sold; many of the statutes define it. They cover a life insurance
policy, corporation stock, railway rolling stock, seamen's wages,
growing crops and trees, profits from the use of a steamboat, premiums
earned by a horse, book accounts, leasehold interests, nursery stock,
besides many other things. Whenever fixtures annexed to real estate
retain the character of personal property they may be mortgaged. And
when animals are mortgaged their natural increase are included. A
mortgage made of an unfinished article will hold the article when
finished if it can be identified.
By the common law nothing could be mortgaged that was not in existence
at the time of the mortgage. By statute a mortgage may cover
after-acquired property, and this statute has become very important
especially with merchants, manufacturers, and others who are
constantly changing their stocks of goods.
When the mortgagor fails to pay his debt, the right of the mortgagee
to proceed in taking the property is usually regulated by statute,
except when the parties have agreed themselves and in conformity with
statute. The rights of the mortgagee depend in many cases on the
title, whether that has passed to him by virtue of the mortgage, or
whether it still remains conditionally in the mortgagor. Where the
mortgagor still retains the title, a clause is often put into the
mortgage to the effect that, should the mortgagor default in payment,
the mortgagee may take possession of the property and sell it; and
such a provision is valid and enforcible. Where the title is vested or
transferred to the mortgagee by virtue of the mortgage, this is
equivalent to giving him possession whenever he chooses to demand it.
In other states the mortgagee's discretion is not so broad, before
taking possession he must have reasonable grounds for believing
himself insecure, that the mortgagor has done, or threatens to do,
something that would impair the mortgagee's security.
Where the common law prevails and no statute has been enacted
regulating the rights of parties, an important question is still
unsettled in cases of a mortgage given on a stock of merchandise which
permits the mortgagor to remain in possession and to sell the property
mortgaged in the course of trade. Can he do this? In many states such
a mortgage is regarded as fraudulent to creditors, in other states if
such a mortgage is not, on proper judicial inquiry, proved to be a
fraud, it will be upheld.
A provision in a mortgage that it shall cover after acquired property
is regarded in some states as an executory agreement that it shall be
held by the mortgagee as security; and the mortgagee may take
possession of it, should the mortgagor fail to pay his debt, in
accordance with his promise, before the rights of third persons have
intervened. See _Mortgage_.
=Chauffeur.=--In many states minors are forbidden by statute to run
automobiles. If therefore the owner of a car permits a minor to drive
his car, he may be held liable for the injuries resulting from the
driver's negligence. Should a chauffeur's license not disclose
physical disabilities the license is not void, nor is he a trespasser
in operating the machine on the highway. Such a license though
defective is valid until revoked by the proper authority.
If discharged before the expiration of the term of his employment, an
employer is still liable for his chauffeur's pay unless he has been
unwilling or unable to fulfill his contract. If, however, he has been
prevented by sickness or similar disability, he can recover, not
perhaps the amount stated in the contract, but the worth of his
services during the period of serving his employer.
A chauffeur may recover damages from his employer for injuries
received while operating his car. The basis of the action is his
employer's negligence. If the engine "kicks back" while he is cranking
the car, and the employer contributed to the result by moving the
spark lever, he is liable. If he is injured while running a car from a
defective brake of which he had knowledge, he cannot recover. But if
the employer knew, and the chauffeur did not know that the brake was
defective, he could recover if injured in consequence of it. The
employer is under no duty to warn his chauffeur of obvious dangers, or
instruct him in matters that he may be fairly supposed to understand.
If a chauffeur is riding at the owner's request, who is driving the
car, he may recover if injured by the negligence of the owner in
running the machine. Under the Workmen's Compensation Laws a chauffeur
who is injured while running his car beyond the speed limit
prescribed by statute can recover nothing. Nor is he justified by the
custom of other chauffeurs in disregarding the rule. Lastly, if the
owner of a car is injured, physically or financially, by reason of the
wrongful conduct of his chauffeur, he has a remedy against him. See
_Automobile_; _Garage Keeper_.
=Check.=--A check should be properly signed. A check signed by an
individual with the word "agent," "treasurer," or other descriptive
term, has sometimes been regarded as the check of the individual
signer, and not that of a principal or company. The proper way is to
sign the name of the principal or company, adding the name of the
person by whom this is done, thus: "John Smith by John Doe, agent," or
"The Atlas Co. by John King, Treasurer," or other official
designation.
The statement will not accord with the view of many a reader, that a
bank on which a check is drawn is under no legal agreement with the
holder to pay it, whether the maker has a sufficient deposit or not.
Consequently, should the bank refuse to pay, the holder has no cause
of action against the bank. The agreement to pay is between the bank
and the depositor, and if the bank fails to fulfill its agreement with
him, he has a just cause for complaint. Sometimes a bank declines to
pay supposing, through an error of bookkeeping perhaps, that the
depositor has not money enough there to pay his check. In such a case,
as the bank is in the wrong, if the depositor has suffered from loss
of credit or in any other way from the bank's action, it must respond
and make the loss good.
Suppose a person presents a check and the maker's deposit is not
enough to pay the full amount, what can be done? Usually the bank
declines to pay. Suppose the holder says he is willing to give up the
check and take the amount in the bank? There is no reason why the bank
should not accede to his wishes. Suppose a bank should pay more than
the amount on deposit through no fraud of the holder, from whom can it
recover the amount? If the holder has been free from wrong in
presenting the check, the bank cannot look to him, but to the drawer
for repayment. If the maker of a check has no money in the bank,
perhaps he may not be a depositor, he commits a fraud in making and
giving his check to another, and the offense in many states is deemed
a crime: likewise a person who receives such a check knowing its true
nature is equally deep in the wrong.
The law is very strict in its requirement of banks when paying the
checks of customers. After a check has been delivered and has
therefore passed beyond the maker's control, the law requires the
greatest care on the part of a bank in paying it. The bank must be
especially careful in examining the signature and the amount, and if
the signature has been forged, or the amount changed, the bank is
liable for an improper payment. Once an employer gave his trusted
clerk a post-dated check, which he was to present on the day
specified, and, after drawing the money, was to pay this to his
employees. The clerk changed the date to an earlier one, drew the
money, kept it and fled. The court said the bank should have detected
the alteration. The bank contended that had the clerk waited until the
proper day, and then drawn the money, it would not have been liable.
The court said that was not the case presented, the clerk did not
wait. Banks suffer, far more than the public knows, from the payment
of raised checks, for it is quite impossible always to detect them,
yet banks are held liable therefor.
There are two rules relating to the payment of checks worth
mentioning. One is, the maker of a check should use proper precaution
in making it. He should write in a way that will not be likely to
confuse the paying official. For instance, if in the above case the
maker, intending to give a post-dated check, had written the date so
imperfectly that the teller was misled, the bank would not have been
liable for paying it, or for refusing to pay because there was not
money enough in the bank at the time of presentation for payment. Some
persons are very careless in making figures; when they are, they
cannot look to the bank for the ill consequence of their own neglect.
Again, if a bank paid forged checks, for example, which were returned
with other checks on the balancing of a depositor's book, and months,
perhaps years afterward, the depositor discovered the forgeries or
forged indorsements, he could, notwithstanding the lapse of time,
demand of the bank the sums wrongfully paid. This was a great hardship
to banks, and has been corrected in many states by statutes and by the
courts in others. The rule now is, the depositor must, within a
reasonable time after the return of his bank book, examine it, also
his checks, and, if payments have been improperly made, demand
immediate correction.
The holder of a check should demand payment within a reasonable time
after he has received it. He may keep it longer if he pleases, but if
he does, and the bank should fail, he cannot demand payment again from
the maker of the check. He in effect says to the holder of the check
when giving it to him, "present this check to the bank within the
proper time and it will be paid, if you keep it longer, you do it at
your risk." What is a reasonable time? The law has fixed it. If the
bank is in the town or city where the holder of the check dwells, he
must present it the day he received it, or the next day. If it is
drawn on a bank outside, the check must be forwarded for presentment
at the latest on the day after it is received. With respect to the
first class of checks therefore if the maker and receiver are both
depositors of the same bank, the operation on the part of the bank
consists simply in debiting one account and crediting another with the
amount; if checks are drawn on another bank in the same city the
receiver usually deposits them in his own bank and they are paid
through the clearing house the next day.
A drawer may stop the payment of his check. And when he requests the
bank to do so it must heed his instruction, and is liable if
neglecting, though not always for the whole amount of the check.
Suppose the check was given for a bill which the maker actually owed,
yet for some reason, after giving the check, he did not wish to pay.
If it was actually due and undisputed it would be hardly just to
require the bank to pay the check over again to the holder, this would
be too much. But for whatever injury the maker of the check may have
sustained the bank must make good.
When a check has been certified by the bank on which it is drawn, the
effect of the certification after the drawer has parted with it "is
precisely as if the bank had paid the money upon that check instead of
making a certificate of its being good." The check is charged up to
the maker, or should be, and therefore as between him and the bank has
been paid.
=Citizen.=--In modern usage this means a member of the body politic
who owes allegiance to the nation and is entitled to public
protection. One may be a citizen of the United States without being a
citizen of any state, for example, a citizen of the District of
Columbia, or the territory of Alaska. Citizen-ship implies the duty of
allegiance to the government, and the right of protection from it. A
citizen of the United States who resides in a state owes a double
allegiance, and can demand protection from each government. For the
ordinary rights of person and property he looks to the state for
protection. The rights for which he can seek the protection of the
United States are only such as are established by the constitution and
federal laws. For some purposes even a corporation may be included
within the term citizen, for example the right to sue in the federal
courts as a citizen of the incorporating state.
By the fourteenth amendment of the federal constitution, all persons
born in the United States and subject to its jurisdiction are citizens
of the United States. In 1855 Congress passed an act conferring
citizenship on alien women who should marry American citizens. An
American woman therefore who marries an alien takes the nationality of
her husband. When her marital relation ends she may elect to retain
her marital or her original citizenship. Since minor children follow
the status of their parent, by the marriage of an alien widow to an
American citizen, her children also become American citizens.
An alien may be naturalized. To do this he must have continuously
resided in the United States for five years before his application,
and he must have appeared in court at least two years before, and
there declared his intention to become a citizen of the United States
and to renounce allegiance to his former sovereign. He must prove by
the oath of at least two persons his residence, also during that time
that he has behaved as a man of good moral character and attached to
the principles of the federal constitution. He must take an oath to
support and defend the constitution and laws of the United States and
renounce allegiance to any foreign prince. The naturalization of a
person confers citizenship on his minor children if dwelling in the
United States, also on his wife, unless she is of a race incapable of
American citizenship.
The rights of aliens, from the very beginning of the American
government, have been expanded by treaty provisions and by liberal
legislation. In nearly all the states resident aliens were given the
right to take title to land, whether by deed or by inheritance, to
hold such real estate and to transfer it by law or by descent. In some
states they were given the right to vote and hold office. And at
common law they were entitled to purchase, own and sell personal
property, engage in business and to make contracts and wills. By the
fourteenth amendment to the federal constitution their rights and
privileges have been further secured.
Aliens owe to the country in which they reside a temporary and limited
allegiance, that is, an obligation to obey its laws and subject
themselves to the jurisdiction of the courts. A non-resident alien is
not within the terms of the fourteenth amendment, indeed it is
doubtful if he can ask any aid or relief under the state or federal
constitutions. A statute therefore imposing a higher inheritance tax
on property passing to a non-resident alien than on his property if he
resided here is valid. Non-resident aliens can acquire no rights
incident to residence here except as permitted by the federal
government. This power may be exercised, either through treaties made
by the president and senate, or through statutes enacted by congress.
So congress has excluded not only diseased, criminal, pauper and
anarchist immigrants, but also contract and Chinese laborers.
=Contracts.=--At the outset the various kinds of contracts should be
explained so that the principles which apply to them may be better
understood. One of the divisions is into simple contracts and
specialties. A simple contract may be verbal or it may be in writing,
but no seal is appended to the signatures of the parties. A specialty
is in writing and a seal is added to the signature. A written contract
may be a duplicate of another with a seal, yet the two belong to
different classes and different rules of law apply to them as we shall
learn.
Another classification is into executed and executory contracts. An
executed contract, as the name implies, is completed, an executory
contract is to be executed or completed. An unpaid promissory note is
an executory contract, when paid it becomes an executed one.
Another classification is into express or implied contracts. An
express contract is one actually made between two or more persons or
parties; an implied contract is one that the law makes for the
parties. Suppose a man worked a day for another at his request, and
nothing was said about payment, the law would require him to pay a
reasonable sum for his day's work. Another kind of contract
technically called quasi contract differs somewhat from an implied
contract and will be explained in another place.
To every contract there must be two or more parties, who have the
legal right to make it. Not every person therefore who wishes to make
a contract can legally do so. Of those whose ability to contract are
limited are minors or infants. The period of infancy is fixed by law,
and is therefore a conventional, yet needful regulation. In most
states infancy ends at the age of twenty-one, though some states fix a
younger period, eighteen for women. A person becomes of age at the
beginning of the day before his twenty-first birthday. The reason for
this rule is, the law does not divide a day into a shorter period or
time except when this is required in judicial proceedings. Another
class of incapable contractors are married women. Their disability
however has been largely removed by statutes in all the states, as we
shall learn in another place.
Insane and drunken persons also are under disability to make
contracts. By the old law a drunken man who made a contract was still
liable, and required to fulfill as a penalty for his conduct. A more
humane rule now prevails and he can be relieved, though like a minor,
if he wishes to avoid a contract, he must return the thing purchased,
in other words he can take no advantage of his act to the injury of
the other contracting party. If however he has given a negotiable note
that has passed into the possession of an innocent third person, who
did not know of his drunkenness at the time of making it, he can be
held for its payment. It is not quite so easy to state rules that
apply to insane persons because their conditions vary so greatly. A
person may be insane in some directions and yet his insanity may not
be of a kind affecting his capacity to make at least some kind of
contracts. Again, he may have lucid intervals during which he is
quite as capable of contracting as other persons. And again when an
insane man has made a contract, the relief to which he is entitled
depends on circumstances. In some cases he may repudiate it, a partial
fulfillment only may be required.
The law has much to say about the consideration that is an element in
every contract; in other words, there must be a cause, something to be
gained by the parties in every contract to sustain it. If A should
promise to give to B a house next week, and on the day fixed for
transferring it A should change his mind, he could not be compelled to
transfer it, for the promise would be without any consideration or
thing coming from B. But if the house had been transferred, A could
not afterwards repent of his act and demand its return. An executed
gift therefore, free from all fraudulent surroundings, is valid: the
donor of an executory gift is free to withhold its execution.
A consideration need bear no relation or adequacy to the other thing
that is to be received. Nothing is more frequent than a one-sided
contract, in which one party has gained far more than the other. If
the law attempted to adjust these cases, many more courts would be
needed than now exist.
We will briefly note the need of consideration in some classes of
cases. First, a voluntary undertaking to work for another without
compensation cannot be enforced. Under this head is the promise to pay
the debt of another. Why should one do such a thing? Let us remember
that should one make such a promise and keep it, the money could not
be recovered back, that is quite another thing. Again, if A owed B a
debt and delayed payment, and B should say to him, "if you will pay me
half of it next week I will give up the rest," B would not be bound
by his promise. Suppose that B learning that A had ample means to pay,
should sue him, A could not relieve himself from liability by offering
to pay the amount A promised to take in settlement of the debt. But
should B accept one half, in fulfillment of his promise, that would be
the end of the matter.
Again should a bank defaulter make good the amount taken, and the
directors, in consideration thereof, promise to take no steps towards
his prosecution by the government, there would be no valid
consideration to sustain the promise. The state would be just as free
to prosecute him as before. Very often such criminals are not
prosecuted after returning all or a part of their unlawfully taken
money, nevertheless no settlement of this kind stands in the way of
prosecution.
Suppose A agreed to work for B for a month and, after working a week,
should leave him without good reason, can he recover for his week's
work? If he can get anything, he cannot claim it under his contract
for he has broken it and therefore a court could not enforce it. If he
can recover anything it is on the implied contract which the law
makes, the worth of his work after deducting the loss to his employer.
Suppose the employer should prove that he had lost more by A's going
away when he did than he had gained by his week's work, he could
recover of B, for the rule works both ways. In some states he cannot
recover anything, for, having broken his contract, he has no standing
in court.
Suppose one signs his name to a subscription paper, calling for the
payment of money, to build a church, for example, and the designated
amount has been subscribed, can a subscriber refuse to pay? He
cannot. Suppose he withdraws before the subscriptions have been
completed, what then? He can refuse. If a subscription has not been
completed, death operates as a revocation and the subscriber's estate
is not held for the amount. Sometimes a moral obligation to pay money
is a good consideration for a promising to pay it. Thus if one owes
another for a bill of goods, and the debt has ceased to be binding by
lapse of time, yet he should afterwards promise to pay, he could be
held on his promise because there was a good consideration for the
debt. Lastly a contract may be modified by mutual agreement without
another consideration.
Another element in a contract is mutuality, a meeting of minds in the
same sense. In every contract there is an offer made by one party and
an acceptance or refusal by the other. When an acceptance occurs,
there is a meeting of minds, or an assent. Very often the parties do
not understand each other, they acted hastily, ignorantly perhaps,
their minds did not really meet in the same sense. In such cases there
is no contract.
Generally the acceptance must be at the time of receiving the offer.
If it is not, there is no meeting of minds, no assent. A person
however may make an offer on time, this is common enough. When this is
done the other party must furnish some kind of consideration to make
the offer good for anything, otherwise the offerer can withdraw his
offer whenever he pleases. Many an offeree has been disappointed by
the action of the other party in withdrawing his offer, yet the
offerer has been clearly within his rights in doing so when he has
received no consideration for giving the other party time to think
over his offer.
An eminent jurist has said "that an offer without more is an offer in
the present to be accepted or refused when made. There is no time
which a jury may consider reasonable or otherwise for the other party
to consider it, except by the agreement or concession of the party
making it. Until it is accepted it may be withdrawn, though that be at
the next instant after it is made, and a subsequent acceptance will be
of no avail."