lender may recover the ship itself in the admiralty court, but not in bottomry or respondentia. See 6 Moore, 397.—Chitty.
[(l) ] Carth. 67.
[21 ] The statute cited in the text was repealed by the statute of 53 Geo. III. c. 141, which last-named act was explained by the subsequent one of 3 Geo. IV. c. 92, and, lastly, by that of 7 Geo. IV. c. 75. By these three acts the enrolments and forms of attestation of annuity-instruments are now regulated.—Chitty.
[(m) ] Cod. 4, 32, 26. Nov. 33, 34, 35. A short explication of these terms and of the division of the Roman “as” will be useful to the student not only for understanding the civilians, but also the more classical writers, who perpetually refer to this distribution. Thus Horace, ad Pisonas, 325.
It is therefore to be observed that in calculating the rate of interest the Romans divided the principal sum into a hundred parts, one of which they allowed to be taken monthly; and this, which was the highest rate of interest permitted, they called usuræ centesimæ, amounting yearly to twelve per cent. Now, as the as or Roman pound was commonly used to express any integral sum, and was divisible into twelve parts or unciæ, therefore these twelve monthly payments or unciæ were held to amount annually to one pound, or as usurarius; and so the usuræ asses were synonymous to the usuræ centesimæ. And all lower rates of interest were denominated according to the relation they bore to this centesimal usury, or usuræ asses: for the several multiples of the unciæ, or duodecimal parts of the as, were known by different names, according to their different combinations; sextans, quadrans, triens, quincunx, semis, septunx, bes dodrans, dextans, deunx, containing respectively 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 unciæ, or duodecimal parts of an as. Ff. 28, 5, 50, 2. Gravin. Orig. jur. civ. l. 2, 47. This being premised, the following table will clearly exhibit at once the subdivisions of the as and the denominations of the rate of interest:—
[(n) ]De jur. b. & p. 2, 12, 22.
[(o) ] Essays, c. 41.
[22 ] As to the law of usury in general, see 3 Chitty’s Com. L. 87 to 91, 310 to 316, R. B. Comyn on Usury, Ord. on Usury, and Plowden on Usury. There must be an unlawful intent, and therefore if the usury arise from error in computation it will not vitiate. Cro. Car. 501. 2 Bla. Rep. 792. 1 Camp. 149. Exorbitant discount to induce the acceptor to take up a bill before it is due is not usurious; because there must be a loan or forbearance of payment, or some device for the purpose of concealing or evading the appearance of a loan or forbearance, (4 East, 55. 5 Esp. 11. Peake, 200. 1 B. & P. 144. 4 Taunt. 810;) nor if the charge alleged to be usurious is fairly referable to the trouble, expense, &c. in the transaction. 3 B. & P. 154. 4 M. & S. 192. 2 T. R. 238. 1 Mad. Rep. 112. 1 Camp. 177. 15 Ves. 120. Bankers may charge their usual commission beyond legal interest. 2 T. R. 52. Under the direction of the court, it is the province of the jury to determine when there is usury in a transaction. 4 M. & S. 192. 1 Dowl. & R. 570. 3 B. & A. 664. 2 Bla. Rep. 864. The purchase of an annuity at ever so cheap a rate will not primâ facie be usurious; but if it be for years or an express agreement to repurchase, and on calculation more than the principal with legal interest is to be returned, it will. 3 B. & P. 151. 3 B. & A. 666. And if part of the advance be in goods, it must be shown that they were not overcharged in price. Doug. 735. 1 Esp. 40. 2 Camp. 375. Holt, N. P. C. 256. A loan made returnable on a certain day, on payment of a sum be yond legal interest, on default thereof may be a penalty and not usurious interest, the intention of the parties being the criterion in all cases. If money be lent on risk at more than legal interest, and the casualty affects the interest only, it is usury; not so if it affects the principal also. Cro. Jac. 508. 3 Wils. 395. The usury must be part of the contract in its inception, and being void in its commencement it is so in all its stages, (Doug. 735. 1 Stark. 385;) though bills of exchange so tainted are, by the 58 Geo. III. c. 93, rendered valid in the hands of a bonâ fide holder, unless he has actual notice of the usury; but if the drawer of a bill transfer it for a valuable consideration, he cannot set up antecedent usury with the acceptor as a defence. 4 Barr. & Ald. 215. A security with legal interest only, substituted for one that is usurious, is valid. 1 Camp. 165, n. 2 Taunt. 184. 2 Stark. 237. Taking usurious interest on a bonâ fide debt does not destroy the debt. 1 H. B. 462. 1 T. R. 153. 2 Ves. 567. 1 Saund. 295. The penalty of three times the amount of the principal is not incurred till the usurious interest has been actually received; and the action must be brought within one year afterwards. 2 Bla. Rep. 792. 2 B. & P. 381. 1 Saund. 295, a. The borrower is a competent witness in an action for the penalty. 1 Saund. 295, a., 33.—Chitty.
[(p) ] 1 Eq. Ca. Abr. 209. 1 P. Wms. 395.
[23 ] By the 13 Geo. III. c. 63, s. 30, no subject of his majesty in the East Indies shall take more than twelve per cent. for the loan of any money or merchandise for a year, and every contract for more is declared void; and he who receives more shall forfeit treble the value of the money or merchandise lent, with costs, one moiety to the East India Company and the other moiety to him who sues in the courts in India. If there be no such prosecution within three years, the party aggrieved may recover what he has paid above twelve per cent. If the informer shall compound the suit before the defendant’s answer, or afterwards, without leave of the court, he shall be liable, upon conviction, to be fined and imprisoned at the discretion of the court. Sec. 21.
Where foreign interest is to be taken or not, see, in general, 1 P. Wms. 395, 396. 2 T. R. 52. 1 Bla. R. 267. Burr. 1094. 2 Bro. C. R. 2. 2 Vern. 395. 3 Atk. 727. 1 Ves. 427. Comyn on Usury, 152.—Chitty.
[24 ] To remove doubts which have arisen upon this statute, the 1 & 2 Geo. IV. c. 51 provides that bonds, &c. made in Great Britain concerning lands, &c. in Ireland or the colonies, whether the interest be payable there or in this country, and bonds under similar circumstances given as a collateral security, shall be good and valid to all intents and purposes the same as if the parties had resided on the spot where the security exists. But this act and the 14 Geo. III. c. 79 extend only to landed securities; and therefore where A. contracted with B. for the sale of an estate in the West Indies, and part of the purchase-money was secured by the bond of B. and C., which bond having been cancelled, another was executed in England reserving 6l. per cent., it was held usurious. 3 T. R. 425.—Chitty.
By the statute 3 & 4 W. IV. c. 98, some relaxation of the usury laws was made in favour of trade, and it was enacted that no person taking more than the rate of legal interest for the loan of money on any bill or note not having more than three months to run should be subject to any penalty or forfeiture. Shortly afterwards, the statute 5 & 6 W. IV. c. 41 enacted that bills or other securities should not be totally void because a higher rate of interest than was allowed by the statute 12 Anne, s. 2, c. 16 had been received thereon. The statute 1 Vict. c. 80 next enacted that bills of exchange payable at or within twelve months should not, for a limited time, be liable to the laws for the prevention of usury; and this statute was followed by six others, extending from time to time the original enactment. The statute 2 & 3 Vict. c. 37 enacted that no bill of exchange or promissory note made payable at or within twelve months after the date thereof, or not having more than twelve months to run, nor any contract for the loan or forbearance of money above the sum of 10l., should, by reason of any interest taken thereon or secured thereby, or any agreement to buy or receive or allow interest in discounting, negotiating, or transferring any such bill or note, be void, nor any person so lending be liable to the penalties of the usury-laws; but it was provided that this relaxation should not extend to the loan or forbearance of any money on the security of lands. The public mind, having thus slowly advanced in the direction of the policy advocated by Bacon above two centuries ago, at length became prepared for a still wider measure, and the statute 17 & 18 Vict. c. 90, after laconically reciting in the preamble that “it is expedient to repeal the laws at present in force relating to usury,” proceeds to repeal wholly, or in part, eleven English, five Scotch, and four Irish acts, on which the whole penalties of usury previously vested. Among these acts are included those relating to annuity-transactions. The natural laws which regulate the terms on which money can be borrowed are therefore now left to operate freely, and borrowers and lenders are amenable to no other rules than those which govern contracts in general. The act, however, does not affect the rights, remedies, or liabilities of any person in respect of any thing done previously to its passing.—Kerr.
[(q) ] F. N. B. 119.
[25 ] As the description in the text of the different kinds of contracts is too succinct, it may be useful to the student to state the distinctions between each and give a comparative view of their relative effect. In point of form, contracts are threefold,—by parol, by specialty, and by matter of record. Those most in use in commercial affairs are parol or simple contracts not under seal. All contracts are called parol, unless they be either specialties—that is deeds under seal—or be matter of record. A written agreement not under seal is classed as a parol or simple contract, and is usually considered as such, just as much as any agreement by mere word of mouth: for, as observed by chief-baron Skynner, 7 Term Rep. 350, Plowd. 308, there is at common law no such class of contracts as contracts in writing, contradistinguished from those by parol or specialty. If they are merely written and not specialties, they are parol. There are, indeed, distinctions between the two kinds of simple contracts under the statute of frauds, which render it necessary that certain descriptions of simple contracts should be in writing, and sometimes signed. But, though written, they still continue, like all other contracts not under seal nor of record, to be considered merely as in the nature of contracts by parol.
The principal points in which a deed differs in effect from a parol contract are—1st. That the want of consideration constitutes no defence at law to an action on such deed; and though in equity relief may sometimes be had in cases of surprise, or catching bargains, or in favour of creditors, yet the mere circumstance of a bond or deed having been given voluntarily without consideration constitutes no ground for relieving the party himself. Fonbl. on Eq. 2d edit. 347, n. f. Toller, 1st edit. 222, 223. Whereas, in support of any proceeding on a simple contract, the creditor must prove that it was founded on a sufficient consideration. 4 East, 403. 7 T. R. 350. 7 Bro. P. C. 550. 2 B. & P. 77. And though the defendant in an action on a deed is at liberty to avail himself of any illegality in the consideration or transaction, yet it is incumbent on him to state the objection with precision in pleading; whereas in an action on a simple contract such ground of defence may be given in evidence under the general issue. 1 Saund. 295. 3 T. R. 538. 3 T. R. 424. 2 Wils. 347. 1 Bla. R. 445. 7 T. R. 477. 2dly. That in pleading a deed it is not necessary to show that it was founded on any consideration, except in setting forth conveyances operating under the statute of uses, (1 Hen. Bla. 261. 2 Stra. 1229;) whereas a declaration on a simple contract will be bad in arrest of judgment, unless it appear therefrom that there was a consideration coextensive with the promise. 7 T. R. 348. 4 East, 455. 3dly. That the party to a deed is in most cases estopped or precluded from controverting any statement therein, or to show that it was executed with a different intent or object to that which the deed itself imports, (Hayne vs. Maltby, 3 T. R. 9, 438. Com. Dig. Estoppel. 1 Saund. 216, n. 2. Willes, 9;) except indeed in cases of duress, fraud, or illegality, which defences the law admits, notwithstanding the security has the appearance of having been deliberately framed. 3 T. R. 418. 4thly. That the efficacy of a stipulation by deed cannot be affected or altered at law by any subsequent simple contract, nor can the party be discharged or released from the obligation of a deed by any subsequent contract, unless by a release under seal. Co. Litt. 222, b. 3 T. R. 590. 8 East, 346. 5thly. That a deed binds the heir when named, (Bac. Abr. Heir and Ancestor, F. 2 Saund. 7, n. 4, 136. Plowd. 439, 441,) and a devisee of real estate may be sued in debt, though not in covenant, on such a deed, (3 & 4 W. and M. c. 14. Bac. Abr. Heir, F. 1 P. Wms. 99. 7 East, 128;) whereas a simple contract-creditor has no remedy at law in any case against the real estate of his deceased debtor, though in some cases, by marshalling the assets, (3 Wooddes. 488,) or where the debtor died a trader, relief may be obtained in equity. 47 Geo. III. sess. 2, c. 74. 6thly. That a deed is entitled to preference, except as to rent due on a parol demise, over simple contract-debts, in the course of payment of a testator’s debts, (supra, 465. Toller, 1st ed. 221. 5 T. R. 307;) and though this rule does not obtain in case of bankruptcy, where all creditors receive a dividend pari passu, yet, by means of a mortgage and some other deeds, some specific security may frequently be obtained, or right to prove acquired, which even in that event places one creditor in a better situation than he would otherwise have been. 7thly. That a deed is not affected by the statute of limitations, which renders it necessary for a simple contract-creditor to proceed within six years after his cause of action accrued. Cowp. 109. 1 Saund. 37, 38. 21 Jac. I. c. 16. Tidd, 6th edit. 19. 8thly. That in pleading a deed it is in general necessary to make a profert, as it is technically termed, of the deed, or to state upon the record some excuse for the omission. 10 Co. 92, b. 1 Chitty’s Plead. 351. 3 T. R. 151. 4 East, 585. 9thly. That in case of a deed when a profert is necessary, the other party is entitled to oyer and copy, (1 Saund. 9, n. 1.;) a right which does not in general exist in case of simple contracts. Tidd, 6th edit. 618, 619. 10thly. That if a deed be given expressly to secure a pre-existing simple contract-debt due from the obligor, it will at law merge the latter, and prevent him from suing upon the same, (3 East, 258, 259. Cro. Car. 415;) though if the deed be given as a collateral security or by a third party, it will not have that operation. 3 East, 251. Com. Dig. Accord. 6 Term. Rep. 176, 177. 2 Leon. 110.
Debts or contracts of record, being, as we have seen, sanctioned in their creation by some court or magistrate having competent jurisdiction, have certain particular properties distinguishing them as well from simple contracts as from specialties. 1st. These debts or contracts cannot in pleading be impeached or affected by any supposed defect or illegality in the transaction on which they are founded; and if a judgment be erroneous, that circumstance will afford no answer to an action of debt upon it, and the only course for the defendant is to reverse it by writ of error, (2 Burr. 1005. 4 East, 311. 2 Lev. 161. Gilb. on U. & T. 109. Gilb. Debt. 412. Yelv. 155. Tidd, 6th ed. 1152;) and though third persons, who have been defrauded by a collusive judgment, may show such fraud, so as to prevent themselves from being prejudiced by it, (13 Eliz. c. 5. 2 Marsh. 392. 7 Taunt. 97,) the parties to such judgment are estopped at law from pleading such a plea, and must in general apply for relief to a court of equity. 13 Eliz. c. 5. 2 Marsh. 392. 7 Taunt. 97. 1 Anstr. 8. There is, however, one instance in which a party may apply to the common-law court to set the judgment aside,—viz., where it has been signed upon a warrant of attorney given upon an unlawful consideration or obtained by fraud; in which case, as this is a peculiar instrument, affording the defendant no opportunity to resist the claim by pleading, and frequently given by persons in distressed circumstances, the court will afford relief upon a summary application. Doug. 196. Cowp. 727. 1 Hen. Bla. 75. Semble; not so in Exchequer. 1 Anstr. 7, 8. Another peculiar property of a contract of record is that its existence, if disputed, must be tried by inspection of the record, entry of recognizance, &c., and not by a jury of the country. Tidd, 6th edit. 797, 798. But notwithstanding, since the act of union, an Irish judgment is a record, yet it is only provable by an examined copy on oath; and therefore it is only triable by a jury. 5 East, 473. Another quality, and one of the most important, is that a judgment when docketted binds the land as against subsequent purchasors, (Tidd, 6th edit. 966, 967;) and such a judgment and recognizance is entitled to preference to a specialty and other debts of an inferior nature. 6 T. R. 384. Tidd, 6th edit. 967. Lastly, if a judgment be obtained expressly for a simple contract or specialty debt, and not as a collateral security, the inferior demand is merged, according to the rule transit in rem judicatam; but if the judgment were obtained merely as a collateral security, the creditor retains an election to proceed either on the judgment or inferior security. 3 East, 258.—Chitty.
[(r) ] 2 Carte Hist. Eng. 203, 206.
[(s) ] Mod. Un. Hist. iv. 499.
[26 ] The different States which compose the United States are sovereign and independent and foreign to each other in all respects not provided for by the terms of the federal compact,—the constitution. Hence a bill drawn in one State upon a person residing or doing business in another has been invariably held to be a foreign bill of exchange. Buchner vs. Finley, 2 Peters, 586. Phœnix Rank vs. Hussey, 12 Pick. 483. Wells vs. Whitehead, 15 Wend. 527. Rice vs. Hogan, 8 Dana, 133. Brown vs. Ferguson, 4 Leigh. 37. Carter vs. Burley, 9 N. Hamp. 558.—Sharswood.
[(t) ] Roll. Abr. 6.
[27 ] One very important distinction between foreign and inland bills of exchange still remains unaltered by the statutes,—viz., in a foreign bill, in order to recover against the drawer or endorsers, it is necessary that the bill should be protested for non-acceptance or non-payment, (5 T. R. 239;) but a protest is not necessary upon an inland bill to enable the holder to recover the amount of it against the drawer or endorsers; and the only advantage of a protest upon an inland bill is to give the holder a right to recover interest and expenses incurred by the non-acceptance or non-payment. Ld. Raym. 993. No inland bill, payable at or after sight, can be protested, or which is not drawn payable at some time after date. 4 T. R. 170.—Christian.
In Windle vs. Andrews, 2 Barn. & Ald. 701, it was decided that although the endorsee of an inland bill of exchange has no remedy for interest under the statute of Anne, unless the bill has been regularly protested, still, that statute does not take away any remedy which the holder of a bill of exchange had previously; and the drawer of a bill of exchange which is not duly paid is liable at common law for interest, although no protest was made.—Chitty.
[28 ] By the statute of 7 Geo. IV. c. 6, the issuing of promissory notes for any sum under 5l. is prohibited, under a penalty of 20l. for every such note issued.—Chitty.
[(u) ] Stra. 1212.
[(v) ] 2 Show. 235. Grant vs. Vaughan. T. 4 Geo. II. B. R.
[(w) ] Stra. 1000.
[29 ] No authority is cited by the learned commentator for the qualification here expressed; and I have been unable to trace it. I can find no statute which confines a protest for non-acceptance to bills of the value of 20l. and upward and expressed to be for value received. Bills for the payment of less than 20s. are void by statute 15 Geo. III. c. 51. I have supposed that this was a mistake of pounds for shillings; but every edition has it 20l. Again, although some advantages were formerly held to arise from a bill or note being expressed to be for value received,—such as that it was necessary to raise the presumption of value, or estopped the maker from denying consideration,—yet all distinctions of that character are now exploded; and all the incidents of negotiable paper attach as fully to bills and notes which are not, as to those which are, expressed to be for value received. White vs. Ledwick, 4 Doug. 427. Grant vs. Da Costa, 3 M. & S. 351. Benjamin vs. Fillman, 2 McLean, 213. Townsend vs. Derby, 3 Metcalf, 363. Hubble vs. Fogartie, 3 Rich. 413.—Sharswood.
[30 ] With respect to acceptance and protest, the law now is, in several material points, different from the statement of it in the text. Acceptance is not necessary, though usual and desirable, on bills payable at a certain time; but when the bill is payable at a certain distance of time after sight, then acceptance is essential and should not be delayed, because (as the time for payment of the bill does not begin to run till it is accepted, 6 T. R. 212. Bayl. 112. Chitty on Bills, 268) the responsibility of the drawer would be thereby protracted. Acceptance of an inland bill can now be in writing only on the face of the bill itself, (by 1 & 2 Geo. IV. c. 78;) though formerly, as is still the case with foreign bills, it might have been verbal, or in writing on any other paper. 4 East, 67. 5 East, 514. But in all cases, whether of an inland or foreign bill, if it be presented and acceptance is refused, prompt notice (within fourteen days will not suffice, but usually the next day to the immediate endorser; and each endorser is allowed a day) must be given to the drawer and endorsers, or they will be discharged from responsibility. Upon non-acceptance, the holder may immediately sue the drawer (2 Camp. 458) and endorsers, (4 East, 481,) without waiting till the bill become due, according to the terms of it. No protest of an inland bill is essential to entitle the holder to recover interest and costs; and such protest now seems useless. 2 B. & A. 696.—Chitty.
[(x) ] Lord Raym. 993.
[(y) ] Salk. 127.
[31 ] The holder of the bill may bring actions against the acceptor, drawer, and all the endorsers, at the same time. But, though he may obtain judgments in all the actions, yet he can recover but one satisfaction for the value of the bill. But he may sue out execution against all the rest for the costs of their respective actions. Bayley, 43.—Christian.