Studies in Civics
by
James T. McCleary
Part 5 out of 8
ARTICLE VI.
RIGHTS OF ACCUSED PERSONS.
_In all criminal prosecutions the accused shall enjoy the right to a
speedy[1] and public[2] trial by an impartial jury[3] of the state and
district wherein the crime shall have been committed, which district shall
have been previously ascertained by law,[4] and to be informed of the
nature and cause of the accusation;[5] to be confronted with the witnesses
against him;[6] to have compulsory process for obtaining witnesses in his
favor;[7] and to have the assistance of counsel for his defense.[8]_
The importance of this provision is likely to be underestimated. Says
Montesquieu, "Liberty consists in security. This security is never more
attacked than in public and private accusations. It is, therefore, upon
the excellence of the criminal laws that chiefly the liberty of the
citizen depends." And Lieber, in his very able work on Civil Liberty and
Self-Government, says, "A sound penal trial is invariably one of the last
fruits of political civilization, partly because it is one of the most
difficult of subjects to elaborate, and because it requires long
experience to find the proper mean between a due protection of the
indicted person and an equally due protection of society.... It is one of
the most difficult things in all spheres of action to induce irritated
power to limit itself."
Besides the guarantees of the constitution, Lieber mentions the following
as characteristic of a sound penal trial: the person to be tried must be
present (and, of course, living); every man must be held innocent until
proved otherwise; the indictment must be definite, and the prisoner must
be allowed reasonable time to prepare his defense; the trial must be oral;
there must be well-considered law of evidence, which must exclude hearsay
evidence; the judge must refrain from cross-examining witnesses; the
verdict must be upon the evidence alone, and it must be _guilty_ or _not
guilty;_ [Footnote: In some countries the verdict may leave a stigma upon
an accused person, against whom guilt cannot be proven. Of this nature was
the old verdict, "_not proven._"] the punishment must be in proportion to
the offense, and in accordance with common sense and justice; and there
must be no injudicious pardoning power, which is a direct interference
with the true government of law.
Most, if not all but the last, of the points mentioned by Dr. Lieber are
covered by that rich inheritance which we have from England, that
unwritten constitution, the common law. The question of how best to
regulate the pardoning power is still unsettled.
[1] He may have his trial at the next term of court, which is never very
remote. But the accused may, at his own request, have his trial postponed.
[2] Publicity is secured by the keeping of official records to which all
may have access, by having an oral trial, by the admission of spectators
to the court room, and by publication of the proceedings in the
newspapers.
[3] For the mode of securing the "impartial jury," see page 63.
[4] It is provided in the body of the constitution (III., 2, 3,) that
criminal trial shall be by jury, and in the state where the crime was
committed. This amendment makes the further limitation that the trial
shall be in the _district_ where the crime was committed, so a person
accused of crime cannot be put to the trouble and expense of transporting
witnesses a great distance.
[5] The nature of the accusation is specified in the _warrant_ and in the
indictment, both of which, or certified copies of them, the accused has a
right to see.
[6] Not only do the witnesses give their evidence in the presence of the
accused, but he has also the right to cross-examine them.
[7] But for this "compulsory process" (_called a subpoena_), persons
entirely guiltless might be unable to produce evidence in their own
behalf. The natural desire of people to "keep out of trouble" would keep
some knowing the circumstances of the case from giving their testimony,
and others would be afraid to speak up for one under a cloud and with all
the power of the government arrayed against him.
[8] The accused may plead his own cause, or he may engage a lawyer to do
it for him. If he is too poor to employ counsel, the judge appoints a
lawyer to defend him, whose services are paid for out of the public
treasury.
From the foregoing, it will be seen that great care is exercised to give a
person accused of crime full opportunity to defend himself. And it must be
remembered in this connection that it is a principle of our jurisprudence
that _the burden of proof lies upon the government_. That is, the accused
is to be deemed innocent until he is _proved_ guilty. We prefer that a
number of guilty persons should escape punishment rather than that one
innocent person should suffer.
ARTICLE VII.
JURY TRIAL IN COMMON LAW SUITS.
_In suits at common law,[1] where the amount in controversy shall exceed
twenty dollars, the right of trial by jury shall be preserved; and no fact
tried by a jury shall be otherwise re-examined in any court of the United
States, than according to the rules of common law.[2]_
[1] The meaning of this expression is difficult of explanation, but it
covers most ordinary lawsuits. From the fact that a jury in criminal cases
has already been guaranteed (III., 2, 3, and Am. VI.), it may be assumed
that this provision is intended to cover civil suits.
[2] Among the "rules of common law" are these: 1. All suits are tried
before a judge and a jury, the jury determining the _facts_ in the case
and the judge applying the _law_. 2. The facts tried by a jury can be
re-examined only by means of a new trial before the same court or one of
the same jurisdiction.
The purpose of this provision is to preserve the jury trial as a real
defense against governmental oppression. In the Supreme Court there is no
jury; the trials are by the court. If questions of _fact_ could be
reviewed or re-examined by such a court on appeal the protection now given
by the jury would be nullified.
ARTICLE VIII.
EXCESSIVE BAILS, FINES AND PUNISHMENTS FORBIDDEN.
_Excessive bail shall not he required, nor excessive fines imposed, nor
cruel and unusual punishments inflicted._
Having enjoyed the protection of this and similar provisions for so many
years, we can hardly appreciate their value. It must be borne in mind that
those who "ordained and established" the constitution had been abused in
just these ways, and that in this provision they provided against a real
danger.
ARTICLE IX.
UNSPECIFIED PERSONAL RIGHTS PRESERVED.
_The enumeration in the constitution of certain rights shall not be
construed to deny or disparage others retained by the people._
Certain rights which governments are prone to trample on have been
mentioned in the preceding provisions. But not all of the personal rights
could be enumerated. Hence this provision covering those unnamed.
ARTICLE X.
THE UNITED STATES GOVERNMENT ONE OF LIMITED POWERS.
_The powers not delegated to the United States by the constitution, nor
prohibited by it to the states, are reserved to the states respectively,
or to the people._
This provision gives a rule for interpreting the constitution. "It is
important as a security against two opposite tendencies of opinion, each
of which is equally subversive of the true import of the constitution. The
one is to _imply_ all powers, which may be useful to the national
government, which are not _expressly prohibited;_ and the other is, to
_deny_ all powers to the national government which are not _expressly
granted_." [Footnote: Story] The United States is "a government of limited
powers," and has only such implied powers as are necessary to carry out
the express powers. On the other hand, a state has all powers not denied
to it by the state or federal constitutions.
_Pertinent Questions._
What is the general purpose of the first ten amendments? Do they restrict
the general government or the state governments, or both? When and how
were these amendments proposed? When and how ratified? What three
limitations to the power of amendment does the constitution contain?
Is there any "established" or state church in the United States? How do
you suppose that this came about? Are we as a people indifferent to
religion? Can a person say what he pleases? Can he publish whatever
opinions he pleases? What is _slander?_ _Libel?_ Why should these last two
questions be asked here? Petition whom? What's the good of petitioning?
What petitions did you learn about at the beginning of this study? Can
soldiers in the regular army petition? Why? Has the "right of petition"
ever been denied in this country?
Wherein is a standing army dangerous to liberty? Is this true of the navy?
How is a "well-regulated militia" a check upon usurpation of authority?
Does Amendment II. authorize you to keep a revolver? To carry it in your
pocket? How often is the army mentioned in the Declaration of
Independence, and what is said?
What are the objections to "quartering" soldiers in a private house? Does
the amendment protect tenants? Why the exception in the amendment? What
mention of quartering soldiers in the Declaration of Independence?
Get and read a warrant of arrest. A search warrant. Has a warrant always
been needed as authority for arrest? Are arbitrary arrests, searches and
seizures permitted in any civilized countries today?
What is a capital crime? An infamous crime? A presentment? An indictment?
A grand jury? How do the proceedings of a grand jury compare with those of
a petit jury? Why the differences? Why the exception in the first clause
of the amendment? Can a convicted and sentenced person ask for a new
trial? Under what other circumstances can persons be tried again? In what
connections have you heard of private property being taken for public use.
Taking each guarantee in the sixth amendment, show the wrongs which an
accused person, presumably innocent, would suffer if the provision were
not recognized or that guarantee removed.
Find out all you can about _common law_. What is meant by a _civil_ suit
as distinguished from a _criminal_ suit? What is meant by a case in
_equity?_ When an appeal is taken what is subject to re-examination? What
is not? Why?
What conditions determine the just amount of bail? Of fines? What cruel
punishments have you heard or read of as being administered by public
authority? When and where were such punishments not "unusual"? Was the
eighth amendment necessary? What limit is there to things which "The
People" may do? To the powers of the United States government? To those of
a State government?
Find the history behind each provision in the ten amendments. From what
country did we obtain the notions that the rights here preserved belong to
freemen? From under what other country could the Colonies have come ready
to be the United States as we love it, or from what other country could we
have inherited such notions?
Since these ten amendments are intended for the protection of individuals
against governmental oppression, it will be an excellent scheme now for
the student to arrange in the form of a tabulation the various directions
in which such protection is guaranteed by the constitution as amended. The
following is simply suggestive:
I. From Legislative Oppression.--1. Thought; 2. Expression; 3. Bills of
Attainder; 4. _Ex post facto_ laws; 5. Social distinctions; 6. Assembly;
7. Petition.
II. From Executive Oppression.-1. Military; 2. Searches and seizures; 3.
Life, Liberty, or Property; 4. Suspension of _Habeas Corpus_.
III. From Judicial Oppression.-1. Before trial: arrest, bail, information
as to accusation, time of trial; 2. During trial: publicity, jury,
evidence, counsel, punishment; 3. After trial: retrial; 4. Treason.
IV. From State oppression.
ARTICLE XI.
LIMITING THE JURISDICTION of UNITED STATES COURTS.
_The judicial power of the United States shall not be construed to extend
to any suit in law or equity,[1] commenced or prosecuted against one of
the United States[2] by citizens of another state, or by citizens or
subjects of any foreign state.[3]_
[1] Equity is hard to define. According to Aristotle it is "the
rectification of the law, when, by reason of its universality, it is
deficient." Blackstone says, "Equity, in its true and genuine meaning, is
the soul and spirit of all law.... Equity is synonymous with justice." It
is the province of law to establish a code of rules whereby injustice may
be prevented, and it may therefore be said that all law is equitable. "In
a technical sense, the term equity is applied to those cases not
specifically provided for by positive law." (See page 208; also Dole's
Talk's About Law, page 502.)
[2] According to III. 2, a state could be sued for a debt the same as an
individual, and shortly after the adoption of the constitution several of
them were sued for debts incurred during the Revolutionary War. Pride and
poverty both prompted the states to desire immunity from such suits. Hence
the adoption of this amendment. (See page 209.)
[3] A non-resident secures the payment of a debt due from a state in the
same way as a resident--by legislative appropriation.
ARTICLE XII.
MODE OF CHOOSING THE PRESIDENT AND VICE-PRESIDENT.
The amendment has been discussed in connection with Article II. of the
constitution, pages 184-6.
ARTICLE XIII.
ABOLITION OF SLAVERY.
_1. Neither slavery nor involuntary servitude, except as a punishment for
crime, whereof the party shall have been duly convicted, shall exist
within the United States, or any place subject to their jurisdiction._
_2. Congress shall have power to enforce this article by appropriate
legislation._
This amendment, one of the "first fruits" of the Civil War, put an end to
slavery in the United States. The wording was taken, almost verbatim, from
the Ordinance of 1787.
ARTICLE XIV.
MISCELLANEOUS RECONSTRUCTION PROVISIONS.
SECTION I.--"CITIZEN" DEFINED. PRIVILEGES GUARANTEED.
_All persons born or naturalized in the United States, and subject to the
jurisdiction thereof, are citizens of the United States and of the state
wherein they reside.[1] No state shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United States; nor
shall deprive any person of life, liberty or property, without due process
of law, nor deny to any person within its jurisdiction the equal
protection of the laws.[2]_
[1] This provision defines citizenship. It was worded with the special
view of including the negroes. It embodies the principle of the Civil
Rights Bill, and is intended to guarantee to the negroes the protection
implied in citizenship.
[2] Some of the amendments impose limitations only on the general
government. Lest the states in which slavery had recently been abolished
should endeavor to oppress the ex-slaves this provision was made as a
limitation upon the states.
But this provision is general in it nature, and by means of it the United
States can protect individuals against oppression on the part of the
states. Pomeroy [Footnote: Constitutional Law, p. 151.] regards this as
the most important amendment except the thirteenth.
SECTION II.--BASIS of REPRESENTATION.
_Representatives shall be apportioned among the several states according
to their respective numbers, counting the whole number of persons in each
state, excluding Indians not taxed. But when the right to vote at any
election for the choice of electors for president and vice-president of
the United States, representatives in congress, the executive and judicial
officers of a state, or the members of the legislature thereof, is denied
to any of the male inhabitants of such state, being twenty-one years of
age, and citizens of the United States, or in any way abridged, except for
participation in rebellion or other crime, the basis of representation
therein shall be reduced in the proportion which the number of such male
citizens shall bear to the whole number of male citizens twenty-one years
of age in such state._
Each state determines who may vote within its borders. This provision was
intended as an _inducement_ to the former slave states to grant franchise
to the colored men. It does not _compel_ them to do this. But granting the
franchise increases their representation. The fifteenth amendment is more
_imperative_ in this direction.
SECTION III.--DISABILITIES of REBELS.
_No person shall be a senator or representative in congress, or elector of
president or vice-president, or hold any office, civil or military, under
the United States, or under any state, who, having previously taken an
oath, as a member of congress, or as an officer of the United States, or
as a member of any state legislature, or as an executive or judicial
officer of any state, to support the constitution of the United States,
shall have engaged in insurrection or rebellion against the same, or given
aid or comfort to the enemies thereof.[1] But congress may, by a
two-thirds vote of each house, remove such disability.[2]_
[1] The primary purpose of this provision was to exclude from public
office those who in the Civil War, by entering the service of the
Confederate States, broke an oath previously taken. Though the persons
whom it was immediately intended to affect will soon all be "with the
silent majority," the provision, by being made part of the constitution,
will remain a warning to all in the future.
[2] The disabilities have been removed from all but a few of those
immediately referred to. This clause seems to put another limitation upon
the power of the president to grant pardons. From 1862 to 1867 the
president had been specially authorized by congress to grant amnesty to
political offenders. And in 1867 President Johnson continued to grant such
amnesty, denying the power of congress to put any limitation upon the
president's pardoning power. But this provision specifically places the
power to relieve certain disabilities in the hands of congress. The
"two-thirds" vote is required in order that such disabilities may not be
easily removed.
SECTION IV.--PUBLIC DEBT.
_The validity of the public debt of the United States, authorized by law,
including debts incurred for the payment of pensions, and bounties for
services in suppressing insurrection or rebellion, shall not be
questioned. But neither the United States nor any state shall assume or
pay any debt or obligation incurred in aid of insurrection or rebellion
against the United States, or any claim for the loss or emancipation of
any slave, but all such debts, obligations and claims shall be held
illegal and void._
_Congress shall have power to enforce, by appropriate legislation, the
provisions of this article._
This section needs little comment. It means simply that any expense
incurred on the part of government in suppressing rebellion _shall be
paid_; and that debts incurred in aid of rebellion _shall not be paid_. It
applies not only to the late Civil War but to all future wars of the same
kind.
ARTICLE XV.
SUFFRAGE.
_The right of citizens of the United States to vote shall not be denied or
abridged by the United States, or by any state, on account of race, color,
or previous condition of servitude._
_Congress shall have power to enforce this article by appropriate
legislation._
This amendment was intended to put negroes upon the same footing as white
people in the matter of suffrage.
Each state, as has previously been stated, prescribes the qualifications
of voters within its borders. It may require that they be fifteen or
twenty-five or twenty-one or any other number of years old; it may or may
not require a property qualification; it may or may not require an
educational qualification; it may include or exclude women as voters; it
may draw the line at imbeciles and felons, but it cannot draw the color
line. A black citizen must be permitted to vote upon the same conditions
as a white one.
_Pertinent Questions._
What is meant by a state "repudiating" a debt? What states have done so?
What reason did each assign for doing so? Can a city repudiate? A county?
Were amendments XIII., XIV., and XV. constitutionally adopted? [Footnote:
See Wright, 284; Andrews, 272; and Pomeroy, 76.]
How was slavery abolished in each of the states? [Footnote: See page 343.]
What does the emancipation proclamation say about slavery? Can slavery
exist in Alaska? Why?
Are you a citizen of the United States? How may an alien become a citizen?
May a person be a citizen of the United States without being a citizen of
any state? A citizen of a state without being a citizen of the United
States? [Footnote: See Wright, 287.] How does a citizen of the United
States become a citizen of a certain state? What are some of the
"privileges and immunities" of a citizen of the United States? [Footnote:
See Wright, 287.] Can a Chinaman become a citizen? An Indian? Does this
section give women the right to vote?
What provision of the constitution is amended by the second clause of the
fourteenth amendment? What change is made? How often does the "counting"
take place? What is it called? When will the next one occur? Has the
penalty mentioned in the second clause ever been inflicted?
Name persons affected by the third clause of the fourteenth amendment.
Name persons from whom the disabilities have been removed. How were they
removed? Name persons against whom the disabilities still lie. May they
vote? What provision of the original constitution is affected by the last
sentence of this clause, and how is it modified?
How much money was expended in suppressing the rebellion? How was it
raised? How much debt has been paid? How much remains unpaid? Did you ever
see a United States bond or note? How much is a confederate bond for $1000
worth? Why? Have any emancipated slaves been paid for by the government?
What is the necessity of the clause commencing, "The congress shall have
power?"
What is secured to negroes by the thirteenth amendment? By the fourteenth?
By the fifteenth? Name persons who are citizens but cannot vote. Name
three eminent colored men.
What clause could be omitted from the constitution without affecting it?
PART IV.
GOVERNMENT IN GENERAL.
CHAPTER XXX.
FORMS OF GOVERNMENT.
Classification.--Aristotle divided governments into three chief classes,
based upon the number of persons constituting the governing element, as
follows: government by _one_, monarchy; by the _few_, oligarchy; by the
_many_, democracy.
Subdivisions of these classes may be made as follows.
1. By _one_, monarchy; hereditary or elective; absolute or limited.
2. By the _few_, oligarchy or aristocracy.
3. By the _many_, democracy or republic.
Definitions and examples.--A hereditary monarchy is one in which the
succession is acquired by birth, the usual order being from father to
eldest son; examples, England, Prussia, etc.
An elective monarchy is one in which the succession is by election; the
term for life; example, the old German empire, in which the emperor was
chosen by certain princes called "electors." [Footnote: Our mode of
electing a president may have been suggested in part by this old
practice.]
An absolute monarchy is one in which the three functions of government as
related to law--the legislative, executive and judicial--are all vested in
one person; examples, Russia and Turkey in Europe, and most of the
countries of Asia and Africa.
A limited monarchy is one in which the sovereign's power is confined
chiefly to executing the laws framed and interpreted by other departments;
examples, England, and most of the other countries of Europe.
An oligarchy is that form of government in which the supreme power is
vested in the hands of a few (_oligos_, few); example, the triumvirates of
Rome.
An aristocracy is really a government by the best (_aristos_, the select,
the best). This is the sense in which the word was first used. It has come
to mean government by a privileged class. Aristocracy seldom, if ever,
exists alone.
A democracy is that form of government in which the functions are
administered directly by the people, only the clerical or ministerial work
being done by officers, and they appointed by the people; examples, the
old German tribes, some of the states of ancient Greece, some of the
present cantons of Switzerland, the early settlements of New England, and
in a limited sense our own school districts and towns.
A republic is a representative democracy. A democracy is practicable only
within a very limited area. When the area grows large the people must
delegate much of work of government to representatives. Examples, the
United States, each state in the Union, Switzerland, and most of the
countries of America.
The Origin of Each Typical Form.--Monarchy and oligarchy both probably owe
their existence to war. The successful chieftain or leader in war became
the king, and his retainers or followers became the privileged classes.
Those who were subdued either became slaves or were simply "the common
people." Democracy had its beginnings, and flourishes best, in times of
peace. The people, though they had to fight again and again to secure
recognition, have really won their right to it by the arts of peace.
The Criteria of Good Government.--Among the tests by which the goodness or
badness of a government, or form of government, may be determined, are the
following:
1. A good government is _stable_. Stability is the foundation of
worthiness of character in governments as well as in persons. The basis of
progress is permanence--one cannot grow wise, or rich, or strong, unless
he can preserve at least a part of what he gains. "Conduciveness to
progress includes the whole excellence of government." [Footnote: Mills
Representative Government.]
2. A good government _tends to increase the sum of good qualities in the
governed_. Strength comes from exercise. Therefore a government is
excellent in proportion as it works up to the possibilities of a people
for self-government and fits them to go on advancing in intellectual and
moral power.
3. A good government _has proper machinery_. This should be "adapted to
take advantage of the amount of good qualities which may at any time
exist, and make them instrumental to right purposes." [Footnote: Mills
Representative Government.]
"Representative Government the Ideally Best Polity."--Every student who
has access to Mills' Representative Government should read the chapter
with the heading at the beginning of this paragraph. He combats the
proposition, "if a good despot could be insured, despotic monarchy would
be the best form of government." Granting that much good might be done, he
shows that the very passivity of the people must result in deterioration,
"that is, if the nation had ever attained anything to decline from." On
the other hand, he shows that participation in public affairs gives a
mental and moral training otherwise unattainable. After showing the nature
of the mental development acquired, he says: "Still more salutary is the
moral part of the instruction afforded by the participation of the private
citizen, if even rarely, in public functions. He is called upon, while so
engaged, to weigh interests not his own; to be guided, in case of
conflicting claims by another rule than his private partialities; to
apply, at every turn, principles and maxims which have for their reason of
existence the general good; and he usually finds associated with him in
the same work minds more familiarized than his own with these ideas and
operations, whose study it will be to supply reasons to his understanding,
and stimulation to his feeling for the general good. He is made to feel
himself one of the public, and whatever is their interest to be his
interest. Where this school of public spirit does not exist ... a
neighbor, not being an ally or an associate, since he is never engaged in
any common undertaking for the joint benefit, is therefore only a rival."
Dangers in Each Form of Government.--While each of the typical forms has
merits of its own,--the monarchy having stability, the aristocracy
securing the benefit of inherited good qualities, and democracy the
advantages referred to in the preceding paragraph--there is danger in each
form. Monarchy continually tends toward that inconsiderate exercise of
power which we call tyranny. Aristocracy tends toward oligarchy;
government by the _best_ is prone to decline into government by the _few_
without regard to qualification. And democracy is in danger of
degenerating into mob rule.
Every Government Aims to be Aristocratic.--That is, each government in
theory seeks to have those rule who are best fitted to manage public
affairs. This is the thought, for instance, in our requiring certain
qualifications in voters and office-holders.
Our Own Government.--We fondly believe that our own government combines to
a high degree the excellencies of all the forms.
Our hope for stability lies chiefly in the fact that our corner stone is
eternal justice, the equality of all men before the law. Even the severe
shock of civil war has been endured, and our system is more strongly
intrenched in the confidence of the world than ever before.
We believe in the potency of good blood and good training. But the worth
of each individual must be _shown_, it will not be taken for granted. We
will neither lift him up because he is "his father's son," nor cast him
down because his father was unworthy.
Situated as we are, with no powerful rivals near us, with the ocean
between us and the countries of Europe, the common defense requires no
great standing army to eat up our substance and to menace our liberties.
Living in the north temperate zone, the belt of highest civilization, in a
country capable of producing almost everything desirable, there is every
reason to believe that, if we are true to ourselves and our opportunities,
we may long enjoy prosperity and peace.
_Debate_.
Resolved, That universal suffrage is dangerous to the well being of
society.
PART V.
COMMERCIAL LAW.
RESPONSIBILITY.
_Ignorance of the law is no excuse._
At first sight this would seem unjust, since no one but a lawyer can be
expected to have much legal knowledge. But as law is simply common sense
applied, the exercise of ordinary judgment is usually sufficient to enable
a person to act safely.
To present a few of the more common principles of commercial law, is the
purpose of the following pages.
CHAPTER XXXI.
CONTRACTS.
Definitions.--A contract is an agreement between two or more parties,
containing on the one hand an _offer_ and on the other an _acceptance_.
Contracts are _express_ or _implied_. An express contract is one whose
terms are definitely stated in words; an implied contract is one whose
terms are understood from the circumstances. A written contract is express;
an oral contract may be express or implied.
Fundamental Principles.--Every one able to contract is free to enter into
any agreement not forbidden by law. Every such person is bound to fulfill
every legal contract that he makes.
Essential to a Contract.--To be binding, however:
_1. A contract must be to do a lawful act._
Most contracts are permitted by law. But a contract the carrying out of
which is recognized as subversive of justice, morality, or the general
welfare, is illegal, and therefore void.
_2. The thing contracted to be done must be possible in its nature._
That a person finds it impossible _under the circumstances_ to live up to
his contract should not and does not release him from responsibility.
_3. The parties to the agreement must be competent to contract._
Persons not able to contract are minors, lunatics, idiots and drunk
people, and married women (except in some states in relation to their
separate estates). The purpose of this arrangement is to protect those who
cannot protect themselves. A minor may, however, enforce a contract if he
chooses to do so. A contract with a minor for the necessaries of life,
when they are not or cannot be furnished by a parent or guardian, is
valid. And any contract ratified by a minor after coming of age is binding
upon him. A person unable to contract personally cannot contract through
an agent. But he may act as an agent.
_4. The parties to the contract must assent to it._
The assent must be voluntary. It may be given by words, by acts, or by
accepting the benefits of the offer. If acceptance is by letter, the
contract is complete when the letter of acceptance is mailed. The parties
must assent to the same thing. Assent imposing a new condition is no
assent.
_5. The promise must be for a consideration._
The law will not compel a person to give something for nothing. But the
amount of the consideration is usually unimportant, so long as it is
reasonable. Anything is a consideration which is of benefit to the person
promising or of loss or inconvenience to the other. An illegal
consideration is, however, not a consideration; nor is the performance of
a moral duty, nor the doing of what would be a legal duty without the
promise in question. If the consideration fails, the contract fails. One
has no right to sue on a contract unless he has performed or offered to
perform his part.
_6. The contract must be made without fraud._
Fraud may be practiced in two ways, by making statements known to be false
or by concealing facts that ought to be revealed. But if the parties meet
on equal terms, with the same sources of information, and if nothing is
done to conceal faults, there is no fraud in law. "Let the buyer beware,"
is an ancient maxim, and a buyer must exercise reasonable diligence and
prudence. Fraud absolves the injured party, but the defrauding party may
be held to the contract; that is, the contract is voidable at the option
of the party deceived.
_7. Some contracts must be in writing._
The principal classes of commercial contracts which must be in writing to
be binding, are: (a) agreements for the sale of property of more than a
certain value; (b) agreements of guaranty; (c) agreements not to be
performed within a year.
In the famous English "Statute of Frauds," which is the basis of the
American local statutes on matters referred to in this section, the value
of personal property requiring written contract was ten pounds or fifty
dollars. In the United States the value varies in different states from
$30 to $200. But if part of the property is delivered or part of the
purchase money is paid the whole contract is binding, even if not in
writing.
A guaranty is an agreement by which a person warrants that a certain third
person shall duly perform an engagement. Thus if A obtains goods from B
upon the assurance of C that they will be paid for, C is said to guarantee
the debt.
A contract which _may_ be performed within a year does not come under the
statute, even if such performance seems improbable at the time of making
the contract.
The style of the writing is immaterial--it may be formal or informal, in
ink or pencil. It may be made by the principal or by his agent.
_Pertinent Questions._
How are the laws--legislative enactments and decisions of the Supreme
Court--made public? Why are they thus published?
Tell whether the following agreements are valid contracts or not, and why:
1. An agreement to print a libel. A lease of a house for gambling
purposes. A contract executed on Sunday. A contract for work to be done
for five consecutive days, beginning on Friday. How would it affect the
case if the work were the removing of goods from a building in imminent
danger of falling? The agreement of a tinsmith never again to work at his
trade. His agreement not to work at it within a specified time or in a
certain town.
2. An agreement to swim across the ocean. To pay for a horse at the rate
of one kernel for the first nail in the horse's shoes, two for the second,
four for the third, eight for the fourth, and so on. To deliver goods at a
certain time, though the delivery at the proper time may be prevented by
some accident. Is a person released from responsibility by sickness?
3. An agreement by an orphan to pay for necessaries at some future time.
If the price charged is exorbitant, is he bound to pay it or only a fair
market price? A man while drunk buys a horse for which he has no use, but
after becoming sober continues to use the horse. If the price is
excessive, how much must he pay? When a married women buys goods on
credit, is she acting as the principal or as her husband's agent?
4. An order for goods to be sent to a man's house, nothing being said
about payment. An offer retracted before acceptance. An offer for a
certain horse; an acceptance under the impression that a different horse
is meant. A service permitted though uninvited; give an example. A man in
St. Paul offers by letter a certain piece of property at a certain price
to a man in Chicago; an hour after mailing the letter he changes his mind;
how can he prevent a contract?
5. A agrees to give B $25 for a silver dime. But if this particular dime
were of a rare kind and desired by A, a wealthy coin collector, to
complete a set, would the consideration be sufficient? An offer shouted
from a fourth story window just as the roof is about to fall, in
consequence of which offer a fireman at unusual personal risk successfully
attempts the rescue. An offer and acceptance for a horse which is
afterwards discovered to have been dead at time of sale. A promise made
under threat of spreading an infamous report. An agreement for the purpose
of securing the postponement of the payment of a debt. How many
"considerations" are there in a valid contract?
6. The sale of an unfashionable "ready-made" suit of clothes, nothing
being said about the style. The sale of a plated watch chain, the dealer
permitting the purchaser to suppose it solid gold. The sale of a blind
horse, nothing being said about its sight, no effort being made to conceal
its blindness, and full opportunity for examination being given to the
purchaser. The sale of a house and lot at a certain price, greater than
the purchaser had at first intended to give, upon the representation of
the seller that he had "been offered" such a sum. The purchase of a piece
of land which unknown to the vendor contains a valuable mine, nothing
being said to mislead said vendor.
7. An oral order for goods to the value of $500. How does the buyer's
receiving part of the goods affect the matter? How else could the contract
be made binding? What position does a person assume by endorsing a note?
By orally saying that a debt of another will be paid? An oral engagement
made December first to work a year beginning January first.
CHAPTER XXXII.
AGENCY.
Definitions.--An agent is a person authorized to act for another in
dealing with third parties. The one for whom the agent acts is called the
principal.
Authority of Agent.--An agent's authority may be granted orally or in
writing. When written it is called a "power of attorney." A general agent
has all the authority implied in his employment. A special agent has only
such authority as is specifically granted.
Responsibility of the Principal.--Between the principal and his agent
responsibility is determined by their contract. Expressly or impliedly the
principal agrees to pay for the service rendered.
It is in the principal's relation to third parties that the most important
rule of agency appears. It is this: _The principal is responsible for the
authorized acts of his agent_. The theory is that the acts are those of
the principal, the agent being merely an instrument. And accordingly, the
principal is bound not only by such acts of his agent as he has really
authorized, but also by such as he _apparently_ authorizes.
Responsibility of Agent.--The agent is responsible to his principal for
any violation of their contract. Expressly or impliedly he is bound to
obey orders, to exercise ordinary skill and care in the performance of his
duty, and to refrain from putting his interests in adverse relation to
those of his principal.
To the third party the agent is not responsible, except in the following
cases: When he specifically assumes responsibility, when he conceals the
identity of his principal, when he exceeds his authority, or when he acts
fraudulently.
Termination of Agency.--An agency terminates at the death of either
principal or agent. It may also be terminated by revocation of authority,
which takes effect upon receipt of the notice, or by the bankruptcy or
lunacy of the principal, judicially declared.
_Pertinent Questions._
In the following cases name the principal, the agent, and the third party:
A clerk in a store; a man employed to sell goods by sample; a cashier in a
bank; a conductor on a train; a commission merchant; a partner acting for
a firm, a sheriff.
May a minor act as principal? As agent? A watch left at a jeweler's store
for repairs is injured by the workman; who is responsible to the owner? On
account of a road overseer's neglect a horse is injured by stepping
through a hole in a bridge; to whom shall the owner look for damages? If a
person is notified that another claims to represent him as agent and he
neglects to repudiate the claim, is he responsible for acts of the
claimant as agent?
May an agent having authority to fix prices sell to himself?
May a clerk in a store take goods at regular marked prices?
An agent transacts business after his principal's death but before he has
received notice thereof, is the transaction binding upon the heirs?
CHAPTER XXXIII.
PARTNERSHIP.
What it is.--Partnership is the relation existing between persons who have
agreed to combine their property or skill for the prosecution of a given
enterprise, and to share the profits or losses resulting therefrom.
How Formed.--Partnership being a matter of agreement is subject to the law
of contracts. When the agreement is in writing, it is called "articles of
copartnership." The articles usually specify the parties and the firm
name, the nature and the location of the business to be carried on, the
investment of each party, the basis for apportioning profits and losses,
and sometimes the duration of the co-partnership. There are generally
other provisions, their nature depending upon the circumstances.
Responsibility.--As to each other, the partners have the rights and duties
which they agree upon.
As to third parties, the two most important rules of law are: first, that
_the firm is bound by the acts of each member_, in matters pertaining to
the firm's business; second, _each member is liable for all the debts of
the firm_.
Dissolution.--If the duration of the partnership is not specified, it may
be dissolved by any partner at any time. If its duration is specified, it
expires, of course, by limitation or by mutual consent. In either case,
the death of a partner dissolves the firm. If a partner becomes insane or
acts fraudulently, the partnership may be dissolved by a decree of the
court. The sale of an interest (which must have the consent of each
partner) dissolves the partnership and forms a new one.
Notice of Dissolution.--That the retiring partners may be freed from
responsibility for new debts, if the dissolution be by sale of interest
(and this is a very common way), notice of the dissolution must be given
to the world, and special notice of the fact must be given to those from
whom the firm has been in the habit of buying.
Limited Partnership.--In most states, what is called a limited partnership
may be formed, whereby the responsibility of some of the partners may be
limited to their investment in the business. By this arrangement the
private property of the special partners (as they are called) cannot be
taken for debts of the firm.
In such a case, however, it is but just, and the law therefore demands,
that notice of the fact of limited responsibility be given and that no
appearance of responsibility be assumed. To this end it is required: (a)
that the articles of copartnership be in writing, and that they be
published and recorded; (b) that the amount contributed by the special
partners be actually paid in; (c) that the names of the special partners
do not appear in the firm name; (d) that they take no active part in the
management of the business.
_Pertinent Questions._
Why are partnerships formed? May one person invest money while another
invests skill? Is a person who receives a percentage of his sales by way
of salary a partner?
Why cannot a partner sell his interest without consulting the other
members of the firm? Why may the fraudulent act of a partner dissolve the
firm? Why does the death of a member end the firm--that is, why not let
his heir succeed to his right in the firm as he succeeds to his real
estate?
May the _private_ property of a partner be taken to satisfy the debts of
his firm? May the firm's property be taken to satisfy the debt of one of
its members? Can men dissolve their debts by dissolving their partnership?
If one partner continues the business agreeing to pay all indebtedness of
the firm, is the retiring partner released from obligation in relation to
the debts? Show the justice of each requirement in case of special
partners.
CHAPTER XXXIV.
CORPORATIONS.
Purpose--Partnership enables a number of persons, as we have seen, to
accomplish by combining their property and skill what would be
unattainable by them acting individually.
But the individual responsibility involved in partnership, and the
difficulty of transferring interest, render necessary some other mode of
combining capital for carrying on enterprises requiring vast resources,
and, from their nature, demanding long time and freedom from interruption
for their accomplishment. For instance, no one would dare to assume
personal responsibility for the debts of a railroad, nor could such an
enterprise be managed if every transfer of interest dissolved the company.
The desired limitation of responsibility and facility of transfer of
interest are secured by the formation of _corporations_.
Nature.--But responsibility there must be, or the combination could
transact no business. And responsibility depends upon personality--a
_thing_ cannot be held responsible. As this personality does not exist
aside from the persons of those uniting their resources, it must be
created. The creative power is the legislature. The personality created is
the corporation. [Footnote: From the Latin _corpus, corporis,_ a body.] A
corporation is, therefore, an artificial or fictitious person, created
under general law or by a special act of the legislature, [Footnote: This
special act defining the powers and duties of the corporation is called
its _charter_.] and capable of acting within prescribed limits as if it
were a natural person, but beyond those limits incapable of acting at all.
Management.--The persons who contribute to the capital of the corporation,
or company, receive certificates of stock, that is, pieces of paper
certifying that said persons own so many shares in the company. The
capital, be it remembered, is the property of the corporation, not of the
individuals. The number of these stockholders may be large or small, a
dozen or a thousand. The general management of corporate business is
necessarily entrusted to a small number of persons called directors. These
are elected by the stockholders, each share having one vote. The directors
select from their own number a president, a secretary, and other necessary
officers. These persons and the other agents of the corporation carry out
the policy determined upon by the directors.
Why Limited in Powers.--The question suggests itself, Why can a
corporation do only certain things? The most obvious answer is, that this
is consequent upon its mode of creation. Being a creature of the
legislature, it can have only those powers which are specifically or
impliedly granted to it. But pushing the matter farther, it may
pertinently be asked, Why doesn't the legislature endow it with power to
do anything that may properly be done by a natural person? Two reasons, at
least, appear. First, from the corporation's standpoint, it is a matter of
business prudence to have its purpose and powers defined: (a) to enable it
to secure subscribers to its stock, as no one would like to risk his money
blindly; and (b) because thus only can the directors be held to
accountability. Second, from the standpoint of the public, for whom the
legislature acts, the defining is necessary in order that corporations may
be controlled and dangerous combinations prevented.
In this connection it may be noted that corporations are granted some
privileges not possessed by individuals. For instance, private property
such as land may be taken, even against the wishes of the owner, to permit
the building of a railroad. This can be done, however, only on the ground
of public good, and by giving the owner just compensation.
Responsibility.--A corporation, like any other person is responsible for
any contracts that it makes, within its charter. It necessarily acts
entirely through agents, hence the law of agency has an important bearing
upon all contracts with a corporation.
Debts incurred lie against the corporation, not as a rule against the
stockholders individually. Sometimes stockholders are by the charter made
liable to limited extent, say to an amount equal to the par value of their
stock.
Dissolution.--Some companies are incorporated so that they may last
forever. Others are incorporated for a specified time. The latter expire
by limitation or by becoming insolvent. A corporation of either kind may
secure dissolution by voluntarily surrendering its charter. And sometimes
the legislature reserves in the charter the right to dissolve the company
under certain conditions.
The affairs of a corporation are usually closed up by a "receiver," who
collects the bills, disposes of the property, pays the indebtedness as far
as he can, and distributes the residue among the stockholders.
COMPARISON OF PARTNERSHIP WITH CORPORATION.
POINTS OF PARTNERSHIP. CORPORATION.
COMPARISON.
1. Status. A collection of natural A fictitious person.
persons.
2. Formation. By agreement. By legislative
enactment.
3. Powers. Those of natural persons. Only those conferred
by law.
4. Debts. All partners liable for all Stockholders not
debts. usually liable.
5. Transfer of Dissolves partnership. New stockholder
interest by sale succeeds to shares of
or death. the old.
_Pertinent Questions._
Who constitute the managing body in a school district? In a town? In a
village? In a city? In a county? In the state? In the United States?
[Footnote: The United States: "Its charter, the constitution.... Its flag
the symbol of its power; its seal, of its authority."--Dole.] In a
railroad? In a mining company? In a bank? In a church? In a college?
Write a list of all the corporations that you know or have ever heard of,
grouping them under the heads _public_ and _private._
How could a pastor collect his salary if the church should refuse to pay
it?
Could a bank buy a piece of ground "on speculation?" To build its
banking-house on? Could a county lend money if it had a surplus? State the
general powers of a corporation. Some of the special powers of a bank. Of
a city.
A portion of a man's farm is taken for a highway, and he is paid damages;
to whom does said land belong? The road intersects the farm, and crossing
the road is a brook containing trout, which have been put there and cared
for by the farmer; may a boy sit on the public bridge and catch trout from
that brook? If the road should be abandoned or lifted, to whom would the
use of the land go?
CHAPTER XXXV.
COMMERCIAL PAPER.
Kinds and Uses.--If a man wishes to buy some commodity from another but
has not the money to pay for it, he may secure what he wants by giving his
written promise to pay at some future time. This written promise, or
_note_, the seller prefers to an oral promise for several reasons, only
two of which need be mentioned here: first, because it is _prima facie_
evidence of the debt; and, second, because it may be more easily
transferred or handed over to some one else.
If J.M. Johnson, of Saint Paul, owes C.M. Jones, of Chicago, a hundred
dollars, and Nelson Blake, of Chicago, owes J.M. Johnson a hundred
dollars, it is plain that the risk, expense, time and trouble of sending
the money to and from Chicago may be avoided, and the indebtedness wiped
out by J.M. Johnson ordering Nelson Blake to pay the hundred dollars to
C.M. Jones. The written order to this effect, called a _draft_, would be
sent to C.M. Jones, who would present it for payment to Nelson Blake, and
upon receiving his money would turn _the draft_ over to Blake.
To avoid the risk of being robbed, merchants and some others are in the
habit of depositing each evening in a bank the receipts of the day, with
the understanding that the money will be paid out, at any time, to any
person whom they order it paid to. The order on the bank is called a
_check_.
It is very easy to see that these three devices are of immense value to
the commercial world; the first by rendering available future resources,
and the other two by enabling payments to be made safely.
Definitions.--A _note_ is an unconditional promise in writing, to pay a
definite sum of money at a certain time to a specified person.
A _draft_ is an order, written by one person and addressed to another,
directing him to pay a definite sum of money at a certain time to a
specified third party.
A _check_ is a draft for immediate payment, drawn upon a bank or banker.
In the case of a note, the person who promises to pay is called the
_maker_ of the note; and the person named to be paid, the _payee_.
In the case of a draft or check, the person ordering the payment is called
the _drawer_; the person addressed, the _person drawn upon_ or the
_drawee_; and the person to be paid, the _payee_.
Negotiability.--The payee in any of these cases may wish to transfer the
paper to some other person. For instance, the holder of the note may wish
to use the money before it is due, or the payee of a draft may wish to
realize without going to the drawee. In either case, the desired
accommodation can be secured only by selling the paper to some one else.
This ability to be transferred is part of what is meant by the term
_negotiability_.
But this liability to have to pay another person than the one named,
cannot be imposed upon the maker or drawer without his consent. This he
gives by inserting after the name of the payee the words "or order," or
the words "or bearer." In the latter case, whoever holds the paper when it
becomes due can collect upon it. In case the former words are used, the
paper can be transferred only by _indorsement_, of which more anon.
A very important characteristic of negotiability is that it enables a
person to grant to another rights which he may not himself possess. To
illustrate: As between the maker and the payee, a note is a contract, and
is binding only if it has all the requisites of a binding contract.
Therefore, if there was no consideration, or if the note was obtained by
fraud or by intimidation, the payee, knowing these facts, has no right to
collect upon the note, and he could not by law compel payment. But with a
third party it is different. He sees only the note, and may not--
presumably does not--know anything else about the contract. To compel him
before buying the note to learn all the details of its history, might be
embarrassing to the parties, even where everything is all right, and would
certainly delay, perhaps materially, the transfer. Therefore, to enable
people to keep their business to themselves, and to facilitate transfers
of commercial paper, it has seemed best not to require this investigation.
The law presumes that when a person makes a transferable note, he has done
so deliberately; and if loss ensues, it says that he must bear it rather
than the innocent purchaser of his note.
Conditions of Negotiability.--But this peculiar protection is given, be it
observed, only to an _innocent purchaser_. If in good faith, in the
regular course of business, a person comes into possession of commercial
paper, negotiable in form, not yet mature, and for which he has given a
reasonable consideration, he can collect on it. On the other hand, if he
has found the paper or stolen it, or if he has bought it under
circumstances calculated to raise a suspicion as to right of the seller,
he should not have, and will not by law receive, this privilege. Thus if a
man is offered commercial paper of perfectly responsible parties at
one-third its value, it would be reasonable to suppose that the person
offering it had found or stolen it, and the buyer would obtain only the
rights of the person from whom he bought. Or if a note past due is offered
for sale, the presumption is that it is paid or that it is for some reason
uncollectable, and the purchaser would buy at his peril. In other words,
_if there is anything on the face of the paper or in the circumstances of
the case to warn the purchaser, he buys at his own risk_, and secures only
such rights as the vendor has.
Transfer.--Negotiable paper with the words "or bearer" is transferable by
delivery alone. If made payable to some person "or order," it is
transferable only by his _indorsement_. An "indorsement in full" consists
of the signature of the payee and his order that the money be paid to a
specified person. An "indorsement in blank" consists simply of the
signature of the payee. The effect of the latter mode of indorsing is to
make the paper payable to bearer.
Responsibility of Maker.--A note being a contract, the maker of one is
responsible to the payee, as has been said, only if all the requisites of
a binding contract are present. If the note is negotiable in form, he is
responsible to the innocent purchaser of it.
Responsibility of Drawee.--The person drawn upon may know nothing of the
draft. He cannot be made a party to a contract without his knowledge and
consent. That he may have knowledge of the draft, it must be presented to
him. If upon seeing it he is willing to assume the responsibility of
paying it when due, he signifies his willingness by writing across the
face of the draft the word "accepted," with the date of presentation and
his name. The draft thereby becomes his unconditional promise, and he
becomes the principal debtor, occupying the position of a maker of a note.
Responsibility of Indorser.--When a person endorses any commercial paper,
he not only expresses thereby his consent to the transfer of it, but he
also enters into a conditional contract with each person who may afterward
come into possession of the paper, whereby he becomes responsible for its
payment, if the principal debtor fails to meet his obligation. To fix
responsibility upon an indorser, payment must be demanded of the principal
debtor on the very day when the obligation matures, and if payment is not
made notice of the fact must be sent to the indorser before the end of the
following day.
Responsibility of Drawer.--Between the drawer and the payee a draft is a
conditional contract, whereby the former impliedly agrees to pay the draft
if the person drawn upon does not. His obligation is that of a surety or
first indorser. To fix responsibility upon the drawer, the holder of the
draft must promptly present it for acceptance to the person drawn upon;
then, if it is not accepted, he must immediately notify the drawer.
Forged Paper.--Forgery is the fraudulent making or altering of a written
instrument. One whose name is forged cannot be made responsible, since the
act is not his. And since money paid under a mistake must be refunded, a
person who, deceived by the skill of the forger, should pay the seeming
obligation, would be entitled to get his money back.
But every person is bound to use reasonable effort to prevent forgery.
Thus, if a merchant writes out a note all but the amount, and authorizes a
clerk to put that in at some other time, and the clerk inserts a larger
sum, any innocent purchaser can compel the merchant to pay the full
amount. In some states it is held that a person who leaves space in an
obligation wherein the amount can readily be raised, is bound to stand the
loss caused by his negligence.
Accommodation Paper.--A man may be perfectly willing to lend a friend some
money and yet be unable to do so. He may, however, in any one of several
ways, make it possible for his friend to obtain the money. Thus A, wishing
to accommodate his friend B, may make a note payable to B's order; or he
may endorse B's note; or he may make a draft payable to B's order; or he
may accept B's draft on him. By selling the paper, B secures the money
desired. The implied contract between A and B is that B will pay the
obligation.
In none of these cases could B compel A to pay him any money, because the
contract between them lacks consideration. But A would be responsible to
an innocent purchaser, because there is nothing on the face of the paper
to indicate the defect. And he would be responsible even to a purchaser
who knows the paper to be accommodation, because by signing he binds
himself to pay if B does not, and his signature is what enables the sale
to be made.
Certified Checks.--Business men make most of their payments by check. If
the receiver of a check does not, for any reason, wish the money, he may
deposit the check in the bank as if it were cash. If he is going away from
home, or if he wishes to make a payment in some other place, he may save
the expense of a draft, and make a check equally as acceptable, by getting
the cashier of the bank to "certify" it, that is to state officially that
the drawer has the money in the bank. This he does by writing across the
face of the draft the word "Good," with his signature as cashier. When
this is done the responsibility rests primarily on the bank. It occupies
the position of the acceptor of a draft.
_Pertinent Questions._
Two of the following are valid notes; which two? The others are not; Why?
1. March 5, 1890, I promise to pay John Smith one hundred dollars, if he
is then living.--William Jones. 2. On or before March 5, 1890, I promise
to pay John Smith one hundred bushels of wheat.--William Jones. 3. On
March 5, 1890, I promise to pay John Smith whatever is then due him.--
William Jones. 4. When he comes of age, I promise to pay John Smith one
hundred dollars.--William Jones. 5. March 5, 1890, I promise to pay one
hundred dollars.--William Jones. 6. One year after date, I promise to pay
to John Smith one hundred dollars.--William Jones. 7. Mankato, Minn.,
December 11, 1888. One year after date I promise to pay John Smith one
hundred dollars. 8. On the death of his father, I promise to pay John
Smith one hundred dollars.--William Jones. 9. On March 5, 1890, I, William
Jones, promise to pay John Smith one hundred dollars.
How many parties may there be to a note? How many, at least, must there
be? As between them, must there be consideration to make it binding? Must
the words "for value received" appear on the note? A note being a
contract, what things are necessary to make it binding? Write two valid
notes in different forms. Write a negotiable note transferable without
indorsement. A note transferable by indorsement. Which is safer to carry
in the pocket? Why? Which imposes the less responsibility if transferred?
If you were taking a note payable to bearer, would you require the person
from whom you were getting it to indorse it? A man has some non-negotiable
notes; if he dies can his heir collect them? A note payable "to order" is
indorsed in blank; to whom is it payable? May a note payable "to bearer"
be made payable only "to order?" When does a note cease to be negotiable?
Under what circumstances may a person have to pay a note which he has
already paid? What is a "greenback?"
How many persons, at least, must there be to an accepted draft? When does
the responsibility of the drawer begin? That of the person drawn upon? How
does the acceptance of a draft affect the responsibility of the drawer? If
the draft is not accepted, to whom shall the holder look for pay? Are
drafts negotiable before acceptance?
Compare and contrast a note and a draft. A draft and a check. Is the bank
under any obligation to the holder of an uncertified check? Does
certifying a check release the drawer of it? Are checks negotiable?
What responsibility does an indorser assume in case of a note? Of an
unaccepted draft? Of an accepted draft? Of a check? What does "without
recourse" mean? To how many persons is the maker of a note responsible?
The first indorser? The second? How can the first indorser be
distinguished from the second? To whom is the second indorser not
responsible?
Who are not responsible to the holder of a negotiable paper unless
notified? Who are responsible without notice? What principle do you
discover? When is a demand note due? A check? A time note? A sight draft?
A time draft?
What should you do, and why, in the following cases:
1. When you pay a note? 2. When you make a partial payment on a note? 3.
If you should lose a note? 4. If you have a note without indorsees, to
render the maker responsible? 5. If you hold a note having indorsers, to
render the indorsers responsible? 6. If you hold an unaccepted draft? 7.
In case acceptance is refused? 8. If you hold an accepted draft? 9. If the
acceptor fails to pay when the paper becomes due? 10. If you hold an
uncertified check, in order to render the drawer responsible? 11. If it is
indorsed, to make the indorsers responsible? 12. If you have a certified
check, to make the bank responsible? 13. If you are a third indorser of a
note, whom can you hold responsible in case the paper is dishonored, and
how? 14. If you have a bearer note and you wish to transfer it without
assuming responsibility? 15. How if it is an order note?
APPENDIX A.--FORMS.
TOWN BUSINESS.
_I. Organization of a Town._
PETITION.
To the board of county commissioners of the county of
__________,__________ : The undersigned, a majority of the legal voters of
congressional township number ______ north, of range number ______ west,
in said county, containing not less than twenty-five legal voters, hereby
petition your honorable board to be organized as a new town under the
township organization law, and respectfully ask that you forthwith proceed
to fix and determine the boundaries of such new town and to name the same
(giving the proposed name.)
(Dated, and signed by a majority of all the legal voters in the town.)
COMMISSIONERS' REPORT.
State of __________, county of __________, ss.
Upon receiving a petition of a majority of all the legal voters of
congressional township number ______ north, of range number ______ west,
in said county, asking that the same be organized as a new town under the
township organization law, to be named __________, we, the county
commissioners of said county did, on the ______ day of A.D. 18______,
proceed to fix the boundaries of such new town and name the same
__________, in accordance with the said petition, and designated
__________ as the place for holding the first town meeting in such town,
to be held on __________, 18______. The boundaries of said town of
__________, as fixed and established by us, are as follows: (Beginning at
the southeast corner of section ______, town ______ north, of range ______
west, thence west on the township line ______ to the southwest corner of
section ______, town and range as aforesaid, thence north, &c., giving the
boundary lines complete.) Given under our hands this ______ day of
__________, 18______.
[Auditor's official seal.]
(Signed by the Commissioners.)
Attest: O.J., County Auditor.
II. Elections.
NOTICE OF ANNUAL ELECTION.
Notice is hereby given, that on Tuesday, the ______ day of November,
18_____, at ___________, in the election district composed of the
__________, in the county of __________, and state of __________, an
election will be held for (here name the state, judicial, congressional,
legislative and county officers to be elected); (if constitutional
amendments are to be submitted, add:) also the following amendments to the
constitution of the state will be submitted to the people for their
approval or rejection, viz.: amendment to section _____, article _____, of
the constitution (naming each one proposed); (and if any special matters,
such as removal of county seat, &c., are to be voted on, then specifically
state them); which election will be opened at nine o'clock in the morning,
and will continue open until five o'clock in the afternoon of the same
day, at which time the polls will be closed.
Dated at ________ this _____ day of October, 18____.
C.O.S., Town Clerk (or City or Village Recorder.)
REGISTER POLL LIST.
List of qualified electors in the election district composed of the
__________ of __________, in the county of __________, and state of
__________, for an election to be held in the said election district, on
Tuesday, the _____ day of November, 18_____:
Adams, James | Little, Joseph
Babcock, George | Mann, Oscar.
(Write the surnames in alphabetical order, and leave sufficient space
between the alphabetical letters to insert all additional names.)
Notice is hereby given that the undersigned judges of election of said
election district, will be present at the __________, in said __________,
at the times named below, for the purpose of making corrections in the
foregoing list, viz.: On "Wednesday, October _____, and (here insert the
days and times of the day they are to meet), from 9 o'clock A.M. till 4
o'clock P.M. of each day, and also on the morning of election day, from 7
o'clock A.M. to 9 o'clock A.M."
Given under our hands this _____ day of October, 18_____.
(Signed by all the judges of election.)
MINUTES OF TOWN MEETING.
At the annual (special) town meeting held in the town of __________,
county of __________, state of __________, at _____, on the day of _____,
18 _____, the meeting was called to order by R.G., town clerk. M.J.H. was
then chosen to preside as moderator of the meeting.
The moderator, at the opening of the meeting, stated the business to be
transacted and the order of the same as follows: That the business to be
transacted would be to elect three supervisors, &c., (stating the officers
to be elected,) and to do any other business proper to be done at said
meeting.
That said business would be entertained in the following order: 1st--The
election by ballot of town officers, the polls to be kept open throughout
the day. 2d--At one o'clock P.M., election of overseers of highways for
each road district in the town. 3d--That immediately following the
election of overseers of highways the general business of the town would
be taken up and proceeded with until disposed of.
Proclamation of opening the polls was then made by the moderator and the
polls opened and the election of town officers proceeded.
The hour of one o'clock P.M. having arrived and the general business of
the town being now in order, the following named persons were elected, by
ayes and noes, overseers of highways for the ensuing year in the following
road districts, viz.: (here give the numbers of the road districts and the
names of the persons elected overseers thereof.)
A.B. was elected poundmaster of said town. On motion, ordered that a
pound, &c., (give the location, cost, &c., of pound, if ordered.)
The following three places were determined and designated by the voters
present as the most public places in said town for the posting up of legal
notices, and suitable posts for such purpose were ordered to be erected or
maintained by the supervisors at each of such places, viz.: (describe the
places.)
The supervisors submitted to the electors a report of all the places at
which guide posts are erected and maintained within the town, and of all
places at which, in their opinion, they ought to be erected and
maintained. Thereupon, it was ordered that guide posts be erected and
maintained at the following places, viz.: (describe the places.)
The town clerk read publicly the report of the board of auditors,
including a statement of the fiscal concerns of the town and an estimate
of the sum necessary for the current and incidental expenses of the town
for the ensuing year.
The supervisors rendered an account in writing, stating the labor assessed
and performed in the town, the sums received by them for fines and
commutation, &c.; a statement of the improvements necessary to be made on
the roads and bridges, and an estimate of the probable expense of making
such improvements beyond that of the labor to be assessed for this year,
that the road tax will accomplish; also a statement in writing of all
expenses and damages in consequence of laying out, altering or
discontinuing roads.
On motion, it was ordered that the following sums of money be raised by
tax upon the taxable property in said town for the following purposes for
the current year: (enter the specific amounts carefully.)
On motion of H.S.H.H., the following by-law was adopted, ayes _____, noes
_____: "It is hereby ordered and determined that it shall be lawful for
horses, mules and asses to run at large in the town of __________, in the
day time, from the first day of April to the 15th day of October, in each
year, until further ordered."
On motion, it was resolved, &c., (set forth in order each resolution or
order as it transpires.)
The next annual town meeting was ordered to be held at (naming the place.)
At five o'clock the polls were closed, proclamation thereof being made by
the moderator. The judges then proceeded to publicly canvass the votes,
and the persons having the greatest number of votes for the respective
offices voted for were declared elected.
STATEMENT OF RESULT OF CANVASS. (To be read publicly.)
The following is a statement of the result of the canvass of votes by
ballot for the election of officers at the annual town meeting in the of
__________, county of __________, and state of __________, March _____,
18_____, as publicly canvassed by the judges at said meeting:
H.B. had _____ votes for chairman of supervisors.
J.L. had _____ votes for chairman of supervisors.
H.B. was declared elected chairman of supervisors.
(In this way give a statement of the votes cast for each officer.)
On motion the meeting adjourned without day.
J.H.T., C.O.C., Judges
Attest: R.G., Clerk.
OFFICIAL OATH.
State of __________, county of __________, town of __________, ss.
I, J.A., do solemnly swear (or affirm) that I will support the
constitution of the United States and of the state of __________, and
faithfully discharge the duties of the office of __________ of the town of
__________, in the county of __________, and state of __________, to the
best of my ability. J.A.
Subscribed and sworn to before me this _____ day of __________ A.D.
18_____
T.S., Justice of the Peace.
OFFICIAL BOND.
Know all men by these presents, that we, R.S., as principal, and B.B.S.
and J.E. as sureties, all of the county of __________, and state of
__________, are held and firmly bound unto J.D.E., E.C., and E.E., as
supervisors of the town of __________, in said county, and their
successors in office, in the sum of (five hundred) dollars, lawful money
of the United States of America, to be paid to them as such supervisors,
their successors or assigns; for which payment well and truly to be made,
we bind ourselves, our heirs, executors and administrators, jointly and
severally, firmly by these presents. Sealed with our seals dated the _____
day of __________, 18_____.
The condition of the above obligation is such, that whereas, the above
bounded R.S. was, on the _____ day of __________, A.D. 18_____, duly
elected (or appointed) __________ in and for the town of __________, in
said county, for the term of __________, and is about to enter upon the
duties of said office; now, therefore, if the said R.S. shall, will and
does faithfully discharge all his duties as such __________ in and for
said town, then the above obligation to be void, otherwise to remain in
full force and virtue.
R.S. [Seal.] B.B.S. [Seal.] J.E. [Seal.]
Sealed and delivered in presence of
J.B. and G.J.
State of __________, County of __________, ss.
On this _____ day of __________, A.D. 18_____, before me, the subscriber,
a __________ in and for said county, personally appeared __________ to me
known to be the person described in, and who executed the foregoing
instrument, and acknowledged that he executed the same as __________ free
act and deed.
County of __________, ss. B.B.S. and J.E., being duly sworn, say each for
himself, that he is surety in the within bond; that he is a resident and
freeholder of the state of __________, and that he is worth the sum of
(five hundred) dollars over and above his debts and liabilities, and
exclusive of property exempt from execution.
B.B.S. and J.E.
Subscribed and sworn to before me, this _____ day of __________, 18_____.
W.R.P., Justice of the Peace.
(After folding the instrument the approving officer must indorse on its
back the following words:) "I hereby approve the within bond and the
sureties therein contained, this _____ day of __________, 18_____."
(Signed officially by the approving officer.)
NOTICE TO CLERK OF DISTRICT COURT OF ELECTION OF JUSTICE OF THE PEACE.
State of __________, county of __________, town of __________, ss.
To H.A.B., (address,) clerk of the district court of the county of
__________.
You are hereby notified that at the _____ town meeting held in the town of
__________, in the county of __________, and state of __________, on the
_____ day of March, A.D. 18_____, P.E.C. was duly elected to the office of
justice of the peace, for the term of two years. (If elected to fill a
vacancy, state who was the last incumbent.) Given under my hand, this
_____ day of March, A.D. 18_____.
A.R., Town Clerk.
_III. Roads._
PETITION.
To the supervisors of the town of __________, in the county of __________,
and state of __________:
The undersigned, legal voters (who own real estate, or who occupy real
estate under the homestead or pre-emption laws of the United States, or
under contract from the state of __________, within one mile), (or who are
freeholders and residents of the town within two miles) of the road to be
laid out (or altered, or discontinued), hereby petition you to lay out a
new road (or alter, or discontinue a road) as follows: Beginning (give the
point at which it is to commence, its general course and its termination.)
The description of the lands over which the said (new) road passes, and
the names of the owners thereof which are known, as well as the lands
whose owners are unknown, are as follows: (Give the owners of the lands
that are known and describe the lands whose owners are unknown.)
And your petitioners pray that you will proceed to lay out said new road
and cause the same to be opened (or alter, or discontinue said road)
according to law. (Dated, and signed by at least six resident legal voters
owning real estate or occupying United States or school lands within one
mile, or at least eight resident freeholders within two miles of the
road.)
PROOF OF POSTING.
State of __________, county of __________, town of __________, ss.
D.S. being sworn, says, that on the ______ day of __________, 18______, he
posted copies of the within petition in three of the most public places of
said town, to-wit: At (naming the places.) _________________________ D.S.
Subscribed and sworn to before me this ______ day of __________, 18______.
E.W.R., Justice of the Peace.
SUPERVISORS' NOTICE OF HEARING.
Notice is hereby given that the supervisors of the town of __________, in
the county of __________, and state of __________, will meet on the ______
day of __________ A.D. 18______, at ______ o'clock in the ______noon, at
__________, in said town, for the purpose of personally examining the
route named below, proposed for a new (or altering, or discontinuing a)
road, and for hearing all reasons for or against said proposed laying out
(or altering, or discontinuance) and deciding upon said application. Said
proposed new road (or alteration, or discontinuance) as described in the
petition is as follows: (Here give the description of the route as
contained in the petition.)
The several tracts of land through which said road will pass (passes) and
the occupants thereof, as nearly as we can determine the same, are as
follows: (Give a description of the lands and the names of the occupants,
and if any have no occupants and the owners are unknown, state that fact.)
(Dated, and signed officially by the supervisors.)
PROOF OF POSTING NOTICE.
State of __________, county of __________, town of __________, ss.
D.S. being sworn, says that on the ______ day of __________, A.D.
18______, he served the within notice upon each of the occupants of the
land through which the within described road may pass, by leaving copies
as follows: To A.B. personally; to C.D. at his usual place of abode with
E.F., a person of suitable age and discretion, (describing each service.)
That, also, on the ______ day of __________ A.D. 18______, he posted
copies of the within notice in three public places in said town, to-wit:
At (naming the places.)
D.S.
Subscribed and sworn to before me this ______ day of __________, 18______.
E.W.R., Justice of the Peace.
SUPERVISOR'S ROAD ORDER.
State of __________, county of __________, town of __________, ss.
Whereas, upon the petition of (six) legal voters, owning real estate, or
occupying real estate under the homestead or pre-emption laws of the
United States, or under contract from the state of __________, within one
mile (or eight legal voters, freeholders and residents of the town, within
two miles), of the road proposed in said petition to be laid out (altered
or discontinued), copies of said petition having been first duly posted up
in three of the most public places of said town at least twenty days
before any action was had in relation thereto, proof of which posting was
duly shown to us by affidavit; Which said proposed new road (alteration or
discontinuance) is set forth and described in said petition as follows,
viz.: Beginning, etc., (set forth the road as given in the petition.)
And whereas, upon receiving said petition we did, within thirty days
thereafter, make out a notice and fix therein a time and place at which we
would meet and decide upon such application, to-wit: on the day of _____,
A.D. 18_____, at __________, causing copies of such notice to be posted in
three public places in said town, at least ten days previous to such
meeting; and having met at such time and place as above named in said
notice, and being satisfied that the applicant had, at least ten days
previous to said time, caused said notice of time and place of hearing to
be given to all the occupants of the land through which such highway might
pass, by serving the same personally or by copy left at the usual place of
abode of each of said occupants, proof of which was shown by affidavit, we
proceeded to examine personally such highway and heard any and all reasons
for or against laying out (altering or discontinuing) the same, and being
of the opinion that such laying out (or altering, or discontinuing,) was
necessary and proper and that the public interest would be promoted
thereby, we granted the prayer of said petitioners and determined to lay
out (alter or discontinue) said road, the description of which as so laid
out is as follows, to-wit: Beginning, &c.
It is therefore ordered and determined that a road be and the same is
hereby laid out (or altered) and established according to the description
last aforesaid, and it is hereby declared to be a public highway, four
rods wide, the said description above given being the center of said road.
Given under our hands, this, &c., (dated and signed officially by the
supervisors.)
SURVEYOR'S REPORT.
To the supervisors of the town of __________, county of __________, and
state of __________:
The undersigned having been employed by you to make a survey of a road in
said town would report that the following is a correct survey thereof, as
made by me under your directions, to-wit: (Give an accurate description of
the road by course and distance) and that below is a correct plot of said
road according to said survey. (Dated and signed.)
RELEASE OF DAMAGES.
State of __________, county of __________, town of __________, ss.:
Whereas, a road was laid out (or altered or discontinued) on the _____ day
of __________, A.D. 18_____, by the supervisors of the said town of
__________, on the petition of (six) legal voters, owning real estate, or
occupying real estate under the homestead or pre-emption laws of the
United States, or under contract from the state of __________, within one
mile (or eight legal voters freeholders and residents of the town within
two miles) of said road; which said road (or alteration, or
discontinuance) is set forth and described in the supervisors' order, as
follows, viz.: Beginning (describe the road as in the order laying it out);
which said road passes through certain lands owned by us as described
below:
Now, therefore, know all men by these presents, that we, the owners of the
lands described below, for value received, do hereby * release all claims
to damages sustained by us by reason of the laying out (or altering, or
discontinuing) and opening said road through our lands, viz.: (Here give a
description of the lands and their owners' names.)*
In witness whereof, we have hereunto set our hands and seals this day of
__________, A.D. 18_____. (Signatures and seals.) Signed, sealed and
delivered in presence of two witnesses.
AGREEMENT AS TO DAMAGES.
(Use form "Release of Damages" to the * then substitute to the next * as
follows:) do hereby "agree to and with the said supervisors that the
damages sustained by us by reason of laying out (or altering, or
discontinuing) said road be ascertained and fixed, and the same are hereby
ascertained and fixed as follows: (Describe the lands, give the owners'
names, and the amounts agreed on;" and conclude as in form "Release of
Damages.")
AWARD OF DAMAGES.
State of __________, county of __________, town of __________, ss.:
Whereas, a road was laid out (or altered or discontinued) on the day of
__________, A.D. 18_____, by the undersigned supervisors of the said town
of __________, on the petition of (six) legal voters, owning real estate,
or occupying real estate under the homestead or pre-emption laws of the
United States, or under contract from the state of __________, within one
mile (or eight legal voters, freeholders and residents of the town within
two miles) of said road; which said road (or alteration, or
discontinuance) is set forth and described in the supervisors' order as
follows, viz.: Beginning (describe the road as in the order laying it
out.) And not being able to agree with the owners of the following
described lands, claiming damages by reason of said highway passing
through, we have assessed the damages to each of such individual claimants
with whom we could not agree, and awarded damages to the owners of such
lands through which such highway passes as are unknown, at what we deemed
just and right; taking into account and estimating the advantages and
benefits the road will confer on the claimants and owners, as well as the
disadvantages. We have assessed and awarded damages as follows:
(Here give a particular description of each tract of land and its owner,
if known; but if not known, state that fact also.)
And in case of the following lands and claimants for damages, we estimate
that the advantages and benefits said road will confer on them are equal
to all damages sustained by them by reason of laying out (or altering, or
discontinuing) said road, to-wit: (Set forth lands and owners as far as
known; and describe the unknown lands, stating that the owners are
unknown.) (Dated, and signed by the supervisors.)
APPLICATION FOR JURY.
State of __________, county of __________, town of __________, ss.
To J.P., justice of the peace in and for said county:
I, J.A.B., of said town, feeling myself aggrieved by the determination
(award of damages) made by the supervisors of said town (county
commissioners of said county) by their order bearing date the _____ day of
__________, A.D. 18_____, in laying out (altering or discontinuing) (or
refusing to lay out, alter or discontinue) a highway in said town
(county), do hereby appeal to you for a jury to be summoned by you to hear
and determine such appeal.
The highway (alteration or discontinuance) in question is described in
said order, filed in the town clerk's (county auditor's) office of said
town (county) ________, A.D. 18_____, as follows: (describe the road, as
in the order on file), which said road passes through lands owned by me,
viz.: (describing them.)
The grounds upon which this appeal is brought, are: (to recover $80
damages to my said land by reason of such laying out, instead of $40 as
awarded in said order) (or, in relation to the laying out, or altering, or
discontinuing said highway;) (or their refusal to lay out, or alter, or
discontinue said highway;) (or said appeal is brought to reverse entirely
the decision of the said supervisors or commissioners;) (or is brought to
reverse that part of their order [specifying which part,] &c.) (Dated and
signed by the appellant.)
JUSTICE COURT.
_I. Civil Suit._
SUMMONS.
State of _____, }ss.
County of ____ }
[Footnote: This brace of lines, giving the state and county as
introductory to a process, certificate, affidavit or other paper, is
called a "venue," and should be inserted wherever the word _(Venue)_ is
expressed in forms given hereafter.]
The state of _______ to the sheriff or any constable of said county:
You are hereby commanded to summon A.M., if he shall be found in your
county, to be and appear before the undersigned, one of the justices of
the peace in and for said county, on the ___ day of _____ 18_____, at ___
o'clock in the ____noon, at my office in the ____, in said county, to
answer to J.T. in a civil action; and have you then and there this writ.
Given under my hand this ___ day of ___, A.D. 18_____.
W.D.D., Justice of the Peace.
CONSTABLE'S RETURN.
_(Venue as in Summons.)_
I hereby certify that I personally served the within summons upon the
within named defendant, by reading the same to him, in said county, on the
__ day of _________, 18_____.
Fees--Mileage, 8 miles, - - .80
Service, - - - - - - - - - .15
--
.95
G.M.G., Constable.
COMPLAINT.
State of ______} ss. In Justice Court,
County of ____} Before W.D.D., Justice of the Peace.
J.T., plaintiff,
against
A.M., defendant.
[Footnote: All the affidavits, pleadings, and other papers filed by
parties in an action should be "entitled," that is to say, should begin
with a caption similar to the above, giving the state and county, name of
justice, and the names of the parties, plaintiff and defendant, to the
action. This caption (_title of cause_) is to be inserted in every form
given hereafter, wherever it is so expressed.]
The complaint of the plaintiff shows to this court that at ___, in the
state of ___, on the _____ day of ____, 18___, the defendant made his
promissory note in writing, dated on that day, and thereby promised to pay
to the plaintiff (one year after date) the sum of (eighty) dollars, for
value received, with interest thereon from the said date at the rate of
(ten) per cent, per annum until fully paid, and delivered the same to the
plaintiff.
That the plaintiff is now the holder and owner of said note; that the same
has not been paid, nor any part thereof; but the defendant is now justly
indebted to the plaintiff thereon in the sum of (eighty) dollars, with
interest as aforesaid.
Wherefore, the plaintiff demands judgment against the defendant for the
sum of (eighty-nine) dollars and (sixty) cents, with costs of suit.
J.T. (_Venue._)
J.T., the plaintiff (or defendant) in this action, being duly sworn, says
that the foregoing complaint (or answer, or reply,) is true, to his own
knowledge, except as to those matters stated on his information and
belief, and as to those matters, that he believes it to be true.
J.T. (_Jurat._)
ANSWER.
(_Title of cause._)
The answer of the defendant to the complaint herein, shows to this court:
1. That he admits the making and delivering of the note therein stated,
but denies each and every other allegation therein contained.
2. And for a further defense this defendant shows that on the _____ day of
_________, 18_____, he bought (a horse) of the plaintiff for the sum of
(one hundred and thirty) dollars, and paid him (fifty) dollars in money,
and the note of (eighty) dollars described in the complaint; which
(horse), by the contract of sale, the plaintiff warranted to the defendant
to be sound; and the defendant further states that the said (horse) was
unsound at the time, whereby the defendant sustained damage in the sum of
(one hundred) dollars.
Wherefore he asks that said amount of damage be set off against the amount
of said note, and demands judgment for the balance of (twenty) dollars,
besides costs of suit.
A.M. (_Verified._)
Back to Full Books
|