Albert Sidney Bolles, Ph.D., LL.D. (continued 4)

A rule of construction may here be added; if a blank form is used in making a lease and the printed and written parts or agreements are inconsistent, the matters written are regarded as expressing the intention of the parties.

Much might be said concerning the use of the premises. If a farm is rented and the lease is silent on the matter, the law presumes that the tenant will use it in a proper and husbandlike manner, like other exemplary farmers in that vicinity. He must cultivate the soil properly, preserve the timber, consume the hay as fodder to the cattle, if such be the custom, and keep the buildings and fences in repair. Manure in the ordinary course of farming belongs to the farm. To manure made in livery stables a different rule applies and the tenant can remove it. If the lease be of a mill it usually provides how it shall be run, if it be a house in the city and nothing is said about its use the law implies that there shall be no waste or destruction beyond the ordinary wear and tear. To use the doors for firewood is not uncommon with tenants, unless they are not burnable, though surely it is not a proper use of a leased house.

A farm tenant has the right to take and use material found on the land suitable and needful to repair the buildings, fences, also dead and fallen timber for fuel. He cannot use shrubbery and ornamental trees for this purpose, nor cut standing timber for this purpose. He is entitled also to the way going crop, but must remove it during his lease. He cannot go on the land afterward and remove crops, unless he was prevented by some good reason from removing them while he was in possession.

Can a lessee assign or sublet his lease? Of course this may be forbidden, and often is by the lessor, without his consent. If the lease is silent this can be done. If the lessee die, his executor or administrator can assign the remainder of his term. A lease may also be assigned if the lessee become insolvent, also by a new partnership created by the addition or retirement of a member. A transfer by the lessee of the whole or a part of his interest for a part of the time is a sublease and not an assignment. And whenever a sublease is made, the rights of the original lessor are not changed, nor does he recognize in any way the sub-tenant unless by agreement, nor has he any right of action against him. Of course there is nothing to prevent the parties from making any arrangement that may be agreeable to them.

As the lessee may assign or sublet unless forbidden, so may the lessor part with his interest in the leased premises. When an assignment of it is made, the assignee may sue in his own name for rent accruing after the assignment.

The lease of a private residence is not a warranty that it is reasonably fit for occupancy. Thus saith the law. Nor can a lessee, unless the lessor has misrepresented the healthfulness of the place, leave after the unwelcome discovery that it is not healthful. This seems to be rather harsh, but the rule is founded on the presumption that the lessee will examine the house before leasing and make proper inquiries about its healthfulness.

By the common law the lessor was not required to make repairs. This has been changed in some states by statute. He is not required to make repairs needed and known to the tenant at the time of making his lease. Hallways, staircases, elevators, and the like that are used in common by the tenants of a building and are under the landlord's control, must be kept in repair by him. If he shall let a many storied building to several tenants, to each tenant a story, who have exclusive possession thereof, the lessor will not be liable to any lessee for the damage caused by another.

If the landlord agrees to make repairs and keep the tenement in good condition, he is required to keep it in essentially the same condition as it was when the tenant took possession. Should the house or other building be destroyed by fire what then? An agreement to keep it in good repair imposes an obligation on the landlord's part to rebuild. But an agreement by the lessee to keep and leave it in good repair, does not require him to rebuild should it be destroyed by fire, or other cause without any fault of his own. If the lease provides that the insurance money, when the landlord has insured the premises, shall be applied to rebuild in the event of fire, he must regard his agreement, but if there be no such agreement, the tenant cannot compel his landlord to thus apply it. Should the lessor fail to fulfill his agreement to repair, the tenant is not excused from paying his rent, nor justified in leaving the premises. His remedy is to sue his landlord for the damages or injury to himself. And even if the premises be destroyed by fire the tenant must continue to pay his rent unless he has been wise enough to relieve himself by a proper clause, or unless some kindly statute has been passed relieving him on the happening of such an event. No oral stipulation, that the parties should make covering the effect of loss by fire or other contingency, would be binding if contrary to the terms of the written lease. As this is the highest form of the agreement, all verbal stipulations to the contrary must give way.

A tenant can make no permanent alteration without his landlord's consent; and should he do so and injure the premises the landlord may recover damages, or, if such an alteration is feared or threatened, he may prevent it by obtaining an injunction from a court ordering the tenant not to make it and penalizing him should the order be disobeyed.

When a lease is renewed, the new lease may be regarded in two different ways. It may be considered as the continuation of the lease, and thereby protecting all the interests created under it. And this will be the case whenever the old lease clearly shows that if a renewal should be made this was the intention of the parties. When nothing is said, a renewed lease is a surrender of the old one and different conditions may arise. It is important therefore when providing for the renewal of a lease to specify what the parties intend, whether a renewal or continuation on the old terms, or a renewal on other terms to be fixed at another time.

Usually a lease specifies not only the amount of rent to be paid, but the time of payment. If silent, yearly rent is not due until the end of the year, quarterly rent at the end of the quarter, monthly rent at the end of the month. When a lessee is evicted or turned out of possession by his landlord, he is excused from paying rent. What, therefore, is an eviction? Any act by the landlord, or by his agent, impairing the worth of the premises to the tenant, for example, the destruction of a summer house, turning rooting pigs into the premises, the erection of a new building rendering the leased premises unfit for occupation. One of the curious cases is the lease of a distillery which could not be run because the landlord prevented the lessee from getting a license. In like manner if the landlord is to furnish heat and fails to do so, the tenant is justified in leaving. More generally, any act by the landlord whereby the leased premises are rendered unfit or impossible for the purpose intended, and affecting the health and comfort of the tenant, is an eviction.

The eviction must be done by the lessor. An act done by a wrongdoer, not under the lessor's order, will not justify the lessee in quitting. Thus the darkening by an adjacent owner of the lessee's premises by erecting a structure, however injurious it might be, would not justify the lessee in quitting and refusing to pay his agreed rent. This is one of the risks taken when making the lease.

Suppose a person occupying state land is evicted by the state, must he continue to pay rent? In Missouri the rent ceases, or if evicted of a part, he must pay rent on the remainder. In some states he must still continue to pay his rent and then demand compensation for his loss.

Sometimes land is rented on shares, a very common way in the olden time. When this is done, the relation of landlord and tenant may be created, or perhaps a partnership relation. If the farmer is to do the work of a servant of the owner of the farm, receiving in return therefor, a specified part of the crops, the agreement is one of hiring and not a lease. If the farmer has rightful possession of the use of the land, then the payment of his rent in produce does not affect his relation as a tenant. The natural increase of stock leased with a farm belongs to the tenant, and a landlord cannot recover for the death of cattle in the tenant's possession, unless he can prove his tenant's negligence. And if a lessee should sell part of the stock contrary to the lease, the purchaser would be liable therefor.

A landlord often leases separate parts of a building to different tenants, while the stairways and passages to them, though intended for their use, are still under his control. He thus invites the tenants and other persons having relations with them to use the approaches to obtain access to their rooms or apartments, and is accordingly liable when they are not kept in proper repair; the same as any owner of structures either expressly or impliedly invites persons to enter them. If therefore he should leave elevator shafts, or hatchways unguarded, he would be clearly liable for the consequences. So, too, should a mill owner have a defective bridge to his mill, forming part of a common way thereto, he would be liable for the consequences.

The lessor is liable if he leaves his premises with a way or cellar entrance, or coal hole inadequately guarded at the time the lessee takes possession, but not if the guard or covering gets out of repair during the tenancy, or is temporarily left unguarded by the tenant or some third person. If the hole or other dangerous place is made without proper authority, it is considered a nuisance and the owner is liable for all injuries whether he has rented the premises or not. Who is liable for injuries caused to travelers by ice and snow on the pavement? This is a hard question to answer in a short space. If the ice or snow has accumulated by reason of a defective roof, then the landlord is liable because of its faulty construction. In some parts of the country it is most difficult to keep the walks safe in winter. Experience has led the parties to make stipulations defining and fixing their liability. Many states also have statutes and cities ordinances regulating the duties and liabilities of landlords and tenants.

When a lease is about to expire a difficult question sometimes arises, what can the tenant take away with him? Of course he can remove all his furniture and the things that can be separated without injury to the premises, but during his tenancy, he may have added things possessing a more permanent nature, called fixtures, these he cannot remove. The courts have had great difficulty in deciding in some cases what these are. In a general way it may be said that whatever a tenant adds to the premises can be removed, while he is still in possession, without material injury to it, but he cannot remove anything afterwards. Suppose the tenant erects a building, can he remove it? One would not think of his building this for the benefit of his landlord. Suppose he had built it on a foundation from which it could be easily removed, a court would have no difficulty in deciding that it belonged to the tenant. Many cases have arisen about ranges and stoves. An ordinary stove of course can be removed; suppose it is affixed to the house in such a way that some portion of the wall will be detached by the removal, can this be done? Not if the wall will be badly injured. How badly? This is a question of fact to be answered by inquiry in every case. Among the fixtures that can be removed are hangings and tapestries, ornamental chimney pieces, wooden cornices, wainscoting affixed to the wall by screws and spikes, bells and bell wires, chandeliers, cisterns and sinks though fastened by nails and set into the floor, fire frame fixed in the fireplace, pipes for gas or water, grates removable without injury to the building, pumps, stoves, ranges and furnaces, gas ranges and water closet appliances, washtubs fastened to the house, gas fixtures and shelves. A greenhouse is not removable, nor gutters placed in the roof of a dwelling, nor a stairway, nor flowers, shrubs, or bushes planted for ornamental purposes.

Chattels placed by a tenant on leased premises for the purpose of carrying on his business or trade are generally regarded as personal property. Annexations of this kind are called trade fixtures and the law is liberal in permitting their removal. Show cases, counters and shelves, engines, boilers, machinery, tanks in a distillery, a bowling alley, bar fixtures, even buildings are removable. The same liberal rule applies to agricultural implements. A tenant, therefore, if wishing to remove whatever he may have added, should be careful about their nature, or protect himself by an effective agreement.

Legal Remedies.—Elsewhere we have shown how civil and criminal law differ. In criminal proceedings the state is a party and prosecutes offenders through agents or attorneys who are chosen or appointed for that purpose. In all civil offenses the person injured prosecutes the offender, through the courts established by the state for that purpose. Suppose A owed B one hundred dollars for which he gave his promissory note payable in ninety days from date, and which on its maturity A declined to pay. B could then have recourse to a court of law to collect the money. If knowing nothing about the mode of proceeding he would employ a lawyer; if he was familiar with legal proceedings he could do this himself.

What is the first step taken by a lawyer? He makes out a writ or complaint stating B's course of action against A—that he has loaned him a sum of money which he has not paid as he promised to do, and he is summoned to appear in court at a certain time and place and answer why he does not pay and the court is asked to render judgment against him, if there is no defense, for the money due with the addition of the costs incurred in seeking the aid of the court to collect the money. This writ, declaration, or complaint is given to the sheriff of the court where either A or B lives, who "serves" it on A. This service consists in reading a copy of it by the sheriff, or by one of his deputies or a constable, or other authorized person, to A, or in leaving a true and attested copy thereof with him, which has become the universal practice. This is the ordinary mode of beginning a legal action against a person or corporation.

An action thus begun is followed by a trial of the case unless it is settled. Usually the trial comes off within a few months, but not infrequently long delays occur. If, after the introduction of testimony, judgment is rendered in favor of B, an "execution" or order is issued by the court directing the sheriff to levy on A's property, whatever he may have, save a small sum, household furniture and the like, and sell it and turn over the proceeds to B in payment of his debt. If there was a balance left from the sale of A's property after satisfying the judgment of the court and the costs of the legal proceedings, it would be paid to A. This, in fewest words, is the mode of proceeding in a court of law to obtain redress in a civil suit or action.

There are several kinds of actions or remedies used in different cases and these will now be explained. First, is the action of assumpsit. This is the form of action used whenever one sues to recover on all kinds of promises, those implied by the law as well as express promises, not under seal. They include all ordinary promises to do things either orally or in writing. Next, is the action of covenant. This is used whenever one sues to recover for some failure on the part of a person who has given a deed or other sealed writing. Suppose the purchaser of land discovered there was an unpaid mortgage thereon, though the deed covenants or declares that it is free from all encumbrances. The vendee or purchaser would sue to recover for a broken covenant. Another action is replevin which is used to recover specific goods. Suppose someone had taken my horse and refused to deliver the animal to me. The proper remedy would be replevin. Suppose I did not wish to have the horse back, but only its value or worth. Then the proper remedy would be an action of trover. Another form of action in much use is called trespass. This is used to recover damages for injuries to persons and property. If a person knocked me down and I sued him to recover for the injury, trespass would be the proper form of action. In many states an action in tort instead of trespass is the proper remedy. If one should come upon my land and take away wood, grass, stone, or in any way injure it, trespass also would be the form of action. Ejectment is the action employed to eject or turn out a wrongful possessor and recover possession of land. In this action the title or ownership of the land lies at the foundation; and the title to many a piece has been settled in an action of ejectment. One of the most familiar actions is habeas corpus, which is employed to recover a person's liberty from illegal restraint. As the actions of slander and libel have been described, only two others require notice, mandamus and quo warranto. The first of these is used to compel one to do something. A familiar example is that of a city which refuses to pay a judgment that has been rendered against it. The court in this action commands the city to pay, and it must obey unless there exists a legal defense. A quo warranto is the form of legal action to which a person resorts to get possession of an office to which he is entitled, but is denied him. Suppose one is elected mayor of a city, but for some reason or other, the one in possession is determined to keep him out. He would bring this action and a court would then decide whether he was entitled to it or not, and if he were, the court would proceed to put him in possession.

In many of the states, especially the newer ones, not all of these different forms of action are used. Only one form, called a complaint, includes most of them. While the substitution of this has simplified the modes of redress, the substance of the complaint really embodies, as before, the different kinds of injuries above explained.

Life Insurance.—The contract of life insurance is a mutual agreement whereby the insurer agrees on the payment of a fixed sum or premium to pay to a person designated in the policy on the happening of a contingency, usually death, a sum of money. By another form of insurance the insurance may be made payable at a fixed time, or before, should the insured die before that period.

The contract to be valid must be for the benefit of one having an insurable interest, otherwise the contract is a wager, which the law condemns. This is sufficient if the person taking the insurance has such an interest arising from his relation to the insured as creditor and surety, or from the ties of blood or marriage that will justify a reasonable expectation of advantage or benefit from the continuation of his life. It is not needful that this expectation or benefit should possess a pecuniary valuation. The mutual legal rights and liabilities of father and minor child are sufficient to create an insurable interest on the part of each in the life of the other; also the relationship of brother and sister, and that of husband and wife. Likewise a man and a woman who are engaged to be married; and a creditor has an insurable interest in the life of his debtor. And this interest covers not only the amount of the indebtedness, but also future advances, and the cost of taking out and keeping up the insurance. A partner who has advanced the capital of the business has an insurable interest in the life of his partner. More generally any person who invests money relying on the efforts of another to produce a return has an insurable interest in such person's life. A surety therefore has an insurable interest in the life of his principal; an executor in the life of a person who has granted an annuity to the testator; a common carrier even may insure against loss from injuries to passengers. But the relationship between uncle or aunt, nephew and niece and that of cousin is not sufficient to support a policy taken by one in the life of the other.

A policy may be assigned to one who has no insurable interest if made in good faith, and not as a cloak for the procuring of insurance by one having no insurable interest. This rule does not prevail everywhere, but the courts which do not accept this rule usually protect the assignee who has paid the premiums to the amount of his payments, while the estate of the insured takes the balance that may come from the insurer, whenever the assignment of the policy is not invalid. An assignment to one who has an insurable interest as relative, creditor and the like, is always valid.

A general agent, says Justice McClain, "may bind the company by an agreement as to rate of premiums, or other terms of the contract, even as against the express provisions of a policy subsequently issued, there being no negligence on the part of the insured in failing to advise himself as to the terms of the policy; but if the want of authority of the agent to vary the terms of the application is brought home to the applicant, oral communications of the insured to the agent are not to be considered in determining the validity of the insurance. If the agent has exceeded his authority as to the terms of the proposed contract, the company cannot reject that part which the agent was without authority to make and enforce the rest, but must accept or reject in toto."

Until a proposition for insurance has been accepted by the company there is no contract. Delay in accepting an application which is subject to approval does not effect an acceptance. There may be a binding contract of insurance as soon as the company has accepted the application, or on the delivery and acceptance of it by the company's agent, when he has authority to do so. In order to complete the contract before issuing the policy there must be an agreement to this effect, and before the death of the applicant. The receipt by an agent for the first premium, or of a note therefor, subject to the approval of the application by the company, does not effect a contract between insurer and insured.

Some states have enacted statutes prescribing requirements for life insurance policies, or standard forms. Delivery to a third person for the insured may be sufficient. The contract becomes complete when the policy is put in the mail, postage prepaid, for delivery in due course to the insured. Delivery to the insured for examination of course does not effect any engagement on the part of the insurer, nor does a delivery on condition.

It is often stated that the delivery shall not be effectual to create a contract unless the insured is alive and in good health when the policy is delivered and the first premium is paid. Indeed, how could it be valid if the insurer is dead? And if the contract is with a person other than the insured as beneficiary, it would be void on the ground of mistake. Likewise, under such a condition, a policy does not become effective, without a waiver, if the insured is in ill health at the time of its delivery or payment of the premium.

Unless waived by the company, there is usually a stipulation to the effect that the company shall not become bound until the first premium has been actually paid and accepted by the company or its authorized agent. But if the premium is actually paid by the agent of the company for the insured by virtue of an agreement between them, this will bind the company. The payment of the premium by a third person without the knowledge of the insured does not have the same effect.

A general agent has authority to waive the stipulation, that the policy shall not take effect until the first premium is paid, though of course he may be restricted in this regard, but a special agent cannot waive this stipulation; though if he acts otherwise and the company ratifies his act, it is bound. A provision also that a policy shall not be valid unless the premium is paid when the insured is in good health may be waived by an agent who has authority to take applications, collect premiums and deliver policies.

Passing to the nature of the contract, if made in violation of a statute, or if contrary to public policy and this is known by both parties, it is void. Thus a stipulation that a policy shall be payable though the insured may be executed for a crime is contrary to public policy and is therefore void. The same is true of a stipulation insuring against death by suicide while sane. It is against public policy to allow one person to have insurance on the life of another without his knowledge. A policy issued on a person beyond a specified age is prohibited by statute.

What is the effect of fraud in negotiating and issuing policies? If the company or its agent perpetrates a fraud whereby one is induced to take out a policy, he can at his option declare it void, unless so negligent in acting as to work an acquiescence of it. But if acting in a proper way and time he can set up fraud as a defense in an action to get the premium for which the contract has stipulated; or he may sue to have the policy declared void and his premiums returned to him; or he may bring an action against the company or its agent, or both, to recover the damages he may have sustained by the fraud that has been practiced on him.

On the other hand, if the insured has been wronged, the courts furnish relief, and perhaps may set the policy aside. Mistake is a common ground of relief; it must in all cases be clearly proved. And if a policy is susceptible of two constructions, the ambiguity is to be resolved in favor of the insured. As the company framed the policy all of its provisions in its favor are strictly construed. It may be added that the construction which the parties themselves have put upon a contract of life insurance will be generally followed in determining their intention. Again, the entire contract is to be construed together for the purpose of giving effect to each clause and as between general and specific provisions relating to the same matter the specific provisions control.

In determining who is the beneficiary under the terms of a policy of life insurance the courts are governed by the intentions of the parties. They need not be named if they can be otherwise identified, and may be designated in a separate paper prepared for that purpose. The amount named in the policy generally fixes the liability of the company. To obviate the wager feature, the amount of insurance effected for a creditor on the life of his debtor ought to be limited to the amount of the debt with interest and premiums during the expectancy of the life insured.

The risk is presumed to begin from the date of the policy and to continue until the happening of the contingency or time when payment is to be made by the insured. It may be added that words or figures written or printed on the margin of a policy of life insurance, on its back, or on a slip, with reference to the terms and conditions of the contract, constitute a part of it and must be considered in deciding its meaning. But representations made in a prospectus or circular issued by a life insurance company are no part of a contract.

The payment of premiums to a general agent without notice of any limitation of his authority to receive payments will bind the company, but a different rule applies to a special agent. The premiums may be paid by the insured, or the beneficiary, or by the agent of the company whenever he has agreed to pay them for the insuring party. A discount allowed by the company for the punctual payment of premiums belongs not to the agent, but to the insured. Cash is usually paid, though other arrangements also exist for taking notes, that are ultimately paid in cash or from the earnings of the company, and belong to the insured and would be paid to him. In mutual life insurance companies a portion of the premium is often paid in this manner.

A policy of life insurance payable to the insured, or in the event of his death to his personal representatives, may be assigned unless forbidden by statute, therefore a policy payable to the wife of the insured, or another may be assigned by the united act of the insured and the beneficiary. Thus a policy taken out for a wife's benefit is often assigned by her and her husband to his creditors to secure their debts. In some states statutes forbid the assignment of such policies for the benefit of creditors. The written assignment must be delivered to the assignee to be effective. On some occasions assignments have been declared valid where the intention was clearly proved though both the written assignment and the policy remained in the possession of the assignor. An assignee who holds a policy as security is entitled on its payment only to the amount of his claim and advances with interest, including premiums paid to keep the policy alive and thus preserve his security. More generally premiums paid for this purpose are chargeable on the proceeds of the insurance, but a mere volunteer who pays the premiums acquires no lien on the proceeds of the policy when it is paid. Nor can one who ought to pay the premiums give a lien on the policy to another for money advanced by him to pay them; and an assignee who has promised to pay the premiums may be liable should he fail to keep the policy alive.

Contracts of reinsurance are often made by all insurance companies. In some states the reinsuring company becomes liable to an action by the beneficiary named in the original policy. Where the reinsuring company, by agreement, undertakes to reinsure the members of the other company should they execute applications for that purpose, any member who does this is not required to be reexamined or comply with other conditions respecting his age or health.

A policy may be canceled or surrendered by mutual agreement. After the death of the insured the rights of the parties become fixed, and there can be no cancellation. During his lifetime the insured may abandon his contract by refusing to pay the premiums, but an intention to abandon will not be presumed, nor will the taking out of a second policy before his failure to pay the premiums on the other establish an abandonment. If both parties treat the contract as void, neither can revive it without the consent of the other. As the beneficiary has a vested or definite interest in the contract, the insured cannot, by surrendering the policy, cut off the rights of the beneficiary without his or her consent unless permitted to do so by the contract itself.

A surrender or cancellation of a policy may be avoided on the ground of mutual mistake. But the insured cannot seek cancellation on the ground that he thought it was something else when his mistake was simply his own in not reading the release.

A policy may be rescinded whenever fraud has been practiced by either party. Thus, should a greater premium be demanded than that stated in the contract this would be a good reason for rescinding on the part of the part of the insured. Likewise, if he was induced to take out the insurance by the fraud of the company or its agent, unless he has lost his right to rescind through inaction or negligence. Likewise, the company may rescind for fraud practiced by the insured by misrepresentation or other fraudulent acts concerning his age, health, etc. Concealment of facts may and often does operate as a fraud on the company. Says Justice McClain: "If the applicant has answered the questions asked in the application he is justified in assuming that no other information is desired. On the other hand if he wholly fails to answer questions the company waives information as to matters thus asked for by accepting the application without objection. If, however, the applicant purports to answer a question by giving only an incomplete answer, concealing facts which should properly be stated in response to the question, and these concealed facts are material, the policy is voidable." If a material change for the worse in the health of the applicant takes place after the application and medical examination, it is the duty of the applicant to disclose it. The failure to disclose facts of which the applicant is ignorant, or which are immaterial to the risk, is not ground for avoiding the policy.

When a policy is surrendered or canceled by the contract or by statute, the insured may be entitled to the surrender value of his policy. The amount is to be determined by the period for which the policy has to run, the amount of the annual premium, the age of the insured, and the probability of the continuance of his life stated in the usual life tables. The value of an immatured paid-up policy is the unearned premium called the reserve and is to be computed in the same manner as that of a policy on which annual premiums are paid. The beneficiary is entitled to the surrender value as against the insured, as well as the creditors, unless the beneficiary has consented to giving them the preference.

By a clause in the contract of insurance or by statute, the insured can convert his policy into a paid-up policy for such an amount as the premiums would have secured. These conversions often happen where the insured is unable or unwilling to continue to pay the premiums required to maintain the policy. Formerly on the failure of the insured to pay, policies lapsed or were forfeited, and the insurance companies gained large sums from this source. This led to legislation and to the creation of paid-up policies. These are issued on somewhat different terms, but the principle in all of them is the same.

Minor.—The contracts of a minor are of two kinds, those for necessaries and other things. Contracts for necessaries made by him the law will uphold. They are really implied contracts which the law will sustain for his benefit and protection. What are necessaries is a question of fact, not always easily answered. Much depends on a minor's place in society and condition. The question is for a jury to decide, also whether the prices for them are reasonable or not. One of the well-known cases occurred many years ago. The bill against the minor was for more than a thousand dollars for twelve coats, seventeen vests, twenty-three pairs of trousers, five canes, fur caps, chip hats and other things, in less than six months. The jury rendered a verdict for almost the entire amount, but the reviewing court remarked that the bill made the members shudder, that the seller must have known that all these things were not needed for the minor's comfort within that short period, and the verdict was therefore set aside.

The question is constantly arising, what are necessaries? A thing might be to one and not to another. Thus a bicycle merely for pleasure would not be a necessity; one that is used to go to and from an individual's daily work would be. A dentist's bill for repairing one's teeth has been disputed, the law, though, generally favors the preservation of human teeth. Education furnished to a minor may be a necessary thing, yet only when it is suitable to his wants and condition. Should a minor repudiate a contract, the law is observed if he restores all that he has received, or that is capable of restoration.

With respect to contracts for other things, they are not always void, but may be avoided. If they have not been executed, he can disavow them at any time. If nothing is done during infancy inaction operates generally as an affirmation. If he disaffirms a contract, he must return the thing purchased or received, or make the best restitution he can, for it would not be just to retain possession and refuse payment.

A different rule applies to a minor who makes a fraudulent contract. Suppose he buys goods assuring the seller that he is twenty-one years of age when in fact he is not, though nearly so. Can the seller recover on his contract? No, but the law has another way of reaching him. He is liable in an action of deceit, and the amount or damage that may be recovered is that of the goods sold to him.

A minor who has a parent or guardian cannot make a contract even for necessaries, nor is he under any obligation to pay his bills for them. Should he be in need of such things and his guardian or parent be unwilling to furnish them, they can be compelled by law if having the means to provide him with whatever he requires.

Mortgage.—Two kinds of mortgages are given, one kind is secured by real estate, the other kind by personal property. In both the borrower of money pledges his property as security while the money remains unpaid. During this period he usually remains in possession and control of the property, though not always. The borrower is called the mortgagor, the lender the mortgagee. The contract is in writing sealed, is in fact a deed. Sometimes the contract is in two writings, the conveyance of the land and security in one, and the conditions or defeasance on which the conveyance is made in another. It is more usual, however, to set forth the transaction in a single writing or conveyance.

A mortgage may be so made as to cover future advances, but it will not cover them in preference to advances or loans made by another without any knowledge of them. Nor need another person who makes such a loan inquire whether a mortgagor has made any other loan, or for a larger amount than that stated on the public record, where the mortgage deed is recorded. For, it should be added, a mortgage deed is recorded like any other for the benefit of all parties, not only to secure the mortgagee from a later purchaser who might buy if knowing nothing of the prior mortgage, but from another who might be willing to lend on such security like himself; or from a creditor of the mortgagor who might attach the property as belonging to him, if he did not know of the existence of the mortgage. As the record is public, and may be examined by everyone, all who are interested in the property are supposed to examine it and thus find out whether it has been mortgaged, and if it has been, the conditions of the mortgage, and if they do not, their neglect is their own.

Improvements, additions of every kind to property after it has been mortgaged, become a part of it, and if the mortgagee takes future possession, they pass to him. But a difficult question arises sometimes, what additions or improvements are included? We have learned what they are whenever a tenancy relation exists. The law does not favor a mortgagor to the same extent. The test to apply is that of intention. If a mill has been mortgaged, the rule is very broad and the mortgage covers machinery attached by bolts and screws though removable without injury to the premises. If a mortgage has been given, by no evidence can it be shown that the deed was intended as an absolute or entire conveyance of the property. On the other hand by proper evidence it can be shown that an absolute conveyance was intended to be only a mortgage. This has been often done. One may ask, why does the rule not work both ways? There is a much stronger probability of making a mistake in the second case than in the other. One of the facts of great importance in such a dispute is the amount of the consideration or money paid. Suppose a piece of land was worth $1000 and the deed mentioned only $100, unless there was some other explanation, there would be a strong probability that the parties intended only a mortgage which for some reason or other was not completed.

Again, it is a rule of law that an agreement which is in fact a mortgage cannot be changed in character by any other agreement made at the time between the parties relating to the repayment of the money and the return of the property. The law presumes that the entire transaction was embodied in the agreement. "Once a mortgage always a mortgage." Of course this rule does not prevent the parties from making any later arrangement they please about the property.

A mortgage may be made with a power of sale whereby, should the debt be not paid at the time fixed, a valid title may be acquired by a purchase from the mortgagee. The mortgagee thus becomes a kind of trustee or agent for the debtor. This is a great responsibility to repose in the mortgagee, and he must perform the trust in good faith in every respect. He must proceed in a way that will best serve the interest of the mortgagor, and strictly observe the terms stated in the mortgage, otherwise the sale will not be valid and the mortgagor can recover his property. If there is a surplus after satisfying the mortgage debt it must be paid to the mortgagor, or, if he is dead, to his heir. Such deeds of trust are made by large corporations to secure loans, and may be made to secure future advances as well as present ones.

If the property is sold to satisfy the mortgage debt, the mortgagee cannot purchase it, unless authorized by statute, or by the terms of the mortgage; but if it is sold by an officer of the law, the mortgagee is as free to purchase it as any other individual. This rule, though, is denied by some courts, which hold he cannot because the officer is acting as the mortgagee's agent.

A vendor or seller of property, may have for the money he is to receive a lien, which is nearly the same thing as a mortgage. A subsequent purchaser would be affected by this lien, however innocent he might be of its existence. But if the purchaser should mortgage the property to a third person, who should put his deed on record, he would gain a valid lien over the vendor. This lien is founded on the idea that the vendor holds the land in trust for the purchaser until he has paid for it, but is not recognized in every state. It is reasonable to suppose that the owner will not sell his land until he has been paid, or the purchase money has been secured. The lien will also prevail against any assignment that the vendor may make for the benefit of creditors, provided he enforces his lien before the assignee begins to execute his trust.

Much has been said about the notice of the vendor's lien. Any reasonable notice will suffice, but what is such a notice to charge, for example, a second purchaser with knowledge? Payment of a part of the money is held to be knowledge of the lien. Again, a vendee who has paid any part of the purchase money before the delivery of the deed to him has a lien for the amount advanced. A third party who pays the purchase money to the vendor for the purchaser and takes a note for the amount does not have such a lien.

The mortgagor in most states is regarded as the real owner and remains in possession; and the mortgagee has a lien, or security for his advance of money or whatever it may be. The mortgagor may sell his land at any time subject to the mortgage, in other words he cannot by any sale impair the mortgagee's security. On the other hand, the mortgagee can transfer, sell or assign his mortgage to another, and this is often done.

Both parties may insure the premises though the mortgagee cannot exceed his debt. If they are destroyed by fire, the mortgagor cannot claim to have the insurance applied in liquidation of the mortgage debt. The mortgagee, therefore, can first collect the insurance money and then proceed to collect the debt that is due to him from the mortgagor. If the sums collected from the two sources exceed the amount advanced to the mortgagor that is only the mortgagee's affair. But if he insures the property at the mortgagor's request or at his expense, then the mortgagor would have the benefit of the insurance.

Frequently several mortgages are made of the same property. The one that is the first recorded has the first lien, the one recorded next the second lien, and so on. And if the property is subsequently sold to pay the mortgage, the first mortgagee has the first claim to the money received, the second mortgagee next and so on. If there is not enough to pay all, the last mortgagee is the first to be cut off, or to receive less than the full amount due to him.

If a testator devises mortgaged land, is the devisee or person who receives the land also entitled to the money due from the mortgagor? Generally, but not everywhere. A bequest of money securities includes a note secured by mortgage. The mortgagor's interest in the land on his death, if leaving no will directing who shall take it, goes to his heirs, and not to his executor or administrator like other personal property. Of course, if there were no other property that could be used to pay his debts, if he had any, it could be claimed and taken by his creditors for that purpose.

The mortgage usually states a time for paying the debt, and if the terms are not observed, the mortgagee may proceed to take the property. This he cannot do in an arbitrary way, except in the case of mortgages in which the mortgagee is entrusted with power to sell the property and apply the money in payment of the debt. In other cases the mortgagee must apply to the court to fix a time for the sale of the property, if the mortgagor fails to make payment. The courts usually give the mortgagor a period of several weeks or months to pay, and if payment is not made at the end of this period, the land is sold by an officer of the court, who conveys the title to the new purchaser, and if there is any surplus left after satisfying the mortgage, this is returned to the mortgagor. If there is a deficit, he is still liable therefor. Any person who is interested in a mortgaged estate has the right to redeem it; heirs, devisees, creditors. On the death of a mortgagor his heirs may call his executor or administrator to pay the mortgage out of the personal estate if there is any, and not from the sale of real estate, because it was given, so the law presumes, for the benefit of the personal estate belonging to the mortgagor. Or, if the land has been given to a devisee, he can require the executor or administrator to pay the mortgage. Again, if two persons are jointly liable for the debt, and one of them pays it, he may call on the other to contribute his portion. See Chattel Mortgage.

Negotiable Paper.—By negotiable paper is meant paper that can be sold and transferred. The law on this subject is now regulated by a statute that is nearly uniform in almost all the states of the Union. The courts are constantly applying it, and in doing so are putting their meaning or interpretation on the words of the statute. Thus far they have looked with quite similar eyes, and no serious differences have arisen.

The statute declares that a promissory note must be in writing and signed by the maker or drawer; that it must contain an unconditional promise or order to pay a certain sum of money on demand, or at a fixed future time to order or to bearer. And if the note is addressed to a drawee he must be named or indicated with reasonable certainty. A note may be written payable with interest or by stated installments, or with exchange, or with costs of collection, or an attorney's fee in case payment shall not be made at maturity.

An unqualified order or promise to pay is unconditional within the meaning of the law even though it indicates a particular fund from which it is to be paid, or a statement of the transaction on which the note is based. Thus the indorsement of the words "per contract" on the back of a note written at the time of its execution does not affect its negotiability.

A note payable at a fixed future time may be at a fixed period after date or sight, or on or before a fixed future time specified therein, or on or at a fixed period after the occurrence of a specified event which is certain to happen, though the time of happening be uncertain. A note that is payable on a contingency is not negotiable, and the happening of the event does not cure the defect. Likewise a note which contains an order or promise to do any act in addition to the payment of money is not negotiable. To this rule, though, are some exceptions. Thus a note may be negotiable that authorizes the sale of collateral securities that have been delivered to the holder if the note is not paid at maturity. But a note stating that the title to property for which it is given shall remain in the payee, and that he shall have the right to declare the money due and take possession of the property whenever he may deem himself insecure "even before the maturity of the note," is not negotiable.

Again, the validity and negotiable character of a note is not affected by the fact that it is not dated, or does not specify the value given or the place where it is drawn, or the place where it is payable, or bears a seal, or designates a particular kind of current money in which payment is to be made. Furthermore, a note is payable on demand when it is thus stated, or is payable at sight or on presentation. Also an overdue note accepted or indorsed is regarded as payable on demand, so far as the maker is concerned.

A note may be drawn payable to the order of a specified person, or to him or his order, or it may be drawn payable to the order of a payee who is not the maker, drawer or drawee, or it may be drawn payable to the order of the drawer or maker, or to the drawee, or to two or more payees jointly, or to one or some of several payees, or to the holder of an office for the time being.

Again, a note is payable to the bearer when it is thus expressed, or to a person named therein or bearer, or when it is payable to the order of a fictitious or non-existing person, and the fact is known to the person making it so payable, or when the name of the payee does not purport to be the name of any person, or when the only or last indorsement is an indorsement in blank. On one occasion funds were deposited in a bank in the name of a federal disbursing agent under treasury regulations that "any check drawn by a disbursing office upon moneys thus deposited must be in favor of the party by name to whom payment is to be made and payable to order." The disbursing officer fraudulently drew checks payable to fictitious payees and cashed them under forged indorsements of the fictitious payees' name. The court held that the checks were not payable to bearer and that the bank was not protected in paying them.

A note is not invalid for the reason only that it is ante dated or post dated, provided this is not done for an illegal or fraudulent purpose. The person to whom it is delivered acquires the title from the date of delivery. If a note expressed to be payable at a fixed period after the date is issued undated, or the acceptance of such a note is ante dated, the holder may insert the true date of issue or acceptance. Nor does the insertion of the wrong date avoid the note in the hands of a regular subsequent holder. More generally, when a note is wanting in any particular material, the holder or possessor has the authority to complete it by filling up the blanks. This authority extends to every incomplete feature of the note and may be used for inserting the date, amount, name of the payee, and time and place of payment. When authority is conferred on another to fill blanks it must be strictly followed. If a note is drawn payable with interest at the rate of __ per cent, it draws interest at the legal rate, although the blank is not filled. The presumption that a note was completed before it was signed and not afterwards does not arise in a note written in several inks and by different hands. And the purchaser of a note with an unfilled blank is put on inquiry respecting the authority of a person entrusted with an incomplete note. Thus A signed blank forms of notes and left them with his attorney, but with no authority to complete and issue them until instructed. The attorney filled them up without further instructions and issued them to a person who knew they had been signed, that the attorney had a power of attorney to act for A, but did not attempt to read or otherwise ascertain its terms. A was not prevented from denying the validity of the notes. In another case a person who signed a number of notes in blank as to date, payee and amount, and left them in his desk in his office, whence they were stolen, filled in and indorsed to B for value before maturity and without notice of any defects, was nevertheless not liable on them. When therefore an incomplete instrument has not been delivered it cannot be completed and negotiated without authority, and if it is, it is not a valid contract in the hands of any holder as against the person whose signature was placed thereon before delivery.

Every contract on a negotiable note is incomplete and revocable until its delivery. As between the immediate parties, and also a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by the authority of the party making, drawing, accepting or indorsing as the case may be. The delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property of the note. But where the note is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him is conclusively presumed.

When the language of a note is ambiguous the following rules of construction are applied: (a) if there is a discrepancy between the words and figures in expressing the amount, the words control, if the words are ambiguous or uncertain, reference may be had to the figures to fix the amount; (b) if the note provides for paying interest without specifying the date from which it is to run, the interest runs from the date of the note, if this is undated, from the issue of it; (c) if not dated a note will be considered as dated from the time of issue; (d) if there is a conflict between the written and printed provisions, the former will prevail; (e) if it is doubtful whether the instrument is a bill or note, the holder may elect which it shall be; (f) it is not clear in what capacity the person making the note intended to sign he is to be deemed an indorser; (g) when a note containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon.

The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose, and the authority of the agent may be established as in other cases of agency. If, however, one signs as agent without disclosing his principal, he is personally liable. Thus, a husband signed a note in his own name without adding more. As he had disclosed no principal, he was personally bound, and his wife, for whom he claimed to have signed the note, was not liable. The maker of a note added to his signature, "Pastor of St. Frances' church." This was regarded as his personal note, all besides his name were words merely of description. A person signed a note thus: "Estate of William R. Clark by William R. Clark, Jr., Trustee." As he was not authorized to borrow on behalf of the trust and give a note as trustee, he was individually liable notwithstanding the form of the note.

Where the signature is forged or made without the authority of the person whose signature it purports to be it is wholly inoperative. Thus A cashed a number of drafts and checks payable to B's order on a forged indorsement of B's name by B's bookkeeper, who appropriated the money to his own use. Nevertheless, B recovered the amount of the drafts and checks from A, nor was his negligence in not examining the bookkeeper's books or accounts a good defense. In another case before a note was delivered to and accepted by the payee, A, whose name appeared on the back, was shown the note who said, "Everything is all right." Afterward he resisted payment on the ground of forgery. As the payee was induced to take the note on A's statement of its genuineness, he could not escape payment.

Every negotiable note is deemed to have been issued for a valuable consideration, and every person, whose signature appears thereon, to have become a party for the value. An accommodation party is one who has signed the note as maker, drawee, acceptor or indorser without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the note to a holder for value, though the latter knew he was only an accommodation party.

What is meant by negotiating a note? By transferring it in a way whereby the transferee becomes the holder or owner. If payable to bearer it is negotiated by delivery; if payable to order it is negotiated by indorsement and delivery. An indorsement may be either special or in blank; and it may also be either restrictive, or qualified, or conditional. A special indorsement specifies the person to whom, or to whose order the note is payable. An indorsement in blank specifies no indorsee, and a note thus indorsed is payable to bearer and may be negotiated by delivery. The holder may convert a blank indorsement into a special one by writing over the signature of the indorser in blank any contract consistent with the character of the indorsement. By a qualified indorsement the indorser becomes a mere assignor of the note, and is made so by adding to his signature the words "without recourse," or others of similar import. Such an indorsement does not impair the negotiable character of the note. When a note is payable to the order of two or more payees or indorsers who are not partners, all must indorse unless the one indorsing has authority to indorse for the others. Again, where a note is drawn or indorsed to a person as cashier or other fiscal officer of a bank or corporation of which he is the officer, it may be negotiated by either the indorsement of the bank or corporation or by the indorsement of the officer. And where the name of a payee or indorser is wrongly designated or misspelled he may indorse the note as therein described, adding, if he thinks fit, his proper signature. The holder may at any time strike out any indorsement which is not necessary to the title. When this is done, he and all subsequent indorsers are thereby relieved from liability on the note.

The holder of a negotiable note may sue thereon in his own name; and payment to him in due course discharges it. Who is a holder in due course? One who holds a note on the following conditions: (a) that it is complete and regular on its face; (b) that he became the holder before it was overdue and without notice that it had been dishonored; (c) that he took it in good faith and for value; (d) that at the time of its negotiation to him he had no notice of any infirmity in the note or defect in the title of the person negotiating it. A note therefore, providing that any delinquency in the payment of interest "shall cause the whole note to immediately become due and collectable" is made overdue by the maker's failure to pay the interest when due, and a subsequent taker cannot be a holder in due course.

To constitute notice of an infirmity in a note or defect in the title of the person negotiating it, the person to whom it is negotiated must have had such actual knowledge of the infirmity or defect that his action in taking the note amounted to bad faith, but merely suspicious circumstances are not enough to put a prudent man on inquiry.

On the other hand if the purchaser does suspect and fails to investigate, lest a defense be disclosed to the maker of the note, he is not a purchaser in good faith. The maker of a note engages that he will pay it according to its terms and admits the signature of the payee and his capacity to indorse, and engages that on due presentation the draft will be accepted or paid or both, according to its terms, and that if it is dishonored, and the needful proceedings in consequence are taken, he will pay the amount. A person placing his signature on a note otherwise than as maker, drawer or acceptor is deemed to be an indorser unless he clearly indicates his intention to be bound in some other way. The Negotiable Instruments Act fixes the liability of a person who is not a party to a note, and who indorses it before delivery. The law was in great confusion before this act established a definite rule. Such a person is now liable as indorser in accordance with the following rules: (a) if the note is payable to the order of a third person, he is liable to the payee and to all subsequent parties; (b) if payable to the order of the maker or drawer, or if payable to bearer he is liable to all parties subsequent to the maker or drawer; (c) if he signs for the accommodation of the payee he is liable to all parties subsequent to the payee.

Presentment for payment is not necessary in order to charge the person primarily liable on a note, but if it is payable at a mentioned place and he is able and willing to pay it there at maturity, such action is equivalent to a tender of payment on his part. Presentment for payment, of course, is needful to charge the drawee and indorsers. When the note is not payable on demand, presentment must be made on the day it falls due. When it is payable on demand, presentment must be made within a reasonable time after its issue. This rule does not apply to all bills of exchange. Thus unreasonable delay in presenting a check will discharge the indorser whether such delay is a cause of loss to him or not. Likewise a certificate of deposit payable on demand must be presented for payment within a reasonable time after its issue in order to hold the indorser. "The usage of trade or business includes the usage of banks relating to presentment of checks for payment. It is sufficient diligence to charge an indorser if a check on the bank in another place is forwarded through various banks for collection in accordance with the regular usage of the business, although presentment might have been more promptly made if a more direct course had been taken." Presentment for payment must be made by the holder or by some person authorized by him to receive payment, at a reasonable hour on a business day and at a defined place, and to the person primarily liable thereon. And if he is absent or inaccessible then to any person who is at the place where presentment is made. If a note is payable at a bank the payor has until the close of banking hours to pay it, and if, before the close of the bank day, he deposits money enough to pay it a demand earlier in the day is premature. Delay for presenting a note for payment is excused where the delay is caused by circumstances beyond the holder's control, and he is in no way negligent. Nor need presentment for payment be made when after using reasonable diligence it cannot be made, or where the drawee of a bill is a fictitious person, and lastly where presentment, express or implied, has been waived.

Every negotiable note is payable at the time fixed therein. When the day of maturity falls on Sunday or a holiday, the note is payable on the next succeeding business day. Notes falling due on Saturday are to be presented for payment on the next succeeding business day, except that notes payable on demand may, at the option of the holder, be presented for payment before twelve o'clock noon on Saturday when that entire day is not a holiday.

When the note is payable at a fixed period after the date, after sight, or after the happening of a specified event, the time of payment is determined by excluding the day from which the time is to begin to run, and includes the date of payment. And where a note is made payable at a bank it is equivalent to an order to the bank to pay it for the account of the principal debtor thereon. In accordance with the notation on the margin of a note the holder sent it for collection to a bank which held, as a special deposit, the maker's money. The cashier at maturity notified the maker who directed the cashier to pay the note. The cashier said "All right, your note is paid." The note was regarded as paid.

When a negotiable note has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged. A written notice need not be signed and an insufficient notice may be supplemented by verbal communication. Nor does misdescription of the note vitiate the notice unless the party to whom the notice is given is in fact misled thereby. The notice may be in writing or merely oral, and may be given in any terms which sufficiently identify the note and indicate that it has been dishonored by non-acceptance or non-payment. It may be delivered personally or through the mails. Where the parties to be notified are partners, notice to any one of them is notice to all even though there has been a dissolution. But notice to joint parties who are not partners must be given to each of them, unless one of them has authority to receive the notice for the others.

When the person giving, and the person who is to receive notice reside in the same place, it must be given within the following times: (a) if given at the place of business of the person who is to receive notice this must be done before the close of the business hours on the day; (b) if given at his residence it must be given before the usual hours of rest on the day following; (c) if sent by mail it must be deposited in the post office in time to reach him in usual course on the day following. If the parties reside in different places the notice must be sent within the following times: (a) if sent by mail it must be deposited in the post office in time to go by mail the day following the day of dishonor, or if there be no mail at a convenient hour on that day by the next mail thereafter; (b) if given otherwise than through the post office then within the time notice would have been received in due course of mail if it had been deposited in the post office had it been deposited in the post office as above described.

If a party had added an address to his signature the notice must be sent to that address, if he has not, then the notice must be sent as follows: (a) either to the post office nearest to his place of residence or to the post office where he is accustomed to receive his letters, or if he lives in one place and has his place of business in another, notice may be sent to either place, or if sojourning in another place, the notice may be sent there. In any event if he receives the notice within the time specified, it will satisfy the law.

Of course notice may be waived; sometimes, also, it is quite impossible to give notice; whenever this happens the law does not require notice to be given.

Something should be added concerning alterations that are made occasionally in negotiable instruments. Any alteration which changes the date, the sum payable either of principal or interest, the time or place of payment, the number or the relations of the parties, the medium or currency in which payment is to be made, or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect is a material one and ought not to be made. To add the words "with interest," with or without a fixed rate, is a material alteration. But the insertion by the payee of the words "interest" after the making of a note by authority of maker will not vitiate it. And if a note had the clause, "interest at __ per cent," the insertion of the legal rate would not be a material alteration since the legal import would not be changed.

The position of a writing on a note is not important, for the effect of the contract is to be gathered from the four corners of the paper. The general rule is, if a memorandum written on an instrument in the margin or at the foot is made before or at the time of its execution, it is considered a part thereof, and if it affects the operation of the terms of the body of the instrument it is a material part. It follows that words written by a party on the margin of an instrument after its execution and delivery, constitute an alteration if intended to affect the terms of the instrument and would have such effect if they were there when the instrument was executed.

A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed determinable future time a certain sum of money to order or bearer. A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for its payment, nor is the drawee liable on a bill until he accepts or agrees to pay it. An inland bill is one drawn and payable within a state. Any other is a foreign bill.

An indorsed promissory note and an accepted bill are very much the same thing, and that is why the law always treats of both together. The maker of a note incurs the same obligations as the acceptor of a bill, both are the parties primarily liable thereon, and the indorser of a note and the drawer of a note are both secondarily liable on proper notification of the failure of the primary parties to pay, as we have learned. The payees in both cases are the same. The acceptance of a bill is the signifying by the drawee that he has assented to the drawer's order, and must be in writing. An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who on the faith thereof receives the bill for value. The drawee is allowed twenty-four hours after presentment to decide whether or not he will accept the bill; but the acceptance, if given, dates from the day of presentation. Furthermore, an acceptance may be qualified as to time, acceptance of payment in part only and in other ways. When a foreign bill is not accepted it must be protested, which must specify the time and place of presentment, and other particulars, and is usually made by a notary public, though this can be done by other persons.

Parent and Child.—A parent is legally as well as morally bound to support his children who are incapable to care for themselves. Should a wife be divorced from her husband his duty to maintain the children would not fall on her, unless she also had the custody of them. A father's obligation to maintain his child continues until he is able to provide for himself. The legal obligation ceases by common law as soon as a child attains majority, however helpless he may be or great may be his father's wealth.

A child that has property of his own, while his father's means are not enough, may be supported from his own means. Even the principal may be used in this manner. Generally if the father has ample means, he must use them to educate his child. When the father can use the child's fortune and how much, is sometimes a difficult question to answer. The education of a child is now largely regulated by statute.

A parent may protect his child, even a homicide is justifiable. A parent can also correct his child. Says an excellent authority: "The rights of parents result from their duties. As they are bound to maintain and educate their children, the law has given them such authority, and, in support of that authority, a right to the exercise of such discipline as may be requisite to the discharge of the sacred trust." See Adopted Child; Husband and Wife.

Partnership.—There may be a partnership in a single transaction, for example, to buy and sell a load of potatoes. Persons may be liable as partners to others who had no intention of creating that relation. If A acts in such a way by speech or deeds as to create the belief in B that he is a partner, and thus believing B sells goods to the partnership, A is liable as a partner for them. On the other hand if B knew that A was not a partner, he could not hold him as one. In many cases it is difficult to determine whether one is a partner or not. Many tests have been applied. The most general is that of intention. Simply sharing in the profits and losses will not always suffice. This was long considered a proper test but it broke down after many applications. Thus, suppose a clerk is paid by giving him a fixed percentage of the profits as a compensation, is he a partner? He was so regarded on one occasion, and the firm having failed he was made liable for all its debts. That is one of the consequences attending the relation, every partner is liable for the entire indebtedness of the amount he may have contributed. The clerk contributed nothing, nevertheless he was liable like the others. Today the courts would decide such a case differently. It would inquire whether the partners intended to make him a partner, or only gave him a share of the profits as a mode of paying him for his service. The recent Partnership Act contains this test.

A partnership may usually hold any kind of property, real and personal, and not infrequently is formed to cultivate or deal in land.

A partner is a general agent. Hence the risk of creating the relation. Being a general agent he can bind his partnership for any acts within the scope of his authority. Yet there are limitations. If a partnership was engaged in selling dry goods, a partner could hardly bind his partners by making a contract with a person for a quantity of iron, unless it was needed in rebuilding the store, or in some other connection with the business. He can make and indorse negotiable paper that is used in connection with the business. Suppose he borrows money on his own note and he gives the money to his firm, is it responsible for the amount? This has proved a hard question for the courts. If the money though loaned on his note was for the benefit of the partnership, and it was known at the time that it was to be used in that way, the partnership would be liable; but if the money was to be used by the borrower and this was known and believed by the lender he could look only to the borrower for payment.

The receiving of a new member constitutes a new partnership. It may reorganize the old partnership and become responsible for its debts, or it may not. Unless recognized in some way by paying interest on them and the like, the new member does not become responsible for them.

A partnership is formed usually by a definite agreement that is put in writing. Yet it may be simply an oral agreement with very general terms about the contribution of capital or skill of the respective partners and their division of profits. They may and usually do have distinct fields of employment, each doing the thing for which he is, or supposed to be, best prepared. By reason of their general liability, in the olden days persons who wished to thus engage and yet not be responsible, were kept in the background, and were known as secret and dormant partners. If found out they were liable because they were to share in the profits. The fact that they were unknown when credit was given to the partnership at the time of selling goods to the concern did not shield them from liability after the discovery of their relation.

The difficulty has since been removed in two ways, by incorporating the partners into a corporation whose powers and liabilities are fixed by law and therefore known to all, and by forming limited liability partnerships. These consist of two or more general partners, also special partners who contribute an amount of capital, of which the public is publicly informed. If such an association is unsuccessful, the special partners may indeed lose all, or a part of the capital they have contributed, but are liable for no more. This is a great improvement over the secret and dormant methods of getting the capital needed for partnership purposes. One of the matters that should be carefully guarded in forming a limited liability partnership is to contribute the full amount of capital advertised. If any deception is practiced, or mistake made, whereby a smaller amount is contributed, should the partnership not succeed, the special partners become liable as general partners for the full amount. Once such a partnership was formed with three special partners who contributed each $100,000, and at the end of two years were told that their profits individually were $60,000. Each was asked to contribute $100,000 more, and feeling happy over his venture, he put in $40,000 more, which, added to his profits, made up the required amount. When the concern failed a few years afterwards the books showed that neither special partner was ever entitled to $60,000 as profits. Though innocent, for they had never examined the books, they were held as general partners for the entire indebtedness of the concern.

An illegal contract made by a partner will not bind his partnership, for all parties are supposed to know the law, and an illegal bargain cannot be enforced, for example, an agreement to pay usurious interest.

How may a partnership be dissolved? Unless the time is fixed by agreement, it may be dissolved by any member whenever he pleases to do so, though he cannot act wantonly to the manifest injury of the others without making himself responsible for their loss. And if a partner should attempt to transfer his interest before the time fixed for ending the relation without good reason, to the manifest injury of the other partners, he can be legally restrained from taking such action.

The death of a partner causes a dissolution. Nor can executors or administrators succeed to his place, though they often do so for a short period to prevent the interruption of the business and to enable all parties to fare better than they would by its sudden ending. Yet it is awkward for these officials to thus act, and in so doing they incur an unpleasant personal responsibility. To relieve them from this some states have passed statutes permitting them to thus act with the other partners under the direction and orders of the court having charge of the estate.

A partner who retires should give notice of his retirement to relieve himself from future liability. For, should he neglect, and persons continued to sell on credit to the firm, supposing he was a member, he would be liable as before. The statutes in some states regulate his duty in this regard; it is one that he cannot safely omit.

Should a partnership fail, the general rule with respect to the assets is the partnership property must be used to pay partnership debts, and the individual property of partners to pay their individual debts. If a partner has anything left after paying his individual debts, it must be devoted to paying the partnership debts. If the partnership has anything left after paying its debts, this belongs to the partners in accordance with their agreement in contributing it and the earnings, and must be devoted to the payment of their individual debts.

Lastly concerning the authority of a liquidating partner. He can do many things, give renewal notes, make indorsements, collect debts due the partnership, and even revive an outlawed debt. Of course the affairs of a partnership may be settled by some other person than a partner; not infrequently a receiver is appointed who acts under the order of the court that appointed him.

An agreement between a liquidating partner and the other partners, to take all the property and pay all the debts, is limited in its effect to themselves and does not affect others. After the partnership assets have been transferred to a liquidating partner, or to any other person for liquidation, a debtor who has notice of the transfer is not justified in making a settlement with any one else. And if he should do so, the liquidator could require him to pay again to himself.

Patent.—In the United States the thing patentable is a new and useful art, machine, manufacture or composition of matter, or new and useful improvement thereof, or new, original and ornamental design for an article of manufacture. An idea, principle or law of nature is not patentable, but only the means for utilizing the idea or principle. Many a great discovery has slipped away from the inventor or discoverer, because he sought to hold the discovery or invention of the principle as his own, instead of limiting his claim to the means or methods of putting his principle into use. Morse's invention of telegraphy is one of them. An art or process is patentable as well as machinery, though the inventor may not know the abstract principles involved in his art. But he must know and describe the steps by which the result is accomplished. A composition of matter is a mechanical mixture or chemical combination of two or more substances; and an improvement is an addition to, or change in, a known art, machine, manufacture or composition of matter, which produces a useful result and is patentable if it amounts to invention. Lastly "a patentable design may consist of a new and ornamental shape given to an article of manufacture, or of an ornamentation to be placed upon an article of old shape." It is said that the law relating to this subject intends that the patentability of a design shall be determined by its appeal to the eyes of the ordinary man, and not to the eyes of a jury of artists. Design patents are granted for different periods, three years and a half, seven years and fourteen years, as the applicant may elect.

The subject matter of a patent must be new and useful. It must be new not only to the patentee, but to all the people in this country, and at the time he filed his invention. The federal law, however, secures a patentee who had no knowledge that his invention had been discovered abroad and which had not been patented there, nor described in a printed publication. Before the enactment of this law a patent was not granted without showing that the applicant was the original inventor with relation to every part of the world.

Much has been said concerning the novelty of an invention. This may be in the use of an old means in a new way; or a change of shape or form to produce new functions and results, but the changes must amount to invention, which is more than mere novelty.

A foreign patent in order to invalidate an American patent must antedate the invention patented. A foreign patent exists as a patent only as of the date when the invention was published. In England an invention is not patented within the meaning of the act of Congress until the enrollment of the complete specification.

What is meant by a prior publication? It is a printed book, newspaper or document of a public nature disclosing the invention intended and actually employed for the purpose of informing the public. Publication in a book of general circulation is sufficient; business catalogues or circulars are not such publications as are meant in the law.

To defeat a patent on the ground of want of novelty the proof of prior use or knowledge must be convincing, sufficient to establish the fact beyond a reasonable doubt. The recollection of one witness concerning the peculiar construction of a piece of machinery, especially if the structure is one of complex character, is not enough evidence to defeat a patent. Much less evidence, however, might be sufficient to prove that a very simple invention had been anticipated.

To justify the granting of a patent it must be useful. If the invention be frivolous or pernicious, the inventor cannot secure for it legal protection. The use of the invention must not be contrary to public health or morals. It is not needful that the invention should be the best of its kind, or that it should accomplish all that the inventor claims for it. Furthermore, its utility depends on the state of the art at the time of making the claim or issuing the patent; its subsequent inutility does not invalidate the patent. Extensive use is evidence of utility. The presumption of law favors a patent, and the burden of proof is on the one attacking it to show that it is not useful. The infringement of an invention is in effect an admission of utility, because use implies utility.

A patent also calls for the exercise of inventive power. Though invention must be seen in every patent, it is difficult to define. Says a former commissioner of patents, Justice Duell: "It is a matter resting in judgment and therefore no fixed rule for its determination is possible." Some principles, however, assist in defining the term. "Thus, it is declared that an act of invention is primarily mental and involves the conception or mental construction of a means not previously known for accomplishing a useful result. It is not the mere adaptation of old means by common reasoning, but is the construction of new means through an exercise of the creative faculties of the mind." Between invention and discovery the patent laws draw no distinction. Again, it has been often said that the design of the patent laws is to reward those who make a substantial invention or discovery, which is an additional step in the useful arts. The law never intended to grant a monopoly for every trifling device which would naturally occur to a skilled mechanic in the ordinary progress of manufacture.

An article of manufacture is not patentable because means have been devised to make it more perfectly than before; it must be new in itself and not merely in its workmanship. A machine-made article therefore is not patentable simply because it is thus made, and no longer by hand.

The substitution of an art, manufacture, or composition of matter of one element or device for another which does the same thing in the same way and accomplishes a similar result is not invention. Even if the substituted part performs the function better, there is no patentable invention unless some new function or result is secured. Changes therefore of the relative location of parts without changing the functions performed by them are not an invention, nor is the omission of a part with a corresponding omission of function.

A patent can issue only to the inventor, or if he is dead to his executor or administrator. If there be two original inventors the one who first made it or brought it to this country is entitled to a patent. A patent granted on the application of a non-inventor is void. By first inventor is meant the one who first had a mental conception of the invention provided he exercised diligence in perfecting it. If there be a rival claimant the party who first reduced to practice the invention was, until the contrary fact is shown, the first inventor. One who merely utilizes the ideas of others is not an original inventor and is not entitled to a patent. In the United States any person, regardless of residence, citizenship or age may obtain a patent.

An invention is reduced to practice when it is so far perfected that it may be put into practical and successful use. The machine may not be perfectly constructed, but it embodies all the essential elements of the invention. Demonstration of its success by actual use is usually necessary, but not always. The reduction to practice must be by the applicant for a patent, or by his agent; to do this by a third party will not suffice. The person who first conceived the invention, but was later than his rival in reducing it to practice, is not regarded as the first inventor unless he exercised due diligence to perfect his invention after the time that his rival entered the field against him.

Two or more parties may contribute in developing an idea and producing an invention, which is truly the result of their joint mental efforts, and not the separate invention of either. In such case both must apply for the patent, which is granted to them jointly. But if a patent is thus issued to two and only one of them is the inventor, the patent is invalid. Nor can one of two joint inventors make application and secure the patent on assignment from the other; both must join.

The patent must issue on the application of and in the name of the real inventor even though he was employed to make it for the benefit of another. Notwithstanding, the employer is the owner of the patent and may compel the patentee to transfer it to him. Of course their respective rights may be changed by agreement. If no agreement exists, a company that employs a skilled workman to make improvements on its machinery is not entitled to the patents granted to the workman. Says Justice Duell: "An employee, performing all the duties assigned to him in his department of service, may exercise his inventive faculties in any direction he chooses with the assurance that whatever invention he may thus conceive and perfect is his individual property. The company, however, has an implied license to make, use and sell the invention."